House of Commons

Wednesday 7th May 2014 Commons Chamber

Wednesday 7 May 2014

The House met at half-past Eleven o’clock

Prayers

Wednesday 7th May 2014 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 7th May 2014 Commons Chamber

The Secretary of State was asked—

[Rory Stewart (Penrith and The Border) (Con)]

1. What assessment he has made of the potential effects of Scottish independence on border parliamentary constituencies.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

As a United Kingdom, we all have better job opportunities, employment and mobility. Every day, 30,000 people travel between Scotland and England for work. If Scotland were to leave the United Kingdom, our border constituencies would be the first to feel the effects of the creation of an international border.

[Rory Stewart]

Does the Secretary of State agree that one of the challenges of separation would be that our focus would be lost and our energy dissipated by looking at the details of administration and borders, rather than all the opportunities in the world, from Brazil to Indonesia?

[Mr Carmichael]

That is one of the many downsides a vote for independence would bring. It would be an unnecessary distraction that would indeed remove our focus from the opportunities that being part of the United Kingdom give us to develop Scottish business by looking overseas.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

On the question of separation, surely it is understood that divorce can be messy and that in this case it certainly would be messy? What I have been told by businessmen in my area is that they will move out of Scotland if separation takes place.

[Mr Carmichael]

I think we all know that what matters to business is the bottom line: the profit and loss account and the balance sheet. If businesses felt that independence was going to be good for them, they would be lining up to support it. Since the turn of the new year, we have heard a steady chorus from the business community, who have all been coming out to underline the risks and uncertainty that would come from independence. [Interruption.] These are voices that the hon. Members on the nationalist Benches may wish to drown out with their incessant chatter, but they will not do it.

[Michael Moore (Berwickshire, Roxburgh and Selkirk) (LD)]

Anybody who pauses at the top of the hill on the Carter Bar on the A68 is able to reflect on one of the most beautiful views of Scotland and on one of the most beautiful views of England, and reflect on the fact that these two countries have so much in common and so much shared family experience. Does my right hon. Friend share my hope that that will always be the case, rather than it marking the border point between two separate states?

[Mr Carmichael]

I very much agree with my right hon. Friend. I always think of the United Kingdom as being a family of nations. Of course, like all families, we do have those moments where we have disagreements, and we do occasionally want to do things in a slightly different way, but as a family the ties that bind us are so much greater than the differences that divide us. That is why I believe that Scotland, come 18 September, will choose to remain part of that family of UK nations.

[Angus Robertson (Moray) (SNP)]

But the people of the borders and the rest of Scotland are being subjected to the self-styled “project fear” campaign, which its own supporters describe as negative, nasty, and threatening, and who also say that the Prime Minister is toxic in Scotland. Why are even the Secretary of State’s own colleagues saying this?

[Mr Carmichael]

I have to say that it is a bit rich to hear the right hon. Gentleman talking about “project fear” when the First Minister went to Carlisle on St George’s day to deliver a lecture that I can only describe as project ridiculous. The fact of the matter—there is no escaping this for the nationalists—is that for people living in the constituencies on either side of the border, there are real benefits to being part of the United Kingdom. The nationalists want us to walk away from those benefits.

[Angus Robertson]

Leading members of the right hon. Gentleman’s own campaign have told people in the borders and the rest of Scotland that they will have to show a passport at the border; drive on the right-hand side of the road; worry about their pensions, when in this place people are being told that they are safe; and that they will not be able to use their own currency, when the media in London are being briefed that that will be safe. Why do his colleagues think that the people of the borders and the rest of Scotland will fall for this demeaning, insulting nonsense?

[Mr Carmichael]

The question of the borders highlights perfectly how the Scottish nationalists want to have their cake and eat it. On the one hand, they tell us that we could have a common travel area, which works very well with the Republic of Ireland at present. At the same time, they tell us that we will have a widely divergent immigration policy, which the Republic of Ireland does not have. They can have one thing or the other: they cannot have both. That is why their prospectus is flawed.

[John Stevenson (Carlisle) (Con)]

In places such as Carlisle, many businesses have branches and offices on both sides of the border. Does the Secretary of State agree that if Scotland votes yes there is a real danger that there will be such an additional burden on those businesses that it will have an effect on jobs and economic prosperity on both sides of the border?

[Mr Carmichael]

Inevitably, an independent Scotland would have a different taxation system, different national insurance provisions and different economic regulations, and that would impose an extra cost on business. The financial services sector, which supports 200,000 jobs in Scotland, has already issued serious warnings about what would happen to its business and how it would organise itself if Scotland became independent.

[Katy Clark (North Ayrshire and Arran) (Lab)]

2. What discussions he has had with his ministerial colleagues on the effects of housing benefit changes in Scotland.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

9. What discussions he has had with his ministerial colleagues on the effects of housing benefit changes in Scotland.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

I have had regular discussions with ministerial colleagues about the effect of housing benefit changes in Scotland, and in particular about the application of discretionary housing payments to those affected by the removal of the spare-room subsidy. Those discussions led to the announcement on Friday 2 May that the setting of the limit for such payments could become the responsibility of the Scottish Government.

[Katy Clark]

In February the Scottish Parliament voted in favour of full mitigation of the bedroom tax, but much of that money has not yet reached tenants. Given that there has been a discussion about the discretionary cap, does the Minister agree that the Scottish Government could have acted earlier, and, given that an announcement has now been made, will he do everything in his power to ensure that there is co-operation between Westminster and the Scottish Government so that the money reaches the people who need it?

[David Mundell]

I entirely agree with the hon. Lady. The Scottish Government already had powers that they could have used to take other steps for the purpose of the mitigation that they said was necessary, but they chose not to do so. The Scottish Parliament forced additional funds to be provided, and we will not stand in the way of the spending of those funds. I shall be meeting the Deputy First Minister of Scotland tomorrow morning, and I shall convey the hon. Lady’s comments to her.

[Sandra Osborne]

Does the Minister agree with the far-reaching proposals of Scottish Labour’s devolution commission, including the proposal for the devolution of housing benefit? Does he agree that that would be a progressive, logical and practical step that would enhance devolution and the ability to meet Scottish housing needs?

[David Mundell]

I think that the proposal to devolve the setting of the cap for discretionary housing payments is a positive step, and I welcome the fact that the Labour party has presented proposals. At the end of May, the Scottish Conservative party will present its proposals following the outcome of the work of our own devolution commission.

[Mary Macleod (Brentford and Isleworth) (Con)]

An important part of dealing with housing benefit is ensuring that there is enough affordable housing. Does my right hon. Friend agree that the lack of suitable affordable housing in Scotland is the result and the responsibility of successive Scottish Governments?

[David Mundell]

I do agree with my hon. Friend. She will be aware that since 2010 the Scottish Government have had an additional £1.3 billion in funding that they could have used to provide affordable housing in Scotland. We used to hear constantly in the Chamber about the number of shovel-ready projects in Scotland, but we have not seen much shovelling.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

The bedroom tax has been a costly fiasco in Scotland. It should never have happened, but I am glad that the Government have at long last agreed to allow the Scottish Government to mitigate its worst impacts. However, the Secretary of State recently boasted that we have a “fantastic” benefits system. Does the Minister think that he was talking about the bedroom tax, or is he also living in a parallel universe?

[David Mundell]

I certainly do not live in the universe that the SNP inhabits. It has not given us a single detail of how a welfare system would operate in Scotland. Indeed, in the 670 pages of the Scottish Government’s White Paper, there is just one reference to the establishment of such a system. The SNP set up a commission, but we have heard nothing from it, so I am afraid that I shall take no lessons from the hon. Lady.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

Does the Minister accept that, now that the Scottish Government have been given the powers for which they asked in relation to discretionary housing payments, there is no reason why they should not first cancel all the bedroom tax for this year, and then write off all the debts that were incurred last year? In order to ensure that no moral hazard is involved, should they not do as the Scottish Affairs Committee has asked, and refund the money that Scottish people paid last year in bedroom tax?

[David Mundell]

I understand that a statement is to be made about the matter in the Scottish Parliament today, and I am sure that the hon. Gentleman’s colleagues will raise those very points with the Scottish Government.

[John Robertson (Glasgow North West) (Lab)]

3. What assessment he has made of the effects of recent trends in household energy bills on standards of living in Scotland; and if he will make a statement.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

Rising energy bills are a serious concern for consumers in Scotland and across the rest of the UK. We are increasing competition, sustaining vital financial support for vulnerable consumers, and working to ensure suppliers put customers on the cheapest tariff.

[John Robertson]

I thank the Minister for his answer. Does he agree that with the closing of coal-fired power stations and a doctrine of anti-nuclear power stations north of the border, under independence, with the reliance on renewables, energy costs must increase?

[David Mundell]

I certainly agree with the hon. Gentleman about the serious loss to the Scottish economy of closing the door on the nuclear industry, which has brought so much benefit to Scotland, and I pay tribute to him for being such a champion of that cause. He is right that energy costs will go up in an independent Scotland, as set out in the Government’s analysis on energy.

[Guy Opperman (Hexham) (Con)]

Both in Northumberland and in Scotland people are setting up oil-buying clubs to deal with the problem of off-grid energy. Does the Minister agree that the best way to combat energy problems and price rises in off-grid circumstances is to copy this good measure and spread it out across the country?

[David Mundell]

I absolutely agree with my hon. Friend. Oil clubs are developing in Scotland and the Government are keen to promote and support them. I commend him for highlighting this issue.

[Mr Mike Weir (Angus) (SNP)]

11. If the Minister is genuinely concerned about rising costs of energy in Scotland, why is it that Ofgem has yet again delayed the implementation of Project TransmiT, which would finally begin to tackle the discriminatory and expensive transmission charges? Will he press his colleagues to implement it immediately?

[David Mundell]

Project TransmiT is one matter on which I am probably in agreement with the hon. Gentleman. The important thing for Scotland is to get the right answer. Yes, it is disappointing that it has taken some time, but the Scotland Office is determined to work towards getting the right answer, and I urge him and his colleagues to continue to press Ofgem on this as well.

[Margaret Curran (Glasgow East) (Lab)]

Will the Secretary of State explain why, when the Prime Minister said that consumers in Scotland would be £50 better off after cuts to the green levies, hundreds of thousands of Scottish consumers have seen their bills decrease by only £12?

[David Mundell]

There is no reason why consumers in Scotland should not be seeing this £50 benefit, and the Government will continue to do all we can to make sure that they do.

[Margaret Curran]

That is the definition of an inadequate answer, and perhaps goes some way towards explaining why Labour’s policy has gained widespread support across Scotland. In opposing Labour’s energy freeze, the Tory-led Government have had the full support of a surprise friend in the form of the Scottish National party, and it does not stop there: standing up for energy companies, failing to take action on the living wage, proposing tax cuts for those at the top. Does the Minister not agree that Scotland deserves better than this?

[David Mundell]

What I believe is that we do not take any lectures from Labour on energy issues. Gas bills more than doubled under Labour, electricity bills went up by 50%, the leader of the Labour party was responsible for £179 of additional levies on gas bills and fuel duty went up 12 times. I am proud of this Government’s record on energy and Scotland is doing well under it.

[David Mowat (Warrington South) (Con)]

4. What discussions he has had with Ministers in the Scottish Government on the potential role of the Bank of England in the event of Scotland becoming an independent country.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

I have not had any discussions with Ministers in the Scottish Government on the potential role of the Bank of England. If people in Scotland vote to leave the UK, they are voting to leave the UK institutions that support it, such as the Bank of England, which will continue to operate on behalf of the continuing UK.

[David Mowat]

I thank the Secretary of State for that answer. The majority of my constituents hope very much that Scotland will stay in the Union, but for the avoidance of doubt, will he confirm that in the event of a yes vote, there are no circumstances under which my constituents will underwrite the borrowing and spending plans of an independent Scotland, whichever currency it uses?

[Mr Carmichael]

I thank my hon. Friend for his support for the continuation of Scotland within the United Kingdom. The position on any currency union or central banking arrangements if Scotland were to vote for independence has been made very clear recently by the Chancellor and the Chief Secretary and also by the shadow Chancellor: there will be no such arrangements.

[Ian Murray (Edinburgh South) (Lab)]

In the event of an independent Scotland, will the Bank of England’s Monetary Policy Committee take its instructions from the UK Treasury or the Scottish Government?

[Mr Carmichael]

The Bank of England will continue to take its instructions from the UK Treasury. It is a UK institution and that would not change.

[Mr Philip Hollobone (Kettering) (Con)]

If Scotland separated from the United Kingdom, how would the UK’s foreign exchange reserves be reallocated?

[Mr Carmichael]

That would be a matter to be determined in the event of Scotland voting to leave the United Kingdom. I very much hope that will not come to pass.

[Stewart Hosie (Dundee East) (SNP)]

The Bank of England has already sensibly engaged in technical discussions with the Scottish Government. As each day passes and a yes vote on independence becomes more likely, is it not about time this Government abandoned their bellicose scaremongering and also engaged in sensible discussions with the Scottish Government on how these institutions can continue to work, in the best interests of both countries?

[Mr Carmichael]

Both Governments agreed in the Edinburgh agreement that there would be no question of pre-negotiation. That was a sensible situation and I am astonished that the hon. Gentleman now seeks to walk away from it.

[Sir Malcolm Bruce (Gordon) (LD)]

Does the Secretary of State agree that the Bank of England is not an asset to be shared but an institution that belongs to the United Kingdom which Scotland chooses to leave? Does he also agree that it is an extraordinary kind of independence where one wants to hand over control of one’s fiscal and monetary policy to a foreign bank?

[Mr Carmichael]

My right hon. Friend puts it perfectly. The difference between an asset and an institution is not a difficult one to understand, but the Scottish nationalists do seem to struggle with it.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

5. What discussions he has had with Ministers in the Scottish Government on a potential currency union with an independent Scotland.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

I have not had any discussions with the Scottish Government about the prospect of a currency union. The Chancellor, Chief Secretary and shadow Chancellor have all said there will not be a currency union. The only way to keep the UK pound is to stay in the UK.

[Michael Connarty]

I thank the Secretary of State for that reply. Having read the fiscal commission’s report, it is clear that it took the advice that I have been giving Scottish National party colleagues here that they would be destroyed if they went into the eurozone, where the stability and growth pact would destroy their economy. If they have no currency union with the UK, exactly what prospects are there for the 8% deficit that Scotland is running at the moment?

[Mr Carmichael]

The position is very clearly laid out: the difficulties that would be created by the currency union would be difficulties for the whole of the United Kingdom, but particularly for the people of Scotland. If we are to be independent, we need to be independent with all that that means. It is not possible to be half independent.

[Michael Fabricant (Lichfield) (Con)]

Is my right hon. Friend aware that Moody’s has stated that if Scotland were to gain its independence it would downgrade Scotland’s credit rating to B? What effect would that have on Scotland’s interest rates?

[Mr Carmichael]

The comments and report by Moody’s last week have to be taken very seriously and read with some care. Moody’s makes it clear that on its estimation an independent Scotland would be rated two levels below the rating the UK currently enjoys. For the people of Scotland that would mean more expensive store cards, more expensive overdrafts and more expensive mortgages. We are cheaper as part of the United Kingdom.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

12. Does the Secretary of State agree that all the currency options that have been put forward for an independent Scotland by the nationalists would actually involve constraints on decision making on fiscal policy?

[Mr Carmichael]

Every option that is put forward by the Scottish nationalists is inferior to what we currently have as part of the United Kingdom. That is the unpalatable truth that they do not want to hear, but from which there is no escaping. The people of Scotland know that truth.

[Mr Alan Reid (Argyll and Bute) (LD)]

The success of the Government’s economic policy is proven by the fact that the number of people claiming unemployment benefit in my constituency reduced by 419 in the past year. Does my right hon. Friend agree that the best way to keep this sustained economic growth is to stay within the UK and with the common currency that we have at the moment?

[Mr Carmichael]

Indeed. My hon. Friend gives me an opportunity to remind the House that the United Kingdom has the fastest growing economy in the G7, and that Scotland is the second wealthiest part of that economy.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

10. The people of Scotland want facts, so will the Secretary of State tell us on what date, if Scotland chooses to separate, will it either have to begin printing its own money or, failing that, start using the pound as a foreign currency?

[Mr Carmichael]

The hon. Gentleman invites me to look into the future and make a prediction, which is never an easy prospect—it is an unwise prospect for anyone in politics. The truth of the matter is that all these things are uncertain, and they bring enormous risks in areas where we do very well as a result of being part of the United Kingdom.

[Sir Menzies Campbell (North East Fife) (LD)]

To echo the hon. Member for Moray (Angus Robertson), what could be more demeaning and insulting than to lead the Scottish people to believe that there are no risks in independence, and that a currency union is a foregone conclusion?

[Mr Carmichael]

The only foregone conclusion about a currency union is that it will not happen. It will not happen because that is the advice that has been given by the permanent secretary to the Chancellor of the Exchequer. That advice is not going to change, and the outcome of that advice is not going to change.

[Pete Wishart (Perth and North Perthshire) (SNP)]

The Chancellor’s sermon on the pound was supposed to bring the Scottish people back into fearful line, but as the opinion polls have shown, the Scottish people will not be discouraged by this; instead, they are emboldened and angered. The Scottish people will no longer be told by Westminster. Will the Secretary of State tell us what has happened to the search for the Minister who told the truth? Have they made any progress, or do they perhaps need our help?

[Mr Carmichael]

Mr Speaker, I am delighted that you were able to fit the hon. Gentleman in; otherwise, we would all have missed his monthly comedy turn. It is quite remarkable that he chooses to ignore the advice given by the permanent secretary to the Chancellor of the Exchequer, setting out why a currency union would be bad for the rest of the United Kingdom and bad for an independent Scotland. Why does the hon. Gentleman want something that would be bad for Scotland?

[Gordon Banks (Ochil and South Perthshire) (Lab)]

Last week, 18% of members of Scottish Chambers of Commerce confirmed that they are making plans to move out of Scotland in the event of a yes vote, and 63% believe that an independent currency or the euro would be bad for business. Today we have heard from the British Chambers of Commerce that 85% of their businesses are against independence, and nearly half identified currency concerns as the most important issue for them. What reassurances can the Secretary of State give the House about currency for businesses on both sides of the border?

[Mr Carmichael]

The only reassurance I can give is that if people in Scotland vote no, they will continue to enjoy the use of the pound and they will continue to have the Bank of England as a lender of last resort. Beyond that, everything is uncertain.

[Iain Stewart (Milton Keynes South) (Con)]

6. What assessment he has made of the potential effects of Scottish independence on cross-border trade and employment.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

Scotland’s place in the United Kingdom means we have a truly single domestic market, with no barriers to trade and employment across the United Kingdom. Independence would fundamentally change that. The resulting “border effect” would disrupt trade and free movement of workers, reducing real incomes by, it is estimated, around £2,000 per Scottish household per year.

[Iain Stewart]

My constituency is home to a large number of national logistics and distribution companies. Is my right hon. Friend aware of the growing concern in that sector that separation could make some cross-border routes less attractive, as they would become international rather than domestic ones?

[Mr Carmichael]

Indeed, and I hear the same message from a range of business interests. The financial services industry, for example, says that independence would bring extra costs with different taxation and different regulation. The supermarkets have made it very clear that extra costs would fall to Scottish consumers if Scotland were independent.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

According to the House of Commons Library, 200,000 UK jobs depend on trade with the Republic of Ireland—double that of Canada and Norway. Ireland used to be part of the UK, but trade between the two has never been higher. The UK is Ireland’s No. 1 trading partner, and among the recently independent nations of the European Union, foreign direct investment rose by 215% in the first four years of independence. For those realities, what scare stories will the Secretary of State use?

[Mr Carmichael]

It is not a scare story to point out that the White Paper presents a prospectus and a future where there would be barriers and where the mere existence of a border would be an extra cost. If the hon. Gentleman wants to know the truth of the matter, he need look no further than at the situation that exists between Canada and the United States. The hon. Gentleman might not like it, but that is the truth.

[Graeme Morrice (Livingston) (Lab)]

What discussions has the Secretary of State had with the Scottish Government regarding the possibility of border controls between an independent Scotland and the rest of the UK, if an independent Scotland had a separate immigration policy?

[Mr Carmichael]

It is an inescapable fact that if, as the nationalists tell us in the White Paper, Scotland were to have a widely divergent immigration policy, which would be necessary for such of their economic plans as they have been prepared to tell us about, the operation of a common travel area of the sort that currently works well with the Republic of Ireland simply would not operate. You cannot have your cake and eat it on this occasion.

[Mr Speaker]

Last but not least, Mrs Anne McGuire.

[Mrs Anne McGuire (Stirling) (Lab)]

Given the First Minister’s threat to blockade Scottish fishing grounds if he does not get his own way on EU membership and given that licences are held across the United Kingdom, what analysis has the Secretary of State done on the impact on employment in the Scottish fishing industry?

[Mr Carmichael]

The impact on employment would be serious in some of the most economically fragile communities in Scotland in our coastal and island communities. I have to say that the First Minister’s comment about blockading Scottish waters went beyond the ridiculous, but it makes me wonder whether that is why he seems so desperate to cosy up to Vladimir Putin.

The Prime Minister was asked—

[Mel Stride (Central Devon) (Con)]

Q1. If he will list his official engagements for Wednesday 7 May.

[The Prime Minister (Mr David Cameron)]

This morning I had meetings with ministerial colleagues and others, and in addition to my duties in this House, I shall have further such meetings later today.

[Mel Stride]

As the proud father of three daughters, I am sure that the entire House will share my deep concern for the more than 270 Nigerian schoolgirls held captive in that country. Their only so-called crime is that they aspired to receive an education. Will my right hon. Friend set out for the House the steps that the Government are taking to ensure that we help to secure their release as soon as possible?

[The Prime Minister]

I know that my hon. Friend speaks for the whole House—and, indeed, the whole country. I am the father of two young daughters, and my reaction is exactly the same as my hon. Friend’s and of every father and mother in this land and in the world: this is an act of pure evil, which has united people across the planet to stand with Nigeria to help find these children and return them to their parents.

The Foreign Secretary and the British Government have made repeated offers of help to the Nigerian Government since the girls were seized. I shall be speaking to the Nigerian President this afternoon and will say again that Britain stands ready to provide any assistance, working closely with the US, as immediately as we can. We already have a British military training team in Nigeria, and the Foreign Office has counter-terrorism experts. We should be proud of the role we play in that country where British aid helps to educate 800,000 Nigerian children, including 600,000 girls. We should be clear that this is not just a Nigerian issue: it is a global issue. There are extreme Islamists around the world who are against education, against progress and against equality—and we must fight them and take them on wherever they are.

[Edward Miliband (Doncaster North) (Lab)]

Let me begin by fully associating myself and the Opposition with the Prime Minister’s remarks on the terrible situation in Nigeria.

On our proposal for three-year tenancies in the private sector, will the Prime Minister tell us when he expects to make the inevitable journey from saying that they represent dangerous Venezuelan-style thinking to saying that they are actually quite a good idea?

[The Prime Minister]

I have not had the time to study the rent control proposals, but I am sure the right hon. Gentleman will be able to lay them out for the House. Let me be clear about my view. If there is an opportunity to find longer-term tenancy agreements to give greater stability—a proposal made at last year’s Conservative conference—I am sure we can work together. If, however, the proposal is for rent controls that have been tried all over the world, including in Britain, and have been shown to fail, I think it would be a very bad idea.

[Edward Miliband]

Even by the right hon. Gentleman’s standards, this is a pretty quick U-turn. Last week, the chairman of the Conservative party—I know the right hon. Gentleman does not have a briefing on this, but perhaps he can listen to the question—was saying this was all back to Venezuela and that it is completely wrong, but the Community Secretary has supported these proposals. The question is how are we going to make it happen?

[The Prime Minister]

Actually, I have got some very good briefing on these proposals—from Labour MPs. Here they are. Let us start with Labour’s Housing Minister. You would think she would support Labour’s policy. She says:

“I do not think it will work in practice”.

The shadow Secretary of State for Communities and Local Government says this:

“We don’t want to return to rent controls because the rental sector is meeting a demand for housing.”

There we are—the authentic voice of Bennism.

Then we come to the Chairman of the Communities and Local Government Committee, a Labour MP, the hon. Member for Sheffield South East (Mr Betts). He said this:

“We concluded that rent control was not feasible.”

So there we have a Labour policy, completely unclear about what it is; but the one thing that is clear is that Labour MPs do not back it.

[Edward Miliband]

All the right hon. Gentleman shows is that he has nothing—[Interruption.]

[Mr Speaker]

Order. I know it has to be said every week, but I will very happily say it again. However long it takes—a very simple exercise in democracy; the lesson should be learned—the question will be heard and the answer will be heard. It is incredibly simple.

[Edward Miliband]

All the right hon. Gentleman shows is that he has no idea about this incredibly important issue facing our country. Let me explain it to him. There are 9 million people renting in this country. Our proposal is that there should be fixed three-year tenancies as the norm for those people with predictable rent changes. Right? That is the proposal. Many people across this country think that for the first time this is a party addressing the issue they face, so will he explain what is wrong with going from one-year tenancies with unpredictable rent rises to three-year tenancies with predictable rents? Why has the Conservative party given up on millions of people who are Generation Rent.

[The Prime Minister]

We want to build more houses so we have a better rental sector with more affordable rents. But as I said in my very first answer, if this is about finding new tenancies that give long-term security on a voluntary basis, yes. If it is about mandating rent controls from the centre and destroying the housing market, no. The problem I have with so many of the right hon. Gentleman’s policies is that they all come from the same place—

[Steve Brine (Winchester) (Con)]

Len.

[The Prime Minister]

Thank you very much. Len—they come from the Unite union. Unite said, “Renationalise the railways.” The right hon. Gentleman wants to renationalise the railways. Unite says, “Let’s have old-style rent controls.” He wants old-style rent controls. The problem with rent controls is their policies are for rent, their candidates are for rent and their leader is for rent. That is the problem.

[Nigel Adams (Selby and Ainsty) (Con)]

The Prime Minister will be as encouraged as I am that unemployment in my constituency is down by almost a third since the last election. However, the future for almost 1,000 workers related to Eggborough power station in my constituency is less certain. Will he meet me to ensure that we have a future for this very important asset in my constituency?

[The Prime Minister]

I am very happy to meet my hon. Friend to discuss this. What he says about the fall in unemployment, which we are now seeing right across our country, is welcome. In fact, employment is growing fastest not in the south-east but in Wales, which shows that the recovery is increasingly more broadly based. I know about the problems at Eggborough power station, and the demand there for further action, as has been agreed at Drax. I am very happy to discuss that with him and see what can be done.

[Mr Andy Slaughter (Hammersmith) (Lab)]

Q2. I have two world-class hospitals in my constituency. The Secretary of State for Health has decided that Hammersmith will lose its A and E this year and Charing Cross will be demolished, losing all consultant emergency services, including A and E, and the country’s best stroke unit. Will the Prime Minister stop his Health Secretary putting my constituents’ lives at risk?

[The Prime Minister]

What we are doing in north-west London is ensuring that the NHS gets more money. It will be getting £2.4 billion this year—£74 million more than the year before. Let us remember that his own party’s policy was to cut the NHS, as is happening now in Wales. The changes that are being made in north-west London are backed by clinicians and local people. We want to see our NHS improve, as it is under this Government.

[Sir Tony Baldry (Banbury) (Con)]

Does my right hon. Friend agree that the policies of the UK Independence party are based on fear—fear of the world and fear of foreigners? As a great trading nation, we should embrace the world. If anyone comes to my constituency and goes to the hospital, the nursing homes, the farms or the building sites, they will see the great contribution that is being made to our communities and to the growth of our economy by fellow EU citizens.

[The Prime Minister]

My right hon. Friend is absolutely right that Britain has benefited from being an economy that is open to investment and open to people coming who want to contribute and work hard here. I agree with what he says about UKIP: so much of its view seems to be that we do not have a bright future in this country. I absolutely believe that we do. If we get our deficit down and our economy growing and we invest in apprenticeships, we will show that we can be one of the success stories of the 21st century. We are making progress and that is the way to challenge its world view.

[Edward Miliband]

There is deep concern in the British business and scientific communities about the proposed takeover of AstraZeneca by Pfizer. The deal would have an impact for decades to come on British jobs, British investment, British exports and British science. The Business Secretary said yesterday that he is “not ruling out intervention”. What type of intervention is under consideration by Government?

[The Prime Minister]

I absolutely agree with what the Business Secretary said yesterday, but let me be clear that the most important intervention we can make is to back British jobs, British science, British research and development, British medicines and British technology. That is why I asked the Cabinet Secretary and my Ministers to engage with both companies right from the start of this process, and I make no apology for that, because we know what happens when you do not engage. If you stand back and just say you are opposed to everything, you get abject surrender and no guarantees for Britain. We are fighting for British science, and it is a pity that the right hon. Gentleman is trying to play politics rather than backing the national interest.

[Edward Miliband]

It is good to hear that the right hon. Gentleman agrees with the Business Secretary. The Business Secretary said this:

“One of the Government’s options would be to consider using our public interest test powers.”—[Official Report, 6 May 2014; Vol. 580, c. 23.]

There needs to be a proper assessment of this bid, and yesterday the Business Secretary said that he was open to doing that. It could be done straight away, through this House, and we on the Labour Benches would support making that happen. Will the Prime Minister agree to do it?

[The Prime Minister]

The assessment that I want is from the Business Department on this deal or indeed, because there is not now an actual offer on the table, any subsequent offer. I will judge all these things on whether they expand British jobs, British investment and British science. Let me just make this point, because I worry that it may be lost in this debate. We all know that the right hon. Gentleman thinks he is extremely clever—we all know that—but he may have missed this point. Britain benefits massively from being open to investment. Nissan is now producing more cars than the whole of Italy. Jaguar Land Rover, under Indian ownership, has created 9,000 jobs in the west midlands since I became Prime Minister. Vodafone and indeed AstraZeneca have benefited from that backing of an open country to go out and build and buy businesses around the world. There is more inward investment in Britain today than the rest of the EU combined. Let us not put that at risk.

[Edward Miliband]

The right hon. Gentleman does not understand. This is simply about something very straightforward—having an independent assessment of this bid and whether it is in the national interest. I will ask him the question again as it matters to people right across this country. Is he ruling out, or ruling in, using the public interest test on this takeover? We could make it happen. His Business Secretary could make it happen, and we would support it. If he does not take action now, and the bid goes through without a proper assessment, everyone will know that he was cheerleading for this bid, not championing British science and British industry.

[The Prime Minister]

I think it is deeply sad that the Leader of the Opposition makes accusations about cheerleading when the Government were getting stuck in to help British science, British investment and British jobs. Does it not tell us everything that, given the choice of doing the right thing for the national interest and working with the Government or making short-term political points, that is what he chooses to do? We might ask why the public interest test was changed in the first place. It happened when they were sitting in the Treasury. Yes, they wrote the rules, they sold the gold and they saw manufacturing in our country decline by one half. We will never take lectures from the people who wrecked our economy.

[Dr Julian Lewis (New Forest East) (Con)]

Will the Prime Minister confirm that under his leadership this country will never spend less than the NATO recommended minimum of 2% of GDP on defence?

[The Prime Minister]

We are spending in excess of 2% and we are one of the only countries in Europe to do that. The Greeks, I believe, are spending more than 2% but, if I can put it this way, not all on things that are useful for all of NATO. We should continue to make sure we fulfil all our commitments on defence spending.

[Joan Walley (Stoke-on-Trent North) (Lab)]

Q3. Will the Prime Minister urgently meet again with me and fellow MPs to find a way forward on consultant-led maternity services to be run by the university hospital in Stoke-on-Trent?

[The Prime Minister]

The hon. Lady has asked me this question in the past. I was keen to ensure that despite all the difficulties at the Mid-Staffordshire hospital there was an opportunity to see whether it might be possible for the long term to have consultant-led maternity services. People who live in our major towns, such as Stafford, want to be able to have their babies locally. It is vital that we do that and I am regularly updated by my hon. Friend the Member for Stafford (Jeremy Lefroy). I would be happy to meet him and a delegation of Staffordshire MPs if it is necessary to talk further about this point.

[Margot James (Stourbridge) (Con)]

Q4. Last week, Boston Consulting Group published research that found that Britain is the No. 1 competitive manufacturing country in the whole of western Europe and number four globally behind China, the United States and South Korea. Does my right hon. Friend agree that that is just the sort of company we should be keeping and further evidence that our strategy to rebalance the UK economy towards manufacturing and the west midlands and other regions is working?

[The Prime Minister]

I am grateful to my hon. Friend for what she says, because for the first time in almost a decade all three main sectors of the economy—manufacturing, services and construction—have grown by at least 3% over the past year. That is further evidence that the economic plan is working. Manufacturing is important in itself and it is also important because so much of it is tradeable. We want to see Britain export more, make more and invest more. The moves made by my right hon. Friend the Chancellor in the Budget in terms of investment allowances and backing UK Trade & Investment are dedicated to that angle. As I said earlier, we must also remain an open economy, which will encourage people to invest in our manufacturing base.

[Mr Nigel Dodds (Belfast North) (DUP)]

Later this week, the opening stages of the Giro d’Italia will take place in Northern Ireland. The Tour de France is also coming to Yorkshire. Such world-class sporting events allow us to showcase our region, boost tourism and grow the local economy. Does the Prime Minister agree that as we seek to build a more prosperous and better future for all our people in Northern Ireland it is vital that the suffering and hurt of the victims is never forgotten and that whether it happened one year ago, 10 years ago or 42 years ago, justice must be pursued and the police must be allowed to follow the evidence wherever it may lead?

[The Prime Minister]

First, I agree with the right hon. Gentleman about the importance of these great sporting events—both the one he mentioned in Northern Ireland and, of course, the Tour de France, which will be starting in Leeds. That will be a great moment for Yorkshire and for the whole United Kingdom. We should do all we can to promote these events, although we should perhaps draw the line at appearing in lycra at either of them.

The right hon. Gentleman raises a very important issue about terrorist victims. We discussed recently the important issue of trying to ensure greater assistance from Libya over Semtex that is still being found in Northern Ireland as we speak today. As for his other remarks, we should be proud of the fact that a free country has an independent judiciary, an independent legal system and an independent police service and that they decide who to arrest, who to question and who to charge. That is how it must remain.

[Paul Burstow (Sutton and Cheam) (LD)]

Q5. Dementia is one of the biggest challenges facing our country. Will the Prime Minister join me in congratulating the Alzheimer’s Society and Public Health England on launching a major new campaign through Dementia Friends to raise awareness and to challenge stigma? Given that 50,000 people quit their jobs to care for people with dementia, will he ensure that there is a new dementia strategy at the end of this year—the current one ends this year—so that we can ensure that people with dementia receive the support they need?

[The Prime Minister]

I pay tribute to my right hon. Friend for raising this issue. We have turned the zero on No. 10 into the dementia flower today to help to boost the importance of raising awareness of this issue and of encouraging more people to train as Dementia Friends. I will look at what he says about the strategy. As he knows, it is about investing in research and science, where we have doubled the budget for dementia. It is about dementia-friendly communities and also making sure that our hospitals and care homes treat people with dementia better. We will carry forward all those, and I will perhaps write to him about the update to the strategy.

[Ann Clwyd (Cynon Valley) (Lab)]

Some 100,000 people are already dead in Syria and others are dying while we are here today. They need help desperately. We have talked about humanitarian help, but we have not crossed borders. What on earth are we doing about it?

[The Prime Minister]

The right hon. Lady is right to raise this. The answer to what are we doing about it is that Britain is the second largest bilateral aid donor in terms of humanitarian aid going into Syria, so we are helping to feed, clothe and house people in Turkey, in Lebanon, in Jordan and elsewhere. She raises the important point about getting aid into Syria. More is being done on that, but it is extremely difficult because of the security situation. We will continue to do what we can.

[Andrew Griffiths (Burton) (Con)]

Q6. As we mark the centenary of the first world war, it is a national disgrace that the graves of Victoria Cross winners lie crumbling and derelict. As a patron of the Victoria Cross Trust, may I congratulate the Prime Minister and the Secretary of State for Communities and Local Government on pledging £100,000 to help to restore some of those graves, and The Sun on highlighting this campaign? As the Government have pledged to match-fund every penny raised by the Victoria Cross Trust, will the Prime Minister join me in urging people to go online, to donate and to ensure that we have fitting memorials for the bravest of the brave.

[The Prime Minister]

I certainly join my hon. Friend, who is a patron of the Victoria Cross Trust, for the hard work that is being done. The Sun did a good job in highlighting the importance of this issue. As my hon. Friend mentioned, my right hon. Friend the Secretary of State for Communities and Local Government has announced £100,000 of funding for the Victoria Cross Trust. This should go to restoring the graves of Victoria Cross recipients.

We also have a programme for letting local authorities put down paving stones for people who won Victoria Crosses in their area, and we are looking at many other ways to commemorate this absolutely vital anniversary. The most important thing we are doing is the huge multimillion pound investment going to the Imperial War museum, which is opening this summer and to which I take my children. It brings the first world war to life in an extraordinary way, and that is at the heart of our important commemorations.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

Q15. My constituent Darren Lugg’s disability means that he needs a specially adapted bed. He therefore cannot share a room with his wife, but still they are hit by the bedroom tax. Can the Prime Minister explain why this Government are punishing him for his disability?

[The Prime Minister]

As the hon. Lady knows, we have discretionary housing payments for exactly this sort of case, and the money has been topped up, so there is no reason for people to be disadvantaged in the way she suggests.

[David Rutley (Macclesfield) (Con)]

Q7. AstraZeneca is Macclesfield’s largest employer with 2,000 employees, so I share constituents’ concerns about Pfizer’s proposed bid. I welcome the steps taken by the Government to secure initial commitments from the company if it succeeds. Can the Prime Minister tell the House what further steps are being taken to strengthen those commitments and to safeguard highly skilled manufacturing jobs in Macclesfield?

[The Prime Minister]

I am grateful for my hon. Friend’s remarks. There are 2,000 people employed by AstraZeneca in his constituency, and he is quite right to speak up for them. Our entire approach is based on trying to secure the best possible deal in terms of jobs, investment and science, and that is why I believe it was absolutely right to ask the Cabinet Secretary to engage with Pfizer, just as we are engaging with AstraZeneca. I find it extraordinary that we have been criticised for this. Of course, there is no offer on the table, but the commitments that have been made so far are encouraging in terms of completing the Cambridge campus and making sure that 20% of the combined companies’ total research and development work force is in the UK going forward—and they specifically mention substantial commercial manufacturing facilities in Macclesfield. The company also goes on to say that because of the patent box that we have introduced, it would look at manufacturing more in the UK. But let me absolutely clear: I am not satisfied; I want more, but the way to get more is to engage, not to stand up and play party politics.

[Mr Kevan Jones (North Durham) (Lab)]

On a number of occasions the Prime Minister has raised the important issue of awareness of mental health, and I thank him for that, but can he explain why, since 2011, there has been a 30% drop in the number of mental health beds in the NHS, and is it really right that mental health patients are having to travel up to 200 miles to access a bed?

[The Prime Minister]

What matters in our NHS is the quality of provision and parity of esteem between physical health and mental health. This Government have not solved every problem, but we have put proper parity of esteem into the NHS constitution and the NHS mandate. We have also put in proper targets for some of the talking therapies that are absolutely vital in mental health. Measuring the output of our NHS purely by the number of beds is not a sensible approach.

[Iain Stewart (Milton Keynes South) (Con)]

Q8. The Government are making a substantial investment in renewing and expanding the nation’s infrastructure. There is, however, a real need to get more young people into engineering so that we will have the long-term skills base for these projects. Will my right hon. Friend assure me that this Government will do all they can to inspire the next generation of engineers?

[The Prime Minister]

I absolutely back what my hon. Friend says. I know he has been campaigning very hard to get the HS2 academy to go to Milton Keynes, because there is a vital bit of skills work that needs to be done. [Interruption.] I am sure there will be a lot of competition. The key thing about these investments, whether it is Crossrail, the Olympics or HS2, is to plan in advance for the skills that we are going to need so that we can fill the jobs with British people leaving school and college wanting to take on those skills. Today the Chancellor and the Minister for Schools have launched the “Your Life, Your Choice” campaign, which is all about encouraging young people to get into STEM subjects—science, technology, engineering and maths—and to stay in STEM subjects, because there is a massive fall-off from GCSE to A-level, particularly in physics among young women, and we need to encourage them to go on studying.

[Hazel Blears (Salford and Eccles) (Lab)]

I am delighted to see that the Prime Minister is wearing his Dementia Friends badge today. He will congratulate the Alzheimer’s Society on its commitment to get 1 million dementia friends over the next year, but will he also today commit personally to putting an end to the scandal of 15-minute visits, low wages and zero-hours contracts for the dedicated home carers who look after people with dementia in our country?

[The Prime Minister]

First, let me praise the right hon. Lady for her work on dementia and the amount of work she has done to spread awareness about this. The 15-minute working times is an issue for local councils. My local council has just decided to stop these 15-minute visits because it does not believe people can really get any meaningful work done, but this is a matter for councils. We are the first Government to have a proper review on zero-hours contracts. We are very unhappy about those with exclusivity clauses that do not allow people to work elsewhere. As important as those things are, it is as important to make sure that our care system has got people inside it who are really caring and understanding about the problems of dementia. The right hon. Lady and I have both been through the very short Dementia Friends training course, and I do not know about her, but I think I am ready for a refresher.

[Neil Carmichael (Stroud) (Con)]

Q9. With 1.3% growth in manufacturing in the last quarter and some strong performances from my local firms such as Renishaw, Dairy Crest, Lister Communications, Lister Shearing and others, largely through innovation, does the Prime Minister agree that one key element of the long-term economic plan is the need further to strengthen our skills base so that those firms can continue to grow, work hard for Britain, and generate exports?

[The Prime Minister]

My hon. Friend is absolutely right. A key part of the long-term plan is to rebalance our economy away from purely the south-east and also towards manufacturing exports and investment. I know that he has been playing his part by running a festival for manufacturing and engineering in Stroud. This is really important, because one of the things we have to do is inspire a new generation to think of these careers and think of the subjects they should be studying in school and at university to open up these careers for them.

[Keith Vaz (Leicester East) (Lab)]

Last Thursday, the European Union ban on the import of Indian mangos took effect. As a result, hundreds of businesses in Leicester and throughout the UK will suffer millions of pounds of losses. There was no consultation with this House and no vote by British Ministers. Next week, the Prime Minister will have his first conversation with the new Indian Prime Minister. Will he do his best to reverse this ban so that we can keep our special relationship with India, which his predecessors and he have worked so hard to maintain, and have our delicious mangos once again?

[The Prime Minister]

I know how much the right hon. Gentleman cares about this issue, so much so that he delivered a tray of mangos to No. 10 Downing street—missing the deadline, I might add, so that they could safely be consumed by the people inside. I am very grateful for that.

This is a very serious issue. The European Commission has to consider it on the basis of the science and the evidence. There are concerns about cross-contamination of British crops and interests, so we have to make sure that that is got right. I understand how strongly the right hon. Gentleman and the Indian community in this country feel. Indeed, I look forward to discussing the issue with the new Indian Prime Minister.

[Chris White (Warwick and Leamington) (Con)]

Q10. Will the Prime Minister join me in congratulating Vitsoe, the world-class furniture manufacturer, on its decision to locate its manufacturing facility in Leamington and on the jobs that will create? I am proud the decision was based in part on our community’s rich industrial heritage. Will the Prime Minister also pay tribute to local businesses that have created jobs and reduced the number of jobseeker’s allowance claimants in Warwick and Leamington by a remarkable 54% since May 2010?

[The Prime Minister]

I congratulate my hon. Friend on the decline in unemployment in his constituency, which is incredibly marked at 54%. I note what he says about furniture factories, because those are the sorts of businesses that were going offshore. What we are seeing in our country is a slow trend—but I want to encourage it—of reshoring and getting businesses to come back to, and invest and expand in, Britain. We must do everything we can to encourage that by keeping their taxes down, keeping national insurance down, cutting national insurance for young people, training more apprentices and investing in infrastructure. That is what we will do so that there are many more success stories like that mentioned by my hon. Friend.

[Nic Dakin (Scunthorpe) (Lab)]

Q12. My constituent Lorraine Seath’s son has recently returned from serving our country in Afghanistan. Does the Prime Minister think it is right that she has to pay the bedroom tax to keep a room available for her son to stay in when he is at home?

[The Prime Minister]

Let me look at this individual case, because we made a specific exemption from the spare room subsidy for people who were serving overseas. If the spare room subsidy exemption does not apply in this case, there is of course the provision of the discretionary housing payment, which is another way of dealing with this, and I would hope that Scunthorpe borough council would take up that offer.

[Mr Speaker]

I call Mr Simon Burns. [Hon. Members: “More!”] There will indeed be more, which is why we must hear the right hon. Gentleman and then, at my request, others. We are concerned also, I am sure, about others.

[Mr Simon Burns (Chelmsford) (Con)]

Q11. The Prime Minister will be aware that last week the service sector grew at its fastest level this year, with the ensuing creation of jobs. Does he agree that that demonstrates that we must stick with the long-term economic plan, because it is working? I trust my right hon. Friend has enough time to answer the question in full.

[The Prime Minister]

My right hon. Friend is absolutely right: we have to stick to the long-term economic plan and deliver it. For my right hon. Friend to be called at 12.33 pm on a Wednesday shows that if you stick at anything, you can win.

[Mr Speaker]

I have always practised that philosophy myself: however long it takes, we are going to get through them.

[Kate Hoey (Vauxhall) (Lab)]

The Prime Minister will know that recently it has gone into the public domain that more than 365 people in Northern Ireland were given the royal prerogative of mercy, despite 10 years of files being lost. Will he give a commitment that those names will be made public? After all, if the Queen takes the time to sign 365 names, surely the public and particularly the victims have the right to know.

[The Prime Minister]

I would say to the hon. Lady, who I know takes a very close interest in these issues in Northern Ireland, that difficult decisions were taken, principally by the previous Government at the time of the various agreements, which involved very difficult choices—hard choices—that had to be made in order to try to build the platform for peace and reconciliation. I am very happy to look at her specific point and see whether there is anything I can do to reassure her in a letter, but I do not want to unpick decisions taken at a difficult time to try to give us the peace that we enjoy today.

[Zac Goldsmith (Richmond Park) (Con)]

Q13. The chief medical officer warned last month that we are misusing antibiotics to such an extent that we risk returning, in just a matter of years, to a 19th-century environment where routine operations carry a grave risk of death. A couple of days ago, the World Health Organisation issued a similar warning, saying that we are hurtling towards the post-antibiotic age. On that basis, it is surely madness to continue to allow so many antibiotics to be used on our factory farms—about half the total use in this country—when we know that that contributes to resistance.

[The Prime Minister]

My hon. Friend raises an extremely serious problem, which is global in its nature and could have unbelievably bad consequences in terms of anti-microbial resistance leading to quite minor ailments not being properly treatable. One of the problems is that the way research is done currently by pharmaceutical companies is not necessarily bringing forward new antibiotics in the way that we need or solving this problem. I have met the chief medical officer to discuss this. There are a number of steps that we can take here in the UK and working with other countries, and I hope to say something about it soon.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Yesterday, the Secretary of State for Business, Innovation and Skills said that he was working with civil servants to ensure that any assurances given by Pfizer during the proposed takeover of AstraZeneca could be made legally binding. Does the Prime Minister back that?

[The Prime Minister]

As I said, the more we can do to strengthen the assurances we are given, the better. But the only way to get assurances is by engaging and getting stuck in with those companies, which is what we have been doing, and I find it extraordinary that the Labour party chooses to criticise us for that.

[Mr Speaker]

Last but not least, I call Dr Julian Huppert.

[Dr Julian Huppert (Cambridge) (LD)]

Q14. The Pfizer bid for AstraZeneca is driven by tax advantages. Has the Prime Minister spoken to the US Government about whether they propose any changes to their tax law, and has Pfizer asked for any changes to our tax system, particularly to the patent box?

[The Prime Minister]

In its letter to me, Pfizer mentions the patent box as a positive reason for wanting to invest in Britain and for examining whether it could increase manufacturing in Britain. Of course, because of the way the patent box works, you only get the low-tax benefit if you make your investments and do research in the UK, and then exploit that research by manufacturing in the UK. I agree with the hon. Gentleman that we should be incredibly hard-headed about this. It is an advantage that Britain is a low-tax country. We used to stand in this House of Commons and bemoan the fact that companies were leaving because of our high taxes. They now want to come here because of our tax system. I agree with the Business Secretary that that is not enough; we want the investment, the jobs and the research that comes with that competitive tax system.

Petition

Wednesday 7th May 2014 Commons Chamber

Keith Vaz (Leicester East) (Lab)

- Hansard - - Excerpts

If you were at Prime Minister’s questions today, Mr Deputy Speaker, you would know that I asked the Prime Minister about the EU mango ban, a decision taken by the European Union without consulting this House or British Ministers. This vote took place with officials. Last week I asked local residents who were affected by this to gather a petition so I could present it to the House, and in a very short time 329 local residents have signed it—people who regularly buy and eat mangoes and those who sell them. I present this petition today on behalf of Hasmukh Pabari, Darmesh Lakhani, president of the Belgrave road traders association, Joga Sandhu, Shahidullah Khan and Ratilal Patel.

The petition states:

The Petition of residents of Leicester East,

Declares that the EU ban on the importation of Alphonso mangoes from India is unjust, that petitioners are anxious about the hugely detrimental impact that this ban will have on the livelihoods of millions of people in, and on the economies of, both the UK and India, and further declares that there has been a significant lack of consultation with both the Parliament and the affected people.

The Petitioners therefore request that the House of Commons urges the Department for the Environment, Food and Rural Affairs do everything possible to reverse this ban, to develop an action plan on how best to progress in this matter and to better communicate with the people affected.

And the Petitioners remain, etc.

[P001348]

Smoke Alarms (Private Rented Sector)

Wednesday 7th May 2014 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

12:38

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to make provision for the mandatory installation of smoke alarms in privately rented accommodation; and for connected purposes.

At the outset, I draw attention to my interests as declared in the Register of Members’ Financial Interests, including my role as a non-executive director of the Fire Protection Association—a not-for-profit organisation that works to improve fire safety.

Smoke alarms save lives. The latest Government statement on the subject, issued by the Department for Communities and Local Government in February, states that

“analysis suggests a person is…4 times more likely to die in a fire in the home if they do not have a working smoke alarm”.

In recent years, as our fire and rescue services have focused increasingly on fire prevention, we have seen a substantial increase in the number of homes that are protected by smoke alarms. Building regulations require smoke alarms to be installed in all new dwellings. The impact of that regulatory requirement, together with national and local promotional campaigns to get alarms fitted in existing properties, has been to ensure that almost nine out of 10 homes across the country are equipped with at least one working smoke alarm.

That still leaves about 2.5 million homes unprotected. By a margin, the largest proportion of unprotected homes are privately rented. The latest available data from the English housing survey suggest that only 82% of privately rented homes were equipped with a working smoke alarm in 2011. The purpose of the Bill is to remedy that by making the installation of a working smoke alarm mandatory in all privately rented housing. I would have no objection to extending the provision to all rented homes, including those rented from councils and housing associations. However, as those sectors have already gone significantly further, with 89% of council properties and 93% of housing association homes having working smoke alarms, it seems sensible to start with the sector where the need is greatest.

Very few people appear to disagree with the proposal. The National Landlords Association says:

“we already advise that it is best practice to install smoke alarms and carbon monoxide detectors in rental properties and are comfortable with this being made a regulatory requirement”.

The British Property Federation says that it

“supports the compulsory roll-out of smoke alarms and CO alarms across the rented sector”.

The Chief Fire Officers Association, which has provided me with very helpful information and guidance in preparing the Bill, is adamant that this proposal is one of the simplest and most effective ways to save lives.

The Government appear to agree. Section 150 of the Energy Act 2013 empowers the Secretary of State to make provision, by statutory instrument, to require residential landlords to ensure that tenanted properties are

“equipped with a required alarm”.

A required alarm is defined as covering smoke alarms and carbon monoxide alarms.

The public appear to support the proposal overwhelmingly. Research by YouGov, which was commissioned by Cheshire fire and rescue service but conducted nationwide, found that 93% of the more than 2,000 respondents agreed with the statement:

“Private landlords should be required by law to ensure that working smoke alarms are fitted in rented residential properties.”

A parallel YouGov survey of businesses found a very similar level of support, with 91% of the 690 respondents agreeing with the statement. Interestingly, when that was broken down by category of business, YouGov found 100% support among real estate respondents. That does not imply that there is opposition to the principle of regulation in the industry.

What can possibly be the objection to taking action? Why has the necessary statutory instrument not been introduced? The clue to answering that question appears in the DCLG consultation paper that was issued in February, to which I have referred. The paper, which is entitled “Review of Property Conditions in the Private Rented Sector”, sets out clearly the forceful arguments in favour of the mandatory installation of smoke alarms and carbon monoxide alarms as a lifesaver. However, the paper continues:

“requiring the installation of smoke alarms in all privately rented homes would impose additional costs on landlords.”

It concludes:

“Regulation is always a last resort and, as part of the review, we will also explore the scope for non-regulatory alternatives to promote further take-up.”

I find that regulatory burden argument wholly unconvincing. As I have pointed out, the National Landlords Association and the British Property Federation are in favour of the proposal. When the representative bodies for the businesses concerned are not complaining about the regulatory burden, why on earth do the Government see a problem?

The Government are sceptical about regulation, but that scepticism does not prevent them from imposing new regulatory burdens on landlords when they want to. For example, the Immigration Bill, which the House will debate this afternoon, will impose penalties of up to £3,000 on landlords who let premises to people who do not have leave to remain in the UK, even if they were unaware of their tenant’s immigration status. Landlord representatives have made it clear that they oppose that new regulatory burden, but the Government have insisted on keeping the provision in the Bill.

However, when landlord representatives are not opposed to a new regulation that would save lives, the Government appear less committed. That is, frankly, perverse. The cost would be tiny both in absolute terms and as a proportion of landlords’ income. A sealed smoke detector with a 10-year battery costs about £15, which is only £1.50 a year spread over the life of the battery. Even if three or four alarms needed to be installed, it would still be no more than £6 a year, compared with an average rental income from a private letting of more than £10,000 a year. The regulatory burden argument is wholly unpersuasive, and we simply cannot allow such a flimsy pretext to delay any further the necessary action to save lives.

Nor is it the case that, as the DCLG consultation paper implies, voluntary arrangements without a regulatory obligation will be an adequate alternative. We have certainly seen real progress in voluntary arrangements to date, with the number of existing homes protected by smoke alarms increasing dramatically over the past decades. However, a law of diminishing returns is at work. Landlords keen to do the right thing will almost all have installed alarms by now. Those who are negligent or indifferent to tenant safety may well not have done so. Without a legal obligation, it is unlikely that they will respond positively to further encouragement. That is one reason why landlord representatives are not opposed to making the installation of smoke alarms a regulatory obligation. It would ensure that there was a level playing field and help raise safety standards across the whole sector.

The failure of irresponsible or negligent landlords should no longer be allowed to damage the reputation of the whole private rented sector. The case for the mandatory installation of smoke alarms in all privately rented housing is overwhelmingly strong, which is why I am presenting the Bill as a call to action. I am delighted that it is supported by Members from throughout the House, and I am grateful to all right hon. and hon. Members who have agreed to add their names as sponsors. It is a simple, common-sense measure that would save lives, and I commend it to the House.

12:47

[Philip Davies (Shipley) (Con)]

I rise to oppose the Bill. First, like the right hon. Member for Greenwich and Woolwich (Mr Raynsford), I should draw the House’s attention to an interest declared in the Register of Members’ Financial Interests. As I have made clear before, I am a landlord, although an accidental one, and a tenant as well, so perhaps I am in an unusual position in being able to see both sides of the argument from personal experience. I want to place on record my thanks to the Residential Landlords Association for its help on the issue. Although it does not oppose the right hon. Gentleman’s proposal outright, as I do, it has highlighted to me a number of potential problems with it.

Perhaps I should start with something that the right hon. Gentleman failed to mention: his former ministerial role. He was the Minister in charge of this area of policy, and he had the opportunity to introduce the law that he suggests, but he did absolutely nothing about it. We should start compiling a list of things that Opposition Members ask for that they failed to do in their 13 years in office. The right hon. Gentleman has gone one step further, because he was the Minister responsible and did absolutely nothing. In fact, when he was questioned about what measures he would take to require more smoke alarms in properties, he used to give answers that mentioned everything apart from a mandatory requirement for private landlords to install them. He asks how on earth anyone could oppose the Bill, but the question for him should be why on earth he did not introduce it when he was the Minister responsible if it is such a fantastic idea. I might add that at the time he failed to introduce it, there were far fewer private landlords with smoke alarms and far more fires. If there was ever a time to do it, it would have been when he was a Minister, rather than now.

There is no doubt that the desire exists to reduce and eliminate the number of incidents and fatalities that horrifically result from fire accidents, but I wish to record my concerns about the Bill because I do not believe that it provides the necessary solution. Surely, it is obviously in everyone’s interests to have a fire prevention device installed in their property. In a rented property, the tenant would want one to protect themselves and their family, and the landlord would be keen to protect their property from any chance of fire damage—the figures bear that out.

In answer to a parliamentary question on 27 March, the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Keighley (Kris Hopkins), stated that 82% of privately rented properties already have a smoke alarm. As I find myself saying all the time, some people want to regulate everything in the name of a worthy cause. However, potentially criminalising law-abiding, decent landlords—the vast majority of whom, by anyone’s standards, have properties with smoke alarms already fitted—and adding to the burdens that could put them off renting their properties will have undoubted unintended consequences on the market and the very people this proposal seeks to protect.

The right hon. Gentleman spoke about the cost of this measure as though that were the only factor, but it is not. The risk of prosecution is a factor for landlords when making these decisions. The practicalities of implementing and enforcing a mandatory programme to install smoke alarms in private rented accommodation could make it incredibly inefficient and almost impossible to police. Although landlords would be legally obliged to install such devices in their properties, they would not be able to check the status of the alarm regularly. Shifting that responsibility to the landlord, who has irregular and unguaranteed access to the property, might result in testing becoming a less regular affair than would otherwise be the case.

We should also consider tenant responsibility. Given that time and again it appears that tenants interfere with fire protection devices in their property, how can the landlord be held responsible if those sensitive alarms are disconnected or tampered with? You do not have to take my word for it, Mr Speaker, because when the right hon. Gentleman was a Minister, he stated in a parliamentary answer that

“in approximately 9 per cent. of households containing fitted smoke alarms at least one alarm has either been disconnected or has had the battery removed.”—[Official Report, 13 January 2003; Vol. 397, c. 392W.]

How can a landlord be held responsible for that?

If a tenant were to remove the batteries, cover the sensor or disconnect the device completely without notifying the landlord, would it still be the landlord’s responsibility to ensure that those protection devices were engaged, and if so, how? [Interruption.] Opposition Members are chuntering, but they just like having noble ideas. They have absolutely no idea about the practicalities because they never think anything through. It is totally impractical, impossible and unrealistic to expect a landlord to check on the status of all smoke alarms in his or her properties on a daily basis to ensure that all devices are connected and operational. How on earth are they expected to do that? If smoke alarms are not working, they are pointless.

How many smoke alarms would be satisfactory? Guidelines seem to suggest that an alarm should be present on every floor of a property, but given the nature of private letting, where rooms are often let on an individual basis, will the landlord need to provide a separate alarm in all rooms of the property? Would one alarm in an eight-bedroom property be sufficient? Not only would excessive alarm installation amount to an increased financial burden on the landlord, but it would no doubt have a knock-on effect on tenants, who will pay extra to rent those properties.

A mandatory smoke alarm policy could reduce the use or consideration of alternative safety alarms and measures. I believe that heat alarms have been acknowledged as a suitable and in some cases more appropriate alternative to smoke alarms. They reduce the risk of accidentally triggering an alarm, which in turn lessens the chances of tenants actively disengaging them. The Residential Landlords Association recently pointed out that it is clear from relevant British standards and Local Authorities Co-ordinators of Regulatory Services guidance, that in certain situations the fitting of a heat alarm is more appropriate. Smoke detectors are not appropriate in kitchens because of the higher risk of accidentally setting off the alarm. [Interruption.] Labour Members do not like listening to this because they have not thought it through. Any mandatory policy on smoke alarms could create a climate where landlords might remove a more effective heat alarm system and replace it with a less effective smoke alarm system that would be less suitable for the type of property and tenant, just because of the right hon. Gentleman’s diktat.

I understand that private rented accommodation is already covered by an extensive amount of safety regulations, including on fire safety, which makes this proposed extra burden seem completely unnecessary. Local authorities already have powers to require the provision of smoke alarms where necessary through the housing, health and safety rating system. A British standard underpins various provisions for the installation of fire detection, along with LACORS guidance, as agreed by the Department for Communities and Local Government and the Chief Fire Officers Association, and that is the basis for fire protection in existing dwellings. A clear downward trend in fire deaths and injuries has been evident for many years in fire statistics. Although those statistics are encouraging, they bring into question the need to adopt compulsion for fitting smoke alarms when steps are already being taken in the right direction and with excellent results.

Finally, I have great concerns about discriminatory treatment in relation to private landlords. If the intention is to promote fire safety, surely the right hon. Gentleman’s motion should apply to the mandatory installation of smoke alarms in all types of accommodation and not single out private landlords. Given everything that I have said, I do not believe there should be any move towards the mandatory provision of smoke alarms in private rented accommodation. As mentioned, the Bill applies only to private landlords, not to social housing or owner-occupied homes, despite the threat of fire not respecting such boundaries.

The Labour party thinks that, whatever something is, it must be regulated, that there must be a law for it and that we must have more burdens and unnecessary regulations, but I think that this provision is completely unnecessary. The right hon. Gentleman needs to explain why he did absolutely nothing to introduce this measure when he was a Minister and in a position to do so. I oppose this Bill. I will allow the right hon. Gentleman his moment in the sunlight and his moment of glory, and I will not seek to divide the House. However, I hope that the Minister will register my points and not introduce this ridiculously unnecessary nanny-state proposal.

Question put (Standing Order No. 23).

12:57

Division 265

Ayes: 245

---

Labour: 196
Conservative: 24
Liberal Democrat: 14
Democratic Unionist Party: 6
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Independent: 1
Green Party: 1

Noes: 8

---

Conservative: 8

Ordered,

That Mr Nick Raynsford, Jim Fitzpatrick, Alistair Burt, Mr Andrew Love, Mr Adrian Sanders, Mrs Mary Glindon, Peter Aldous, Mr Barry Sheerman, Mr David Amess, John Healey and Bob Blackman present the Bill.

Mr Nick Raynsford accordingly presented the Bill.

Bill read the First time; to be read a Second time on Thursday 15 May, and to be printed (Bill 207).

Water Bill (Programme) (No. 2)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Water Bill for the purpose of supplementing the Order of 25 November 2013 (Water Bill (Programme)):

Consideration of Lords Amendments

(1) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion three hours after their commencement at today’s sitting.

(2) The proceedings shall be taken in the following order: Lords Amendments Nos. 15 to 30, 32, 33, 43 to 64, 101 to 103, 107 to 147, 1 to 14, 31, 34 to 42, 65, 66, 104, 67 to 100, 105, 106.

Subsequent stages

(3) Any further Message from the Lords may be considered forthwith without any Question being put.

(4) The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—[Harriett Baldwin.]

Question agreed to.

Water Bill

Wednesday 7th May 2014 Commons Chamber

Consideration of Lords amendments

[Mr Speaker]

I must draw the attention of the House to the fact that financial privilege is involved in Lords amendment 142. If the House agrees to it, I will cause an appropriate entry to be made in the Journal.

Clause 10

Agreements by water undertakers to adopt infrastructure

13:11

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)]

I beg to move, That this House agrees with Lords amendment 15.

[Mr Speaker]

With this it will be convenient to discuss Lords amendments 16 to 30, 32, 33, 43 to 64, 101 to 103, and 107 to 147.

[Dan Rogerson]

The Lords amendments relate to the subject of market reform, and in particular to retail exits. By that I mean allowing an incumbent water company to exit from the market for retail services to non-household customers.

Lords amendments 15 to 30, 43 to 48, 101 to 103 and 107 to 147 are minor technical or consequential amendments to the market reform provisions in the Bill—for example, changing wording from “a code” to “the code”. Some are minor and technical amendments relating to cross-border pipes. Lords amendments 32 and 33 ensure that the Consumer Council for Water is consulted on water company charges schemes. The Government are keen to ensure that customers are protected, and are grateful to Opposition Members for highlighting the important work done by the council on behalf of customers. We expect it to contribute to all discussions about the future of the industry, and we are pleased to have been able to enhance that in the Bill.

Lords amendments 49 to 52 would implement recommendations made by the Delegated Powers and Regulatory Reform Committee in another place. We are very grateful for the Committee’s scrutiny of the Bill. I do not propose to refer to the amendments in detail, but I shall be happy to respond to any specific queries.

Lords amendments 53 to 64 deal with the issue of retail exits, which we have discussed previously in the House. The Bill seeks to introduce a range of reforms that will enhance and extend competition in the water sector. The Government believe that the development of competition in the sector will bring real benefits to customers. They listened to, and acted on, well-argued contributions to the debate on market reform, especially the calls for incumbent water companies to be able to choose to exit from the non-household retail market.

I think it would be appropriate for me to expand on the retail exit amendments, as the House is not familiar with the clauses involved. The amendments differ in some crucial ways from amendments on the subject that Members have seen before. When drafting the amendments, we were particularly careful to ensure that customers were protected, both the non-household customers who will be transferred to a different retailer and the household customers who will remain with the incumbent. Non-Government amendments tabled by Members here and in another place have not reflected those safeguards fully.

The Lords amendments relating to retail exits contain three core principles. Exits must involve non-household customers only, they must be undertaken voluntarily, and they must ensure the ongoing protection of customers. Any exit will be possible only with the consent of the Secretary of State. Other amendments that the House has considered did not grapple with those key issues. These amendments create broad, permissive powers in what will be a very complex area. Further work will be required to consider the practical implications of exits, and to develop the detailed policies that will underpin the use of the powers. We will therefore be consulting widely with all interested parties as we develop our approach and produce exit regulations.

13:15

So what do the Lords amendments actually do? They give the Secretary of State powers to establish, through regulations, a framework that permits incumbent water or sewerage companies—with the consent of the Secretary of State—to stop supplying any retail services to current or future non-household customers in their areas of appointment. The services will then be provided by one or more retail licensees. Any incumbent water company whose area is wholly or mainly in England will be able to apply to the Secretary of State to exit from the non-household retail market for that area.

This approach reflects amendments tabled by parties in both Houses, but builds on them by increasing safeguards. These amendments ensure, for example, that in allowing retail exits we will not make forced separation possible, which an amendment tabled by the hon. Member for Dunfermline and West Fife (Thomas Docherty) would have done. We do not want to take risks with a successful model, given the challenges that we face in building the resilience of the sector, which is a crucial aim of the Bill and our programme of water reform. We cannot risk damaging investor confidence.

The amendments are enabling only, and we are committed to full public consultation on how best to implement the provision for retail exits. We will consult on the content of draft regulations by the end of the year. We will work closely with incumbent water companies, Ofwat, the Competition and Markets Authority, the Consumer Council for Water and others as we develop our approach and produce the regulations. We will also send a copy of the draft regulations to the Environment, Food and Rural Affairs Committee to give it an opportunity to comment. In addition, Ministers will make themselves available to Members of both Houses for further discussions as we develop the regulations, given the limited opportunities for parliamentary scrutiny of this part of the Bill.

Let me explain some key elements of the regulation-making powers. They provide for the protection of both household and non-household customers who are affected by the exit. As I have said, it is of paramount importance that we ensure that customers are protected. The regulations may provide for the transfer of customers, and set out what will happen in an area where a company will no longer be providing retail services for non-household customers. They must ensure the protection of any non-household customers who are subject to a transfer, as well as household customers who remain with the incumbent. The amendments enable the Secretary of State to make regulations that establish strong safeguards. That extends to requiring the exiting incumbent to take certain steps before making an application, such as consulting its customers.

Our intention is that any exit must be voluntary, and must be delivered in a way that ensures continued protection both for non-household customers and for householders who will not be able to switch their suppliers. In order to prevent forced separation or exit, the amendments require the Secretary of State to consent to any application to exit.

Lords amendment 54 also sets out some of the grounds on which an application to exit could be refused—for example, if the company could not demonstrate that exit was in the best interests of customers or in the public interest. Lords amendments 59 and 61 also underline our intention that exits should be voluntary. In developing the exit regulations, we recognise the regulatory independence of the competition authorities, and the provisions are not intended to undermine it.

The Enterprise and Regulatory Reform Act 2013 reaffirmed the importance that the Government ascribe to an independent competition regime. Lords amendment 61 enables the Secretary of State to make a statement about the Government’s policy on voluntary exits. Any statement issued would fully reflect the Government’s wider approach to competition and the independence of the regulators. Lords amendment 62 provides a power to make changes in the duties and powers of a number of public bodies, including Ofwat and the Competition and Markets Authority. The amendment is necessary because the exit regulations are likely to involve changes in the existing legislative regime. Its scope is limited to the necessary adaptations of the framework governing the exit arrangements in the water sector. Any changes will be very specific to retail exits.

Let me end by welcoming the hon. Member for Penistone and Stocksbridge (Angela Smith) to her new position. While we may disagree on matters of policy from time to time, I have the greatest respect for the contribution that she makes in the House—and it is good to have someone of Cornish descent facing me across the Dispatch Box.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

May I start by thanking the Minister for his kind comments?

As it is some time since the Bill was debated on the Floor of the House, I want briefly to refresh the memories of Members on it. It includes many important reforms that attempt to build on three important reviews taken forward by the previous Government: the Pitt review on flooding, the Walker review on affordability, and the Cave review on competition.

Throughout the Bill’s long passage through Parliament the Opposition have been supportive. In the Commons we voted for it on Second Reading and on Third Reading. In the other place, although we raised legitimate concerns and challenged the Government, again we remained broadly supportive of the Bill. We have backed measures to increase competition. We have supported measures that will provide a statutory basis for agreement on flood reinsurance, providing affordable insurance to households who would have otherwise not been covered. However, as my hon. Friend the Member for Garston and Halewood (Maria Eagle) pointed out on Third Reading, there still remains even now a major hole at the heart of the Bill, and at the heart of the Government’s water policy: the absence of any serious attempt to tackle the impact of rising water bills on household budgets, which is adding to the cost of living crisis.

Unfortunately, the Government have failed to back a new national affordability scheme that would have ended the current postcode lottery in which companies choose whether to offer a social tariff and set the criteria for eligibility. Last year the industry made £1.9 billion in pre-tax profits, of which they returned £1.8 billion to shareholders, yet fewer than 25,000 people are eligible to benefit from social tariffs offered by just three water companies. In many ways, therefore, the Bill represents a missed opportunity and remains seriously flawed, despite its being improved by amendments made in the other place.

Although we will not vote against any of the first group of amendments, that does not mean that we believe that the Bill could not have been made stronger and more effective through the adoption of our amendments. We are where we are, as they say. While, as the Minister pointed out, most amendments in the group present a series of technical and drafting changes, amendments 32 and 33, amendments 49 to 52 and amendments 53 to 64 make significant changes to the Bill that was debated in the Commons.

Amendments 32 and 33, which were originally introduced in Committee by Lord Grantchester, give a new role to the Consumer Council for Water. They will require Ofwat to issue rules that will mean that the CCW must be consulted by water and sewerage undertakers on all charges schemes. That will allow the CCW to play a role at an early stage in the charges process and will enable it to flag up problems, before the relevant bills start arriving on customers’ doorsteps and further problems occur. For example, as Lord Grantchester pointed out in Committee, the CCW had previously challenged the charging plans of some companies that restricted half-yearly payment options for those on direct debit payments. Some customers prefer to pay on a half-yearly basis, as it better enables them to manage their money.

Although we welcome the amendments, which we promoted in the other place, it is a pity that the Government have not gone further by accepting our argument that we need to tackle the impact of rising water bills on household budgets. As I said, the Government could have backed our plans for a new national affordability scheme that would have ended the current postcode lottery in which companies choose whether or not to offer a social tariff, with no minimum standards in place to ensure fair and effective affordability measures.

Amendments 49 and 50 introduce parliamentary scrutiny for any regulations that the Secretary of State may deem fit to introduce under clauses 37 and 39. The amendments, which were introduced at a very late stage—I think on Third Reading in the Lords—mean that the affirmative procedure will now apply on the first exercise of those powers. That is quite right, especially given the importance of the regulations in question. It is a pity, however, that the Government have been forced into this position and have had to be pushed into introducing the amendments by Labour Members and the Delegated Powers and Regulatory Reform Committee in the other place. That Committee made firm recommendations in this regard, and has rightly argued that the Secretary of State would have enjoyed so-called Henry VIII powers over many parts of the Act if the Bill had remained unamended, so Parliament is right to assert its right to scrutinise the relevant regulations as and when they see the light of day.

Amendments 53 to 64 deal with retail exit. I want to put it on the record that we have also backed measures in the Bill that increase competition to support businesses that wish to enter the retail market for non-domestic consumers. The measures are similar to those that have been a success north of the border; Scotland became the first country in the world to introduce competition to the non-domestic water market in 2008. We find it odd, however, that the Government have repeatedly dragged their feet in relation to allowing such businesses to exit this market. Without our persistence, which was shared by peers on the Government Benches, the Government’s original proposals would not create a market at all.

Retail exit enjoys a great deal of support, including from Ofwat, the Environment, Food and Rural Affairs Committee and some of the major water companies. Indeed, in Committee, amendments introduced by the Chair of the Select Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), were not supported by the Government. In the other place, Lord Whitty commented that there was bemusement in all parts of the House as to why the Government were so resistant to the concept of exit in the new retail market, and introduced an amendment that would have allowed it. His arguments were not, however, supported by the Government, who gave the lame reason that such a measure would cause investor insecurity. On Report, Lord Moynihan introduced an amendment that would have gained our support, but he withdrew it on advice that the Government would introduce an amendment on Third Reading. Although we welcome the Government’s late conversion, we have to wonder why they resisted such a measure during most of the Bill’s progress through this House and the other place. Surely it would have been more appropriate if the amendments had been brought forward earlier, to allow adequate parliamentary scrutiny. Once again, however, we are where we are.

It is also right that, when and if regulations are brought forward by the Secretary of State, they will be laid before both Houses under the super-affirmative procedure. I pay tribute again to the work of the Delegated Powers and Regulatory Reform Committee in highlighting the need for that even at the 11th hour of the Bill’s passage through Parliament.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

First, I welcome the hon. Member for Penistone and Stocksbridge (Angela Smith) to her new position, and pay tribute to her predecessor, the hon. Member for Dunfermline and West Fife (Thomas Docherty). I understand that they have performed a job swap. The hon. Gentleman has made a big contribution to this debate and, in the past, to the work of the Environment, Food and Rural Affairs Committee. I can only apologise to both Front-Bench teams that there are not more colleagues from the Committee here today. The reason for that is that we are undertaking a farm visit this afternoon. I had to give my excuses and will be joining colleagues later for the completion of the visit today and tomorrow. It would be churlish of me not to congratulate my hon. Friend the Minister and welcome both the outbreak of common sense in the other place and in the Department and a very welcome and worthwhile amendment.

I shall briefly go over the deliberations in the Select Committee and the earlier proceedings in this place. In our report on the draft Water Bill, the Committee strongly recommended that the Bill should include provisions to enable incumbent companies to exit the retail market voluntarily. Indeed, as the hon. Member for Penistone and Stocksbridge mentioned, the Committee tabled a new clause in my name on Report to provide for retail exit. Also, during the course of the inquiry both regulators—Ofwat and the Water Industry Commission for Scotland—the incumbent companies and new entrants were united in calling for the Bill to include an exit route. WICS provided a welcome and helpful explanatory note, and I hope the amendment it proposed during the Commons stages of the Bill will bear fruit today.

13:30

In the Public Bill Committee, Opposition Members proposed a new clause to allow the incumbent companies to choose to provide to the retail market or wholesale market only, subject to approval by the Secretary of State. Regrettably, that amendment was lost, but we heard some powerful arguments in favour of allowing retail exit, which include the following: an exit clause is needed to allow the market to function as a normal competitive market; a company should be able to organise its business in the way it considers best for the interests of shareholders and customers; and an exit clause facilitates entry by new entrants, particularly larger ones, into the water and sewerage retail market, as they would not have to win one contract at a time. Without today’s amendment, economies of scale would work against new entrants, either preventing them from entering the market or, at the very least, reducing the benefits they could provide to new customers because of the higher costs of entry. It is also not in the interest of the companies or customers to force companies to stay in a market when they have no or very few customers. It is, therefore, entirely appropriate that the amendment recognises that this is about the proper functioning of the market.

Many of the amendments in the group are technical and I do not propose to comment on them, but I believe they go some way towards resolving issues with the drafting of the Bill or addressing concerns expressed during the Lords stages of the Bill. Clearly the amendment on retail exit is the most substantial. I echo the hon. Lady’s concerns, as I am sure other hon. Members would, about the lateness of the hour of this move, but the amendment is before us today and we should welcome its content. I believe the Minister recognises that there are a wide range of views in the industry on this subject, and all companies will wish to have the opportunity to provide input on the detailed arrangements that would be needed to ensure that any option for companies to exit voluntarily the non-household retail market did not have unintended consequences. Therefore, we should welcome the positive development of the amendment providing appropriate opportunities, as he explained, for full engagement and consultation with all interested parties and for consideration of all potential implications of allowing voluntary exit from the non-household retail market. I particularly welcome the role that will be played by the Consumer Council for Water, because it has, certainly in my area, a positive role to play.

I ask the Minister to elaborate on one comment made by Lord De Mauley in the other place when these amendments were discussed on Third Reading. He said that regulations made under these provisions on voluntary exit would be subject to an “enhanced affirmative” procedure, whereby draft regulations would be laid before the House. I have not heard that expression before, so I would welcome any clarification the Minister can provide on it. The right for companies to exit in this way reflects market conditions and it can only enhance investor confidence, because anything else would have been an intolerable situation, as a company would not have been allowed to exit, thus placing both company and its customers in a difficult position. Obviously, it is pleasing to note that the draft regulations will be subject to the full scrutiny by the Select Committee on Environment, Food and Rural Affairs, and our having the earliest sight of the regulations will permit us to perform that scrutiny within the timetable he has set out. I also welcome the fact that the Department has allowed a full consultation. With those remarks, I welcome this small group of amendments, as I recognise that allowing a voluntary exit can only enhance the Bill’s provisions in this sector.

[Dan Rogerson]

First, may I welcome you to the Chair, Ms Primarolo? I thank the hon. Member for Penistone and Stocksbridge (Angela Smith) and my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) for their contributions today, and the latter for the contribution she has made as Chair of the Select Committee, both throughout this process and long before any Bill was formally considered in both Houses.

The hon. Member for Penistone and Stocksbridge raised a number of issues and returned to the issue of affordability. The Government have made it clear that the best thing we can do on affordability is keep bills low for everybody by having a robust regulator and setting out to that regulator the policy framework to which we aspire in order for things to happen. The regulator has taken good action to explore with companies what they can do to keep bills lower; that is the trend we are seeing into the next price review period, with some companies bringing it forward into the current period as well, to the benefit of all consumers. Of course, this Government took action to deal with the acute situation in the south-west, where bills were much higher than everywhere else in the country. The hon. Lady rightly points out the contribution that social tariffs can make and the fact that three companies have introduced them. Other companies are bringing them forward in the next year or so, following consultation with their customer base. It is important that that consultation takes place, because introducing social tariffs involves a funding mechanism.

The Opposition have talked of a national scheme, but they did not introduce one when they were in government. We can continue to debate that, but my concerns with such a scheme, and those of the Government, are that the situation in each water company area is different. Therefore, one scheme mandated across the whole area will have different impacts on different customer groups across those water company areas and may have perverse impacts on the bills of some, given the different demographics and mix of bill payers. We are not convinced of that approach, but I welcome the Opposition’s support for social tariffs where they have been introduced.

The hon. Member for Penistone and Stocksbridge raised the issue of parliamentary scrutiny, as did the Chair of the Select Committee. We have listened to concerns and examined the use of the affirmative procedure where necessary. When we get into the realms of the super-affirmative procedure I bow to those with more experience of the range of options at the House’s disposal and how such a procedure might be used. We feel that the affirmative procedure is the correct one to take things forward, but we very much welcome the work done by the relevant Committee in another place to make suggestions on how to ensure that Members of both Houses, and those observing our deliberations externally, will have confidence that we have got things right.

I spoke earlier about the position on retail exits, but there are a couple of further things to say in response to the two speeches we have just heard. First, the Government’s position has never been that such exits should never happen and that we would never make proposals for them. We said at earlier stages that we had concerns, given the range of opinions held across the industry. Both regulators have supported such provisions throughout, whereas the Consumer Council for Water had a much more nuanced position. Some companies were very concerned about it, as were some investors, particularly with regard to pressure for the forced separation of companies. We know that investors would be concerned about that, and we want to see continuing investment in improving resilience, which is a key feature of where we are going with our programme. We are very concerned about the position of household customers, who will not have the options under this Bill that non-household customers have.

With that in mind, we have introduced amendments that take heed of arguments made by Opposition and Government Members, as well as people outside the House, and which put in place safeguards that make sure that all customers are protected throughout any process of change. There will be further consultation, as my hon. Friend the Member for Thirsk and Malton has said, which is crucial, and the question of forced separation, for example, can be addressed. On that basis, the amendments introduced by the Government allow us to move forward on the potential for retail exit in a measured way. That is the difference between the earlier debates on the Bill and where we are now. I thank the hon. Member for Penistone and Stocksbridge for her contribution, and I thank my hon. Friend the Member for Thirsk and Malton and the Committee for the work that they have done.

[Miss McIntosh]

I am most grateful for what my hon. Friend has said, but would he clarify the enhanced affirmative procedure?

[Dan Rogerson]

When the House considers options on the enhanced affirmative procedure there is a range of processes that can be used, but we believe that the affirmative procedure is the correct one with regard to most of the changes that we have discussed this afternoon. I thank hon. Members for their contributions to the discussion on this group of amendments. I hope that the House approves the amendments and that we can agree the changes made in another place.

Lords amendment 15 agreed to.

Lords amendments 16 to 30, 32, 33, 43 to 64, 101 to 103, 107 to 147 agreed to, with Commons financial privileges waived in respect of Lords amendment 142.

Clause 8

Bulk supply of water by water undertakers

[Madam Deputy Speaker (Dawn Primarolo)]

The Minister will move Lords amendment 1 formally. [Interruption.] I am sorry, Minister, I did not intend to cut you off. I meant to say that the Minister will move Lords amendment 1.

[Dan Rogerson]

I am grateful, Madam Deputy Speaker. I am delighted that the Chair has such confidence in what happened in another place that she does not need to hear anything further.

I beg to move, That this House agrees with Lords amendment 1.

[Madam Deputy Speaker]

With this it will be convenient to consider Lords amendments 2 to 14, 31, 34 to 42, 65, 66 and 104.

[Dan Rogerson]

As you have shown, Madam Deputy Speaker, there are many amendments in this group, so I shall try to make my explanation as brief as possible, as I sense that that will be popular.

This group of amendments was tabled in the other place to build on and strengthen further the existing environmental protections under the Bill and to provide reassurance regarding the timetable for abstraction reform and its relationship to the upstream reforms in the Bill. In particular, this group of amendments reinforces environmental protections under the bulk supply and private water storage regimes, improves the resilience duty and the strategic policy statement, and places a new duty on the Secretary of State to provide Parliament with a progress report on abstraction reform.

This group also contains a number of minor and technical amendments. As before, I will not dwell on them, but I am happy to consider any points that hon. Members wish to make. The Government welcome the scrutiny that the Bill has received, and we have listened carefully to all the speeches made in this House and another place. Protection of the environment is close to my heart, and it is important to the Government too. Indeed, one of the Bill’s main objectives is to increase the resilience of our water supplies to ensure a future in which water is always available to supply households and businesses without damaging the environment. I am therefore delighted to bring back a number of important amendments that will ensure the continued protection of the environment.

First, the Government have strengthened environmental protections under the bulk supply regime under clause 8. There are already several bulk supply agreements in the current system and there is a number of environmental protections in place. However, we have listened to the concerns raised on this issue during the passage of the Bill and have enhanced those protections accordingly. Ofwat can only order, vary or terminate a bulk supply agreement at the request of one of the parties, and after consulting the Environment Agency or Natural Resources Wales. Our amendments strengthen the consultation requirement by clarifying the fact that Ofwat can take environmental considerations into account before ordering, varying or terminating a bulk supply agreement. The amendments add a requirement for Ofwat to consult the Environment Agency and Natural Resources Wales before it issues the codes in this area.

13:45

Water companies have statutory environmental duties that prevent them from entering into bulk supply agreements that would damage the environment. However, our amendments reinforce this protection by adding a requirement for such codes to require the parties to a bulk supply agreement to consult the relevant environmental regulator before entering into the agreement. We have also added an enforceable duty on the supplying party to provide information about the water supplied at the request of the relevant environmental regulator.

Secondly, we have strengthened the environmental protections with regard to water supply agreements under clause 12. We have amended the clause so that the regulations about water supply agreements between incumbent water companies and other relevant parties can require Ofwat to consult the Environment Agency or Natural Resources Wales before ordering, varying or terminating such an agreement. The amendments to clauses 8 and 12 will provide a greater role for the Environment Agency and Natural Resources Wales. We recognise the important role that those bodies play in ensuring that environmental considerations are taken into account. This is a more proactive approach and one that the regulatory bodies support.

Thirdly, I am pleased to note the widespread support for the new resilience duty under clause 22. Following debates in another place, that support has been further strengthened so that it explicitly requires Ofwat to promote the efficient use of water by water companies. That could include, for example, capturing and retaining water by investing in new water storage or by tackling leakage. That will ensure that this precious resource is used as efficiently as possible, and it will contribute to the Bill’s objective of increasing resilience in the water sector.

Fourthly, we have amended clause 24 so that the Secretary of State and Welsh Ministers must have regard to social and environmental matters when setting strategic priorities and objectives for Ofwat. Clause 24 is designed to help Ofwat to weigh all the relevant considerations appropriately when making regulatory decisions. We agree with Members in the other place that the consolidated guidance must include social and environmental considerations. We have therefore clarified the fact that social and environmental matters form an integral part of this process.

Finally, we have tabled a significant amendment that will place a new duty on the Secretary of State to report to Parliament on progress on abstraction reform in England within five years of Royal Assent. This amendment signals the Government’s determination to progress abstraction reform and ensures that the Government are fully accountable to Parliament for the delivery of this commitment. In practice, this will mean that a written progress report will be laid before Parliament no later than early 2019. We cannot commit to a timetable for introducing legislation on abstraction reform, but our aim is to introduce the necessary legislation early in the next Parliament. The report will also provide the opportunity to update Parliament on the preparations for implementation of both abstraction reform and upstream reform, and how the two are closely aligned, as well as setting out any other progress on moving towards a more sustainable abstraction regime.

[Angela Smith]

I thank the Minister for introducing the second group of amendments, which relate to some very important provisions in the Bill.

Lords amendments 1 to 14 are largely drafting amendments, but they include some important additions to the Bill. Lords amendments 1 to 3 detail the efficient use of water resources and take into account the effect on the environment of water use, with particular reference to what constitutes a bulk supply agreement with water undertakers, and the effect of such agreements on the environment. Lords amendments 1 to 14 and Lords amendment 31 give a greater role, as the Minister acknowledged, to the Environment Agency and Natural Resources Wales with regard to the effects on the environment of bulk supply agreements. We welcome the strengthening of the role of these two bodies to provide environmental expertise and to prevent bulk supply agreements from damaging the environment.

Amendments 34 to 42 relate to social and environmental safeguards more generally, and amendment 38 in particular requires that the Secretary of State and Welsh Ministers “must” have regard to social and environmental matters when compiling their statements to Ofwat, thereby strengthening the requirement in the Bill. The change from “may” to “must” have regard is a major concession by the Government. Given the importance of securing environmental safeguards at the heart of all aspects of water management, one can say only that it is surprising that the Government did not make that amendment of their own volition, rather than as a result of facing pressure from Members of both Houses on the point.

It is important to put on the record our deep disappointment that the Government have not gone further and recognised the need to make the Bill stronger and more effective by making sustainable development a primary duty for the regulator, as is the case with other regulators. We believe that resilience and the associated term that the Government use here—“the efficient use of water”—are not good enough. In the water White Paper, the Government said that they would carefully consider the case for that, and many environmental organisations are concerned that Ofwat does not have the necessary powers to prevent environmental damage and damaging water exploitation. That is particularly important in the light of greater competition, where companies will be looking to maximise efficiency however they can. Without a tough regulatory duty, that could come at the expense of the environment. My question to the Minister about the Government’s failure to grasp the opportunity presented by the Bill to strengthen regulation in this regard is this: why have they failed to respond to this vital issue in a robust manner and safeguard our environment?

On water abstraction, the Government’s White Paper, “Water for Life”, published in 2011, set out the case for a comprehensive reform of abstraction licences, suggesting that the current licensing system was outdated and in need of urgent reform to deal with increasing pressure on water resources—an issue with which we are all now familiar. Pressures develop because of population change and climate change. The Government tabled an amendment requiring the Secretary of State to publish a report on abstraction reform within five years. That is in the context, however, of the Government’s decision to allow the introduction of greater competition in the upstream market to take effect before reform of the abstraction regime.

We, along with leading environmental experts, are concerned that without comprehensive abstraction reform, upstream competition could incentivise existing abstraction licence holders to sell their water to water companies, even when the catchment is already over-abstracted or over-licensed. In response, the Government have said that the Environment Agency is adequately placed to review and/or change abstraction licences. We do not agree with that assessment.

In his response to their lordships’ amendments, Lord De Mauley said:

“The Environment Agency will soon use its powers to revoke or vary abstraction licences without compensation where they are causing serious damage to the environment.”—[Official Report, House of Lords, 4 February 2014; Vol. 752, c. 163.]

However, following budget cuts, the Environment Agency has cut 600 staff since 2010, so surely the Minister must concede that the Environment Agency will now have less capacity effectively to discharge its duties in that respect. What will be the priority for this smaller, rather emaciated, Environment Agency—flood defence schemes or attention to abstraction reform? Given its much reduced resource, is the Minister confident that the Environment Agency can manage all its duties effectively?

Under the new market conditions created by the upstream market reforms in the Bill, more water could be abstracted from water courses than is sustainable or suitable for local ecosystems. We support the amendment for upstream market reforms to allow new water undertakers into the market, but we still think it wise for the Government to deliver progress on abstraction reform, running concurrently.

We asked the Government to bring forward reformed abstraction licences on the same day as the upstream reform measures in the Water Bill come into effect, but they have unfortunately neglected to do so. Instead, under amendments 65 and 104, the Secretary of State is required to produce a report on progress made on water abstraction reform within five years of the Bill being passed, as the Minister indicated. We do not oppose that amendment because it is better than nothing, but it is unsatisfactory overall, because unsustainable water abstraction could continue for some time after the Bill has been passed—before DEFRA effectively addresses the issue.

In conclusion, why are the Government reluctant to commit to ensuring that the abstraction reforms run concurrently with the upstream marketing reforms? I look forward to hearing the Minister’s answer on that point.

[Miss McIntosh]

I shall make just a few comments. Over the last three years, events in Yorkshire have certainly shown the unpredictability of the weather, which can swing from a real flood to a virtual drought within a matter of weeks. The hon. Member for Brent North (Barry Gardiner), whom I see in his place on the Opposition Front Bench, and my hon. Friend the Minister sat in the Environment, Food and Rural Affairs Committee when we debated these issues—both at the pre-scrutiny stage and when the amendments to the Bill were tabled. It was a constant theme of the Select Committee to call for the implementation of abstraction reform—certainly by 2022. If I understand the Minister correctly, he is saying that this will happen within five years of the Act being passed, whereas we asked for it within seven years. It looks as if we are on course.

Personally, I would have made the case to include abstraction reform within the context of the Bill. I hope this does not come home to roost in the intervening five, six or seven-year period, but given the climatic changes and swings in weather patterns that we have seen, I hope we do not rue the day that we failed to include abstraction reform in the Bill. I understand that there was no appetite for it and that the Department felt, as I am sure the Minister will confirm, that doing so would have brought an inevitable delay to the Bill.

The reason abstraction reform should be included, and the reason I welcome this group of Lords amendments, is that the current system of managing abstraction of water from rivers and aquifers was introduced in the 1960s and is woefully out of date. It does not effectively address the severity of pressures on water resources due to increasing demands from a growing population and an increasingly varied climate. The Environment Agency has mentioned that in a number of areas, including my own, it cannot, for understandable reasons, afford the upkeep of existing flood defence banks. Farm land in those areas will be prone to future floods.

Water from rivers and aquifers has many uses, and there is a fine balance between industrial and non-industrial use. I visited the constituency of my hon. Friend the Member for Witham (Priti Patel), which I had the privilege of representing as an MEP for 10 years, to see the difficulties that many industrial users such as jam manufacturers and others experienced in a climate that they were not used to. Essex has on occasions been compared to Egypt in respect of the amount of water fall that it receives. The weakness in the current system means that it could start to constrain economic growth, reduce the resilience of the water supply and lead to environmental damage.

14:00

I would like to hear what discussions the Minister is having with the European Commission’s water unit. That used to be chaired by someone whom I count as a friend, Grant Lawrence, who was a British official who did great work for the European Union, but who was mindful of the uses of water and the competition for use between agricultural users, anglers and industrial users. Mr Lawrence left a number of years ago and since then I have been briefed on a number of occasions by the water unit, and I am struck by the fact that it does not understand our approach to water use. One reason for that, as it explains it to us, is that our rivers might seem long to us, particularly the Thames, meandering as it does through a number of counties, but compared with the Rhine and the Danube they are not. So it approaches river quality, water quality, and—dare I say?—abstraction in a completely different manner from us. When the Bill receives Royal Assent and we proceed within the timetable that my hon. Friend has set out, what discussions will he have in relation to water abstraction and abstraction reform on the reforms to the water framework directive and the other EU directives that are trundling down the river as we speak? That is important with regard to drafting and considering water abstraction reform.

I hope that my hon. Friend will again say that there will be plenty of opportunities to consult a variety of industrial users, and, obviously, I would make a bid for the Select Committee to be consulted at an early stage. I would like to make a plea for the farmers. I represent a deeply rural constituency, and there is concern among the farming community that delaying abstraction reform until 2020 or 2022 will mean that their interests are disregarded, more so in times of drought than in times of flood.

The detail of any abstraction regime will need to be developed following the Government’s consultation, which closed at the end of March, and, as my hon. Friend has set out, legislative proposals will be produced. One of the difficulties with the Bill, which I hope the water abstraction reform legislation will not suffer from, is a bane of the legislative programme. This point of the legislative Session is like midnight, and we have only one more year. I hope that we can make a plea for adequate time in the legislative programme in the next Parliament for the new regime to be introduced and properly considered.

The Opposition tabled a new clause whereby upstream reform could not have been implemented until new primary legislation on the licensing of abstraction had been passed, and they made the case for five years to elapse to allow for its implementation, and that has echoes in what the Government propose today. I would have preferred the new clause that we moved on Report to have seen greater favour, but I take this opportunity to welcome today’s amendments.

It is appropriate to raise water efficiency in terms of abstraction and the environmental protection measures that my hon. Friend set out. The Water Industry Commission for Scotland raised concerns throughout the Bill’s passage that retailers should focus on offering water efficiency advice and other environmental services as opposed to companies being encouraged to cherry-pick customers to the detriment of the generality of an incumbent’s customer base. The amendments that I understand came from WICS were not successful, but they sought to remove the link between the proposed wholesale authorisation and the proposed retail authorisation, by requiring those with wholesale authorisations to interact with water companies rather than retailers, and further that Ofwat would be under an obligation, among other things, to set charging rules in a way that helps to incentivise water efficiency and other services. The Government resisted those amendments, but they go to the heart of what the hon. Member for Penistone and Stocksbridge (Angela Smith) said about the background reports that have seen fruition in this group of amendments, in particular the Anna Walker report on water efficiency. Each and every one of us has a role to play by not heating more water than we need and not running water while we clean our teeth, all of which have an effect. I hope my hon. Friend will have some regard to the powerful arguments that have been made when we go on to consider greater efficiency and in the context of abstraction reform.

[Dan Rogerson]

Once again, I thank hon. Members for their contributions. It is fair to say that we have a great deal in common, although with slightly different emphases in aspects of debate both today and during previous outings. The crucial issues concern the interaction between what is in the Bill and what is not with regard to abstraction reform and the parallel process, so I take this opportunity to reassure the House that the Government are fully committed to abstraction reform, as our amendment tabled in the other place demonstrates.

Further illustrating that commitment, the Government’s consultation on our proposals for reform of the abstraction regime closed on 28 March. We are analysing the responses, a summary of which we will publish later this year. The proposals in our consultation document demonstrate how seriously we take abstraction reform, as well as the complexity of reforming such a long-established regime. As has been said, it is crucial that we get that right and give people an adequate chance to express their opinions and for those to be taken into account. Our proposals reflect how important abstraction reform is for people, as well as for the environment, and the fact that organisations and individuals throughout the country need access to water to run their businesses.

The Government want to see a real improvement in the quality of water bodies throughout the country, and that means that we must take action to reduce over-abstraction that damages the environment now, while continuing to protect the environment and ensuring access to water in the more challenging conditions that we will face in the future. Abstraction reform and upstream reform are both designed to help to achieve that goal. The intention is for them to be entirely complementary, both in design and in implementation. Both are part of the Government’s wider agenda for securing the long-term resilience of our water supplies and the water environment, as set out in the water White Paper. The upstream reforms in the Bill are important because they will build resilience in the sector, bringing in new thinking and innovation to drive efficiency. Upstream reform will help to keep bills affordable and benefit the environment. We estimate that these reforms will bring benefits of up to £1.8 billion over 30 years.

As I have said, the report to Parliament on progress with abstraction reform will provide the opportunity to update Parliament on the preparations for the implementation of both abstraction reform and upstream reform, and how the two are being closely aligned. There is therefore no question about our commitment to abstraction reform, and no case for delaying implementation of our upstream reforms.

On the points made by the hon. Member for Penistone and Stocksbridge (Angela Smith), we are carrying on the process begun by the previous Government of looking at the reform issues, and we seek to demonstrate that this is an ongoing commitment. There is much support across the House for taking these matters forward, so we can have confidence that the two processes can be aligned.

We considered the sustainable development duty in depth. The Ofwat review recommended that that not be included because it was not necessary. I have sought throughout to make the point that we can integrate the desire for sustainability in the resilience duty, and that is what we did during the Bill’s passage through this place. That move was welcomed by the non-governmental organisations that originally called for the sustainable development duty. In another place we have further drawn out the emphasis on water efficiency. Water efficiency is important not just for environmental reasons—although they are crucial and we want to see the responsibility to improve environmental quality returned to water bodies—but to ensure that we have the water resources that we need to deliver the growth in the economy, allow businesses to grow and to prosper, and deal with the challenges that we face in the future.

Another issue that was raised was the capacity of the Environment Agency to use the powers that it has now and to take forward the regime without compensation. The hon. Member for Penistone and Stocksbridge rightly said that that capacity is now at its disposal. Indeed, the Environment Agency gave evidence to the Public Bill Committee and was quite clear that it has the resources to undertake such duties. It has been undertaking work to return water to the environment to bear down on unsustainable abstraction, and it will continue to do that. It is something on which it will remain focused. This is crucial in respect of our consideration of sustainable development in that, unlike other regulatory regimes, there are multiple regulators of the water sector. We have the Environment Agency, which has a great focus on that particular activity, Ofwat and the Drinking Water Inspectorate. The regime is slightly different from that in other utilities.

My hon. Friend the Chair of the Select Committee was right to make it clear that we need careful consideration of the abstraction reform process, and it is very much the Government’s position that we will provide the opportunity for such work. Were we simply to have put in the Bill some sort of broad enabling power, it arguably would not have had the consideration that it will get as primary legislation in a future Bill, and that is absolutely right in terms of taking forward that process. On that basis, I hope the House will support the amendments made in another place.

Lords amendment 1 agreed to.

Lords amendments 2 to 14, 31, 34 to 42, 65, 66 and 104 agreed to.

Clause 51

The Flood Reinsurance Scheme

[Dan Rogerson]

I beg to move, That this House agrees with Lords amendment 67.

[Madam Deputy Speaker (Dawn Primarolo)]

With this we may take Lords amendments 68 to 100, 105 and 106.

[Dan Rogerson]

This group of amendments is mainly to do with flood insurance measures, and includes the Government’s response to the recommendations on flood insurance from the Delegated Powers and Regulatory Reform Committee. It also includes a small number of minor changes.

Lords amendments 70, 75, 81 to 83 and 91 to 95 are in response to the Delegated Powers Committee’s recommendations on the flood insurance measures. The amendments include changing the scrutiny procedures so that the affirmative resolution procedure is used for all regulations—in certain cases on first use only—and placing some definitions in the Bill.

We agree with the Delegated Powers Committee that the definitions are important. However, it was not possible to include all of them in the Bill as they require further consultation and, in the case of “relevant insurer”, have separate meanings for Flood Re and for the flood insurance obligation—the alternative proposal. By defining those terms in regulations that will be subject to the affirmative procedure, Parliament will be able fully to scrutinise these definitions in due course.

The Delegated Powers Committee also recommended that the powers to make regulations to provide for the sharing of council tax data should be subject to the affirmative procedure. However, to meet the commitment to establish Flood Re in 2015, we need to release the council tax information as soon as possible after Royal Assent to ensure that IT systems can be put in place. Lords amendments 77 to 79 place that data-sharing power in the Bill. I hope that hon. Members will see that that is necessary owing to the challenging timetable to deliver Flood Re. Lords amendments 74, paragraph (ab) to amendment 93 and amendment 100 make consequential changes based on the new power. Although that power does not mandate the release of data, the Government are committed to doing so. They also give a power to add to the list of data releasable in the future. If we do that, the powers also allow for the application of a criminal sanction—for example, where the additional information is of a particularly sensitive nature warranting the protection of a criminal sanction for misuse. It is right that we have powers to protect the release of public information, but the sanction is not automatic and we will consider whether one is necessary following consultation.

14:15

I wish to turn briefly to another Lords amendment on the subject of Flood Re’s reserves. To ensure that the power set out in clause 54 cannot compromise the sound operation of Flood Re and its orderly management, a small change was made to make it clear that the scheme administrator’s consent is to be sought first if regulations are proposed to be made requiring reserves to be paid to Government. That consent means that the scheme administrator is able to object to any prudentially unsound proposals, as well as to make representations on the retention of some or all of the reserves; consequently, there is no longer a need to consult the Prudential Regulation Authority as well. Members can be assured that the Prudential Regulation Authority will continue to be closely consulted on this and all other regulations made in relation to the Flood Re scheme.

Lords amendment 72 allows the Secretary of State to require Flood Re, through regulations, to provide information for relevant insurers to pass on to their policyholders who will benefit from Flood Re. We expect the information to cover the Flood Re scheme, flood risk and the actions householders can take to reduce the risk and impact of flooding.

[Andrew Percy (Brigg and Goole) (Con)]

I am intrigued by and interested in this amendment, not least because so many of my constituents—perhaps the majority of them—live in flood-risk areas. Will the Minister say a little bit more about what he envisages the Secretary of State will require to be provided to residents in terms of mitigating risk? This is an interesting idea, but my question is about the breadth of that information and whether it will include particular providers of certain solutions.

[Dan Rogerson]

The first thing that will be taken forward is information that a policy has been ceded to Flood Re. It is important that people should know that, as the scheme has a life span and the whole direction of policy is to protect more homes and to move to a post Flood Re period in due course. What exactly that information will take forward is a matter for discussion with the industry. When it comes to particular technologies or particular things that may help in certain circumstances, there are experts out there who offer that advice to policyholders. The Government’s current repair and renew scheme is in operation. There is also a body of work out there involving local authorities, which is giving people confidence in what might be done to support them. It is not our intention to be too specific as we consider this measure in the Bill.

I am sure that, like my hon. Friend, other Members will welcome this amendment, because it reflects our belief that it is important that policyholders whose buildings, contents or combined insurance policy are ceded to Flood Re know about their flood risk so that they can take simple steps to manage it. I am talking about signing up to free flood warnings as well as investigating other longer-term options.

To plan for the future, households also need to understand the likely impact of the transitional nature of the Flood Re scheme which is subsidising their premiums. Members should note that it is expected that standardised information will be sent to the customer by the relevant insurer that is ceding the policy to Flood Re, as that maintains the relationship between insurers and their customers.

Lords amendments 84 and 85 provide the power to define in regulations the meaning of “flood” and “flood risk” and are as a consequence of the amendment that I have just described.

Lords amendment 96 addresses the risk that secondary legislation made at the end of the life of Flood Re could be classed as hybrid. I can assure Members that, in any event, we have every intention of carrying out a full consultation before making that secondary legislation to ensure that any private interests are properly considered.

There are also a small number of technical changes made by the Lords amendments to the Bill. They cover the definition of the “eligibility threshold” and are intended to ensure the flood insurance measure is legally enforceable, as the risks relating to flooding are not calculated consistently across the various insurers.

On another matter, the Lords amendments to clauses 56 and 71 on the period of operation of Flood Re ensure that employment contracts within the scheme are transferrable.

Turning finally to the subject of sustainable drainage systems, we have also corrected an error to schedule 3 to the Flood and Water Management Act 2010 to ensure that unused bond funds, called in by a SUDS approving body, can be returned to the right person.

[Angela Smith]

As the Minister has explained, this group of amendments relate, to the provisions in the Bill on flood reinsurance. Again, we will support the amendments, which we believe have materialised primarily because of pressure from a wide range of Members in the other place and from the official Opposition. However, we believe that more could have been done.

In many ways, this is yet another example of a missed opportunity to produce effective and robust legislation. We support the Flood Re scheme and believe that it is important that affordable cover is made available for those who are struggling and are at greatest risk from future floods. It is also important that the policy should be underpinned by the principle of minimal impact on wider bill payers, so it is important that the levy agreed between the Government and the industry remains equivalent to about £10.50 for each UK household with both buildings and contents insurance in place.

We also welcome the fact that Flood Re is designed to be progressive, with the benefits targeted on lower income households, but we are disappointed that the Government could not support Labour’s amendment in the other place, which would have at least enabled parliamentarians to shine a light on the potential problems created by the arrangements for leasehold and tenanted properties. As Lord Whitty pointed out, there are complicated qualifying or excluding conditions surrounding the ownership and occupation rules under the scheme.

The rules could also have an impact on the private rented market, as there is a fear that single property landlords, for instance, might find that their exclusion from the scheme means that the cost of insurance eats away at their capacity to invest in their properties. As Lord Whitty pointed out, the consequence could be increasing levels of dilapidated housing stock with potential impacts at a neighbourhood level. The only option that might be open to the landlord to raise funds for improvements could be to raise rents or the service charge, so tenants might suffer indirectly as a consequence of being excluded from the Flood Re scheme. The risk is clear: the number of new landlords prepared to invest and buy property will diminish in the areas that are affected. Given the housing crisis facing the country, that is not a welcome prospect.

Although we recognise that the actuarial calculations for Flood Re are delicate and depend on various assumptions, we feel it is important that Parliament understand, the position. Labour’s amendment would address that by ensuring that a report was made available so that Parliament could see for itself the consequences of including or excluding different combinations of property before taking the Flood Re scheme forward via statutory instrument.

We also feel that the Government have failed to grasp the importance of using reliable scientific evidence on the potential impact of climate change when making estimates of the current and projected number of properties eligible for inclusion in the Flood Re scheme. That is perhaps not surprising, given that the Secretary of State has been known before now to deny the reality of climate change, but the threat, as most of us agree, is real and we need to be sure that the scheme will operate effectively within its 25-year span and will be adaptable to weather conditions resulting from climate change. If they are to adapt effectively, it is crucial that households can access information that identifies current and projected estimates of the number of people eligible for the scheme.

It is entirely sensible that we should seek the advice of the Committee on Climate Change to inform as accurately as possible our calculations on the challenges that the Flood Re scheme will face over time. Only then can households truly take the necessary action to minimise risk. The Government have tabled amendments providing information on transitioning from Flood Re to risk-reflective pricing, which Labour has been arguing for throughout the passage of the Bill.

Flood Re cannot operate on a static basis. It needs to respond to changing weather patterns, and we continue to believe that the Secretary of State should take advice from a credible expert source. Lord Krebs, chair of the adaptation sub-committee, has indicated that he would be willing to take on that role. However, our amendments, along with others on access to the national database and the right to appeal, were not accepted by the Government. We think that is short-sighted, but we support the amendments in this group and will continue to engage positively on this important issue.

[Miss McIntosh]

When we took evidence on the insurance aspects of the Bill during the Select Committee’s scrutiny stages, we were told that the package on Flood Re stood as a whole and that we could not consider any exceptions—not small businesses or leaseholders, or anything else, and certainly not band H. I hope that my hon. Friend the Minister will permit me a wry smile as I see that some of those exceptions have been included.

I hope that my hon. Friend will clarify the position on leaseholders. I—like many others, I am sure—have been contacted by constituents asking me to consider the implications for an owner who buys a leasehold property, as my constituents did in their block of flats. Apparently, the cost under Flood Re of the flood insurance alone will run to thousands of pounds, which they cannot afford and which they believe will affect their ability to resell those properties. I would be grateful for an explanation of where we are on that.

I understand that my noble Friend Lord de Mauley confirmed in the other place that domestic contents policies will be available to all under Flood Re, regardless of whether the properties are leasehold or freehold, rented or owned-occupied, except for properties in band H and those built since 1 January 2009. I have seen on many of my flood visits around the country that tenants on low incomes are often the first not to take out an insurance policy for their contents. The cost is therefore greater when they have to replace many of their possessions, some of which are of course priceless and cannot be replaced. Will domestic contents policies indeed be available to all?

Will my hon. Friend the Minister confirm the intention behind the exception for band H properties? It seems bizarre. We are going to exclude from Flood Re leaseholders who are perhaps on lower incomes and often in smaller, more affordable properties, but people in band H tend to be wealthier and in a better position to afford insurance. I want to understand the situation so I can explain to my constituents why these exceptions have been considered.

I know that the date of 1 January 2009 was taken as the benchmark, but did the Department ever look closely at why that was a good date to choose? With hindsight, should it perhaps have been 1 January 2012 or 1 January 2013, when we first began closely to scrutinise these issues through the proposals from the Department and the work of the Select Committee and others in this place?

It would also be helpful to understand the position for small businesses, particularly farms. If the farmhouse itself has been flooded, will that be covered in the provisions of Flood Re?

14:29

The greatest concern—I am sure the Minister will recall that I raised it earlier—remains that the Government may end up as an insurer of last resort because Flood Re will not cover a one-in-200-year or one-in-250-year event. We found out that the winter floods in 2013-14 were a one-in-200-year event, so it will be sooner rather than later that the Government will end up as the insurer of last resort. The House will be interested to learn what provisions the Treasury has in place if that occurs earlier than might have been assumed, because there will not be money in the pot if the winter floods are repeated in the autumn of 2014 and 2015.

The hon. Member for Penistone and Stocksbridge (Angela Smith) raised an interesting issue that we discussed in Committee. The evidence we took was that the subsidy was then £8.50. It has already gone up to £10.50, and we need an assurance from the Minister that there will not be an open remit to the insurance industry and that the level of subsidy will be reasonable. Before the Bill leaves this place today, the Minster should comment on what the Treasury has in place were the Department and the Government to be an insurer of last resort.

I have two more issues pertaining to this group of amendments. One concerns regulated as opposed to negotiated access. Amendments were proposed to make it clear in the Bill that access should be regulated, not negotiated. The amendments were unsuccessful, but I understand that the Department has given a commitment that access terms should be regulated. Can the Minister give a commitment today that that will be in the regulations that will give effect to the Bill?

An issue that caused great concern in our pre-legislative scrutiny in Committee and later was the de-averaging of charges. Concern was raised about the risk of a competition or EU challenge to the Department’s guidance or Ofwat’s implementing rules on harmonised or regionally averaged wholesale charging, which could result in a forced de-averaging of charges. My understanding is that that could be seriously bad news for rural areas and I would like the Minister to put my mind at rest. Amendments were proposed to address that risk, but the Government did not accept that the risk existed or, if it did, that the existing provisions in the Bill were not adequate to address it. Any de-averaging of charges that might arise through the application of the Bill would be highly regrettable. Otherwise, I welcome this group of amendments, but I hope that the Minister can put my mind at rest on the concerns I have raised.

[Andrew Percy]

I intend to make only a short contribution. The Minister probably heard most of what I said in Committee, but if something is worth saying once, it is worth saying three times, so I will do so.

I begin, as I did in Committee, by welcoming Flood Re, which is important. I pay tribute to the Government for getting us here eventually. It is incredibly important for my constituents and those of my near neighbour, my hon. Friend the Member for Beverley and Holderness (Mr Stuart), who is here for this important debate. I am grateful and delighted that we have a scheme up and running to ensure that insurance cover will continue.

I am still concerned about the scheme’s limitation to properties built before 2009—a point that is often made by my constituency near neighbour, the hon. Member for Kingston upon Hull North (Diana Johnson). Many people in my constituency and constituencies nearby who bought their properties in good faith post-2009 have struggled to obtain insurance. I am still concerned that major developments on flood plains are continuing, including the Lincolnshire Lakes project near the River Trent in my constituency, where the proposal is to provide up to 10,000 properties in a major flood risk area on the River Trent’s natural flood plain. I have called on the developers to put a hold on that until we know where we are with flood defence funding for the Humber catchment area, but unfortunately that has not enjoyed the support of local Labour councillors, who accused us of scaremongering in trying to prevent that building on a flood plain. That is a concern because I am worried that the properties will be built but will not be covered by Flood Re and that there will be a whole set of other problems.

When I was in my constituency on Friday, visiting Hook church, which was launching its new heritage boards, I was approached by a single-property leaseholder who is concerned about whether he will qualify for Flood Re. He is not a major investor, but an individual who is using the property as a pension pot. He has been rejected for flood insurance yet again because of the flooding in Goole two years ago, and he is worried that he will not come within Flood Re. I echo the words of my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) about the need for clarity.

I welcomed amendment 72 when I intervened on the Minister. Informing residents that they are indeed part of Flood Re and providing practical advice on their exact flood risk and how they can deal with it are important. The Minister mentioned the renewal and repair grant, which is an excellent proposal. Providing people with the means and advice on how to protect their properties is important, and funding is required. Whether or not there is funding, there is a big job to be undertaken to ensure that residents are properly informed about their flood risk and how they can protect their properties.

Many residents have it in mind that the only way to protect their property is through every-increasing defensive banks in our area, and that may be true, but it is not the answer to everything, particularly as my constituency is so low-lying. Much of it is below high-tide level, so it is impacted not only by tidal and river flooding, but by surface water flooding. Getting information to residents to ensure that they know how to protect their property is vital. I welcome amendment 72 and look forward to establishing in more depth what information will be provided on flood mitigation measures.

The Minister mentioned the renewal and repair grant. I hope that it is in order, Madam Deputy Speaker, to raise that while I am on my feet. Many of my constituents are trying to use the grant, but there seems to be confusion about whether they will be able to access it if the Environment Agency has come up with community improvement schemes. That is a particular issue for one of my communities because the Environment Agency, after pressure from many of us, has come forth with a scheme that will be in place next year to raise defensive banks at Reedness in North Yorkshire. It is not now clear whether those properties will be eligible for a renewal and repair grant. They will still be at risk of flooding and, in the spirit of amendment 72, which is about providing people with more information on how to protect their properties, it is important that they still have access to the grant. It is not their fault that their improvement scheme will come forward more quickly than other schemes. I hope, Madam Deputy Speaker, that I am in order by linking the matter to amendment 72. I can see from that near-thumbs up that I am straying, so I shall move on.

Right of appeal is another issue that I spoke about in Committee. We need a mechanism of appeal for residents who are judged to be outside Flood Re. We know from the debates in Committee and elsewhere that that will be a very small number of people, but they are an important group all the same. It is important to have a mechanism that allows people to understand why they have been drawn outside the scheme, and they should have a right of appeal. Like my hon. Friend the Member for Thirsk and Malton, I ask Ministers to consider this.

I do not want to say much more. [Interruption.] I hear some chuntering from Opposition Front Benchers—in support of my last comment, I hope. If the hon. Member for Penistone and Stocksbridge (Angela Smith) wants to intervene, I will gladly give way. No? Okay.

[Maria Eagle (Garston and Halewood) (Lab)]

Sit down!

[Andrew Percy]

The hon. Lady tells me to sit down; that is a good way to work cross-party, if ever there was one. I will heed her advice, however.

I hope that the Minister will be able to respond to those few comments, particularly on leaseholders. This is an important issue for residents who have made small investments for their pension pots, or in lieu of a pension pot, and who may now be drawn outside the scheme. Other than that, I support the scheme and the amendments outlined by the Minister.

[Dan Rogerson]

I thank all hon. Members who have contributed to this debate, across a broad range of issues, and welcome their questions.

All three Members who spoke mentioned leaseholders. Let me put on record again the point alluded to by my hon. Friend the Member for Thirsk and Malton (Miss McIntosh). All contents policies would be eligible for Flood Re, whether leasehold, freehold, rented or owner-occupied, provided that the properties were built before 1 January 2009 and are in council tax bands A to G. Leasehold houses will also be within the scope of Flood Re in terms of buildings insurance, provided that the leaseholder lives in the property and purchased the buildings insurance in their own name. Flats will be eligible provided that there are no more than three flats in the building and that the freeholder, or one of those with a share of the freehold, lives in the building and takes out the cover.

[Miss McIntosh]

My hon. Friend says that the scheme applies if there are no more than three flats in the building. Where we lived—the current residents now have the problem—there could be 12, 16 or 20 properties. These are small properties that tend to be more affordable and occupied by those with a mortgage. Residents have put it to me that the increases are unaffordable already. Insurance companies are extracting those increases from them when they renew their insurance policies in an area that they know has already been flooded at ground-floor level because of the properties’ proximity to the river. I urge the Government to revisit this, because it is not acceptable. I do not want to pander to the Opposition’s argument about the standard cost of living, because that would be inappropriate, but I do believe that the Government should make the insurance affordable by reducing the cost. They should take out the below-three number because they have to reflect what working families are living in.

[Dan Rogerson]

We believe that a significant proportion of the leasehold sector will fall within the scope of Flood Re if the properties are at the highest levels of flood risk. I should emphasise, however, that we expect that most properties will not need to be in Flood Re and will find better prices through normal routes. We have been assured that there is no evidence of a systemic problem with freeholders being unable to obtain insurance for their leasehold properties. Specifically, feedback from members of the Association of British Insurers, representing over 60% of the market, including specialist commercial property insurers, showed no expectation of a widespread issue in an open market. As for the small businesses that are outside the scope of Flood Re, we and the ABI will monitor the market over time.

14:45

My hon. Friend the Member for Thirsk and Malton raised a number of other issues, including small businesses, as she has done before. It is important to focus on the fact that the scheme is for residential properties, not for the commercial insurance market. Commercial cover tends to be far more bespoke and of a different nature to the policies that householders usually have. This is relevant to her point about the levy that is paid into the pot. In seeking to add to that pot in terms of what is paid out and the level of risk, we would have to add to what everyone else is paying for. We think that the balance is right and that the level of a more transparent cross-subsidy—there is already a cross-subsidy within the market that has been more hidden—is focused on household policies and not on commercial policies. The danger is that, once we start to get into the more commercial arena, we are then asking for a cross-subsidy from householders to commercial landlords. We therefore think it important to draw this line. Landlords already benefit from tax relief on the cost of their buildings insurance policies. They can offset many of their costs through taxable allowances that can significantly reduce their tax bill—to zero, in some instances. The hon. Member for Penistone and Stocksbridge (Angela Smith) referred to this being more progressive, and I welcome her support. That is one of the reasons why we have had the scheme structured as it is.

My hon. Friend the Member for Brigg and Goole (Andrew Percy) mentioned properties built after 1 January 2009, as did my hon. Friend the Member for Thirsk and Malton. This is in line with the prior agreement with the industry. As I am sure my hon. Friend the Member for Thirsk and Malton is aware, that is where the date comes from, so it should not come as a surprise to those constructing properties in flood risk areas. It is a pre-existing cut-off date that we have carried forward into the new arrangements. As my hon. Friend the Member for Brigg and Goole pointed out, properties built after 1 January 2009 should have been constructed in line with national planning policy and should therefore be resilient to flooding and able to access affordable insurance. Maintaining this approach under Flood Re will help to ensure that new development is appropriate and resilient to flooding. That covers the points made by my hon. Friend the Member for Thirsk and Malton about the levy, in which I have confidence. We have to make sure that we base it on existing assumptions and do not seek now, at this late stage, to add other potential draws on the reserves of Flood Re and the scheme as a whole.

Flood Re will be an authorised insurer operating under the requirements of solvency II. Insurers must hold capital reserves that can be used to cover the cost of a catastrophic event. To assess the required capital reserves, insurers must keep their detailed catastrophe models up to date, including any changes in levels of insured risk such as from climate change. Flood Re will need to take account of climate change as part of its regulatory obligations in ensuring that it remains solvent over time. We therefore expect it to seek the best available advice on climate change, including external verification of its assumptions. Detailed audited information about Flood Re’s ongoing operation will be reported to Parliament on a regular five-yearly basis. Parliament will have the opportunity to vote on the levy and the eligibility thresholds of the scheme. I assure colleagues that the impacts of climate change will be considered during the entire lifetime of the scheme to ensure that Flood Re is resilient to changes to flood risk.

I would like to reassure my hon. Friend the Member for Thirsk and Malton about one-in-200-year events and what we experienced during the winter flooding this year. Although she may be right to point out that we had the wettest January in about 250 years, that does not equate to a one-in-200-year flood event; they are different things. As we have heard from hon. Members in several debates over the past few months, the effects of flooding are extreme for the families and businesses affected, but because about 8,000 properties were affected during the recent winter floods, we were nowhere near triggering the sorts of events that she mentioned. Should a one-in-200-year event occur, however, we have been clear that the Government have no direct liability. The Government would take primary responsibility for deciding how all available resources would be used, but the Government are not an insurer of last resort in that they do not have financial liability for Flood Re.

[Miss McIntosh]

Will my hon. Friend hark back to the evidence the Select Committee heard from the insurance industry during pre-legislative scrutiny? We were told categorically that, if there is a one-in-200-year event, the pot into which the subsidy will be paid, on which we all agree, will not be sufficient to pay out the resources, and it is generally accepted by the insurance industry that the Government will step in. Perhaps that is a different phrase from the one that my hon. Friend might use, but it means that the buck stops with the Government.

[Dan Rogerson]

We have been absolutely clear that, in such an event, the resources from the Flood Re pot would be significant and the Government would be involved in discussions about how that money would be used to help the people affected.

Although we have been focusing on Flood Re, my hon. Friend also asked about de-averaging. I want to use this opportunity to put on the record the fact that the Government’s charging principles on de-averaging are unambiguous. Ofwat must not allow de-averaging that is harmful to customers, particularly rural customers. Our charging guidance will follow soon. I am happy to commit, as I have before, to making it plain in that document that there must be strong, definitive boundaries for the scope of any de-averaging and that households in particular must be protected.

We should not, however, be over-simplistic. There is no doubt that there are areas where better cost reflectivity could have substantial benefits for the environment and the resilience of our water supplies. It must be right that the new upstream markets should reflect the environmental costs of supply and that there are economic incentives for business users that use large volumes of water.

My hon. Friend the Member for Brigg and Goole asked about the operation of current Government grant schemes. It might not be appropriate to go into that in detail now, but I would be happy to respond to correspondence from him on the specifics of how the scheme in his area is working.

I thank hon. Members for their contributions to our debates on the Bill today and at various other stages in this and another place. I hope that the House will agree with their lordships’ amendments.

Lords amendment 67 agreed to.

Lords amendments 68 to 100 and 105 and 106 agreed to.

Immigration Bill (Money) (No. 2)

Queen’s recommendation signified.

Resolved,

That, for the purposes of any Act resulting from the Immigration Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenditure incurred under or by virtue of the Act by a statutory body or recognised charitable organisation.—(James Brokenshire.)

Immigration Bill (Programme) (No. 2.)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Immigration Bill for the purpose of supplementing the Order of 22 October 2013 (Immigration Bill (Programme)):

Consideration of Lords Amendments

(1) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion three hours after their commencement at today’s sitting.

(2) The proceedings shall be taken in the order shown in the first column of the following Table.

(3) The proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.

Immigration Bill

Wednesday 7th May 2014 Commons Chamber

Consideration of Lords amendments

[Madam Deputy Speaker (Dawn Primarolo)]

I must draw the House’s attention to the fact that financial privilege is involved in Lords amendments 7, 16 and 24. If the House agrees to any of these amendments, I shall ensure that the appropriate entry is made in the Journal. I should also tell the House that Mr Speaker has selected the five manuscript amendments tabled today by the hon. Member for Brent Central (Sarah Teather). Copies are available in the Vote Office.

Clause 60

Deprivation if conduct seriously prejudicial to vital interests of the uk

14:54

[The Minister for Security and Immigration (James Brokenshire)]

I beg to move, That this House disagrees with Lords amendment 18.

[Madam Deputy Speaker]

With this it will be convenient to take Government amendments (a) and (b) in lieu of Lords amendment 18.

[James Brokenshire]

The fundamental duty of any Government is to protect the British public and maintain the security of the UK against a range of threats. There is a small but very dangerous number of individuals who, despite having taken an oath of loyalty to become a British citizen, seek to threaten the security of this country. Those same dangerous individuals seek to exploit a loophole in our legislation preventing us from removing their citizenship if it would render them stateless, even temporarily, while they reacquire their former nationality. This Government have sought to address that issue, in line with our international obligations to protect the security of the UK.

Our proposals, previously debated in this House on 30 January, sought to extend the existing deprivation powers of the Home Secretary so that a naturalised British citizen who has conducted themselves in a manner seriously prejudicial to the vital interests of the UK—I underline the high bar that has been set—can be deprived of their citizenship, regardless of whether it would render them stateless. We believe that is vital for the security of the UK and an important point of principle. It is not right that people who subvert our values and fight against our armed forces should invoke our protection and enjoy the privileges of British citizenship.

Many of the debates on this issue have focused on the use of the existing powers in the UK and overseas. I remind right hon. and hon. Members that the Home Secretary has long-standing existing powers to deprive a British national of their citizenship where that individual acquired it using fraud or where she is satisfied that doing so is conducive to the public good. Where fraud has been used, a decision can be made to deprive, which leaves a person stateless. Our proposals have built on the non-conducive powers to target a narrow cohort of naturalised Britons who are a real threat to our national security.

[Sarah Teather (Brent Central) (LD)]

Is the Minister able to clarify the numbers involved and how the Secretary of State and, indeed, her predecessors have used those powers? The Joint Committee on Human Rights has repeatedly asked for those data, but has been unable to access them. I have asked similar questions and have also been unable to get the data, so could the Minister tell us how many people have had the power used against them?

[James Brokenshire]

It might be helpful if I explain that since the law was changed in 2006, 27 people have been deprived of their citizenship through different conducive powers. Twenty-six people have been deprived on the grounds of fraud, false representation or concealment of a material fact, and one further person has been notified of the intention to deprive on those grounds. Perhaps that gives my hon. Friend an idea of the context in which the power is used. It is used extremely sparingly: it is not undertaken lightly and the Secretary of State considers its use extraordinarily carefully.

I recognise that the proposals that were suggested when the Immigration Bill was last before this House have, rightly, provoked a great deal of debate and discussion. It is important that the House understands the significance of the measures and that the other place has had an opportunity to consider them after our debate on Report. There has been much debate, both here and in the House of Lords, about the impact of leaving a person stateless, and there are concerns about those who cannot acquire another nationality.

15:00

Although the Government are confident that our original proposals would have affected only a small number of people—given the pre-existing utilisation of the power and the high hurdle that needs to be cleared, most people would have been able to acquire their former nationality or another—we are now seeking to address the concerns expressed about leaving individuals permanently stateless and with no recourse to another nationality. Our amendment (a) provides that deprivation of nationalised citizens under clause 60 can take place only when the Home Secretary has reasonable grounds to believe that, under the laws of a country or territory, an individual is able to become a national of that country or territory.

[Dr Julian Huppert (Cambridge) (LD)]

Amendment (a) is certainly a helpful move on some, if not all, the concerns, but how will the provision be interpreted? For example, if somebody who is not a British citizen leaves another country and would otherwise have claimed asylum in this one, will that factor be taken into account? Will the Home Secretary be able to take into account the idea that a country may refuse to give citizenship because we had taken away their British citizenship? How will she make it work in practice?

[James Brokenshire]

It may be helpful if I say that the Home Secretary will consider the relevant nationality laws of a person’s country and that person’s circumstances, and she will make a decision based on whether, under those laws, the person is able to acquire another nationality. The test is whether there is a route under the law, but she will have regard to other considerations—for example, about practical or logistical arrangements. Those considerations will obviously vary from case to case, but she will consider them in forming a view. We have reflected that in the concept of the reasonable grounds. The Home Secretary will need to be satisfied about those reasonable grounds in determining whether the proposed power can be utilised.

[Pete Wishart (Perth and North Perthshire) (SNP)]

What happens if no other nationality is available? Does the Home Secretary simply give up?

[James Brokenshire]

The hon. Gentleman clearly makes the point about what we are seeking to achieve in respect of the concerns highlighted in the House and elsewhere, which is that if the Home Secretary cannot satisfy herself on reasonable grounds that the individual can acquire the citizenship of another state, she will not be able to use the power.

In this context, we are seeking to address the specific issue highlighted by the Supreme Court in the al-Jedda case, with which many right hon. and hon. Members are familiar. The case showed that the existing law was well within our international obligations, but we are seeking to act on the Supreme Court’s statement in that case about how to address the issue appropriately. We judge that the proposed provision is an appropriate mechanism for guarding our national security. It will ensure that what appears to be a loophole identified as a consequence of the al-Jedda case is not open to abuse and, building on the existing deprivation powers, it will therefore ensure that our national security is properly protected.

[Several hon. Members]

rose—

[James Brokenshire]

Various people are attempting to catch my eye. I give way to my hon. Friend the Member for Forest of Dean (Mr Harper).

[Mr Mark Harper (Forest of Dean) (Con)]

I am listening carefully to what my hon. Friend is saying, and the House should realise that he is simply putting the law back to its position before it was changed by the previous Government. I listened carefully when we debated the issue on Report, and many of the concerns involved people who have no recourse to citizenship elsewhere being left permanently stateless. Government amendment (a) deals with the very real concerns of many hon. Members. It is a very welcome move that should be supported.

[James Brokenshire]

I am grateful to my hon. Friend for his intervention. I pay tribute to him for his work on the Bill and for the steps he took, quite properly, to consider not only this issue, but the provisions more broadly. We will no doubt move on to those provisions in considering the Lords amendments. My hon. Friend highlighted the fact that the law was changed in 2002. In many respects, we are seeking to bring the law back more closely to the pre-existing position. The law was changed in 2002, and changed again in 2006. There is, therefore, a long history, with clear precedents to setting provisions that comply with our international and UN obligations on statelessness.

[John McDonnell (Hayes and Harlington) (Lab)]

I want clarification about what the reasonable grounds are. Amendment (a) could be interpreted to mean that someone has to prove that no country or territory on the globe is willing to accept them as a citizen. That cannot be the interpretation of reasonableness in this amendment, can it?

[James Brokenshire]

The hon. Gentleman needs to understand that the particular concern—the gap that has been identified—relates to someone with dual nationality who surrenders their second nationality to prevent the deprivation provision from applying to them and to prevent the Secretary of State from using the powers as she can now do for dual nationals. The Home Secretary needs to consider such factors in considering whether she is satisfied that the relevant test set out in amendment (a) has been met. She would need to show such reasonableness, and that reasonableness might be tested in the courts, because whether her determination was reasonable would be justiciable or challengeable in the courts.

[Several hon. Members]

rose—

[James Brokenshire]

I can see that my hon. Friend the Member for Brent Central (Sarah Teather) wants to make a second intervention, and I will then give way to my hon. Friend the Member for South Swindon (Mr Buckland).

[Sarah Teather]

I want to follow up the Minister’s answer to my hon. Friend the Member for Cambridge (Dr Huppert). The Minister said that the issue was about having a route in law to secure another citizenship, but he rather glossed over the practical barriers that many people face in obtaining another citizenship. Will he put on the record more information that might help those of us with concerns about amendment (a), as drafted, particularly about what constitutes an objection to the Home Secretary proceeding in relation to practical impediments to such people gaining another citizenship, rather than the provision necessarily being used as a route in law?

[James Brokenshire]

As I have said, the primary consideration is for the Home Secretary to research various materials and determine whether the individual could reacquire their former nationality, because that is what we are largely talking about in the circumstances of considering such laws. I am sure that she would also have to consider practical issues and the other surrounding circumstances. It is difficult to be specific, as individual facts and cases will no doubt be relevant to the provision. She will, therefore, wish to consider those other practical or logistical arrangements as part of her determination about whether there are reasonable grounds for the individual to secure citizenship from another state.

[Mr Robert Buckland (South Swindon) (Con)]

I want to press my hon. Friend on justiciability. Is he now satisfied that amendment (a) deals with the convention issue about deprivation of citizenship not being exercised arbitrarily, but proportionately? Does the amendment meet such tests?

[James Brokenshire]

Yes. My hon. Friend rightly points to article 15 of the universal declaration of human rights, which makes a point about protection against the arbitrary deprivation of nationality. We are very clear that the provision is not arbitrary. It is a very focused and proportionate power that meets not only those requirements, but our obligations under the UN convention on the reduction of statelessness of 1961, and the declaration made by the UK when it ratified that convention in 1966. We have considered our international obligations very carefully. We believe that the provision absolutely complies with the obligations that we have set for ourselves.

[Fiona Mactaggart (Slough) (Lab)]

All the examples that the Minister has used relate to cases in which he expects people to reacquire a nationality that they gave up to avoid having their British nationality taken away. If that is his intention, would it not have been better to table a much narrower amendment in which that was the circumstance in which the Home Secretary could consider withdrawing a person’s citizenship? That might have been more broadly welcomed in the House than amendment (a).

[James Brokenshire]

Amendment (a) was carefully framed and consideration was given to the comments of the Supreme Court in the al-Jedda case. Indeed, the amendment is more tightly framed than was suggested by the Supreme Court and is required by our obligations under the ratifying declaration that the UK signed in 1966. That speaks more widely about reserving the right in relation to statelessness, including where the person has conducted themselves in a manner seriously prejudicial to the vital interests of the UK.

We have refined those broad terms in amendment (a) by requiring the Home Secretary to undertake the reasonableness test that I have highlighted. She must have reasonable grounds for believing that the individual whom we are seeking to use the powers on has the ability to obtain citizenship under the laws of another state. I argue that we have considered the matter carefully and framed the amendment appropriately to deal with the significant loophole that was created and that was highlighted by the al-Jedda judgment. We believe that it is important to close that off in the interests of national security.

[Several hon. Members]

rose—

[James Brokenshire]

A number of my hon. Friends are trying to intervene. I give way to my hon. Friend the Member for Aldridge-Brownhills (Sir Richard Shepherd), who has not intervened on me thus far.

[Sir Richard Shepherd (Aldridge-Brownhills) (Con)]

I am very grateful to the Minister. This proposal is predicated on the fact that the Home Secretary will act rationally and reasonably, but—[Laughter.] No, I do not see that as funny at all. I want to know how the people of Britain will know that the action has been taken in a rational and reasonable way, when it is obscured from public view, and is therefore challengeable.

[James Brokenshire]

I will make two points in answer to my hon. Friend. First, the decision of the Secretary of State would be reviewable by the courts. It would, therefore, be open to the individual to challenge the decision and the reasonableness of the Home Secretary’s determination. Secondly, I point him to amendment (b), under which there will be an independent review of the power, which will report after one year and then on a rolling three-yearly basis. That will provide clarity about how the power is being used and give the reassurance that he has sought to exact.

[Jeremy Corbyn (Islington North) (Lab)]

Will the Minister clarify the point that he has just made? Is he suggesting that there will be a right of appeal against a ministerial decision, or will there only be a right to undertake a judicial review, which of course would relate to process and not to the facts of the case?

[James Brokenshire]

There is the ability to challenge deprivation decisions. Many cases have been brought before the courts that relate to the Home Secretary’s use of the existing deprivation powers. That will continue to apply for the power and the amendments relating to the specific circumstances in which someone may be rendered stateless, subject to the Home Secretary’s being satisfied of their ability to seek the citizenship of another country. The existing challenge, process and procedures will continue to apply.

15:15

[Mr Harper]

I listened carefully to the hon. Member for Slough (Fiona Mactaggart) because I respect her opinions on home affairs matters. It would not be appropriate to narrow the scope of amendment (a) in the way that she suggested. She missed the point that the individuals concerned are not always compliant and helpful in seeking a second nationality. Indeed, they often try not to do so. That is why the Home Secretary has to take a reasonable decision, taking account of the laws of the countries involved and the behaviour of the individual. If the amendment were narrowed in the way the hon. Lady suggested, I do not think that we would succeed in closing the loophole.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I remind the hon. Gentleman that the point of an intervention is not to comment on a previous intervention, but to comment on what the Minister is saying. If he wants to challenge what the hon. Member for Slough (Fiona Mactaggart) said, perhaps he will try to catch my eye.

[James Brokenshire]

I am grateful to my hon. Friend, who has made his point. I am sure that he will make it again in the debate. He is right to underline the careful way in which we have framed the amendments.

[Sarah Teather]

rose—

[Dr Huppert]

rose—

[Sir Richard Shepherd]

rose—

[James Brokenshire]

I will take one further round of interventions, then I will make some progress.

[Sarah Teather]

Will the Minister comment on the time frame in which he thinks it is reasonable to expect somebody to obtain another citizenship? In the Government’s mind, would somebody be stateless for two years, five years or 10 years? Is there any sense of how long the process could go on for?

[James Brokenshire]

That is largely in the hands of the individual. When the power is exercised, it will be open to the individual to seek the citizenship of the other country. We are unable to compel them to act in that way. That goes to the heart of the problem that we have identified. It is open to the individual to seek the citizenship of the other country, so it depends on what action they take.

[Dr Huppert]

The Minister is being very generous; I am sure that there will be questions on later sections of his speech as well. It is possible for the Home Secretary to have reasonable grounds to believe something, but for it not to be the case. What will happen if somebody in the UK goes through the process, the Home Secretary believes that they are able to get citizenship from another country and they make a bona fide application for that citizenship, but it is turned down?

[James Brokenshire]

In those circumstances, the Home Secretary would have exercised her power to deprive, so the case does not relate to the specific power under discussion. Obviously, we are able to deprive somebody of citizenship, whether they are in the UK or outside the UK, under the existing powers. That is an important mechanism for maintaining national security and ensuring that the actions of an individual who may be involved in terrorism are addressed by restricting their ability to become involved in terrorism-related activity and by preventing travel that might be a key component of terrorism-related activity. That underlines the importance of deprivation as a means of addressing the very small cohort of individuals who would seek to do us harm.

[Sir Richard Shepherd]

rose—

[Alok Sharma (Reading West) (Con)]

rose—

[James Brokenshire]

I give way to my hon. Friend who has not intervened on me before.

[Alok Sharma]

I want to press the Minister on the point that my hon. Friend the Member for Cambridge (Dr Huppert) made. If the Home Secretary has every reason to believe that an individual could get the citizenship of another country, but the Government of that country say that they do not want them as a citizen, what will happen to that individual? Will he or she remain without citizenship?

[James Brokenshire]

If the individual is in the UK, which I think is the situation on which that comment is predicated, there is precedent for giving limited restricted leave to remain. That might impose specific conditions. It would also mean that an individual would not have the usual rights of a citizen to access public services and enjoy public benefits. In seeking to mitigate the risks, that of itself may be considered a significant and relevant factor.

[Keith Vaz (Leicester East) (Lab)]

I apologise for missing the Minister’s opening remarks, which I am sure were extremely important.

I and other Members have a lot of sympathy with what the Minister says and understand and support what he is trying to do, but we are concerned about the practicalities of what will happen if he takes citizenship away from someone and leaves them stateless. That was what upset the other place. Has he studied any other country that has a similar power, and what has he gleaned from that comparative study?

[James Brokenshire]

It is difficult to make general comparisons with other states, because of the different natures of the threat that countries face, the court judgments that have been made there and the international conventions that apply to them. However, other states do have the ability to render citizens stateless, and some have made protocols and reservations to that effect. Some people have sought to portray those states as somehow despotic, or—[Interruption.] I know that the hon. Member for Perth and North Perthshire (Pete Wishart) is eager for me to get to his point, and I am happy to do so, but I do not think anybody would regard countries such as Belgium or the Republic of Ireland as despotic, and those states have reserved powers to make citizens stateless. Although it is difficult to make generalisations, because of the different treaties and conventions to which each country is subject, other countries have reserved powers to make individuals stateless in certain circumstances.

[Keith Vaz]

As usual, I have asked a question and the Minister has given me a straight answer, and I am extremely grateful. He mentioned Belgium, but what are the practicalities of what it has done? I accept that the power in question is used in other countries, but what happens when a citizen of Belgium has their citizenship removed and is left stateless? Is not the truth that they cannot go anywhere else?

[James Brokenshire]

I would hesitate to provide commentary on the laws of Belgium, the Republic of Ireland or other countries that have reserved this power. I have explained to the House this afternoon what would happen in this country if someone were left in those circumstances, and I hope that I have provided clarity.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

Although I was not present for the beginning of the Minister’s speech, I have been watching the debate assiduously in my office.

In my constituency, there have been cases in which an individual has rightly been threatened with deportation by Her Majesty’s Government, yet their home nation state has categorically refused to take them back. I have constituents who have automatically lost their nationality by making an application in this country not for citizenship but for asylum. As my right hon. Friend the Member for Leicester East (Keith Vaz) asked, what are the practicalities? Do we wander the world trying to sell those individuals to some accepting nation state?

[James Brokenshire]

It is not about that at all. I am sorry that the hon. Lady may have missed some of my earlier comments, although I appreciate that she has been watching from afar. As I stated earlier, the provision is about dealing with a small cadre of individuals who may have waived or surrendered their previous citizenship as a means of frustrating the Government’s attempts to guard our national security by using our existing deprivation powers. The Home Secretary would need reasonable satisfaction in exercising the power to deprive. It would then be open to the individual in question to take whatever steps they needed to take to regularise their position. We are closing a gap that the Labour Government left us by virtue of the changes that they made in 2002 and built on in 2006. The Supreme Court highlighted that gap in the al-Jedda case. Our proposal is intended to guard our national security.

We recognise the comments that have been made here and in the other place, but Lords amendment 18 would prevent deprivation of citizenship from being pursued in the case of an individual who had no recourse to another nationality. Every country operates its own nationality law, and there are a range of requirements and eligibility criteria. As part of the “reasonable grounds” consideration, the Home Secretary will of course consider whether there are any legal points that would prevent an individual from regaining their former nationality. The individual in question will retain a full right of appeal, which will be to the Special Immigration Appeals Commission. The courts will be able to consider whether the Home Secretary was correct to conclude that there were reasonable grounds to believe that that person was able to become a national of another country or territory under its laws.

As the Government have stated in both Houses, the proposal to extend the Home Secretary’s powers to deprive citizenship is an important and timely measure to strengthen the security of the UK. It has rightly been subject to substantial debate, and to scrutiny by the Joint Committee on Human Rights and Members of both Houses. We do not agree that a small Committee from each House would be the right place to consider the matter. It would not have access to the appropriate closed material to make further assessments beyond what has already been discussed in the House. Having such a Committee would also cause unnecessary delay, leaving a loophole to be exploited and creating a barrier to effective action for a considerable number of months, if not years. It is important that we close the loophole in a timely way, which is why the Government have decided to proceed with a narrower measure than we had originally proposed in preference to allowing delays for a Committee to consider the issues.

[Sir Richard Shepherd]

Is the Minister saying, then, that the person deprived of their citizenship will not know the reasons for that, and that the only course of court action will be through SIAC, which is a secret court? We will therefore never know whether the deprivation was justified.

[James Brokenshire]

My hon. Friend will gain satisfaction from the judgment that SIAC will make in each individual case. He will be familiar with debates that we have had on other legislation and with the challenge for any Government of how to handle sensitive material. He will also know the existing case law on the gisting of some material, and that is a matter of active consideration by the courts. I therefore think that the public, the House and the country can be satisfied that if SIAC has considered a matter, it will have done so appropriately and reached an appropriate outcome in respect of the actions by the Secretary of State.

[Glenda Jackson]

Will SIAC have the information from the individual’s home Government? For example, will there be a requirement on the Chinese embassy—I cite China because it is the first example that comes to mind—to furnish evidence as to why it is refusing to allow its former citizen to regain their nationality, and will that information be furnished to SIAC?

[James Brokenshire]

It is difficult to comment on individual circumstances and cases. The Secretary of State will need to show that her judgment was reasonable in bringing forward and using the power that we are contemplating, if the amendment is accepted, and it would obviously be open to the individual to present evidence to SIAC in non-closed circumstances regarding their situation, and to challenge that decision. That right of challenge is obviously protected by provisions in the Bill.

15:30

On Report in the Lords, the Government tabled an amendment to provide for an independent review of the use of the new power to deprive. That was in response to concerns expressed in earlier debates that there should be independent scrutiny and that a report should be made to Parliament, and that provision is included in the measures we propose today. We recognise the importance of scrutinising the operation of the power at the earliest opportunity, and we have therefore proposed to review it after 12 months, with a subsequent 36-month review period. A report to the Home Secretary will be laid before Parliament alongside those reviews, which can then be debated in both Houses. We have not yet decided who will conduct those reviews. It may be appropriate, for example, to appoint the independent reviewer of terrorism legislation—currently David Anderson—to take on that additional task, but we are mindful that if the review of the deprivation power is added to the demands on him, that must not be to the detriment of his capacity to meet his existing important statutory reviews.

[Several hon. Members]

rose—

[James Brokenshire]

I will draw my comments to a close, as I have been generous to hon. Members across the House.

In conclusion, this power is narrowly drawn and aimed at addressing a real and current threat posed by a small number of individuals. The Government have taken steps to listen to the concerns of both Houses about statelessness. We are committed to taking proportionate action to protect the public and remove the privileges of British citizenship from those who abuse it. That is what these provisions do, and I commend them to the House.

[Mr David Hanson (Delyn) (Lab)]

I support the Lords amendments. Having listened to their lordships and to contributions from Members across the House, and having noted the keen interest there appears to be in this debate, I hope that the Minister will reflect on what he has said and support the Lords amendments in due course.

I will start with a quote:

“If we identify someone as a person proposing to commit a serious terrorist offence, for example, surely the obligation is on us to deal with that person. If we simply deport him, we shall be handing on—in my submission, irresponsibly—this terrorist problem to another state which may not have the same capability of dealing with it as we do. It cannot be a proper response to the terrorist threat to refuse to deal with it ourselves”.—[Official Report, House of Lords, 9 October 2002; Vol. 639, c. 277-78.]

That was the late Lord Kingsland who spoke in October 2002 as Conservative shadow Lord Chancellor when these matters were debated in relation to nationality. At that time, the then Labour Government determined that statelessness should not be part of the legislative framework, and that prompts the question why have the Government brought forward this proposal at this time?

I think the Lords did a service to Parliament in providing it with an opportunity to discuss this proposal again, and I remind the House that the Lords voted by 242 votes to 180 to ensure that the amendment was accepted in another place. Among those who voted were a large number of Labour peers, and it is fair and proper that I report that to the House. There were also many others, both Cross-Bench, from the Government Benches and among the Bishops, who voted to ask this House to consider the matter again. Those included Lord Judge, a former Lord Chief Justice, and Lord Hannay, a former senior diplomat, as well as such Liberal Democrat notaries as Lord Lester, Lord Willis of Knaresborough, Lord Roberts of Llandudno, Lord Phillips of Sudbury, Lord Oakeshott and Baroness Neuberger, and also the notable former Foreign Secretary Lord Howe of Aberavon. That group of peers did not vote for the amendment to cause trouble for the Government; it is a group of peers who take an interest in this matter and have reflected on the Government’s approach. Whatever else can be said, the Home Secretary did not convince the other place that her measures were right and proper. In fact, the charitable view is that the Home Secretary has made a mess of this matter. She has tried to rush the proposals through.

[James Brokenshire]

No.

[Mr Hanson]

The Minister says no, but the Home Secretary brought forward the proposals on 30 January on Report, after they were tabled on 29 January. We had to table a manuscript amendment on Report, which we withdrew because we wanted to take legal advice. That legal advice led to a cross-party Lords amendment, moved by Lord Pannick, to ensure proper consideration of the proposals in Committee.

The Lords amendment is reasonable. It asks for the establishment of a Joint Committee of both Houses to consider and report on the complications of the removal of citizenship and the issues raised by Members across the House. From discussions I have had with the Minister, I know he is concerned that that would lead to delay, but I hope I can reassure him. Through agreement outside this House, we could, if the Lords amendment was accepted, give a time scale to that consideration to ensure that we have detailed examination and, effectively, pre-legislative scrutiny of the proposal, so that we can take the concerns raised in another place seriously, look at what points are being made even today by Members of this House and come to a consensus on this extremely serious issue—the removal of citizenship from individuals.

I think we can come to an agreement whereby a proposal is considered and completed perhaps, dare I say it, by the summer recess. I do not want to pre-empt the Gracious Speech in a couple of weeks’ time, but it will undoubtedly include a criminal justice Bill. Measures could be introduced at that stage and looked at in detail.

[Dr Huppert]

The shadow Minister is talking about the process and that is very interesting, but can I press him on the Labour party’s view on the policy principle? Some of us, including some Labour Members, voted against the measure on principle. He says that it may be a positive thing to have this sort of deprivation. His party abstained, with Whips quite forcefully stopping people voting. What is the Labour party’s position on the principle at stake?

[Mr Hanson]

If the hon. Gentleman will allow me, I will come on to that point in a moment. We abstained on 30 January because we wanted to ensure that we gave proper consideration to this matter, and we supported the amendment in another place to ensure that we did consider this matter. My noble Friend Baroness Smith of Basildon signed the amendment before the House today. We want to support the amendment today and return it to the Lords.

The Labour party and my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) will not do anything that puts the security of the United Kingdom at risk. I want to ensure that we do not remove citizenship without a proper right of appeal. I want to ensure that people know the grounds of that removal of citizenship and that the consequences are considered. I want, with the Minister, to tighten up how the Government intend to exercise that power. How do the Government intend to ensure that what is “reasonable” is deemed to be reasonable? I want to give the Minister the opportunity to explain that. This is a serious matter that needs proper parliamentary scrutiny. We have had a very short time in another place and one day in this House to consider this matter. We need to look at it in much more detail and we need to take evidence. A large number of people outside this place have raised concerns and we need to ensure, and not just in one-and-a-half hours, that the Minister justifies the opportunity and practice over a period of time.

[Mr Harper]

The more the right hon. Gentleman speaks, the more confused I am about his position. My right hon. Friend the Home Secretary tabled the amendment in January, so more than three months have passed since she put this provision before Parliament. The right hon. Gentleman has now said, notwithstanding the fact that the amendment says the Committee will serve for the duration of the Parliament, that it could all be sorted out before the summer recess, which is only two months away. What does he expect to learn in the next two months that he has not learnt in the past three?

[Mr Hanson]

I think both Houses of Parliament should have an opportunity to take evidence, as happens during pre-legislative scrutiny, and I am not the only person who thinks that. Moving the amendment in the House of Lords, Lord Pannick said:

“A Joint Committee is required because Clause 64 was added to the Bill very late in the passage of the Bill through the other place—that is, 24 hours before Report and Third Reading…so there was no pre-legislative scrutiny of this proposal, no consultation and no opportunity for consideration by the Public Bill Committee of the other place. The absence of pre-legislative scrutiny and proper consultation is especially unfortunate in a context such as this.”—[Official Report, House of Lords, 7 April 2014; Vol. 753, c. 1168.]

The hon. Member for Forest of Dean (Mr Harper) may want to steamroller the Bill through, but I think it important that we get it right.

[Glenda Jackson]

There is a great, gaping hole in the Government’s argument. However much the Minister may speak about the powers of the Home Secretary, no British Home Secretary in the House of Commons has ever had the power to impose on a sovereign nation state laws governing whom it should or should not take back, and to whom it should or should not give a passport and citizenship.

[Mr Hanson]

My hon. Friend has anticipated some of my own arguments. Like the hon. Member for Cambridge (Dr Huppert), I think we need to examine important issues relating to both the deprivation of citizenship and the impact on terrorism prevention. The Minister is seeking to delete the amendment in order to prevent potential terrorist action. I want to test him on that, potentially during scrutiny in the Committee, but also in the House today.

If citizenship is removed from an individual who happens to be outside the country, we shall have given up all jurisdiction over that individual, who could be returned to the United Kingdom by a third-party country that did not recognise him as having citizenship of that country. As Lord Kingsland said in 2002, he will not be the responsibility of the United Kingdom, but will still be potentially able to undertake activity that the Minister would not support, as a result of the Minister’s own actions.

[James Brokenshire]

I am somewhat confused by what the right hon. Gentleman is now saying. Does he not support the Government’s existing use of the deprivation powers to deal with counter-terrorism?

[Mr Hanson]

The Minister should reflect on that. He will know that the Nationality, Immigration and Asylum Act 2002 specified just two grounds on which citizenship could be removed: it could be removed from those who had gained it through fraud, and it could be removed

“if the Secretary of State is satisfied that the person has done anything seriously prejudicial to the vital interests of…the United Kingdom”,

provided that the revocation of citizenship did not render the person stateless. That is the point, and that is the position that was taken by the Labour Government in the 2002 Act, about nine to 12 months after the horrendous events of 9/11. Surely, if we made that judgment in 2002, at the height of concern about the impact of 9/11, the Minister will be able to back it up in 2014. If he cannot, let him justify that to a Joint Committee. Lord Pannick said in another place:

“The Joint Committee will also want to consider whether the benefits, if any, of the proposed new power justify the… international implications.” .”—[Official Report, House of Lords, 7 April 2014; Vol. 753, c. 1169.]

How can the British Government lecture others, or promulgate international law, when the Bill proposes the establishment of circumstances which, in my view, would break international requirements across the board? The Minister says that that is not the case, which is a view that we need to discuss.

[Jeremy Corbyn]

I agree with what my right hon. Friend has just said, but is not one of the fundamental problems the fact that what the Government are doing has about it more than a whiff of Executive decision making on major issues to which there is no simple legal remedy? The Government are trying to avoid a court process, and to give powers to an elected politician over an independent judiciary.

[Mr Hanson]

I am grateful for that because my hon. Friend anticipates the concerns we had and that we raised in the debate on 30 January. The proposal then from the Minister was that the Home Secretary could determine, on reasonable grounds, the deprivation of citizenship. There was no judicial oversight promised. The Minister has today brought forward amendments (a) and (b) which would provide for a review. I do not happen to think they go far enough. I think we need to stick to the original idea of an examination by a Joint Committee. The Minister, however, has brought forward those amendments which move slightly from his original proposal of some six or seven weeks ago. Why has he done that? He has done so because he has been roasted in another place and, this proposal having been considered by Members of that other place, has lost the vote quite considerably. Yet today we find that, rather than listening to those concerns, the Minister wishes to vote down this amendment and has brought forward proposals that, again, I think do not go far enough.

15:45

[Richard Fuller (Bedford) (Con)]

Like my hon. Friend the Member for Aldridge-Brownhills (Sir Richard Shepherd), when I hear phrases such as “review by SIAC” I shudder on the question of process, but I am interested to hear what the right hon. Gentleman would say to my constituents who want us to move quickly on all immigration issues—who say we are not moving fast enough, we are not making change quickly enough. What is the relative merit of his proposal to support Lords amendments that would delay enactment as opposed to the Government proposal to see and review the impact after enactment?

[Mr Hanson]

That is a legitimate question, and it is one that deserves an answer. The point I would make is that we are legislating. If we legislate for this and if it goes back to the other place in the form the Minister has brought forward, it will be enacted: it will have Royal Assent within a matter of, presumably, days. We will therefore have one year of operation between May or June 2014 through to May or June 2015. That is fair enough. We will then review it and make changes. All the concerns raised by Members today would potentially be applicable in that 12-month period. The argument I would make is that if we accept the amendment that has been considered by the Lords, we can look at this, get it right and ensure that the concerns that have been raised not just here today but by Members in another place are dealt with. The measures that are taken will then have the full confidence of both Houses of Parliament. At the moment, given the vote that was taken in the other place—242 in favour and 180 against— the proposals the Minister brought forward previously do not have the support and confidence of both Houses. The removal of citizenship is such a challenging and extreme measure to take that it must have the confidence of both Houses of Parliament.

[Mr Buckland]

I listened with interest when the right hon. Gentleman talked about his fear that the UK would be in breach of its international obligations in relation to statelessness if the Government’s proposals went through. Which particular international obligations does he think the UK would be in breach of?

[Mr Hanson]

I am trying to ensure that we propagate good practice. There are many states that currently remove citizenship from individuals. It has happened in Iraq and it has happened in other countries before, and we have been critical of that. We are trying to ensure that any action taken by a Government, particularly when it is one of Executive power by the Home Secretary, is supported by both Houses of Parliament.

Let me give the hon. Gentleman the opinion of international lawyer Professor Guy Goodwin-Gill, who says that:

“any state that admitted an individual on the basis of his or her British passport would be fully entitled to ignore any purported deprivation of citizenship and as a matter of right return that person to the UK.”

That was the point made by my hon. Friend the Member for Hampstead and Kilburn (Glenda Jackson). We need to consider this in considerable detail.

[Mark Reckless (Rochester and Strood) (Con)]

The shadow Minister did say that this was in breach of our international obligations, but he now says it is only a matter of good practice. He has quoted another international jurist and many Members from the other place, but we are the elected Members. Some of us have come to this debate to try to make up our minds. If we could hear more of what the right hon. Gentleman thinks of the principle of the Bill and the arguments around it, we could make a decision today, and I for one would enormously appreciate that.

[Mr Hanson]

I could do worse than to cite what Lord Deben, a Conservative peer, has said—[Interruption.] The hon. Gentleman looks as though he lacks concern about this, but I am expressing a number of concerns that have been expressed, both in this House and in—[Interruption.] My view is that we need to ensure that if we take this step, we do it in an effective and appropriate way that does not damage the credibility of the anti-terrorism case. Removing someone’s citizenship is an extreme measure and it has to be done in a way that is appropriate. The Minister has not made it clear to me that the “reasonable” judgments of the Home Secretary—[Interruption.] If the Parliamentary Private Secretary would like to join in the conversation, he could go to the Back Benches and do so. For the past three months we have received wodges of legal advice and wodges of views saying, “This is not practical, it will not be effective and it will damage our attacks on terrorism.” The Minister is asking us to take things on trust, but the other place has determined that it wants to examine these issues in detail, argue them and test the Minister on them, and that is a fair proposal.

Lord Deben, a Conservative colleague of the hon. Member for Rochester and Strood (Mark Reckless), has said that

“to take away someone’s citizenship, it is not reasonable to say that you assume that they can get another country’s citizenship. It is only reasonable to say that you know that they have another citizenship; anything less than that is wrong. It may not be convenient, but it is not right.

We have been the signatory to and the driver of much of the international law that seeks to reduce statelessness to its minimum. I fear that in this particular case, we may, for very good reasons—in seeking to close loopholes…do something which will do great injustice to a very small number of people.”—[Official Report, House of Lords, 19 March 2014; Vol. 753, c. 213.]

That is what we need to test by a Joint Committee of both Houses of Parliament and that is what we need to test over the next few weeks and months, which is why the other place has given its support. Justice, Liberty and the Immigration Law Practitioners Association, among others, have made cogent arguments as to why we need to consider this in detail. We need to examine it, and I support the retention of the Lords amendment and hope the House will do so.

[Sir Richard Shepherd]

I am greatly concerned about this measure, and I will just make some observations. The Minister referred to the power that the Home Secretary used to have in relation to something being not conducive to the public good. Its removal created a real difficulty for Governments, but my concern is not the difficulty for Governments; my concern is for the British common law system. This is not about the European Court of Justice—its rulings or anything else. The issue of concern to me is: what is our process?

I believe, and this was fundamental to our legal system, that a person should know the reasons they are to be aggrieved, but that is not possible under the Bill. He or she will not know the reasons they are being deprived of citizenship, so they can make no case that can be held to be valid, because they do not know what they are challenging—or they will claim they do not know what they are being challenged with. We do not know and the public do not know, so this violates one of the first principles of our legal system—our common law system. I want the House always to remember that our common law system in England has been absolutely essential to our liberties, freedoms, standing and our sense of who we are.

I understand the difficulties that Governments face, as there are a lot of wicked, evil people out there, but the answer has always been to prosecute. We are told, “Oh we can’t prosecute because in a prosecution we may have to reveal our sources.” This is the nightmare situation that the world in which we now live is facing: we are not to know, we cannot know and we cannot challenge. The Special Immigration Appeals Commission is one of the most monstrous extrusions on the national scene, as not even the solicitor representing the accused or the person who loses their citizenship knows the reasons their client is there. Gisting? Well, all those rules that have been put in place essentially deny open justice using the argument of national security.

I have been a Member of Parliament for 36 years, and I look back over the decline of our sense of who we are, what our system is, and our freedoms and liberties, which are concentrated in the concept of the common law. I did not invent it—we did not invent it—it came from the movement of the people of this country over hundreds of years and the development of our legal system. Year after year, in a way that one could never assume would happen, Governments have gone out searching for new measures to conceal the openness of what justice should be. We, as citizens of this country, have a right to know why people are charged. That is why we have an open court system, so that we can judge whether the measures are competent, reasonable or truthful to the purpose of our nation. That is why I cannot support the very notion that so much power should be concentrated in one individual—a Home Secretary—whether good or bad, that they may make decisions of this nature without our being able to challenge whether they are valid, true or right. I want the House to stand up for who we are and what our system of justice is—and it is not secret justice.

[Pete Wishart]

It is always a pleasure to follow the hon. Member for Aldridge-Brownhills (Sir Richard Shepherd). What a powerful case he has made about the closed process of justice, which has become a feature of the Government as they proceed on issues of national security.

When the Government first came to power, I cheered them on, as they practically went around deconstructing Labour’s anti-civil libertarian state, which we all remember: identity cards; the national database; pre-charge detention. I cheered the Government on when they did that, but they have now constructed a closed process with a lack of justice—all the things that the hon. Member for Aldridge-Brownhills powerfully expressed. We have created a new anti-civil libertarian state, helped by the Liberal Democrats. This is not the type of justice, society, country and community that we want. We are better than that. Yes, we need to balance national security and civil liberties, but this is another Government who have got it wrong.

The plans were roundly monstered in the House of Lords, as they deserved to be. If one looks at how many Lords supported the amendment and spoke against the measures, we find one former Director of Public Prosecutions, a former Supreme Court judge and even 23 Liberal Democrat peers. The measure was defeated by 242 to 180 votes in the House of Lords, which demonstrates wide-ranging opposition and great concern about proceeding in this way.

The Lords amendment does not even seek to delete the clause. I wish that it did. I do not have a vocation like Labour spokespeople. I think that this is a bad measure, and I voted against it in principle because it is fundamentally wrong to remove the citizenship of people of this country just because they are suspected of being terrorists. That is absolutely wrong—I make no bones about that—and I wish that the amendment deleted the entire clause. However, it does not do so; all that it seeks to do is to set up a Committee of both Houses to look at the implications of the measure and see whether we are doing the right thing.

We have not had a chance to look at the measure properly in the Commons. It was introduced on Report without our having any opportunity to consider its value or implications and what it meant in the context of the Bill. The Lords had a little more time; we have an hour and a half to consider what the Lords said, to look at the measure again and, I hope, to make the right decision. The amendment does not ask us to reject the measure; it just asks us to look at it again.

Panicked by the Lords defeat, the Government have introduced their own amendments, which would provide a review once the measure had been implemented. That is closing the stable door after the horse has left without its passport, having been deprived of its citizenship. It is too late to do anything then. We have to take a look at how the measure would impact on what we are trying to achieve and secure before we effect any legislation rather than afterwards.

16:00

Under the Government amendments, before depriving people of their British citizenship, the Home Secretary would be required to have

“reasonable grounds for believing that the person is able”

to acquire another nationality, and a review of the measure after one year and then again every three years would also be required. There are so many difficulties with the Government’s suggestions, however. The principal power would still be exercised by the Home Secretary, who would subjectively assess whether another nationality was theoretically available. We have just heard the Minister’s desperate attempts to answer the many points paraded before him during this debate. How will this work in practice? We were looking for answers when this proposal was first promoted on Report, and we are looking for answers today, but nobody knows how much of a limbo effect this will have on people who are suspects and will be subjected to this attempt to deprive them of their citizenship. We have had no clear answer on how it will impact on the individual.

The Government review will allow the Home Secretary a veto on the information put before Parliament, thus compromising both the independence and the transparency of the process. If the Government are so confident of their proposals, surely they have nothing to fear from making the case to a parliamentary Committee in a timely, considered and evidence-based manner. This contempt for the legislature and this rushed approach to law-making is no way to produce the type of outcome that we want. This measure is so draconian that it must be looked at before it is implemented, and we must have a pre-legislative look at it rather than a post-legislative review.

Of all the things said in the Lords debate, the words of Lord Pannick were the most powerful, when he said:

“There are, regrettably, all too many dictators around the world who are willing to use the creation of statelessness as a weapon…and we should do nothing to suggest that such conduct is acceptable.”—[Official Report, House of Lords, 7 April 2014; Vol. 753, c. 1169.]

It seems as though the Government message has been listened to already, when we have heard Marine Le Pen, the leader of the Front National party in France calling on the French Government to implement the Home Secretary’s plans. That just shows what a bad international example we are setting—a dreadful example around the world. This is a policy for despots, not democrats and for “liberal strippers”, not liberals. The UK’s reputation as a country that values the rule of law will be put at risk if MPs do not oppose the Home Secretary’s plans for citizenship-stripping. People need only to be suspected of terrorism to be deprived of citizenship, and we have still not heard any satisfactory answer on what will happen to these people.

This measure is unfair, possibly unlawful and unlikely to make the UK any safer. It is also a feature of the type of democracy that we are beginning to see here in the United Kingdom, with the rise of UKIP and a grotesque race to the bottom between this Government and UKIP to see who can be the toughest on immigration measures and who can be the best at stripping off our citizens’ civil liberties. Let me tell the Government that they will never beat UKIP on this. It is an absolute certainty that UKIP will always triumph when it comes to this appalling race to the bottom.

The Lords amendments would provide time for further reflection; the Government amendments are no substitute. Let us make sure that we support the Lords amendment; let us make sure that we look at this issue properly before going down this appalling road.

[Mr Harper]

Let me first remind the House what we are asking it to do today—to disagree with the Lords in their amendment. I have a reason for saying that. I listened carefully to what the right hon. Member for Delyn (Mr Hanson), the shadow Minister said, as he carefully avoided setting out his party’s view and quoted lots of other people back at us. His proposed solution was to spend the next two months before the summer recess coming to a rapid conclusion. I think that he accepts that there is a legitimate national security issue here, but what he said does not reflect what the amendment says.

Paragraph (2) of Lords amendment 18 talks about nominating a Committee that would serve

“for the duration of the present Parliament”,

with no deadline to reach a conclusion. I repeat what I said in my intervention on the right hon. Gentleman. I accept his point that there was not much time between tabling the amendment and the Report stage in this House. It is a perfectly fair point that we had discussions before the issues were discussed in the House of Lords. However, three months have elapsed and these matters have been considered in the other place, and I really do not understand what we are going to learn in the next two months that we have not been able to learn in the past three months.

[Mr Hanson]

The hon. Gentleman is right to say that the proposal is that the Committee shall serve for the duration of this Parliament. I was trying to be ever helpful by offering the Minister the opportunity that we could, through the usual channels, determine to examine these matters in a reasonable time. We could set that time informally even if the Committee did serve for the duration of the Parliament.

[Mr Harper]

I accept the right hon. Gentleman’s point, but that is not provided for. The Committee regulates its procedure. Nothing here talks about the balance of party members on the Committee. The Chairman of Committees in the other place will nominate the members from the House of Lords, and the Speaker of the House of Commons will nominate those from this place. There is no provision in the amendment to do what the right hon. Gentleman suggests.

If a Committee of members of both Houses considers the matter at length, it will produce a report. If we accept for the sake of argument that it manages to agree on the right outcome, it will only produce a report that will inform a further debate in this House. Members of this House will still be required to take a decision. We will still be required to weigh up the arguments that my hon. Friend the Minister for Security and Immigration so ably laid out before the House today and the Home Secretary did in January. We will still be required to consider the arguments that the shadow Minister did not put before the House; he simply recited the views of others. We will not be freed from the responsibility of taking a decision. It is the “kick the can down the road” amendment, which allows the House to avoid taking a decision.

These are difficult issues. I listened carefully to my hon. Friend the Member for Aldridge-Brownhills (Sir Richard Shepherd), whom I respect hugely on these matters, but there is a balance to be struck between defending the liberties of our citizens and protecting us from terrorism. I do not reach easily for the national security argument. I was pleased when I was elected to the House to vote against the provisions for 90-day pre-trial detention. But this is a proportionate and limited proposal. I supported the previous measure. The Home Secretary has listened to the debate on 30 January in this House and to the debate in the other place. Amendments (a) and (b) do two things. First, they ensure that we are not left with a situation of someone left unable to seek citizenship. She has to have reasonable grounds for believing that they are able to, and that addresses many of the concerns raised previously by the Chair of the Home Affairs Committee and my hon. Friend the Member for Cambridge (Dr Huppert), who set those out on 30 January.

A review mechanism is now in place, whether by the independent reviewer of terrorism legislation or another independent person, which will enable the House to look quite quickly, after an initial one-year process, and then every subsequent three years, at the actual implementation of the legislation in practice, so enabling us, if there are issues, if some of the concerns set out by my hon. Friend for Aldridge-Brownhills or others come to light, to enable the House to amend the legislation. The concern that the Home Secretary set out with the al-Jedda judgment leaves a gap in our legislation, which leaves us vulnerable to those who would do us harm.

[Mr John Redwood (Wokingham) (Con)]

Given my hon. Friend’s expert knowledge on this subject, can he give the House some indication of how many people this treatment might be applied to? Are we talking about very few people?

[Mr Harper]

My hon. Friend the Minister set out how many individuals had been deprived of their citizenship on non-conducive grounds, so not using this power, since 2006, and it was 27. It is not possible to know in advance, but we are talking about very small numbers. We are talking about people who conduct themselves in a way that is seriously prejudicial to our national interests. It is a small number of people, but it is a small number of people who mean to do us serious harm, but whom we are not able to prosecute.

This is a proportionate use of the Home Secretary’s power. It is reviewable by the independent judiciary, so there is a check and balance in place. We have to ask ourselves whether we want to leave ourselves open to this vulnerability, exposed by the Supreme Court. We are, as I said, only putting the law back to what it was before 2002. I do not think that any of the scenarios set out by Members happened before 2002. I urge Members to disagree with the Lords in their amendment and to put amendments (a) and (b) on the statute book when we vote this afternoon.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Before I call anyone else to speak, let me say that we have a very short time in this part of the debate, so I urge Members to be brief in consideration of their colleagues.

[Fiona Mactaggart]

I will be brief. I spoke in 1997 in the debate on the formation of SIAC, and I was wrong. I thought that the changes that were being made from the previous system were sufficient to protect people who are accused of terrorism. I reminded the House then that the previous arrangements had been used against not just people who wanted to blow up our country but journalists and others such as Mark Hosenball. One reason why we need to have a publicly accountable system, as mentioned by the hon. Member for Aldridge-Brownhills (Sir Richard Shepherd), is that, without it, there cannot be a guarantee that a Home Secretary will not end up doing the same again.

I said in the debate about the formation of SIAC that transparency is the most effective protection against terrorism. I am really concerned that this arrangement not only risks creating statelessness but depends on a grossly untransparent system. I think that we should adopt the route that the Lords has offered us: yes, it is kicking the can down the road, but it is stopping and thinking so that the can is not mashed, thus destroying the reputation of our country.

[Dr Huppert]

It is a pleasure to follow the hon. Member for Slough (Fiona Mactaggart). I pay tribute to her for her acceptance that SIAC was an error and a big problem. Indeed, it is rare in this place for any of us to admit making a mistake. The encroachment of secret justice started with that commission and has continued in a number of other ways.

In the interests of time, I will not go through all my concerns. I have expressed them on a number of occasions in debates in the main Chamber and in the Home Affairs Committee and in discussions with the Minister. The reasons for my concerns remain the same, which is why I was proud to oppose the measure when we discussed it previously, and acted as a teller for the other side. It is a shame that more people did not join us, and I pay tribute to those who did, especially those Labour Members who braved the wrath of their Whips to fight their way into the Lobby, where we saw some interesting rows. It is also interesting to see people who voted for it on that occasion now opposing the principle. I still oppose the principle. There has been much more debate, both in the other place and on the Home Affairs Committee, which has helped to clarify how the measure might work. The Select Committee’s report on counter-terrorism is due out shortly, and I hope the Minister will look carefully at what it says. Obviously, I cannot presage its comments on anything, but I am sure that he will be interested to see it.

There are many issues relating to what happens if somebody is stateless in this country. If we end up leaving someone stateless because they cannot get the passport that we thought they could apply for, we have taken somebody who is apparently dangerous to us and prevented them from leaving the country. That does not seem a great success to me. There is also the issue about what happens if they are overseas. It also fosters the idea of two classes of citizen—people whose citizenship can be taken away without them being convicted of something and those who cannot have it taken away. It is about how the legal process works and much, much more.

In the interests of time, let me talk about the Government concessions, which I welcome. They are a step in the right direction, but they do not go far enough for me. There are two of them. I welcome the concession about the independent reviewer, and I was pleased to hear the Minister imply that it may be the independent reviewer of terrorism legislation, for whom I have huge respect. I would be more encouraged if he, rather than others, was taking on the role. I understand that no decision has yet been made. Will the Minister clarify whether the reviewer will look at specific cases, or just the overall process? Will they be able to trigger a review if a particular case has gone wrong? Will they have full access to all the information that SIAC has? If the independent reviewer does not have all that information, it will be hard for them to make a proper judgment.

Let me turn to the other amendment about reasonable grounds for belief. I welcome this step, because it addresses the key issue of avoiding statelessness. We should all be very concerned to avoid anything that will leave people stateless. My concern is about how certain we are. It was helpful to hear the Minister say—I ask him to correct me if I misquote him—that if someone wanted to claim asylum from a country, that would be deemed to mean that the Home Secretary could not act. If it was not possible to get the citizenship without travelling and the person was stuck in this country, that would be an issue.

I am still concerned about the appeal rights and about what will happen if the Home Secretary makes an error. What will happen if she acts reasonably, but it turns out that she is wrong and someone cannot get citizenship? That would be very alarming and I hope that the Minister will consider the issue and perhaps even tighten this up in the other House.

16:15

[John McDonnell]

It is a disgrace that we are talking about civil liberties and yet we have only nine minutes left, the debate in the Lords ended only 18 hours ago, and the amendments land before the House when it is likely to rise early next week because of insufficient business. Our job is responsibly to look after our constituents’ interests, which means both their human rights and their protection and security. Not one of the amendments we are considering is capable of doing that as a result of this bouncing of the House. I have been in this place only 17 years now and the worst civil liberties violations have occurred when the House has been bounced into urgent decisions. That is what is happening today and I resent that.

I resent it on behalf of my constituents. The practicalities of the provisions mean that we will deprive some of their citizenship and, as the hon. Member for Aldridge-Brownhills (Sir Richard Shepherd) has said, we will do so in a way that will not even allow them to answer the charges themselves. That is the SIAC process, which I voted against all those years ago.

What are the practicalities of depriving someone of their citizenship when they are a threat, particularly if they are abroad? In the other House there was a discussion about the comity of interest between individual states. What are we to do? Will we deprive a suspected terrorist of their citizenship and leave them as the responsibility of another state? Will that protect our citizens’ interests, if that person can then roam free to take action against this country? That is not fair, just or based on human rights, and it does not practically tackle the issue of security.

Their lordships want time to set up a Joint Committee to give this difficult area of policy the detailed consideration it needs. The Minister referred to the Government’s proposed review as independent, but the amendment makes no reference to independence. The reviewer will be appointed by the Government, not by an independent process. In addition, the Secretary of State will have a veto over what is reported to the House and that applies not just to national security but, as the amendment says, to public interest. Public interest has been used in this House by successive Governments to avoid embarrassments and to avoid providing the House with information on which we can make considered judgments.

The Government’s amendments are not acceptable. I do not think they resolve the concerns that the other House has raised and I hope that that place holds firm so that we can negotiate a proper process. I agree with my right hon. Friend the Member for Delyn (Mr Hanson) that we need a reasonable process within a limited period of time to allow us to return to the House to consider proper proposals that protect civil liberties while, just as importantly, protecting the security of our constituents.

[Mr Buckland]

I feel like I am in an episode of “Just a Minute”, Madam Deputy Speaker, but here goes.

I support the Government’s amendments, as we must focus on the issue. This is not some descent into despotism; all we are talking about is a return to the law as it stood before 2002. We are not even talking about the principle of statelessness, because the Nationality, Immigration and Asylum Act 2002 allows for a person to be stateless when that nationality has been obtained by fraud. We are talking about only a very small cohort of people who pose a serious threat to the safety of the citizens we represent.

It is important that the Government ensure that they do not end up with decisions being made in an arbitrary or disproportionate way, which is why the provision about reasonable grounds is important and goes a long way towards answering that point. The report of the Joint Committee on Human Rights, of which I am a Member, correctly said that the decision to deprive people of their state per se does not breach any international conventions. That is the case that was not properly answered by the Opposition.

In the seconds I have left in which to speak, all I can say is that the Government have moved a significant way and that that allows me and others to support their amendments and reject the Lords amendment.

[James Brokenshire]

It is worth outlining again at the outset the purpose of the Government’s amendments, which is to close a gap that has been highlighted by the Supreme Court, to guard our national security and to deal with a very small number of individuals who put this country’s security at risk. It is only to deal with those very serious cases of people whose conduct meets the requirement of being

“seriously prejudicial to the vital interests of the UK.”

It is important to understand the context and how the Home Secretary, in exercising the power based on the amendments, must have reasonable grounds to believe that under the laws of a country or territory an individual is able to become a national of that country or territory. We have listened to the points that have been made about statelessness, and the amendments address and significantly close the issues that have been highlighted in the other place.

On scrutiny, as my hon. Friend the Member for South Swindon (Mr Buckland) said, the matter has been considered by the Joint Committee on Human Rights, as well as in the other place, so it is not correct to say that it has not been subject to careful consideration in the other place and by Members of this House, or considered in detail. That was incorrectly suggested by the right hon. Member for Delyn (Mr Hanson), who spoke for the Opposition. He has made various assertions that in some way the provisions are not compliant with our conventions and obligations to the United Nations. I reject that. We do not accept that in some way the provisions that are contemplated in the amendments do not comply with our conventions. Indeed, we believe that they adhere more closely to our obligations.

[Yasmin Qureshi (Bolton South East) (Lab)]

rose—

[James Brokenshire]

I am afraid that I do not have time to give way.

We have reflected on the need for oversight and have provided for periodic independent reviews. My hon. Friend the Member for Cambridge (Dr Huppert) asked whether David Anderson is an appropriate person. He is certainly someone we are examining and we want to have discussions, if the amendments are accepted, to consider his role in that context.

We take our obligations on statelessness extraordinarily seriously and in terms of common law the House has considered these matters in the recent past. My hon. Friend the Member for Aldridge-Brownhills (Sir Richard Shepherd) has consistently made that point. There are challenges for the Government in what we are able to do to ensure that evidence can be provided appropriately in guarding our national security, and that gisting of facts and information remains available. It is important that the right of challenge exists, but it is also important that we guard our national security, which is why I commend the amendments to the House.

16:23

Ninety minutes having elapsed since the commencement of proceedings on consideration of Lords amendments, the debate was interrupted (Programme Order, this day).

The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83F), That this House disagrees with Lords amendment 18.

The House proceeded to a Division.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

I ask the Serjeant at Arms to investigate the delay in the No Lobby.

16:23

Division 266

Ayes: 305

---

Conservative: 263
Liberal Democrat: 37
Democratic Unionist Party: 4

Noes: 239

---

Labour: 225
Scottish National Party: 6
Conservative: 2
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Independent: 1
Green Party: 1
Liberal Democrat: 1

Lords amendment 18 disagreed to.

Government amendments (a) and (b) made in lieu of Lords amendment 18.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

I now have to announce the result of the deferred Division on the question relating to the draft Licensing Act 2003 (Mandatory Conditions) Order 2014. The Ayes were 313 and the Noes were 205, so the Ayes have it.

[The Division list is published at the end of today’s debates.]

Before Clause 60

Child trafficking guardians for all potential child victims of trafficking in human beings

[James Brokenshire]

I beg to move, That this House disagrees with Lords amendment 16.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to discuss the following:

Lords amendment 24, and Government motion to disagree.

Lords amendments 1 to 5.

Lords amendment 6, and manuscript amendments (a) and (b) thereto.

Lords amendment 7, and manuscript amendment (a) thereto.

Lords amendment 8, and manuscript amendment (a) in lieu.

Lords amendments 9 to 15 and 17.

Lords amendment 19, and manuscript amendment (a) thereto.

Lords amendments 20 to 23 and 25 to 36.

[James Brokenshire]

This group covers the remaining aspects of the Bill. I will focus on Lords amendments 16 and 24 at the outset, which, as has been highlighted, infringe financial privilege.

Lords amendments 16 and 24 require the appointment of a guardian to represent the interests of children when there are reasonable grounds to believe that they are the victims of cross-border trafficking. The Government wholeheartedly share the noble Lords’ intention to protect and support that incredibly vulnerable group of children. Supporting victims, including children, is at the heart of everything that we are seeking to achieve through the draft Modern Slavery Bill. That Bill aims to tackle the appalling crimes of human trafficking, slavery, forced labour and domestic servitude. Those crimes are quite separate from the matters that are dealt with in the Immigration Bill. In our judgment, it would be wrong and unhelpful to conflate the two.

[Lisa Nandy (Wigan) (Lab)]

Before I came to this place, I spent nearly a decade working with trafficked children. These matters are not separate at all, because many trafficked children come through the immigration system, and often the only state official they come into contact with is a member of the UK Border Agency. These matters are as one and the Immigration Bill is a fitting place to provide support and protection for such children.

[James Brokenshire]

I agree with the hon. Lady that immigration can be a relevant factor and that it relates to a number of the issues that are involved in trafficking. From visiting charities and meeting victims of trafficking, I understand the compelling stories and issues that they raise. However, at its heart, trafficking is organised crime. Sometimes, when it is viewed simply in the context of immigration, significant aspects of the level of organisation and criminality involved can be missed, as can trafficking within the UK. That is why we judge it important to recognise the broader context so that the solutions that are provided are comprehensive and address all the issues involved. The Government’s approach of seeking to understand that broader context and the organised criminality involved has gained support from non-governmental organisations, charitable organisations and others.

16:45

Consensus is also being gained across the House, because we recognise that victims of child trafficking need specialist and dedicated support and that the current provision of support for those children can be patchy and inconsistent. That was why I announced in January our intention to trial specialist independent advocates for victims of child trafficking. The trial was due to start on 1 July across 23 local authorities, to test how those advocates might improve the experiences of those extraordinarily vulnerable children.

The Government consider that the role of our specialist independent advocates is almost entirely aligned with that of the guardian set out in Lords amendment 16, with two important deviations. First, the Lords amendment would extend the provision of guardianship to adults up to the age of 21, whereas our advocates will instead focus on the needs of children, including those who may be involved in an age-related dispute.

Secondly, the Lords amendment would apply only to victims of cross-border trafficking. The evil of child trafficking extends not only to those who are trafficked across our borders but to children who are trafficked within the UK, as the horrific sexual exploitation of girls in Rochdale and Oxford has shown. That is why our specialist independent advocates will offer support to all victims of child trafficking, not just those trafficked across our borders. [Interruption.] The hon. Member for Wigan (Lisa Nandy) is making her point from a sedentary position, but I genuinely do not think that there should be a difference between us on this point. There is a genuine desire to address the issue in its broadest sense and understand it effectively and properly. I know that members of the Joint Committee on the Draft Modern Slavery Bill are here this afternoon, and they have made an enormous contribution to the consideration of these matters. I do not want to get drawn into a broader debate this afternoon—I hope there will be plenty of further time for that—but I believe that there is a growing unity of view across the House on the need to act and the way in which we should approach this issue.

[Lisa Nandy]

I welcome the fact that the Minister is trying to look at broader issues of children’s welfare; perhaps I would welcome that even more from the children’s Minister.

There is a particular issue for children who come into this country from overseas concerning their immigration status. Quite often, the reason we do not get trafficking prosecutions and do not really tackle this awful crime is that we do not treat the victims properly. Children who are accommodated under section 20 of the Children Act 1989 do not have anybody with parental responsibility to instruct their lawyer, which is why this debate really matters.

[James Brokenshire]

I am grateful to the hon. Lady for her intervention and for her genuine passion and concern for the welfare and well-being of an incredibly vulnerable group of children. We are taking forward our pilots of child advocates so that we can ensure that there is support for those children, and we must not take lightly our responsibility for protecting them. However, having tested the model of advocacy, we do not want to risk putting in place a model that would fail to deliver safety for that group in a practical way.

[Mr Frank Field (Birkenhead) (Lab)]

I am not sure there is a dispute between the Minister and my hon. Friend the Member for Wigan (Lisa Nandy) on the issue. If the model that the Minister advocates were to go ahead, it would cover both trafficked children and those who are not technically trafficked but are pushed around and sold in this country. For many of us, the nub of the debate is whether the Government will meet the spirit of the Lords amendment, which is not only to give permission for the Government to go ahead with the pilots but to see whether the scheme will be rolled out universally when the results of the pilots are known.

[James Brokenshire]

I am grateful for the right hon. Gentleman’s intervention, for his work in chairing the Joint Committee and scrutinising the draft Modern Slavery Bill, and for the report that has been produced. The Government are considering that report carefully and will respond in due course.

The right hon. Gentleman is right to say that there should not be dispute on this issue. There might, however, be a difference of emphasis—perhaps I might characterise it like that—between me and the hon. Member for Wigan on why I believe the Immigration Bill is the wrong place to deal with this issue in a broad sense. We are, of course, reviewing work on that initial assessment of when children present to different agencies, and the fact that EU children and non-EU children are dealt with differently in the system. We are examining that carefully and scrutinising the way the system operates at the moment. I hope I can reassure the hon. Lady by recognising that we should consider carefully issues such as initial identification and the way in which different agencies highlight children through that system, as well as the way the system operates and responds, and the different times taken to make an initial determination. It is important that such work is conducted, and it has been commenced by the Government.

In a practical sense, it is important to bring agencies together and to shine a light, as I characterise it, on crimes that have largely been in the darkness. Vulnerable individuals have not been highlighted and brought to attention, and we need greater recognition of the serious criminality involved, and the appalling exploitation and trade in human misery that underpins so many of the dreadful actions we see.

We believe that Parliament has already considered the draft Modern Slavery Bill, and that when the full Bill is presented that will be the right place to address the issues highlighted by the Lords. The full Bill will include an enabling power to ensure that we have the opportunity to test and assess fully the child trafficking advocate role through a trial, before setting in stone its specific functions. By taking that approach we will achieve what is essentially our collective ultimate aim: to give children who have been subjected to this appalling crime the best chance of dealing with the trauma of their experiences.

[Mr Frank Field]

I have two questions for the Minister on this important point. I do not think anyone disputes that it might be better for such provision to be part of the Modern Slavery Bill, but the question is about what the Government will transfer to that Bill. The measure passed by their lordships was not to interrupt the Government’s pilots—they are all in favour of those—but to ensure that once the results of those pilots are through, there will be a statutory basis on which to make the service universal when public expenditure allows that movement to occur. Can the Minister give the House that assurance?

[James Brokenshire]

As I have indicated, our intention is to introduce an enabling power. We will provide a statutory basis for the child trafficking advocate role in the Modern Slavery Bill, which we will be in a position to inform through the trials that are due to start in July. Our concern is that the Lords amendment as currently framed would put those trials at risk—we do not see how the trials could commence if the current provisions are maintained. I hope that by assuring the right hon. Gentleman about the Government’s intention to provide that statutory basis, he will understand that that enabling power will provide the underpinning for further work, which can properly be informed by the results of the trials that will start in the summer.

[Mr Field]

I am grateful to the Minister for giving way, because this issue is so important. He is proposing that, if we do not oppose their lordships’ changes, he is offering in return the trials and, when we have learnt from the trials, a statutory basis for the service. Is that what the Government want to be in the draft Modern Slavery Bill?

[James Brokenshire]

Clearly, having announced the trials at the end of January, I want to see them proceed. It is important that we test the service and the system, which is patchy and not as consistent as I want it to be. Equally, some local authorities provide good services and it is important that we recognise that and learn from them. We want an enabling provision in the draft Modern Slavery Bill to be the bedrock that provides the mechanism, which can be informed by the trials that I want to happen, that can be acted on and be the statutory underpinning that allows it to be developed through the experience of the trials. I hope that right hon. and hon. Members will find that helpful in underlining the Government’s commitment not simply to provide a statutory mechanism through that enabling provision, but to deliver practical action. The most important thing is that we provide support, advice and guidance for this extraordinarily vulnerable group, and that we ensure they are supported through the system. That is what matters most.

[Mr Hanson]

Can the Minister remind us how many trials there will be, and where and when? What is the date of completion and when does he intend to report back to the House?

[James Brokenshire]

The trials are intended to be conducted in 23 areas, commencing at the beginning of July. We have not, at this stage, set an end point for the duration of the trials, but I want evidence and feedback that can inform the consideration of an enabling power in any modern slavery Bill that comes forward. A statutory mechanism will ensure that the trials can commence and that we can learn and benefit directly from them, enabling a statutory underpinning of the optimum provision.

[Lisa Nandy]

I am grateful to the Minister for giving way again on such an important issue. The statutory underpinning for advocates is welcome. I want to check that they will be provided for children who are suspected of being victims of trafficking before they have to go through the very difficult process and jump through those hoops to be deemed a victim of trafficking. It is that process that children find very hard to get through. Will advocates be provided at the point at which concerns are raised that the child may be a victim of trafficking, rather than at the point when they have been deemed by the system to be a victim of trafficking?

[James Brokenshire]

Under the arrangements, each child victim is to be allocated a person with specialist training and expertise in trafficking. They will provide dedicated support and guidance to ensure that the child’s voice is heard. That is often the biggest challenge when there are so many different obstacles, such as language and the trauma the child has gone through. It is intended that the advocates will provide a single point of contact through the care and immigration process and will be responsible for promoting the child’s safety and well-being. That is particularly important in relation to the risk of children being re-trafficked, which is a significant concern. Children have disappeared and the worry is that they have been re-trafficked into slavery.

The scope of the work is being developed further. I note what the hon. Lady has said about initial identification and support throughout the subsequent process. I would expect the trials to involve thorough and appropriate tests, in accordance with the optimal periods during which interventions can take place. I would also expect appropriate support to be provided for children who have come forward and are waiting for an initial assessment of the prima facie evidence relating to whether or not they have been trafficked. I recognise the genuine concern that has been expressed by Members and others about the provision of support, and I hope that my assurances will enable the House to support the Government in disagreeing with the Lords amendments.

17:00

[Mr Frank Field]

If a child was brought into this country and an immigration officer suspected that the child was being enslaved, could the child be referred to the advocate at that point so that the advocate would have a chance of separating the child and a slavemaster?

[James Brokenshire]

Let me reassure the right hon. Gentleman, and the hon. Member for Wigan, that all children who are dealt with by means of the national referral mechanism—with which the right hon. Gentleman will be familiar—will be provided with advocates as soon as they are identified as suspected victims of trafficking. We intend appropriate support to be provided as soon as children have been referred.

Let me now deal with Lords amendments 1 to 4. When the Bill left this House, clause 1 provided for regulations specifying, first, who would count as a family member for the purpose of removal and, secondly, the arrangements for giving notice of removal. The power to make regulations is exercisable by statutory instrument following the negative resolution procedure.

The Joint Committee on Human Rights asked why the original clause gave discretion over whether family members should be notified of removal when we had clearly stated during a debate that they would always be notified. The Delegated Powers and Regulatory Reform Committee believed that the definition of a family member should be in the Bill, and that delegation was inappropriate. The Lords amendments are designed to address all the concerns raised by the two Committees: they would insert in the Bill the definition of family members, the requirement always to notify them of removal, and the effect of the notice.

The Government have transformed the approach to returning families with children, in line with their commitment to end the detention of children for immigration purposes. Lords amendments 5 to 9 and 29 to 34 give legislative effect to our current policies on family returns by putting key elements of the new process into primary legislation. That will guarantee that the fundamental elements of the approach cannot be changed without parliamentary oversight and debate.

First, the amendments prevent families from being removed for 28 days after any appeal against a refusal of leave has been completed. That will ensure that they will always have an opportunity to consider their options and avoid enforced return. Secondly, we are placing the independent family returns panel on a statutory footing: its advice must be sought on how best to safeguard and promote the welfare of children in every family returns case in which return is enforced. Thirdly, we are providing specific legislative protection for unaccompanied children so that they are not held in immigration removal centres when we are trying to return them. Finally, we are providing a separate legal basis for pre-departure accommodation, independent of other removal centres. It will be used only for holding families with children and only within the existing maximum time limits.

I know that my hon. Friend the Member for Brent Central (Sarah Teather) and others have tabled some manuscript amendments to Lords amendments 6, 7 and 8, which were debated in Committee and again on Report in the other place. I am sympathetic to her intentions and the intentions of those who have supported her manuscript amendments. However, although I understand the motivation, her amendments (a) and (b) to Lords amendment 6 and amendment (a) to Lords amendment 7 would widen the definition of families in the family returns process and apply the 28-day period during which a child, relevant parent or carer may not be removed or required to leave the UK to parents who do not live with the child as part of a family unit. They would also stipulate that we could only separate a child from their parents for child protection reasons.

These amendments do not reflect the Government’s returns process. We will always seek to ensure that families remain together during their return, but there are exceptional circumstances in which temporary separation may be necessary. For example, where there is a public protection concern or, indeed, a risk to national security, a dangerous individual might not be considered a threat to their own children but could be a risk to the wider public and we would therefore need to remove them as soon as possible, which might require a family separation.

Manuscript amendment (a) to Lords amendment 8 would mean no unaccompanied child could be detained under Immigration Act powers. Lords amendment 8 reflects the operational reality that unaccompanied children may need to be held for short periods in transit to a port of departure or at the port awaiting removal. These types of removal are rare, but if we do not hold children safely in very limited circumstances while they are travelling unaccompanied in and out of the UK, we increase the risk that they may come to harm by falling prey to traffickers or even absconding. Lords amendment 8 will ensure that detention is for the shortest possible time.

Lords amendments 10 and 11 deal with appeals, and the Government have reformed appeal rights in this Bill to reduce complexity and provide the most effective and appropriate remedy for all cases. Administrative review will provide a faster and cheaper way of correcting caseworking errors, but Lords amendment 10 provides further assurance. It requires that the Secretary of State commission the independent chief inspector within a year of clause 11 being commenced to prepare a report on administrative review. That report must address the specific concerns raised about the effectiveness and independence of administrative review. Lords amendment 11 makes a technical correction to clause 11(5), which provides that the tribunal may not hear a new matter that the Secretary of State has not considered unless the Secretary of State consents to its doing so.

[Jeremy Corbyn]

On the question of administrative review, is it not really a way of avoiding the inconvenience —from the Home Office’s point of view—of a proper appeal where the individual can be properly represented and the whole case be considered? Is it not just another example of trying to get rid of the impediments of any legal appeal system on behalf of the individual?

[James Brokenshire]

The administrative review process is already effective in identifying and correcting caseworking errors. From April to December 2013, 93% of these administrative reviews were completed within 28 days, and 21% of the administrative reviews requested resulted in the original decision being overturned. This shows that the review process can provide an effective way of correcting errors, and it does so in a speedy and efficient manner, so that periods of uncertainty are addressed. I do not think it does anyone any good to have long and protracted periods of uncertainty. Indeed, we are in the perverse position of having 17 rights of appeal, which are being reduced to four, to ensure that matters are dealt with effectively and appropriately, supplementing the administrative review process outlined in the Bill.

The Bill also requires landlords to check the immigration status of their tenants. That is dealt with in Lords amendments 12 to 15. The scheme includes statutory codes of practice giving the technical detail of how it operates. Lords amendments 12 to 15 address concerns of the Delegated Powers and Regulatory Reform Committee to ensure that those codes have parliamentary oversight.

Lords amendments 25 to 28 deal with student accommodation. The Bill already excluded some student halls of residence from the proposed landlord checking requirement. We concluded that there was scope to go further and broaden the exemption for student accommodation. Educational institutions already have a duty to check the immigration status of their international students, and we do not want there to be double-checking of these persons. The changes therefore strike a sensible balance and minimise regulatory burdens on higher education institutions.

Lords Amendments 17, 35 and 36, which were proposed by Lord Avebury in the other place, correct an historical anomaly relating to the treatment of illegitimate children. Nationality law is complex, and anomalies arise, particularly as aspects of family life have changed since the time of the British Nationality Act 1981. In 2006, amendments to the 1981 Act enabled illegitimate children to inherit nationality from a British father in the same way as a legitimate child. Those amendments were not made retrospective. To have done so could have itself caused problems for individuals who were now adult and had made a life for themselves in a different nationality. These amendments enable illegitimate children born to British fathers before 2006 to register as British if they choose to do so, correcting a historical anomaly by providing a route to citizenship for those who want to take it.

[Dr Huppert]

I thank the Minister for the Government’s support for these amendments, which I tried to put in the Bill but encountered some technical difficulties. Will he join me in paying tribute to those who campaigned for many years to get this injustice changed? People such as Tabitha Sprague, Antonia Fraser Fujinaga and Maureen Box tried very hard, and the many thousands affected by this will be delighted that the Government are now fixing it.

[James Brokenshire]

I recognise those who have made the case for this change for some considerable time, and I am pleased that the Government have been able to support these amendments in the other place. I hope that this House will be equally able to support them here. It is important to recognise that they have addressed an historical anomaly and now allow that opportunity to the individuals affected of a route to citizenship that was not available to them before.

[Fiona Mactaggart]

The Minister rightly says that we are dealing with an historical anomaly, and that makes the case for introducing this part of the Bill and commencing it as early as possible. I hope that he can assure the House that he will put his foot on the accelerator to do that, because my constituent whose case prompted Lord Avebury to table these amendments is still stuck in limbo and, like other people, he would like to be able to remedy his situation.

[James Brokenshire]

I am grateful to the hon. Lady for that and I have certainly heard the points she has made.

I know that others wish to speak to their manuscript amendments, but let me just say that Lords amendment 19 clarifies that the Bill does not limit the duty regarding the welfare of children imposed on the Secretary of State or any other person by section 55 of the Borders, Citizenship and Immigration Act 2009. Under section 55, the Secretary of State must make arrangements for ensuring that her functions in relation to immigration, asylum and nationality are discharged having regard to the need to safeguard and promote the welfare of children who are in the UK. That duty continues to apply, and nothing in the Bill impinges on it.

Lords amendment 20 relates to some technical changes concerning the bank accounts measures. Lords amendments 21 to 23 respond to recommendations of the Delegated Powers and Regulatory Reform Committee, ensuring that, where appropriate, affirmative procedure processes apply in respect of certain notices and certain aspects of the sham marriage provisions contained in part 4 of the Bill. I believe that the Lords amendments, with the exception of Lords amendments 16 and 24, improve the provisions, making them clearer and more workable in practice.

[Mr Hanson]

I, again, thank the Minister for his helpful introduction to the Government’s position on the Lords amendments. I am here to maintain Her Majesty’s official Opposition’s support for them and wish the Government to reflect on that again during today’s debate. I pay tribute to Baroness Butler-Sloss for tabling her amendments in the other place. I thank my right hon. Friend the Member for Birkenhead (Mr Field) for scrutinising the evidence for the draft Modern Slavery Bill. I have heard what the Minister said about the proposals on a pilot and the enabling power in such a Bill, but I remain unconvinced that that will lead to the action that we want and, indeed, the action that the other place has proposed for consideration.

17:15

The House of Lords voted by 282 votes to 184 for the proposed new clause, which received cross-party support. The measure was introduced by Baroness Butler-Sloss and seconded by Lord McColl, who is a member of a Government party. I remind the House that the House of Lords took that action because there were grave concerns that we should take immediate action. The measure had cross-party support and has been cited by my hon. Friend the Member for Slough (Fiona Mactaggart) and my right hon. Friend the Member for Birkenhead.

Child trafficking remains a serious issue. If a relevant child has arrived in the United Kingdom and is a potential victim of trafficking, it is important that, once they are identified, an independent individual can monitor and represent the child’s best interests and support them in a defined role. The Lords amendment details a number of key functions for the child trafficking guardian. Those functions could be tested by the pilots that the Minister is examining, and they would give statutory legal backing to a range of issues, including responsibilities to advocate that all decisions relating to the child are made in the child’s best interests, to look at the statutory role to ascertain the child’s wishes and to ensure that the child receives appropriate care, safe accommodation, medical treatment, psychological assistance and education, translation and interpretation services. Those are all positive and, in my view, necessary requirements.

My hon. Friend the Member for Slough spoke about legal access and representation, which are equally important. Advice on legal rights is extremely important, as is keeping the child informed of relevant immigration, criminal, compensation, community care and public law proceedings. We must ensure that we contribute to the identification of a durable plan to safeguard and promote the child’s best interests. We must provide a statutory link between the child and a number of agencies, including immigration services, the police, local authorities and the national health service, to ensure that the child’s best interests are safeguarded.

It is important that someone has a statutory responsibility for the child who has arrived in the United Kingdom, perhaps with a trafficker but without family, so that contact is made with their family to establish what is in the child’s best interests in the longer term. It is important that that person has a statutory role to liaise with the immigration service in handling the child’s case and that they accompany the child to police, immigration and care proceedings. If a child appears before the courts, it is important that somebody is there to advise them.

I am approaching my 57th birthday, as I think you are, Mr Deputy Speaker. If I faced all those trials, even with the life experience that I have, I would it find it difficult to deal with all those issues. A child in a strange country needs the statutory protections provided by the amendment tabled by Baroness Butler-Sloss. It is important, as the Lords amendment makes clear, that a child trafficking guardian should undertake training in a number of things. They should probably be, as the amendment suggests, an employee of a statutory body such a local charity or council, or a volunteer with a charitable organisation.

We are debating whether we accept giving statutory underpinning to those issues, or whether we accept the Minister’s proposal of 23 pilots to commence in July, without a date for completion, with an enabling power—whatever that means in real life—to do some or all of those things. But we need to press the Minister more on the detail of his alternative. The proposal from Baroness Butler-Sloss sets out clearly what is expected of a potential guardian for any trafficked child or any child who is subject to potential trafficking. Even though my right hon. Friend the Member for Birkenhead has done good work in the Joint Committee on the draft Modern Slavery Bill, there is a template that we could agree today and which could return to the other place very shortly, with Royal Assent within a matter of days.

[Mr Frank Field]

I hope that what the Minister has said does satisfy the other place, but if we vote against the Government motion tonight, it can decide. That is the advantage. I think that the Minister has satisfied us, but I would not want the other place and those who moved the amendments not to have the possibility to consider when they read Hansard whether they are satisfied.

[Mr Hanson]

My right hon. Friend makes a valuable point. As I said at the beginning, the vote was 282 to 184 in favour of the proposal. If we reject the proposal today, we are left with no proposal. We are left with a promise of a pilot and a Bill after the Gracious Speech, following the scrutiny rightly given to it by my right hon. Friend.

[Dr Huppert]

A few of us are slightly confused about the procedure, and the right hon. Gentleman has been here longer than I have, so perhaps he could help us. If the House were to accept the Lords amendment, the Lords would not discuss this again; whereas, if we rejected it, the Lords would have the chance to discuss it. Regardless of merit, is that not the right way round?

[Mr Hanson]

That is the right way round. The Lords expressed a clear view on the matter. The Lords will be able to examine the Government’s proposal when the Modern Slavery Bill comes forward. But we have a clear template today, and I want to see that enacted. If the Government accept this today, the proposal is a clear template. We have a number of proposals from Baroness Butler-Sloss, and I have gone through them today.

[James Brokenshire]

I think that the right hon. Gentleman is saying that he wants to accept the Lords amendments because he feels that they are right, but that if he does so, it would not allow any further consideration by the Lords in terms of reflecting on what I have said from the Front Bench.

[Mr Hanson]

Their lordships have expressed their view clearly, and what the Minister has said today is known already. He announced that he had said in January that he would have pilots on the matter. The draft Modern Slavery Bill has been scrutinised by my right hon. Friend the Member for Birkenhead, and there is a template that we should support, and that is why I reject the Government’s proposal.

[Mr Harper]

I think that the right hon. Gentleman is missing the fact that the amendments are narrowly framed. They deal only with children who come to the UK from abroad. On trafficking and modern slavery, I have constant representations about not just focusing on people who come from outside the UK. The Minister has set out a sensible point. If we reject the amendments, as the right hon. Member for Birkenhead (Mr Field) has said, the other place has the option of sending them back to us again, and we can consider them again if it does not think that the Minister’s representations hold water. That is the right course of action.

[Mr Hanson]

There is clearly a common interest but a disagreement on procedure. If the Minister has a view about the impact of children being trafficked in the UK, such as in the case in Rochdale that he mentioned, he has the draft Modern Slavery Bill to contribute to those matters. But there is a clear will from the other place, which was supported on a cross-party basis, and I would wish to see that as the template for discussion today.

[Mr Harper]

One thing that would not be helpful is to put these measures in place and have a procedure that deals with foreign national children when the draft Modern Slavery Bill, expertly scrutinised by the right hon. Member for Birkenhead, will put in place yet another process for children who happen to be UK nationals. It would be much more sensible to have one process that deals with all children who are victims of slavery. We should not make the system more complicated than it need be.

[Mr Hanson]

Imperative action is needed now. I have dealt with a number of Bills over the past few years and seen the Government bringing back amendments and amending their own legislation not six months after they introduced it. There is potential here today for a clear statement and clear action on the international trafficking of children. The pilots that the Minister brings forward can be undertaken.

[Fiona Mactaggart]

Does my right hon. Friend agree that if the Minister gave a commitment, which he has not done, that this comprehensive amendment, with all the powers for advocates included, would be in his proposed Modern Slavery Bill, we would not feel the need to press this to a vote? However, the Minister has not yet given that promise.

[Mr Hanson]

My hon. Friend is, as ever, correct. I have not yet had, following my intervention on the Minister, a closing date for his proposed pilot. We do not know what the outcome of that pilot will be. We have taken a principled position on the amendments from Baroness Butler-Sloss that there is scope for that to be done immediately. I am talking about not just us here, but UNICEF, Anti-Slavery International, Barnardo’s, the National Society for the Prevention of Cruelty to Children and Amnesty International. An EU directive, which may not find favour with everyone in the House, says that we should consider that step. I understand that position, because 5.5 million children globally are trafficked each year. The UK Human Trafficking Centre identified 549 child victims in 2012. The national referral mechanism recognises 349 victims. A number of trafficked children face being sold into the sex trade and being exploited through work, cannabis farming, forced begging and sexual exploitation.

There is a need now to send out a strong signal that we want to take action on that in England and Wales. Trafficked children who arrive in Scotland value the care and support that they receive from their appointed guardians. That system works in Scotland, yet constituencies such as mine and those of my right hon. and hon. Friends still face real difficulties in that regard. Such a system operates not just in Scotland, but in many western European states, including the Netherlands, Belgium and Germany. There are templates for a system and it is time that we put in place a legislative framework for it. I wish to see that undertaken and supported today.

In passing, may I say that I welcome the changes on residential accommodation that the Government have accepted from the other place? In particular, I welcome the changes on student accommodation. I am pleased that my hon. Friend the Member for Sheffield Central (Paul Blomfield) is in his place today, as he has pressed over the past weeks and months, in Committee, to me personally and to the Minister, a very strong case to ensure that all student accommodation was included in the Bill. It is good that, following the discussions in Committee and the representations from members of Sheffield university’s students union whom my hon. Friend brought to London, the Minister has accepted that point. The Minister will have our support on those Lords amendments that have been accepted on residential landlords, students and other areas, because they are important issues.

I look forward to hearing what the hon. Member for Brent Central (Sarah Teather) has to say on her manuscript amendments. The Lords amendment has our support, and I hope that it will have the House’s support in due course.

17:29

[Sarah Teather]

I have tabled a series of manuscript amendments today to seek clarification from the Minister. I hope that he will have an opportunity to respond to my points at the end of the debate.

Let me deal first with amendment (a) to Lords amendment 8, which is my principal concern. The ending of routine detention of children in the immigration system is one of the areas of which I am most proud in my record in government. The Government can be extremely proud of that and it has made a significant difference to many children’s lives. Many thousands of children used to be detained in the immigration system and there is significant evidence of the harm that that causes to children’s mental health.

It was very hard work to get to the 2010 agreement, which followed a painstaking process of negotiation, but it has made a significant difference. Trying to enshrine it in legislation is an extremely positive step and it is important that what happened before can never happen again, but with these issues the devil is always in the detail. I am not yet persuaded that the amendments, which we have not had an opportunity to debate as they were tabled in the Lords, have the detail correct.

I have a number of questions, which I have not been able to get answers to in private, so I hope that the Minister might be able to answer them today. I tabled amendment (a) because I do not understand why we would reasonably need powers to detain unaccompanied children in this way. As drafted, the Government amendments afford less protection to unaccompanied children than to those who have a claim as part of a family. If they are with their family, the family returns panel process is enacted. No such protection applies to unaccompanied children.

If a family needs to be held prior to deportation for a short period of time they are held in Cedars, which has Barnardo’s and specialist social workers working with it and has a carefully designed process to ensure that the welfare of children is paramount. An unaccompanied child who needs to be held for a short period of time will be held in a holding facility, and at the moment they do not have any rules for best practice. Successive Governments have held that question in abeyance and my colleague Lord Avebury has managed to drag out of the Government a commitment finally to try to bring forward some rules. I am very pleased to see that, but the conditions are very different from those in Cedars.

The amendments, as drafted, do not quite meet the Government’s guidelines. I acknowledge that there is currently no time limit for the detention of unaccompanied minors, so the 24-hour limit in the Government’s amendments is at least a step forward, but chapter 31 of the immigration and nationality directorate instructions states that

“detention will occur only on the day of the planned removal to enable the child to be properly and safely escorted to their flight and/or to their destination.”

Although the amendments imply that people could be held overnight, the rules do not suggest that, so I would appreciate the Minister’s response on that point. I see that he is dealing with a matter of whipping, so I do not know whether he heard me. Perhaps he can be refuelled from the Box to ensure that that point is answered.

Chapter 45 of the enforcement instructions and guidance states:

“Unaccompanied children (i.e. persons under the age of 18) must only ever be detained in very exceptional circumstances, for the shortest possible time and with appropriate care”.

The new clause inserted by Lords amendment 8 also contains the power for unaccompanied children to be removed without removal directions already being in place so long as the decision whether or not to give such directions is likely to be positive from the Home Office’s point of view. That does not seem to me to be very satisfactory.

The serious question is: why do we need to detain unaccompanied children at all? I have asked officials about particular cases in which this might apply, and they gave me the example of a Japanese student who wanted to come to the UK to study but found that the institution they were going to study at had suddenly been dissolved. We would need to put them on a plane rapidly, so we would have to hold them for a short period of time. The Minister gave the example of someone who might have to be detained for their own safety to prevent them from being trafficked. That makes me sigh, because it is a typical Home Office response. The Home Office always assumes that the natural reaction to any problem is enforcement, but our duty in this case is protection rather than enforcement. We tend to mistake those two things and it is a psychological trait of the Home Office always to assume that the answer is enforcement and that is precisely why it cannot always be trusted to come up with policy in this area.

[James Brokenshire]

indicated dissent.

[Sarah Teather]

I am sorry that the Minister is upset, but it means that he has heard me.

If an unaccompanied, vulnerable child turns up at a police station, the police do not put them in a cell, but get in touch with social services. Why can we not do the same for unaccompanied children who come here as migrants or to apply for asylum? Why do we need to detain them? Surely our duty is to protect them. There is plenty of legislation that allows us to do that, and I have not heard an example of detention being required as opposed to protection with appropriate powers of social services.

What really bothers me is whether this is a preamble to a more significant change in policy on the forced removal of unaccompanied, asylum-seeking children. Currently, the United Kingdom does not routinely remove unaccompanied, asylum-seeking children, but it is probably the worst kept secret that the Home Office wants to be able forcibly to remove more unaccompanied children, particularly to Albania and Afghanistan. My concern is that the Government’s amendment leaves wide open the possibility of a drastic expansion of forced removal of children. Instead of moving towards the ending of detention of children for immigration purposes, the clause could allow more unaccompanied children to be detained for the purposes of removal. I am desperately hoping that the Minister will tell me that my fears are ill founded, and I will be delighted if he does so. I hope that he can answer my other specific points about why we cannot simply involve social services and protect children in the small number of such cases instead of detaining them using enforcement powers.

My amendments to Government amendments 6 and 7 also relate to child detention and essentially ask for clarification and strengthening of our 2010 commitment not to split families to achieve compliance with the immigration process. The Minister will be aware that Barnardo’s, which works closely with the Government at Cedars, has produced a report stating that family splits are, unfortunately, sometimes used to effect enforcement of immigration provisions. We agreed in 2010 that we would not do that, and my amendments seek to strengthen that commitment and to make it clearer. In particular, there are sometimes cases when a parent lives away from the family temporarily. The obvious case is when they are in immigration detention, but similar cases are when someone has been sectioned, is in hospital or is in prison. I am worried that the legislation as drafted does not capture such cases or consider the best interests of children, and is not in the spirit of the agreement that we negotiated in 2010.

Finally, I tabled an amendment to Lords amendment 19 to clarify that the best interests of the child should continue to be a primary consideration in all cases involving children. The Joint Committee on Human Rights criticised the Government, saying that they have

“not explained how in practice the provisions in the Bill are to be read alongside the section 55 duty. Without such explanation there is a danger that front-line immigration officials administering the legal regime will be unclear about the relationship between the children duty in section 55 and the new tests introduced by the Bill which use different and unfamiliar language.”

Lords amendment 19 goes some way to meeting that concern, and I explored some of the issues in amendments tabled on Report. It confirms that it is necessary to take into account the need to safeguard and promote the welfare of children in the UK, but I am worried that it does not go far enough because the section 55 duty applies only to the Home Secretary and not to the courts. My amendment makes it clear that consideration of children’s welfare should always be the primary concern. That is necessary because there is growing evidence that recent immigration rules are negatively impacting on decision makers’ understanding of what factors should be taken into account when considering the best interests of children. For example, research last year by Greater Manchester’s immigration aid unit into unaccompanied, asylum seeking children found that, in seven of 10 cases analysed, the Home Office failed to carry out any determination of the child’s best interests. Similarly, last year’s audit of Home Office procedures by the United Nations High Commissioner for Refugees highlighted the lack of any systematic collection or recording of information necessary to determine a child’s best interests. That includes the lack of a process to obtain the view of the child. This proposal simply tries to make sure that the Government do the things they say are their priority. At the moment, the Bill still leaves some confusion.

[Paul Blomfield (Sheffield Central) (Lab)]

I want briefly to seek clarification in relation to international students and the changes that have been made to the Bill in relation to landlord checks. I pay tribute to Lord Hannay and others who have pressed this point in the House of Lords. I regret that students are included in the Bill at all, and I know that many Members on both sides of the House feel that they have no place in this debate.

The point relates to the changes that have given powers to universities to nominate students to occupy accommodation. That is a welcome move, and I am glad that the Government have accepted it. Speaking for the Government, Lord Taylor said in the other place that

“nominating is just the naming of an individual as being a student at a higher education institution…It is a form of vouching for the genuineness of the student’s immigration status. That is all.”

Baroness Warwick asked whether it would be

“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?”

This is crucial, because there is a brief period between being accepted into an institution and being enrolled during which many students sort out their accommodation. In response to Baroness Warwick, Lord Taylor said:

“Yes, absolutely: that is the case.”—[Official Report, House of Lords, 3 April 2014; Vol. 753, c. 1056-1057.]

That involves a potential contradiction.

Will the Minister confirm in his closing remarks, or in intervening on me now, that an institution can nominate a person who has accepted a university place and has been given a confirmation of acceptance to study, but is awaiting a visa, so that they can confirm their accommodation before they have been issued with their visa?

[Mr Harper]

I am grateful to be called to speak, Mr Deputy Speaker. I will make sure that I leave the Minister sufficient time to respond to the points that have been made. I will keep a close eye on you, and if you think I am not leaving adequate time, I am sure you will indicate firmly that I should sit down.

I support what the Minister said in rejecting Lords amendments 16 and 24. I very much want us to deal with those who have been trafficked and victims of modern slavery, but I want us to implement a system that will apply to all children who have been trafficked, and a system that works. I want that decision to be informed by the pilots that the Minister is conducting. That is because in England and Wales the local authority has the legal responsibility to look out for the best interests of those children. In some local authorities, that system works very well, but in many it does not. The legal position is clear, but what is important is not what the law says, by itself, but how it is implemented.

That is why I want to make sure that the Minister runs those pilots and looks at their results. He has clearly stated that he will make sure there is an enabling power in the draft Modern Slavery Bill and that the detail of how we bring these powers into effect can be informed by the pilots. He gave a very clear commitment at the Dispatch Box to use what is learned from the pilots to bring that into force. That is a sensible procedure. I agree with the right hon. Member for Birkenhead (Mr Field): I think there is no disagreement in the points made by him, by the Minister and by the hon. Member for Wigan (Lisa Nandy), who has long experience of these matters. We all want to achieve the same thing, and I want to make sure that it is done in the most practical way possible.

I welcome the moves in amendments 5 to 9 and 29 to 34 to put on to the Statute Book the Government’s current policy on the family returns process. I previously gave some commitments at the Dispatch Box when this matter was raised by my hon. Friend the Member for Cambridge (Dr Huppert), and when the Bill was going through Committee, in saying that the Government would bring forward those amendments in the House of Lords. I am very pleased that my hon. Friend the Minister and his colleague, Lord Taylor of Holbeach, were able to do so. That is a great step forward that locks these provisions into place.

The manuscript amendments tabled by my hon. Friend the Member for Brent Central (Sarah Teather) are not helpful. The issue of an individual living in a household with the child is important. Otherwise, those who have no right to be in the United Kingdom but who happen to have a child here for whom they have no parental responsibility and with whom they have no contact will use that child as a legal tool to avoid being removed from the UK. What is worse, it would encourage people who have no right to be in Britain—a judge set this out clearly in his legal judgment on a specific case in which he jailed the relevant couple—to have children for the specific purpose of avoiding removal from the country. That is not in the interests of children or of the proper working of the immigration system, so I urge the House not to support the manuscript amendments.

17:45

My hon. Friend also addressed the provisions in Lords amendment 8 on the detention of unaccompanied children. I can think of a clear example. She mentioned the need to put children in contact with social services, but relevantly qualified officials are not always immediately available if a child turns up. If there is a delay of a few hours while waiting for a social services person to turn up, the child will, for their own protection, be detained by a Home Office official. That is, technically and legally, detention. If Home Office officials did not have the power to do that, there would be nothing to stop the child leaving the port of entry and potentially coming to harm. I do not think the Minister would be carrying out his duty to protect such children if he allowed that. It is a common occurrence. If Members talk to staff at ports, they will realise that social services officials are frequently not available immediately when unaccompanied children turn up. Technically, therefore, those children are detained. There is a limit on that detention and I think the proposal is sensible.

Overall, the bulk of the Lords amendments are sensible and I hope they will be accepted. I think that the Minister has good reason for wishing us to reject two of the Lords amendments, and I do not think the manuscript amendments tabled by my hon. Friend the Member for Brent Central would improve the Bill. In fact, I think they have the potential to damage the interests of children and I hope the House will reject them.

[James Brokenshire]

This has been a useful opportunity to touch on a number of important issues. In some ways, we have strayed from the strict provisions of the Bill—understandably, I think—particularly with regard to trafficking and the protection of children.

On the pilots and the point of referral, I reassure the hon. Member for Wigan (Lisa Nandy) that the intention is to refer all children suspected of being victims of trafficking to the national referral mechanism. They will be allocated a child trafficking advocate at the point of identification. The advocate will be able to provide support as soon as the child is identified in those first crucial hours. I think that is the point the hon. Lady made. In other words, the child advocate will be available when a child has been identified and the intention is to make a referral to the NRM. I hope that gives the hon. Lady the assurance she seeks. I recognise that, during the initial hours in which a child is identified, they will be very vulnerable and questions will be asked about what should happen to them, so they will need an advocate to support them during that early phase. I am grateful to the hon. Lady for allowing me to provide that clarification.

In response to the Opposition’s Front-Bench spokesman, the right hon. Member for Delyn (Mr Hanson), I have clearly set out our approach to the enabling power. It is important that we crack on with the trials and get those pilots under way, so that effective support can be provided quickly—that children will benefit and that we have the statutory underpinning. I know that the right hon. Gentleman is not satisfied by that and that he supports Lords amendment 16, although it deals only with cross-border cases and covers those up to the age of 21. There is clearly a difference between us. I hope that the House of Lords will consider the points made by the Government and recognise our clear intent and commitment to seek to provide such support.

I want to address head-on the point about student accommodation made by the hon. Member for Sheffield Central (Paul Blomfield), who I know takes a close interest in the issue of support for students and in the sector generally. A tenancy can be offered on a conditional basis when the visa is processed, and we will deal with that point when making the necessary codes and regulations to implement the scheme. I am sure that he will take a close interest in that further detail when it is published after the passage of the Bill. I hope that that clarification will help him and the sector at this time.

My hon. Friend the Member for Brent Central (Sarah Teather) highlighted several points, particularly about unaccompanied children. My hon. Friend the Member for Forest of Dean (Mr Harper) commented on the short-term need—the period in which social services should respond to the arrival of an unaccompanied minor in the UK—and the provision is intended to cover precisely those circumstances. I echo the hon. Lady’s comments about the tremendous work done by Barnardo’s, and she was right to draw attention to the support it provides at Cedars, but that support is intended for a longer period. In relation to unaccompanied children, we are talking about hours, rather than any longer period. Cedars can obviously provide support for a period of days in certain circumstances, as she knows. No unaccompanied child can be detained, but the operational reality is that unaccompanied children may need to be held for short periods in transit to a port of departure or while waiting after their arrival.

We will always seek to ensure that families remain together during their return, although temporary separation may sometimes be necessary to ensure that a family can return safely. We would not separate a family solely for a compliance reason; it will be done only when it is considered to be in the best interests of children for them temporarily to be separated from their parent or when the presence of one of the parents or carers is not conducive to the public good.

On the position of my hon. Friend the Member for Brent Central on Lords amendment 19, the need to safeguard and promote the welfare of children who are in the UK—

17:53

Three hours having elapsed since the commencement of proceedings on consideration of Lords amendments, the debate was interrupted (Programme Order, this day).

The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83F), That this House disagrees with Lords amendment 16.

17:53

Division 267

Ayes: 307

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Conservative: 267
Liberal Democrat: 39

Noes: 241

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Labour: 224
Scottish National Party: 6
Democratic Unionist Party: 5
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Independent: 1
Green Party: 1
Liberal Democrat: 1

Lords amendment 16 disagreed to.

The Deputy Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83F)

Question put, That this House disagrees with Lords amendment 24.

18:07

Division 268

Ayes: 304

---

Conservative: 266
Liberal Democrat: 37

Noes: 240

---

Labour: 224
Scottish National Party: 6
Democratic Unionist Party: 5
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Green Party: 1

Lords amendment 24 disagreed to.

Remaining Lords amendments agreed to, with Commons financial privileges waived in respect of Lords amendments 7, 16 and 24.

Motion made, and Question put forthwith (Standing Order No. 83H), That a Committee be appointed to draw up Reasons to be assigned to the Lords for disagreeing to their amendments 16 and 24;

That James Brokenshire, Stephen Gilbert, Mr David Hanson, Anne Milton and Phil Wilson be members of the Committee;

That James Brokenshire be the Chair of the Committee;

That three be the quorum of the Committee;

That the Committee do withdraw immediately.—(Claire Perry.)

Question agreed to.

Committee to withdraw immediately; reasons to be reported and communicated to the Lords.

EU Ban on import of Indian Alphonso mangoes

Wednesday 7th May 2014 Commons Chamber

18:20

[Keith Vaz (Leicester East) (Lab)]

If you were at Prime Minister’s questions today, Mr Deputy Speaker, you would know that I asked the Prime Minister about the EU mango ban, a decision taken by the European Union without consulting this House or British Ministers. This vote took place with officials. Last week I asked local residents who were affected by this to gather a petition so I could present it to the House, and in a very short time 329 local residents have signed it—people who regularly buy and eat mangoes and those who sell them. I present this petition today on behalf of Hasmukh Pabari, Darmesh Lakhani, president of the Belgrave road traders association, Joga Sandhu, Shahidullah Khan and Ratilal Patel.

The petition states:

The Petition of residents of Leicester East,

Declares that the EU ban on the importation of Alphonso mangoes from India is unjust, that petitioners are anxious about the hugely detrimental impact that this ban will have on the livelihoods of millions of people in, and on the economies of, both the UK and India, and further declares that there has been a significant lack of consultation with both the Parliament and the affected people.

The Petitioners therefore request that the House of Commons urges the Department for the Environment, Food and Rural Affairs do everything possible to reverse this ban, to develop an action plan on how best to progress in this matter and to better communicate with the people affected.

And the Petitioners remain, etc.

[P001348]

Self-Build and Custom-Build

Wednesday 7th May 2014 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Gavin Barwell.)

18:22

[Mr Richard Bacon (South Norfolk) (Con)]

It is a great pleasure to have an Adjournment debate on the importance of self-build and custom-build housing, and particularly to do so in national self-build week, so may I start by thanking you, Mr Speaker, for allowing this debate in national self-build week?

Grand Designs Live has been taking place at the ExCeL centre in the last few days and has had over 100,000 visitors, and I know that a number of Department for Communities and Local Government Ministers have attended the event, which was greatly appreciated. It was an excellent thing to support. I also want at the outset to give credit to Mr Ted Stevens for all his work in this area. He runs the National Self Build Association, NaSBA, and he has done much, against the odds, to promote this sector and help people understand that building their own property, or getting a piece of land and getting somebody to build a property for them, is possible.

My interest is as the recent founder and chairman of the new all-party group on self-build, custom-build and independent housebuilding. I should also say at the outset that the term “self-build” is in some ways perhaps almost uniquely unhelpful as it immediately creates the impression that everyone who wishes to do this has to learn how to become a plumber or an electrician or a joiner, and that simply is not the case. Probably the best definition I have come across was in a paper by Alex Morton, then of Policy Exchange, called “A Right to Build: Local homes for local people.” I should say that Alex Morton has done a great deal to promote the interests of this sector and to draw the Government’s attention to its value. In answer to the question about what we mean by self-build, he stated:

“The notion of self-build…does not mean that the entire process is handled by a single individual from start to end. It means that an individual or family has had serious input in the design and construction of a house, a house they then live in for a prolonged period of time.”

At the moment, part of self-build’s image in this country is as running on a spectrum from the “muesli fringe” to the eccentric wealthy wives of hedge fund managers. Those elements do exist, and I say nothing against either of them. We might say that what the muesli fringe are trying to do with community-led, bottom-up solutions is reach for ways of dealing with housing problems in an environment in which they feel powerless. What I would like to do, and what I would like to see the Government do, is make it even easier for their voices to be heard. The idea of a muesli fringe at one end and hedge fund managers’ wives at the other is a caricature. Self-builders make up an important but small part of the housing market, with about one in 10 houses being built in that way.

The self-build market is divided into a number of different components. Perhaps the most established is what we might even call the “established market”, comprising people in their 40s, 50s or early 60s who already own a property and have the cash available to buy a plot, and whose typical budget is in the region of £250,000 to £350,000. Such people are primarily driven by the opportunity to have the home they really want and to reduce running costs. A moot point, which we might deal with later, is why the big national house builders, the top 10 of which are responsible for 50,000 houses a year, do not already build houses that have extremely low running costs. They build houses that have lower running costs than the ones they were building 20 years ago, but it is possible to build a house that costs £200 a year to run, as I found when I visited a Passivhaus in my constituency that was built by the excellent Saffron Housing Trust. As I was told that, I thought that that is exactly the sum we pay out on the winter fuel allowance each year, and it would be much better to have homes that cost little to heat rather than paying so much money to people to insulate poorly constructed and insulated homes of an old design. Of course this goes further than that because, as anyone who has watched “Grand Designs” will know, it is possible to build a house that actually makes people money—it makes an income because it is so fuel-efficient.

The sector I just described, the more established market, is only one part of the self-build market—or the interest for self-build, as I should call it. The potential boom that could arise in self-build will be driven by a different group of people: a younger generation in their 20s, 30s and perhaps 40s, many of whom are struggling to afford a new home and have much smaller budgets, perhaps of £100,000 or up to £200,000. Such people will be driven by the opportunity to have a say in the home they really want, but mainly by the affordability benefit.

One of the most important aspects of this debate is the idea that self-building is an eccentric or odd activity, because in fact the UK is the outlier. Nearly all the other countries in the developed world do this much better than we do. In Denmark 40% to 45% of houses are constructed in this way. In France and Germany, countries that are in many ways comparable to the UK, although France has a bit more land, the figure is more like 50% to 60%. The figure for Sweden is 65% and even the figure for little Austria is 80% or higher. The issue is the structure of our entire market and how difficult that makes it for anyone who would like to self-build to get things off the ground. People often do not have a real or effective choice that they can turn into a reality; it is an aspiration rather than a reality in many cases.

That brings me to the issue of choice in the marketplace. When we ask what people spend most of their money on, we find that for nearly all of us it is where we live, whether we are renting or buying, yet more genuine choice exists in the market for beer, apples or perhaps even toothpaste than in the market for housing. It is an extraordinary paradox that where people spend the most money, they also have the least choice. That happens because of a collision of at least three important facts. The first fact is land—they have stopped making it. There is no land any more—there is a permanent scarcity of land, which leads to fact No. 2: the planning system. There is a plethora of rules and regulations that have been developed over many decades to deal with that scarcity. Thankfully, the Government have slimmed down the planning regulations from an indigestible 1,300 or 1,400 pages to something that the lay person can begin to read and get their head round. That was very much overdue, and I give enormous credit to the Government for doing so.

The system still has to cope, whether there is a 52-page policy framework or whether there are hundreds and hundreds of pages. It has to deal with the intrinsic issue of the tension between competing land uses. Fact No. 3 is the nature of the stock market and our very open capital markets. I mentioned earlier that the top 10 house builders do about 50,000 houses a year; the top 25, including the next 15, do another 25,000. The top 25 are responsible for about 74,000 or 75,000 houses a year. Because they are large and publicly quoted, they have relatively easy access to the capital that they need. They buy up the land that they need to build, and sit on it, land banking it in some cases for years.

“Land banking” is something of a misnomer, because it implies that people buy the land, but they do not always do so. What they often do is buy the option to buy it. They pay a landowner a sum for the right to buy the land for a specified period in future, and by doing so they can obtain the advantages of owning the land—crucially, preventing anyone else from owning it or even trying to buy it—without the inconvenience and cost of capital outlay. That approach, from their point of view, is much more flexible.

The current system does not give large house builders an incentive to become long-term place makers and place shapers. I do not blame large, national house builders for acting as they do: they are merely acting rationally within the constraints of the system. In fact, one could say that large-scale house builders are not so much incentivised as required by the current system to take as short-term a view as possible. They have to get in, build the houses and sell them. They have to pay as small a contribution as they can get away with towards the infrastructure; then they have to get out.

What is the result? Kevin McCloud, the presenter of “Grand Designs” who spoke at a packed all-party meeting—I am pleased that DCLG Ministers attended—said:

“The consumer has been on the receiving end of a pretty poor deal. We build some of the poorest performing, most expensive and smallest homes in Europe. That’s not something to celebrate.”

It could be quite different. According to Ipsos MORI, 53% of the adult population would like to build a house at some stage in their life, and 30% would like to do so in the next 15 years. Some 14% are researching how and what to do, and whether they can finance it. More than 1 million people want to buy a site and start building in the next 12 months.

Much of that is aspirational thinking demand rather than actualised demand, if I can put it that way without getting too Hegelian. The fact is that it is very, very difficult. If someone tries, the first thing they encounter is some official at the council saying, “Have you done the archaeological survey?” They will say, “I’m sorry, I didn’t know that I needed to do an archaeological survey.” At every stage, the process is made as difficult as possible. The two key issues are the availability of land for purchase by individuals and finance. I pay tribute to Lloyds bank, which helped to sponsor the report published by the university of York a year ago. That report was entitled “Build-it-yourself? Understanding the changing landscape of the UK self-build market”. Stephen Noakes, who is a senior official at Lloyds bank and head of mortgages, came to our last meeting with DCLG Ministers.

The university of York report points out—and Mr Noakes from Lloyds bank dwelt on this—the need to create structures that de-risk the process and make it easier for financiers to come in and take a serious interest and a serious stake in this space.

The university of York report states:

“Both individual and group self-build are characterised throughout by uncertainty. In part this is due to the components of self-build being organised as a series of silos and disjunctures. Each step (land acquisition, design, planning, finance etc.) is often taken without any certainty that subsequent steps will be realised. Uncertainty brings delay and sometimes additional costs. Few steps have been taken towards forging more integrated approaches, but these could bring significant benefits in terms of greater certainty, less risk, control of costs and speed of completion.”

A variety of different mechanisms might be used for that. Off-site construction, which is now a completely different world from what it was when we spoke pejoratively of prefabs 50 years ago, is one such example. The Passivhaus that I mentioned earlier, which I visited in my constituency, had triple-glazed windows that were constructed off-site and installed as completed units. Why is it that all house builders in this country do not as a matter of standard policy install triple-glazed windows, because it would be much better and much more energy efficient in the long term?

The Government’s response so far has been quite encouraging. The announcement in the Budget, which did not get a huge amount of coverage, but which I was enormously excited by, was for £150 million to help councils to develop serviced plots. A serviced plot is what it sounds like. It is a plot where, instead of being a scruffy piece of land where people cannot see which bit they own and which bit they do not, the difficult bits have already been done. The roads and sewers have been constructed and the foul and fresh water have been connected for the housing, as have the electricity and the gas. There is a lot of experience of that on the continent. In the Netherlands, where this has been done in Almere, which is just opposite Amsterdam on the other side of the IJsselmeer, if 100 serviced plots are put on the market at the same time, people queue through the night, like they do outside Harrods before the January sale, for the chance to buy one.

There is enormous pent-up demand in this country as well, but it just does not know where to go or how to get a foothold. That is why the Government’s initiative to promote the development of more serviced plots, essentially to take steps towards a much more integrated approach, is so important. It is—I say advisedly—only £150 million. I would have preferred it if it had been even more, but it is not nothing. It will do a considerable amount for the self-build sector. It will make a big difference in the next couple of years. I fully expect it to be a success, particularly as the money is recyclable. The money has to be put in for the plot. Simple mathematics tell us that £150 million for 10,000 plots is £15,000 a plot, but the money is returned, and it can be used again. That is the great attraction of this approach. I hope that once it has proved successful, as I am sure that it will, the Government will take this considerably further.

What I had not appreciated when I started getting interested in this was the breadth of possibilities of self-build and custom-build. My first interest in the sector was spawned by representing a very rural constituency where many young couples simply cannot imagine how they will get on the housing ladder, let alone in the village where they grew up, have a stake in their own community, own their own house and start a family there in the way that they saw their parents do.

The multiple of average income that is required to buy an average house is now nine times, when years ago it was three or four times. The position has got a lot worse even in the past 10 years or so. One has only to look at the decline in the proportion of people who own a house to see how desperate many young people must feel and how difficult they must regard the future in terms of achieving what their parents achieved, which they might have thought that they, too, would be able to achieve.

I have begun to realise that the potential is much wider. I pay particular tribute to Stella Clarke, who runs the Community Self Build Agency in the Bristol area and who came to one of our all-party group meetings with Kevin McCloud, for finding young men from ethnic minorities, who might have been rioting five or 10 years ago, and getting them to the point where they are building a stake in their own community. This is not necessarily about everyone learning how to become a plumber or an electrician, but it is also true that this space does present enormous opportunities for the skills agenda.

Saffron housing association, in addition to doing great work locally, has launched an apprenticeship scheme for micro-businesses that find it too difficult to take on the administration of having an apprentice. It has taken 20 students from Diss high school and said to the micro-businesses, “We will handle all the paperwork for you to have an apprentice. You just take the apprentice.” The scheme has been so successful that the Minister for Skills and Enterprise who is responsible for apprenticeships has been to see it. The scheme will be repeated again this year.

I do not think for one moment that we will all learn how to become plumbers, electricians and joiners, but we should not underestimate the scheme’s potential to help people who have felt marginalised, disaffected and cut out to have a stake in society. They can physically help in the process of building their own stake in society.

Berlin has gone further and proved that this movement can be done at scale, which is why I plan to take a group of parliamentarians and others to Berlin at the end of next month. It is not simply a case of 50 units here, or 100 units there. Some 190,000 dwellings have been constructed in Berlin by self-build and custom-build groups. What is fascinating in Berlin is that the municipality—the local council or the Berlin senate—actively seeks to help. For example, a group of parents will come together and say to the local council that they want to build a block of apartments with a garden in the middle and a school. The social glue that holds them together is the fact that their children all have some special need. The parents have a common interest in developing something that meets their children’s needs. The local council will say, “How can we help you?” If it can be done there, it can be done here. In Berlin, a group of 25 women between the ages of 60 and 70 decided that they wanted to build an apartment block together. They are friends, and if one of them goes into hospital to have a hip replacement, she has 24 friends whom she knows will be there to look after her dog.

The building group model has tremendous possibilities, and the fact that this does not simply mean private individuals for private ownership is under-appreciated. I am a huge supporter of private individuals owning private property and having their own stake in society, but this model has been used successfully in the Netherlands, Berlin and elsewhere for community groups, rent and shared ownership. The possibilities are very broad indeed.

The possibilities for institutional investment are much broader than might first have been realised. If an institutional investor wants to gain exposure to the residential housing market, their option is to buy shares in one of the large national house builders. However, as Saffron housing has proved recently, it is possible even for a small to medium-sized housing association to launch a bond. Saffron recently launched a £125 million bond, which will be drawn down in stages over the next 30 years or so to finance its development programme. If there is an appetite among institutional investors for investing in that sort of vehicle, it is quite possible that if we gave those investors, who anyway have a need to invest for the long term, the opportunity to invest directly in unlocking land and infrastructure, there would be a considerable response, particularly if it were done in a way that coupled their investment horizon needs in a way that enabled place making to occur rather than simply the construction of housing units.

[Paul Uppal (Wolverhampton South West) (Con)]

My hon. Friend is making a compelling speech. I worked in commercial property real estate for 20 years before I came to this place, and the holy grail, particularly on residential property, is to get institutional investment flowing inwards to residential developments. May I just say that that is a non-political point? It is the crucial issue if we are to get housing balanced within the UK.

[Mr Bacon]

I am delighted by my hon. Friend’s supportive intervention. I believe that that is achievable, as there is institutional appetite and institutional demand out there. The thing that I find extraordinary about the current residential housing market, which to me proves that there is a systemic problem, is that we seem either to be almost in a state of sclerosis, with almost nothing happening and all the land on which anything might happen being optioned up to the hilt by large-scale house builders, so that individuals and small commuter groups can simply cannot get hold of it, or to be almost perpetually talking about the next housing bubble and how we need to dampen down demand.

On that point, I do not believe that the Help to Buy scheme has been a contributor to any putative housing bubble. I feared when it was launched that that would be the case, and we considered the issue in detail in the Public Accounts Committee when we took evidence from Sir Bob Kerslake as permanent secretary at the Department for Communities and Local Government. It is absolutely clear, and would be to anyone who considered the evidence, that the Help to Buy scheme has not contributed in any significant way to a housing bubble.

The housing market cannot function as it should, in a reasonably non-volatile way, if we swing between these wild extremes of inactivity and housing bubbles when the need for people to have a roof over their heads does not go away. It is a sustainable long-term need that ought to be capable of being met through institutional investment that is, after all, looking for a long-term sustainable return. I do not think that it is beyond the wit of man or woman to link those two, and there are interesting possibilities, although in this short debate I shall not have time to explore them fully.

After the Budget, I stopped an aide of the Prime Minister in the corridor to thank him for the £150 million provided in the Budget for serviced plots. When I explained that it was for self-build and the nascent but not yet legalised right to build that we want to see, his instant response was to say, “Oh, I want to do that.” The number of people I have conversations with who say, “Oh, I have always wanted to do that,” is why I believe the Ipsos MORI figures.

There is a difference between having an aspiration and being able to do something about it and there is such a big gap between the two because of the structure of our housing market, which does not really meet customers’ needs. The Government have made an enormously important start with this £150 million. This approach could become the new normal, but the fundamental shift that we need is to start treating the building of houses as if customers mattered.

18:47

[The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins)]

I congratulate my hon. Friend the Member for South Norfolk (Mr Bacon) on securing this debate and pay tribute to him for his work as chairman of the new all-party group on self-build, custom-build and independent housebuilding. I appreciated the opportunity to address the all-party group a few months ago. Let me also put on record my appreciation for the massive contribution that Ted Stevens has made to the custom-build and self-build industry, driving it forward positively.

As we have heard, my hon. Friend is very passionate about this issue and is a persuasive advocate of custom and self-build housing. He has rightly highlighted the huge potential that broad sector has to help support the need to build more houses in this country. The debate could not be better timed. As he mentioned, we are in the middle of the second national custom and self-build week, which was launched on Saturday by my right hon. Friend the Secretary of State for Communities and Local Government at Grand Designs Live. That is an initiative that my Department is delighted to support, as it draws national attention to the huge potential of this form of housing to become a mainstream housing option for any aspiring home owner in this country.

Why does this question matter to the Government and why do we support the sector? Unlike the previous Administration, who did absolutely nothing to support self-builders and custom-builders in this country, the Government are committed to and are offering strong support to this part of the sector. We face a huge challenge in building the number of homes that are needed, and we must look at all opportunities to stimulate that supply. Supporting more self-build and custom-build housing is part of a much bigger package of housing supply initiatives the Government are introducing to get more homes built. Some 165,000 affordable houses will be completed next year to add to the housing supply. We have just closed on bids to deliver another 170,000 houses in the years to 2018. We have allocated some £1 billion to deliver 10,000 houses in the private rented sector and we have launched a prospectus to encourage councils to bid for £300 million to deliver housing across the sector.

My hon. Friend kindly mentioned the Help to Buy scheme, and I agree that it is a huge encouragement to enable people to get on the housing ladder. Some figures have been issued in the last 24 hours that are pertinent to the debate. Under the Help to Buy scheme, the average mortgage is £145,000 with an average deposit of £36,000. While it is a vital part of our offer on housing, it constitutes only 2% of transactions, and I do not believe it is fuelling a bubble.

Many people would love to own their own home. As my hon. Friend said, research by Ipsos MORI has shown that more than 1 million people want to do so in the immediate future. That strong level of interest is not surprising. Custom-build and self-build housing offers people more choice and the ability to design a home to suit their own needs, leading to greener and better designed homes. In many cases, that is more affordable than buying a home in the conventional way. A report published by Lloyds Banking Group concluded that self-builders can save between 20% and 25% on the cost of an equivalent home on the open market, a crucial saving for those who are trying to get on the housing ladder.

There are wider benefits. A strong custom-build sector helps diversity and strengthens our house building industry, bringing new opportunities for medium and small house builders. It can also speed up the supply of new homes where there is strong demand for plots. It sustains and creates new jobs and supports local economies. As my hon. Friend said, it helps young people who are going into apprenticeships and vocational jobs—an important part of the economy—which are facilitated by this type of build.

Let us be clear. The custom-build sector already makes an important contribution to our housing supply with around one in every 10 homes being built or commissioned by individuals. That is much more than many volume builders are already building. It is important to say that custom-build and self-build are already facilitating a turnover of around £4 billion per year.

There is significant growth potential in the sector. Among our European neighbours, more than half of all new homes are built and commissioned by self-builders—about 60% in Germany and more than 80% in Austria. We must do more to facilitate that, which is why we have looked at our national planning policy framework for land to ensure that councils can assess and plan for the needs of people who want to build their own homes. I encourage my hon. Friend and the all-party group to contribute to the call by Nathalie Elphicke and Keith House for evidence on how to get and utilise more local authority land for building houses.

As has been mentioned, there is a real challenge in securing finance. We have launched a £30 million custom-build homes fund to provide repayable finance for larger custom-build developments. We have given self-build groups access to some £65 million under the affordable housing guarantee programme. We are engaging with lenders to ensure that there are more self-build mortgages available in the sector.

This Government now have a strong reputation for removing red tape. Self-builders are now exempt from the community infrastructure levy, potentially saving them thousands of pounds on individual projects. We have just finished consulting on a similar policy to change section 106 charges. We have also simplified design and access statements and made it easier to change the use of buildings to housing, which the industry has welcomed.

An important aspect is making sure that we can get advice out to consumers and developers. We have worked with the custom and self-build sector to launch an online portal to provide better information for self-builders. It has received more than 35 million hits and now attracts about 20,000 new users each month. That is fantastic progress and a clear demonstration of the interest in this sector. We were delighted to be able to secure Kevin McCloud as the new industry champion. He is doing an excellent job in raising public awareness of the benefits of custom-build. We have worked closely with the National Self Build Association to facilitate a range of new guides and advice to councils, developers and consumers on self-build and custom-build housing.

We have had some successes to date. There are up to 5,000 new plots in the pipeline and many new projects coming forward across the country, with thousands more to come. Some 60 councils have brought forward land and new initiatives, including Stoke, Cherwell, Woking, Hereford, Cambridge and Newcastle. We now have 26 lenders who are interested in this sector—10 more than in 2011. We have cut red tape, as I mentioned, and put portals in place to make sure that people have access to information. Making custom-build a mainstream housing option is very important for this Government, but we recognise that there is still a long way to go in doing so. The next step is to end the myths about this sector, and that will be a significant move forward.

In the Budget, we made some major commitments to driving this forward. I recognise and appreciate my hon. Friend’s comments about the consultation that is about to take place on right to build. That proposal recognises that some councils already provide land for custom-build, in response to local demand. We want to encourage that further. We will identify a small number of councils that want to act as vanguards to test how the right-to-build model would work in practice. We have been very generous, I might say, in providing £150 million in repayable finance. As he said, there is the potential for more if we can get the traction we need. The idea that we can recycle that money is extremely important. We want to get those shovel-ready plots out there delivering 10,000 custom-build houses.

[Mr Bacon]

My hon. Friend mentioned a couple of points that I want to test him on. The community infrastructure levy was removed from self-builders, rightly, although that creates a financial incentive for local councils to be less keen on self-build because they do not get the benefit. Does he agree that it is absolutely vital to hold the feet of local councils to the fire in fulfilling the duty that has now been placed on them to measure demand for self-build and to say what they are going to do about it?

Does the Minister also think that there is scope for encouraging enlightened national house builders with large land banks—some of which are at an advanced stage and some of which are less so—to make a proportion of that development available for self-build? If they did, they would probably sell them rapidly and that would encourage them to do more.

19:00

Motion lapsed (Standing Order No. 9(3)).

Motion made, and Question proposed, That this House do now adjourn.—(Gavin Barwell.)

[Kris Hopkins]

On councils, my hon. Friend will forgive me if I leave contemplations about the community infrastructure levy to the planning Minister, the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Grantham and Stamford (Nick Boles). What I would say, as a former council leader myself, is that, in the majority of cases, we are building houses for people who live in those communities. Really strong leadership is about understanding demand and this particular way of responding to it. I want more councils to embrace that and we need to encourage them to do so. We need to provide leadership from this House by offering guidance through the right to build and other measures that demonstrate that there is a clear outcome for communities and the individuals who live there.

I have seen lots of evidence that the major builders are not land banking, but that does not mean that there is not huge potential, particularly for local authorities that own a vast amount of land. I encourage my hon. Friend the Member for South Norfolk to respond to the call for evidence from Elphicke and House, which I think will begin to shape the debate about this part of the housing offer, which will be facilitated by the local authorities that own that land.

I have touched on the Budget. We want to look at how we can extend the Help to Buy equity loan scheme. High-level conversations are being held about how we can facilitate that and we will make further announcements in the future. It is important to make sure that we provide support to the sector through Help to Buy and, in particular, to understand the demands of the sector. Money will be released in stages for a custom-built house, while it is usually released in one transaction for a conventional build.

I wholeheartedly agree with my hon. Friend that custom and self-build should be—and I hope will be through our efforts—a mainstream housing option in this country. Given the Government’s measures and the support of my hon. Friend in challenging the myths about custom and self-build, I believe we are firmly on the path of realising that ambition. I again thank him for securing this debate and look forward to working with him and other hon. Members to help support this important sector and enable more people to realise their ambition to build their own home.

Question put and agreed to.

19:03

House adjourned.

Division 264

Ayes: 313

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Conservative: 263
Liberal Democrat: 44
Democratic Unionist Party: 5
Independent: 1

Noes: 205

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Labour: 201
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Conservative: 1
Green Party: 1