Andrey Lugovoy and Dmitri Kovtun Freezing Order 2016
(8 years, 8 months ago)
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The Economic Secretary to the Treasury (Harriett Baldwin)
I beg to move,
That the Committee has considered the Andrey Lugovoy and Dmitri Kovtun Freezing Order 2016 (S.I. 2016, No. 67).
It is a pleasure to serve under your chairmanship, Mr Pritchard. I would like to make the Committee aware that some minor errors were made when the order was laid; they did not impact on the substance of the order and have now been corrected by way of a correction slip.
The order was laid before the House on 22 January, in response to the Litvinenko inquiry report published on 21 January. As Members will be aware, Alexander Litvinenko was a former officer of the Russian Federal Security Service and a British citizen. He was killed in London in 2006, and the Litvinenko inquiry was the independent inquiry into his death. I am sure Members will echo my right hon. Friend the Home Secretary’s thanks to Sir Robert Owen, the chairman of the inquiry. His conclusions were clear yet deeply disturbing, and I would like to highlight some of those conclusions today, as they provide essential background to this debate.
One of the inquiry’s key findings was that Mr Litvinenko was deliberately poisoned by two Russian nationals: Andrey Lugovoy and Dmitri Kovtun. Those individuals killed him using polonium-210, a radioactive isotope. The Litvinenko inquiry also found that the killing of Mr Litvinenko was probably authorised by Nikolai Patrushev, head of the Russian Federal Security Service at the time, and by President Putin.
In response to those conclusions, the Treasury imposed an asset freeze on Mr Lugovoy and Mr Kovtun, the two individuals directly implicated in Mr Litvinenko’s tragic death. That was done by making an order under the Anti-terrorism, Crime and Security Act 2001. The order was debated in the other place on 10 February. I would like to set out again why that was an appropriate and proportionate response and why this House should also approve the order.
The Metropolitan police launched a murder investigation shortly following Mr Litvinenko’s death. Mr Lugovoy and Mr Kovtun are the prime suspects in that investigation. The Crown Prosecution Service has sought extradition of the chief suspect, Mr Lugovoy, from Russia, but Russia has consistently refused to comply with that request. There are now Interpol notices and European arrest warrants against them, and the Metropolitan police investigation is still open.
However, in response to Sir Robert Owen’s unequivocal finding that Mr Lugovoy and Mr Kovtun killed Mr Litvinenko, the Government took the view that it was appropriate to take further steps. That is why the Home Secretary wrote to the independent Director of Public Prosecutions, asking her to consider whether further action could be taken. That is also why, following the inquiry’s report, the Treasury moved swiftly to impose an asset freeze on the two individuals responsible for Mr Litvinenko’s death. The Treasury was satisfied that Mr Lugovoy’s and Mr Kovtun’s roles in Mr Litvinenko’s death clearly fulfilled the criteria under the 2001 Act that give the Treasury powers, including making a freezing order, when a threat to the life of a UK national has been or is likely to be taken by non-UK residents.
We believe that the order will be a deterrent and a signal that this Government will not tolerate such activity on British soil. The asset freeze prohibits UK persons from making funds available to Mr Lugovoy and Mr Kovtun and denies the men access to the UK financial system. In circumstances where it is necessary for frozen funds to be used, those wishing to do so must seek a licence from the Treasury.
I am sure all hon. Members will agree that the ideal response to the killing of a British citizen on the streets of London is to bring those responsible to trial in a British court. However, until that can be done, the asset freeze, together with the other measures that the Government have already taken, sends a clear message that we will defend our national security and rule of law.
Some people responded to the inquiry’s conclusions with calls for us to radically reform our relationship with Russia, yet as the Home Secretary set out, the findings of the report do not come as a surprise. Indeed, the roles of Mr Lugovoy and Mr Kovtun and the probable involvement of the Russian state are consistent with the long-held assessments of successive UK Governments. Those assessments informed the response by the then Government in 2007, which included visa restrictions and the expulsion of certain officials from the Russian embassy in London. The conclusions of the inquiry confirm that successive Governments have been right to keep those measures in force to date.
This is not business as usual with Russia; our relationship with the Russian state is heavily conditioned. The Government have reinforced that message. Following the publication of the inquiry’s report, we made very clear to the Moscow Government our profound concerns, and the Russian ambassador was summoned to the Foreign Office in London. We will continue to demand that the Russian Government do more to co-operate with the investigation into Mr Litvinenko’s death. Such co-operation must include the extradition of the main suspects and the provision of satisfactory answers, and Russia must account for the role of its security services.
We are clear about the wider threats that Russia poses, which the Government have outlined in the national security strategy. In particular, we have long been aware of Russia’s disregard for international norms and principles, which is why we led the call in the EU for sanctions in relation to Russia’s actions in Crimea and eastern Ukraine. That is why, when we engage with Russia on a variety of issues, including the fight against Daesh, we do so guardedly and with our eyes wide open.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The Minister is making a strong case for the order, which I completely support. She mentioned the EU and political co-operation on targeting some of Russia’s behaviour in Europe, but the order refers to actions on European economic area firms and relevant institutions. Will she explain how we are going to co-operate across Europe to deal with these two individuals and prevent them from behaving as they have been throughout Europe, not just in the UK?
Harriett Baldwin
My right hon. Friend the Home Secretary has written to her counterparts in all 27 EU member states, so that they are also aware of the conclusions in this important report and are able take action accordingly should these gentlemen appear in their jurisdictions.
I hope that my words have assured the Committee that the asset freeze imposed on Mr Lugovoy and Mr Kovtun is an appropriate and proportionate response to their role in Alexander Litvinenko’s death. The Government believe that, in addition to the steps taken in 2007, the order is a proportionate measure that is necessary to send a clear message to those who might wish to undertake similar acts in future. I commend the order to the Committee and hope that all Members support the motion.
Richard Burgon (Leeds East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Pritchard.
As the Minister has outlined, the purpose of the measure is to establish a freezing order that prohibits persons from making funds available to or for the benefit of Andrey Lugovoy and Dmitri Kovtun. The Home Secretary stated her intention to pursue this course of action in her statement on 21 January in response to the publication of Sir Robert Owen’s report into the death of Alexander Litvinenko in 2006. Members will recall that the report clearly set out Sir Robert Owen’s conclusion that he is sure that Andrey Lugovoy and Dmitri Kovtun were responsible for the death of a British citizen, Alexander Litvinenko. It also set out his finding that the death was probably sanctioned by the Russian state at its highest level.
When the Home Secretary set out her response to the report on 21 January, the shadow Home Secretary expressed the Opposition’s support for her statement. He also asked a number of questions, as did my colleague, Lord Tunnicliffe, when the order was discussed in the other place just before the recess. I therefore have fewer questions about the specifics of the measure and how the order relates to what the Home Secretary said last month than might otherwise have been the case.
The Home Secretary made reference to extra resources for security agencies and the Investigatory Powers Bill, and to points relating to the national security strategy and strategic defence and security review, on which I do not wish to comment in this debate. When responding to the statement, a number of Members discussed the kind of pressure that the Government’s response to Sir Robert Owen’s findings would put on the Russian authorities.
In the discussions of the freezing order, the Minister in the other place confirmed that it will lapse two years after it was made, as set out in section 8 of the Crime and Security Act 2001. He said that the Government will continue to monitor the evidence and, if the order is still in force after two years, consider at that point whether it is necessary and proportionate to make a new order. Will the Minister set out what the expected impact of the freezing order will be in assisting the Government in reaching their goals? How will that impact be monitored?
The Minister in the other place also stated that the Home Secretary was considering the names of individuals, on a list supplied by Mrs Litvinenko’s lawyers, who Mrs Litvinenko felt should have further action taken against them and who are not already subject to Government sanction. Will the Minister say whether it is likely that further freezing orders will be proposed in relation to other individuals? Is consideration ongoing on that? If so, how long should it take to reach a decision?
In the other place, my colleague also highlighted, as mentioned in the order’s explanatory notes, the risks relating to asset flight. I do not believe that the Minister on that occasion replied to that point, so, for the purposes of the record, will the Minister say any more about what assets are being frozen and whether there has been any suggestion of asset flight since 21 January, when Sir Robert’s report was published, and noon on 22 January, from which time the order retrospectively applies?
I appreciate that the Minister may not be able to answer all those points and she may have to consult her colleagues in the Home Office on some of them. If that is the case, I would appreciate it if she wrote to me. The far-reaching implications of the report’s findings cannot be overstated. More work, which may include further asset freezing, clearly needs to be done to deliver justice. I reiterate that the Opposition are committed to working with the Government to bring that about. We support the order.
Harriett Baldwin
I am grateful to the Opposition for their support. They rightly asked a range of questions that I will be happy to update them on.
The hon. Member for Leeds East asked about the order’s impact. I think its primary impact is to send a strong message to deter people from taking such steps on UK soil. The specific impact of the freezing order is to prohibit UK persons from making funds available to the two gentlemen named in the order. The order effectively freezes any assets that individuals hold in the UK, or any UK-incorporated entities. It also prevents them from any effective links with the UK financial system.
In terms of the duration of the order, the hon. Gentleman is absolutely right that it lasts for two years and it will be subject to potential renewal at that point. He also asked whether there is any evidence of asset flight. So far we have not received any reports from the financial sector about funds frozen under the order or about movement of funds immediately before its implementation.
The hon. Gentleman and the hon. Member for Cardiff South and Penarth asked about other related matters concerning the EU. It is probably worth highlighting that EU sanctions related to action in eastern Ukraine cover almost 150 individuals.
The hon. Member for Leeds East asked about the letter that Mrs Litvinenko sent to the Home Secretary asking whether she will consider extending such measures to other individuals. I can confirm that, at this point, the Government have not responded to Mrs Litvinenko’s letter. The Home Secretary met Mrs Litvinenko with the Foreign Office Minister and her legal advisers on 28 January, and she is now giving detailed consideration to the issues raised in Mrs Litvinenko’s letter. I anticipate that she will respond soon, but I do not have a precise date for that.
I think I have answered all the hon. Gentleman’s questions. I am glad that everyone here seems to support our case for imposing the order. Until such time as the individuals responsible for Mr Litvinenko’s death are brought to justice, freezing their assets sends a clear signal about how profoundly we disapprove of their actions. I believe that we met both the tests required under the Anti-terrorism, Crime and Security Act 2001 in introducing this order. I am grateful for hon. Members’ constructive engagement with this matter. I commend the order to the Committee.
Question put and agreed to.
DRAFT REGISTER OF PEOPLE WITH SIGNIFICANT CONTROL REGULATIONS 2016
DRAFT LIMITED LIABILITY PARTNERSHIPS (REGISTER OF PEOPLE WITH SIGNIFICANT CONTROL) REGULATIONS 2016
(8 years, 8 months ago)
General CommitteesRead Full debate Read Hansard Text
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
I beg to move,
That the Committee has considered the draft Register of People with Significant Control Regulations 2016.
The Chair
With this it will be convenient to consider the draft Limited Liability Partnerships (Register of People with Significant Control) Regulations 2016.
Anna Soubry
It is a pleasure to serve under your chairmanship, Mr Rosindell. This area is covered by an uncontentious Act of the previous Government. There was much collaboration and co-operation between both sides and an important part of the legislation is now being introduced through regulations. I will not go into all the detail. My officials have kindly provided me with a speech that might, with a fair wind behind me, take me 15 minutes to read. In any event, the regulations are clear about what they set up and why. I want to deal with why the regulations are now before us. In 2013, the Prime Minister set out the UK’s ambition to improve corporate transparency and tackle criminal abuse of UK corporate entities. The regulations, which I am pleased we are considering today, underpin the detail of the register of people with significant control and bring that ambition one step closer to reality.
The register is the central pillar of the United Kingdom’s ambition to increase the transparency of UK corporate entities. It will record the people who own and control UK companies, limited liability partnerships and societates Europaeae—a little-used pan-European form of company. Information about the ownership and control of UK corporate entities will bring benefits for law enforcement, business, civil society and citizens. By making such information publicly available, free of charge, via a central register, the Government are setting the standard for open government that we are encouraging international partners to follow. It was therefore gratifying to see that the Dutch Government recently announced their intention to make public their beneficial ownership register.
The register of people with significant control, or PSC register, will record the details of those who own or control UK companies. There are five conditions for being a PSC: an individual holds, directly or indirectly, more than 25% of a company’s shares; an individual holds, directly or indirectly, more than 25% of the voting rights in a company; an individual holds the right, directly or indirectly, to appoint the majority of the board of directors; an individual has the right to exercise, or actually exercises, significant influence or control over a company; and, finally, the trustees of a trust or the members of a firm that is not a legal person would meet one of the first four conditions in relation to a company, or would do so if they were individuals, and have the right to exercise, or actually exercise, significant influence or control over the activities of the trust or the firm.
The regulations set out the detailed requirements for the PSC register and are self-explanatory, so, as I said, I will not go into the details. In short, they set out the scope of the register, the fees that a company can charge for providing copies of its own register, the information to be included on the register, the contents of warning and restriction notices, and how the protection regime will work for PSCs at risk of harm through their information being made public. The limited liability partnership regulations, or LLP regulations, apply the provisions contained in part 21A of the Companies Act 2006 and the companies regulations to limited liability partnerships with appropriate modifications.
Rather than going into all the details, I will happily take questions and answer them as best I can. The regulations are an invaluable part of improving corporate transparency in the United Kingdom.
Richard Fuller (Bedford) (Con)
My right hon. Friend says that she will answer questions, so I will get mine in early. Do these regulations come under the one-in, two-out rule for regulation, and can she give some advice on what the consequential changes to other regulation will be when she sums up the debate?
Anna Soubry
Of course I undertake to answer my hon. Friend’s question. As he will know, with all regulation we are absolutely determined—and indeed we do this—to check the cost, if any, to business and to mitigate it in any way we can; and in any event we have as an overarching principle the absolute determination to cut red tape and to reduce bureaucracy and regulation as much as we can.
Dr Sarah Wollaston (Totnes) (Con)
Will my right hon. Friend also set out what the penalties will be? Will there be a sliding scale depending on the size of the company? We so often see with these kinds of regulations that the penalties can be meaningless, so it would be interesting to hear more on that.
Anna Soubry
Of course I will also answer that question when I sum up the debate. If there are any more questions, I will be more than happy to take them. If not, that is all I will say. I will listen, of course, to the hon. Member for Cardiff West.
Kevin Brennan (Cardiff West) (Lab)
Government Members have anticipated a couple of the questions that I had planned to ask, so for the sake of brevity I will not repeat them; I know that the Minister will want to answer them.
These measures are about improving trust in UK companies—an aim that we share across the Committee. As the Minister rightly said at the outset, they have their genesis in some of the work of the previous Government; it has attracted cross-party support. They apply a new requirement in relation to different business forms. The requirement is aimed at increasing the transparency of the ownership of companies, and it will have most impact on unlisted companies. Obviously, the measures also have a basis in the Small Business, Enterprise and Employment Act 2015—the Bill was broadly supported by both sides of the House when it was discussed last year. In general, there has been little criticism of these measures outside the House and, broadly speaking, the Opposition are content to support the Government today and not to oppose the measures should there be a Division.
There has been an indication that some groups—perhaps trustees, for example—have a lower awareness of the requirements than might be hoped. Can the Minister say something about how awareness of the requirements under these provisions will be made more widespread? Is there a plan in place to ensure that there is greater awareness of what is being proposed today?
Clearly, much of this work is the result of disquiet about anonymous owners of companies and their actions. That can operate on many levels; it ranges from concern in the Government about connections between companies and terrorist groups, for example, to people who fear for their jobs as shadowy funds try to buy their company, and to local worries about who is buying up a town’s offices and shops. Transparency around all these issues is therefore very important, which is why, broadly speaking, the Opposition are content to support what the Government are doing today.
I note that in this area the biggest opposition seems to have come from the British Bankers Association and the British Private Equity & Venture Capital Association. What is the Minister’s view of their objections that all of this might be a time-consuming process that interferes with enterprise? The British Bankers Association also has concerns about the dangers of public access to the proposed register. As I said, we intend to support the measures, but we look forward to hearing the Minister’s answers to our questions and to any questions that her hon. Friends might have.
Mr Graham Allen (Nottingham North) (Lab)
It is a great pleasure to serve under your chairmanship, Mr Rosindell. I strongly welcome the regulations, but I do not want us to get too carried away in thinking that this is the end of the process or the answer to all our questions. It is a welcome baby step, but the problems we face are enormous. I am sure that the Minister will underline how serious a longer term effort is, particularly when it comes to transparency.
The Prime Minister referred to transparency in his 2013 remarks about the abuse of company power, and we need to stay vigilant. We are very much at the penny farthing end of legislative regulation while the enemy—if I can put it that way—is at the cutting edge of digital technology. Our attempts to run after some of the problems are forlorn and sometimes quite pathetic, so we need to continue to be as serious as we can on a number of these issues.
International co-operation is key. Perhaps I am mirroring some of the debate that is happening at this very moment about whether we should be in or out of the European Union. The question whether we should be in or out of European and, indeed, international co-operation surely unites the Committee, because we have to work together. It is absolutely pointless if one nation—even our own—regulates at a particular level and is then perhaps joined by the Dutch but by very few others; international capital and international companies can move swiftly and defeat the efforts of even the best domestic regulators.
Looking at that level is important because the regulations apply only to UK-registered companies, and companies have been known to switch their base of operations. There have been clear examples recently of companies avoiding tax by moving their base and their tax designation. We need to develop an international level of regulation, so that people cannot evade due process. In taxation that is very clear; whether it is Google or Starbucks, that level of interaction and co-operation is needed, and that is relevant to the regulations.
At the European level, we are seeing some small steps. However, perhaps there is an argument for those who are arguing to be outers today—I do not know whether we need a show of hands to see who in the Committee is an outer and who is an inner. If the European Union is yet to deliver a directive, that might give strength to the outers. It is yet to finalise its proposals, which apparently will be the fourth money laundering directive—clearly the first three were not as effective as we might have liked—and they might be launched in the near future. The Minister might know better than I do, but the directive was kicked off way back in 2013.
However, at the global level there seems to be very little progress indeed. The sub-prime crash seems many moons ago, but have we learnt the lessons of that? Is the regulation in place on a European and an international basis? Despite the devastating consequences in all our constituencies, progress has been very, very slow. I suspect that it will also be very, very slow when we discuss taxation internationally and it may well be very, very slow in terms of transparency internationally, as my hon. Friend the Member for Cardiff West said.
I understand that British bankers and British venture capitalists constantly send letters to the Minister talking about the administrative burden and how difficult it is to actually figure out who owns 25% of any given company. What absolute nonsense. I hope that she will dismiss that, as she has done in bringing forward the regulation. We should show the legislative door to the idea that, in this day and age, we might use what was called, under the previous Labour Government, a “light touch” on the regulations, because it can be a matter of such significance when we cannot find out who owns and manages companies.
In essence, I am suggesting that all companies, no matter where they are registered, should have to publish a list of people who have a significant say in the running of their businesses. It is important for transparency and taxation and so that we know—so that everyone knows—where big money is going and who controls it. International capital has an important say in, and sway over, what can happen in domestic economies—far greater than at any point in our history. I therefore hope that the Minister will listen to the comments and be able to respond that today we are not at the end of the process, but just at the beginning.
Anna Soubry
Perhaps I may begin by answering the question from my hon. Friend the Member for Bedford. The regulations were out of scope because they were an international requirement, so the one in, two out principle did not apply to them. We had international obligations.
I am sure my hon. Friend will be interested to know that the final state impact assessment estimated the costs as a net cost to business per year of £97.5 million. Over 10 years it is £1,086.2 million, so it is not exactly small. What will please my hon. Friend, however, is that that final assessment also found that there would be a cost of £10 to small simple companies in relation to updating beneficial ownership information annually and, of course, £10 in relation to providing information to the central register annually. The good news is that for the smaller businesses the amount of money involved is very small. It has been argued, and I would argue, that it is well worth paying because of the importance of making sure that we tackle the problem.
Kevin Brennan
I think I heard the figure that the Minister used then, but the impact assessment documents for the two sets of regulations state that the net cost to business in relation to the PSC register would be £10.09 million per year, and that the net cost to business per year in relation to the other one would be £4.7 million per year—both on 2014 prices. I think she gave a considerably higher figure, so I wonder whether she could explain the difference.
Anna Soubry
I am afraid I cannot. I would be delighted if the figure that I had been given is wrong and the one that the hon. Gentleman has is correct. One thing that is for sure is that if I am wrong—if the figure I have been given is incorrect, as I hope it is—I will happily write to all members of the Committee to correct that. If the hon. Gentleman is right, that will be good news all round. Obviously, we are determined to make sure we keep the cost as low as possible. The regulations are serious and important, with the aim of tackling a genuine problem; it is sometimes a mark of their seriousness that such things cost money. However, I will sort that matter out.
Richard Fuller
Of course the Minister will come back with the answer, and I very much appreciate that. However, the Government’s objective over the next five years is to reduce the burden of regulation by £10 billion. So if the figure is close to the Minister’s number, and the matter is out of scope, it rather calls into question the veracity of the Government’s deregulation agenda. If we can have an extra £1 billion of regulation that is out of scope, while we are trying to get rid of £10 billion, that seems a matter of concern. Can the Minister assure the Committee that she will not only validate the number but consider the issue of what is in scope or out of scope about the regulations, and perhaps give us some advice on that?
Anna Soubry
I think the best thing I can do, although I am always happy to talk to my hon. Friend, is to write to him in more detail. We have saved a huge amount of money—around £5 billion—for businesses over the past five years through deregulation, and it is now accepted that we are one of the best places in the world to do business, specifically because we do not over-regulate in the way that we did. We have made huge strides. There is more to be done in the next five years, but we have made enormous progress, which is now being recognised. When I meet smaller businesses and, notably, the Federation of Small Businesses, they do not complain as they used to about the amount of regulation, but it is absolutely accepted that more can be done.
On the question asked by my hon. Friend the Member for Totnes, I am told that the Act introduced robust penalties to deter and sanction those who seek to misuse UK companies. Those penalties will, of course, support law enforcement tax authorities’ existing powers of investigation. The details, if I may be so bold, are in the Act, but if she would like me to point to them, I am more than happy to do so. However, as I have said from the outset, this is a serious piece of work due to the nature of the threat to the security of our nation, particularly in the business sector.
I agree with some of what the hon. Member for Nottingham North said, but it is often the case that the United Kingdom is doing all that it can, and this is a good example. Others will no doubt come and play, but we cannot force other countries to follow our example, any more than we can force companies registered in other countries to abide by our law. That has always been the case, and rightly so.
I hope that I have been able to answer right hon. and hon. Members’ questions. It is an important new regime for companies, increasing the transparency of who owns and controls UK companies. It is important to maintain the United Kingdom’s high standards of corporate trust. Anti-corruption is a key priority for this Government, and our Prime Minister has taken a serious personal interest in it. I know that there is, quite rightly, cross-party support for the issue.
Kevin Brennan
I am grateful to the Minister for giving way, which will undoubtedly save us time. Although we are content, as I said earlier, to let these regulations pass without asking for a Division, I would like to put it on record that it is important to get accurate figures on the impact assessments and the cost to business when we discuss such matters. Who knows; inspiration might come to the Minister while I am on my feet. However, if she is unable to clarify that matter now, I would welcome an early communication from her, as I am sure would other Committee members, about the correct figure. We are content to let the regulations go through on trust because we think that they are good measures, but nevertheless, it is important when we debate such things that the Minister has the correct information before her—it is not her fault—so that the Committee can discuss them with the full information before it.
Anna Soubry
I apologise for being unable to give the definitive figure. I can tell the Committee only what I have been given, and it is not the same as the figure that the hon. Gentleman has. However, there is some indication that he might be right and that, for reasons that I do not understand, the figure that I have been given is not. Either way, we will sort out the matter, and I apologise. One would think from the abundance of papers and officials that I have that somebody might be able to give a definitive answer.
Notwithstanding that, these are important regulations and I am pleased that they have cross-party support. I commend both statutory instruments to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Register of People with Significant Control Regulations 2016.
Draft Limited Liability Partnerships (Register of People with Significant Control) Regulations 2016
Resolved,
That the Committee has considered the draft Limited Liability Partnerships (Register of People with Significant Control) Regulations 2016.—(Anna Soubry.)
Draft Infrastructure Planning (Onshore Wind Generating Stations) Order 2016
(8 years, 8 months ago)
General CommitteesRead Full debate Read Hansard Text
Tom Pursglove (Corby) (Con)
On a point of order, Mr Nuttall. May I draw the Committee’s attention to my declaration in the Register of Members’ Financial Interests? I am the director of Together Against Wind, the national anti-wind-farm campaign.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
I beg to move,
That the Committee has considered the draft Infrastructure Planning (Onshore Wind Generating Stations) Order 2016.
It is a great pleasure to serve under your chairmanship this afternoon, Mr Nuttall.
The Government were elected with a clear commitment to give local people the final say on whether to have a wind farm in their area. The order helps to do exactly—and only—that, as was stated in our manifesto. This affirmative instrument amends section 15 of the Planning Act 2008, removing the obligation in that Act to obtain consent from the Secretary of State for Energy and Climate Change to construct, extend or operate an onshore wind farm in England or Wales.
The change, alongside secondary legislation already made and proposed primary legislation in relation to the Electricity Act 1989, will have the effect of removing the requirement for planning permission to be obtained from the Secretary of State for the construction of new onshore wind farms. Instead, developers will need to apply for planning permission under the Town and Country Planning Act 1990, where the primary decision maker is the relevant local planning authority. To be clear, the provision relates only to proposed new wind farms with a capacity greater than 50 MW. Smaller wind farms, including those owned by the community, are already consented by the relevant local planning authority.
The changes are further supported in England by the implementation of the written ministerial statement outlined by the Secretary of State for Communities and Local Government on 18 June last year. The combined effect of the measures is to ensure that new onshore wind is consented at local level and built only where local people have said they want it.
I wish to make it clear to all hon. Members that the intention behind the draft order and the instrument already made under the 1989 Act is simply to implement the full devolution of onshore wind consenting powers to local authorities and away from Whitehall. The instrument does not go any further than I have set out and does not in any way change the existing Town and Country Planning Act regime, or devolve planning further than to that regime. The measure affects only new projects in England and Wales. Once onshore wind consenting powers have fully devolved to Wales, it will be for the Welsh Assembly and Welsh Government to determine how new onshore wind farms in Wales are consented.
Dr Alan Whitehead (Southampton, Test) (Lab)
It is a pleasure to serve under your chairmanship this afternoon, Mr Nuttall.
The order is a straightforward, almost elegant piece of secondary legislation. As we discussed in our deliberations on the Energy Bill, it will ensure that onshore wind applications of more than 50 MW are decided by local authority planning arrangements, rather than by reference to the Minister under the terms of the 2008 Act. From my reading of the text, that gives rise to very few consequentials, but that does not mean there are none overall. Has the Minister discussed with other Departments, particularly the Department for Communities and Local Government, what the consequences will be for existing planning arrangements? I will give two brief examples of consequentials that I feel might arise.
First, the existing planning application guidance for local authorities will necessarily be deficient in the new circumstances, because applications for wind stations of more than 50 MW have essentially, up to now, not come before those authorities. I am particularly keen to ensure that planning applications for onshore wind farms of more than 50 MW are actually in the hands of local authorities and of no one else. However, there is, and will remain, an appeal process to planning inspectors and there is the possibility that the process will be undertaken not by the local authority concerned. It therefore seems particularly important that proper guidance is in place as to the extent of such appeals and the circumstances in which an inspector might intervene in the process. Has the Minister had the chance to talk to the DCLG about that consequence?
Secondly, the 2008 Act generated substantial books of national planning policy guidance. Onshore wind was a part of that guidance but will no longer be—in theory, and probably in practice—as a consequence of the proposed change. Therefore, it ought at least to be considered whether the existing national planning policy guidance needs to be amended.
Those are two examples of consequences of a statutory instrument that is otherwise relatively unencumbered by consequences. There is, however, one other point on which I would like briefly to detain the Minister. The order contains essential instructions and guidance regarding applications that are already under way. The order will come into effect the day after it is made, but there will be schemes that were started in different circumstances and have not yet come out of the pipeline for final consideration. Does the Minister have a view as to what would happen were any scheme presently in the pipeline, and therefore covered by the transitional clauses, to wish to be considered by a local authority? Is it her understanding that the order would be a bar to that happening, or are there circumstances in which a requirement to continue to work according to the 2008 Act could or should be waived?
I would be most grateful if the Minister shed some light on my questions. In the circumstance of light being properly shed, I imagine that we could agree the statutory instrument and not divide the Committee.
Peter Aldous (Waveney) (Con)
I am a supporter of renewables, including onshore wind and ground-mounted solar, and I have a solar farm on the farm in which I am a family partner. I support the proposals in the draft order.
Thirty or 40 years ago, when onshore wind first arrived in the UK, there was tremendous popular support in communities for it, such as in Swaffham in Norfolk. Somehow along the way we have lost that strong local community support for onshore wind, and I suspect that one of the reasons for that is that communities have felt that schemes have been foisted upon them. The draft order enables us to give onshore wind a chance in the future. On that basis, I support the proposals.
Mr Kevan Jones (North Durham) (Lab)
I will pick up on some of the points made by my hon. Friend the Member for Southampton, Test, in particular on the guidance and the parameters for a local authority to determine an application.
I am sorry, but I completely disagree with the hon. Member for Waveney. The draft order will mean that in many cases the wind plants do not go ahead, as popular opinion locally and the voice of the communities will clearly argue against them. It is therefore important to know what the guidance will be and how local authorities will draw up their policies on how wind plants fit into their local plans, for example. Without such guidance, a local authority could attract great costs if it declines a wind farm and that decision is appealed to the Secretary of State for Energy and Climate Change or the Planning Inspectorate. A local authority could be left in a difficult position, because in meeting local opinion and satisfying objections, it might incur the cost of the appeal process. If the Secretary of State or the inspector granted the planning application, members of local planning committees could be left in a difficult position.
Will the Minister say when guidance for local authority planning committees will be produced? Will the ultimate role of the Secretary of State be similar to that in relation to other planning applications: if appealed, they end up on the Secretary of State’s desk? If so, will the Secretary of State deal with them case by case, or will there be a de facto Government position whereby all applications turned down by a local planning authority will be resisted by the Secretary of State?
I also have questions about the involvement of other Departments in wind farm applications. The Ministry of Defence in particular has a clear interest in the siting of wind farms, because of the effect on military radar tracking aircraft and so on. Will individual Departments still make and be able to make objections to applications for wind farms that would be detrimental to the Department’s interests? The MOD, for example, might object because of flying operations.
Finally, I remember the slogan, “vote blue, go green”. Has any assessment been made of the effect of the draft legislation on the number of wind farms applications that would be successful under the proposed process?
Glyn Davies (Montgomeryshire) (Con)
I have one brief question for the Minister, seeking an observation as much as anything else. By way of background, I have had a personal interest—not a financial interest, but a personal interest—in renewable energy and onshore wind for about 30 years. Generally speaking, I was not opposed to onshore wind, and when it was a new technology, it was welcomed in my constituency. The Centre for Alternative Technology is based in my constituency, where there is a general thriving interest. In recent years, though, a level of development has been imposed that has caused great objection locally, and I am now thought of as an opponent of onshore wind, which is, generally speaking, the truth. That is why I welcome the draft order and everything the Minister said, but there is on point on which I seek her views.
The Minister spoke very much about localising decision making on granting permission for wind farms with an output of more than 50 MW, which is essentially being given to local government in England and Wales. In Wales, the Welsh Government have already taken in hand the permissions on wind farms smaller than 50 MW where they have decided that there are issues of significant national interest. They are going to take the power away from local councils for 25 MW upwards, so we can anticipate that local government in Wales will not have any say on such applications, which is a huge concern to me. It seems to be the opposite course from the one that most Members of Parliament would support, which is giving power to local councils. Does my hon. Friend have any observations on the likely consequence of the change in Wales?
Andrea Leadsom
I will try to respond to everyone’s questions. They were coming at me thick and fast, but hopefully I have caught them all.
First, I thank the hon. Member for Southampton, Test, who asked how this statutory instrument will affect the DCLG and the planning process overall, and in particular whether onshore appeals will still take place. The call-in powers and recovery capability of the Secretary of State for Communities and Local Government will remain. Call-in powers are used by the Secretary of State, or in Wales by Welsh Ministers, when a decision is taken to move an application away from a local planning authority and to make the decision themselves. Similarly, recovered appeals are used when those Ministers decide to make the final decision on an appeal themselves, rather than the Planning Inspectorate making it on their behalf. The Secretary of State or a Welsh Minister will reserve the right to call in applications and recover appeals. That power is already devolved in Wales.
Secondly, the hon. Gentleman asked whether there are any transitional arrangements. A transitional arrangement applies when a valid planning application for a wind energy development had already been submitted to a local planning authority when the written ministerial statement was made last year and the development plan does not identify suitable sites. In such instances, a local planning authority may find the proposal acceptable if, following consultation, it is satisfied that the proposal has addressed the planning concerns of the affected local communities and therefore has their backing. In the case of appeals, it would need to be considered by planning inspectors on a case-by-case basis.
The hon. Member for North Durham raised the same question and asked what happens in the local planning authority process for determining whether there is local agreement. It will normally be the case that local planning permission will be given where there is scope in the local plan, as agreed by the local authority, for general approval of wind farms in its area. If a local planning authority has not yet identified sites for wind farms, there is a transitional arrangement whereby it may find a proposal acceptable following consultation with local communities, which was set out in the DCLG ministerial statement that was laid before the House last June.
Mr Jones
I am grateful for that reply, but County Durham, for example, is still going through the process of developing its local plan because it was rejected by the inspector. Where does that leave a county such as County Durham, which at the moment does not have a local plan in place, when determining where the sites should be?
Andrea Leadsom
As I said, in that transitional period, the local authority would need to consult local communities to address any concerns that they may have and only then approve a planning application when the site has the backing of local communities. That was set out in the ministerial statement in June last year. I think I have answered the hon. Gentleman’s question—
Mr Jones
What the Minister is saying is that if local people object, the application can be turned down. Surely guidance has to be given to the local authorities on what is and is not a suitable site. There is guidance for every other type of thing. She is arguing for a situation in which, in a place such as County Durham where there is no plan, if local people object, the proposal will be stopped. I am sure developers would not like that.
Andrea Leadsom
The national planning policy framework encourages local councils to consider identifying suitable areas for renewable energy; equally, local neighbourhood plans can identify sites. As I have said to the hon. Gentleman, it is absolutely the case—it was in our manifesto—that we are determined that local communities have the final say, so he is exactly right: in the event that the local authority cannot get the backing of the local community, it will turn down that application, and that is the point about our manifesto commitment.
Moving on to the point made by my hon. Friend the Member for Waveney, I am grateful for his support for the measure, which takes local planning absolutely to the forefront for all onshore wind. I am also grateful to my hon. Friend the Member for Montgomeryshire for raising the very important point about how, under devolution, the Welsh Government decide how they intend to hear onshore wind farm applications. I can only confirm to him that it will be for them to decide, and I share his concern that given that this Government’s policy is to ensure that local communities have their say and have the last word, it will be unfortunate if that is not the case in Wales for those in his community who want it to be, but this is a devolved matter and it will be for Welsh Ministers to decide.
Dr Whitehead
The Minister has made it clear that the commitment in the Conservative manifesto was that local authorities should have the final say. The concern that I raised in my initial comments—my hon. Friend the Member for North Durham has alluded to this— was what guidance will be in place on local authority actions once the Minister has relinquished her authority under the previous legislation to consider applications, so that local authorities really do have the final say and other factors do not come into play. It seems to me that the guidance would necessarily have to spell that out fairly clearly, either where a local authority is minded to turn down the application because there is a great deal of local opposition or good planning grounds to turn it down, or where a local authority, because there is massive local public support, is very much minded to agree an application and has the policies in place to back that up.
Andrea Leadsom
As I think I said, the national planning policy framework encourages local authorities to identify sites that are suitable for renewable energy. It also encourages neighbourhood development plans to do the same. I want to be clear that this Government believe in devolving powers to local authorities. We made a manifesto commitment that local communities will have the final say on onshore windfarms.
Andrea Leadsom
I will not give way again; I have answered the question three times. It is absolutely our settled position that local communities will have the final say. The ministerial statement issued by the Department for Communities and Local Government in June last year sets out the process by which local communities will be able to have their say on onshore windfarm applications. By transferring decisions out of Whitehall to local planning authorities, combined with the measures set out by the Secretary of State for Communities and Local Government, we are putting local communities in the driving seat. That will deliver our manifesto commitment by ensuring that new onshore wind—
Mr Jones
On a point of order, Mr Nuttall. I thought the purpose of these Committees was to scrutinise the piece of legislation before us. The Minister is refusing to answer the legitimate concerns expressed by my hon. Friend the Member for Southampton, Test and the points I have raised. It is not the case that it is somehow left up to people to decide. A planning appeal has to go through a legal process. I expect the Minister to answer those points.
The Chair
I think the hon. Gentleman has been in the House long enough to know that that is not a point of order. The Minister has given way and is now not giving way. That is the end of the matter for the moment.
Andrea Leadsom
Thank you, Mr Nuttall. I have answered the hon. Member for North Durham four times. Unfortunately, perhaps the problem is with him.
I have been clear throughout the wide-ranging debates on this issue, including during consideration of the Energy Bill, that our manifesto commitment on onshore wind is to strengthen the position of local communities, and that is exactly what the draft order will achieve.
Question put and agreed to.