Prayers
Tuesday 3rd May 2016
(8 years ago)
Commons ChamberRead Full debate Read Hansard Text
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Oral Answers to Questions
(8 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Paula Sherriff (Dewsbury) (Lab)
1. What assessment he has made of the adequacy of availability of broadband to businesses in Yorkshire and the Humber.
Julie Elliott (Sunderland Central) (Lab)
3. What assessment he has made of the adequacy of availability of broadband to businesses in the north-east.
The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)
I recently announced a joint review by the Department for Business, Innovation and Skills and the Department for Culture, Media and Sport of business broadband to ensure that businesses are able to access the affordable, high-speed broadband that they need and deserve. More than 250,000 homes and businesses in Yorkshire and the Humber, and more than 100,000 in the north-east, have superfast broadband available for the first time thanks to the Government’s investment programme.
Paula Sherriff
I thank the Secretary of State for his response. If the Department is on track to meet its targets, why does Ofcom analysis predict that by 2017, when 95% of all UK premises will have superfast broadband, around 18% of small and medium-sized enterprises, including many in my constituency, will not? Why are so many businesses being left behind, and does the Secretary of State accept that his plans show a lack of ambition?
Sajid Javid
No, I do not. I hope that the hon. Lady will recognise that superfast broadband coverage throughout the UK has increased from 45% of the country in 2010 to almost 90% now, and that we are fully on target to reach 95% by 2017. It is important that we keep looking at new ways to extend coverage through fixed wireless and mobile, and that is exactly what we are doing.
Julie Elliott
A senior adviser at the Institute of Directors has said that they expect the Government to meet the universal service obligation, but that is only because the bar is set so low. How are the Government going to provide the physical infrastructure to maintain Britain’s position at the forefront of digital innovation in business? Will the Secretary of State also answer the question about the lack of provision for SMEs, which he did not address?
Sajid Javid
We are extending broadband coverage throughout the country and it includes hundreds of thousands of SMEs, including in the hon. Lady’s constituency. We are on target, and she may like to know that our USO is twice as high as is recommended in the EU. Already, despite the fact that there is more work to do—I am the first to accept that—we have wider coverage than most of our large EU partners, we have higher average speeds and we have the lowest average price.
Kevin Hollinrake (Thirsk and Malton) (Con)
The Ofcom solution to the desperately poor penetration of fibre to premises in the UK is to open up access to BT’s ducts and poles, but that would require reasonable rates of access as well as a clear network map of those ducts and poles. What can the Secretary of State do to make sure that BT complies with those requirements?
Sajid Javid
I have read Ofcom’s report carefully and met Ofcom a number of times about that issue, and I have every reason to think that BT will comply. If that does not happen, of course we will look at what action we can take.
James Morris (Halesowen and Rowley Regis) (Con)
2. What recent steps he has taken to (a) promote regional growth and (b) create a midlands engine.
The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)
We are absolutely committed to regional growth. We recently launched a further round of growth deals, and the March Budget highlighted the Government’s support for the midlands engine. It includes a £250 million midlands engine investment fund, new enterprise zones, and a devolution deal for Greater Lincolnshire worth £450 million.
James Morris
One of the keys to growth in the black country part of the west midlands, which I represent, is greater collaboration between business and further education colleges. Halesowen College and Sandwell College both excellently serve my constituency. Will the Secretary of State agree to meet the principals of Halesowen and Sandwell Colleges to talk more about how to reduce the skills gap in the black country, to promote further growth in the region?
Sajid Javid
I agree absolutely with my hon. Friend. One of the reasons we have seen a 50% fall in his constituency is that he has been promoting just that type of collaboration. I enjoyed visiting Halesowen College with him last year to learn about the advanced science, engineering and technology centre, and of course I will be more than happy to meet him and college representatives.
Keith Vaz (Leicester East) (Lab)
Will the Secretary of State join me and other Leicestershire MPs as well as many throughout the world in congratulating Leicester City football club on winning the premier league yesterday? Does he agree that this will boost jobs not just in Leicester but in the midlands region, and not just for those interested in football but for those in tourism? Does he accept that rather than Red Leicester, it is actually Blue Leicester?
Sajid Javid
I like the sound of Blue Leicester—I like it very much—but let me congratulate the right hon. Gentleman and, most of all, his constituents on their stunning victory last night, which I think the whole nation is celebrating. I suggest he make the most of it while he can.
Amanda Milling (Cannock Chase) (Con)
Regional growth and the midlands engine are reliant on businesses such as those in Cannock Chase that are investing and exporting. I visited a business in Cannock on Friday that is looking to grow, but faces difficulty in getting access to finance from the bank it has banked with for years, and this has resulted in its switching banks. Will my right hon. Friend outline what measures the Government have taken to improve access to finance for small and medium-sized businesses?
Sajid Javid
My hon. Friend raises a very important issue. I will highlight two things. First, there is the local growth fund: almost £8 billion has already been allocated, and the Chancellor talked in the last Budget of a further £4 billion by the end of this Parliament. There is also the launch of the midlands engine investment fund: hundreds of millions of pounds will be allocated to small businesses, including those in Cannock Chase.
Chris Leslie (Nottingham East) (Lab/Co-op)
But if we are to get all these visitors to Leicester, Nottingham, Derby and across the east and the west midlands and we are to get the midlands engine moving, will the Secretary of State talk to his colleagues about infrastructure investment more generally, because we are certainly losing out in the east midlands, with only £37 per head of rail investment compared with £294 per head in London?
Sajid Javid
The hon. Gentleman raises the important issue of infrastructure investment. It is because we have a strong economy that, under this Government, we have a programme of £300 billion of investment over the next few years. That of course includes the midlands, with the investment in the main line and in HS2. However, there is always more we can do, and I am very happy to hear new ideas.
Michael Fabricant (Lichfield) (Con)
Will the Secretary of State take this opportunity to praise the work of the local enterprise partnerships in promoting the economy of the west midlands, particularly the Greater Birmingham and Solihull LEP, of which Lichfield is a member? Will my right hon. Friend clarify, however, what will be the role of the LEPs and what will be the role of the midlands engine, which is about to appoint or has appointed a new chairman, in helping to promote the regional economy?
Sajid Javid
I join my hon. Friend in commending the work of LEPs throughout the UK, but especially that of the Greater Birmingham and Solihull LEP, not least because it covers my constituency. I have seen the work that it has achieved, particularly under its chairman, Andy Street, and it is very commendable. The LEPs will work with local authorities throughout the midlands to really fire up the midlands engine, which means co-operation on things such as infrastructure, trade and skills.
Mr John Spellar (Warley) (Lab)
A couple of weeks ago, I asked the Prime Minister about the possible closure of the British Gas Oldbury site, with the loss of 700 jobs. In his reply, the Prime Minister assured me:
“We will make sure that a ministerial taskforce is available to talk to the company and the local community and to provide assistance in terms of retraining and other things.”—[Official Report, 20 April 2016; Vol. 608, c. 917.]
Imagine my disappointment on being told that there will be no ministerial taskforce, but that Ministers will have regular contact with a taskforce to be set up by the local authority. I do not think that that matches up to the assurance from the Prime Minister. There needs to be a real drive to keep or to replace these jobs, so when is BIS going to deliver on the Prime Minister’s assurance?
Sajid Javid
Job losses, whenever they are announced, are regrettable, as they of course are in this case, which is why we must do everything we can. I can tell the right hon. Gentleman that soon after the Prime Minister said that, the Minister for Small Business, Industry and Enterprise and the Minister for Employment had a meeting with a managing director from British Gas. I understand that the redundancies are not final yet—the consultation period is still going on—so let us hope that they are not as bad as those that have been seen. We will continue to do whatever we can, and that includes contact with the company.
Colleen Fletcher (Coventry North East) (Lab)
4. What his Department’s strategy is for the funding of adult skills provision in FE colleges for the remainder of this Parliament; and if he will make a statement.
The Minister for Skills (Nick Boles)
We are protecting the adult education budget in cash terms, extending subsidised loans to advanced learners and introducing an apprenticeship levy, so funding will be 40% higher in cash terms by 2020.
Colleen Fletcher
We are told that the adult skills budgets will be devolved to regions that have secured a devolution deal. Will the Minister assure me that those budgets will be ring-fenced and not subjected to cuts?
Nick Boles
We will certainly be ensuring that the budgets are spent on skills training, but the whole point of devolving them is to give the local combined authorities the power to decide which are the skills priorities in their area, not to have them asking me for permission to spend on a skills need that they have identified.
Mrs Maria Miller (Basingstoke) (Con)
Area reviews are an important way of understanding local adult education needs. Will the Minister be encouraging such reviews to look at the needs of women returning to work after caring responsibilities, so that they can use the further education sector to really develop their skills and add to the productivity of our country?
Nick Boles
My right hon. Friend is absolutely right. One of the great opportunities in the apprenticeships programme is that apprenticeships are all age. For women who have perhaps taken a career break, or just want to change their profession, an apprenticeship is an opportunity to gain new skills while also earning an income so that they can forge a great career.
Nic Dakin (Scunthorpe) (Lab)
When will the Government be publishing guidelines on how skills budgets might be devolved in those areas where that devolution is being looked at?
Nick Boles
That will depend on when exactly the devolution deal is done. As the hon. Gentleman will be aware, in our own area of Greater Lincolnshire that deal is reasonably well advanced; in other parts of the country, the deals are less well advanced. Fundamentally, it is pretty simple: we want authorities to be commissioning from their local colleges the adult skills provision that they believe their area can benefit from.
Andrew Bridgen (North West Leicestershire) (Con)
Although the budget is enhanced, it is only a finite amount. Given that, it is important that it is targeted at where it will have the most effect. Does the Minister agree that those funds are best targeted at young adults, the low-skilled and those actively seeking work?
Nick Boles
I agree with my hon. Friend that those will often be the best targets. What is even more important is that his local combined authority and those of other hon. Members are best placed to identify the particular groups or industries with particular needs, and then respond accordingly.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
Further education colleges in Scotland are the largest providers of apprenticeship education. Will they therefore be exempt from the apprenticeship levy?
Nick Boles
The apprenticeship levy will apply to all employers throughout the United Kingdom with a payroll bill of more than £3 million. Of course, there is absolutely nothing to prevent any employer in Scotland that is paying the levy from putting pressure on whoever is in government in Scotland after this Thursday to make sure that they increase their investment in apprenticeships, as we are doing in England.
Mr Gordon Marsden (Blackpool South) (Lab)
Tucked away in the autumn statement was the Government’s admission that they will be cutting—their term is “efficiencies”—£360 million of adult skills non-apprenticeship funding between now and 2020. Does the Minister not see that there is a paradox in the Government going hell for leather on English and maths for young people’s apprenticeships while failing to ring-fence funding for basic skills, when England has 9 million people of working age with low literacy and numeracy, and we are ranked bottom in literacy and next-to-bottom in numeracy among 23 developed nations? Last year, the Government cut the adult skills budget across England by 18%. Now they have scrapped plans for advanced post-24 skills. Why is the Government’s key White Paper addressing technical skills shortages being delayed? Is all this a strategy or a wing and a prayer?
Nick Boles
There was a lot of detail in the hon. Gentleman’s question, but not a lot of clarity, so here is the clarity: we are increasing total funding available for further education by 40% in cash terms during this Parliament. He talks about last year because he does not like this year, and that is because this year’s spend tells the story of a Government investing in skills for the future.
Andrew Stephenson (Pendle) (Con)
5. What steps he is taking to encourage businesses to take on apprentices.
The Minister for Skills (Nick Boles)
We have removed employers’ national insurance from apprentices under the age of 25, and are introducing an apprenticeship levy for larger employers, which will increase the budget for apprenticeship training in England to £2.5 billion in 2019-20.
Andrew Stephenson
To mark national apprenticeship week, I visited Silentnight in Barnoldswick, whose award-winning apprenticeship scheme has already created over 40 full-time jobs. Does the Minister agree that companies such as Silentnight, which is seeing real year-on-year sales growth at the moment because of its apprentices, are great examples to employers across Pendle and the rest of the UK?
Nick Boles
I particularly welcome the example of Silentnight in my hon. Friend’s constituency, because it is really important to understand that apprentices add value to their employers—they are not just receiving training; they are also adding value. We consistently hear employers saying that apprentices bring energy, ideas, enthusiasm and new contacts to their businesses.
Hannah Bardell (Livingston) (SNP)
It is becoming increasingly clear that the systems and processes needed to implement the apprenticeship levy are far from ready. Many see it as a tax on jobs. The Scottish National party has tabled an amendment to the Finance Bill to seek a full review, and the CBI has called for a radical rethink. I am grateful to the Minister for meeting me and representatives of the oil and gas sector recently. He well knows the continuing issues with double charging. Will he heed these calls and delay implementation of the apprenticeship levy until the systems and processes are ready and business has been fully engaged?
Nick Boles
No, we will not be delaying, because for decades no Government adequately gripped the problem we have in this country, which is that businesses invest too little in skills development. That is what holds our productivity back. As it happens, since the CBI’s survey, and since other surveys of the same kind, we have published a detailed technical guide for employers on how the apprenticeship levy will work. I encourage the hon. Lady and her constituents to look at it. If they have any further questions I am happy to answer them, but the levy will be coming in in April 2017, and we will be fixing Britain’s skills problems.
Peter Heaton-Jones (North Devon) (Con)
On Friday I attended an event to mark the first anniversary of the extremely successful Care Academy, which is a unique collaboration in my constituency between Petroc College and the Northern Devon Healthcare NHS Trust. In effect, it provides apprenticeships for young people wanting to get into the health profession. Will the Minister join me in congratulating the excellent students who have been through the Care Academy in the first year, and does he agree that it is an extremely worthwhile programme for the future?
Nick Boles
It is well known that we have huge skills needs in the care sector and the NHS, and that kind of academy is exactly what we need to see more of, so I am delighted that my hon. Friend’s constituency, Petroc College and others are setting an example.
Paul Blomfield (Sheffield Central) (Lab)
The Minister will know that the number of BIS staff working on the apprenticeship programme is due to fall massively by 2020. What assessment has he made of his Department’s capacity to deliver the apprenticeship target?
Nick Boles
The number of BIS staff who will be working on the apprenticeship programme will fall, but only because we are setting up a new, independent institute for apprenticeships that will take over many of the jobs that are currently undertaken by BIS staff. That institute will be in the control of the employers who are paying the levy. I think that is the right way to do it and I hope that the hon. Gentleman will welcome it.
Ben Howlett (Bath) (Con)
Businesses such as Rotork, BMT and Designability in Bath have taken on hundreds of new apprentices since the scheme first started, enabling young people to gain the best qualifications for a really great career. Does my hon. Friend agree, however, that although the Government are doing a great deal to encourage older people into apprenticeship schemes, a cultural shift is required to encourage even more into the scheme in the future?
Nick Boles
I think my hon. Friend is right about that, because there is a common misconception that apprenticeships are somehow only really appropriate for school leavers, whereas the reality is that they offer opportunities to people at all stages in their lives, and indeed at all stages in their careers. It is not just for new recruits to an employer; it can be for somebody who has been working for an employer for several years but has discovered that they have the potential to develop.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
6. What discussions he has had with the Secretary of State for Work and Pensions on the support and guidance for businesses on employing people on the autistic spectrum.
The Parliamentary Under-Secretary of State for Life Sciences (George Freeman)
Through our one nation reforms, we are committed to a labour market that allows everyone to fulfil their obligations and opportunities wherever and whoever they are, including those with autism. That is why the Prime Minister launched the Disability Confident campaign, and why we have continued to spend over £100 million a year on the Access to Work scheme, helping over 36,000 people with disabilities into work. We have published guidance to employers on employing people with autism, and my hon. Friend the Minister for Skills and my right hon. Friend the Minister for Small Business, Industry and Enterprise recently met Autism UK and the all-party group on autism.
Dr Cameron
The autism employment gap is much larger than the disability employment gap, with only 15% in full-time employment and 26% of graduates remaining employed. We are losing the potential that people with autism spectrum disorder can offer to our economy. What specific programmes and support will be provided to employers and jobseekers to close this startling gap, and will the Government produce disaggregated data to evidence progress?
George Freeman
The hon. Lady makes an important point, and I pay tribute to her work on this. As I said, we are investing substantially in this area, and through the Disability Confident campaign, we are actively engaging with employers of different sizes and sectors to promote access to work for people with autism. We launched the latest part of that campaign on World Autism day, on 2 April. We do not think that quotas are the right way to go. We want to encourage employers and we want those with autism to know that good employers will recognise and reward their skills.
Scott Mann (North Cornwall) (Con)
Many skill-based jobs are perfect for people suffering from autism, with computer coding and programming being a prime example, given the rigid structure of the work. Will the Minister work with me to help promote coding within Cornwall and to support people who wish to get involved in skill-based work?
George Freeman
I would be delighted to work with my hon. Friend and with other Ministers in the Department for Business, Innovation and Skills and the Department for Work and Pensions, and I commend him for his leadership on this excellent initiative.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
When will the Government follow the example of Leicester City football club and try to get into the premiership on this question? There are so many talented people on the autism spectrum desperate and waiting for a job, many of them in regions such as Yorkshire, yet we are faced with uncertainty for everyone—apprentices, people with autism—because of this great cloud that is the possibility of our leaving the EU. No one is investing or hiring.
George Freeman
Even for me, it would be a stretch to delve into the EU on this question. The Government are investing £100 million a year in the Access to Work scheme, helping 36,000 people with disabilities into work, so we are absolutely committed to this agenda. People with autism have a lot to offer in the workplace, and we are serious about giving them opportunities.
Hannah Bardell (Livingston) (SNP)
April is Autism Awareness month, and earlier this month, The Economist led with an article on how the talents and skills of people with autism and on the autistic spectrum are potentially being wasted. It said that if businesses were encouraged to take more friendly approaches to recruitment and to deploy the appropriate skills, we could have many more people in the workplace. We had a fascinating and moving debate last week on autism, during which many Members shared moving experiences of their own children, including my hon. Friend the Member for Angus (Mike Weir) and the hon. Member for Berwick-upon-Tweed (Mrs Trevelyan). Will the Minister meet me and a cross-party delegation to discuss how we can get businesses properly to mark the number of people on the autism spectrum and how we can work together more across the House?
Mr Speaker
I was going to invite the hon. Lady to seek an Adjournment debate, until I realised that in fact she had had it.
George Freeman
I will restrict my answer, Mr Speaker. The right meeting would be with the Secretary of State for Work and Pensions, whose Department leads on this issue, and with the Ministers for Skills and for Small Business, Industry and Enterprise. We are actively engaging with all the relevant charities on this issue.
Mr Speaker
I hope that the hon. Lady is content with that answer, although, whether she is or is not, she has had it.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
7. What assessment he has made of the potential effect of a UK withdrawal from the EU on the UK’s digital industries.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
With your permission, Mr Speaker, I would like to take Question 7 with Question 14, if that is okay.
We think that leaving the EU would be an absolute disaster for Britain’s digital industries.
Mr Speaker
It would be okay, if the hon. Member for Sedgefield (Phil Wilson) were here, but he isn’t, so it isn’t, but we will proceed unabashed by his absence, because we have the right hon. Member for Newcastle upon Tyne East (Mr Brown).
Mr Brown
The digital sector is very important to the north-east of England, as my hon. Friend the Member for Sunderland Central (Julie Elliott) made clear earlier. Some 25,000 jobs are now directly involved in the sector. What reassurance can the Minister give the House that there will be market access arrangements with our partners in the EU in the event of a no vote?
Mr Vaizey
I am afraid that I cannot give the right hon. Gentleman that reassurance, and that is what really worries me about our leaving the EU. Not only does the digital industry provide the 25,000 jobs he mentioned but overall it represents about 7% of the UK’s gross value added. We are at the heart of negotiating the digital single market, which will give our digital industries even more opportunities, and that is why we must stay in.
Andrew Percy (Brigg and Goole) (Con)
I was at a breakfast meeting this morning with digitech companies from Vancouver in British Columbia that are here on an inward trade mission, looking at investing in the UK. Does the Minister agree that this dangerous and damaging remain campaign, which is based wholly on a fear of leaving the European Union that is not justified, is going to do great damage? Has he done any assessment of how much damage is being done to investment by the talking down of this country by those who want us to remain in servitude to the EU?
Mr Vaizey
I hear what my hon. Friend has to say, but I wish the leave campaign would stop running this terrible fear campaign. I am confident that we are going to stay in Europe and continue to attract investment. I am pleased to hear that our Canadian trade envoy, to which I gather my hon. Friend had access, shows us how even as members of the European Union, we can still negotiate and engage globally with many other countries. Being a member of the European Union does not prevent us from working with countries outside the EU, and the leave campaign’s fear campaign has to stop saying it does.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
On Sunday, the European Union slashed roaming charges by 75%, and they will be abolished altogether next year. That is a huge boost to British businesses with European ambitions as well as to Leicester City fans, now with Champions league travel to plan. The UK is Europe’s biggest digital economy. We buy and sell more online than any other country. Would the Minister like to estimate how long it would take him, even with his fabled charm, to renegotiate all our international digital agreements in the event of a Brexit, and what our £118 billion digital economy would do in the meantime?
Mr Vaizey
I think it would take ages—it would take absolutely years to renegotiate. I recently returned from a G7 meeting in Japan, proving again that the leave campaign’s fear campaign is completely wrong. I was able to spend some time with the European vice-president, talking about the great opportunities that the digital single market presents. It was a lot of fun. We want to be part of that digital single market—growing for Britain.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
8. What assessment he has made of the most significant threats to the UK steel industry.
The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)
Global overproduction and reduced demand have caused steel prices to collapse, eroding the profitability of steel producers across the world. We have acted decisively to help UK steel companies by delivering lower electricity prices, tackling unfair trade, updating procurement guidance and introducing flexibility in emissions regulations.
Tom Blenkinsop
One of the main issues in the current steel crisis is time. The Greybull deal took nigh on 12 months, and that time was allocated to ensure that a better buyer, as opposed to the original potential purchaser, came forward. What has the Secretary of State done and what conversations has he had with Tata to ensure that it will be a responsible vendor and allow enough time to encourage not just buyers, but the best buyers, to come forward? Where does he see strip and tube in the future? Does he still see Tata remaining in situ in some form in both those sectors?
Sajid Javid
The hon. Gentleman is right about the importance of time for securing a viable long-term future for the Tata strip business. I have had a number of discussions, as have my officials, with Tata. It has been very straightforward in being reasonable about time—of course, it does not have an unlimited amount of time, but it has shown through the long products business that it understands that things take time.
Craig Williams (Cardiff North) (Con)
I congratulate my right hon. Friend on his approach—particularly to Tata and Neath Port Talbot in south Wales, but also to Celsa Steel in Cardiff. Some £76 million has already been given in compensation to high-energy users and the Government are projected to spend, I hope, £100 million this year. Will my right hon. Friend confirm that and clarify what future support we can give to high-energy steelmakers?
Sajid Javid
My hon. Friend is absolutely right to raise the issue of Celsa Steel, which has made a substantial investment in the UK, employing hundreds of people, and we want to see that continue. The price of electricity is very important to Celsa and other steel producers. We have already extended the compensation available and we have announced that we will move towards exemption, which I think will help Celsa and many others.
Mr Iain Wright (Hartlepool) (Lab)
I thank the Secretary of State for attending the Thursday sitting of the Select Committee, which is conducting an inquiry on steel. He may recall that I asked him about the maintaining of confidence. There is growing concern that firms are not supplying to Tata facilities because they fear that the steel business may go into administration and they will not be paid, and credit insurance is being withdrawn. Businesses that supplied SSI do not want to get their fingers burnt twice, and customers, especially those with long-term horizons, are looking to Tata’s competitors for alternative provision. What further firm steps will the Government take on the matter of credit insurance to ensure that word goes out, loudly and with clarity, that this is a viable operation and firms can supply to and buy from Tata with confidence?
Sajid Javid
I thank the hon. Gentleman for his Committee’s work on this matter, which is helpful to the debate and enables us to look more closely at the position. As for the question of suppliers to Tata, and, indeed, large customers, I have already written to, or asked officials to write to, all the suppliers and customers of Tata Steel strip products. We have contacted the largest suppliers and the largest customers, as has Tata, which has given its reassurance on this point as well. However, I think that the main reassurance I can give relates to the approach of the Government, who are doing all that they can to secure a long-term, viable future for the business.
Tom Pursglove (Corby) (Con)
I would argue that Tata Steel in Corby is a vital component of the midlands engine. Bearing in mind all the commercial sensitivities, will the Secretary of State update us on exactly what point has been reached in the discussions that are taking place with the aim of securing its future?
Sajid Javid
My hon. Friend’s approach is commendable, as is the work that he is doing in Corby to secure Tata Steel’s future. As I hope he understands, there is a limited amount that we can say about what is a very commercially sensitive process, but let me reassure him that we are doing everything we can.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Does the Secretary of State agree that it is of strategic importance to the economies of Wales and the wider United Kingdom to keep the blast furnaces in Port Talbot operational following any future takeover? Will he consider introducing a steelmaking-specific enterprise incentive scheme, as advocated in the management buyout option, to provide the fiscal incentive that is required to safeguard steelmaking in Wales?
Sajid Javid
I agree with the hon. Gentleman in that I, too, want to see a future for steelmaking in Wales, and we are doing everything that we can to help with that. He mentioned the management buyout proposal. We are taking a very careful look at that, and would, of course, be willing to work with those involved.
Mike Wood (Dudley South) (Con)
What action is my right hon. Friend taking to help UK steel suppliers to win Government contracts, and to ensure that small and medium-sized enterprises in the supply chain benefit from those opportunities?
Sajid Javid
That is a good question. As my hon. Friend will know, we have already changed procurement rules so that they can take economic and social factors into account. We are also making the pipeline of deals much more visible, and targeting that at SMEs in particular.
Kevin Brennan (Cardiff West) (Lab)
Carwyn Jones, the Labour First Minister in Wales, who is at Port Talbot again today, had a package of support in place immediately after Tata’s announcement of its intention to sell. Now that the UK Government have belatedly woken up and followed that lead, how confident is the Secretary of State that Tata’s true intention is to be responsible? It took over a year to sort out long products, and Tata wants this to be done and dusted—including due diligence—by the end of June. Does the Secretary of State think that that is a realistic prospect?
Sajid Javid
We are working with the Labour First Minister and his Government. Both Governments understand just how important this is, and I think it is also important for us to continue to work together. As for the question of timing, I believe, as I said earlier, that Tata is sincere in its commitment to a reasonable time frame and a reasonable process. I have no reason to think that that will not be the case. Tata continues to show flexibility, and I hope that things stay that way.
Wendy Morton (Aldridge-Brownhills) (Con)
9. What steps his Department is taking to support people who want to start their own businesses.
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
We have a growing and healthy economy, which is good for all business, but which, in particular, encourages people who want to start up their own businesses. We are looking at ways in which we can improve, for example, practices for self-employed people, which is also very helpful. Our start-up loans scheme has provided more than 37,000 loans worth over £210 million.
Wendy Morton
In my constituency, the number of registered businesses increased by about 10% between 2014 and 2015. As I am sure my right hon. Friend will agree, that is very welcome. I recently visited Streetly Vets, a new business that has been set up by two sisters in my constituency. Does my right hon. Friend agree, however, that the first few years of being in business can be some of the most challenging, and will she assure me that the Government are doing all that they can to support new and small businesses?
Anna Soubry
I absolutely agree with my hon. Friend that it is the first few years that are the trickiest. If you can jump that hurdle, you can achieve almost anything; you can certainly make sure that your business will grow. I have explained about the start-up loans that we do, but the other great achievement of this Government in the past 12 months is our work on cutting business rates. This has been the biggest ever cut in business rates, reducing the burden by £6.7 billion, which will benefit 900,000 smaller properties. That is very good news, especially for small businesses.
Alison McGovern (Wirral South) (Lab)
Small businesses might like to start up in the town centre of New Ferry in my constituency, except that footfall has gone through the floor and the Co-op and Lloyds bank are now closing. Who should my constituents blame for the dereliction? Is it the Tory Ministers who withdrew from regeneration, or is it the absentee landlords who bought up property and are now nowhere to be seen?
Anna Soubry
I really do not think it is as simple as that. It is unfortunate that when bad news is delivered it is often turned into a party political football. There are all sorts of reasons why a number of high streets continue to have difficulties. Equally, there are all manner of solutions that can be used to turn them around. I would ask the hon. Lady to look at some of the successes of Conservative, Labour and indeed Lib Dem councils in helping and supporting their high streets. Most importantly I would suggest that, rather than talking down her high street, she should be talking it up.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
10. What steps the Government are taking to increase take-up of apprenticeships among (a) people with disabilities, (b) care leavers and (c) other disadvantaged groups.
The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)
We want to ensure that apprenticeships are accessible to the widest possible range of people. We are promoting reasonable adjustments for disabled learners and fully funding apprenticeship training for young people aged 19 to 24 with an education, health and care plan and for care leavers up to the age of 24.
Vicky Foxcroft
As the Government already have targets to increase the proportion of black and minority ethnic apprenticeships by 20%, does the Minister not agree that they should do the same for people with disabilities and for care leavers?
Sajid Javid
I agree that we should do all that we can, and we have made it a huge priority to help more individuals with learning difficulties and disabilities to take up apprenticeships. We have done this by providing guidance for individuals and working with employers to help them better to understand what more we can do. Our apprenticeship revolution will leave no one behind.
Sir Henry Bellingham (North West Norfolk) (Con)
21. Is the Secretary of State aware that the Construction Industry Training Board, which is based in Bircham Newton in my constituency, has been excellent at encouraging people with disabilities to take up apprenticeships? Can he confirm that when the CITB’s existing levy is merged with the apprenticeship levy, it will still have sufficient funding to carry on with its excellent programmes? Will he come up to Bircham Newton to visit the CITB at some stage during his tenure?
Sajid Javid
My hon. Friend is absolutely right to raise the good work of the CITB in this regard, and when the apprenticeship levy is introduced from April 2017, we can make sure that it continues to have the funding available to do the same kind of work.
Ruth Cadbury (Brentford and Isleworth) (Lab)
12. What discussions he has had with the Chancellor of the Exchequer on the potential effect on small and medium-sized enterprises of proposed changes to filing of tax returns.
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
I talk to Treasury Ministers on a continuing basis, and in my ministerial role I am more than happy to take up the cause of small businesses. I met representatives of the Federation of Small Businesses only last week and they reiterated their concerns about the proposals, but of course this is not a mandatory filing every quarter; it is effectively good bookkeeping. They raised their concerns and I am more than happy to listen to them and, most importantly, to represent them to the Treasury. Also, a consultation is taking place, so there is always room to make sure that we continue to do the right thing.
Ruth Cadbury
I am glad that the Minister is listening. My constituent Sheila Knight is the director of a small local business and she is very concerned about the proposal to make businesses submit data quarterly to HMRC. She says:
“It will cause a huge amount of extra work, expense and worry for absolutely no benefit. Like most small businesses, I collate my accounts information once a year and give it to my accountant. Having to do this four times a year will be a huge imposition and my accountant’s fees will be pro rata more expensive.”
Does the Minister not agree that what small businesses need is strategic support from the Government, not more bureaucracy and unnecessary cost?
Anna Soubry
It is about reducing bureaucracy and cutting costs for small businesses. It is not a quarterly tax return; it is good, sensible bookkeeping, which good businesses do anyway. Keeping the books in good condition every quarter will help small businesses when they come to submit their annual returns. I am more than happy to meet the hon. Lady’s constituent and explain things to her, because there is a lot of misinformation.
Kit Malthouse (North West Hampshire) (Con)
I am pleased to hear that the Minister has met the Federation of Small Businesses, of which I am a proud member. From that meeting, she will know that 60% of small businesses do not currently operate digital accounting systems. Does the Minister understand the rising level of anxiety in that part of the business community? Does she agree that it might be sensible for the Treasury to consider introducing the system on a voluntary basis, which made self-assessment such a success when it was introduced all those years ago?
Anna Soubry
My hon. Friend makes a good point. There will always be good, full support for this digital movement. The other thing that is of concern to some small businesses is access to superfast broadband, because there is no point in doing this unless a business has it. Many small businesses are reticent to get up to speed—if I can put it that way—but I am confident that, with the excellent work of my hon. Friend the Minister for Culture and the Digital Economy, we are making huge progress and ensuring that all businesses have access to superfast broadband.
Bill Esterson (Sefton Central) (Lab)
The Minister has singularly failed to explain how the change will help businesses. I do not know whether she has ever produced a set of business accounts, but the Financial Secretary to the Treasury told MPs in a Westminster Hall debate in January that it would require a
“a summary of income and expenses.”—[Official Report, 25 January 2016; Vol. 605, c. 36WH.]
As every businessperson knows, that can be done only by putting together the full detail each quarter. Whether the Minister calls it reporting, filing or updating, her claim that the change represents a reduction in red tape is laughable. It is a major increase in bureaucracy, administration and costs, especially for those businesses without digital access. The Government should go away and think again.
Anna Soubry
I am one of those who actually had a real job or two before coming to this place. I can therefore assure the hon. Gentleman that, as a self-employed barrister, I absolutely did have to provide accounts each week, but I do not claim to have run a business of more than just myself and maybe one other. The most important thing is that these are not quarterly returns. The hon. Gentleman really should understand what is proposed. It is actually a good way of ensuring that small businesses always keep up to date with how their business is going. The change will enable businesses to do their annual returns considerably better.
William Wragg (Hazel Grove) (Con)
13. What steps he is taking to reduce the level of business regulation.
The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)
The Government committed in their manifesto to cut £10 billion of business red tape through the business impact target. We will report on our progress in June this year.
William Wragg
The Government are doing well to cut regulation at home, but we cannot ignore the fact that the most burdensome regulations on British companies come from the European Union and cost British business £22 billion a year. Given that there were 1,469 new pieces of EU regulation and 51 EU directives in 2015, is it not clear that the only way to end the cost to British business is to vote to leave?
Sajid Javid
My hon. Friend is absolutely right to raise the issue of cutting business regulation, but I do not recognise the £22 billion a year figure for EU regulation. I am sure that he will agree that as well as looking at the costs of regulation, we should consider the benefits of the single market. With 500 million consumers, it is the world’s largest economic zone, and there is no doubt that it helps to generate jobs throughout Britain, including in Greater Manchester.
Andrew Gwynne (Denton and Reddish) (Lab)
The Secretary of State will be aware that many small businesses often apply to only one lender for finance—usually their bank—and that two in five of those turned down do not go on to apply for finance anywhere else. What more are the Government doing to ensure that small businesses have access to as good a range of financial products as possible to keep the economy moving in the right direction?
Sajid Javid
First, the hon. Gentleman may know that one of the changes brought in during the coalition Government was that if a small business’s application for credit is refused, that application can be passed on, with the business’s permission, to other potential lenders. That has certainly helped to change the landscape. We can also help to increase competition, on which the Treasury has been leading. If the hon. Gentleman looks at the number of providers of SME finance, he will see that there has been a dramatic change there, too.
Jo Cox (Batley and Spen) (Lab)
15. What recent assessment he has made of trends in productivity levels.
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
Productivity, measured as output per hour worked, increased by 1% in 2015 as a whole—the largest annual increase since 2011—and is now 1.7% higher than it was in 2008.
Jo Cox
The reality is that this Government’s record on productivity has been one of failure. Last July, they launched their deeply underwhelming productivity plan, which was damned by the Select Committee on Business, Innovation and Skills as
“a vague collection of existing policies”,
the Committee warning that it risked
“collecting dust on Whitehall bookshelves”.
Can the Minister update the House on what steps she is taking to improve on the Government’s record to date?
Anna Soubry
I am sorry that it seems the hon. Lady did not hear my answer; I remind her that productivity is now 1.7% higher than it was in 2008 and we saw its largest annual increase since 2011 only last year. I do not know where she is getting her information from—I have my suspicions—but unfortunately she is wrong. This Government are absolutely committed to improving productivity, and we have already heard, by way of example, the Minister for Skills talking about the work we are doing to ensure that we have the right skills—that is an essential part of an effective productivity plan.
Julie Elliott (Sunderland Central) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)
Ministers and officials across government continue to work around the clock to support Britain’s steel industry—I have updated the House on progress several times and will continue to do so, whenever appropriate; our two major pieces of legislation, the Enterprise Bill and the Trade Union Bill, are moving closer to the statute book; and we are on the verge of naming the National Environment Research Council’s new polar research vessel. The final decision on that will be made by the Minister for Universities and Science—Joey McJoface, as we like to call him.
Julie Elliott
In The Sunday Times this week it was reported that meetings are taking place in France to look at how people could take advantage of getting business from the UK in the event of a Brexit vote. Does the Secretary of State agree that remaining in the EU is vital for British trade, particularly in the automotive and aerospace industries, and for the health of the British economy as a whole?
Sajid Javid
Yes, I agree with the hon. Lady on that. She mentioned the automotive and aerospace industries, two of our strongest manufacturing sectors in the UK, which rely heavily on a supply chain that is international—much of it is in Europe. Equally, she could mention our services industries, which account for 80% of our GDP.
Sir Simon Burns (Chelmsford) (Con)
T6. Does the Secretary of State accept that the proposals to allow waiters and waitresses, rather than restaurant owners, to actually receive tips given to them will be warmly welcomed? Does he not think that the House of Commons should show a lead, because in our own restaurants the agency workers and part-time workers who serve Members and their guests do not receive tips?
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
I thank my right hon. Friend for that question. May I begin by thanking and paying a huge tribute to everybody who works in this place, especially those in our catering services? They often have to work the most unsocial hours and often do so in the most difficult of conditions, as they suddenly have a huge influx of us going into the Tea Room or wherever it might be. We perhaps underestimate the work they do. My right hon. Friend makes a very good point and I would be more than happy to take this up with the House authorities. In the meantime, I congratulate my right hon. Friend the Secretary of State on rightly launching this consultation, as when someone, in any facility, pays a tip, they expect the person to whom they want that tip to go to receive it—all of it. I think this will allow us to begin to see real progress, so that we do the right thing on this.
Ms Angela Eagle (Wallasey) (Lab)
Two Select Committees of this House are now preparing to examine the collapse of BHS into administration last week, putting at risk 11,000 jobs. Sir Philip Green bought the company for £200 million, took hundreds of millions of pounds out of it in dividend payments for his own family and then sold it for £1 to a bankrupt with no retail experience. What does the Business Secretary think are the issues for public policy as he contemplates the current situation? Does he think this represents responsible ownership?
Sajid Javid
The hon. Lady is right to raise that issue. As she said, two Select Committees are already looking into it, and considerable concern has been expressed in Parliament. I share some of those concerns, which is why I can inform her that today I have written to the chief executive of the Insolvency Service and instructed her to commence an investigation immediately. She has agreed to do so, and I will make both those letters—mine and hers—available in the Libraries of both Houses later today.
Ms Eagle
That is good news and I certainly welcome the steps that the Business Secretary has taken. During Sir Philip Green’s stewardship of BHS, the pension fund went from a surplus to a black hole of £571 million. What options do the Government and the pensions regulator now have to ensure that Sir Philip Green pays his fair share of that huge liability? Does the Secretary of State agree that the Pension Protection Fund was designed as a lifeboat for staff pensions, not a funding stream for the owner’s luxury yacht?
Sajid Javid
Hopefully, the hon. Lady will understand that it would be wrong of me, and of anyone else, to single out any particular individual. That is for independent investigators to look at by examining the evidence in front of them. She will also know that, when it comes to defined benefit pension schemes, there are many in deficit, and just because one is in deficit does not necessarily mean that there has been some kind of wrongdoing. As I have said, I have instructed the Insolvency Service to commence an investigation, but she should also be reassured that the pension regulator will be looking into this matter.
James Morris (Halesowen and Rowley Regis) (Con)
T10. There are 850,000 dementia sufferers in the UK, and that number is set to double over the next few years. What is the Minister doing to encourage British scientists to be as innovative as possible in delivering on improved care for those suffering from dementia?
The Minister for Universities and Science (Joseph Johnson)
We took the decision to protect the science budget, enabling us to invest and put the UK at the front of tackling diseases such as dementia. In addition, a Government investment of £150 million has been announced by the Prime Minister to establish a dementia research institute. I am pleased to confirm that two leading charities, the Alzheimer’s Society and Alzheimer’s Research UK, have now pledged a further £100 million towards the project. The Medical Research Council will be looking for an inspirational director to lead the institute and bring together the collective experience that exists in the UK and worldwide.
Margaret Greenwood (Wirral West) (Lab)
T2. Guidance issued by the Government on 8 February on the use of Government-funded research for lobbying caused great concern in the field of higher education and indeed among academics in my constituency of Wirral West. Can the Minister confirm that all grants given out under the remit of the Department for Business, Innovation and Skills will be exempt from the anti-lobbying clause? Will he also confirm that he is seeking a similar exemption for research grants given out by other Government Departments and agencies?
Joseph Johnson
Yes, there has been concern from academic communities and I can confirm that all grants issued by the Higher Education Funding Council for England and the academies will not be covered by that clause.
Kelly Tolhurst (Rochester and Strood) (Con)
T7. I am proud that, of the south-east’s 348,000 apprenticeships, Rochester and Strood has provided 7,410, the fourth largest number. I am also grateful to companies such as BAE Systems that makes an annual commitment to 12 higher level apprenticeships in my area. How can the Secretary of State provide further support to my constituency’s small and medium-sized businesses to offer more local people the opportunity of a quality apprenticeship?
The Minister for Skills (Nick Boles)
The performance of businesses in my hon. Friend’s constituency is truly remarkable and leads the way in the south-east. I hope that she is aware that we offer smaller employers who have never had apprentices before a grant to help them with their first five apprenticeships. I hope that she will be able to communicate that to them and ensure that they take up that grant.
Diana Johnson (Kingston upon Hull North) (Lab)
T3. Given the similarity of recent events at British Home Stores with what happened to Hull-based Comet four years ago, when British taxpayers were left with tens of millions of pounds to pay out in redundancy payments, will the Secretary of State ensure that the report that he commissioned on Comet and the Comet scandal is published?
Sajid Javid
The hon. Lady will know that the report was commissioned by my predecessor. I will take a close look at what she has said and get back to her.
Seema Kennedy (South Ribble) (Con)
Given the hope of renewed trade links between the UK and Iran, which will be dependent on good communication, does my right hon. Friend consider that now is the right time to withdraw accreditation for Persian GCSE and A-level?
Sajid Javid
My hon. Friend is right to highlight the importance of trade with Iran. She will know that that is why the Government have announced a trade mission that will take place soon. If more people in the UK speak Persian, that will help. I will happily take up the matter with my right hon. Friend the Education Secretary.
Mike Kane (Wythenshawe and Sale East) (Lab)
T4. I welcome the fact that BHS administrators have entered consultation with USDAW, the retail union, for the lack of consultation was in part to blame for the pension fund going from a £5 million surplus to a £571 million deficit. In the light of that, will the Secretary of State consider the case that there should be enhanced employee rights, in particular in this aspect of companies law?
Sajid Javid
As I said earlier, it would be wrong of anyone to jump to conclusions about the pension fund and the reason for the deficit. The right way forward is for independent regulators to take a look.
Andrea Jenkyns (Morley and Outwood) (Con)
I am a champion of the Sutton Trust and the inquiry by the all-party parliamentary group on social mobility into access into leading professions. What is the Department doing to support our leading professions to work with schools and universities to build up the schools base, so that more young people from disadvantaged backgrounds can access our top professions?
Joseph Johnson
We have established the Careers & Enterprise Company to make sure that all young people know about the opportunities available to them through our higher education reforms. We are also giving students more information than ever before about their course choice, and we have introduced degree apprenticeships as a new route into the professions. We want to see universities playing their part too, which is why I have asked the director of fair access to continue to focus on access to the professions in his work with universities.
Liz McInnes (Heywood and Middleton) (Lab)
T5. A total of 11,000 BHS employees face an uncertain future over not just their jobs, but their pensions. Where will the Secretary of State place responsibility for filling the pension fund black hole? Will it be with the taxpayer or with the owners of the company, who paid themselves more than £400 million in dividends while the pension fund was driven into the ground?
Sajid Javid
The hon. Lady will know that if, sadly, defined benefit pension funds have trouble, we have the Pension Protection Fund in place, but of course we should always examine why a pension fund may need recourse to the PPF. That job should be done by independent regulators, not politicians.
Martin Vickers (Cleethorpes) (Con)
The HCF CATCH training facility in my constituency was established 10 years ago as a partnership between the local authority and the private sector, since when 800 apprentices have passed through its doors. May I invite my right hon. Friend the Secretary of State or the Skills Minister to visit it? Does he agree that such a partnership is the way forward?
Nick Boles
I feel sure that my hon. Friend is slightly disappointed to have just a Lincolnshire neighbour coming to visit him, but if he can put up with me, I would be delighted to do so.
Angela Rayner (Ashton-under-Lyne) (Lab)
T8. In the Secretary of State’s discussions with Tata, will he have time to raise Tata’s involvement in the outsourcing of up to 800 jobs from British Airways, including its centre in south Manchester, which supplies jobs to my constituents and has already announced 80 redundancies? As The Daily Telegraph revealed last week, this is another example where Tata’s actions threaten our national security along with our jobs, so will the Government step in to protect both?
Sajid Javid
If the hon. Lady wants to send me more detailed information about that, I will gladly take a closer look.
Mr David Nuttall (Bury North) (Con)
Why should 100% of British businesses have to comply with EU regulations when less than 10% of them export to the EU?
Sajid Javid
I touched earlier on the importance of the single market. It is the largest single market in the world, with 500 million consumers, and it brings huge benefits to British businesses in growth and jobs.
Yasmin Qureshi (Bolton South East) (Lab)
T9. Will the Secretary of State reconsider the decision to scrap bursaries for nurses? First, that will deter mature students and people from black and minority ethnic communities and disadvantaged communities, and secondly, while nurses are training, they spend 50% of their time doing practical work, looking after people. It is unfair that they should pay to provide services to others.
Nick Boles
What I share with the hon. Lady is a determination to ensure that the groups she mentioned and other groups that have been discussed today have the maximum opportunity, particularly in the NHS. That is one reason why we are making great steps towards developing a new nursing apprenticeship, which will offer people a way into the profession, gaining that qualification while they are working and earning.
Richard Fuller (Bedford) (Con)
Alas, there is no law against selling a company to a bunch of clowns, which is a great pity for the employees and pension holders of British Home Stores. However, there is an expectation that the public should be able to look to the advisers in such a sale—the lawyers and accountants—to live up to their responsibilities and to do their duty. Will my right hon. Friend look carefully at the templates and responsibilities for advisers in transactions so that we do not see another great British company sold to a bunch of muppets?
Sajid Javid
I can reassure my hon. Friend of that. He has spoken eloquently on this issue a number of times, and he knows it well. We will learn lessons from the collapse of any company, but especially one as important and as large as BHS. As I said earlier, there will now be an investigation by the Insolvency Service, which I have instructed to start today, and we will certainly draw lessons from the outcome of that and other investigations.
Several hon. Members rose—
Petition
Alec Shelbrooke (Elmet and Rothwell) (Con)
I rise to present a petition relating to the closure of Garforth clinic. I have more than 1,000 signatures from my local community, who believe that the Leeds Community Healthcare NHS Trust decision to close the clinic has not been properly thought through.
The petition states:
The petition of residents of Elmet and Rothwell,
Declares that the decision of the Leeds Community Healthcare NHS Trust to close Garforth Clinic removes ease of access to local health services for elderly and disabled patients; further that it removes podiatry, adult dietetics, children’s speech and language therapy, psychological therapies, musculo-skeletal, cardiac and weight management services from Garforth; further that it removes access to a local warfarin clinic for those without personal transportation; further that it highlights a failure to comply with statutory functions of an NHS Trust; further that the Leeds Community Healthcare NHS Trust has failed to identify a sustainable alternative or detail how neighbouring health centres will cope with increased demand; further that the Trust has failed to reference pressure from Leeds City Council’s Core Strategy, which plans to build thousands of additional dwellings around the town; and further that the Trust withdrew from a pre-arranged public meeting with our Member of Parliament and City Councillors at which residents were hoping to explain their personal concerns over the removal of local health services.
The petitioners therefore request that the House of Commons urges the Department of Health to encourage the independent Leeds Community Healthcare NHS Trust to review its decision to close Garforth Clinic; arrange a meeting with residents to answer concerns; and re-consult with patients on the impact that such a closure will have.
And the petitioners remain, etc.
[P001687]
Aleppo
(8 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
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Jo Cox (Batley and Spen) (Lab)
(Urgent Question): To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the situation in Aleppo, Syria.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
The Syrian conflict has entered its sixth year. As a result of Assad’s brutality and the terror of Daesh, half the population have been displaced and more than 13 million people are in need of humanitarian aid. The UN special envoy, Staffan de Mistura, estimates that as many as 400,000 people might have been killed as a direct result of the conflict.
Our long-term goal is for Syria to become a stable, peaceful state with an inclusive Government capable of protecting their people from Daesh and other extremists. Only when that happens can stability be returned to the region, which is necessary to stem the flow of people fleeing Syria and seeking refuge in Europe.
We have been working hard to find a political solution to the conflict. There have been three rounds of UN-facilitated peace negotiations in Geneva this year—in February, March and April. The latest round concluded on 27 April without significant progress on the vital issue of political transition. We have always been clear that negotiations will make progress only if the cessation of hostilities is respected, full humanitarian access is granted and both sides are prepared to discuss political transition.
The escalating violence over the past two weeks, especially around Aleppo, has been an appalling breach of the cessation of hostilities agreement. On 27 April, the al-Quds hospital in Aleppo city was bombed, killing civilians, including two doctors, and destroying vital equipment. More than a dozen hospitals in the city have already been closed because of air strikes, leaving only a few operating. The humanitarian situation is desperate. According to human rights monitors, at least 253 civilians, including 49 children, have been killed in the city in the last fortnight alone.
At midnight on Friday, following international diplomatic efforts between the US and Russia, a renewed cessation came into effect in Latakia and eastern Ghouta in Damascus. We understand that this has reduced some of the violence in Latakia, but the situation remains shaky in eastern Ghouta.
The situation in Aleppo remains very fluid indeed. The Assad regime continues to threaten a major offensive on the city. There were some reports of a cessation of attacks overnight, but we have received reports indicating that violence has continued this morning. We need swift action to stop the fighting. My right hon. Friend the Foreign Secretary is speaking to Secretary Kerry today to discuss how we can preserve the cessation.
We look to Russia, with its unique influence over the regime, to ensure that the cessation of hostilities does not break down. It has set itself up as the protector of the Assad regime, and it must now put real pressure on the regime to end these attacks. This is crucial if peace negotiations are to be resumed in Geneva. These negotiations must deliver a political transition away from Assad to a legitimate Government who can support the needs and aspirations of all Syrians, and put an end to the suffering of the Syrian people.
We also need to inject further momentum into political talks. We therefore support the UN envoy’s call for a ministerial meeting of the International Syria Support Group to facilitate a return to a process leading to a political transition in Syria. We hope that this can take place in the coming weeks. The UK is working strenuously to make that happen, and we will continue to do so.
Jo Cox
I have to say that, once again, it is a shame that the Secretary of State cannot be here personally for an important discussion on this matter. I hope that that will be noted.
Without international action, on current trends, at the end of this short debate, another two Syrian civilians will be dead and four will be badly injured. On Friday, desperate doctors in Aleppo appealed for international help to stave off further massacres and the potential besiegement of that city, fearing a repeat of the horrors of Srebrenica. In the light of this, does the Minister agree that it is the Syrian authorities who are primarily responsible for these horrific ongoing abuses, continuing their long-standing policy of targeting civilians in rebel-held areas? Does he also agree that we now urgently need a mechanism, with clear consequences, to deter further barbaric attacks on civilians? I have raised repeatedly in this place the need for a no-bombing zone; will he now look again at that?
What is the UK doing to work with all those with an influence over parties to the conflict, including Saudi Arabia, Turkey, Iran and Russia, to put pressure on all sides to stop all attacks on civilian targets, including hospitals? Does the Minister have evidence that Russian forces have been directly involved in the latest air strikes? If they were, does he agree that it is surely time for fresh sanctions against Russia? Is it not now also time for his Department, along with the Ministry of Defence and the Department for International Development, to look again at airdrops to besieged communities? Why can we not join forces with our European allies to get food to starving people? Would not airdrops also put the regime under renewed pressure to grant more traditional and reliable land access?
On accountability, is the Minister’s Department involved in collecting evidence to enable eventual war crimes trials, as we did during the Balkans conflict? I understand that the Commission for International Justice and Accountability, which is funded by the UK and US Governments, has evidence to link abuses to the highest level in the Syrian state.
On refugees, given the escalation of the violence in Aleppo and the lack of medical care now available there, what more can the UK do to get the most vulnerable people out of harm’s way? Surely, given what we know about the horror which many of the refugee children in Europe have fled, it is now time to end the Government’s shameful refusal to give 3,000 unaccompanied children sanctuary here in the UK.
While I am a huge fan of President Obama—indeed, I worked for him in North Carolina in 2008—I believe that both he and the Prime Minister made the biggest misjudgment of their time in office when they put Syria on the “too difficult” pile and, instead of engaging fully, withdrew and put their faith in a policy of containment. This judgment, made by both leaders for different reasons, will, I believe, be judged harshly by history, and it has been nothing short of a foreign policy disaster. However, there is still time for both men to write a postscript to this failure. Does the Minister agree that it is time for the leaders of both our countries, even in the midst of two hotly contested political campaigns, to launch a joint, bold initiative to protect civilians, to get aid to besieged communities, and to throw our collective weight behind the fragile peace talks before they fail? I do not believe that either President Obama or the Prime Minister tried to do harm in Syria but, as is said, sometimes all it takes for evil to triumph is for good men to do nothing.
Mr Ellwood
First, may I pay tribute to the hon. Lady’s work as chair of the all-party friends of Syria group? It is important that the House is kept up to date with the fluid events taking place in that country. Let me qualify her remarks: the Foreign Secretary is returning from an important visit to Latin America; otherwise, he would be in the Chamber responding on this very important matter.
The hon. Lady raised a number of issues and I will do my best to go through them efficiently. First, I absolutely concur with her: it is Syria that is very much responsible for the significant number of deaths of people in the country of all religions, particularly the Sunnis. That is why we call on Russia to use its influence to bring Assad to account and to make sure that we can get access. Following the previous ceasefire, we gained access to about a third of the areas that we could not previously get to. We hope that we can unlock the situation and get access in the forthcoming days.
The hon. Lady mentioned methods of delivery, particularly airdrops. There are places in Daesh-held territory where it is possible, because of air superiority, to fly slow and low enough to drop aid packages accurately, but that is not the case for some of the conurbations and communities in the built-up areas. Aleppo is Syria’s largest city by some margin, and not only are the opposition and the Assad Government there; al-Nusra is there as well. Without the regime’s support—it has air superiority—we cannot carry out the airdrops that the hon. Lady would like. It is better to get agreement from Assad to take trucks straight into those places so that they can go directly to the people in need. Airdrops can land randomly. They often get into the wrong hands and do not help the very vulnerable whom we wish to support.
The hon. Lady mentioned the role of other countries, including Saudi Arabia. Foreign Minister al-Jubeir is in Geneva with John Kerry at the moment, playing his role. Let us not forget that it was Saudi Arabia that brought together the opposition groups in the first place in December, which began the three rounds of talks that have taken place.
The hon. Lady talked about the importance of collecting evidence. We had a very good debate two weeks ago about genocide, crimes against humanity and war crimes. We are playing a leading role in making sure that people are brought to justice. As we saw in the case of the former Serbian-Bosnian leader, Radovan Karadžic, sometimes the process takes many years, but we are actively and heavily involved—we are likely to make more effort—in making sure that we collect the evidence as we speak.
The hon. Lady made an interesting comment about placing Syria on the “too difficult” pile. I ask the House to consider how different Syria might look if, in August 2013, we had voted in favour of punitive bomb strikes. Daesh did not even exist in Syria at that time—it had no foothold whatsoever. Instead, this House stepped back from that decision, and I think that we will live to regret that.
Crispin Blunt (Reigate) (Con)
Back in February, President Assad described retaking the whole of Syria as
“a goal we are seeking to achieve without hesitation”,
but he was slapped down by the Russian ambassador to the United Nations, who said:
“I heard President Assad’s remarks on television…Of course, they do not chime with the diplomatic efforts that Russia is undertaking”.
The Foreign Secretary has admitted that he does not get much out of his conversations with Foreign Minister Lavrov. Does the Minister think that the Foreign and Commonwealth Office has the necessary capacity satisfactorily to read Russian interests and intentions?
Mr Ellwood
The key relationship that has developed and that allows us to place greater emphasis on Russia—whether it be Putin, Lavrov or Bogdanov—is that with John Kerry. The closeness with which he is working with the Foreign Secretary shows that we are playing our part as well. From a humanitarian perspective, we are the second largest donor to the country. We are playing our part on the humanitarian aspect as well as with regard to the military. We are very much at the forefront of activities but, ultimately, it is not for the Americans or the British but for Russia to determine that it is going to place pressure on Assad to allow access to the very areas into which we need to get humanitarian aid.
Diana Johnson (Kingston upon Hull North) (Lab)
I thank the Minister for his response and congratulate my hon. Friend the Member for Batley and Spen (Jo Cox) on securing this urgent question. In the short time that she has been in the House, she has consistently stood up for the people of Syria who are caught in this appalling conflict.
The whole House can unite in condemning last week’s air strikes and shelling in Aleppo. In particular, as is recognised by the Geneva convention, there is never any justification for attacking hospitals. The bravery and commitment of the medics who remained in Aleppo stand in sharp contrast to the cowardice and brutality of the Assad regime, which once again showed its indifference to the population of Syria. Despite the actions of the Assad regime, we must remain committed to the peace talks and to a political solution to the current conflict.
As a member of the Syria Support Group, Britain has a crucial role to play, particularly in supporting the US-Russia ceasefire talks. Britain ought to be an active contributor to that process. As a leading EU country, we can wield real influence as a member of Russia’s most important trading bloc. What discussions are ongoing at an EU level about exerting pressure on the Russians to redouble their commitment to the ceasefire? As the Minister has stated, Russia is in the strongest position to tell President Assad to stop killing civilians in Aleppo.
Along with my hon. Friend the Member for Batley and Spen, may I ask what specific steps the UK Government are taking with key allies such as Saudi Arabia to encourage the Syrian opposition to recommit to the peace process? Will the Minister comment on reports that the Assad regime used the ceasefire to move troops and prepare for an assault on Aleppo? May I ask whether the negotiations under way in Geneva include provisions for additional monitoring so that all sides can have confidence that a new ceasefire agreement will be genuine?
At the heart of the conflict is a humanitarian disaster of an almost unimaginable scale. Can the Minister assure the House that the UK is pushing for humanitarian access to be at the heart of any new ceasefire agreement? Finally, will the Minister comment on recent reports of an increase in collusion between the Assad regime and Daesh, with the Assad regime stepping back from confronting Daesh in a number of areas while continuing to trade with it and therefore providing vital funds for its campaigns?
Mr Ellwood
I welcome the tone in which the hon. Lady raises these important questions. We have had a series of debates on the matter, and I concur with the hon. Lady in welcoming the work that the hon. Member for Batley and Spen (Jo Cox) has done in her role as chair of the friends of Syria all-party group.
The hon. Member for Kingston upon Hull North (Diana Johnson) mentioned the Geneva conventions. They are part of collecting the evidence that is necessary in the longer term to bring the culprits to account. That work is ongoing with a number of non-governmental organisations that Britain is supporting. If I may, I will digress to pay tribute to the White Helmets, an organisation that Britain helps to fund, which helps to dig people out of the rubble. Its members are based in these very dangerous areas and are trained to save the lives of civilians who are caught up in them. They go into those disastrous areas with the necessary technology to try to pull survivors out.
The hon. Lady mentioned the role of the EU. Federica Mogherini, the EU High Representative, is a member of the ministerial working group, and she is very much engaged on the matter at the highest level. As I mentioned, the group will be meeting in the very near future.
The hon. Lady talked about the importance of the Syrian opposition and its cohesion. I had the opportunity to meet the president of the Syrian opposition in Istanbul only a couple of weeks ago. The Syrian opposition was pessimistic at that point about the progress that was being made, and now we have seen events unfold. Given its disparate nature and the wide agendas that it follows, the fact that the group has stayed together is an indication of its determination to say, “We do not want to be part of Daesh, but we also do not want to have Assad as our leader.”
The hon. Lady is right to indicate that there is huge collusion, as a matter of convenience, between Assad and Daesh. Reports are coming out that in Palmyra, for example, a deal was struck that Daesh would retreat from that area and the Assad regime would be able to claim that retreat as a victory, but clearly something else was happening behind the scenes.
The hon. Lady alludes to the fact that there have been oil sales. The Assad regime is short of oil supplies and Daesh has crude oil that it can sell, which is another area of mutual convenience. Thankfully, the work we have been doing right across the board on counter-Daesh initiatives is preventing Daesh from being able to produce its oil and therefore to gain financially from sales or, indeed, to use the oil itself.
John Redwood (Wokingham) (Con)
What is the Government’s current advice to the military opposition to Assad other than Daesh, given that the Government have been sympathetic to the opposition in the past, but it now finds itself in an extremely difficult position?
Mr Ellwood
I made it clear in my opening remarks that a political solution is needed in relation to the Assad regime. We need to move forward with a transition process to ensure the eventual removal of Assad, which will allow the country to unite to take on Daesh itself. However, the two are not mutually exclusive—we can continue our campaign to destroy Daesh. We have already seen the liberation of Ramadi, and I hope that we will see the liberation of the city of Mosul in the near future.
Patrick Grady (Glasgow North) (SNP)
This is an urgent question, but it would be helpful if we heard more of a tone of urgency in the Government’s response. The destruction of the infrastructure in Aleppo is so wanton that we are beginning to wonder whether there will be anything left worth fighting over. The first priority has to be a ceasefire so that humanitarian aid can be supplied to those desperately in need. Are the Government making or supporting preparations to deliver aid as soon as any window of opportunity arises? The second priority has to be a longer-term peace settlement. It would be useful to hear what role the Government see themselves playing in a process currently dominated by the US and Russia. Finally, we must support those fleeing conflict. I therefore echo the calls for the Government finally to show some humanity and to reconsider their position on accepting unaccompanied refugee children from Europe.
Mr Ellwood
The hon. Gentleman asks three questions. First, on restructuring, one of the reasons why we co-hosted—along with Kuwait, Germany, Norway and the United Nations—the important conference that took place in February was exactly to make sure that we could collect the necessary pledges from around the world. Over $11 billion, a record amount for any single day, was pledged to provide such support, most of which is going to the refugees, but there are also other initiatives.
The hon. Gentleman is right to point to the need for a political track, which I have already mentioned. It is not for us to determine that track. This is part of why the opposition coalition has come together, and it is exactly what the talks in Geneva are all about.
The hon. Gentleman mentioned the 3,000 children. That issue has already been mentioned, and I apologise for not previously touching on it. We are doing our best to help to stem the flow of refugees from the source itself. There is a huge question to be asked when EU member states, it is felt, cannot look after refugees and we are taking refugees from other EU member states. We have put in extra funding to make sure that, no matter where the refugees come to, they are looked after to absolutely the same standards. We do not want to add to the problem by encouraging more people, including children, to make the perilous journey along the various routes. As I say, the UK is helping to provide better support. Indeed, we are sending out teams to the various refugee camps to make sure that they have the necessary standards that we would expect if the refugees were in this country. I would add that we are honouring the Dublin convention, as hon. Members will be aware, which allows the transfer of children from other member states if they have a direct family connection in this country. I am sure that the Under-Secretary of State for Refugees, who is sitting on the Front Bench, concurs.
Helen Whately (Faversham and Mid Kent) (Con)
The news from Aleppo emphasises that Assad must not be part of the endgame in Syria. To what extent would my hon. Friend say that Russia has also come round to that view, and what more can be done to get Russia to rein in its ally, Assad?
Mr Ellwood
Those who are familiar, as I know my hon. Friend is, with the long-term historical relationship between Russia and Syria will be aware that this is an area of the world that Russia sees as its sphere of influence. Syria supported the Soviet Union during the cold war and Assad’s father trained as a MiG pilot in Russia. There are strong ties between the countries. I would advocate that Russia recognise that although it wants to keep its influence, it is not so wedded to Assad the individual. The political transition must move forward and the people of Syria must determine who their next leader will be.
Mr David Winnick (Walsall North) (Lab)
Is it not clear that although Daesh is, of course, a murderous group run by outright murderers and psychopaths, the Syrian Government have for some time been carrying out crimes against humanity on a far greater scale—aided and abetted, moreover, by a member of the United Nations Security Council?
Mr Ellwood
I concur with the spirit of what the hon. Gentleman says. We took steps to hold Assad to account when he crossed a line by using chemical weapons. We wanted to take action, and we came to this House, but I am afraid that this House decided that that was not the action that was needed. We need to recognise that there are occasions when a few countries in the world can stand up to dictators such as Assad, and the rest of the world looks to countries such as Britain to act. We did not at that juncture.
Mr James Gray (North Wiltshire) (Con)
As the Minister has said, in particular in answer to my hon. Friend the Member for Faversham and Mid Kent (Helen Whately), Russia is absolutely central to finding any kind of long-term solution in Syria. That is absolutely correct. Yet in all our attempts to talk to Russia we discover that there is an absolute brick wall between us.
Last week, members of the House of Commons Defence Committee were in Moscow, but the Russian Government would not speak to us. Lines of communication have broken down. Does the Minister agree that now may be the time to put aside, temporarily, our perfectly reasonable objection to and outrage at the illegal annexation of Crimea, and say to the Russians that we need to talk to them about Syria and that for now we should park our differences on other matters?
Mr Ellwood
I am aware that the Defence Committee made efforts to visit Moscow, which would have been an important visit—
Mr Ellwood
What I am trying to say is that what my hon. Friend has put his finger on, in tying the two issues together, is exactly what we should recognise. The sanctions against Putin are coming from the very countries to which the refugees are moving. We need to be a bit more astute in recognising that from Putin’s perspective the issue of Ukraine and the Crimea is linked with what is happening in Syria.
Ann Clwyd (Cynon Valley) (Lab)
I am sure that the Minister is aware of the draft statement circulating among non-governmental organisations working in the Aleppo area, which says that there is a
“complete absence of the fundamentals of safe humanitarian intervention, and the absence of a clear mechanism to monitor and document violations of international humanitarian law and human rights law”.
Is that the case, and can he tell us more?
Mr Ellwood
As the right hon. Lady is aware, getting access to Aleppo is very difficult indeed. We are collecting intelligence for the long term. She is right to highlight the complexities of this large city. The al-Nusra Front is based there, and Assad has taken advantage of the ceasefire to move weapons systems up to the area. That is why it is all the more important that we get Russia to exert its influence to make sure that Assad comes back to the table.
Sir Edward Leigh (Gainsborough) (Con)
Surely we have to accept Syria as it is. Whether we like it or not, Assad is not going to go away in a hurry. He has the only army on the ground capable of defeating ISIL, and he has just as much support as all the hundred other warring factions. If we undermine him, an authoritarian, we will unleash worse totalitarian forces. Is it not significant that any progress this week has been as a result of contacts between America and Russia, yet our Government have put the Russian Government in complete deep freeze? We are denying them visas, we are not talking to Lavrov, we have absolutely no influence—because of our obsession with Russia and getting rid of Assad, we are not actually propelling peace forwards. We must drop the present policy and try to co-operate with the Americans so that Russia can get peace.
Mr Ellwood
I do not agree with what my hon. Friend has said, but I agree with the direction of travel he wants. Russia has influence over Assad. We are speaking with the Russians. John Kerry is in Geneva along with Lavrov, al-Jubeir and others, acknowledging the urgency of getting a renegotiated cessation of hostilities so we can get humanitarian aid back in.
Mike Gapes (Ilford South) (Lab/Co-op)
The Minister referred to the long term. Can he tell us how long is long term? He also made reference to the vote in this House in 2013. Is not the real failure the fact that our Government and the United States Government did not impose no-fly zones and humanitarian corridors when they could have done in 2011 and 2012? Now it might be very difficult to do so. That is the real failure. Non-intervention is not necessarily the best policy.
Mr Ellwood
I am a former soldier, and I looked at the idea of no-fly zones and humanitarian corridors. I even wrote some papers on it when I was on the Back Benches. The trouble is: who implements them, and what authority would they have to be in the country? We wanted to take Syria through the UN Security Council to the International Criminal Court, and guess who vetoed it: China and Russia. That is the difficulty we have. We have to ask ourselves how we would implement and enforce such a no-fly zone. I concur with the spirit of what the hon. Gentleman says, but these are the realities of where we actually are.
Bob Stewart (Beckenham) (Con)
I think that the most important concern with unaccompanied children is their safety, and I am beginning to wonder whether we might not have our policy the wrong way around. Three thousand children wandering around Europe can easily be picked up by traffickers; 3,000 children in the middle east can be kept safely in camps. I am wondering whether we should look at our policy anew.
Mr Ellwood
The concerns expressed about the 3,000 children are absolutely sincere. The solution, however, is not simply to remove the challenge from the area, but to solve the challenge in the area. We cannot endorse the idea that it is acceptable for other EU states not to meet the basic requirements for looking after refugees. By taking those refugees, we would simply be providing more space for further refugees to come in, and that is not a long-term solution.
Several hon. Members rose—
Mr Speaker
Order. The Minister was diverted from the path of virtue by the hon. Member for Beckenham (Bob Stewart). No doubt the intentions were good, but we were straying somewhat from the terms of the UQ. As the Minister and others know, I have facilitated much discussion on the matter of refugees. I rather imagine that there will be more, and no doubt people will think, “And so there should be”, but it would be best today if we could stick to the terms of the UQ that the hon. Member for Batley and Spen (Jo Cox) applied for and that I granted.
Mr Kevan Jones (North Durham) (Lab)
The Minister quite rightly spoke about the influence of Russia, but what pressure is being put on Iran, which has equally supported the Assad regime, both directly and through proxies such as Hezbollah? Has the Foreign Office or the international community opened up that dialogue with Iran and, as part of the Iran deal, put pressure on it to make sure that it actually responds?
Mr Ellwood
The hon. Gentleman makes an important point. If Iran is to take a more responsible role on the international stage, following the nuclear deal, we expect it to act in a more honourable way, whether in Damascus, Beirut, Baghdad or Sana’a. We have not seen that to date. He is right to say that Hezbollah continues to play an important role, but we are also seeing a difference of opinion between what Iran is looking for and what Russia is after.
Richard Benyon (Newbury) (Con)
When we hear at first hand from charities and NGOs that run hospitals in places such as Aleppo of those hospitals being bombed repeatedly by the regime and by Russian forces, the temptation is to come to this place and rage against the system, using those well-worn words, “Something must be done.” But in reality this is a most complex situation. What we want to hear—I think I heard the Minister allude to it this morning—is that everything is being done to work with the Russians to create a framework whereby safe areas and, if possible, air corridors for delivering aid can be secured. There must be a way of ensuring that it is humanitarian aid, even if that means having a Russian at Akrotiri to see what goes on the wretched plane that is delivering it.
Mr Ellwood
My hon. Friend and I discussed these things over the weekend, and I know he has been following events closely. Indeed, he knows people working in the region. It is important we look for a longer-term solution around access to the humanitarian corridors. As I mentioned, the Foreign Secretary is speaking with John Kerry this afternoon, and I hope we will have more to report as time elapses.
Alison McGovern (Wirral South) (Lab)
I think I heard the Minister say in his reply that 49 children had been killed in recent hostilities. If I am correct, will he repeat those facts to the House, so that everybody is clear about what is happening? Will he say what the Government are doing to make sure there is medical care for children in Aleppo?
Mr Ellwood
I am happy to confirm what I said before. According to human rights monitors, at least 253 civilians, including 49 children, have been killed in the city of Aleppo in the last fortnight alone. As I have said a couple of times now, the situation in Aleppo is fluid, because of the advances the Assad regime wants to make. Taking this most northern city, a key prize, has been a long-standing objective of the regime, and it would have a huge impact were the city to fall from the coalition.
It is important that we do what we can to provide access and make sure that areas such as hospitals are not bombed. We need to consider the case for giving grid references to make sure that such areas are protected and recognised, not least because a breach of the Geneva convention could be involved.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
My hon. Friend has twice said that in order to break the logjam we must have a political transition in relation to the Syrian Government. Will he enlighten the House as to what that means? Unpalatable as it might be, could it mean that Assad or some of his key Alawite officials have a role in a temporary transitional government?
Mr Ellwood
When the Syrian International Support Group came together in Vienna for the first time, it discussed a process of transition to allow the various and diverse stakeholders across the country to determine the timetable. A timetable of 18 months to two years was put forward, but these things are always in the realms of speculation. I certainly hope that the Geneva talks, which is where these negotiations need to take place, will resume discussions on this issue.
Tom Brake (Carshalton and Wallington) (LD)
Will the Minister set out what the Secretary of State said in his representations to the Russians following the al-Quds hospital bombing, which was a gross violation of international humanitarian law? Did he ask them to tell Assad to stop, and what was the Russians’ response?
Mr Ellwood
I was not privy to the exact wording used. If I may, I will ask the Foreign Secretary, who arrives back this afternoon, to write to the right hon. Gentleman directly.
David Rutley (Macclesfield) (Con)
More than five years of conflict is too long, and Members across the House will support the Government and the international community in their efforts to bring peace to this war-torn country. What progress are the Government making in shaping plans for post-conflict reconstruction in Syria?
Mr Ellwood
My hon. Friend makes an important point. It has been five years, but the difference over the last five or six months has been that negotiations have taken place and the stakeholders have been brought around the table. The international community, including Iran, Russia, the United States and France, as well as representatives from the EU and the UK, have all been around the table. That had not happened in the previous five years. The coalition and opposition groups have also come together. That is the major change on the previous five years. The London Syria conference was an important step in looking at the detail of what the international community must do, and be ready to do, once the guns eventually fall silent.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
Together with the hon. Member for North Wiltshire (Mr Gray), I was in Moscow last week, and one of the things I found most difficult was that we had no shared understanding of history or of language and diplomacy. I therefore find it incredibly concerning that we are talking in vague words about how to bring Russia genuinely to the table for discussions—through proxies, if not by ourselves. May we have some more detail about what such a plan would be?
Mr Ellwood
I must have misunderstood, because I thought that the visit did not take place. I am pleased to know that the hon. Lady was able to make it to Moscow. I look forward to hearing any further reports she or the Committee might produce on what they learned from their discussions there. She is right to place the focus on Russia itself and the need for us to have a better understanding of Russia’s intentions—of Putin’s intentions, effectively. Much of this is not the old regime; it is more about this President making his mark, often in an attempt to provide distractions from the domestic mess his country is in.
Seema Kennedy (South Ribble) (Con)
I welcome the Minister’s assurance that the Government are committed to gathering evidence relating to crimes against humanity, but will he update us on what protection is being given to Christian communities and other refugees in the countries neighbouring Syria?
Mr Ellwood
My hon. Friend is right to highlight the plight of the Christians, not least in Mount Sinjar and then in other areas with the Yazidis. We saw devastating attacks by Daesh as they cleaned these areas out. We had a comprehensive debate on these matters only a couple of weeks ago. It is important for us to collect the evidence, which is what we are doing. I shall not name the NGOs involved; that would be wrong and place them in danger. We are carrying out a lot of work, however, to make sure that we can collect the necessary forensic and legal evidence, which will then allow us to make the case at the UN Security Council and take this matter forward.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
We all condemn the bombings of civilians in Aleppo, but what specific action is the UK taking, in conjunction with our European partners, to try to kick-start the peace process, which, as others have mentioned, is now seriously in the mire?
Mr Ellwood
I do not want to repeat myself, but the first thing is to get support for the humanitarian initiative that needs to take place in the area. We are the second-largest donor there. The Syria conference was critical in helping refugees—not just in Syria, but in Lebanon, Jordan and indeed Turkey, and I would like to pay tribute to those countries. This is critical. As we speak, talks are taking place behind the scenes to try to pressurise Russia and make sure that Lavrov and Putin recognise that they are best placed to allow humanitarian access and to prevent the bombing of the civilian areas.
Rehman Chishti (Gillingham and Rainham) (Con)
I very much welcome the Minister’s statement. According to the BBC website, John Kerry has said that the Syrian conflict is now “out of control”. If that is the case, why is the Minister optimistic that the current talks will lead to a solution? Aleppo is the last stronghold of the opposition. If that falls, one may ask why the opposition should take part in any further discussions in Geneva.
Mr Ellwood
My hon. Friend is right to point out why the Syrian opposition pulled out from the talks. It is pointless sitting down for talks in Geneva when their own communities are being bombed back home. Although the situation has grown out of control and we have seen the cessation of hostilities break down, the whole purpose of John Kerry’s current initiative in speaking with Lavrov and working with our Secretary of State is to get ourselves back on course to ensure that the cessation of hostilities can be resumed. As I mentioned in my statement, we are seeing some signs that that is working.
Nick Thomas-Symonds (Torfaen) (Lab)
The recent bombing of hospitals took place in a city that already has a severe shortage of doctors because of the events of the last three or four years. What can the Minister do to ensure that any ceasefire has at its heart not only humanitarian aid, but the resumption of medical facilities to prevent a humanitarian catastrophe?
Mr Ellwood
In the sidelines of the London Syria conference, a number of major NGO workshops and meetings took place. A huge amount of effort has been put in by the Department for International Development Minister, my right hon. Friend the Member for New Forest West (Mr Swayne), who is in his place beside me, so that there is a readiness to move in. At the moment, however, the situation is just too dangerous for that to happen on a large scale.
Nusrat Ghani (Wealden) (Con)
Time is not on the side of the people of Aleppo. On Sunday night, the main and only road for those in the rebel-held east was bombed. If the regime manages to close that route, nearly 200,000 residents will be left trapped, without food or medical supplies. Pressure on Russia is key. I urge the Minister to do all he can to stress to Russia that time is running out.
Mr Ellwood
My hon. Friend has made her point very powerfully. The very fact that we are having this debate means that we have another method of communicating with Russia and saying, “We care. We recognise what is going on. Russia, you need to do more, and currently you are not doing that.”
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
It is estimated that recent violence in Aleppo has led to the death of a Syrian every 25 minutes. There is grave humanitarian urgency. What progress are the Government making in negotiations on taking aid trucks into Aleppo? If no progress is made, will high-altitude airstrikes and air drops be reconsidered?
Mr Ellwood
The hon. Lady has raised the important question of how we can best get aid into these vulnerable areas. That horrific statistic, of which I too am aware, highlights the challenge that we face. The international community must put more pressure on Russia, and must ensure that Assad is prohibited from bombing those areas so that we can get the aid in.
The best way to convey aid directly to where it needs to go is by truck, but the local checkpoints must give the trucks permission to go through in order for that to happen. Air drops can land anywhere. They often land in precisely the wrong hands, and are then used as a barter and as a means of worsening the situation, because the aid is denied to the people who need it.
Jason McCartney (Colne Valley) (Con)
Our Sentinel aircraft and unmanned aerial vehicles have provided a very complex and detailed picture of Syria from the air. Has evidence been gathered showing who the perpetrators of the attacks on civilians are? If there is such evidence, how is it being presented to the United Nations and to other nations?
Mr Ellwood
I pay tribute to my hon. and gallant Friend for his work during a previous campaign. He has a huge amount of knowledge of what the Royal Air Force does, and he will therefore appreciate that the fact that his is an operational question prevents me from giving him a firm answer. However, if he would like to talk to me in the Lobbies, I shall be more than happy to have a quiet chat with him.
Andrew Gwynne (Denton and Reddish) (Lab)
The bombing and shelling of civilian areas in Aleppo is sickening, and calls into serious question the Assad regime’s commitment to a peaceful resolution of the situation in Syria. So too, however, do the attempts to collude and trade with Daesh, as described by my hon. Friend the Member for Kingston upon Hull North (Diana Johnson). What more is the Foreign and Commonwealth Office doing to bring together all sides, and to make it clear that action of this kind is compromising our efforts to secure a peaceful settlement in Syria?
Mr Ellwood
The hon. Gentleman has articulated how complicated Syria is. However, that should not prevent us from playing our part in bringing Daesh to account, along with the international community. We are destroying Daesh on the battlefield, we are destroying their ideology, and we are destroying their ability to get their message out via the internet. We are also providing humanitarian aid and stabilisation capabilities in areas that have been liberated. The piece of the jigsaw that remains difficult is the political situation and the transition in Syria, and that is why it is so urgent for talks to resume in Geneva.
Henry Smith (Crawley) (Con)
Along with the United Kingdom’s diplomatic efforts and the £2.3 billion worth of aid for the region, there have been reports of collusion between the Assad regime and Daesh in Syria. Can my right hon. Friend assure us that the British airstrikes are focused, and have not resulted in any civilian casualties?
Mr Ellwood
That is another operational question. I know that the rules of engagement that we adopt and with which we comply ensure that we try to avoid civilian casualties at all times, but, if I may, I will write to my hon. Friend giving him more details.
Steven Paterson (Stirling) (SNP)
What recent contact has been made with the peshmerga to discuss their role both in defeating Daesh and in building a stable and peaceful future throughout Syria?
Mr Ellwood
The hon. Gentleman’s question gives me licence to pay tribute to the work of the peshmerga in liberating the Mosul dam, for example, and most of Kirkuk and the north of Iraq. It is important that they recognise the importance of working with the Iraqi army to improve the indigenous capability if we are to take Mosul and liberate Iraq from Daesh completely.
Several hon. Members rose—
Mr Speaker
Order. We are most grateful to the Minister and to other colleagues.
Southern Health NHS Foundation Trust
(8 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
Urgent Question: To ask the Secretary of State to make a statement on the safety of care and services provided by Southern Health NHS Foundation Trust.
The Minister for Community and Social Care (Alistair Burt)
I thank the hon. Member for Liverpool, Wavertree (Luciana Berger) for her question. At the outset of my response, I want to express my deep concern and apologies to the patients and family members who will again have felt let down by the contents of last week’s report from the Care Quality Commission. Our first duty to patients and their loved ones is to keep them safe. This applies to all of us with a role to play in the NHS, from the frontline to this House, and the Government are therefore clear that it is imperative to be open and transparent about what has gone wrong in order to minimise the risk of similar failings occurring throughout the NHS as a whole. We must ensure that the trust itself continues to be scrutinised and supported to make rapid improvements in care. If that means intervention from the regulators, they will not hesitate to take the necessary action, and we will not hesitate to back them.
Last week’s CQC report followed a focused inspection announced and requested by my right hon. Friend the Secretary of State in December 2015. The report from the CQC set out a number of concerns, including: a lack of robust governance arrangements to investigate incidents; a lack of effective arrangements to identify, record or respond to concerns about patient safety; and a need for immediate action to address safety issues in the trust environment. The report also found that the senior management and board agendas were not driven by the need to address these issues. None of those matters is acceptable.
NHS Improvement has taken action in recent months to address the issues at the trust. It has been working closely with the CQC and the trust, and on 24 March, NHS Improvement appointed an improvement director to the trust. On 14 April, following a CQC warning notice on 6 April, NHS Improvement placed an additional condition on the trust’s licence, asking it to make urgent patient safety improvements to address the issues found by the CQC. That condition gave NHS Improvement the power to make management changes at the trust if it did not make progress on fixing the concerns raised.
On 29 April, following the resignation of the trust chair Mike Petter, NHS Improvement announced its intention to appoint Tim Smart as the chair of the trust. As chair, Mr Smart will have responsibility for looking at the adequacy of the trust’s leadership. Given the centrality of issues of governance to the CQC’s report, I welcome the action taken by NHS Improvement. The direct appointment of a new chair by a regulator is a relatively rare step, and it reflects the seriousness of the issues at the trust. NHS Improvement will continue to monitor the situation closely in the coming weeks and months.
I understand that the CQC is considering the trust’s response to its warning notice, and the risks it highlighted, before deciding whether to take any further enforcement action, and none of its options is closed. The notice required significant improvements to be made by 27 April. Dr Paul Lelliott, the deputy chief inspector at the CQC, was directly responsible for the report, and I spoke to him this afternoon. He informs me that the delivery plan required by 27 April has been received and is in the process of being evaluated. NHS Improvement is working closely with the CQC and the trust, and the improvement director appointed by NHS Improvement is on site regularly, so there is constant independent oversight of the progress being made, as well as the formal monthly progress meetings between NHS Improvement and the trust.
In addition to the action we are taking on Southern Health, it is vital that we learn the wider lessons for the NHS as a whole. First, I hope the whole House can agree that it is right that we have robust, expert-led inspection from an independent CQC that provides an objective view about issues of safety and leadership, and that this is backed with action from NHS Improvement where that is required. Secondly, it is vital that we take the issue of avoidable mortality as seriously for people with learning disabilities and mental health problems as we do for other members of our society. To that end, the learning disability mortality review programme has been put in place by NHS England to ensure that the causes of this inequality are understood, and with the aim of eliminating them. In addition, the CQC will be leading a review of how all deaths are investigated, including those of people with learning disabilities or mental health needs. There can be no question but that the CQC report makes for disturbing reading, and that it demands action at local and national levels. We owe our most vulnerable people care that is safe and secure, and I am determined that we will do all we can to ensure patient safety.
Luciana Berger
I thank the Minister for very brief advance sight of his response. Patients and parents have a right to be angry at the failure of Southern Health NHS Foundation Trust, and we in this House have a duty to be angry on their behalf. To read the litany of failure, missed warnings, reports and recommendations ignored, and secrecy over the last four years would make any reasonable person angry, too. Friday’s CQC report shows that very little has been done since the House last discussed the matter in December.
The scandal at Southern Health has happened on this Government’s watch, and Ministers must take responsibility for what has happened to some of the most vulnerable people in our country. We should be angry that Connor Sparrowhawk was left to drown in a bath. We should be angry that Angela Smith took her own life. We should be angry that David West died in the care of this NHS trust—his father was repeatedly ignored when he raised his concerns. All of them were denied the care that they so desperately needed. Last week, the BBC reported that over the past five years, 12 patients who had been detained for their safety or that of others have jumped off the roof of a hospital run by this trust. Access to a roof was still permitted to people at risk of suicide. If all those tragic incidents were the only signs of systemic failure, we should be angry, but there is a much bigger story of neglect and malpractice, which aggregates into a major scandal.
When the Secretary of State responded to the urgent question on Southern Health in December, he rightly said:
“More than anything”
people will
“want to know that the NHS learns from”
such
“tragedies”.—[Official Report, 10 December 2015; Vol. 603, c. 1141.]
The CQC report published on Friday shows that that clearly has not happened. So I ask the Minister: first, what guarantees can the Minister give to the 45,000 patients currently in the care of Southern Health, and their families, that they are safe? Secondly, where is the accountability, the culpability and the responsibility? There seems to be very little. I heard what he said about the chair, but does he agree that the chief executive’s position is now untenable, and that she should be sacked? Thirdly, will he listen to the heartfelt pleas of the victims’ families, the campaigners, and all of us who are demanding a full public inquiry into Southern Health and broader issues, such as the abject failure adequately to investigate preventable deaths?
As the Secretary of State said in December, such issues are not confined to one trust. The Ofsted-style ratings that he previously mentioned will make a difference only if there is proper accountability and the ability to take action to make real improvements to patient care and patient safety. The families have behaved with such dignity and tenacity, and we owe them a debt of gratitude, but it should not be left to them alone to push for accountability.
I listened carefully to what the Minister told the House, but I remain unconvinced that enough has changed. Four months ago, we heard similar reassurances. Today, we are debating the Government’s failure to act. The time for yet more warm words and hollow reassurances is over. We need action, and we need it now.
Alistair Burt
I thank the hon. Lady for her response. We are not actually debating the Government’s failure to respond at all. The Secretary of State did exactly what he said he was going to do, and the CQC’s inquiry and work that followed can be seen in the report that was produced last week. The report contains a number of further concerns—there is no doubt about that—and people are right to be angry, but there is a process to find out what is going on and to do something about it and that process is in place. That is what NHS Improvement is doing and it is important that that is done.
There is an issue of urgency, which is really important. There are things that are discovered and things take time to get done. I am not content with that in any way, but the process is in place to do something about that. The CQC has been engaged and has ruled out no option for further action. Its options are quite extensive, including prosecution for things that it has found. The process started by the Secretary of State is not yet finished. That my right hon. Friend has demonstrated his commitment to patient safety from the moment he walked into that office cannot be denied by anyone, and this is a further part to that.
I asked the same question that the hon. Lady asked about safety directly to the CQC this afternoon, and I spoke to Dr Paul Lelliott who compiled the report. I asked whether people are safe at the foundation trust today. People are safe because, as we know, the CQC has powers to shut down places immediately if there is a risk to patients. It has not done so, but I am persuaded that if it had found such a risk it would have closed things down. There is therefore no risk to safety in the terms that the hon. Lady suggests.
On the chief executive’s position, the power to deal with management change is held by NHS Improvement. I also offer a brief word of caution. There is a track record of Ministers speaking out, at great cost, about the removal of people in positions over which they have no authority. That is understandable in situations of great concern when an angry response seems right, but it is not an appropriate response. The chair has gone, and processes are available should any more management changes be necessary, which is important. Colleagues in the House can say whatever they like, but a Minister cannot and must say that appropriate processes can be followed, because that is right and proper.
I do not yet know about an inquiry, and I want to wait and see what comes out of the further work being done in the trust. I do not rule out some form of further inquiry, but an inquiry is physically being carried out now by the actions taking place on the ground. What needs to follow is urgent action to respond to what the CQC has said, and a long drawn-out public inquiry is not necessarily the right answer. More work might be necessary, but I need to consider that in relation to further work being done at the trust.
On preventable deaths, as I made clear in my statement, I am sure that not enough attention has been given to those cases that require further investigation across the system, often dating back many years and preceding this Government. We have turned our attention to that issue, and we will make changes because such inequality must end.
Dr Sarah Wollaston (Totnes) (Con)
The report on Southern Health makes disturbing reading, but we will never tackle unacceptable levels of health inequality and early deaths among those who live with learning disability and mental health issues unless we address safety and risk. Will the Minister go further on the mortality review and set out how we can see where differences exist around the country? Will he reassure the House that duty of candour will in future be more than a tick in the box?
Alistair Burt
A tick in the box for duty of candour, which the report mentioned, was unacceptable—it must mean much more than that. The learning disability mortality review programme is important and will support local areas to review the deaths of people with learning disabilities, and use that information to help improve services. In time, it will also show at a national level whether things are improving for people with learning disabilities, and whether fewer people are dying from preventable causes. That review is already under way in a pilot in the north-east in Cumbria, which will help to inform us how the programme operates as it is rolled out. Plans are in place to roll out that review across all regions of England between now and 2018, with pilots commencing in other parts of the country between 2016 and 2017. That work has never been done before, and it is right that we are doing it now.
Dr Alan Whitehead (Southampton, Test) (Lab)
As the Minister and other hon. Members have said, Friday’s report makes grim reading for the many families and patients in the care of Southern Health NHS Foundation Trust. The Minister said that those failings are not isolated to that trust, but are on a much wider scale. In light of that, is he seriously considering a public inquiry that will get to the heart of the underlying factors in those matters? Patients and families who use this trust—some of whom are my constituents—must be reassured that those underlying issues are being properly considered and not brushed under the carpet.
Alistair Burt
It is vital that they are not brushed under the carpet, and I will come to that in a second. It is important to put it on the record that there are some positive aspects of this report, some of which relate to Southampton. I am sure the hon. Gentleman will already have seen those, with the trust being commended for its work on the community pathway. On the substance of his question, I spoke honestly a moment ago when I said that I really do not know at this stage whether an inquiry is the right thing to do. I am well aware of the seriousness of this matter, of the questions the families have raised, and of the fact that this has been going on for some time. The important thing is both to effect change and to find out what has happened. The CQC report—the extensive work that has already been done—is in depth, public and transparent. That may well have the answers that are required, but if not, something further may be needed, which is why I have an open mind on this. The most important thing is to give the reassurance that certain things have happened, which the CQC report cannot yet do because that is where the work is needed and where the work is going on now.
Mrs Maria Miller (Basingstoke) (Con)
Our constituents, particularly those with learning disabilities, need to have confidence in the complex set of services provided by Southern Health. The failings that have been identified are completely unacceptable and disturbing, and I welcome the Minister’s statement and the CQC’s action with the warning notice it has issued. Will he join me in paying tribute to the dedicated staff at Southern Health facilities that are not implicated in these serious problems, including Parklands hospital in my constituency, which provides acute wards for adults needing intensive psychiatric care, in a much needed facility that has very dedicated staff running it?
Alistair Burt
Absolutely. When I got the report over the weekend and turned to the summary of findings, I saw that the first positive summary finding was:
“Staff were kind, caring, and supportive and treated patients with respect and dignity. Patients reported that some staff went the ‘extra mile’.”
It is important to put that on the record; it does not minimise the things that are wrong, but in a trust that is so large, covering such a wide area and so many people, it is important that that good work is recognised, and that errors and faults of management and governance should not be laid at their door. I pay tribute to those staff, who work in incredibly difficult circumstances.
Several hon. Members rose—
Mr Speaker
I just note in passing that four Members on the Opposition Benches are standing and none of them hails from the area covered by the trust. That does not preclude a question, but I should just make the point that the question must be about this trust and this set of circumstances, rather than, as is commonly deployed in this House, “and elsewhere”. It is just about this matter, in this situation, covered by this trust—a matter that will be approached with great dexterity, I am sure, by Ann Clwyd.
Ann Clwyd (Cynon Valley) (Lab)
I will attempt that, Mr Speaker. I just want to ask the following: how long does it take to effect change? Some 45 years ago, the Ely hospital inquiry took place, under the chairmanship of Geoffrey Howe, and recommendations were made. I took part, writing a report on the condition of mental health facilities throughout Wales. We are talking about some 45 years here, and it seems to me that things are going at such a slow pace that we will be asking the same question again in 45 years’ time.
Alistair Burt
The frustration in the NHS is that although what the right hon. Lady says is not true in some places, it is in others; the special measures process in effect at the moment has effected change and has done so more quickly. There are other places where that does not happen. I am concerned that in mental health the sense of defensiveness which we know has characterised parts of the NHS for too long has probably had too great a grip, and we have not always got things done more quickly or demanded that things are done with the degree of urgency that we would expect, on behalf of constituents. I am very determined that any difficulties in getting things done locally in trusts when they need to be done will not be aided or abetted by any lack of urgency in the Department or the upper reaches of the NHS with which we have contact. The concern to make sure that urgency is there is rightfully expressed by the House, and we have to see that that is delivered.
Dr Julian Lewis (New Forest East) (Con)
In 2011 and 2012, I was locked in a bitter confrontation with Southern Health Foundation Trust over the determination of its top management to close no fewer than 58 out of its 165 acute in-patient beds for people suffering from mental health illnesses and breakdowns. It is the only constituency issue over which I have ever suffered sleepless nights, and I failed to stop the trust closing the Winsor ward in the relatively new Woodhaven hospital in my constituency. Today, apart from this terrible issue about the deaths, the system remains overfull, the beds remain too few and I understand that at least 80% of the in-patients are people who have been sectioned, leaving people a very low chance of getting an elective bed from Southern Health unless they are prepared to wait a long time. Can the CQC look into this wider issue, given that it has so many other serious concerns about the trust?
Alistair Burt
The CQC’s powers are extensive and I know that it will absolutely know what my right hon. Friend says. The debate comparing the provision of beds for treatment with community treatment has been going on for some time in mental health, and different pathways are taken by different trusts. Some trusts put more people into beds, while others are doing more in the community. The general sense is that more should be available in the community, but that must not preclude the availability of emergency beds when they are needed. I will ensure that the CQC is aware of my right hon. Friend’s concerns about that particular trust.
Paula Sherriff (Dewsbury) (Lab)
Are the failures at Southern Health a symptom of the growing and unsustainable pressure being placed on the mental health and learning disability services? In the context of increased demand, significant pressure on beds, higher thresholds for care, staffing cuts and shortages, how can the Minister guarantee that mental health and learning disability trusts are able to do their jobs?
Alistair Burt
Let me point out that we have announced an increased resource for mental health of £11.7 billion. The extra £1 billion that the Mental Health Taskforce recommended being spent by 2020 will be spent, and it will be spent right across the board from perinatal mental health to crisis care. It will also improve baselines to ensure that the governance and quality of foundation trusts are good enough, and we are watching what CQCs are spending. Yes, we recognise that there has been historical underfunding from Governments of all characters, but we are determined to improve it and the money is there.
Caroline Nokes (Romsey and Southampton North) (Con)
All too often it is our constituents with mental health problems and learning difficulties who find it hardest to get their voices heard. Those who are patients of Southern Health are not in a position to call for urgent change. I note that the Minister has said that the delivery plan is being evaluated, but can he reassure us that that is being done with the utmost speed so that we see improvements on the ground and not just more reports gathering dust?
Alistair Burt
Today, I met departmental officials and spoke to the regional director responsible for NHS improvement and, as I mentioned earlier, the deputy chief inspector of the CQC who is responsible for this report. I can assure my hon. Friend that, in so far as it is up to me or the Department, that change will be adequately delivered with a sense of urgency, because, as she rightly says, patients and families have, in some cases, waited much too long for this. If warm words are to mean anything, we must show that delivery follows.
Greg Mulholland (Leeds North West) (LD)
The failure of care for people with mental health issues, learning disabilities and autism has been shocking and the board should go. Equally shocking is the fact that, 11 months before Connor Sparrowhawk’s tragic and unnecessary death, failures had been identified but not acted on. What can the Minister do to ensure that, as part of a robust inspection regime, when failures are identified they are acted on and done so very quickly to prevent such failures again?
Alistair Burt
Over the past 12 months I have met a number of families who have been victims in similar circumstances—some had children who had been placed badly in an inappropriate place, and, in one or two cases, death had been the result. My colleagues and I are determined to do whatever we can to break down those situations where people feel that they have to fight for everything, and where they find doors closed against them when they want to challenge something. All too often in mental health, when people are challenged, they respond defensively. The whole transforming care process stems from Winterbourne View and the determination of the NHS and the board that monitors and oversees that process, including those who have mental health issues themselves and their advocates. The concerns that have been expressed in the past will not go completely, but I am sure the system is better placed now to deal with them and to listen to people more seriously than was the case, tragically, in the past.
Suella Fernandes (Fareham) (Con)
Does the Minister agree that the resignation of the chairman is a measure of the seriousness of the issue, and that after two damning reports, serious changes in the leadership are needed? What reassurance can he provide to my constituents in Fareham, such as the family of David West, that the regulatory bodies have the powers necessary if intervention is required?
Alistair Burt
I know that my hon. Friend has followed these matters closely for her constituents. Since last year there have been nine changes to the board, and the chair of the board left last weekend. NHS Improvement has the powers to alter governance, and I know from speaking to NHS Improvement that it takes that power and responsibility extremely seriously. The balance is between ensuring continuity and stability so that what the trust has promised is delivered, and wholesale change, which would provide an opportunity for further delay and prevent the work going on, but I know that NHS Improvement is very aware of its responsibilities in relation to governance, as I hope is the trust itself.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
It is right that this House legislated for parity of esteem for mental health care; I am proud that we did that. I recognise the Minister’s commitment to quick resolution so that we can implement recommendations to address the failings of the trust. Will he consider an independent inquiry similar to the first independent inquiry into Mid Staffs that my right hon. Friend the Member for Leigh (Andy Burnham) initiated in 2010?
Alistair Burt
I can do nothing more than repeat what I said earlier. I am aware that there might be circumstances in which an inquiry would bring out more and would demonstrate the degree of concern that colleagues in the House might find appropriate and that the families and others would understand. My first duty is to make sure that everyone is safe in the trust and to ensure the completion of the work that needs to be done to deliver what the CQC has found. Even after this very thorough work by CQC, which is transparent—that is why we are talking about it today—if anything further is needed, I will give it genuine and serious consideration.
Kit Malthouse (North West Hampshire) (Con)
The Minister is right to call the report disturbing. It has caused alarm and uncertainty across my constituency, and it is with the uncertainty that I hope he can help. In common with other Members, I am keen to know whether he has a hard date by which the trust is to be reviewed again. If it were to fail that hurdle, what would the next action be—revocation of the licence or further improvements? He will understand that most of my constituents want to see a deadline for compliance, and after that significant change that might mean a new era at Southern Health.
Alistair Burt
The best way that I can convey it is to say that constant monitoring is being done. First, the improvement director, who was appointed not by the trust, but by NHS Improvement, is there. In due course he will have a constant presence, but the monitoring needs to be done on a very regular basis. Also, the CQC has made it clear that should there be any need for further unannounced inspections, it will carry them out, so the trust is on constant notice that there can be a further inspection at any time. Further powers of the CQC include issuing another warning notice, varying and removing conditions of registration, monetary penalty notice for prescribed offences, suspending registration, cancelling registration, and prosecution. I understand from speaking to Mr Paul Lelliott that none of these measures has been ruled out.
Marie Rimmer (St Helens South and Whiston) (Lab)
It is that very point I wish to talk about. The duty of candour was going to give us so much more strength, but it is not being applied as yet. It is a statutory duty, placed on people carrying out regulated activities. It can lead to prosecution by the CQC, including without a warning notice. Will the Minister assure me that he will watch carefully to make sure that the CQC uses those powers appropriately? If it does not, we are once again failing these very vulnerable people.
Alistair Burt
Absolutely. If we now have a system where there is, quite rightly, a degree of autonomy, and Ministers’ responsibility is to make sure that the process and the system work well, Ministers cannot make all the decisions personally, but we do have to make sure that decisions that need to be taken are taken and, if not, that there is a good explanation of why not.
The CQC’s powers have been strengthened. Just a few months ago, we had the first case of a care home owner being jailed because of the care given to people in their home. While I recognise that the work done in caring for vulnerable people is complex and difficult, and that prosecution will not be the right answer in every case, knowing that powers are there is really important. The hon. Lady’s anger is appropriate, and I know the CQC takes these powers very seriously.
Bob Stewart (Beckenham) (Con)
Does the NHS improvement director now have the power to go into any Southern Health NHS Foundation Trust facility to assess and neutralise threats we have learned about that have resulted in people dying?
Alistair Burt
I hope my hon. Friend will forgive me, but I will not say things from the Dispatch Box that I do not know, and I do not know the precise powers of the improvement director, although I know the CQC has exactly the powers my hon. Friend suggests. However, the purpose of appointing the improvement director, and indeed of NHS Improvement’s appointment of the new chair, Tim Smart—the former chief executive of King’s College Hospital NHS Foundation Trust—is to put in place people who know what they are doing, know what they are looking for and can authorise others to make sure that nothing is being covered up and that everything is transparent.
Chris Heaton-Harris (Daventry) (Con)
In this sorry saga, what assurances can the Minister give about current levels of care and safety to the families of patients with learning disabilities who are in the care of Southern Health?
Alistair Burt
I think the best thing, genuinely, is to refer to the CQC report. It highlights good practice and good work in relation to staff in a variety of places and community pathways and in relation to work being done for those with learning disabilities. This is a large trust, covering many areas and many different facilities, and it would be quite wrong to assume that the standard of care is uniform across the board in terms of the criticisms that have been made. The criticisms are very real and very strong, but the work done by individual members of staff caring for people is reported by the CQC to be good. Again, in terms of safety, I am reassured that the CQC has powers and that it has assured me that, if it needed to use those powers in relation to safety and risk to patients, it would do so.
Mr Speaker
I thank the Minister and other colleagues who have taken part in these exchanges. I content myself simply with the observation that they have been a very important treatment of a very important subject. Perhaps, on behalf of the House, I can express the hope that the Hansard text of these exchanges will be supplied to Southern Health NHS Foundation Trust. It needs to know that we have treated of it and what has been said—politely and with notable restraint, but with very real anxiety—in all parts of the House about the situation within its aegis. [Hon. Members: “Hear, hear!]
Points of Order
Michael Fabricant (Lichfield) (Con)
On a point of order, Mr Speaker. Last week there were a couple of understandable occasions when people in the Chamber —Members of Parliament—broke into applause. This can be quite awkward for some of us—Conservative Members and Opposition Members—who know about the conventions of the House, because we feel unable to join in the applause. Could you give guidance about what is the current practice? If you uphold the tradition that we do not have applause—although I do not wish to pre-empt your view on this—could you let it be known more generally to Members of the House of Commons whether we should break into applause, or not, on occasion?
Mr Speaker
I thank the hon. Gentleman for his point of order and his great courtesy in raising it in the way that he did. The short answer is that it is the long-established convention of this House that we do not applaud. For what it is worth, to the best of my recollection, I have never myself done so. If he is asking me whether I would prefer it to remain that way, the short answer is that I would. I think that the convention that we do not applaud but register our approval in other ways is a valuable one. All I would say to the hon. Gentleman, who has raised his point in an extremely polite way, is that as far as the Chair is concerned, each situation has to be judged on its merits. I am very conscious that I am the servant of the House. If, spontaneously, a large group of Members bursts into applause, sometimes the most prudent approach is to let it take its course. However, I would much prefer it if it did not happen, unless the House consciously wills a change, and I am not aware that the House as a whole has done so. In that respect, I sense that the hon. Gentleman and I, not for the first time and hopefully not for the last, are on the same side.
Dr Julian Lewis (New Forest East) (Con)
Further to that point of order, Mr Speaker. In fairness to the Members, usually newer Members, who occasionally do this, it is worth pointing out that it usually tends to happen on a particular, spontaneous, unusual occasion, and not routinely. If it did happen routinely, we would end up with organised cheering of the sort that we sometimes get on the more downmarket versions of talent shows on TV. That would not be the direction in which we would want to go.
Mr Speaker
That would be thoroughly undesirable. The more unusual, or even occasional, the better. For it to become the norm would, I think, be deprecated by the hon. Member for Lichfield (Michael Fabricant), deprecated by the right hon. Member for New Forest East (Dr Lewis), and deprecated by the Chair. The hon. Member for Lichfield asked me to find a way of communicating more widely my view on this matter, and I hope I have just taken that opportunity. There is no slight directed at any individual, nor any adverse comment on any particular occasion, but usually our traditions are for a reason, and to find that we elide or morph into a new situation as a result of inactivity or happenstance is undesirable. If the House wants consciously to change things, then let it, but as far as I am concerned it has not yet done so. I hope that is helpful.
Kate Green (Stretford and Urmston) (Lab)
On a point of order, Mr Speaker. You may be aware of a report published over the weekend by Citizens Advice indicating a 25% increase in the number of people coming forward with problems relating to pregnancy and maternity discrimination. This follows hot on the heels of a report shortly before the Easter recess from the Equality and Human Rights Commission indicating that three quarters of women have had negative experiences of work associated with pregnancy or maternity. I am very pleased to see the right hon. Member for Basingstoke (Mrs Miller), who chairs the Women and Equalities Committee, in the Chamber, because her Committee is conducting an important piece of research into this, and an inquiry. However, there has been no comment at all from Government Ministers and so far no indication that time will be made available in the Chamber to debate this important subject. Can you tell me, Mr Speaker, if Ministers have approached you indicating their intention to make a statement on the Citizens Advice report or on the EHRC report, with which the Department for Business, Innovation and Skills was associated?
Mr Speaker
The answer to that is no. As far as I am aware, I have not been approached, certainly not directly, and I am not conscious of any document or missive circulating in my office on this matter. It occurs to me that Work and Pensions questions take place on Monday next week. That is by no means the only, or even necessarily the best, opportunity to raise the matter, but it is one such opportunity. If that does not suit the hon. Lady or other opportunities are sought, they may materialise. As far as the House as an employer is concerned, I am not aware that there is a problem, and I would be very concerned if there were. We must take steps to keep ourselves informed to satisfy ourselves that best practice, as well as the law, is followed.
Caroline Lucas (Brighton, Pavilion) (Green)
On a point of order, Mr Speaker. You might have seen recent press reports that a police unit tasked with spying on alleged extremists intent on committing serious crimes has been wasting its time and, indeed, taxpayers’ money monitoring members of the Green party, including myself. Could you give me advice, Mr Speaker, on the best way to raise the matter so that we can get the Home Secretary to make a statement to the House on the methods of surveillance; the legal power supposedly used in order to justify that surveillance; and, most importantly, why citizens lawfully engaging in legitimate political activity have been targeted by the police in this way?
Mr Speaker
This is a rather disturbing matter. I do not know whether the hon. Lady is suggesting that there is any interference with her work as a Member of Parliament. If that were so, that would be an exceptionally serious matter, but it would be effectively a matter of privilege, about which, in conformity with convention, she should write to me and it would then be taken forward as appropriate.
Beyond that, I can only say that the matter in question is not one for me. It does sound a very bizarre situation. I find it very curious to think that the hon. Lady is being, or might be, subject to some sort of surveillance in relation to her activities as a Member of Parliament. I am not aware of that. I think that I have to advise her that she must find other means by which to air her concerns. If she will not take it amiss, I will simply say that, knowing both her intelligence and her indefatigability, there is no way that finding other means to air her concern will be beyond her very considerable capabilities. Perhaps we can leave it there for today, but if she needs to come back about the matter, which is potentially very serious, she should do so.
If there are no further points of order, we come now to the ten-minute rule motion—a further opportunity for a display of the intelligence and indefatigability of Caroline Lucas.
Transparency and Accountability (European Union)
Tuesday 3rd May 2016
(8 years ago)
Commons ChamberRead Full debate Transparency and Accountability (European Union) Bill 2015-16 View all Transparency and Accountability (European Union) Bill 2015-16 Debates Read Hansard Text
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Caroline Lucas (Brighton, Pavilion) (Green)
I beg to move,
That leave be given to bring in a Bill to establish an independent commission of inquiry to examine ways of improving parliamentary and other public scrutiny of ministerial mandates and outcomes in relation to European Union institutions, policies and legislation; and for connected purposes.
In 50 days, this country will go to the polls to take the most important single decision of a generation, namely that of whether to remain in the EU or to leave. I am strongly in favour of staying in, and I will continue to make the case that we are stronger in, greener in and fairer in. In today’s globalised world, we can achieve so much more by working together with our closest neighbours than we can by going it alone.
I make this speech not as a lover of everything about the EU. Indeed, I understand it when some constituents ask, “Why stay part of an institution that has faults?” or, “Why spend time reforming the EU when we could leave it instead?” Many concerns about the EU and how it operates are valid—as, indeed, are concerns about how Westminster operates—but they are not a reason to walk away.
Moreover, such concerns are often exploited by populist political opportunists with toxic xenophobic messages. Outright fearmongering about foreigners is again rearing its ugly head across the continent. What worries me most about the rise of this divisive politics is that it erases from history the series of events that led to the formation of the EU, and it is also remarkably complacent about the future.
The EU is not an abstract project born of idle philosophising in continental think-tanks. The imperative to share sovereignty in Europe and to ensure that economic competition does not again spill over into conflict was built on the blood and bones of the Europeans killed in the terrible first half of the 20th century. The EU is a pragmatic response to our failure to manage the forces of nationalism and industrialisation, and I would argue that it has done much to reduce the aggressive ambitions of European elites who have disputed control of the continent for centuries. For me, one of the foremost reasons for staying in the EU is that it makes peace more likely. We cannot wish away the EU’s problems, however, and nor can we simply urge people to love it because of its history of peace making. Instead, we must be bold in reforming how the EU works and making sure that our constituents have more of a say over what happens at EU level.
Data suggest that British people are among the least knowledgeable about the EU. That is not their fault, but it highlights the urgent need to ensure that the public are able to be more engaged with EU policy and legislation. The fundamental point is that there are dozens of things that can be done unilaterally here in the UK radically to improve the accountability for, and engagement with, EU decision making, and that is what my Bill is about.
After 10 years working as an MEP in the European Parliament, I am in no doubt that the EU needs far-reaching reform. One major set of reforms could happen tomorrow, because implementation is entirely in the gift of the UK Government. No agreement or even discussion with other EU countries is required, and those reforms are the subject of my Bill. They build on proposals from the Electoral Reform Society, the Hansard Society, the House of Lords European Union Committee and the Commons European Scrutiny Committee, which have already done much important work in this area.
One of the proposals is that the UK Parliament should engage with the Government’s negotiating position before European Council meetings as well as after—that practice is routine in many member states. We need a more effective model of scrutiny to allow Parliament to hold the Government fully to account regarding its dealings with other European states. The Hansard Society has pointed to the fact that our system is largely one of document-based scrutiny that takes place only once policy is decided. We could easily improve the scrutiny of Ministers at monthly departmental oral questions—including topical questions—by setting aside specific time for the coverage of European issues related to their policy areas.
Our Select Committee system should also provide a high-profile powerhouse for scrutinising EU policies. To make that happen, the European Scrutiny Committee should not just be reactive; it should have the capacity proactively to choose what to follow up, in the same way as a departmental Select Committee. We need to raise the profile of the House’s three European Committees, which cover particular Departments. I have much sympathy with the suggestion that the membership of those committees should be made permanent so that experience and expertise can be built up.
The Electoral Reform Society points out that the House of Lords is considered to provide exemplary scrutiny of the EU, with six Sub-Committees covering various aspects of EU policy, as well as the stand-alone European Union Committee. It is an irony that the part of the British Parliament that provides the greatest scrutiny of the EU is the part that is both unelected and unaccountable, and it is time for that to change.
Credit should be given to the European Scrutiny Committee, which has for some time been reviewing its links with departmental Select Committees. For example, it has examined the role of an informal network of EU contact points on each Select Committee team, as happens in the Scottish Parliament. The European Scrutiny Committee can require our Select Committees to develop and provide an opinion on a particular document. However, Commons Select Committees often do not look at legislation, and they do not have the capacity to do so, which means that coverage of European Union matters may be patchy and inconsistent.
The commission of inquiry provided for in the Bill would examine the very strong case for expanding the Commons Select Committee system so that it could proactively scrutinise EU proposals and legislation. I recognise that in order to manage the workload, some kind of Sub-Committee process would be needed, and the whole system would need to be properly resourced, but putting that in place could make a real difference to scrutiny and accountability. We also need better mechanisms to give devolved Parliaments and Assemblies the ability to hold UK Ministers to account on EU negotiations, and devolved Ministers should have the right to participate in European Council meetings. Those are just some examples of changes the UK could unilaterally make to improve accountability and our scrutiny of EU decision making. Indeed, a House of Lords EU Committee report in 2015 identified no fewer than 35 such measures.
Under the Bill, we should also consider reforms that UK Ministers could champion at an EU level. The same House of Lords Committee report has repeated its previous call for a formally recognised green card system. At present, that is just an informal mechanism that is intended to enable the Parliaments of EU member states to join forces to make proposals to the European Commission to initiate EU policy and legislation. The first green card, on food waste, was proposed by the House of Lords and submitted to the Commission last year. This is an important means of strengthening national Parliaments’ ability to take joint action proactively to make proposals, not just to react to them, and of revitalising our democracy in Europe. It also means strengthening the role and work of the offices of national Parliaments in Brussels so that we can enhance parliamentary co-operation among member states on a wide range of issues.
The European Commission is one of the less democratic parts of the EU and we urgently need better ways to hold our European Commissioners to account. The 28 European Commissioners appointed by Governments act almost as a Cabinet, with each Commissioner being responsible for a certain brief. The Commission is too powerful—it proposes EU legislation, manages and implements EU budgets and policies, and enforces EU decisions—yet the channels of representation are byzantine, and there is a serious lack of transparency about how we select our Commissioners. The significant gap between the European Commission and the people obscures channels of accountability, but we can do something about that. The remit of the commission proposed by my Bill should include an assessment of what mechanisms we could use in the UK better to hold our EU Commissioner to account, and to allow for transparency in and scrutiny of their role. In that way, we could begin to remedy the situation in which most voters neither know nor care who our European Commissioners are or what they stand for.
We need new mechanisms to ensure that Parliaments can undertake a more proactive role. It is unacceptably and unnecessarily difficult to follow what our Ministers are doing on our behalf in the EU, let alone for parliamentarians and the public to have meaningful input to shape it. That is a big part of the perceived democratic deficit associated with EU decision making. There is so much that we could and should do, unilaterally in the UK, to make that better, and there are actions that we can take at EU level.
Of course, much bigger reforms are needed, such as with regard to the relative powers of the European Parliament and the European Commission, but the Bill’s purpose is to identify the measures that we can take here and now in the UK, if there is sufficient political will. We already have powers to make the EU more democratic and accountable, if we choose to take them, and there are clear steps we could and should take in this House. I hope that, on 24 June, the UK not only will have voted to remain part of the EU, but will grasp the opportunity to reform our continued participation, and that we in this House will create a positive gateway to a new and revived strand of vital political transparency, participation and accountability. The reforms I have outlined will not, in themselves, save the EU from a crisis of accountability, but they will make a big difference and will certainly help.
Sir Edward Leigh (Gainsborough) (Con)
We are a week from Parliament being prorogued prior to the Queen’s Speech. If we entered some kind of green dreamland, with the Opposition and the Government agreeing to accept the Bill and it becoming law—of course, we all know that that is not going to happen—do you know what I think would be the result, Mr Deputy Speaker? I think the effect on the European Union would be “nul points”—absolute zero.
We could have as many Select Committees as we like. My hon. Friend the Member for Stone (Sir William Cash) has spent a lifetime on Select Committees scrutinising the European Union. It is true that we already summon the Prime Minister to our Chamber after European Council meetings and he spends two hours answering our questions, but how much difference does that make? We could also summon him to appear before such meetings. We could do all the things that the hon. Member for Brighton, Pavilion (Caroline Lucas) wants—and nothing would change.
What is the structure of the European Union? It is a unique construct in terms of democracy and world history. We have a Parliament representing the people of the EU that has no ability to initiate legislation, which can be initiated only by an unaccountable bureaucracy— the Commission. In what Parliament or nation is that replicated?
What of the Council of Ministers? I have served, with my right hon. Friend the Member for Wokingham (John Redwood), on the Council. Were we—or is it now —concerned overtly about what was being discussed by deputies in the various national Parliaments? No. It is all done by making deals through the night.
John Redwood (Wokingham) (Con)
Is not the Bill simply putting a colourful and pretty ribbon on the tail of a very hungry tiger, the EU, that will go on eating up our powers, taking our taxes and forcing up taxes on green products?
Sir Edward Leigh
Absolutely. There is one way in which we can genuinely reform the EU. The Prime Minister tells us that we should remain in a reformed EU. Is there a single hon. Member on either side of this argument, or on either side of the House, who believes that the Prime Minister has reformed the EU? Despite his best efforts, no one believes that. Everyone knows that the negotiation was, to all intents and purposes, a sham to enable him to come back to the British people and try to convince them that this unreformed and unreformable body had indeed been reformed. Everyone in Europe knows that it is unreformed and unreformable, because of the very structure that I have talked about.
The fundamental problem is that we can have as many Select Committees as we like, and summon Ministers here as often as possible, but this Parliament is not supreme. That was the fundamental dilemma that our predecessors, the Labour Government in 1948 and the Conservative Government in 1957, were faced with. They were very happy to try to create European free trade—more free trade in iron and steel in 1948, and more free trade in 1957—but it was made clear to them by Mr Schuman, Mr Monnet and others that this was a project that would inevitably lead to federation. That is what it is about—it is, in the terms of the book by Hugo Young, this blessed plot. The people of Europe are not being consulted. The European construct is designed to ensure that the deals and the progress towards European federation are made in secret. When I was Chairman of the Public Accounts Committee, we went to the European Court of Auditors. The accounts have never been signed off. The EU is a body riddled not only with waste and incompetence, but with corruption.
Even if the Bill were to become law, it would achieve nothing, but there is one way in which we can achieve something. I simply pose a question: if one of the most important countries in the European Union were to vote to leave it, what would happen? We would not be talking about some little ten-minute rule Bill that would be ignored by the rest of the European Union, even if it became law. Do we not think that there would be a most profound electric shock through the whole system? Do we not think that our leaders in Europe might then sit down for a moment, ponder the fate of their construct and say that it should be designed to achieve what the European peoples want, which is peace and friendship?
Peace and friendship have, fundamentally, been created by NATO—at this point, I commend to Members an excellent article by my right hon. Friend the Member for New Forest East (Dr Lewis) making that precise point. NATO is a construct that we can indeed emulate because it is not a supranational body. It is a treaty-based body, but it does not impose its laws or supremacy on the peoples of Europe.
What the peoples of Europe want is what our own people really want: free trade. If we were to take this historic opportunity in June, I do not think for a moment that the world would fall in—it is moving towards European free trade. The very worst thing that could happen would be that we would have most favoured nation status and would have to pay tariffs of 5% on most of our exports to the European Union, but that is not going to happen anyway, because there is a massive balance of trade surplus against us. A deal can be constructed, based on free trade.
Much more important than what we think or want, however, is what might be created in the rest of Europe: a Europe of nation states; a Europe that was the original vision of General de Gaulle; a Europe where national Parliaments have genuine powers, and a genuine veto; a genuinely democratic Europe. That is our challenge, and there are millions of people in this country who will seize that challenge and vote for freedom in the referendum in June.
Question put (Standing Order No. 23) and agreed to.
Ordered,
That Caroline Lucas, Mr Pat McFadden, Tim Farron, Mr Graham Allen, Stephen Gethins, Stephen Kinnock, Hywel Williams, Greg Mulholland and Ms Margaret Ritchie present the Bill.
Caroline Lucas accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 13 May, and to be printed (Bill 171).
Housing And Planning Bill (Ways and Means)
Resolved,
That, for the purposes of any Act resulting from the Housing and Planning Bill, it is expedient to authorise the payment of sums into the Consolidated Fund.—(Brandon Lewis.)
HOUSING AND PLANNING BILL (PROGRAMME) (NO. 3)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Housing and Planning Bill for the purpose of supplementing the Orders of 2 November 2015 (Housing and Planning Bill (Programme)) and 5 January 2016 (Housing and Planning Bill (Programme) (No. 2)):
Consideration of Lords Amendments
(1) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to an end at the moment of interruption.
(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.
Lords Amendments | Time for conclusion of proceedings |
|---|---|
Nos. 1, 9, 10, 37, 184, 47, 54, 55, 57, 58, 2 to 8, 11 to 36, 38 to 46, 48 to 53, 56, 59 to 96, 182, 183, 185 to 188, 190, 191 and 195 to 239 | Three hours after the commencement of proceedings on consideration of Lords Amendments |
Nos. 97, 100, 108 to 110, 98, 99, 101 to 107, 111 to 181, 189, 192 to 194 and 240 to 282 | The moment of interruption |
Subsequent stages
(4) Any further Message from the Lords may be considered forthwith without any Question being put.
(5) 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.—(Brandon Lewis.)
Question agreed to.
Housing and Planning Bill
20:28 - The House having divided: - Ayes: 287 / Noes: 172 - Question accordingly agreed to.
20:44 - The House having divided: - Ayes: 288 / Noes: 172 - Question accordingly agreed to.
20:57 - The House divided: - Ayes: 286 / Noes: 171 - Question accordingly agreed to.
22:02 - The House having divided: - Ayes: 286 / Noes: 163 - Question accordingly agreed to.
22:22 - The House having divided: - Ayes: 285 / Noes: 164 - Question accordingly agreed to.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I must draw the House’s attention to the fact that financial privilege is engaged by Lords amendments 37 to 58, 91, 184 and 185. If the House agrees to any of these amendments, I will cause an appropriate entry to be made in the Journal.
I also remind the House that certain of the motions relating to the Lords amendments are certified as relating exclusively to England, or to England and Wales, as set out on the selection paper. If the House divides on any certified motion, a double majority will be required for the motion to be passed.
Clause 2
What is a starter home?
The Minister for Housing and Planning (Brandon Lewis)
I beg to move, That this House disagrees with Lords amendment 1.
Mr Deputy Speaker
With this it will be convenient to discuss the following:
Government amendments (a) to (c) in lieu of Lords amendment 1.
Lords amendment 9, and Government motion to disagree.
Lords amendment 10, and Government motion to disagree.
Government amendment (a) in lieu of Lords amendments 9 and 10.
Lords amendment 37, and Government motion to disagree.
Lords amendment 184, and amendment (a) thereto.
Lords amendment 47, and Government motion to disagree.
Lords amendment 54, and Government motion to disagree.
Lords amendment 55, and Government motion to disagree.
Lords amendment 57, and Government motion to disagree.
Lords amendment 58, and Government motion to disagree.
Lords amendments 2 to 8, 11 to 36, 38 to 46, 48 to 53, 56, 59 to 96, 182, 183, 185 to 188, 190, 191 and 195 to 239.
Brandon Lewis
I am glad to be back at the Dispatch Box and returning to the Housing and Planning Bill this afternoon. We are now in the final month of the first year of this Parliament: a Parliament that has seen a majority Conservative Government returned to the House—a Government with a clear mandate to deliver the largest programme of house building for a generation.
It is immensely fitting to be here this afternoon having come from Mr Speaker’s own garden, where construction people have been showing the importance of house building across our country and of bringing in more skills to deliver the homes that we are determined to build. We want to place home ownership within the reach of thousands of people who never dreamed that they could achieve it, and we want to ensure that, in doing so, we make the best use of our social housing so that it continues to support those most in need.
The Bill before us today is a slightly different beast from the one we passed to the other place earlier this year. Today we will discuss rather more than the five or six amendments we traditionally see come from the other House. The vast majority of these I will ask this House to accept.
Debates in both Houses have been productive and resulted in improvements to the Bill. I want to be clear from the start. I have heard many, mainly on the Opposition Benches, say that we should have waited before debating the Bill. That would have meant the Government’s having to sit idly by, ticking forms and double checking that what the public elected us to do was what they actually wanted. We are debating the Bill early in this Parliament so that it can take effect as soon as possible and we can get those new homes built for those who aspire to have them.
Dawn Butler (Brent Central) (Lab)
Will the Minister please clarify what “higher-value properties” means? How much?
Brandon Lewis
I will deal with that in a few moments, when I come to higher-value assets and other aspects before us.
We have increased the protection we give to our rural areas, recognising the unique value of our countryside and the particular challenge of providing affordable homes there. I trust, therefore, that there is much on which we can agree with the other place.
John Redwood (Wokingham) (Con)
Does the Minister agree that the idea of more affordable homes for sale is extremely popular? I am getting requests. People want to get on with it, however, so will he say how long the process might now take?
Brandon Lewis
I hope it will not take us too long, that the other House will accept our points today and that the Opposition might come on board and vote with us to make sure we deliver affordable homes for people to buy—
Brandon Lewis
I will finish answering the last intervention, and then I will come to the Chairman of the Communities and Local Government Select Committee.
My right hon. Friend the Member for Wokingham (John Redwood) is right. Whether through Twitter or email, I am hearing from a lot of people wanting to know when we will be able to deliver for the 86% of the population who want the chance to own a home of their own. It is absolutely right that we make affordable homes about affordable ownership as well as affordable rent.
Mr Betts
The Select Committee pushed the Minister on his impact and financial assessment of the full costs and implications of his policies around the sale of higher-value council homes; on whether those would deliver the replacement of housing association properties; and on all the remedial work on brownfield sites. When will that analysis be produced? I see that the other day the Public Accounts Committee made exactly the same criticism as the Select Committee: there is no information for us to go on.
Brandon Lewis
It was rather surprising to see the PAC reviewing a policy that has not gone through the House yet and which will deliver more home ownership to more people across the country, whether through the extension of right to buy, which will benefit 1.3 million people, or the intervention on starter homes.
Meg Hillier
The Minister cited the PAC report published last Friday. Just to be clear, the Committee does look at issues in advance of their becoming law, to make sure that taxpayers’ money is protected in the process. He makes great play of providing more affordable homes for sale, but it is not clear how he will fund it or that there will be a like-for-like replacement of the homes he is forcing boroughs such as mine to sell in order to pay for them. Will he promise now to protect long-term social housing for the people in London who can afford nothing else, certainly not a starter home?
Brandon Lewis
In terms of making good use of our social housing stock, I am sure that the hon. Lady will support us in the votes later today, if there are any, on high-income social tenants. If she is that interested in delivering more housing in this country, however, I am surprised that this is the first time she has engaged directly with the Bill. The hon. Member for Sheffield South East (Mr Betts), who mentioned the PAC report, asked about the data behind the policy. As I outlined at the end of last week, there are 16 million pieces of data impacting on this policy.
Mr David Lammy (Tottenham) (Lab)
The Minister has made a lot of “affordable”. Can he define it? Is it right that an affordable starter home in London will be round about £450,000?
Brandon Lewis
The right hon. Gentleman might like to go back to look at the evidence given to the Committee that scrutinised the Bill or at the Bill itself. The £450,000 is a cap. He needs to look at the average price a first-time buyer pays for a home in this country, which is £181,000. If we then include a 20% discount and allow the purchase with a deposit of just 5%, that really changes affordability. I hope the right hon. Gentleman will support the chance for more Londoners to get on the housing ladder, while understanding equally that this is not the only thing we are doing to promote affordable home ownership. There is a £4.7 billion scheme out there now for shared ownership, which also plays an important part, particularly in places such as London.
Meg Hillier
I am grateful to the Minister for giving way so that I can clarify both the role of the Public Accounts Committee and my role as Chair of it. We had a forensic investigation by the National Audit Office. We set out to be helpful to the taxpayer and to the Government in implementing their policy, ensuring affordability. We set out the key questions that needed answering before such a policy could be delivered. If I may say so, this Minister is being very cavalier in sweeping aside the findings of our report, which were well-measured, cross-party and unanimous.
Brandon Lewis
I have huge respect for the hon. Lady, but I was not sweeping anything aside at all. What I am more focused on—I make no apologies for it—is ensuring that we counter the cavalier attitude of the Labour party, which wants to do down people who want the chance to have a home of their own that they can afford to buy. We are determined to deliver our manifesto promise on that.
Several hon. Members rose—
Brandon Lewis
Let me make a bit more progress; I shall give way again later.
There is much on which we can agree with the other place here today, but let me be clear that, as we have just touched on, there are some areas where we cannot. We are determined to deliver for Britain on our election promises. The manifesto on which this Government were elected set out a very clear statement of intent about a viable extension of the right to buy, paid for by the sale of higher-value housing, and about 200,000 starter homes by the end of this Parliament.
Jake Berry (Rossendale and Darwen) (Con)
My constituents in Rossendale and Darwen look at many of the arguments of Labour Members and say that they are completely London focused. What we in Lancashire want are starter homes that people can buy at a discount and an extension of other affordable housing schemes. Will the Minister take the opportunity to agree with everyone who lives in Lancashire and says, “Let’s get on with it. We want to buy a home; we want to live in an affordable home. Let’s not just talk about London”?
Brandon Lewis
My hon. Friend makes a very good point. As I travel around the country, I find that people are frustrated and want us to get on with the policies that they elected us to deliver. That is because they see that Labour Members are trying to stall them through political posturing at pretty much every opportunity.
Let me also say, however, that some are understandably focused on London, where there is real pressure. We have my hon. Friend the Member for Richmond Park (Zac Goldsmith) to thank because we worked with him to ensure that for every home sold in London, at least two homes will be built, driving a direct increase in housing supply.
Chris Philp (Croydon South) (Con)
I must say to the Minister, with all due respect to my hon. Friend the Member for Rossendale and Darwen (Jake Berry), that starter homes will work in many London boroughs, too. In my borough of Croydon, the average starter home will cost £190,000. With a help-to-buy mortgage, a £10,000 deposit is necessary and a couple, each earning £22,500, can afford to buy. In Croydon, as I say, it will work.
Brandon Lewis
My hon. Friend highlights how this policy is about delivering for people on the ground. While Labour Members want to pontificate, we are going to stay focused on delivering homes for people across our country and here in the capital city of London.
Ms Karen Buck (Westminster North) (Lab)
We need a policy to fit all parts of the country, including London. In inner London, however, starter homes will come in at £450,000. We have to speak the language of priorities. Is the Minister really telling us that a home that requires an income of £77,000 a year—more than an MP’s salary—is genuinely the best priority for public funds?
Brandon Lewis
I am tempted to use the inimitable phrase, “I refer the hon. Lady to the comments I made a few moments ago.” As I said earlier, if she looks at the evidence, she will find that the price a first-time buyer pays is actually quite different. I mentioned my hon. Friend the Member for Richmond Park; thanks to him, homes are already well below that price. The figure the hon. Lady mentioned is a cap; it is not the price at which these properties will be set—and I expect to see them much lower.
Several hon. Members rose—
Brandon Lewis
Let me make some more progress on starter homes.
Amendment 1 requires on resale of the starter home the repayment of the 20% starter discount, reduced by 1% for each year of occupation for a period of 20 years. The average first-time buyer, we should bear in mind, spends just under seven years in their home—in fact, the average in the whole country is only about seven years. Asking someone to spend 20 years in a home, which they may have bought at the age of 30, and not to benefit from the discount that we promised until they are 50, simply does not stack up.
We want to ensure that starter homes are sold to people who are genuinely committed to living in an area, and not to people who simply want to secure a financial uplift by selling on quickly. However, we also want to support mobility. A balance must be struck. I propose that we disagree with Lords amendment 1, and substitute for it amendments (a), (b) and (c), which provide a power to implement a tapered approach to resale. The longer someone lives in a property, the more value that person will gain.
Our amendments provide for the Secretary of State to make regulations on the length of the taper period, and on the details of how the taper will operate. That will enable us to ensure that it is effective and delivers for people in the real world. The amendments set out two potential models for its operation. For example, when a starter home is sold, the first-time buyer must, if there is discount to be returned, pay a proportion of that discount to a specified party. That is the broad approach suggested in the other place, and I can see the logic of it. A body such as the Homes and Communities Agency could then use those funds to build more affordable homes.
As part of our consultation on starter homes regulations, we are seeking the views of developers, lenders and local authorities on how the taper would operate. We strongly believe that we should settle the matter through engagement with the sector, rather than placing the detail of restrictions in legislation. I am confident that that is the best way for us to meet our manifesto commitment on starter homes.
Bob Blackman (Harrow East) (Con)
Will the taper be regional, or will it be a “one size fits all” for the whole United Kingdom? As has already been pointed out, property prices vary considerably, and it is important to ensure that the people who benefit are those who will actually live in the properties.
Brandon Lewis
My hon. Friend has made a good point. That is one reason why the strictures of legislation do not work in this context, and why it is important that we complete the consultation—which runs until 18 May in order to receive all the feedback and deal with this matter in regulations. As the discount is proportional, the difference in values will be dealt with by the way in which the percentages will work.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
The Minister will recall that at the end of last year, in Committee, there were a number of exchanges about housing co-operatives. As a result of changes in the Bill, housing co-ops that own properties are largely exempt from many of its provisions, whereas those that manage properties on behalf of local authorities will still be badly hit by many of the provisions. Potentially, housing co-op properties will be among the 100,000-plus properties currently owned by councils that are likely to be lost as a result of the Bill.
Might the Minister be willing to make a commitment, before the Bill returns to the other place, to look again at the specific impact on co-ops that manage properties on behalf of councils?
Brandon Lewis
I shall say a little about the provision concerned in a moment, but we will be very clear about the fact that a new home will be built for every home sold.
Mr Jim Cunningham (Coventry South) (Lab)
How much consultation has the Minister had about the impact of the Bill with the voluntary sector on the one hand and local authorities on the other? He knows as well as I do that his Department will have conducted an impact assessment of costs and viability.
Brandon Lewis
We have worked across the sector, and it is clear that our starter home proposals are very popular. As Conservative Members have pointed out today, those in many areas are keen for us to get on with delivering more properties affordable to people who want to buy their own homes. There has been no such product in this country before.
Catherine West (Hornsey and Wood Green) (Lab)
The Minister speaks of affordability. Is he aware that the average deposit paid on properties in London is now £91,000?
Brandon Lewis
That is why we have extended and changed the arrangements. We now have the London Help to Buy scheme and we have starter homes coming in with a 20% discount. Shared ownership is also an important product, and we are determined to deliver 135,000 more shared ownership homes. The prospectus went out just a couple of weeks ago and the plan is to spend £4.7 billion in that area. Even in London, the deposit for such properties is closer to £4,000, which completely changes the affordability for people wanting to get into ownership.
Dawn Butler
One of the Lords amendments refers to the principle behind the Khan amendment, which is that when a unit of social housing is sold, another must be built in the local area in which the sale took place. Does the Minister agree with that?
Brandon Lewis
I shall deal with the hon. Lady’s question on high-value assets in just a few moments; I just want to finish dealing with starter homes.
Thanks to my hon. Friend the Member for Richmond Park, the pledge to deliver two homes for every home sold is now on the face of the Bill. As I said earlier, our manifesto was very clear, and this House was very clear when it voted by a majority of 91 to give the Bill a Second Reading. We will deliver the number of starter homes that we promised.
James Cartlidge (South Suffolk) (Con)
On the question of affordability and starter homes, the hon. Member for Hornsey and Wood Green (Catherine West) mentioned the average deposit in London. However, a very big cash cost for any first-time buyer—or indeed any buyer—is stamp duty. Can the Minister confirm that the stamp duty payable on a starter home would apply to the discounted price and would therefore also be 20% lower?
Brandon Lewis
My hon. Friend makes a very good point. The stamp duty will apply to the price paid for the property, so it will apply to that reduced price. That will provide a further benefit for people buying a new home.
We are absolutely determined to deliver the number of starter homes that we promised, in order to help first-time buyers, who were the worst-hit part of the homebuying sector in Labour’s great recession. However, in passing Lords amendments 8 and 9, the other place is seeking to stop us. This House should not stand for that. Those amendments would remove from the Bill the power to set a national starter homes requirement on housing sites. The other place has proposed to replace that power with a locally set requirement that would be effective only when local authorities had completed studies of local housing need and viability.
Scott Mann (North Cornwall) (Con)
We hear a lot from local authorities about trying to secure rental properties, but we in this country have a right to own our own home and this Government are delivering that through this Bill. [Interruption.]
Brandon Lewis
My hon. Friend makes a very good point, regardless of the comments from the right hon. Member for Tottenham (Mr Lammy). My hon. Friend highlights why the Bill is so important. We cannot and should not have to wait for 336 different planning authorities to undertake local need and viability assessments before action on starter homes can be taken. These amendments would hit the very people we are trying hardest to help. First-time buyers would see their chance of home ownership kicked firmly into the long grass yet again by these proposals. That might be what Labour wants, but it is not what we want.
Mr Betts
I am trying to understand what the Minister actually does want. I am trying to work out whether starter homes will be built in addition to other homes that would have been built, or instead of them. The Select Committee unanimously agreed the following words:
“Starter Homes should not be built at the expense of other forms of tenure; where the need exists, it is vital that homes for affordable rent are built to reflect local needs.”
Will the Minister tell us whether the Bill as he would like it to be worded would make starter homes the priority and effectively push out and displace affordable homes for rent as part of the section 106 agreements?
Brandon Lewis
I must point out to the Chairman of the Select Committee that we have been clear from the beginning that we need to see a shift in this country. We have had the farcical situation in which we in this place talk about affordable homes but refer only to homes that people can rent. We know that 86% of our population want to buy their own home, and it is therefore absolutely right that affordable homes should include those that are available to buy. We make no apologies for creating a new product and for turbocharging that new product to ensure that we get 200,000 such homes built over the course of this Parliament. We already have many hundreds of thousands of homes in the rental sector across this country, and we now need to give first-time buyers a chance. To be blunt, that is exactly what we put on the tin in the general election manifesto. We will deliver on our mandate to deliver starter homes.
Brandon Lewis
I am just going to complete this point. We will deliver on the mandate to deliver 200,000 starter homes, ensuring that we deliver homes for first-time buyers at a discount of at least 20% on the local market price.
We have also recognised in discussions in the other place that small sites in rural areas, known as rural exception sites, may require additional discretion on starter homes. Those details should be on the face of the Bill. We have listened to concerns that a compulsory requirement would disrupt the supply of rural exception sites. My noble Friend Baroness Williams of Trafford committed to bring back an amendment to give councils local discretion on rural exception sites. I am pleased to be able to honour that commitment in amendment (a) in lieu of amendments 9 and 10.
When I talk to developers and local authorities around sites around the country, they tell me that one benefit of starter homes is that more affordable housing may be delivered because developers will be allowed to deliver more. I have spoken to a number of developers who have said that the difference that starter homes would make is the ability to deliver 5% or even 10% more affordable housing in some developments in their areas.
There was a lot of discussion, both here and in the other place, about our plans to deliver the ground- breaking voluntary right-to-buy agreement through the sale of higher-value housing. It was another manifesto commitment passed from this House to the other place, and it is another change that we are discussing today. Amendments 37 and 184 would mean a considerable delay in receiving payments from local authorities, and therefore in delivering our manifesto commitment to extend the right to buy to housing association tenants. We remain convinced that the determination is the most appropriate way of setting out the information about the payment a local authority will be expected to make to the Secretary of State in respect of its higher-value housing. The key elements that will determine how much an authority will be expected to pay are set out on the face of the Bill. That includes the housing to be taken into account and the definition of vacancy.
The Government have listened carefully to the arguments made by hon. Members when the Bill was last debated and the contributions of all those in the other place. We have amended the Bill to ensure that local authorities are not disproportionately affected by the plans. The definition of higher value and the types of properties to be excluded will be set out in regulations and therefore subject to further parliamentary scrutiny.
I want to be clear with the House once again. In the other place, the Opposition were clear that they did not press the clauses enabling the voluntary right to buy to a vote and acknowledged our mandate for funding it. However, amendments 37 and 184 would seriously hamper our ability to implement it and so should be returned straightaway. The same applies to amendment 47, which is extremely restrictive and would prevent the Government from considering whether local authorities can actually deliver the required housing. We want to ensure that the Government can enter into agreements with local authorities about their local needs. By focusing solely on social housing, the amendment would prevent the agreement process from recognising that flexibility will be needed to respond to the country’s diverse housing needs—we have already heard from hon. Friends about the different needs in different places this afternoon—and that other types of housing may better meet local housing need.
I find it difficult to listen to those who accuse us of not being localist while tabling amendments that would mandate an old-fashioned, top-down approach. We want to ensure that we give local authorities with particular housing needs the opportunity to reach bespoke agreements on the delivery of different types of new homes.
Mr Betts
I am still as confused as I was at the beginning of the debate and at the Select Committee hearings. The Minister has just made an entirely reasonable point. I thoroughly agree that it should be for local authorities to determine the composition of homes to be built as part of section 106 agreements in their areas. How does that square with a policy of giving priority to starter homes and building 200,000 of them irrespective of the consequences for the building of other sorts of housing?
Brandon Lewis
I am actually talking about what will happen with the sale of higher-value properties, which is slightly different. We want to ensure that we give local authorities with particular housing needs the opportunity to reach bespoke agreements with the Government about the delivery of different types of new homes in their areas. If local authorities can demonstrate, for example, a clear need for new affordable homes, they should be able to make a case for such an agreement, subject to value-for-money considerations and evidence of a strong track record on housing delivery. That is important for areas that I have visited, such as Bath and Oxford. I met leaders in Cambridge and they want the flexibility to negotiate with Government and the Secretary of State to get the right deals for their area.
Victoria Borwick (Kensington) (Con)
I welcome the fact that there will be more flexibility on higher-value homes, particularly for outliers and where prices are particularly high or particularly low in an area. I am delighted that the Minister has taken cognisance of the needs of various people in various different areas so that local need is met.
Brandon Lewis
My hon. Friend makes a good point about the importance of having this flexibility. In London, local authorities from across the parties have asked for the ability to work together to deliver on this front. We need new homes to be built in this country, and the amendment would limit the Government’s ability, and that of local authorities working with us, to ensure that the right mix of housing is delivered as quickly and efficiently as possible.
Ben Howlett (Bath) (Con)
My hon. Friend is being incredibly generous with his time. As he will know from his visit to Bath a couple of weeks ago, we do not have high-value assets, but housing costs are high in the area. Given the earlier announcement about the shift from high-value assets to higher-value assets, which will not be applicable in Bath, how can our authority combine with other authorities to bid for additional funds following the Budget announcement?
Brandon Lewis
My hon. Friend makes a good point. When I visited him and met constituents, developers and the local authority, I saw a really good example of an area that wants to deliver the right type of housing locally by understanding its local needs. Whether that involves working with the Government to bid for some of the £4.7 billion in the shared ownership fund or the £1.2 billion for starter homes on brownfield sites—
Brandon Lewis
I will just answer the previous intervention before I take one from the right hon. Gentleman.
Local authorities could also work with authorities around the income from higher-value homes that they may be able to use to deliver elsewhere. It is important to get that flexibility and to understand that different authorities of different parties want it.
I now turn to amendments 54, 55, 57 and 58, all of which I disagree with. Amendment 54 would make our policy to implement fairer social rents voluntary. It is, as my noble Friend Baroness Williams said in the other place, a blatant denial of the primacy of this House. Local authorities can already operate the policy on a voluntary basis, but we are not aware that any have done so. To put it simply, it is a wrecking amendment and this House should treat it as such.
The policy must also apply consistently, as it would not be right for tenants in certain areas to face possible rent increases while tenants in a neighbouring area do not. The amendment completely undermines the Government’s aim of putting in place a consistent approach and of using the funds raised to reduce the national deficit, which we inherited from the Labour party. It would substantially reduce the revenue that the policy would generate.
Brandon Lewis
I am happy to give way. Perhaps the hon. Lady is going to apologise for the debt and deficit that her party left.
Ms Buck
I draw the Minister’s attention to the fact that Westminster City Council, which, as usual, is in the vanguard of such things, announced in 2012 that it was extremely keen to introduce a version of pay to stay and to charge its higher-earning tenants additional rent. However, it has never done so because it has never found a way to introduce such a scheme that was not ridiculously bureaucratic and costly and that acted as a severe disincentive to work.
Brandon Lewis
The hon. Lady will be interested to hear what I have to say in a few minutes about how the policy will work in practice to ensure not only consistency, but that it always pays to work.
We have brought forward a package of amendments and statements of intent to ensure that the policy is fair and that it does not damage the incentive to find work and keep in work. In addition, we have committed to allow local authorities to retain reasonable administration costs, and my officials are working with the sector to establish an approach to implementation that would minimise costs.
Amendment 55 would set the amount of the taper at 10% on the face of the Bill. Our view is that a 10% taper is simply too low. Our preference is for a taper set at 20% or an extra 20p in rent for every pound earned above the income threshold. That would mean, for example, that a household earning over the £31,000 threshold would contribute just a few pounds a week in additional rent. The level recognises the importance of protecting work incentives, but it is a fairer contribution. It is important that we retain the flexibility to set out the detail of the taper in secondary legislation. We want to keep the position under review, and putting details on the face of the Bill would prevent us from doing so. We have confirmed that the regulations will be subject to the affirmative procedure, which I am sure will be welcomed by the House, so there will be another chance to debate the regulations before they come into force.
Amendment 57 would set higher income thresholds, which totally undermines the principle that social tenants on higher incomes should start to contribute a fairer level of rent once they earn more than £31,000—or £40,000 in London. We have listened to concerns about the policy and taken a number of steps as a result. There will be an automatic exemption for any household in receipt of housing benefit and universal credit. The definition of “household” will not include income from non-dependent children, such as an 18-year-old who is starting his first job. Certain state benefits such as tax credits, disability living allowance and personal independence payments will not count towards the calculation of income, and the income thresholds will be supported by a taper, which will ensure that households towards the start of the proposed income thresholds see their rent rise by only a few pounds each week.
Chloe Smith (Norwich North) (Con)
I welcome the safeguards that my hon. Friend is setting out. Many Labour Members often argue that the rich should pay more, so is it not rather puzzling that in this case they seem to oppose that idea?
Brandon Lewis
My hon. Friend and neighbour makes an interesting point, and people reading Hansard will want to draw their own conclusions about what it means. We are clear: it is right that social tenants on higher incomes contribute more in rent where they can afford to do so, but we are also mindful that the policy should protect work incentives.
Meg Hillier
I take great offence at the suggestion that two people—two pensioners, for example—on a fixed income of £40,000 a year in my constituency would be considered rich, or that they would have any other housing option. Those of a certain age on a fixed income cannot rent privately because the rent would be more than £1,500, and a lot more for a two-bedroom flat. They cannot buy, because the average property price is £682,000, and they would not qualify for a starter home, even if they wanted something of that size. Does the Minister acknowledge that it is invidious to attack those people who do not have a great deal of money?
Brandon Lewis
I do not think that that recognises the policy at all. The policy means that as people earn more, they will pay a few pounds a week more. I do not think that is unreasonable, and it ensures that we make the best possible use of our social housing stock.
Lyn Brown (West Ham) (Lab)
It is difficult to know where to start. The Minister talks about people paying an extra few pounds more, but that is nonsense. This is a tax on aspiration, and the idea that a family in London that earns £40,000 a year is rich is baloney. It costs an awful lot to live in this wonderful capital city of ours—something that the Minister is failing to grasp.
Brandon Lewis
If the hon. Lady reads the Bill and the amendment, she will appreciate that we do not suggest that people over that income should not stay in their home, or that they should move to private rented accommodation; we are saying that as people earn more money, they should contribute a little more into the system. That is reasonable, and it ensures that we make the best use of those properties for the people who need them most. The package we have announced ensures a policy that protects work incentives. On that basis, I cannot support amendment 57, or amendment 58, which raises the income thresholds by the consumer prices index, and I hope that the House will agree.
Mr Betts
The Communities and Local Government Committee took evidence from housing associations when the Government were planning to introduce this scheme for them, and we heard clear evidence that it would cost them more to administer the scheme than they would get in returns from extra rent. Will the Government present a clear analysis of the administration costs of this scheme, particularly for people on variable incomes whose income, and therefore rent, goes up and down each week? We would need enormous amounts of administration to go with this scheme.
Brandon Lewis
The hon. Gentleman is missing the point. This is about fairness across the system. People in London—and cities in other parts of the country—who are in the private rented sector and earn these salaries, or higher and lower, are wondering about those in housing associations who earn more than £40,000. Examples have already been given in the House of Secretaries of State on salaries of £125,000, or union leaders on salaries of more than £100,000, who lived in social rented housing. Tens of thousands of people are earning more than £40,000 or £50,000 a year and are benefiting from social rents, which is simply not fair to those who do not have those salaries or opportunities.
Bob Blackman
Will my hon. Friend tell the House what the reality of social housing for rent in London and beyond is for people who are homeless to start with? There is a huge queue of people waiting for a socially rented property, and it is totally unacceptable for people who are on relatively high salaries to occupy those properties when there is such huge demand.
Brandon Lewis
My hon. Friend places in keen focus one of the problems of the housing deficit that the Government inherited in 2010. Under the right hon. Member for Wentworth and Dearne (John Healey), not only did we see the lowest level of housebuilding since about 1923, but in 13 years the Labour party built fewer social homes through their councils than we have built in the past four or five years. There is a huge amount to do to drive up the amount of housing so that there are more opportunities for people to have homes across all tenures, whether shared ownership, private rental or with affordable rent. We must ensure that more people have the chance to get on and achieve the aspiration held by 86% of the public, which is to buy a home of their own.
The House will be glad to hear that I will not speak to every Government amendment—you might also be pleased about that, Mr Deputy Speaker. Many of those amendments are minor and technical, and much as we might all enjoy it if I spoke to them all, some colleagues would not thank me because we might still be here by Prorogation. Each amendment makes the Bill work better for those who implement these policies on the ground, and they have been tabled because the Government have listened to the debate and taken action as a result. We have strengthened people’s ability to own their own home and get Britain building again—improving on the 25% increase in building over the last year—and I hope that the House will agree to those changes made in the other place.
I also want to send a strong message that this Government will not slow the pace of housebuilding—we will increase it. We will not take away people’s dream of home ownership—we will inspire it, and we will deliver our manifesto commitments. When the hon. Member for City of Durham (Dr Blackman-Woods) responds to this debate, I hope that Labour Members will ask themselves why they stand against our mandate to boost home ownership and supply—something that the people of this country want and expect. While Labour blusters with political posturing after the abysmal housing mess that it left, we remain focused on building homes across our country and across all tenures. We will increase housing supply and home ownership. That is what we promised, and that is what we will deliver.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
I thank their lordships for their amazing work on this Bill. Thirteen defeats and a string of concessions means that some of the sharpest edges have been knocked off a very bad Bill, but it remains an extraordinary and extreme piece of proposed legislation. Concern is being voiced by housing experts, charities, house builders, mortgage lenders, and Conservatives across a range of council leaders, MPs and peers. Doubts about the Bill matter, but even more important are the deeper doubts—on all fronts and with good reason—about whether the Conservative party is competent to fix our housing crisis.
Since 2010, home ownership has fallen, homelessness and rough sleeping have doubled, private rents have soared, housing benefit costs have ballooned, and during the last Parliament, fewer new homes were built than under any peacetime Government since the 1920s. This Bill does little to tackle the overall housing shortage or produce more housing across all tenures, including housing to rent as well as buy. With the exception of provisions on rogue landlords, it does nothing to improve the private rented sector on which so many people now rely.
James Cartlidge
When the hon. Lady talks about the affordability crisis, does she think that any part was played in that by the 200% increase in house prices between 1997 and 2008, as a result of a woefully badly regulated mortgage sector?
Dr Blackman-Woods
As the hon. Gentleman will know, Labour produced more than 1 million more homeowners during our time in government. This Bill shows that the current Government have no long-term housing plan for the country.
Scott Mann
Does the hon. Lady accept that the reason private rents are increasingly high is that we have not built enough homes?
Dr Blackman-Woods
Absolutely. The question is: will this Bill deliver the homes? We do not think it will.
Faced with this bad Bill, a ridiculous timetable and long sittings, the other place has not only done an excellent job scrutinising the Bill, but improved it to make it slightly more palatable. If only the Government had had the grace to accept changes on starter homes, pay to stay and the forced sale of council housing that they are resisting today, it could have been improved further.
I want to deal first with the amendments the Government are voting against. On Lords amendment 1, we do agree with the principle of the Lord Best amendment and think it is important that if starter homes are resold within a given period, a paying back of discount should occur. We accept that the Government have brought forward a compromise which appears to do this to a degree, although we would still have a preference for the discount to remain in perpetuity, as this is a better use of scarce public resources.
Lords amendment 9, tabled by Lords Beecham, Kerslake and Kennedy, quite reasonably asks that:
“() An English planning authority may only grant planning permission for a residential development having had regard to the provision of starter homes based on its own assessment of local housing need and viability.”
The Minister will know that one of the greatest of the many concerns about the starter homes initiative is that such homes will be imposed, with specified numbers required by central diktat from government, regardless of whether they are needed in the quantities demanded. This amendment is a very localist one, seeking to give a role to local authorities in assessing the need for starter homes and their impact on the viability of local development.
Jake Berry
The hon. Lady says she is concerned about the Government dictating the number of starter homes that will be built in an area. Can she name any area in this country where she believes homes sold at a 20% discount are not needed by first-time buyers?
Dr Blackman-Woods
The hon. Gentleman makes a reasonable point, but the point I am making is that we will need not only starter homes, but other types of homes, particularly those for social rent. That is why the numbers should be subject to local determination and not central diktat.
To everyone except the Government, it appears eminently sensible that the need for starter homes should be assessed locally and then delivered, rather than ordered from on high, most likely to the exclusion of genuinely affordable housing for rent or equity share. This amendment is not a block on starter homes, but a requirement that they are part of a local housing mix.
Mr Stewart Jackson (Peterborough) (Con)
The hon. Lady needs to concede that Conservative Members have suspicions that her opposition to starter homes is ideological. Leaving that aside, she would be in a much stronger position were she to concede that a significant number of local planning authorities have not brought forward local district plans or county structure plans in a timely and appropriate fashion, and so the Government are forced to take action to tackle the housing crisis to which she refers.
Dr Blackman-Woods
But surely the hon. Gentleman must agree that the way of dealing with that is through the local plan-making system. Indeed, one of the amendments we might deal with later in our discussions this evening relates to the requirement that is finally being placed on local government by this Government to produce a local plan.
Andrew Gwynne (Denton and Reddish) (Lab)
My hon. Friend is making an important point about localism. Do we not also need the local authority to determine what is truly affordable for its local housing market? I note that the Minister was not so forthcoming about his definition of “affordability”. He said in reply to my hon. Friend the Member for Westminster North (Ms Buck) that these homes in central London would not be sold at £450,000. What then is the point of a cap at £450,000—why not £150,000?
Dr Blackman-Woods
Absolutely. My hon. Friend makes an excellent point, and it shows why a local test of the need for starter homes is so important.
Meg Hillier
My hon. Friend raises an important point. My local authority is set to have to sell 700 homes over the next few years. It is building homes as fast as it can for people to buy and it is certainly not against starter homes, but in London this is a pipe dream for many. Does she not agree that we need to get the Government to address particular issues in high-cost areas such as mine that are forcing everybody out of ownership and out of having any realistic prospect of living there, even if they are on a pretty good income?
Dr Blackman-Woods
My hon. Friend makes an excellent point and I shall come on to deal with that issue when discussing a later amendment.
Why do the Government not want to provide the information I referred to and to have this scrutiny? The lack of information on this policy is an issue that has been taken up by the Public Accounts Committee, too. The Minister will be aware that it said:
“It is not clear how this policy will be funded in practice, or what its financial impacts might be. The Department’s intention is for this policy to be fully funded by local authorities, but it was unable to provide any figures to demonstrate that this would be the case…More widely, an even bigger risk will fall on those local authorities required to sell housing stock to fund the policy, as those assets will in effect be transferred to central government. But the Department did not appear to have a good understanding of the size of these risks”.
The Committee went on to say:
“The commitment to replace homes sold under this policy on at least a one-for-one basis will not ensure that these will be like-for-like replacements as regards size, location or tenure. Experience of the reinvigorated Right to Buy for council tenants, introduced in 2012, shows that meeting such one-for-one replacement targets can be difficult…Moreover, replacement homes can be in different areas, be a different size, and cost more to rent. Neither do they need to be new homes”.
Mr Betts
The Minister has said on a number of occasions that the sale of the “higher-value council properties”, as this has now become, will pay for the replacement of the right-to-buy property sold by a housing association and this £1 billion remedial brownfield fund. The fact that he has said that with such assurance must imply that he has some figures and some workings out somewhere on which he has based those assertions. Would it not be helpful if he could produce those today?
Dr Blackman-Woods
My hon. Friend makes an excellent point. If the Minister has those figures, we will give him an opportunity now to share them with us, as that would be extremely helpful in allowing us to know exactly what we are going to be voting on this evening.
Although more information is important, we need to remind ourselves that the whole policy of selling off higher value council housing to fund the right to buy is considered by almost everyone to be a very bad thing to do, and that replacement is absolutely essential.
Lords amendment 47, tabled by Lords Beecham, Kerslake and Kennedy, addresses the issue of replacement, and would require the Government to enter into an agreement with a local authority under clause 72 whereby a local authority could show the need for a type of social housing and the Secretary of State would then agree a hold-back sum, so that homes sold could be replaced by houses of the same tenure, type and rent. If the Government do not accept this one-for-one, like-for-like replacement, they need to explain why. The reason this amendment is so important is that few details are in the public domain about how the Government will meet their own commitment for one-for-one or two-for-one replacement in London.
It appears that Ministers could force the sale of a council house in Camden and count two other new homes built for open market sale in Croydon as meeting the so-called commitment to replace. Therefore, the like-for-like replacement in amendment 47 is vital to ensure that housing need is met across the range and that homes for social rent are not simply replaced by starter homes or homes at higher rents, which, as the Public Accounts Committee outlined in its statement, is a real risk.
Furthermore, figures from Shelter this morning outline a truly alarming picture of the impact of the sale of higher value council homes on local authority stock, and I will come on to that in a moment or two.
Catherine West
Does my hon. Friend agree that this also punishes good councils that try to build social homes?
Dr Blackman-Woods
Indeed, but I suspect that that is part of the Government’s rationale.
Labour will be supporting the Lords in their amendment 47.
Dawn Butler
The Minister was talking about amendment 47. The important principle of the Khan amendment is that if a council sells social housing, it should replace it in the same area. On starter homes, it would be really great if the Minister could confirm that starter homes in my Brent constituency will be no more than £190,000, because that would change the whole tone of this debate.
Dr Blackman-Woods
My hon. Friend has asked the Minister to make that confirmation, but I doubt that he will take her up on that offer.
Let me move on to pay to stay, another pernicious bit of the Bill. As we all know, that is a tax on tenants and a tax on aspiration and will lead to many people having to leave their homes or increase their levels of personal indebtedness. The Minister should have talked to the group of tenants from Hackney whom I met a few weeks ago. They are not high-income families. How could anyone describe as high a household income of £17,000 and £23,000 inside London; or £12,000 and £18,000 outside London?
Ms Buck
Can my hon. Friend help me understand how Government Members are simultaneously arguing that a household income of £40,000 in London is rich when it comes to social rent, but that a household income of £77,000 is poor when it comes to getting a 20% discount on starter homes?
Dr Blackman-Woods
I look forward to the Minister’s answer to my hon. Friend’s question.
Such people, however, will be faced with a situation in which even a modest rise in income will result in a significant hike in rent. We spoke to a couple with a combined income of just over £40,000—one was a part- time cleaner and the other a sales associate. They want their children to go to university and just do not know how they will manage that in London if their rent moves towards a market one which, in their area, would represent an increase of 400%.
Kevin Hollinrake (Thirsk and Malton) (Con)
Does the hon. Lady agree with the principle of means-testing tenants in properties that are set aside for people on lower incomes? I am talking about social rented properties.
Dr Blackman-Woods
As the hon. Gentleman sat on the Bill Committee, he should know that a voluntary scheme is already in place for local authorities and housing associations to do that very thing.
The tenants also object to their housing being seen as subsidised. In response to a written question, Baroness Williams said:
“Local housing authorities do not receive subsidy from the Exchequer; the Localism Act 2011 abolished Housing Revenue Account Subsidy.”
This housing is not subsidised, and in any case it is there to meet needs. It is outrageous that the Government are taxing tenants in such a way while claiming to stand up for hard-working people.
Chloe Smith
I am deeply worried that the hon. Lady cannot seem to agree with those housing charity chief executives who, in the Bill Committee’s evidence sessions, did accept the principle that social housing should go to those most in need. Considering that she based her argument on Lords amendment 1 around scarce public resources, I do not understand her position, so perhaps she could clarify it.
Dr Blackman-Woods
In the main, council housing in this country is allocated on the basis of need.
Tom Brake (Carshalton and Wallington) (LD)
Does the hon. Lady agree that the hard-working families who we see in our surgeries—I certainly see them in my surgery and I am sure that she sees them in hers—will get nothing from this measure? The single mum who is earning £17,000 and wants to get out of her dreadful private rented accommodation, which literally has rodents running around on the floor, will get nothing out of this, will she?
Dr Blackman-Woods
The right hon. Gentleman makes a really good point; that person will get absolutely nothing.
Dr Blackman-Woods
I have already given way to the hon. Lady.
Lords amendment 54 would limit the damage of pay to stay by making it voluntary for local authorities, with authorities treated in the same way as housing associations. I do not understand why the Minister wants to treat council tenants differently. All the amendment asks is that council tenants are treated in exactly the same way as housing association tenants so, again, Labour will support the Lords amendment.
Jake Berry
Let me bring the hon. Lady back to her earlier comment about social housing being allocated according to need. The average salary in my constituency is £20,000 and there are more than 1,000 people on the housing waiting list. Does she accept that people on the average salary of £20,000 will feel aggrieved that they cannot get a social home if it is being occupied by a person who is earning £30,000, meaning that they are effectively paying tax to subsidise that person who is earning significantly more than them?
Dr Blackman-Woods
I do not accept most of what the hon. Gentleman says. What we must do is build lots more council houses in this country.
Lords amendment 55 would introduce a taper of 10p in every pound of a social tenant’s income above the minimum income threshold. This sensible measure would ensure that tenants would not face the cliff edge of a small rise in income leading to a huge rent increase. We know—the Minister confirmed this earlier—that the Government are planning a higher taper. I am pleased that he will keep the taper and the level at which it is set under review, and that changes will be subject to the affirmative procedure. We will need to look at that very closely indeed.
Michelle Donelan (Chippenham) (Con)
I thank the hon. Lady for her response to my hon. Friend the Member for Rossendale and Darwen (Jake Berry). Will she remind the House of the average earnings of a person in the UK, and then tell us whether social housing is for everyone or for those in genuine need, as there does seem to be a bit of confusion?
Dr Blackman-Woods
As the hon. Lady knows, many people in this country and, I am sure, in her constituency, are on council waiting lists. What we should be thinking about is how to build more council houses to meet that need.
Lords amendment 57 would increase the thresholds for pay to stay to £50,000 in London and £40,000 outside London in order to limit the damage that this dreadful policy will cause. Similarly, Lords amendment 58 would ensure that income thresholds would increase in line with the consumer prices index, not at the whim of the Secretary of State. We note that the Government will vote against those amendments, but we could do with more explanation of the basis on which they will increase the thresholds.
There are too many Government Lords amendments to comment on, given the time available, although that again demonstrates a problem with this Bill. I will highlight a few of the other amendments in the group, however. We are pleased that the Government adopted Lords amendments 26 to 36, which were tabled by Lord Kennedy and Baroness Grender. The amendments will enable information to be given to third parties when the recovery of abandoned premises is sought and provide a definition of a “tenancy deposit”. My hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) and colleagues in the Lords worked hard to ensure that such measures were included in the Bill.
Government Lords amendments 38 to 43 replace the requirement for local authorities to sell off vacant high-value council housing with a requirement to sell off “higher value” vacant council housing. If selling off high-value housing was bad, selling off higher-value housing is much, much worse. Although the approach might help London a little, it will lead to more sell-offs in other areas. As the Public Accounts Committee noted, there is not enough information available on the impact of the policy or its scope to allow Parliament to vote sensibly on it. Shelter’s analysis found that to raise the £4.5 billion a year needed, each local authority could be asked to raise on average a massive £26 million. That corresponds to the sale of 23,503 council homes a year, which is six times more than it was estimated would be sold under the previous high-value regime.
Government Lords amendment 56 supports the exemption of some categories of persons—as yet unknown —from pay to stay provisions. Labour Members argued strongly for such a measure in Public Bill Committee. The amendment states that
“regulations may create exceptions for high income tenants of social housing of a specified description.”
Do such tenants include people aged over 65, people with a registered disability, people with seasonal contracts of employment, or people who have a household member in receipt of care? We have no idea what the Minister intends, and that is not satisfactory.
Government Lords amendments 215, 217 to 221 and 233 amend proposals on ending security of tenure. Although we recognise that allowing 10-year tenancies, and longer tenancies if there is a child in the home, is a step forward, we still think that the whole policy is dreadful. Many people are commenting that what is really important about social housing, and council housing in particular, is that it provides security of tenure, and enables communities to be stable and to thrive. One can only wonder what will happen to parents when their children reach the age of 19, and what will happen if a young person wants to live at home beyond that age. The policy fails to acknowledge that we are talking about people’s homes. The Government should bring forward proposals to extend security of tenure in the private rented sector, rather than reducing that security for council housing tenants, with all the social upheaval and personal anxiety that that brings with it.
Lords amendments 90 and 91 deal with electrical safety checks. I am pleased that the Government were forced by the action that we took in the Commons, and by their lordships, to adopt the amendments, which would put a duty on private landlords to ensure that electrical safety standards are met, and that checks are carried out at a reasonable frequency and by people with the proper expertise. We should thank Baroness Hayter and others for tabling those amendments and arguing for them in the Lords.
Finally, I am pleased that their lordships have insisted that the regulations that we are still to receive—there are many—that will set out much of the detail of the Bill must, in the main, be subject to the affirmative procedure. This includes measures on banning order offences, and determinations and regulations relating to vacant higher-value housing, high-income social tenants, electrical safety, client money protection and planning freedoms. I thank the Lords for ensuring that the Government’s nasty habit of putting through important regulations under the negative procedure ceases.
As the whole housing world has acknowledged, the Bill does little to solve our housing crisis, yet will make things a whole lot worse for the supply of genuinely affordable housing. According to Inside Housing, the Bill has been producing headaches for the Prime Minister, but I am sure he will be pleased to know that he will not need a junior doctor to cure his headaches—all he needs to do is to drop this dreadful Bill.
Seema Kennedy (South Ribble) (Con)
I draw Members’ attention to my entry in the Register of Members’ Financial Interests.
I am pleased to support the Bill. The passions raised in Committee and now in the Chamber are testament to the fact that we know that we need to build more homes. Many of our constituents want to get on the housing ladder and the Bill does great service for that cause. There is no doubt that house building took a hit following the recession that began in 2008, but I am pleased to note that as our Committee stage was winding up in December last year, housing building completions were at their highest level since 2008, with 143,000 completions in that calendar year. That is to be applauded, but there is still much more work to be done to fulfil the aspirations of the 86% of our fellow Britons who want to own their own home.
Starter homes are an essential part of that offering, to allow young people to own their homes, rather than renting for years on end or perhaps for ever.
Meg Hillier
Most of us on the Opposition Benches would agree that a starter home for a young family is a great thing. Does the hon. Lady not regret that over the past eight years, under a Conservative Mayor of London, we have seen a lot of housing built, but it is for private sale at inflated prices—luxury homes sold to overseas developers, and in no way within reach of local people in my constituency or across London?
Seema Kennedy
I have great respect for the hon. Lady and the work she does on her Committee, but, with great respect to the Opposition, this is not a debate just about London, as my hon. Friend the Member for Rossendale and Darwen (Jake Berry) pointed out. Much of the debate in Committee and the Chamber has been about London. There are affordable houses, and I know that in London there are many. However, there are 590 MPs who represent areas outside London.
Mr Jackson
It was a great pleasure to serve with my hon. Friend on the Bill Committee. She touches on an interesting point. Does she agree that none of our witnesses was able definitively to demonstrate that, leaving aside London and most of the south-east, starter homes with the right vehicle, such as Help to Buy, would be unaffordable? For the vast bulk of England, they were affordable.
Seema Kennedy
Indeed. Those happy days in November and December that we all spent together in Committee were an unalloyed joy. With the right vehicle, such as the Help to Buy ISA, and with shared ownership, starter homes are affordable in many areas, including developments that I have visited in my constituency of South Ribble. For the generation between 20 and 40, which has been disproportionately affected by the increase in house prices, starter homes are a way to get on the property ladder, and we should all welcome the commitment to build these 200,000 homes.
Dawn Butler
I am a London MP. It might be difficult for Members who are not London MPs to understand how difficult and how unaffordable it is to live in London, but that is why London MPs make the points they do. It may be of interest that Londoners will be voting on Thursday in what is almost a referendum on the housing crisis in London.
Seema Kennedy
I will let other London MPs respond more fully on the particular London issues.
Seema Kennedy
I will make a little progress—otherwise, I will be up and down like a fiddler’s elbow.
Let me turn quickly to amendment 1. A 20% discount over 20 years does not really take account of the practicalities of people’s lives—20 years is far too long. We are talking about starter homes, so one would hope that people are not going to live in them for 20 years. As the Minister said, the average time people live in a house is seven years, not 20. The amendment places restrictions on starter home owners, who are precisely the generation—those aged 20 to 40—whom the Bill aims to empower. I am glad the Government are consulting on the duration of the discount and the taper. If we want builders to build and lenders to lend, we need to take a practical, not an ideological, approach—the policy has to work.
Lords amendments 9 and 10 would replace the national requirement with a requirement that is set locally, depending on local housing needs and viability assessments. That completely undermines our manifesto commitment to build these 200,000 homes, but, as my right hon. Friend the Member for Wokingham (John Redwood) mentioned, that policy is very popular. Constituents come to us saying, “I want to get a starter home. How can I get my foot on the ladder?” If we were to remove the national requirement, I fear we would delay the process.
Andrew Gwynne
Earlier the hon. Lady actually made the case for a more localist approach. She said she was not a London Member and that circumstances in her constituency were very different from those in the capital. Surely, if there are different circumstances in different parts of the country, we need a local approach.
Seema Kennedy
I have the greatest respect for the hon. Gentleman, but the Lords amendments would hold the process up; we would get to 2019, and no starter homes would have been built—I really fear that that would happen. The amendments would slow things down, but we need to start building now.
As we know, house prices have risen exponentially, particularly in London, but that is because of a lack of supply. The picture is complicated, and one could not say that things have happened for one particular reason, but the lack of supply is a fundamental block, and we touched on that all the way through Committee. We need to get more houses built—and quickly.
There was much debate in Committee about permission in principle—the new consent model of planning—which will provide certainty.
Marie Rimmer (St Helens South and Whiston) (Lab)
Will the hon. Lady give way?
Seema Kennedy
I am afraid I am going to make a little more progress.
Developers and builders want certainty and speed. One brake on development is the lack of certainty and the slowness of certain planning departments. The whole essence of the Bill is to get the country building homes—to increase the supply and to make more people home owners.
This measure is particularly effective for small builders, who do not have the scale to have in-house planning departments. Measures to encourage those who might build 10 or 20 homes in a village are particularly effective.
Rebecca Harris (Castle Point) (Con)
Does my hon. Friend agree that it is the small builders who actually get on and build, whereas the large developers are often slow at delivering projects? Anything we do to support small builders on small sites will improve the housing supply.
Seema Kennedy
I agree. Given how small builders are funded and run, they are not land banking in the same way. They want to build homes and move on, whereas the large multiples have a different approach because they are land investors as well as builders. I think there is very much a cross-party consensus that we need more units built. That is the whole essence of the Bill.
I welcome the Lords amendments that exclude the winning and working of minerals, which covers fracking. In areas such as South Ribble and the Bowland basin, where companies have made initial exploratory attempts, that will give reassurance to some of my constituents.
We need to build more homes. The Bill will provide some hope and, hopefully, some homes for the many of our constituents who aspire to own a home of their own.
Mr Betts
The most astounding thing about the Government’s proposals is that we are expected to make decisions about them today without any idea of the costings. When the Minister came to the Communities and Local Government Committee, he said the Government would produce costings in due course—I think he actually said spring was the likely time. Well, here we are in the spring, and I have not seen any figures.
It is astounding that we should hear from the Government over and over again that the sale of a, now, higher-value council home will pay for the replacement of that home, the replacement of a housing association property that is sold and the £1 billion fund for remedial work on brownfield land. If the Government are clear that that is what their policies will do, will they please show us the figures? If they are clear that that is what will happen, they must have the figures to have made their promises on. Or are they simply telling us they believe that that is how things will work out, but without any clear evidence to support that?
That is a matter of great concern. It was a concern to the Select Committee, which, having heard the evidence, correctly said:
“We have not seen evidence that the Government has fully costed the proposals and we call on it to do so as a matter of urgency.”
That was agreed at the beginning of February; we are now three months further on, but we still have no figures. The Public Accounts Committee made exactly the same point in its report, and it seemed a very reasonable point, regardless of whether we think the PAC should look at policy before or after it is implemented. The Committee said:
“The Department should publish a full impact assessment containing analysis in line with the guidance on policy appraisal in HM Treasury’s Green Book, to accompany the proposed secondary legislation”.
When will we see the figures? We have not got them for the Bill. Will we have them before any secondary legislation comes before the House for approval? Will the Minister make a firm promise that that will be the case? He referred to further secondary legislation on higher-value council homes. Will these proposals be thoroughly and properly costed before we reach that point? This is a serious matter—the right of the House to have information before it passes legislation.
Let me come now to starter homes. Again, it has been a little hard to understand how the Government’s policy will work. When the Minister came before the Communities and Local Government Committee, he said that local authorities meeting developers to discuss section 106 agreements would have discretion over what mix of affordable housing would be built. Can we have some clarity on that? Will starter homes take absolute priority, with local authorities having no choice but to build them to hit the Government’s 200,000 target, and if there is a bit of money left, perhaps putting one or two affordable homes for rent on the site? Or will local authorities, as they are currently allowed to, come to their own view about section 106 agreements and about the right mix of affordable homes on the site, whether that means starter homes—now defined as affordable homes—homes to rent or shared ownership? What is actually going to be the case?
What about areas of land in my constituency where there is no requirement for any affordable housing at present because the sites are not considered to be viable, yet viability is an important test under the national planning policy framework guidelines that local authorities have to work to? Will the Government insist that starter homes are built on a site where it is not currently considered viable to have any section 106 provision for affordable housing? How is that going to work—or will there be local discretion in that regard as well? We need some clarity.
We also need clarity about the replacement of the higher-value council homes as to precisely what sort of homes they will be replaced with, how that will be defined, and what the negotiation process between Government and local authorities will look like. Will it be a case of starter homes at all costs, or are we going to be in a position where affordable homes to rent can be part of the replacement situation, going back to “like-for-like”?
The Chartered Institute of Housing produced evidence to the Select Committee in which it estimated that during the course of this Parliament there would be 300,000 fewer social homes to rent than there were at the beginning. The Minister likes to take credit for the previous coalition Government having built more council homes than were built under the Labour Government, but let us get to the point: during this Parliament, will there be 300,000 fewer social homes to rent, not just council homes but housing association properties, as the Chartered Institute of Housing has estimated? The Government disagree with that figure, but will they say what they expect their policies to produce by the end of this Parliament?
Kevin Hollinrake
The hon. Gentleman will remember the clear evidence given by David Orr of the National Housing Federation, who said that because of these proposals housing associations will be building more properties of all tenures.
Mr Betts
We had evidence from various housing associations about how they were going to respond to the proposals. Some made it very clear that they felt they would gain fewer properties to rent under section 106 agreements than under the previous legislative arrangements. They also made it clear that given that there is now no money in the Government’s housing programme for the rest of this Parliament for any houses to rent, in terms of grant assistance, all the resources—the £8 billion—will go either to starter homes or to shared ownership. Many associations believe that they will be building fewer homes to rent on an affordable basis because of the combined effects of policy as a whole. That will vary from association to association.
Tony Stacey, the chief executive of South Yorkshire Housing Association, told us that in much of the area where his association works it would not be possible to build back with the money that will be given from the sale of housing association property, and it was likely that the association would simply go and buy up another property in the private rented sector. That could happen as well, and it would not act on the housing stock. There will be very different policies in different areas. I would argue strongly, in relation to starter homes, that we should reflect that by enabling local authorities to come to different agreements that suit their local needs. As the hon. Gentleman will recognise, the Select Committee said very clearly:
“Starter Homes should not be built at the expense of other forms of tenure…it is vital that homes for affordable rent are built to reflect local needs.”
Jim McMahon (Oldham West and Royton) (Lab)
Does my hon. Friend share my concern that research commissioned by the Local Government Association highlights the fact that in 220 local authority areas, people who are in need of affordable housing will not be able to take advantage of the starter homes that are being proposed?
Mr Betts
Yes. It is interesting that my hon. Friend mentions the LGA, which argued very strongly, on a cross-party basis, that the policy of the right to buy for housing association tenants should not be funded by the sale of local authority assets. I will make sure that I get the Committee’s words right in quoting them to the hon. Member for Thirsk and Malton (Kevin Hollinrake). We said that
“public policy should usually be funded by central Government, rather than through a levy on local authorities.”
As usual, perhaps the Government ought to listen to the words of the Select Committee. The whole issue of the right to buy for housing association tenants would not be a significant point of contention if the Government were not forcing the sale of local authority homes to pay for it—and we still have not had the figures to show how that would work. With regard to sorting out more flexibility on starter homes, I still do not know what their policy amounts to because of the lack of clarity that we have had.
Finally, I want to raise two really worrying issues where the Select Committee did not come to a view—lifetime tenancies and pay to stay. We welcome the fact that pay to stay will be voluntary for housing associations. However, the situation will be a bit strange in a street where two tenants are earning the same amount of money and paying similar rents, one in a housing association property and one in a council property, and one finds their rent going up and the other does not. Let us get away from the talk about subsidised council housing. There is no central Government subsidy to housing revenue accounts, so there is no subsidy to council tenants earning a little more than their neighbours next door, but what there will be, if this measure goes through, is a tax on those tenants, because the money will go not to the council but to the Treasury, and the Treasury levying a charge on a council tenant is a tax by any other name—of course it is.
Let us put that together with the lifetime tenancy issue. Are we really going to end up with council estates where some homes will have been sold, but in different proportions in different areas, some of which will then have been sold on into the private rented sector, so that we have an increasing mixture of people on the lowest incomes and people there on only a short-term basis? By forcing their rents up, we will push out people on slightly higher incomes who may have a long-term commitment to the area and roots in the area. They may be the people who run the local housing association, the local residents group or the local community forums, and are really active there. Of course, the very same people will be the longer-term tenants who have a real interest in and long-term commitment to their area. What does this policy, and this mixture of policies, do for social cohesion? It undermines the whole idea of a long-term commitment by people who are rooted in their areas and want to stay there because they enjoy living there, they have connections there, their kids go to school there, and that is where their home is.
Chris Philp
While I have sympathy with some of the points the hon. Gentleman is making, does he not accept the principle that with regard to a scarce social resource like social housing, it is simply common sense to make sure that that scarce resource is targeted at those who are most in need, as this Bill seeks to do?
Mr Betts
I would argue this: let us tackle the scarcity. Let us start a building programme of 100,000 social homes a year. That is the only way that we will hit the target of the quarter of a million homes this country will need. We have never built a quarter of a million homes without a massive social house building programme, and it is unlikely we will do so in future.
I will make one more point about the mix of communities. In other communities where there is, at the very beginning, a limited number of social rented properties, the right to buy that has already happened, together with the proposed extension of the right to buy, will mean that those are exactly the same communities that have the higher-value council homes. Not only will the right to buy remove social housing in those areas, but the sale of vacant higher-value council properties will remove social housing as well. It is likely that, in future, some communities will have no social housing to rent whatsoever, irrespective of people’s needs. That is the other conclusion, and it is very worrying indeed. In some communities, there will be no home available for those on low earnings or short-term tenancies who have a real housing need but who cannot afford to buy. That is another product of the Bill and I am against it. I hope that Members will support the Lords amendments to at least mitigate its worst impacts.
Scott Mann
The House will probably be aware that I am passionate about home ownership and about helping people on modest incomes to be able to afford to buy their first home. In fact, such is the interest that I have taken in housing that I am referred to as a housing spokesman by my Cornish Conservative colleagues, and for that I am thankful.
For more than a quarter of a century, housing policy has failed the people of Cornwall. Thanks to this Government, we now have a number of approaches that will change that, including the introduction of starter homes, Help to Buy, the newly announced £19 million self-build project for the south-west, and continuing discussions with lenders about affordability. We now finally have a number of policies in place that will help the Cornish working population own their own home.
Many colleagues across the House will know the amazing feeling when you buy your first home—the sense of pride and achievement when you get the keys to the front door. It is one of those first big steps in life, like being accepted to university, getting married or having your first child.
When the Bill first appeared in this House back in October, the Government had clear goals to build more homes for a growing population and to reform the planning process. That included 400,000 new homes by 2020; 200,000 starter homes; the extension of right to buy to housing association tenants, turning generation rent into generation buy; and speeding up the planning process.
Since then, I have had many conversations with councillors in Cornwall who have been concerned about certain aspects of the Bill, including the right-to-buy policy and making councils sell off their high-value council houses. That policy could result in coastal communities in Cornwall losing very important social housing stocks, unless like-for-like replacements are built. I therefore welcome amendments 42A, 44A and 44B to clause 2, which were tabled in the other place by Baroness Williams and which allow some flexibility to the under-40 cap for purchasing a starter home. Some people over 40 are still looking to buy their first home—many of them in Cornwall—and certain exemptions will benefit couples where both are over 40 and have a right to buy their first home.
To give those starter homes some security, the Government’s Lords amendments 2 and 3 to clause 2 will introduce a minimum age of 23 to buy a starter home, which is a good policy. It will prevent abuse of the system by those who would try to buy a starter home with a 20% discount by using a young person or a student who otherwise would not intend to buy one.
Turning to part 4 of the Bill, I want to address amendments relating to high-value local authority housing. The initial announcement that councils would be made to sell off such housing caused concern in Cornwall, because the county has a high level of coastal communities where properties have, through no fault of those communities, increased significantly in value in recent years. The selling off of high-value council assets would have resulted in a reduction in the number of homes available to people on low or modest incomes, and would likely have increased second-home ownership. That would have been bad not only for local families but for local communities, as families would have moved to urban areas, thereby bringing about a decrease in local trade.
The Government’s Lords amendment 53 replaces the term “high value” with the term “higher value”, which will introduce a much more local approach, as housing prices differ from area to area. A council house worth £400,000 may have been deemed worthy of selling off, given that that figure is very high compared with that for a council house in an inland urban area. Without protection, communities could suffer.
Local people in coastal communities should not have restricted access because of where they grew up. I am therefore very pleased that the Secretary of State and Baroness Williams acknowledged concerns about the issue and made changes accordingly to give more freedom to local authorities over how they classify their higher value council homes.
I will not address other amendments now, because I want fellow Members to have the opportunity to speak. Suffice to say that the amendments I have touched on strengthen the Bill; illustrate the Government’s commitment to addressing the housing and planning challenges of the modern age; and ensure that rural communities are better protected while we drive towards more affordable homes throughout the country.
Ms Buck
I make no apologies for returning to the issue of London, because that is where housing need is sharpest and where the affordability crisis is most severe.
I find myself in the rare position, for one night only, of being in some harmony with Westminster City Council—a rare thing indeed. Its policy and scrutiny committee’s report on the Bill is deeply fascinating. It makes it clear—in moderate tones, but its content is unmistakable—what it thinks about the Bill and how it will impact on housing supply. Following on from a point made by my hon. Friend the Chair of the Communities and Local Government Committee, it says:
“The Bill is largely a framework”,
which I think is a euphemism for, “We have no idea how most of it is going to work.” That point of view was spelled out more sharply by the Public Accounts Committee—whose Chair is not in her place at the moment—which absolutely stripped away the pretence of the calculations on which high-value sales have been predicated. Westminster City Council itself, however, is clear that the Bill will have a severe impact on housing and that it will also have wider implications, which I will address in a moment.
We do not know what the redefinition of sales from “high value” to “higher value” will mean for local areas. When Shelter did its initial calculation, it found that Westminster was likely to have to sell off 76.3% of its council properties as they became vacant. That would mean a sale rate of 246 a year. We do not know—as we keep saying about this Bill—what the new calculation will mean. The Minister has offered no calculations. The council’s latest estimate, however, is that it will need to sell 200 high-value voids a year in order to fund the right-to-buy housing association properties and that that will be worth £100 million year.
Here is the rub: not only will that reduce the stock and have massive implications for meeting housing needs, but it will simply displace costs into other areas of public expenditure. Westminster City Council has said that that will result in additional costs of £1.5 million a year for temporary accommodation for homeless families. The local taxpayer already has to fund temporary accommodation to the tune of £4 million a year above what the Government pay. An extra £1.5 million will be needed to meet some of the costs of homelessness that will result from the fact that the council will not be able to place people with housing need in its council or housing association stock because it will have been sold off in order to fund the right to buy.
Chris Philp
Will the hon. Lady join me in welcoming the fact that in London, for every single high-value unit sold, there will be two replacements? Does she agree that, across London as a whole, that will ease the housing problems?
Ms Buck
No, I do not welcome that at all. As we heard in the superb speech from the Front Bench by my hon. Friend the Member for City of Durham (Dr Blackman-Woods), we do not know what tenure those homes will have or where they will go. We have no guarantees whatsoever that they will be local. Therefore, they will simply not provide an equivalent level of accommodation or meet need. I cannot remember who said this, but that could result in rental properties for low-income households in inner London being sold to subsidise homes for sale somewhere else, thereby meeting a totally different kind of need.
Westminster City Council also points out—this has not been brought up this evening—that, in order to deliver the two-for-one requirement, the increase in housing delivery would have to be dramatically increased from its current rate, but there is no indication of how that will be achieved. The council has a long list of asks as to how the high-value sales programme will be organised and how inner-London authorities, including itself, would be protected. The Minister has given no answers whatsoever.
The council has also provided further context and it is interesting, given some of our discussions about pay to stay. Government Members describe anybody with a household income of £40,000 as rich, and the council has pointed out that the Government are imposing a higher pay-to-stay requirement on such households while at the same time cutting rents. They are cutting rents for everybody, including working households. People are being asked to pay a higher rent if they have a household income of £40,000, but they get a 1% cut in their rent at the same time. I simply do not understand the logic of that.
In my local authority, the implications are a loss to the housing revenue account of £32 million over the next four years and £237 million over the next 30 years, which will mean, as the local authority says, major cuts to the quality of existing properties or plans for new affordable house building. Yet again, the Government are giving with one hand and taking away with the other—indeed, they are taking away with a third hand, in this case—the capacity to provide additional homes. All that can be fairly summarised as meaning that the council that gave us homes for votes in the 1980s—the biggest scandal in modern local government history—is saying, “Even we do not like this.”
The council does not like the Government’s proposed starter homes policy either. The consultant who advised the council on the Housing and Planning Bill pointed out that a starter home capped at £450,000 in inner London, where the average open market property is going for £2 million, lavishes a gain on a particular small cohort of first-time buyers. Westminster Council states that
“the potential tax-free capital gain, after eight years of occupation…is very considerable (depending on the number of bedrooms) and wholly to the benefit of a first-time buyer”.
Michelle Donelan
It is interesting to hear about the housing market in London, but does the hon. Lady recognise that in Wiltshire, one of the fundamental reasons why we have an above-average ageing population is that young people cannot afford to buy in the area, and so they are leaving it? Does she agree that for the long-term health of communities such as mine, initiatives such as starter homes are a very good and reasonable policy that will enable people to enter the housing market?
Ms Buck
Funnily enough, that is almost the thrust of my argument. Things that are applicable in the hon. Lady’s constituency are not necessarily applicable in mine, so we want to have local flexibility and the freedom to develop a strategy that meets local needs. Also, I do not see why my constituents who are in housing need should fund home ownership for her constituents. We absolutely have to meet local needs; that is intrinsic to the idea of a local authority having statutory duties to meet housing need. I am afraid that I do not accept her point at all.
I know that other people want to speak, so I will not dwell on the issue that has already been raised—I have also raised it previously—about the income that people need to afford starter homes in places such as central London. It seems extraordinary that, on one hand, we think that social housing is a rare good that has to be rationed because we have to speak the language of priorities, but, on the other hand, our priorities are such that we can afford to give a 20% discount to people with incomes of up to £77,000 in central London. My colleagues and I, and Westminster City Council, make it absolutely clear that the strategy, as it is being imposed across the country, will have a very serious and negative effect in central London. It will provide a windfall gain for a very lucky and small cohort of people—good luck to them—but that, critically, will be bought at the expense of others.
I remind the House of what we have seen in recent years as a consequence of the Government’s catastrophic housing failure. In my area, we have 600 fewer social housing units than we had in 2009. We have 2,414 households in temporary accommodation. The number of people in housing need on the housing register has doubled to 4,500 since it was redefined, and reduced, in 2012. We have 1.2 million people on the housing register across the country. There has been an 80% rise in homelessness acceptances in London. We have seen a soaring housing benefit bill in the private sector, and a time bomb of housing benefit expenditure is coming down the line as low-income households are forced into the private rented sector. That is all before the Government cut housing benefit still further.
I end by going back to the point about the lottery. Good luck to those people who get the benefit of high value starter homes, but why should that be at the expense of people such as my constituents: the healthcare assistant I met last week, who is bidding for housing association homes where the monthly rent is more than her take-home pay; the family so overcrowded that their little son, who is suffering from skin cancer, has to share a bed with his siblings; the family of six—two parents and four young adults, two of whom are severely disabled—in a property so small that their wheelchair-bound son is unable to do his required physiotherapy; or the mum with two young children who was moved from Westminster and her local job to the edge of London, from where she has to commute in, getting her children up at 5.30 in the morning and returning home at 9.15 in the evening, who is weeping with the stress of her experience—it is duplicated in hundreds of other families—and who tells me that her daughter does not want to live with her anymore because she cannot bear the stress of homelessness? The Housing and Planning Bill, unfortunately, says that those people and their needs do not matter, and that housing will not be provided for people like them.
Much as I applaud initiatives to support affordable home ownership—and I do—I do not think that it should be achieved at the expense of people in housing need. That is what the Bill does, and that is why it is so pernicious. That is why I hope that we will be able to secure progress on at least some of the amendments that were achieved in the other place a couple of weeks ago.
Bob Blackman
It is a pleasure to follow the hon. Member for Westminster North (Ms Buck), although I suspect that my perspective on housing in London, the south-east and the rest of the country is very different from hers. We have to start from the housing problems that we have and to remember that, as I think the Chair of the Select Committee pointed out, for far too long we have not built enough homes—irrespective of whether they are for sale, for rent or for social rent—in this country. The key point is that we have to ensure that the delivery of new housing begins apace, and the Bill contributes towards exactly that requirement.
We need to face up to the fact that a small number of very large house builders in this country ration the development of land to maximise their profits from the sale of the homes that they build. We must break the stranglehold of that consortium and encourage small developers to develop new groups of houses, which will give people the opportunity to buy those homes. In addition, over the past 10 years, social rented accommodation has been completed solely by registered social landlords—what we call housing associations—which sit on huge bank balances and assets that they could utilise to build far more units than they do. Far too many housing associations are coasting and not providing the sort of accommodation that we all wish to see. Somehow, we have to break through.
The Bill also resolves the problem that it is very hard for young people to afford the deposit that they need to buy their first home. The principle—the Labour party has not yet fully appreciated this—is that the Government are switching resources from social rented accommodation to the development of starter homes for sale, so that young people and families have the chance to own their own home. Home ownership among that group of people has dropped through the floor. The average age at which someone buys their first property is now about 37, and it is going up all the time. Many people now believe that they will never own their own home, because their income is insufficient.
Mr Jackson
Is there not an issue of fairness and social equality here? It was reported today that 25% of the funding for first-time buyers comes from mum and dad—the family. Is it not unfair that if an individual has wealthy parents, their parents can cascade that wealth to them? This policy, under a Conservative Government, will spread the wealth and enable people on modest incomes not to have to rely on the bank of mum and dad to buy their first home.
Bob Blackman
It is quite clear that we want a more democratic system in which people have the opportunity to buy their own homes. The principle introduced in the Bill of encouraging home ownership through that process must be right. Equally, it is quite clear that an unfinished piece of business from the Thatcher revolution of the sale of council homes under the right to buy was that housing association tenants did not have the same opportunity, so I am delighted that the Government are putting that right.
It is right to ensure that people who exercise the right to buy continue to live in their properties as owner-occupiers. It is not right that people should suddenly have a windfall because, having been in social rented accommodation, they are offered a discount on a property that they can either immediately resell or re-let. There should be a taper, and I am glad that the Government have seen sense in accepting that such a taper should apply. There is an argument—or a discussion—about where the taper should start, but the reality is that the vast majority of people see that as the right way forward. People buying a property under the buy-to-let process should also have the opportunity to ensure that they get a discount under the Help to Buy arrangements but, equally, they should not be allowed suddenly to get a windfall and then move on.
Catherine West
What does the hon. Gentleman think of the suggestion recently made by one of my constituents that the right to buy should also apply to private sector tenancies? Should there be a public subsidy so that somebody has the right to purchase a private tenancy?
Bob Blackman
It is quite clear there should be an opportunity for everyone to exercise the right to buy. In London, people who use buy-to-let arrangements are getting a return of probably about 3% to 4% on their capital. They are not necessarily getting a huge rate of return, so they are providing facilities for people to live in accommodation when those people cannot possibly afford to buy their own home, or choose not to do so. There are people who choose to rent rather than buy because that suits their lifestyle better.
I want to move on to an issue that seems to have been forgotten in all this. The reality is that someone who demonstrates that their housing need is sufficient—in other words, they are homeless—has a chance of winning the lottery prize of getting social rented accommodation. If they currently get such a prize, they can live in the property for the rest of their life, regardless of their income. That has to be wrong; it should not happen. People come to me every day and say, “I can’t get a council property. I can’t afford to rent a property in the constituency. All the local authority is offering is, with respect, a place in Bradford, Wolverhampton or somewhere in Birmingham, but nowhere near London.” The reality is that people are being priced out of the market because we are building too few homes and, equally, we are allowing people to live in social rented accommodation for far too long after their incomes have risen considerably. That cannot be right. Social rented accommodation should be for people who need it.
Mr Betts
Is the hon. Gentleman therefore saying that pay to stay is intended to drive people out of social rented accommodation when they earn more than £40,000? Will they actually be priced out? He seems to be implying that if they live in social housing, there will not be enough social housing for other people, and that we therefore need to get them out of such properties so that poorer people can have them.
Bob Blackman
No. This is where there might be differences between London and the south-east, and other parts of the country. The vast majority of London council house tenants, and even housing association tenants, are on the maximum housing benefit, so the public sector is picking up the cost of their rent. I am saying that if someone is earning more—if they are above the threshold—they should contribute more to the cost of their rent. When we examine the figures, we can see that tenants actually pay very little in rent in most parts of London at the moment because housing benefit picks up the cost of their rent. I am saying that if people are employed in reasonable occupations with reasonable incomes, it is right that they should contribute to the cost of public sector housing, and that principle is set out in the Bill. It is the right approach and one we should thoroughly endorse tonight. It is important to put it on record that this is not an attempt to force people out of social rented accommodation; it is a matter of fairness and of people paying their way reasonably.
Transport for London has 5,700 acres of land in London, and while not all of it is developable, a lot of it is. That is one public authority in London that has an opportunity to provide land that could be used for the development of housing for rent or for sale. I piloted the Bill that will enable TfL to provide the homes that are required, and it was interesting that the only opposition to it came from London Labour Members, who opposed the opportunity for more than 50,000 homes to be built in London for the very people they represent. I suggest that we should reject all the Lords amendments that are a deliberate attempt to wreck the scope of the Bill, which contributes to the creation of more housing and more affordable housing, to the opportunity for people to own their own homes, and to local authorities working in partnership with the Government to deliver the homes that people want.
Dr Blackman-Woods
The hon. Gentleman has had much to say about pay to stay, but has he looked at the Government’s own consultation on the policy, which showed that 75% of people disagreed with the thresholds that the Government are setting? In fact, a huge majority disagreed with the voluntary policy that is already in place with a threshold of £60,000. I am not sure where the hon. Gentleman gets the idea that this policy is readily accepted by everyone; it simply is not, and not at the current thresholds.
Bob Blackman
If individuals are not contributing additional rent towards the social rent they are being charged at the moment, I can understand people saying, “I don’t want to pay any more.” Who would want to pay more? That is a foolish view to put forward. We must ask what is fair and reasonable to ensure that we can change the situation in this country by creating more housing and encouraging the development of more housing, while making sure that people pay a reasonable rent so that they are not subsidised by other taxpayers on lower incomes who are struggling either in private rented accommodation or to buy their own homes. Such a view is not fair or reasonable, and it must change.
I end, as I began, by saying that I commend the Bill and the Government amendments to the Lords amendments. I trust that we will reject all the Lords amendments that the Government oppose and that we will support the Government amendments.
Dawn Butler
We have just heard about the land held by TfL, and Labour Members are seeking guarantees that houses built on TfL land will be properly affordable for people living in London. There is only one person who has guaranteed that that will be the case: my right hon. Friend the Member for Tooting (Sadiq Khan). If the hon. Member for Harrow East (Bob Blackman) wants to ensure that affordable houses are built on TfL land, I recommend that he votes for my right hon. Friend on Thursday.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. I am not going to impose a time limit, but there are still 10 Members who wish to speak in the debate and we have less than an hour to go. If people stick to about five minutes or so, everyone will be able to get in.
Chloe Smith
I will speak specifically against Lords amendment 54. Local authorities should not have local discretion to apply pay to stay. I will raise a very clear example that shows the worst possible risk of local self-interest.
Norwich City Council, I am sorry to report, is led by Labour, although we have elections on Thursday. The Norwich Labour party may be having a rather difficult week—the leader of the Labour party is no doubt right now looking into reported extreme tweets from the hon. Member for Norwich South (Clive Lewis).
The leader of Norwich City Council himself, Councillor Alan Waters, lives in one of his own council homes. In fact, he is not alone in doing so. So many Labour councillors on Norwich City Council live in their own council housing that they cannot even recuse themselves from business relating to their pecuniary interest, as clearly laid out in the standards expected of councillors; in response to my investigations on this topic, a city council spokesman confirmed in March that so many councillors were taking advantage of their own housing that the political balance of the council would be affected if all tenants took no part in discussions about housing policy. That means that councillors are being allowed to take part in discussions about council housing even though they have personal financial interests in it.
More specifically, the leader of the council is himself likely to be a high-income tenant under the terms of the Bill. His own register of interests at City Hall clearly shows that as well as living in one of his own Norwich City Council houses, he holds a professional job in London and Norwich and a directorship, all while earning well over many people’s minimum wage from council expenses alone. Of course the leader of Norwich City Council will not want higher earning tenants to pay a fairer rent, because he is likely to be one of them. If his Labour friends in the Lords were to get away with letting councils have discretion over the policy, of course he would not enact it in Norwich.
The policy should be enacted because it means that better-off tenants will pay their way—or, indeed, move out to allow poorer families who really need a council home to have it. There are thousands of families in Norwich on the housing waiting list. Those who argue against the policy seem to believe that if people living in council housing earn a bit more, they should not pay a bit more in rent, and that people on any amount of money should be able to continue to live in public housing, subsidised by the taxpayer. People might remember that union baron Bob Crow lived in a council house until he died, yet reportedly earned £145,000.
I simply do not think it is right for the struggling family who really need that home to be denied a place because a well-off person has it. That is why I support the Bill, as a Norwich MP who wants people to be able fairly to get the homes they dearly need, and why I am speaking against Lords amendment 54.
Bob Blackman
My hon. Friend has jogged my memory. Unfortunately, I forgot to declare my entry in the Register of Members’ Financial Interests and draw it to the attention of the House. May I use this opportunity to correct the record?
Chloe Smith
I welcome my hon. Friend’s doing so, because it shows the kind of principles that we should uphold in public life. We seek integrity and honesty in public life. That goes to the heart of my point. It is particularly hypocritical and wrong if a local council leader opposes this policy while standing to gain personally from doing so.
Mr Jackson
My hon. Friend is making a very strong case. Does she remember the time, not that long ago—about half a dozen years—when the Labour party was on the side of working people and was considering reforms of lifetime tenancies of council houses? Now, for purely political reasons, it is not on the side of working people but, for electoral reasons, on the side of people who support the Labour party. That is why it opposes this policy.
Chloe Smith
I welcome that reminder from my hon. Friend. Like him, I urge people to vote Conservative in city council elections this week, because on the one side we have self-interest, and on the other the principles of public office. Those principles are very clear: council leaders should, like all of us, be upholding integrity, accountability and honesty in public office.
The people of Norwich deserve higher standards of integrity from the leader of our council, rather than a strong smell of self-interest and personal gain. The thousands of people in Norwich on the housing waiting list deserve better. People across the country deserve better than a watered-down pay to stay that could allow local weakness to stand in the way of right and wrong. I urge hon. Members to join me in opposing Lords amendment 54, and to uphold the right thing to do by asking those who are better off to pay accordingly.
Mr Lammy
I am grateful to you, Madam Deputy Speaker, for calling me to speak, because I know that many other Members wish to. I will therefore not take any interventions.
The Government’s own figures show that rough sleeping has increased by 30% over the past year, and it has almost doubled since they came to power back in 2010. The Mayor of London promised to tackle homelessness in the capital, but it has doubled over his period in City Hall. The Combined Homelessness and Information Network found that there are 7,500 rough sleepers on London’s streets alone. Councils are spending a staggering £623,000 every single day on temporary bed and breakfast accommodation just to put a roof over the heads of vulnerable families. That equates to £227.5 million last year, a rise of over £60 million on the previous year. The overwhelming majority of that money—some £176 million —was spent in London; 10% of the total figure—some £20 million—was spent in my home borough, the London borough of Haringey.
We have heard from my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), who chairs the Public Accounts Committee, which has looked into the extension of the right to buy. Its report makes sobering reading. The Government have not published a proper impact assessment on the full extent of the right to buy. In fact, my hon. Friend said:
“The Government should be embarrassed by the findings of this Report.”
I could not agree more.
I ask the Government why they are planning to push through changes that would reduce social housing stock by 370,000 by 2020. That figure is not from the Labour party; it is from the Chartered Institute of Housing. Why are they proposing to push that through? They are stretching councils to breaking point but are not even prepared to publish an impact assessment. Homelessness will increase and more families will end up in temporary accommodation. More families on low incomes will be reliant on the private rented sector. Of course, if they are reliant on the private rented sector, who will pick up the bill for that? We the taxpayers will, because housing benefit will increase.
Ms Buck
Does my right hon. Friend also recognise that there is a phenomenon known as “right to buy to let”, which has seen, for example, ex-council flats on the Amberley estate in my constituency, which would have been rented for £140 a week under the council, now being rented for £690 a week? In some cases, they are used to place homeless families in temporary accommodation. Is that not a phenomenal waste of resources?
Mr Lammy
It is a phenomenal waste of resources. Usually, although we play party politics and there are dividing lines, there are issues on which there is some agreement. But here we have a Bill that offers a discount to those who can be earning up to £77,000, and there is already a discount for right to buy. The housing benefit bill is bound to go up. How is that a sensible Conservative policy? That is what I would like the Minister to explain. On what analysis is that fiscally sensible? It does not feel fiscally sensible to me to introduce a set of policies that will not only run a coach and horses through our housing policy, but actually cost the taxpayer more in the long run.
That is all in addition to the issues of social exclusion and, I believe, social cohesion that will inevitably follow in parts of London. It has been said before that what we are seeing in London—this Bill will make this worse—is a move towards what we see in Paris, with an inner sanctum that is very well off, surrounded by an outer banlieue where people who are very poor move when they are increasingly pushed out. We should commit to having a balanced situation. Of course we want to help people on to the housing ladder, but surely we do not want to drive the very poorest into some of the most squalid housing in the city and then ask taxpayers to subsidise it.
Ben Howlett
I will try to be a little more sober in my approach to this debate. It is a privilege to be able to speak in favour of the Bill. As Members across the House will know, I have raised my concerns about the high cost of housing in my constituency and other high-value areas on multiple occasions, and I have been supportive of the Government’s plans to build 400,000 affordable homes by 2020-21. Starter homes will make a massive impact in the west of England, enabling young families—and indeed families who are not young—to get on the property ladder. I think that is an incredibly important story to tell. I join other Members across the House who have talked about the importance of the housing debate, not just in London, but in other high-value areas throughout the UK.
I am fortunate enough to have got myself on the property ladder a little bit younger than the average age, aged 29, but that was only because my other half and I were able to combine our earnings in order to afford a two-bedroom house worth £450,000. I have a huge amount of respect for the hon. Member for City of Durham (Dr Blackman-Woods), and not just because I went to Durham University and one of the first elections I campaigned in was in her constituency—sadly, we did not win, but we did get rid of those Liberal Democrats, as we managed to do in Bath as well. But I take umbrage with the Labour party on this point, because if a two-bedroom home that costs £450,000 is good enough not to do anything, frankly, I do not think that is an argument that will wash very well with her constituents; it certainly would not wash with any of our constituents.
I am confident that the Bill, which we have now been debating for months, will go some way towards helping Bath residents access the housing ladder. During an earlier stage of our consideration of the Bill I joined several other Government Members, as the Minister has said, in calling for more to be done to increase the amount of affordable housing in high-value areas outside the capital, including Oxford, Winchester, Truro and Bath. Those are all beautiful places, so it is understandable that demand for houses there is very high. In such areas it is often young, aspiring homeowners who do not have the chance to buy, especially when they do not have the financial support of a relative. I do not want those groups to be put off moving to those areas and ultimately staying there, simply because they could not find a deposit. That has a major impact on economies outside London that are desperate for houses to be built to ensure they have the workers to maintain their economic growth. The west of England has increased its growth rate substantially over the past five years, as a result of the Government’s economic policies, but without housing integrated into the equation, we cannot maintain that.
I thank the Minister for taking the time to meet fellow MPs to discuss this issue and for taking our views into consideration. I agree with him that one answer to the problem is to increase the housing stock in higher-value areas. After talks with him, I am pleased to see the Government amendment changing “higher” to “high”, which will allow them the flexibility to ensure that areas with the highest-value housing are not unfairly impacted. That will have a major impact on the flexibility local authorities have to deliver more homes. I am also pleased that the Government have listened to our concerns and ensured that for every home a local authority agrees to sell, at least one new affordable home will be provided. Such measures will increase our housing stock and allow more young people to access the housing ladder. It also suggests that the Minister has listened to the concerns of the past and produced sensible proposals to ensure that housing is built rather than lost.
I applaud the Government for taking those important steps, but they will not, sadly, increase the housing stock in Bath, where the local authority has already taken steps to sell vacant high-value housing, having sold off a lot of homes for social housing. I therefore welcome what the Minister said earlier and call on Bath and North East Somerset Council to work with fellow councils, such as Wiltshire, Somerset and South Gloucestershire, to bid for the £1.2 billion and other funds available to deliver more homes for our areas. I look forward to working with the Minister, I hope, to see how our authority can put that into practice.
Bob Blackman
Is not one problem in this debate that a property will be sold for a certain value—the open-market value less the discount—but that the cost of building a home is normally much less? That great benefit could be used for new housing.
Ben Howlett
I completely agree. The sale of one high-value asset in a high-value area, such as Oxford, could enable more than just one new home to be built, because it costs a lot less to build, particularly given the current style of building adopted in some cities to keep up with demand. That is learning the lessons of the problems in the 1980s when these things were not taken into consideration, and it is thus another reason to back the Government’s proposals and not to listen to the wrecking amendments from the Lords.
I look forward to the housing revolution by 2020, and I hope that the House will reject the wrecking amendments from the House of Lords and back the Government on this vital Bill.
Tom Brake
I am a member of Sutton Housing Society Ltd, although I have no pecuniary interest.
I will start where the Chair of the Communities and Local Government Committee finished, on the issue of supply. The Bill should be about supply in the widest sense, but while I do not doubt that Ministers are seeking to solve housing problems for some, I am afraid that the Bill will do nothing for the people I see regularly in my constituency surgeries. Nothing in it will help the single mother I referred to earlier, living and working in London on £17,000 a year and seeking a better private rented property or social housing through a housing association. Nor will it help the couple I saw a few months ago in a two-bedroom flat with three children, who could not afford the rent in a housing association property, let alone afford to buy in London.
We have heard about the Khan amendments, but perhaps I could throw in the Caroline Pidgeon amendments, which unfortunately do not feature in any of the strings today. The advantage of her proposal for London is that it includes a revenue stream of £2 billion to deliver the housing. Many have said they will deliver housing, but in practice we are still hundreds of thousands of properties short.
The Bill has been subject to an extraordinary number of amendments and no fewer than 13 Government defeats in the Lords, which is testimony to the fact that the Bill was presented to the House lacking a huge amount of detail and clarity. I thought we might get some here but that has not, I am afraid, been the case. The Bill contains provisions that will have extremely concerning consequences for housing in the UK and affordable housing in particular, and the fact that there has been such united cross-party opposition to the Bill in the Lords, including from Cross Benchers, indicates the depth of concern.
The Bill’s focus is on home ownership for better-off renters, but it neglects affordable homes to rent and clearly seeks to reduce the number of social homes provided by local authorities. As Opposition Members have said, the impact will undoubtedly be a rise in homelessness. Furthermore, far too much is being imposed on local authorities, in terms of sales of higher-value council homes, pay to stay and secure tenancies. It is encouraging, however, that the Government have taken on board some of the serious concerns and made concessions in relation to amendments 26 to 36, on abandonment, and amendments 90 and 91, on mandatory electrical safety checks for private tenants. Those are welcome.
I also welcome the Government’s recent inclusion in the Bill of a commitment to replace all homes sold off under the sale of higher-value properties. Replacements are critical to whether the Bill will have a devastating impact on social housing. In the past, promises of replacement have been made but not delivered, and as several Members have mentioned, it is critical that the replacement is like for like, in terms of the type of property, and in the same area.
In London, pay to stay is of particular concern. Some Members might be aware of a report by the Joseph Rowntree Foundation in 2014 that found that a family of two adults and two children needed an income of £40,000 to have an acceptable standard of living. That was an average across the whole country. Given that that was two years ago and an average for the country as a whole, it is clear that families on £40,000 in London would not be wealthy. I hope that the Government will look favourably on amendment 57, which would raise the threshold by £10,000 and might actually get people up to an acceptable standard of living before their income is reduced by rising rents in their social property. In addition, I will certainly support amendment 55, if it is pressed to a vote, and amendment 54. If they are pressed, I will also support amendments 9 and 47, which were debated earlier.
With that and within your five-minute margin, Madam Deputy Speaker, I will sit down.
James Cartlidge
I start by declaring my housing interests in the Register of Members’ Financial Interests. They include a significant involvement in shared ownership, which it is almost impossible not to speak about in such a debate.
I want to focus on starter homes, on how they interact with other affordable home ownership products and, more importantly, on how they will affect my constituents. I am intrigued by the idea, in amendment 1, that someone would repay the 20% discount over 20 years. It is unclear how it would work in practice—I apologise for not having studied the Lords Hansard for a lengthy explanation. Would the money be repaid on the sale of the property only, or would it be a credit agreement repaid annually? If, on the sale of a property, someone’s circumstances had worsened or they were unemployed—people sell their properties when their circumstances change—would they still have to repay the equity discount from which they had benefited? We must remember that whenever we add complexity to a home ownership product, lenders do not like it and are less likely to be involved. I make that impartial observation as a former mortgage broker.
My other point about amendment 1 is that we must remember that it is relatively unprecedented in affordable home ownership products to have repayment of the subsidy from which the homeowner has benefited. With shared ownership, grant is implicit, but when someone sells their share, they do not repay the part that came from the Government grant. They have become a homeowner, and they benefit or otherwise from the increase in the value of the share.
Helen Hayes (Dulwich and West Norwood) (Lab)
I congratulate their Lordships on their meticulous and effective scrutiny of the Housing and Planning Bill and on their staunch opposition to many of its most damaging provisions. Having heard the Government response, I see that what remains is an ideological commitment to the undermining of social and genuinely affordable housing, which flies in the face of evidence from across the housing sector; and a package of measures that will fail to deliver for my constituents and for people across the country the solutions to the housing crisis that they so desperately need.
There is a universal consensus that starter homes will be out of reach for people on median incomes in most areas of the country, and particularly in London, and that the very strong obligations on councils to deliver starter homes will undermine their ability both to deliver genuinely affordable homes and to meet local housing needs. Councils will see their waiting lists grow, while scarce valuable land will be used up delivering homes that very few can afford. Home ownership will not grow in the way that Members on both sides of the House would like to see it grow, while too many people are spending too high a proportion of their income on rent and letting agents fees in the private sector to be able to save for a deposit.
It is therefore extremely disappointing that the Government are refusing to accept Lords amendment 9, which would allow councils to decide how many starter homes are built, based on their own assessment of local housing need. It is astonishing that in their ideological commitment to starter homes, the Government are prepared to override the detailed local knowledge of councils and their ability to respond best to what their local communities need.
It is also disappointing that the Government are refusing to accept Lords amendment 47, which would allow councils to retain the receipts from the forced sale of higher value council homes to provide new homes of a tenure that is in demand locally. Without this amendment, there is no guarantee that homes built to replace those sold under right to buy or forced sale will be of the same tenure, or indeed in the same area, and this will have a devastating impact on the social mix and economy of London in particular, and in many other areas.
The abolition of secure tenancies is deeply concerning. I welcome the extension of the maximum length of a social tenancy from five years to 10, and the introduction of some protection for families with children, but I continue to question the principle of the abolition of secure tenancies. People on lower incomes aspire just as much to a secure home as those who can afford to raise a mortgage. I remain concerned that fixed-term tenancies of 10 years simply postpone the anxiety that will surround the ending of the tenancy.
A tenancy review for families with grown-up children presents the very real prospect that adult children may no longer be accepted as a legitimate part of the household for any new tenancy for the purposes of a housing needs assessment. Where would our young adults go then? It would be far better if the Government accepted the benefits of secure tenancies for families and communities, and removed this damaging measure from the Bill.
I remain concerned about the pay-to-stay provisions, which are a further attack on hard-working tenants—a tax on aspiration and achievement. I recently heard from a constituent who had lived with her partner and children in a council home for 14 years. She wrote:
“You see, our joint income for 2015-2016 is estimated to be £38,000. That’s with me working part time and my partner working full time. I intend to work full time from September 2016. If I do then our income will be over £40,000—the government have decided I will have to pay market value rent. I’m sickened at the idea of having to move as there is no way we can pay that level of rent. We don’t have any savings so we are in no position to even contemplate getting a mortgage.”
How can the Government justify legislation that will have such perverse and damaging consequences?
Let me turn now to the elephant in the room. The single biggest cause of homelessness is now the ending of a private tenancy, yet this Bill does absolutely nothing to improve either security of tenure or affordability for the millions of people living in the private rented sector. I have been contacted by 50 constituents since the beginning of January—more than two a week—who are facing homelessness, the vast majority of them in the private rented sector. Residents whose private tenancy comes to an end are increasingly ending up in temporary accommodation at great financial cost to the public sector and great personal cost to the residents and their children, who often end up a long way from their children’s schools, in overcrowded accommodation, too often sharing kitchens and bathrooms with strangers.
In the London Borough of Lambeth alone, there are 5,000 children living in temporary accommodation—more than in the entire city of Birmingham in a single London borough. The Housing and Planning Bill entirely ignores the plight of these families. It will make it harder for them to access a genuinely affordable home to rent; impossible for them to access a secure tenancy; and offers no hope that their family’s next private tenancy will have any more security than the last. How can the Government introduce major housing legislation that ignores the single biggest cause of homelessness?
The housing crisis has become all-pervading. It is already affecting London’s public services, with schools and the NHS finding it difficult to recruit suitably qualified and experienced staff, and it is affecting London’s economy, as the workforce our city needs cannot afford to live here. This Bill will make the situation worse.
We are debating this Bill during a week when Londoners will vote for our next Mayor. We need a Mayor who will stand up for Londoners who are unable to afford a secure home to rent or to buy. We need a Mayor who will make good use of publicly owned land to deliver genuinely affordable homes. We need a Mayor who will stand up for Londoners against a Government who are determined to divide our city, undermine our diversity and make it a place where only the wealthy can afford to live. I look forward to seeing my right hon. Friend the Member for Tooting (Sadiq Khan) doing just that in two days’ time.
Kevin Hollinrake
Opposition Members have made the point that starter homes will be built, rather than affordable homes to rent. That is, of course, true to some extent, because people want to buy homes and people on lower incomes have been excluded from the housing market for too long. We have been building an average of 50,000 affordable homes to rent for the last 20 years. Why have we not been building more affordable houses for sale, if that is what people want? Given that we have 20 years of catching up to do, it is absolutely right for the Government to set the ambitious target of building 200,000 starter homes over the next four years.
The hon. Member for Dulwich and West Norwood (Helen Hayes) gave the example of someone who will have earned £40,000 by the end of this year and is living in an affordable rented property. The average price of a London home for a first-time buyer is £250,000. I believe that, under this policy, a starter home in London could be built for about £200,000. The information provided by Shelter about the unaffordability of starter homes in most local authority areas is flawed, or deliberately misleading, because it is based on the median house price. First-time buyers buy at around 25% below the median house price, and in my area, the average house price is about £200,000.
Kevin Hollinrake
I am not aware of the figures to which the right hon. Gentleman has referred, but, according to the Council of Mortgage Lenders, the average house price for first-time buyers in Greater London is £250,000. In my area the average house price is more than £200,000, but we have some very nice villages in which the average is £300,000. First-time buyers will pay about £150,000, and will move a few miles away from those nice villages to buy in a more affordable area. If they can buy at 20% below that value, they will pay £120,000. Bringing property for home ownership within the reach of many more people is absolutely the right thing to do, and this policy is clearly very popular with first-time buyers.
Victoria Borwick
Will my hon. Friend join me in welcoming the fact that, over the last eight years, the current Mayor of London has built more than 100,000 affordable homes? Moreover, the public land database established by the London Land Commission, supported by the Chancellor, will reveal that there is space for another 400,000 homes on brownfield sites. It will show that not only the Transport for London land that was mentioned earlier by my hon. Friend the Member for Harrow East (Bob Blackman) but other public land will be publicly available to enable the next Mayor—who we hope will be my hon. Friend the Member for Richmond Park (Zac Goldsmith)—to deal with the housing crisis.
Kevin Hollinrake
I welcome the building of properties for all tenures, because lack of supply is at the heart of the big issues that affect the housing market.
This policy is also popular with local residents. If there are to be new developments in their areas, they want to see properties that local people can afford. There is a feeling that people in affordable properties for rent may have no connection with the area. People who buy affordable homes are much more likely to have that local connection and commitment, so I welcome the Government’s proposals.
Of course we need to ensure that properties are delivered for all types of tenure, and I am convinced that that will happen. The Government are consulting on the proposal that about 20% of a development of 10 units or more should be for starter homes. The average number of affordable homes on a site is more like 35%, so there will be room for affordable homes to rent as well. It will clearly not be possible to achieve the 20% target in some cases for reasons of viability or because other kinds of development have been allowed, so I hope the Government will consider whether allowing a percentage of the affordable homes on that development to be starter homes might be more appropriate, but we certainly want to increase the number of properties being built. I believe that that objective is at the heart of the Bill, and I shall enjoy walking through the Lobbies this evening to support the Government.
Catherine West
It is a pleasure to follow the hon. Member for Thirsk and Malton (Kevin Hollinrake).
I shall be brief, because I know that the hour of the vote is upon us, but I could not resist speaking. Since I was elected a year ago, 1,300 people have come to my advice surgery or have contacted me, and 60% of complaints have been about housing. People have wanted to get on to the housing ladder, have been party to unsatisfactory private rental agreements, or have desperately needed a social home.
It is great that so many London Members have spoken today. Many of us look forward to a wonderful result on Thursday and a more positive approach to housing in London. I am sorry to say that, when it comes to housing for people on ordinary incomes, the record of the current Mayor of London has been pathetic. As a council leader—I must declare an interest as a vice-president of the Local Government Association—I was involved in a number of rows with him. When the council said, “This must be 50% genuinely affordable,” he changed the definition of affordable homes to 80% of the market rate which, in inner London, is utterly unaffordable for the average worker. He also called in applications proactively. When we had agreed with developers about 50% affordability, he turned the application on its head and gave in to the developers. We need a Mayor who will stand up for Londoners and hold developers’ feet to the fire. We need a Mayor who will do the opposite of what was done then and call in developments when councils are not providing enough affordable property.
Let me say a little about the private rented sector. This is not just a London issue, because 4 million families in the country are now renting private property. This is not just a minority interest for London Members; the problem exists across the board. The insecurity that families in the private rented sector feel must be taken much more seriously. It is a crying shame that, notwithstanding all the parliamentary time that we have had in which to debate this matter, and despite all the thinking that has been done in the House of Lords and here in the House of Commons, we have come up with no more than paltry recommendations for an unfair housing sector in which rents go up at the drop of a hat, agents can charge ridiculous fees just to photocopy a rental agreement, and people regularly have to change schools and GPs, which involves a massive cost. In the previous Parliament, housing benefit cost us £60 billion, which could have been spent on building more affordable homes. Why do we think that housing is such a wonderful investment for the private sector? Because of the returns. An investment of £100,000 returns that money after 10 years. It is an excellent investment, which is why housing is so expensive.
I see that you are restless for the vote, Madam Deputy Speaker, so let me end by saying that we must have some leadership from the Government on social housing. There are virtually no proposals, apart from that on starter homes, for the active promotion of high-quality communities with a mix of social homes, private homes, starter homes and key worker homes. We need to be able to take an active interest in how we shape our communities and neighbourhoods so that they are genuinely mixed, rather than being the ghettoes that proposals of this kind could potentially create.
Chris Philp
I draw colleagues’ attention to my entry in the Register of Members’ Financial Interests.
Let me start by responding to a point made by the hon. Member for City of Durham (Dr Blackman-Woods). She referred to the Government’s house building record; let me tell the House that it is a fine one. In the last year of the previous Labour Government, only 125,000 units were started. Last year, that figure had increased to 165,000 units, so this Government have a record they can be proud of when it comes to building new homes.
The hon. Lady and the Chair of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), also talked about the need to increase supply more generally, and we on this side of the House wholeheartedly agree with that. There is much in the Bill with which their lordships have thankfully chosen not to disagree that will increase supply, including local development orders, the requirement to have local plans in place by 2017 and the work of the London Land Commission. There is a huge amount in the Bill that will increase supply, which Opposition Members have asked for.
I want to say a word in support of starter homes. We know that 86% of the citizens of this country aspire to own their own home, and starter homes will help them to do that. By owning their own home, they will benefit economically as house values go up and they pay down their mortgages, and social benefits will accrue as well. We have heard a lot from Opposition Members about the importance of settled and rooted communities. What better way is there of having a settled and well-established community than by ensuring that it is a community of people who own their own homes?
Opposition Members also talked about affordability, speaking about the ceiling of £450,000 in London and £250,000 outside the capital. That is a ceiling; it is a maximum. My borough, the London Borough of Croydon, is the largest borough by population. The average starter home there will cost £190,000. That means that, with Help to Buy, a deposit of £10,000 will secure a home, and a couple earning £22,500 each will be able to afford to service the mortgage on it. In the London Borough of Croydon, starter homes will work.
On the point about increasing the supply of council houses, I must respectfully point out that in the past five years of a Conservative Government, we have built more than were built in 13 years under Labour. I would further point out that under the rules governing the disposal of high-value council houses, one such house will replace every one that is sold outside London, and it will be two for one in London. These measures will actually increase the supply of council housing across London as a whole, so they should be welcomed.
The problem with the amendment relating to the 20 years’ discount is that if someone wants to move from their starter home, they will need to realise its full market value in order to move up the property ladder to their second and then their third home. I believe that we might see regulations that would allow for a sliding scale, perhaps between five and 10 years. Given that the average length of time spent in a property is about seven years, that would make sense.
On the amendment about local authorities being able to circumvent starter home provisions, I must point out that our proposals were part of a national manifesto commitment that was approved by the electorate at the general election, so it is quite right that they should now be implemented nationally. Local issues will be fully accounted for via the 20% discount on the open market value, which will reflect local housing need.
There is more that I could say, but I am sure that we all want to hear from the Minister. I support the Government’s position on the amendments and look forward to supporting them in the Lobby.
Brandon Lewis
With the leave of the House, I shall respond to the debate. I thank all Members who have spoken about such a wide variety of subjects.
I want to make a short speech to outline some important issues. Conservative Members feel strongly that we want to return the Bill to the other place with the clear message that we want more homes to be built, not fewer; more homeowners, not fewer; and progress on increasing our housing supply. Let me put this in context by quoting from our manifesto, which resulted in our being given a mandate at the general election. It stated:
“The chance to own your own home should be available to everyone who works hard…We will…build more homes that people can afford, including 200,000 new Starter Homes…for first-time buyers under the age of 40…We will give more people the chance to own their own home by extending the Right to Buy to tenants of Housing Associations…We will fund the replacement of properties sold under the extended Right to Buy by requiring local authorities to manage their housing assets more efficiently, with the most expensive properties sold off and replaced as they fall vacant.”
That is a direct quote from our election manifesto, and it is a promise to the people of Great Britain that we intend to keep. We also feel strongly that the Houses of Parliament should respect our mandate.
Let us also consider this in the context of the work we have been doing, which the Bill will take further—[Interruption.] The number of new homes delivered in the past year was not as low as it was under the shadow Minister, the right hon. Member for Wentworth and Dearne (John Healey)—he did not find this debate important enough to speak in, other than from a sedentary position—when it was just 88,000. The number of new homes delivered last year was up by 25% on the previous year, thanks to the work that we have done, and 181,000 new homes were built. Housing construction orders have doubled since 2009 and registrations are at their highest level since 2007. In fact, new housing registrations have increased in England more than three times as much as in Labour-run Wales. That gives us a clue about what Labour is doing for housing, and we as a Government are determined to go further.
When the House was asked to give the Bill a Second Reading, it delivered one of the largest majorities in this Session. That is why we believe it is important that we see more progress on delivering on the contract that we now have with the British people, who want more homes that they can afford to buy, as well as an overall increase in supply. The House once again has an opportunity to demonstrate its commitment to helping those who work hard to achieve their dream of home ownership. We are a Government of aspiration and opportunity, and we are getting Britain building again.
We are also a Government who will get our social housing working as efficiently and effectively as possible, not only so that more people can own their own home, but to increase the affordable housing supply overall. We will ensure that one new home is built for every high-value property sold outside London and, thanks to my hon. Friend the Member for Richmond Park (Zac Goldsmith), two will be built for every such home sold in London. That represents real delivery from someone who wants to represent London, with a plan to deliver more homes for London, but we have not seen that from Opposition Members. There is now a guarantee that one affordable home will replace every one sold outside London, and two in London.
We are delivering on our promises and we will continue to deliver on our contract with every person in this country that results from the mandate that they gave us. They gave us a mandate to deliver fair social rents through our first Conservative Budget in 19 years. They also gave us a mandate to deliver the ground-breaking Bill that we are discussing today. I am proud to be here today to enable us to go further with a Bill that will deliver more homes for our country.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I must remind the House that the motion relates exclusively to England. A double majority is therefore required.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I remind the House that the motion relates exclusively to England. A double majority is therefore required.
Mr Deputy Speaker
I must now put the Questions necessary to dispose of the remaining Lords amendments in the group. First, under the Standing Order, I must put the Question on the Lords amendments that relate exclusively to England.
Lords amendments 2 to 8, 11 to 36, 38 to 46, 48 to 53, 56, 59, 60, 88 to 96, 197 to 199 and 215 to 239 agreed to, with Commons financial privilege waived in respect of Lords amendments 38 to 46, 48 to 53, 56 and 91.
Mr Deputy Speaker
I must now put the Question on the remaining Lords amendments that have not been certified.
Lords amendments 61 to 87, 182, 183, 185 to 188, 190, 191, 195, 196 and 200 to 214 agreed to, with Commons financial privilege waived in respect of Lords amendment 185.
Sir Peter Bottomley (Worthing West) (Con)
On a point of order, Mr Deputy Speaker. Lords amendments 92 and 93 were moved by Lord Young of Cookham with the understanding of the Government. Amendment 92 deals, it says, with tenants—in fact, it is leaseholders—and amendment 93 deals with leaseholders in a commonhold agreement. Am I right in saying that they give powers to Government to propose to Parliament statutory instruments, which we can consider separately?
Mr Deputy Speaker
As a man who has been here longer than most, you will know that that is not for the Chair to interpret.
After Clause 128
Neighbourhood right of appeal
Brandon Lewis
I beg to move, That this House disagrees with Lords amendment 97.
Mr Deputy Speaker
With this it will be convenient to consider the following:
Government amendment (a) in lieu of Lords amendment 97.
Lords amendment 100.
Lords amendment 108, and Government motion to disagree.
Lords amendment 109, and Government motion to disagree.
Lords amendment 110, and Government motion to disagree.
Lords amendment 98, 99 and 101 to 107.
Lords amendment 111, and Government amendment (a) thereto.
Lords amendments 112 to 181, 189, 192 to 194 and 240 to 282.
Brandon Lewis
I will try to be brief, but I want to go through a few key areas in this group of amendments. If we are to build more houses, we need to make it as simple as we can to do so, while supporting the key principles of local determination and empowerment. If we are to build new homes so that families and communities can grow, those communities need to be happy that they have a say and a voice. The more red tape there is and the more spanners there are in the system, the more the system grinds to a creaking halt, and we end up in the mess that we are trying to fix—the mess that we inherited.
As we have made clear, decisions on planning applications must be made in accordance with the development plan, unless material considerations indicate otherwise. A neighbourhood plan brought into legal force is part of the development plan and must be the starting point for authorities’ decisions on applications. I want to be very clear that neighbourhood plans have weight in law. I am exceptionally proud of neighbourhood planning, as, I expect, is every Member of this House who has seen their community take the lead in deciding the future development of their area—deciding where new homes and businesses should go, what they should look like and what local infrastructure is needed.
Putting planning power in the hands of local people involves the whole community, from plan drafting to referendum stages. Local support for house building in such areas has doubled, and opposition has halved. I have spoken to people who are excited about the prospect of new homes, schools for their children as they grow older and the opportunity to have their say about how their towns and villages should grow.
Neighbourhood plans are clear evidence of our belief that decisions about community life should be taken by those communities. We can and should trust communities to make those decisions. We do only half our job if neighbourhood plans are there, but in name only. If people have exercised their right to be heard about where new homes should go, and if a group has put time and effort into doing so, I believe it is only right that the local planning authority should take notice, although I am not inclined to support Lords amendment 97 as the best way to achieve that. I am sympathetic to it—of course I am—but even in a limited form, a neighbourhood right of appeal could affect housing supply and reduce confidence in the system.
Neighbourhood plans have weight in law, and I want to make sure that we keep the spirit of the amendment and maintain that confidence. There is no stronger position for a community to hold than to have an up-to-date neighbourhood plan in place. I believe that communities should have the reassurance that, after they have taken the time and effort to get involved, there will be additional safeguards in place to ensure that they are listened to.
Antoinette Sandbach (Eddisbury) (Con)
The Minister will be aware that in a number of areas where neighbourhood plans have been adopted, those plans are repeatedly challenged by developers making planning applications against them. Does the Minister agree that we need to look at that and tighten up the safeguards around neighbourhood planning?
Brandon Lewis
My hon. Friend makes a very good point. She is absolutely right that there have been examples of developers having a go at getting a planning application. That is why it is important that we are very clear that where a neighbourhood plan outlines where housing should be, it should be respected by the local authority. As I said in response to a very similar point, it should also be respected by planning inspectors and by us in the Government.
That is why amendment (a), which I propose to return to the other place in lieu of Lords amendment 97, will ensure that neighbourhood plans are fully taken into account. It will introduce into the Town and Country Planning Act 1990 a requirement for local planning authorities to identify, in their reports to planning committees, how the neighbourhood plan was taken into account in making a recommendation to grant planning permission. They will also be required to identify in the report any points of conflict between their recommendation and the neighbourhood plan. This will ensure absolute transparency in the decision-making process and that the balance of considerations is made clear.
Anne Marie Morris (Newton Abbot) (Con)
The Minister makes an extremely good point. I am pleased that he is introducing such a new clause. However, my concern is that it does not really go far enough. The only redress is to call in the decision, which means that it will not be made by the community, which the Minister has said we should trust. I am very pleased that he is going as far as he is, but if he believes in trusting the community, the original Lords amendment is a much better way to go.
Brandon Lewis
I know that my hon. Friend has campaigned hard and has made her case strongly in the House. However, if a neighbourhood plan is in place, we must trust our elected representatives, who are locally accountable through the local authority, to make the right decisions for their area—ultimately, they are accountable to their area—and to make sure that their decisions are in line with the neighbourhood plan. We intend to make sure that that process is entirely transparent. I should also make it very clear to the House that when we looked at what is happening at the moment, we found that decisions made by local authorities are in line with neighbourhood plans.
Scott Mann
I am grateful to the Minister for giving way because I know he is pressed for time. My issue is not with the local community, but with the planning inspector. May I, in the very strongest terms, ask the Minister to put a rocket up the planning inspectors in order to support local democracy? When neighbourhood plans are voted through in a referendum, they should be respected.
Brandon Lewis
My hon. Friend makes a very good point. I can assure him that I have very recently written to the chief executive of the Planning Inspectorate, and I know that that letter is very clearly in the front of the mind, on the database and under the nose of all planning inspectors, so they are clear that we believe neighbourhood plans should be respected. The amendment (a) that we have tabled will take that even further, but I will continue to work with colleagues to look at how we can go further to ensure that neighbourhood plans get the robust support and programme that they need in the period ahead.
Kit Malthouse (North West Hampshire) (Con)
The Minister is making a powerful point. Last week, he very kindly made that point to three of my constituents from Overton, Whitchurch and Oakley, all of which have neighbourhood plans in place. Does he agree that although greater protection for neighbourhood plans would be very welcome, one of the key building blocks is the five-year land supply? What consideration is he giving to allowing councils greater power to protect their five-year land supply from challenges from developers, so that that can cascade down into greater certainty for neighbourhood plans?
Brandon Lewis
My hon. Friend makes a very good point about the importance of making sure that five-year land supplies are in place, that we are delivering the housing we need and that developers get the message loud and clear that neighbourhood plans will be respected by local authorities, the Planning Inspectorate and the Government.
William Wragg (Hazel Grove) (Con)
Notwithstanding the very welcome amendment (a) in lieu of Lords amendment 97, can the Minister give the House any indication that he is prepared to countenance alternative future measures that might go some way to meeting the Lords amendment?
Brandon Lewis
My hon. Friend has joined colleagues in making it clear that they want us to look at how we can go further to make sure that neighbourhood plans have precedence and that everybody is very clear about central Government’s view that neighbourhood plans should guide planning. I will reflect on that and work with colleagues in the period ahead. We are determined to make sure that the message is that neighbourhood plans are the way for communities to come together, that the time they spend together will be valuable in giving them control and power over planning and that that will have weight in law. I am very happy to continue to do that.
Martin Vickers (Cleethorpes) (Con)
The Minister is making a good case for neighbourhood plans, although I am personally more sympathetic to the amendment, as he well knows from the ten-minute rule Bill I proposed on the subject last year. Does he accept that communities find it difficult to get the resources together to produce a neighbourhood plan and will he consider what additional help might be forthcoming?
Brandon Lewis
I am happy to outline that there is additional help out there. We give money to local areas to do their neighbourhood plans, and to local authorities to support them in that work. We will continue to do that. I am always looking at more ways not just of promoting plans but of making sure that communities have the support that they need, from a wide network, including templates and other work.
We are tight on time, so I will move on. As I said earlier, the Government have listened. Permission in principle is a good example. Thanks to Lords amendment 100 the Bill now states explicitly that permission in principle can be granted only for housing-led development. We are happy to accept that amendment.
We are somewhat unconvinced, however, by amendment 108. It would increase the construction costs for home builders by an average of more than £3,000 on a semi-detached home, and place a regulatory burden of around £200 million a year on the industry. That will have an impact on all home builders—not just the big companies, but the small and medium-sized companies that we are looking to drive and help grow across England. We cannot accept the amendment. It would tip the balance, driving some small home builders out of the industry altogether and making housing development unviable in some areas. We already build some of the most energy-efficient homes in the world as a result of the tough building regulation standards we set in the last Parliament. In fact, there has been a 30% improvement on the standards before 2010, reducing energy bills by around £200 annually.
Brandon Lewis
The right hon. Gentleman might want to reflect on the point I have just made about how we have reduced energy bills with that 30% improvement. We must balance that with the fact that a £3,000 increase in the cost of building a semi-detached home will lead to at least that increase—potentially even more—in the cost of buying one. That will not help home builders, and could slow down house building and make it harder for small businesses to come into the sector.
Rebecca Pow (Taunton Deane) (Con)
Will the Minister assure us that he has given due consideration to our climate change commitments, as energy efficiency in homes really contributes to those?
Brandon Lewis
My hon. Friend makes a very good point. That is why we are so proud of the work that we have done on energy-efficient homes since 2010, raising those standards. But we have to be very clear on certain policy ideas. For example, the reason why we have said no to the reintroduction of zero-carbon homes has been well summed up by the Federation of Master Builders, which represents many of the small builders that we all want to see more of. It said that that policy
“threatened to perpetuate the housing crisis.”
This House should return any amendment that would do that.
Likewise, there are serious and fundamental reasons why amendment 110 is unworkable. I know many of us appreciate how important this issue is, so I will go through why for a few moments. Flood risk is an incredibly important issue, and I fully understand, sympathise with and share the strength of feeling on it. The Government are committed to ensuring that development is safe from flooding, and the delivery of sustainable drainage systems is part of our planning policy, which was strengthened just over one year ago.
Our planning policy and guidance are clear that local councils must consider strict tests that protect people and property from flooding, and that development should not be allowed where those tests are not met. Our approach to avoiding flood risk applies to all sources of flooding, including from surface water and from overloaded sewers and drainage systems, and it sets clear expectations for the use of sustainable drainage.
Rebecca Harris
I very much welcome what the Minister is saying. He will be aware of the problems we have had in Castle Point with surface water drainage, so I am grateful for his guidance to planning authorities. Does he agree that not incorporating Lords amendment 110 will mean that superb companies such as Anglian Water will struggle to deal not just with historical problems but with potential future problems, which could place a heavy burden on bill payers?
Brandon Lewis
I appreciate my hon. Friend’s point; indeed, I appreciate the intention behind Lords amendment 110. The Government are doing some work on this, and are reviewing how the new policy is working.
Brandon Lewis
I will make a little progress, but I will take more interventions later.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Members want to get in, but they will not get in if they keep intervening. They have to choose which they want to do, and I will choose the ones who are not intervening.
Brandon Lewis
Lords amendment 110 seeks to remove an automatic right to connect to the public sewer for surface water, unless a sustainable drainage system forms part of a development and is constructed in accordance with non-statutory technical standards and the planning permission. However, the proposed new clause, as currently drafted, is unnecessary and unworkable. First, it makes the right to connect conditional on complying with the terms of a planning permission that may not actually provide for such a drainage system. That might be because it is not viable or because there are on-site constraints.
Secondly, the new clause presumes that a process exists that determines whether or not a development is permitted to connect to the public sewer, where there is none. Thirdly, making the right to connect conditional on planning permission leaves open a number of issues, including what happens when connections are needed and where there is currently no requirement for planning permission to be obtained at all. That might include situations where water sewerage companies are exercising their statutory obligations to drain an area effectively.
Finally, the new clause, which would increase red tape and barriers to development, has no transitional arrangements and industry, especially smaller house builders, will struggle to respond without time to prepare, leading to delays in house building.
Anne Marie Morris
The Minister is being generous in giving way. I understand his concerns about the current proposal, but he assumes that the authorities will determine that the drainage and infrastructure in place are adequate. I have a number of examples where, in my view and that of the community, that is not the case. If there was a way of appealing those decisions if they are not robust, to say that the draining infrastructure was not appropriate, I would feel much happier with what he is saying.
Brandon Lewis
I appreciate my hon. Friend’s point, but I say again that one of the problems with the proposed new clause is that, as currently drafted, there would sometimes be an issue where there is actually no requirement for planning permission to be obtained in the first place.
Rebecca Pow
I thank the Minister for giving way. I was going to save this point and make a short speech, but I will make my point now. In my constituency of Taunton Deane flooding is a massive issue, and of course the incorporation of SUDS—sustainable drainage systems—would help with wider catchment management, which in future we are all going to have to address, so would it not be sensible to think about doing it now? I do understand his concerns about discouraging house building, because I know that we have to build all these houses.
Brandon Lewis
My hon. Friend make a very good point, as have other colleagues across the Chamber this evening. I am very sympathetic to the points they have raised, which is why we are looking through this review to see how the current system is working, bearing in mind that it came in only a year ago and that it will be reporting back.
There is a theme emerging. I am proposing that this House should disagree with amendments that would increase burdens on house builders, would be unworkable for those building new homes and, like those in the previous group of amendments, would effectively slow the pace at which they can deliver them. That is also why the Government disagree with Lords amendment 109, which seeks to prevent the Secretary of State from using a power in relation to small sites and also in rural areas.
I want to make it clear that we are happy to work with the other place and to address the issues it raises about rural areas through regulations. Regulations will make clear those rural areas where restrictions will not apply. Working with the other place will also allow us to consider how other rural areas can seek exclusion from any restrictions.
Finally, I have read the Hansard reports of the proceedings in the other place, and on many occasions I stood at the Bar to watch them myself. I have missed standing here over the past few weeks talking about the Bill. As you know, Mr Deputy Speaker, we could talk much longer about the Bill, but I will not be tempted to do so this evening. [Interruption.] The hon. Member for Sheffield South East (Mr Betts) tempts me to speak further. I hope that this House will accept my earlier argument. The motions that stand in the name of my right hon. Friend the Secretary of State to agree with the other place mean that homes will be delivered faster as a result, the planning system will run smoother and the way we manage and deliver housing will be faster and fairer.
Dr Blackman-Woods
The first thing I want to say about the planning section of the Bill is that it is a pity that it has not had more resonance in the public realm, because it is bringing about far-reaching changes to the planning system that many local communities should be concerned about. Two issues that I will highlight are the extensive use of permission in principle on brownfield sites and the contracting out of planning services to private providers. Both risk drastically reducing the say that local communities have over what is built in their area and are a further nail in the coffin of the Government’s localist credentials.
Peter Aldous (Waveney) (Con)
I shall speak briefly to Lords amendments 108 on carbon compliance for new homes and Lords amendment 110 on sustainable drainage systems. Both have considerable merit, and I would be inclined to support them both if the Government were not already committed to reviews both matters. It is best to bring in such measures after full consideration of all the evidence, having weighed up and carefully assessed the pros and cons.
An understandable concern with both amendments is that they might have a disproportionate negative impact on smaller buildings. While there is a concern that a carbon compliance standard is an additional regulatory burden that could add to building costs, evidence shows that such a target incentivises innovation, leading to cost reductions and the achievement of its objective of increasing energy efficiency in new buildings.
On sustainable urban drainage systems, I have in mind my own Waveney constituency. As in many places, much new housing is proposed there in the next few years, and it saw devastating flooding of homes last year, caused partially by large new developments that did not have sustainable drainage systems.
I find it significant that Anglian Water, the statutory drainage authority for the area, is backing this amendment. It pointed to the following merits: a reduction in occurrences of surface water flooding; a reduction in the £2 billion cost of flood damage in England each year; the creation of additional drainage capacity that will help to deliver more new homes; lower bills to customers, as SUDS are cheaper than conventional drainage systems; and bringing the system in England in line with the rest of the UK.
I welcome the Government’s reviews of those two issues. The reviews should be wide-ranging, should be conducted in a timely fashion—both should certainly be completed by this time next year—and should be subject to full debate and scrutiny in the House and its Committees.
Mr Betts
I want to say a little about the “alternative provider” clauses and the relevant Lords amendment, which I understand that the Government will be accepting.
I continue to be concerned about what I consider to be a most peculiar form of privatisation. Normally, in cases of privatisation, the council is able to choose the companies or organisations that will provide the service and put that service out to tender. In this case—very peculiarly—the applicant will decide who will conduct the process on behalf of the council and eventually, presumably, supply information and advice to the planning committee. In other words, the council which is ultimately responsible for making the decision—and that, I think, is what the Lords amendments further clarify—will have no role in deciding which organisation will be involved in the process of working with the applicant to decide, eventually, what the recommendation on the application is to be.
There seems to be an idea that suddenly, at the end of the day, a recommendation comes out of thin air. It does not; it results from a very detailed process involving a major application, in which a planning officer and an applicant work through all the details of the scheme. The Bill, however, proposes that that should be done by an alternative provider appointed by the applicant. I think that that is a very strange process, and one that is difficult to justify.
There is also a potential conflict of interests. The alternative provider in one council who advises the planning authority about a scheme could also be a consultant operating directly on behalf of someone in another authority making a very similar application in relation to a very similar scheme, and being paid for doing so. We should be very aware of that possible conflict of interests.
The Lords amendments clearly state that the council—the planning authority—is ultimately responsible for making the decision, and nothing that the alternative provider does should bind the council. I want to know whether, in the context of the pilots, the Minister intends the alternative provider to do all the work and make the recommendation to the planning committee, or whether the alternative provider will make information available to council officers who will independently make a recommendation to the planning committee. I think that that is incredibly important. Will a councillor who receives an application and a recommendation receive the recommendation from a council officer who is independent, on the basis of advice from the alternative provider, or receive it directly from the alternative provider who is appointed by the applicant? That is a fundamental point, which has not been clarified even by the Lords amendments.
Stuart Andrew (Pudsey) (Con)
I want to speak briefly about Lords amendment 97. The issue of planning has been at the forefront of the minds of people in my constituency. I have often said in the past that my constituents felt that planning was something that happened to them rather than something in which they could become involved. I therefore welcome the move towards neighbourhood plans.
Much of this has come about because we have had masses of development on old brownfield sites. That is, of course, a good use of such sites, but we now face the prospect of having to build 70,000 homes over the next 14 years, as that is the target that the city council has set itself. There is a great deal of concern in the constituency that we are going to have to release green-belt land to match that demand.
This has galvanised a lot of local action, and I pay tribute to those involved in the Aireborough neighbourhood development forum and in the Rawdon and Horsforth parish councils who are now working hard to develop local neighbourhood plans. However, their experience in the past has been that the city council can turn down an application on very good grounds, only for it to go to an inspector who will turn it around. Those people want to feel that they have all the necessary support and tools at their disposal to defend their neighbourhood plans. They feel that this is far too often a one-way process.
Helen Hayes
I welcome the Lords amendments that introduce exemptions from permission in principle and clarify the qualifying documents under which permission in principle can be granted. I also welcome the amendments that will allow permission in principle to be overturned on the basis of new information, such as archaeological remains being discovered on a site. I argued for this in the Public Bill Committee.
I am concerned, however, that too many aspects of technical details consent are being left to be set out in regulations. Technical details could include the height or density of a development, open space provisions, design, layout and many other considerations. I maintain, as I did in Committee, that while those details can be informed by technical studies, their substance can often make a fundamental difference to how communities feel about a planning proposal. They are therefore often far closer to matters of principle than the description “technical details” implies. I had hoped that, by this stage, we might have seen some of that detail being set out in the Bill.
I am also concerned by the ability that will be introduced in this legislation to appoint third parties to assess planning applications. This will remove democratic accountability from the assessment of the applications. I welcome the fact that the Government have clarified that councils will be the final decision makers, but important judgments are made during the assessment process, which involves a substantial amount of work. Councils would effectively have to repeat that process to enable proper scrutiny or to unravel that work. A far better solution would be to allow councils to recover the full cost of the development management process from planning application fees, so that they could be properly resourced to carry out this democratic role with full democratic scrutiny and accountability.
Fundamentally, the planning aspects of the Housing and Planning Bill miss the opportunity to set out a positive vision for planning, to engage and involve communities in solving the housing crisis, to strengthen our plan-led system, which is highly valued and highly regarded across the world, and to give communities and homebuilders the certainty they need as we face an unprecedented need to build new homes in this country.
Antoinette Sandbach
I know that the Minister is aware of my constituents’ feelings in the light of an avalanche of applications by developers against adopted neighbourhood plans and an avalanche of objections by developers to emerging neighbourhood plans. I have seen this in Tarporley, in Moulton and in Davenham. My constituents describe themselves as being under siege. In the light of the debate that we have had today, particularly on clause 97, I urge the Minister to take this opportunity to review the planning legislation so that we can have some certainty about the interplay between neighbourhood plans and local plans and provide stronger protections for residents such as mine in Eddisbury. My constituents have put time and effort into creating robust neighbourhood plans that have been passed by inspectors, but they now feel as though they are under siege. We need a full review of the planning process if we are to strengthen local democracy and achieve the localism that everyone in Eddisbury so desperately wants.
Tom Brake
I want to spend a couple of minutes on two amendments. I am disappointed by what the Minister had to say about amendment 108, which he said would cost homebuilders some £3,000. We heard from the Labour Front-Bench team that it might be as little as £1,500, and as builders get used to building homes to high emissions standards, I suspect that the cost will fall further in years to come. Over the lifetime of a property, the savings to its owners will be significant and much greater than £3,000—if that even is the figure. I am therefore disappointed that the Minister is not willing to support amendment 108.
The Minister said that amendment 110, which I will be pressing to a vote, was faulty, but it was not clear whether he was saying that it was defective. If that is the case, the Minister could have amended it in a way that was acceptable to him to ensure that it was not faulty. He has heard the long list of organisations, including the water industry, community groups, and a range of water management experts, that feel that the current arrangements for sustainable drainage systems are inadequate and unsatisfactory. Amendment 110 would ensure that developers provided SUDS to reduce the pressure on existing systems, which we know from the flooding up and down the country cannot cope with current levels of water.
If there is a vote on amendment 108 this evening, I will certainly support it. I will also press amendment 110 to a vote.
Rebecca Pow
I know that we are tight for time. I listened with much interest to what the Minister said about sustainable drainage systems, and I urge him to ensure that the best possible use is made of devices to protect people’s land and to manage surface water, regardless of the size of the development. Having witnessed the consequences of the terrible flooding in Taunton Deane in 2013-14, I am conscious that we must harness every tool in the box to deal with flooding. According to the Met Office, an awful lot more water is coming our way, so we have to be ready.
I am also conscious that Taunton Deane, much like other parts of the country, has seen a massive, rapid increase in house building, which I applaud, because we do need it. I fully support the Government’s proactive house building plan, but I call on the Minister to give due consideration to the water run-off from new houses so that that does not add to the flooding risk. Developers are currently encouraged to install SUDS, but they retain the legal right just to connect new properties directly to the sewerage system, which probably makes more economic sense in many cases. Lords amendment 110 has much support, including from water companies, the Institution of Civil Engineers, the Chartered Institution of Water and Environmental Management, and the Adaptation Sub-Committee of the Committee on Climate Change.
In Somerset and elsewhere, we are required to consider a wider catchment approach to how we address water management and flood prevention. The use of the SUDS will inevitably play its part as time goes on. Both the Environment, Food and Rural Affairs Committee and the Environmental Audit Committee are conducting inquiries into flooding and water management. We await their conclusions with interest, and they will no doubt have many useful things to say. We, as a population, will have to look seriously at holding more water on our land to control the rate at which it rushes into rivers and the rest of the water system.
The Minister has spent a lot of time on this important issue and has considered Lords amendment 110 in detail. I listened to his reasons for not including it in the Bill right now, but I would welcome any future deliberations and review. I would be most willing to work with him on the matter to bring forward the best possible outcomes and to ensure that we encourage our house building programme without exacerbating the risk of flooding or causing unnecessary environmental degradation.
Mr Speaker
If Anne Marie Morris orates briefly, she might almost allow the Minister, with leave of the House, a couple of minutes to reply, although she is not obliged to do so. In this case she has some power over the Minister, but she may only have it once.
Anne Marie Morris
Thank you, Mr Speaker. I will keep my comments brief.
As the Minister knows, I have campaigned for a community right of appeal for many years, and it is now time to consider that issue seriously as there is more and more support for it across the House. The Minister said that the original right of appeal was introduced to redress the balance in favour of the landowner, who was effectively having his freedom taken away. I suggest that the time has come to redress the balance in favour of communities that, in the words of many, are now having development thrust upon them. I hope that the Minister will consider this issue, as it is perfectly possible to introduce a community right of appeal. That is not the same thing as a third-party right of appeal, and I am sure that he could come up with something that would work and not stop the building programme.
In defending his position, the Minister said that the community has a voice through the local authority. I understand where he is coming from, but electing a local authority once every four years is not the same as giving local communities a voice in planning decisions that affect them. It is now time to look seriously at giving the community a real sense of democratic responsibility and accountability. The Minister relies on the local authority to be the arbiter, but in many cases—certainly in my constituency—the local authority is conflicted, and an obligation to write a report will not solve the problem. One of the biggest issues—the Minister knows this, because I have spoken regularly to him about it—concerns infrastructure decisions, because at the moment there is no right of redress if the local authority gets something wrong. That is one of the most significant issues on my desk today.
I understand why the Minister wants to reject the proposal on SUDS, but in my south-west constituency, flooding has been a chronic issue. This is about proper funding as well as planning, and about ensuring that those who make infrastructure decisions understand the issues and are held to account. I cannot think of anybody better to do that than the community.
Brandon Lewis
The debate has summed up just how important the planning system is to many of those who write to us, or who come to see us in our surgeries every week. My hon. Friends have spoken passionately and clearly about the importance of empowering local communities, and all those in my Department who have responsibility for planning understand how deeply a decision about where a new development should go affects those who live or work nearby.
Good planning is about more than just buildings. It is more than just maps, numbers, assessments and forms, and more than calculations about housing need and the ability of our vibrant high streets to deliver local growth. Good planning is about people, and we have heard good things said by good people this evening. Good planning is about seeing past documents and planning applications, and being able to judge the impact of the changing nature of our places on the families and communities that grow up there.
That is why, as my hon. Friends have rightly outlined, neighbourhood planning is so important. It is the future of a community being agreed and designed by that community, and such work must be respected. It is about local people deciding where their children will live when they grow up and leave home. It is about local decisions that affect the future of our schools and our shops. That is why it is so effective and empowering—the ultimate localism. Local support for house building has doubled in the past four years, while opposition to local house building has more than halved. We have empowered more than 1,800 communities to start the process of neighbourhood planning, which we introduced in 2012, and nearly 10 million people in 72% of local authorities are now represented. On average, 89% of people voted yes in their neighbourhood plan referendum.
We are seeing that engagement with the planning system leads to undeniably positive results, which is why I am so passionate about getting right our reforms and our delivery of neighbourhood planning. It is reassuring to hear so many colleagues making their case so passionately to ensure that the voice of their local community is heard and properly represented in the planning system, as that is exactly what neighbourhood planning is about. There is no point in building expectation into the planning system if we then slow it down with red tape and extra bureaucracy. There is no point in getting local authorities to engage properly with local communities if we then prevent building with other red tape and regulations. That is why we have made our points in the debate about drainage and energy-efficiency. It is important that we get this right, that we do the work to get this right, and that we listen to what colleagues have said to make sure that we do just that in the period ahead. We are here to deliver the housing that our country needs.
Mr Speaker
I must remind the House that the motion relates exclusively to England. A double majority is therefore required.
Mr Speaker
I must remind the House that the motion relates exclusively to England and Wales. A double majority is therefore required.
Mr Speaker
I must now put the Questions necessary to dispose of the remaining Lords amendments. First, under the Standing Order, I must put the Question on the remaining Lords amendments that relate exclusively to England.
Lords amendments 100, 98, 99, 101 to 107, 112 to 127 and 240 to 243 agreed to.
Mr Speaker
I must now put the Question on the remaining Lords amendments that relate exclusively to England and Wales.
Lords amendments 128 to 179 and 244 to 282 agreed to.
Mr Speaker
I must now put the Question on the remaining Lords amendments that have not been certified.
Lords amendments 180, 181, 189 and 192 to 194 agreed to.
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 37, 47, 54, 55, 57, 58 and 108 to 110;
That Dr Roberta Blackman-Woods, Andrew Griffiths, Brandon Lewis, Seema Kennedy, Grahame M. Morris and Julian Smith be members of the Committee;
That Brandon Lewis be the Chair of the Committee;
That three be the quorum of the Committee.
That the Committee do withdraw immediately.—(Julian Smith.)
Question agreed to.
Committee to withdraw immediately; reasons to be reported and communicated to the Lords.
Business without Debate
Mr Speaker
The hon. Gentleman is ahead of himself. What a fast-thinking denizen of the House the Comptroller of Her Majesty’s Household, the hon. Member for Croydon Central (Gavin Barwell), is. Why should I expect otherwise from a cerebral Whip?
Closure of Garforth Clinic
Alec Shelbrooke (Elmet and Rothwell) (Con)
I rise to present a petition relating to the closure of Garforth clinic. I have more than 1,000 signatures from my local community, who believe that the Leeds Community Healthcare NHS Trust decision to close the clinic has not been properly thought through.
The petition states:
The petition of residents of Elmet and Rothwell,
Declares that the decision of the Leeds Community Healthcare NHS Trust to close Garforth Clinic removes ease of access to local health services for elderly and disabled patients; further that it removes podiatry, adult dietetics, children’s speech and language therapy, psychological therapies, musculo-skeletal, cardiac and weight management services from Garforth; further that it removes access to a local warfarin clinic for those without personal transportation; further that it highlights a failure to comply with statutory functions of an NHS Trust; further that the Leeds Community Healthcare NHS Trust has failed to identify a sustainable alternative or detail how neighbouring health centres will cope with increased demand; further that the Trust has failed to reference pressure from Leeds City Council’s Core Strategy, which plans to build thousands of additional dwellings around the town; and further that the Trust withdrew from a pre-arranged public meeting with our Member of Parliament and City Councillors at which residents were hoping to explain their personal concerns over the removal of local health services.
The petitioners therefore request that the House of Commons urges the Department of Health to encourage the independent Leeds Community Healthcare NHS Trust to review its decision to close Garforth Clinic; arrange a meeting with residents to answer concerns; and re-consult with patients on the impact that such a closure will have.
And the petitioners remain, etc.
[P001687]
Letting Agent Fees and Deposits: Private Rented Sector
Maria Caulfield (Lewes) (Con)
Thank you, Mr Speaker, for allowing me the opportunity to secure this debate. Tonight, I want to highlight the emerging scandal of letting agent fees. Those are fees charged by letting agents when a tenant takes on a new tenancy, on top of any deposit that needs to be paid to secure a property and in addition to the monthly rent that needs to be paid in advance. In London and the south-east, letting agent fees have rocketed over the last two years as competition for rental properties has grown. Not only has the amount charged by letting agents increased, but there has been an increase in the types of fees charged.
There seems to be a particular problem in London, where competition in the private rented sector is fiercest, but the problem is also now affecting many parts of the south-east, including my own constituency of Lewes. My constituency is only 58.2 miles from London and, despite the poor rail service, which has been the subject of previous Adjournment debates, is still very commutable. After being priced out of the London housing market, many people move to the south coast, so competition for rental properties has soared in my constituency during the past 18 months, and letting agents have put up their fees accordingly.
At this point, I should declare that I am a patron of a local housing charity, Homelink, in Lewes. It provides financial assistance to people struggling to secure a deposit for a home to rent. Homelink has seen a significant increase in local letting agent fees during the past 18 months. As a result, it is having to provide local families with financial support for the fees, as well as help for the deposit. In 2015, Homelink provided over £101,000 in financial assistance to local people to help them to secure a home. Despite that, Homelink has seen key workers, those on a low income and young people priced out of the local property market not because they could not afford the rent, but because they could not afford the fees and the deposit required up front.
To investigate the extent of the problem of lettings agent fees, my local citizens advice bureaux in Seaford and Lewes researched those fees across the constituency. They found that the fees can range from £175 to £922. Such fees are in addition to the average six-week rent deposit required—it is rapidly becoming an eight-week rent deposit—and the month’s rent needed in advance. Using the rent calculator provided by the charity Shelter, which is available on its website, a new tenant wanting to rent a two-bedroom property in Lewes, where the average rent is £1,200 a month, would need to stump up in advance anything from £3,032 to £3,779, depending on the lettings fees charged. Realistically, how many of us could afford that?
The research from the citizens advice bureaux goes further, and makes fascinating reading. They have found that not only do fees vary from £175 to just under £1,000, but that such variations can be found by letting agents on the same high street, with the big national letting agents tending to charge the most, while the small independent agents charge the least. Moreover, the type of fees that a letting agent charges varies greatly. Letting agents often charge a holding fee of about £200 to secure a property.
Alex Chalk (Cheltenham) (Con)
Does my hon. Friend agree that part of the problem is not just the size of the charges, which can be great, but the lack of transparency? They are often levied on the basis of a pretext that is completely unclear and completely unjustified.
Maria Caulfield
I completely agree. I will come on to that specific point in a moment.
The holding fee of about £200 does not always secure a property and is not always refundable. A credit check can amount to about £100. All letting agents charge for drawing up a tenancy agreement, but some charge more for other tenants on the agreement. One tenant who takes out a tenancy agreement may be charged up to £350, but a second tenant may be charged up to £450. Reference checks cost roughly £100, and admin costs usually amount to another £100 to cover phone calls and postage. Some letting agents are making a new charge for an express move. Someone wanting to move into a property within three days will have to pay an extra £100, while to do so within five days costs £50. Letting agents even charge people if they have a pet—this is separate from what the landlord requires—and often charge them £200 to bring a pet with them. If one of the young people in a group who are sharing a property moves out, the person who takes over the sharing arrangement can be charged £300 just to change the name of the sharer in the agreement.
Kevin Hollinrake (Thirsk and Malton) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. My hon. Friend is quite right to raise this subject. There is clearly not a free market for tenants, who follow property rather than choose between letting agents because of fees, so it is an issue that we need to address. However, letting agents rely on these fees for income, and so that income would have to come from somewhere else; it could be added to rent or else come from higher fees for landlords. Agents may also choose to take the most secure tenants and prefer those with good credit histories, rather than take a risk on a tenant with an inferior credit history, because of the risk of having to do the work twice, which would add to their costs. There is a potential issue there, so should we consider a cap rather than abolition?
Maria Caulfield
I completely agree. That will be one of the recommendations I make to the Minister.
Research by the National Union of Students mirrored that undertaken by my local citizens advice bureaux. The NUS surveyed 3,000 students and found that, on average, students pay £887 in fees, going up to more than £1,000 if they rent from an agent online. That shows that the situation in my constituency is being replicated across the country.
There is still one more injustice that tenants have to endure on top—the six-month tenancy regime. Very often, tenants want a longer lease and landlords are happy to give them one. But it is in the letting agent’s interests to keep tenants on a rotating six-month tenancy, because every time that tenancy is renewed the agent charges another £150 to £350. It is a classic opportunity to fleece tenants once again. The renewal of the same lease for the same tenants for the same property just costs the tenants more money. In law, a tenant should be able to ask for a longer lease from their landlord, but letting agents often ensure that that message is not passed on, and so every six months tenants have to pay fees to agents for little more than a new piece of paper.
To go back to the point raised by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), landlords are often none the wiser about the charges that their tenants face. In fact, landlords often pay no fees at all, because they benefit from letting agents who are keen to encourage them to put their properties on their books rather than those of another letting agent. The charges are therefore passed on to the tenant.
What do letting agents actually do to justify their fees? They do a great deal of work. A let-only deal will involve the letting agent assessing a property for rent, submitting the advert, carrying out viewings, doing tenant reference and credit checks, ensuring that tenants have contents insurance, providing tenancy agreements, setting up payments and informing utility companies of any changes. However, does that work really justify charging tenants just under £1,000?
Robert Jenrick (Newark) (Con)
My hon. Friend is making some very important points. Does she appreciate, however, that estate agents are making around 40% of their income from lettings fees, so if we abolish or cap them, those costs will only be passed on to the tenant in a different way, principally through higher rents from the landlord? There are perhaps two answers. She has already alighted on one, which is to try to encourage—not mandate, but encourage—longer tenancies. Secondly, this House should be much more cautious in future about increasing the regulatory burden on landlords, so that letting agents do not have so many items to check off before they can get tenants into properties; I am thinking, for example, of the right to rent changes brought in recently, which put extra costs and burdens on landlords and letting agents.
Maria Caulfield
I thank my hon. Friend for his points. I am sure he will hear some of those suggestions in my recommendations.
The Government have done a tremendous amount to protect tenants and restrict over-exuberant letting agents. Last year, they made it illegal for agents to charge potential tenants to register with them or to charge for providing lists of properties. The Government also changed the law so that agents have to advertise their fees publicly in advance, both online and in their offices; non-compliance is enforceable by local trading standards officers, with a maximum fine of £5,000.
That change is very welcome, but in reality the law is not being followed. Again, my enthusiastic bunch of volunteers at the citizens advice bureaux did a form of mystery shopping locally. They visited 10 letting agents in Lewes and 15 in the town of Seaford. Of those 25, only one had its fees easily and publicly displayed. In practice, then, tenants are none the wiser that there is such a difference in fees between letting agents in the same town.
I therefore have five asks of the Government to ensure further protection for those who find themselves part of generation rent—very often those who cannot afford to buy a property or get a mortgage. First, we should indeed cap letting agent fees, because there can be no justification for the difference in the fees currently charged. Secondly, we should set standards for what can and cannot be charged for. For example, is it right that tenants are charged a holding fee that does not actually hold the property they want and that is not refundable? Thirdly, we should end the practice of charging for tenancy renewal, or at least give greater protection to tenants on short-term lets.
Caroline Ansell (Eastbourne) (Con)
Does my hon. Friend agree that short-term lets of six months are not only hugely costly to tenants in what should be a straightforward renewal—there should also be much more openness about the possibility of having a longer tenancy agreement—but undermine people’s sense of security and their connection to their community?
Maria Caulfield
I agree with my hon. Friend, because tenants have a legal right to ask for longer tenancy agreements, but often that request is not passed on to their landlords.
Fourthly, there should be tougher penalties for not displaying fees, because that is clearly being flouted. I urge that councils should be allowed to keep the money from any fines to encourage them to enforce the law that already exists. Fifthly, we should promote this issue so that tenants are aware that there is a difference between the fees that are charged, often on the same high street for the same properties. I have written about that in my monthly column in the Sussex Express in order to highlight the issue so that tenants are aware and can then make choices for themselves.
In conclusion, letting agent fees have the greatest impact on the young, the poor and those excluded from the housing market. Many letting agents know that these people are desperate to secure somewhere to live and take full advantage by charging exorbitant fees. There is huge competition for housing, particularly in London and the south-east, and if someone refuses to pay these fees there are three or four people behind them in the queue who will. I urge the Government to step in and protect tenants from the scourge of letting agent fees.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
I am grateful to my hon. Friend the Member for Lewes (Maria Caulfield) for securing this debate and giving the House an opportunity to discuss letting agent fees and tenants’ deposits in the private rented sector. The Government are committed to promoting a strong and thriving professional rented sector where good landlords can prosper and hard-working tenants can enjoy decent standards and receive a service that represents value for money for their rent. The vast majority of landlords provide a good service and rent out good-quality, well-managed properties. We know from the English housing survey that 84% of tenants are satisfied with their accommodation and that, on average, tenants stay in a property for four years.
The private rented sector is expanding and is now a major part of the country’s housing stock, providing homes for over 4 million households. We want to see professional buy-to-let and institutional landlords and high-quality and professional letting agents who provide value for money for tenants. We have therefore introduced a range of measures to help drive up standards and improve the quality and management of privately rented housing.
Since 2014, all letting agents and property managers have been required to belong to one of three Government-approved redress schemes, with a penalty of up to £5,000 for those who fail to comply. Where standards do not meet expectations, both tenants and landlords now have an effective and transparent means of raising their concerns. This offers a clear route for both landlords and tenants to pursue complaints by weeding out the cowboys who give agents a bad name, and at the same time we hope to drive up standards for tenants.
Since 2015, letting agents and property managers have also been required to display a full tariff of their fees prominently in their offices and on their websites, and to make clear whether or not they belong to a client money protection scheme, with a fine of up to £5,000 if they fail to comply.
We have introduced legislation, through the Deregulation Act 2015, that prevents landlords and letting agents from evicting a tenant simply for making a legitimate complaint about the condition of the property. They have also been prevented from serving open-ended eviction notices at the start of a tenancy, helping to improve tenant security, which I hope my hon. Friend will agree is an extremely important move. We have also made £12 million available to a number of local authorities to help them crack down on rogue landlords and drive them out of the sector. Results have been impressive, with over 40,000 properties inspected and legal action taken against more than 3,000 landlords to date.
And we are going further. Through the Housing and Planning Bill, we are introducing a package of measures that will enable local authorities to do more to improve standards in the sector and ensure that rogue landlords either are forced to improve or leave the sector. Civil penalties of up to £30,000, which the local authority can retain and use for housing and enforcement purposes, will be levied in the most difficult cases, while a database of rogue landlords and letting agents will allow councils across the country to keep landlords and letting agents convicted of criminal offences firmly on their radar and a target for enforcement action.
My hon. Friend will know that the Government, through the Bill, are introducing banning orders for the most serious and prolific offenders. The measures will also require the repayment of rent where a landlord has illegally evicted a tenant, failed to rectify a potentially serious health or safety hazard or breached a banning order. There will also be a tougher “fit and proper person” test to help ensure that rogue landlords and letting agents are properly vetted before they can manage licensed properties.
The Government are committed to ensuring that where a tenant pays a deposit to their landlord, it will be returned at the end of the tenancy, provided the tenant has complied with the terms of the tenancy agreement. Where a deposit is paid in conjunction with an assured shorthold tenancy, it must be protected by the landlord or agent in one of the Government-approved schemes, and certain information must be sent to the tenant within 30 days of the deposit being received. If a landlord fails to do so, the tenant can initiate legal action and the landlord may have to pay the tenant up to three times the amount of the deposit paid. Tenancy deposit schemes in England have protected over 11.5 million deposits since their launch in 2007 and helped to raise standards in the private rented sector and ensure that tenants are treated fairly at the end of a tenancy.
I am clear that the vast majority of letting agents provide a good service to tenants and landlords and that most fees charged reflect genuine business costs. I do not believe, therefore, that a blanket ban or cap on letting agent fees is the answer to tackling the small minority of rogue letting agents who exploit their customers by imposing inflated fees for their services. Banning or capping letting agent fees would not make renting any cheaper for tenants—tenants would still end up paying but through higher rents—which is why the Government believe that ensuring full transparency is the best approach. This can be done by requiring letting agents to publicise a full tariff of their fees, giving consumers the information they want and supporting the majority of reputable letting agents. Such transparency will help to deter double charging by letting agents and enable both tenants and landlords to shop around, encouraging agents to offer competitive fees.
The evidence from Scotland, where letting agent fees have been banned, strongly suggests a direct relationship between a ban and higher rents. The Association of Residential Letting Agents commented that
“there was strong evidence of a negative fallout in Scotland...agents have gone out of business, some have raised landlords’ fees, some have put up rents”.
In the first quarter after the introduction of the ban, rents in Edinburgh increased by more than 5% and in Aberdeen by over 6%. While a direct link between the abolition of fees and higher rents cannot be proved, these rises are significantly higher than inflation. By comparison, over the same period, the average rent increase across England was just 1%.
Moving on to deal with my hon. Friend’s specific questions, I have probably covered those she asked about the cap. Although we do not believe that a cap on letting agent fees is the right answer, when the requirement on letting agents to publicise their fees was introduced in October 2015, we said that we would review how well the scheme was working after 12 months. I think that is a sensible approach, allowing the new system time to bed in and to demonstrate that it is delivering the expected benefits.
I cannot pre-judge the review or its recommendations, but I am clear that we are not ruling anything out. If we find that the approach is not, in fact, working well, we will consider whether more needs to be done, including looking at the case for taking action on fees. The review will be carried out later this year. In the meantime, the Government’s position is that a ban or cap on letting agent fees would be disproportionate, probably pushing up rents without benefiting either landlords or tenants.
My hon. Friend made a request about having statutory tenancies longer than the usual six or 12-month ones. As I said at the outset, the average tenancy is sustained for a period of four years, and the Government are not currently looking to change that. My hon. Friend will know, I am sure, that the model tenancies brought forward by the Government over the past few years have been extremely successful and have been adopted by many letting agents.
My hon. Friend mentioned tougher penalties. When we look at the review, I am sure that that issue will be considered, too. My hon. Friend knows—she served on the Housing and Planning Bill Committee—that there are significant penalties for rogue landlords and rogue letting agents. Civil penalties of up to £30,000 exist as a deterrent to them, and as my hon. Friend mentioned, that sum can be kept by local authorities to assist them with further enforcement.
I am grateful to my hon. Friend for raising this important issue, and I hope that my response this evening has reassured her that the Government take extremely seriously the issues she has set out for us. Following a review later this year, we will consider whether more needs to be done.
Question put and agreed to.
Ministerial Correction
Defence
(8 years ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Defence Procurement (Mr Philip Dunne)
More broadly for Scotland, our commitment to the successor programme will sustain 6,800 military and civilian jobs there, rising to 8,200 by 2022. As the programme progresses, an additional 270 personnel will be based at Her Majesty’s naval base Clyde. Extending the Typhoon until at least 2040, and upgrading it with the active electronically scanned array radar, will benefit RAF Lossiemouth and continue to benefit Selex ES in Edinburgh. Our new maritime patrol aircraft will be based at RAF Lossiemouth, which is ideally placed for the most common maritime patrol areas and is currently used as a maritime patrol aircraft operating base by our NATO allies. This will also lead to significant investment, and our current estimate is for some 200 extra jobs in Scotland.—[Official Report, 25 April 2016, Vol. 608, c. 1139.]
Letter of correction from Philip Dunne.
An error has been identified at the end of my response.
The correct response should have been:
Mr Dunne
More broadly for Scotland, our commitment to the successor programme will sustain 6,800 military and civilian jobs there, rising to 8,200 by 2022. As the programme progresses, an additional 270 personnel will be based at Her Majesty’s naval base Clyde. Extending the Typhoon until at least 2040, and upgrading it with the active electronically scanned array radar, will benefit RAF Lossiemouth and continue to benefit Selex ES in Edinburgh. Our new maritime patrol aircraft will be based at RAF Lossiemouth, which is ideally placed for the most common maritime patrol areas and is currently used as a maritime patrol aircraft operating base by our NATO allies. This will also lead to significant investment, and our current estimate is for some 400 extra jobs in Scotland.
Divorce proceedings of a UK citizen abroad
Appropriate mental health treatment for Matthew Garnett
Tobacco levy
Investigatory Powers Bill (Fifteenth sitting)
Tuesday 3rd May 2016
(8 years ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 3 May 2016 - (3 May 2016)
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 10 / Noes: 2 - Question accordingly agreed to.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Chair
Before we begin, this sitting is officially due to finish at 5.30 pm, but we will continue until 6.30 pm, at which point there will be a break. The Committee will reconvene at 7 o’clock with Mr Owen in the Chair.
Clause 212
Combination of warrants and authorisations
Question proposed, That the clause stand part of the Bill.
Keir Starmer (Holborn and St Pancras) (Lab)
The clause introduces schedule 8. I seek an assurance for the record from the Minister, but if it is not convenient to deal with this point now, it can be dealt with in some other way. Schedule 8 deals with the supplementary provisions for combined warrants. Having been through it, I think its effect is that any of the conditions necessary for any single warrant will apply notwithstanding that there is a combined warrant—in other words, none of the safeguards is lost by virtue of the combination—and the duration of the shortest warrant will apply. I am pretty sure that that is the intention, but it would be helpful to have that to confirmed for the record, so that we are clear that none of the safeguards is lost when warrants are combined.
The Minister for Security (Mr John Hayes)
With brevity that I know you will welcome, Ms Dorries, I can say that that is certainly so.
Question put and agreed to.
Clause 212 accordingly ordered to stand part of the Bill.
Schedule 8 agreed to.
Clause 213
Payments towards certain compliance costs
Keir Starmer
I beg to move amendment 844, in clause 213, page 165, line 26, leave out subsection (6) and insert—
“(6) The appropriate contribution shall represent the full amount of the relevant costs, subject to any audit process under subsection (4)”.
This amendment would ensure that the Government meets 100% of the compliance costs and that there is full cost recovery for Communication Service Providers (CSPs) implementing the legislation.
It is a pleasure to serve under your chairmanship, Ms Dorries. The amendment speaks for itself, I think. The clause deals with payments towards certain compliance costs and subsection (1) deals with appropriate contributions. As the Committee will know, there has been real concern about what the cost of compliance will be for those called upon to comply and what contribution they will receive toward their relevant costs. The clause allows for “an appropriate contribution”. The amendment would ensure that the Government met 100% of the compliance costs and there was full cost recovery for communication service providers implementing the legislation..
There is concern among providers about what they will be expected to do by way of compliance and what the cost will be. It may be convenient for the Minister to deal with the estimated costs, because £170 million was mentioned at one stage but I am not sure that that is a final figure as far as the Government are concerned.
Mr Hayes
The amendment is designed to ensure that the Government’s commitment to cost recovery for providers is explicitly provided for in the Bill. The hon. and learned Gentleman is right to raise this issue again, reflecting what we heard during the witness session when we debated the issue in part. In his evidence, Mark Hughes said he was aware that
“Under the proposals in the Bill—the Home Secretary has made reference to it—we would recover our costs from the Home Office, as we have done under existing legislation.”
He went on to say that
“the proposed regime is more sensible as long as it is clear that we will recover 100% of our costs.”––[Official Report, Investigatory Powers Public Bill Committee, 24 March 2016; c. 45-46, Q126.]
And I am clear, quoting the Home Secretary, that
“100% of the compliance costs will be met by the Government.”—[Official Report, 15 March 2016; Vol. 607, c. 821.]
The hon. and learned Gentleman asks what that means in practice. The £174 million he mentioned is not a cap, but an estimate. It is dealt with in the impact assessment, and there is no cap in the impact assessment. We will meet costs such as they arise. We are determined to make sure that the Bill works and is not inhibited by any doubts about the cost of its implementation. Clearly, future Governments will inherit this legislation. It is worth emphasising that the current policy has not changed since the passage of the Regulation of Investigatory Powers Act 2000, so it has survived three Governments of different colours or combinations of colours—we used to be more rainbow-like than we are now, which is actually quite welcome, by the way. We are clear that 100% means what it says.
Above and beyond that—the hon. and leaned Gentleman did not ask for this, but I will add it—we need to be clear that the providers are consulted on any changes to the cost model and that they will be able to seek review of any variation to the notice that affects the level of their contribution. To sum up: we have an estimate, not a cap; a determination that 100% means 100%; a willingness to have a proper input into this; and an assurance—which I think is what the hon. and leaned Gentleman really seeks—that the Government will cover the costs so that the Bill does what it should.
Christian Matheson (City of Chester) (Lab)
What a great reassurance it is to see you in the Chair, Ms Dorries. I will be very brief. I welcome the contributions of my hon. and learned Friend the Member for Holborn and St Pancras and the Minister for Security. As Committee members know, I have been banging on about this issue—
Christian Matheson
—rather tediously. The Minister says, “Yes,” but I have to point out that he said it before I said “rather tediously”. I welcome the Minister’s assurance as I have been concerned about communications service provider security since Second Reading. Will the Government consider providing security advice and testing for the smaller communications service providers, in addition to the financial contribution that they are making?
Mr Hayes
I will make only two points in reply to the hon. Gentleman. First, when he describes it as “banging on”, he understates his contribution. I see it more as informed, eloquent and sensible inquiry. Secondly, he is absolutely right that the small providers need to be fully involved at all stages. It may be fair to say that the bigger providers have the mechanisms to implement the requirements for data retention more straightforwardly, so we need to ensure that that does not mean that small providers are in any way disadvantaged. I acknowledge that point, and he is right to make it elegantly. He should never apologise—at least to me—for banging on about anything.
Keir Starmer
I am grateful to the Minister for setting out that assurance for the record. That will reassure those who are concerned about this issue. In those circumstances, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 213 ordered to stand part of the Bill.
Clauses 214 and 215 ordered to stand part of the Bill.
Clause 216
National security notices
Keir Starmer
I beg to move amendment 853, in clause 216, page 166, line 36, after “State”, insert
“following approval by a Judicial Commissioner”.
The Chair
With this it will be convenient to discuss the following:
Amendment 854, in clause 216, page 166, line 41, after “State”, insert “and a Judicial Commissioner”.
Amendments 853 and 854 would require judicial authorisation for national security notices. This would also extend the “double lock” standard that is set in other parts of the Bill.
Amendment 845, in clause 217, page 167, leave out lines 20 and 21 and insert—
“(1) The Secretary of State may, following approval by a Judicial Commissioner that the notice is justified, practicable, necessary and proportionate, give a relevant operator a notice (a ‘technical capability notice’)”.
This amendment would require judicial authorisation for Clause 217 and bring the clause in line with other provisions within the bill that require judicial authorisation.
Amendment 855, in clause 217, page 167, line 20, after “State”, insert
“following approval by a Judicial Commissioner”.
This amendment would require judicial authorisation for technical capability notices. This would also extend the “double lock” standard that is set in other parts of the Bill.
Amendment 852, in clause 220, page 171, leave out lines 1 and 2 and insert—
“(9) The Secretary of State may, after considering the conclusions of the Board and the Commissioner, and with approval of a Judicial Commissioner—”
This amendment would require judicial authorisation for these clauses and bring them in line with other parts of the bill.
Amendment 859, in clause 220, page 171, line 4, at end insert—
“(9A) Any variation made under subsection (9) must be approved by a Judicial Commissioner.”
This amendment would require judicial authorisation for the variation and revocation of national security and technical capability notices. This would also extend the “double lock” standard that is set in other parts of the Bill.
Keir Starmer
The amendments go in pairs: amendments 853 and 854 are to clause 216, amendments 845 and 855 to clause 217 and amendments 852 and 859 to clause 220. They all have the same purpose and intent: to subject the powers in the clauses to the double-lock mechanism—in other words, to involve the judicial commissioners in those powers.
Clause 216 is concerned with national security notices. Subsections (1) and (2) make the power to issue such notices subject only to the test that they be
“necessary in the interests of national security”
and “proportionate”. There is no specific reference to any operational purposes; it is a very broad power. Once a notice is issued, subsection (3) takes effect:
“A national security notice may…require the operator to whom it is given—
(a) to carry out any conduct, including the provision of services or facilities, for the purpose of—
(i) facilitating anything done by an intelligence service under any enactment other than this Act, or
(ii) dealing with an emergency (within the meaning of…the Civil Contingencies Act 2004);
(b) to provide services or facilities for the purpose of assisting an intelligence service to carry out its functions more securely or more effectively.”
The Secretary of State issues a notice; once that notice is issued, the requirement on the operator is very broad. To be fair, subsection (4) makes it clear that a national security notice cannot be used to sideline or cut across a warrant or authorisation that is required under the Act, but the clause does make a very wide-ranging power available to the Secretary of State and it seems subject to pretty well no check, balance or safeguard.
The amendments would subject the procedure to the double-lock mechanism, to ensure that such a notice would go before a judicial commissioner, who would consider whether it was in the interests of national security and proportionate under subsections (1) and (2). The Joint Committee raised concerns about this issue when it looked at the draft Bill, and in particular how the lack of a definition of national security means that the power granted by the clause is very wide indeed.
Joanna Cherry (Edinburgh South West) (SNP)
Does the hon. and learned Gentleman agree that, in the absence of a definition of national security, it is difficult to foresee the kinds of activity or intrusion that obligations under the clause could entail? Is it not therefore providing a blank cheque power to the Government?
Keir Starmer
I agree. This is one of the rare occasions on which the Bill does not set out the procedure for what happens before the Secretary of State considers the exercise of her function. In other areas, we have seen particular requirements for what must be set out in the application and in the warrant—there is a bit more detail. Here, the notice procedure does not include any details of the formalities of the Secretary of State’s consideration or what must be set out in a notice; nor does the Bill provide any safeguard through the judicial commissioners, so not having a definition of national security means that the power is extremely wide and unchecked.
My amendments go only to the process and not to the substance of clause 216, but if they were made, at least a separate pair of eyes would look at the notice and consider whether the test of necessity and proportionality was met. That in itself would be an important safeguard in keeping with the model that runs through the Bill.
The Solicitor General (Robert Buckland)
It is a pleasure to serve again under your chairmanship, Ms Dorries. I have listened carefully to what the hon. and learned Gentleman and others have said about their concerns regarding the provisions, but may I reassure him and put to bed the notion that somehow this is a back door or a blank cheque to allow the authorities to do what they like when it comes to interference with the privacy of individuals? Far from it. I will explain as far as I can the purpose of the type of warrantry, particularly the national security notice, that we are talking about, and indeed the technical proficiency provisions as well.
An example of the type of support that might be required would be the provision of services or facilities to help the intelligence agencies in safeguarding the security of their personnel and operations. A notice might typically require a communications service provider to provide services to support secure communications by the security and intelligence agencies—for example, by arranging for a communication to travel via a particular route in order to improve security. A notice may additionally require the confidential provision of services to the security and intelligence agencies within the communications service providers, such as by maintaining a pool of trusted staff for the management and maintenance of sensitive communications services. I hope that gives the hon. and learned Gentleman some insight into what we are talking about here.
Keir Starmer
I am grateful for that indication, but I am not sure why that is an argument for not subjecting what could be a wide-ranging power to the double-lock mechanism, which has been the preferred safeguard for such powers in the Bill.
The Solicitor General
There are clear reasons for not going down that route. We are talking about the preparatory stage as opposed to the stage of interference with privacy. If the Government’s position was that there was a loophole—a gateway—to allow such interference, the hon. and learned Gentleman’s argument would have real strength, but that is far from the case. This is all about the preparatory stages—the necessary stages that need to be taken by communications service providers before we get to the application for what we all accept is an intrusion.
I am afraid I cannot share with hon. Members their analysis that we need a “now and forever” definition of national security in law. There is a good reason why national security is not defined in statute. Any attempt to define it in the Bill runs a real risk of restricting the ability of this country to respond to constantly evolving and unpredictable threats. It is vital that legislation does not, however unintentionally, constrain the ability of our security and intelligence agencies to protect this country. The examples are all around us: who would have imagined a few years ago cyber-attacks of the nature and on the scale that now threaten us? My concern is that if we try to rigidly define what we mean by national security, we run the risk of defeating the means by which we can keep this country safe.
Joanna Cherry
I hear what the Solicitor General says about the measure only facilitating preparatory steps, but under the terms of clause 218(8) we will never know whether the notices exist or their contents, so we will not be able to know whether we are dealing with preparatory steps or whether they could go beyond that.
The Solicitor General
I have gone as far as I can to explain the types of scenarios that the national security notices would be used for. In essence, they deal with the nuts and bolts rather than the intrusion. If somehow there was a gateway into intrusion, the hon. and learned Lady would be absolutely right, but I assure her that there is not, so the worries that she and other people and organisations have about a blank cheque, while understandable, are unfounded. I can assure her in Committee and I am happy to continue to make the assurance that the function of this type of notice is not intrusion.
Indeed, we have oversight because national security notices will be overseen by the Investigatory Powers Commissioner. The commissioner will have a duty to report at least once a year on what he or she has found and to make recommendations on where improvements can be made. The commissioner will also have the power to report on an ad hoc basis on any issue that he or she considers appropriate.
Keir Starmer
I am listening carefully to the Solicitor General. He says that the notices are not a gateway for preparatory steps to become steps that invade privacy, but where in the Bill is the provision that prevents that happening? The only restriction is subsection (4), which does not achieve that end.
The Solicitor General
With respect, I do not think that is necessary because any agency that sought to use this type of notice in order to get around the double-lock provisions in the Bill would soon come a cropper with the commissioner. That important oversight means that organisations are not operating in a vacuum; they will be held to account if they try to misuse these notices in the way that the hon. and learned Gentleman and others fear.
As I have said, we have the powers of review by the IPC. We also have the provision, pursuant to clause 220(5)(b) and (7), that the Secretary of State must consult the commissioner if a notice is reviewed, and the commissioner will then consider the proportionality of the matter before reporting conclusions to the Secretary of State. We have the checks and balances that the hon. and learned Gentleman rightly wants within the mechanism.
On amendments 853 and 854, I would say this: the role of the Secretary of State in issuing national security notices rightly reflects the responsibility of the Executive in protecting our national security; conversely, the role of the judicial commissioner in approving the issuing of warrants under the Bill reflects the particular and proper sensitivity regarding interference with private communications. We have got the double lock in place to ensure that, before the fact, a senior judge has to be satisfied that any interference with privacy is justified. The Bill explicitly prohibits—this is an important point—the issuing of national security notices for the primary purpose of obtaining private information, and the double lock then applies to the use of the most sensitive powers. We need to focus on the need for the double lock in relation to applications that result in the acquisition of private information. These types of notices do not permit the authorities to do that, so the amendments are unnecessary.
Amendments 845 and 855 deal with technical capability notices. Clause 217 builds on the current power provided for under the Regulation of Investigatory Powers Act 2000, where a company can be obliged to maintain a permanent interception capability in order to ensure that when a warrant is served, a company has the infrastructure in place to give effect to it securely and quickly. Again, any warrant served will have been reviewed by a judicial commissioner; he or she will play an important part in overseeing the operation of technical capability notices and any appeal that may be lodged against them. The commissioner will also be consulted about the making of regulations that will provide more detail about the operation of these types of notices, and those regulations will be put before Parliament for approval. Plenty of the checks and balances that the hon. and learned Member for Holborn and St Pancras, others interested in Bill and I would expect and want to see are here.
I am not persuaded of the need for amendments 852 and 859, because clause 220 already sets out the role of the IPC in the process of review and the actions that the Secretary of State must take in that process. The IPC will be integral to any review, because the Secretary of State must consult the commissioner, who will then consider whether the notice is proportionate. Inevitably, considerable weight will be afforded to the advice of the commissioner. The role of the commissioner provides an opportunity for the person on whom the notice has been served and for the Secretary of State to present evidence. The conclusions of the commissioner will be reported to the Secretary of State and to the person who has made the reference. After consideration of the conclusions, the Secretary of State may decide to confirm the effect of the notice, to change or vary it, or to withdraw it. Until that decision is made, there is no requirement for the person who has referred the notice to comply with the specific obligations under review.
In a nutshell, there are plenty of adequate safeguards to alleviate the concerns expressed by the hon. and learned Gentleman. I urge him to withdraw his amendments.
Keir Starmer
I listened carefully to the Solicitor General, and I am grateful to him for setting out how he envisages the notices operating. The difficulty is that there is a mismatch between what he says is their intended operation, and the safeguards in the clause. For me, subsection (4) does not do what he contends it does.
I am also concerned about clause 217. We will get on to that in more detail in a moment, but it is a wide-ranging clause on the maintenance of technical capability, which again ought to be subject to the double lock.
I apologise to the Committee, but on this occasion I will press the amendments in the group to a vote. In the past, in relation to a number of clauses, I have tested the Committee on the first one, but on this occasion I am not sure that I can do that. I think this will be the only occasion on which I will test the patience of the Committee, but clauses 216 and 217 are conceptually different and do not seem to be run as a group. I am afraid that I will press for a vote—as I say, I will not make a habit of it, and I have not done so before.
Question put, That the amendment be made.
Keir Starmer
I beg to move amendment 846, in clause 217, page 168, line 8, at end insert—
‘(4A) A notice may not impose upon the relevant operator any obligations relating to the removal of electronic protection applied by or on behalf of that operator to any communications or data unless the relevant operator or a person acting on its behalf retains the technical ability to remove the electronic protection from such communications or data.”
This amendment would provide clarity and legal certainty for industry that the Government will not require back doors to be installed into products and services, is not seeking to weaken or restrict the use of encryption and that companies cannot be required to remove encryption if they do not have the means to do so at their disposal.
The Chair
With this it will be convenient to discuss the following:
Amendment 847, in clause 217, page 168, line 16, at end insert—
“(e) persons generally held to be representing users and privacy interests in order to assess the impact of any such Regulations on users.”
This amendment would ensure that privacy protections form an overarching part of the Bill and apply across the full range of investigatory powers afforded to the security services.
Amendment 848, in clause 217, page 168, line 24, leave out subsection (8) and insert—
“(8) A technical capability notice may only be given to persons outside the United Kingdom (and may require things to be done, or not to be done, outside the United Kingdom) where it would not cause the person to act contrary to any laws or restrictions under the law of the country or territory where it is established, for the provision of services.”
This amendment would remove all provisions within the Bill that have extraterritorial reach and undermine the long term objective of creating a long term, international framework for law enforcement to gain access to data held overseas and resolves conflict of laws situations that may otherwise arise by providing the Secretary of State with the power to serve such notices without having to take account of domestic legal obligations to which the recipient is subject.
Amendment 857, in clause 217, page 168, line 30, at end insert—
“(11) A person shall not be liable to have a technical capability notice served on him in accordance with regulations under this section by reason only that he provides, or is proposing to provide, to members of the public a telecommunications service the provision of which is or, as the case may be, will be no more than—
(a) the means by which he provides a service which is not a telecommunications service; or
(b) necessarily incidental to the provision by him of a service which is not a telecommunications service.”
This amendment would exclude (under powers in RIPA section 11(4)) those services that have a communications element, but are primarily not a communication service. This limits the very broad range of “telecommunication services” that could be required to build a technical capability under this Part.
Amendment 849, in clause 218, page 168, leave out lines 37 and 38, and insert—
“(3) Before giving a relevant notice, the Secretary of State must provide evidence that the notice is justified, necessary practicable and proportionate, having, among other matters, taken into account—”
Amendment 850, in clause 218, page 168, line 45, at end insert—
“(f) the effect on the privacy and human rights of people in the United Kingdom and outside the United Kingdom”
Amendments 848 to 850 would make explicit the requirement on the Home Secretary to justify the use of a power as intrusive as a technical capability notice. It will also require the Home Secretary to take account of the full effects of such a notice, particularly on people and companies based overseas.
Amendment 858, in clause 218, page 169, line 7, leave out—
“A technical capability notice may be given to a person outside the United Kingdom”
and insert—
“Where a technical capability notice is to be given to a person outside the United Kingdom, the notice shall be served at that person’s principal office outside the United Kingdom where it is established, for the provision of services. Where it is considered unfeasible or inappropriate in the circumstances”
This amendment would require that a UK agency would only serve a notice on an overseas entity that is capable of providing assistance under the warrant.
Keir Starmer
This important clause is causing a great deal of concern to operators that may be called upon to comply with a notice. The clause provides for a power to be vested in the Secretary of State to give a relevant operator a technical capability notice
“imposing on the relevant operator any applicable obligations specified in the notice,”
and
“requiring the person to take all the steps specified in the notice for the purpose of complying with those obligations”.
That is a very wide power, and the concern is about the extent of it. In a moment, I will refer to the code of practice, which sets out some of the capabilities that might be required.
It is clear that the power includes taking steps relating to encryption. I say that for two reasons. Subsection (4) lists in paragraphs (a) to (e) the obligations that may be specified in regulations. They include obligations
“to provide facilities or services of a specified description”
and obligations relating to
“apparatus owned or operated by a relevant operator”
or to
“the removal by a relevant operator of electronic protection applied by or on behalf of that operator to any communications or data”.
That is clearly veering into encryption. Obligations may also relate to
“the security of any postal or telecommunications services provided by a relevant operator”
or
“the handling or disclosure of any information.”
If one reads ahead, clause 218(4) deals with further provisions on notices under clauses 216 and 217, stating:
“Where the relevant notice would impose any obligations relating to the removal by a person of electronic protection applied by or on behalf of that person to any communications or data, in complying with subsection (3) the Secretary of State must in particular take into account the technical feasibility, and likely cost, of complying with those obligations.”
The concern of many who might be called upon to comply with the obligations is about the wide-ranging nature of the power.
This also goes deep into the debate about encryption. It is absolutely clear that a notice could require protection to be removed, and the clause envisages that being the case. That becomes clearer when one reads the “Interception of Communications” draft code of practice from chapter 8 onwards. If one reads paragraphs 8.1 to 8.94, one sees what is in fact a power that allows the Secretary of State, through this mechanism, effectively to take control of a capability of a service provider. Paragraph 8.1 states:
“The purpose of maintaining a technical capability is to ensure that, when a warrant is served, companies can give effect to it securely and quickly. Small companies (with under 10,000 users) will not be obligated to provide a permanent technical capability”.
Paragraph 8.3 then lists the wide range of obligations that can be imposed in a notice under this clause.
Paragraph 8.4 of the draft code states:
“An obligation placed on a CSP to remove encryption only relates to electronic protections that the company has itself applied to the intercepted communications (and secondary data), or where those protections have been placed on behalf of that CSP, and not to encryption applied by any other party.”
That is very important provision, which I think I am right to say was clarified as a result of a recommendation from prelegislative scrutiny. The difficulty—I am anticipating the discussion we are about to have—is that this crucial issue is dealt with in the code of practice and not in the Bill. The concern expressed in the evidence given to the various prelegislative bodies and to the Committee was that companies will be obliged to remove the protections in their own systems. Paragraph 8.4 is of some comfort to them because it makes it clear that the obligation would only relate
“to electronic protections that the company has itself applied”
and not to other encryption—but the real problem is that paragraph 8.4 is in the code of practice and not in the Bill. That needs to be rectified. We cannot leave something as important as that in the code of practice. It goes to the heart of the power in the clause. It is far and away the biggest cause for concern among CSPs, yet it is not dealt with in the Bill. The Bill provides for a permissive, rather than a restrictive, regime—if I am wrong about that, I will happily take an intervention.
Paragraph 8.6 of the code of practice clarifies that:
“While an obligation to remove encryption may only relate to protections applied by or on behalf of the company…there will also be circumstances where a CSP removes encryption from communications for their own business reasons. Where this is the case, an intercepting agency will also require the CSP, where applicable and when served with a warrant, to provide those communications in an intelligible form.”
The code then makes provision for giving a notice, for the disclosure of technical capability notices, and for their review and variation. Paragraph 8.27 and 8.28 are very wide-ranging. Paragraph 8.28 states:
“CSPs subject to a technical capability notice must notify the Government of new products and services in advance of their launch, in order to allow consideration of whether it is necessary and proportionate to require the CSP to provide a technical capability on the new service.”
That goes deep into territory hitherto unregulated in this way; CSPs will be required to give the Government notice of their new products and services, so that the Government can consider whether to vary a notice that already applies to them. We can see why the service providers are so concerned about that capability.
Pressing on through the code of practice, we see that the contribution of costs for the maintenance of a technical capability is dealt with from paragraph 8.43. Again, these provisions give an indication of the breadth of the capability covered by the clauses of the Bill. Paragraph 8.43 states:
“Section 213 of the Act recognises that CSPs incur expenses in complying with requirements in the Act, including notices to maintain permanent interception capabilities under Part 9. The Act, therefore, allows for appropriate payments to be made to them to cover these costs.”
In a sense, the requirement for CSPs to give notice when they have new or different services and to maintain permanent interception capabilities when they would not otherwise do so means the taking control of their services for the purposes of the Act.
Joanna Cherry
I respectfully support everything that the hon. and learned Gentleman has said.
The Solicitor General
In arguing in opposition to the amendments, I first want to address the last point that the hon. and learned Member for Holborn and St Pancras made. I can come back to his point about the tests, but in a nutshell, they are inherent to the Bill. The tests of necessity and proportionality are part and parcel of the decision-making process that the authority will be enjoined to carry out.
Keir Starmer
It is noticeable that, for obvious reasons, necessity and proportionality have been written into relevant clauses throughout the Bill, but here, I think for the first time, we have a wide-ranging power with no such test—unless I have missed it, in which case I will happily concede the point.
The Solicitor General
In strict terms, the hon. and learned Gentleman is right—I am looking at clause 218 in particular. I think that subsection (3) might help him, because although we do not have the words “necessity” and “proportionality” there, the matters to be taken into account lead one to conclusions based on necessity and proportionality, and perhaps do so in a more prescribed way that is more helpful to the decision maker. Subsection (3)(a) to (e) addresses the hon. and learned Gentleman’s point, and I put it clearly on the record that the principles of necessity and proportionality are part and parcel of the tests to be applied.
I also note that necessity is required under clause 217(6), which relates to the steps specified in a technical capability notice. I do not know whether that helps the hon. and learned Gentleman. I will certainly consider the issue carefully, but on the face of it, I do not think there is a worry of the sort that he envisages.
Joanna Cherry
The Intelligence and Security Committee described the clause as a
“seemingly open-ended and unconstrained power”.
Does the Solicitor General not agree that it is therefore essential that the tests of necessity and proportionality are spelled out in the clause, as they are in other parts of the Bill?
The Solicitor General
I hear the hon. and learned Lady, but I am not convinced that the basis of her argument is right given the breadth of the power. As I said in the context of national security notices, the technical capability notice is only a preliminary step. It will allow the subsequent implementation of a warrant, which will then be subject to the tests of necessity and proportionality. I would not want the Committee to operate under a misapprehension. It is my strong, and I hope clear, assertion that we are dealing with an earlier stage of the process, so we should not be driven to the conclusions that I know critics of the Bill want us to reach.
May I deal with encryption, which, as the hon. and learned Gentleman rightly characterised, is at the heart of the matter? I put it on the record that the Government recognise the vital importance of encryption. It has become part of our daily lives. It keeps our personal data and intellectual property secure and ensures safe online commerce, and the Government work closely with industry and business to improve their cyber-security. I can reassure the Committee that in the preparation of the code of practice, there has been close consultation with the interested parties in the industry to ensure that it comprehensively reflects the realities and needs of those who operate in this sphere. Not only does the code of practice replicate the provisions of RIPA, but it goes further, with a degree of specificity that is not possible in primary legislation. It will be a flexible, living instrument that will form a clear prospectus within which everyone can work. I make no apology for the measure being in a code practice, which is where it should be, rather than in primary legislation. With the best will in the world, we all know that it is difficult to amend primary legislation and ensure that it keeps pace with the somewhat breathtaking changes that occur in this particular field of operation.
I also want to talk about the role of GCHQ, which plays a vital information assurance role and provides advice and guidance to allow the Government, industry and the general public to protect their IT systems and use the internet safely. As the director of GCHQ, Robert Hannigan, made clear in his speech on 8 March:
“I am accountable to our Prime Minister just as much, if not more, for the state of cyber security in the UK as I am for intelligence collection.”
In the past two years the security and intelligence agencies have disclosed vulnerabilities in every major mobile and desktop platform, including some of the big names that underpin business here in the UK. In September 2015, Apple publicly credited CESG, the information assurance arm of GCHQ, with detecting a vulnerability in its operating system for iPhones and iPads, and we all know where that vulnerability could have led. The vulnerability was fixed as a result of that intervention, so the suggestion, which I know has not been advanced in this Committee—and I hope will not be—that the Government are opposed to encryption, or would legislate to undermine it, is wholly wrong.
We have to ensure that we have the necessary capabilities to keep our systems safe. Encryption is now, in effect, the default setting for most of our IT products and online services, and although it can be a power for good in keeping the law-abiding safe and secure, sadly it is used easily and all too cheaply by terrorists, paedophiles and other criminals. Therefore it can only be right that we retain the ability to require telecommunications operators to remove encryption in strictly limited circumstances, with strong controls and safeguards, so that we can address the increasing technical sophistication of those who would seek to do us harm. If we do not do that, we must simply accept that there are areas online that are beyond the reach of the law, where criminals can go about their business unimpeded and without the risk of detection. I do not accept that, and I know the general public do not accept it either. That is our starting principle.
Joanna Cherry
Clause 218(8) and (9) provides that the recipient of a notice must comply with it but must not disclose either its existence or its contents. Does that mean that if an Apple against the FBI scenario were to occur in the UK, Apple would not be able to disclose even the fact that it had been served with a notice, let alone challenge it in court? That is how I read it.
The Solicitor General
Not without the permission of the Secretary of State. I will return to the mechanism in question, but I am grateful to the hon. and learned Lady for raising that point. I am sure I will be able to provide her with clarity as I develop my remarks.
The starting principle is shared by David Anderson, who in his important review said:
“My first principle is that no-go areas for law enforcement should be minimised as far as possible, whether in the physical or the digital world.”
That view was shared by the Joint Committee on the draft Bill and is shared by the Select Committee on Science and Technology, both of which recognise that, in tightly prescribed circumstances, it should remain possible for our law enforcement and security and intelligence agencies to be able to access decrypted communications or data. That is what clauses 217 and 218 are all about: strong safeguards to ensure that obligations to remove encryption can be imposed only in limited circumstances, subject to rigorous controls.
Keir Starmer
I looked carefully at that subsection, but perhaps the Minister could explain why it is a limiting provision. It is a requirement provision as far as the notice is concerned, but on the face of it, encryption is not limited to protection applied by, or on behalf of, the person themselves. It tells us how that situation would be dealt with, but it is not limited to that.
The Solicitor General
I have been interested in the clause for a while, because there are issues about what “relevant notice” means, for example. I assure the hon. and learned Gentleman that that applies only to technical capability notices, not national security notices. I will carefully consider how we can make that absolutely clear, and in that context I will have another look at the how the clause is worded. I want to put beyond any doubt the fact that the clause relates only to a technical capability notice and does not relate to third parties. That has been an important undertaking that we have given.
Mr Hayes
Deliberating on the interesting discourse that has taken place between the Solicitor General and the hon. and learned Member for Holborn and St Pancras, I take the point that the hon. and learned Gentleman makes about necessity and proportionality running as a theme throughout the Bill. My hon. and learned Friend the Solicitor General is of course right that these are preliminary measures, and therefore once an outcome that has been tested for proportionality has been reached, that will not be a problem. I say to him that there is an argument for taking that into account and making it even clearer, either in the supporting documentation or in the Bill.
The Solicitor General
I am grateful to my right hon. Friend, and I will do that.
Before I go further, I will deal with the point that the hon. and learned Member for Edinburgh South West made about Apple. My understanding is that the process will give her some reassurance. In that scenario, Apple, as the recipient of the notice, could refer it back to the Secretary of State, who in turn must then consult the technical advisory board and the IPC before deciding whether to proceed further with the notice. If the Secretary of State proceeded, it would then be judicable in the courts, which would determine whether the notice could be enforced. It is quite similar to the scenario that we discussed in the context of national security notices. I hope that gives her some assistance.
Keir Starmer
I have looked at this issue in the past day or two, and I was concerned about the implication that on the face of it, one could not challenge the provision in court, because there is an absolute bar on disclosure. Am I right in assuming—if I am, it should be on the record—that the Secretary of State will give permission, where appropriate, for a legal challenge to be brought? In other words, there could be disclosure for the purposes of legal proceedings.
The Solicitor General
On the face of it, that has to follow. If any clarification is needed on that, I am sure I can assist as I further develop my remarks.
I was dealing with the process of consultation before the giving of a notice, and we have had the Apple example. I would like to develop the importance of the draft codes of practice, which the hon. and learned Gentleman has referred to.
Suella Fernandes (Fareham) (Con)
The Solicitor General is talking about the power of review in clause 220, which should be read with the power to issue notices. That is important because it obliges the Secretary of State to consult the technical advisory board and the Investigatory Powers Commissioner. That process was endorsed by EE, a communications service provider, in its evidence to the Joint Committee on this very point.
The Solicitor General
I am grateful to my hon. Friend, who provides an example of the sort of dialogue that will be very much part of the process. There will not be mere diktat without further discussion. I was about to develop that point in the context of the draft codes of practice, because they make it clear that should a telecoms operator have concerns about the reasonableness, cost or technical feasibility of any requirements set out in a notice, which of course would include any obligations to remove encryption, they should be raised during the consultation process. That is the dialogue that we have talked about. Also, a telecommunications operator that is given a technical capability notice may refer any aspect of it—again, I gave an example earlier—including obligations relating to removal of encryption, back to the Secretary of State for review. We have dealt with the consultation process set out in the Bill.
The Bill makes it absolutely clear that in line with current practice, obligations placed on telecommunications operators to remove encryption may relate only to encryption by or on behalf of the Government. That is the point I was making about subsection (4).
Lucy Frazer (South East Cambridgeshire) (Con)
I wonder whether clause 217(3) is relevant in the context of what we are discussing. It shows that the Secretary of State can impose the requirements only in so far as they are practicable. The Secretary of State will be prevented from requiring a service provider to do something that it cannot do, for example because a third party has encrypted the material and it is not physically capable of assisting.
The Solicitor General
I am grateful to my hon. and learned Friend, who is right to pray in aid that subsection, which sets out the bones on which we flesh out the procedure in the code of practice.
Christian Matheson
I am getting a bit confused. My understanding was that these provisions applied only to communications service providers. I think it was the hon. and learned Member for Edinburgh South West who raised the question of Apple, which to my mind is not a communications service provider, but the Minister responded in the same terms. Will he clarify who exactly we are talking about and who the provision is intended to cover?
The Solicitor General
The hon. Gentleman is right to make that important point and to steer us back on to the straight and narrow. I am not criticising the Committee for trying to bring the Bill to life with some examples. We are indeed talking about communications service providers, not third parties, which is important in the context of the Bill.
Joanna Cherry
Are we not concerned here with the “relevant operator”, which is defined in clause 217(2) as
“a postal operator…a telecommunications operator, or…a person who is proposing to become a postal operator or a telecommunications operator.”?
That definition is the basis of the concern for companies such as Apple.
The Solicitor General
The hon. and learned Lady is absolutely right to bring us back to clause 217(2). The problem that hon. Members are anticipating is that the provisions will somehow catch parties that no one would regard as appropriate. I think I have given clear assurances on that third party problem.
Sir Simon Burns (Chelmsford) (Con)
I am very grateful to my hon. and learned Friend, and I do not want to be unhelpful, but I would like some clarification regarding Apple. As he is aware, Apple refused to do what the FBI asked. Although the case was never ultimately determined by the courts, because the FBI managed somehow to break open the machine and retrieve the information, how would the clause affect a similar situation if a provider such as Apple refused point-blank to co-operate, just as it did with the FBI?
The Solicitor General
In endeavouring to answer my right hon. Friend’s point, may I deal first with the question about telecommunications operators? Some assistance may be gained from clause 223(10), where a telecommunications operator is defined in a way that includes Apple. The famous Apple case—the California case—was about the use of a password, which is slightly different from the question of encryption, but it does demonstrate the important tussle between the need to balance public safety and privacy. In that case, the FBI, with an appropriate search warrant, was asking for the chance to try to guess the terrorist’s passcode without the phone essentially self-destructing—after so many tries, everything gets wiped.
We are talking about an attempt to obtain communications data within the robust legal framework that we have set out, with the double lock and all the other mechanisms that my right hon. Friend and the Committee are familiar with. I am grateful to him for raising that case, but there are important differences that it would be wrong to ignore. In a nutshell, without the powers contained in the Bill, a whole swathe of criminal communication would be removed from the reach of the authorities. That is not in the interests of the constituents he has served with distinction for well over a quarter of a century—he will forgive me for saying that—or any other of the constituents we represent.
I was going to come back to the obligations imposed under a technical capability notice, with particular regard to the removal of encryption. The obligations imposed under such a notice will require the relevant operator to maintain the capability to remove encryption when it is later served with a warrant notice or authorisation. That is different from merely requiring it to remove encryption. In other words, it must maintain the capability, but there then needs to be the next stage, which is the warrant application and the notice of authorisation, where there is of course the double lock. The company on which the warrant is served will not be required to take any steps, such as to remove encryption, that are not reasonably practicable.
In a nutshell, this measure is about not an interference with privacy but sets out the preparatory stage before a warrant can be applied for. The safeguards provide the strict controls that I assure the Committee are needed in this sphere of activity. We are maintaining and clarifying the existing legal position.
Joanna Cherry
I am anxious to clarify what the Solicitor General said about the justiciability of the issuing of such a technical notice. As far as I can see, the Secretary of State is the gatekeeper to justiciability, because the contents of a notice can be revealed only with his or her permission. Where does it say that that can be justiciable, because I cannot find it?
The Solicitor General
I think it is clause 220, but I will get some further assistance on that point for the hon. and learned Lady before I resume my seat. I am grateful for that intervention.
The Bill does not drive a coach and horses through encryption. It does not ban it or do anything to limit its use. A national security notice—we debated this matter on clause 216—cannot require the removal of encryption, which further supports my argument that there is no blank cheque in the context of these notices. On the issue of civility, rather than keep this Committee waiting, I will write to the hon. and learned Lady to clarify the point that she rightly raised.
Victoria Atkins (Louth and Horncastle) (Con)
This is a general point. Although we are examining this Bill in detail, there will of course be an ongoing debate, particularly as the technical companies tussle with the public, about what the public find acceptable. Those companies should not think that the debate ends here; they will have to justify their actions to the public in future.
The Solicitor General
My hon. Friend is absolutely right. The code of practice has been drafted in that real-life context. It will no doubt be amended and looked at—it will be a living document—as this technology develops and as we move forward. With this clause, we are trying—I do not like this phrase, but I have to use it—to future-proof the legislation to make it resilient so that it lasts and to ensure that this House does not have to return to it time and again to respond to the challenges that increased and enhanced IT present.
Lucy Frazer
My hon. and learned Friend referred to clause 220, which indeed does give the person who receives the notice the power to give it back to the Secretary of State, who then has to consult the Technical Advisory Board and the Investigatory Powers Commissioner, who will then take evidence from those people.
The Solicitor General
I am glad that my hon. and learned Friend has reminded us of that. I referred earlier to that consultation process. The next stage is when the Secretary of State decides to proceed. I will consider that issue even more carefully to ensure that the Committee is furnished with as much information as possible before Report.
Let me deal with the amendments tabled in the name of the hon. and learned Member for Holborn and St Pancras and others. On amendment 846, the Bill already makes it absolutely clear that a communications service provider will not be obligated to remove encryption where it is not reasonably practicable for them to do so. I do not think the amendment adds anything, and in many cases it would have the effect of inhibiting law enforcement agencies and the security and intelligence services from working constructively with tele- communications operators as the technology develops. I am sure that that is not the intention of the amendment. Depending on the individual company and the individual circumstances, it may be entirely sensible for the Government to work with a company to determine whether it would be reasonably practicable for it to take steps to develop and maintain the technical capability to remove the encryption it has applied to communications or data.
My worry about the amendment is that we would end up with communications services that can be used by criminals and others to communicate with each other unimpeded. We know that internet gambling sites, which have chat room provisions, are used by criminals for entirely unrelated criminal activities. I am sure that that is not the intention behind the amendment. Therefore, with respect, I urge hon. Members to reconsider it.
I will not deal in detail with amendment 847, because I do not think the hon. and learned Gentleman seeks to press it. Although I oppose it, I will move on without argument to amendments 848 and 858. We have discussed similar amendments on extraterritoriality in relation to other powers in the Bill. I pray in aid the arguments I used earlier. The provisions in the Bill allow a notice to be given in the most appropriate manner, taking into account the preferences of each company, which is an example of the adaptability of the legislation to the real world.
Amendment 848 is unnecessary because the clause is about not the acquisition but the development and maintenance of a technical capability. Conflict of law issues are much more likely to arise in respect of giving effect to a warrant, and we already have protection in the Bill for such cases. Admirable though the amendment may seem, it is therefore unnecessary.
Amendment 849 is unnecessary because it duplicates provisions in clauses 218, 216 and 217. I have discussed clause 218(3), which stipulates that the Secretary of State must consider a wide range of matters before giving a notice. That detailed assessment already speaks to the issues raised by the amendment. The Secretary of State has to be satisfied that the conduct is proportionate, justified, necessary and practicable.
Joanna Cherry
I am sorry to interrupt the Solicitor General’s flow, but I sense he is coming to the end of his argument. Will he clarify something? Am I right in understanding that there is nothing in the clause to prevent someone who is intent on evading surveillance from using open-source encryption software that is personally generated by the user? That would mean they could encrypt files and email communications themselves, independent of any provider, and therefore remain untouched by this legislation.
The Solicitor General
That question is about the definition of the provider. I am sure we will be able to provide some clarity on that before I draw my remarks to a conclusion. I am grateful to the hon. and learned Lady for raising that point.
Amendment 850 relates to consideration by the Secretary of State of the effect of a notice on the privacy and human rights of people both here and outside the kingdom. The amendment is unnecessary because of the point I made before, which I will reiterate: the clause is not about notices authorising an interference with privacy. A warrant provided for elsewhere in the Bill is required to do that, and we have already considered the potency of the double lock and the test to be applied. A point that is relevant to all the amendments in this group is the statutory function of the Investigatory Powers Commissioner to oversee the use of notices. I raised that in the context of national security notices, and I pray it in aid here again.
Amendment 857 seeks to narrow the category of operators to whom a technical capability notice can be given. I am worried that that would limit the effects of law enforcement. We know about the diversification of criminality and terrorism in order to find new ways to avoid protection. I am concerned that narrowing the legislation would allow loopholes to get larger. It is therefore important that the obligations relating to the technical capabilities for a range of operators can be imposed by the Government in order to ensure we keep ahead of the curve.
The hon. and learned Lady made the powerful point that the clause does not relate to personally applied encryption. However, measures in part 3 of RIPA 2000 provide for where law enforcement agencies can require an individual to remove encryption that he or she has applied themselves. We know that the Bill generally does not cover all the agencies’ powers. This is perhaps a welcome opportunity to remind ourselves of the existing provisions in part 3, so I am grateful to her.
Of course we accept that it may well be appropriate to exclude certain categories of operator from obligations under the clause—I am thinking, for example, of small businesses; we are always mindful of the burden of regulation on small businesses—but it is our intention to use secondary legislation to achieve that. It would not be appropriate in primary legislation to impose blanket exemptions on services with a communications element that are not primarily communications services. To do so would send a rather alarming and clear message to terrorists and criminals that communications over certain systems will not be monitored. That sort of carve-out recalls the point that I made about the use by criminals of seemingly unrelated or innocuous communications channels in other internet facilities or apps, in order to hide their illicit enterprises.
I know that I have taken up an inordinate amount of the Committee’s time. I am obliged to the Committee and to you, Ms Dorries, for your indulgence. I hope that I have set out the reasons why I urge hon. Members to withdraw the amendment, and I pray in aid my arguments as advancing the case that the clause should stand part of the Bill. I urge the hon. and learned Gentleman to withdraw the amendment.
Keir Starmer
I have only three issues to address. The first, which requires more attention from the Solicitor General—I say so with no disrespect—is the question of the extent of the prohibition on disclosure and, essentially, access to the courts or appropriate tribunals. On the face of it, clause 218(8) is a prohibition on disclosure, save with the permission of the Secretary of State. With respect to Committee members, I do not think that clause 220 provides the answer, because that deals with the consultation exercise where a notice is being reviewed.
I have no doubt that, if the Secretary of State exercised her power under clause 218(8) to prevent access to the courts, it would run straight into an article 6 access to courts argument that would succeed on judicial review. I had assumed that one could read into the clause by implication that permission would not be refused in a bona fide and proper case where access to court—or the relevant tribunal, which may be a better way of putting it—was an issue. If that were made clear for the record or by some redrafting of the clause, it would help. As I said, I think that, in practice, any court in this jurisdiction would strike down pretty quickly a Secretary of State who sought to prevent access to the court.
The Solicitor General
I think that the hon. and learned Gentleman is right about that. On that basis, I will have another look at clause 218(8), to get it absolutely right. I reassure him that it is not the Government’s intention to preclude access to the court.
Keir Starmer
I am reassured. I am sure that that would not be the case, but it might be sensible to clarify that rather than relying on clause 220, because I am not sure that that is the right way to do it. However, I will say no more about that.
I was going to press for votes on amendments 846 and 849, but I have listened carefully to what the Solicitor General said and to what the Minister said when he rose to make some observations earlier. They are by far the two most important amendments. Amendment 846 deals with encryption. I think I heard the Solicitor General say that he will look again at the wording of clause 218(4) to see whether it is possible to make clear what is clear in the code of practice, namely, that an obligation placed on a CSP to remove encryption relates only to electronic protections that the company itself has applied to intercepted communications and secondary data. That is clearly the position that the Government adopt, because it is now set out in the code. I think that the Solicitor General might accept that, at the moment, clause 218(4) does not quite achieve that objective. On the basis that he is prepared at least to look at that again, I will not press amendment 846.
Joanna Cherry
The Scottish National party is not happy with this clause without amendment. I was going to press it to a vote, but having heard what the Solicitor General said about the clause, and pending his writing to me, I am willing not to press it. I just lay down a marker in that respect.
Question put and agreed to.
Clause 217 accordingly ordered to stand part of the Bill.
Clause 218
Further provision about notices under section 216 or 217
Question proposed, That the clause stand part of the Bill.
Joanna Cherry
The SNP takes the same position as it did on the previous clause.
Question put and agreed to.
Clause 218 accordingly ordered to stand part of the Bill.
Clause 219
Variation and revocation of notices
Mr Hayes
I beg to move amendment 734, in clause 219, page 170, line 8, at end insert
“(and in the application of section 218(3) and (4) in relation to varying a relevant notice, references to the notice are to be read as references to the notice as varied).”
This is a technical amendment. Ms Dorries, I should have welcomed you to the Chair earlier, but I do so now. The amendment is uncontentious and makes a drafting correction to clause 219. On that basis, it should not cause the Committee any undue concern, and I move it in that spirit.
Amendment 734 agreed to.
Clause 219, as amended, ordered to stand part of the Bill.
Clause 220
Review by the Secretary of State
Keir Starmer
I beg to move amendment 851, in clause 220, page 170, line 31, leave out subsection (6) and insert—
‘(6) The Board must consider the technical requirements and the consequences, for the person who has made the reference and for others likely to be affected, of the notice so far as referred.”
This amendment would require the Technical Advisory Board to look at more than just an implementation of cost measure and instead examine the full costs of the notice.
Our discussions have already strayed on to clause 220. This short amendment is reasonably clear. Subsection (6) makes it clear that the technical advisory board, referred to in subsection (5)(a),
“must consider the technical requirements and the financial consequences, for the person who has made the reference, of the notice so far as referred.”
That is where the person served with the notice has referred the notice back to the Secretary of State, which then triggers a consultation exercise. The board must be consulted; subsection (6) sets out what the board must consider. The amendment is fairly self-explanatory; it would serve the limited purpose of requiring the technical advisory board to look at more than just the implementation of cost measure, and instead examine the full costs of the notice.
Mr Hayes
As the hon. and learned Gentleman said, the amendment would broaden the scope of the technical advisory board by requiring it to consider other matters as part of any review of the obligations imposed by the Secretary of State in a notice. Under the amendment, the board would be required to consider the consequences for others likely to be affected by the obligations imposed by a notice. That is understandable—I can see why the hon. and learned Gentleman tabled the amendment—but unnecessary.
The technical advisory board is essentially a committee of experts. It has a very specific role to play in advising the Secretary of State on cost and technical matters. That role is reflected in its membership: a group of experts drawn from communications service providers and from those entitled to apply for warrants and authorisations under the Bill. Such people are well placed to consider the technical requirements and the financial consequences. If they consider it appropriate, they may look beyond cost and technical feasibility, but those matters, rightly, are the board’s central purpose and are at the core of its work. The board is also required to consider evidence or representations made by communications service providers and must report its conclusions to them and to the Secretary of State.
In my view, responsibility for considering the broader effects of the notice on the communications service provider to whom it has been given should sit with the Investigatory Powers Commissioner. While it is absolutely right that the board considers both the technical aspects and the cost, the broader matters that the hon. and learned Gentleman is rightly concerned about should fall within the scope of the commissioner, as they do in the Bill. As part of any review of the obligations set out in the notice, the commissioner must report on the proportionality of those obligations; that will include an assessment of the consequences of the notice, both on the persons seeking the review and on anyone else affected—which is essentially the argument the hon. and learned Gentleman made for the amendment.
Furthermore, the clause requires the commissioner to seek out the views of the person who has received the notice, who will have the opportunity to raise any concerns about the effect of the notice with the commissioner for consideration; the commissioner must report his or her conclusions to that person and to the Secretary of State. Essentially, combining the role and responsibilities of the board with the role and responsibilities of the commissioner means that each of them will provide a function central to the hon. and learned Gentleman’s concerns, so the amendment is unnecessary. I should add that the commissioner is properly and well placed to consider the proportionality of the matter as a whole, after careful assessment. The amendment’s wording would introduce duplication and, frankly, a degree of ambiguity about the respective roles of the board and the commissioner and about what each of them is considering. With that reassurance, I hope the hon. and learned Gentleman will withdraw the amendment.
Keir Starmer
The Minister says that the Bill places no inhibition on the wider technical consequences looked at by the board, and that other consequences rightly come under the remit of the commissioner. I am grateful for that clarification; I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 852, in clause 220, page 171, leave out lines 1 and 2 and insert—
“(9) The Secretary of State may, after considering the conclusions of the Board and the Commissioner, and with approval of a Judicial Commissioner—”.—(Keir Starmer.)
This amendment would require judicial authorisation for these clauses and bring them in line with other parts of the bill.
Question put, That the amendment be made.
The Chair
With this it will be convenient to consider new clause 23—Review of the Operation of this Act—
“(1) The Secretary of State shall appoint an Independent Reviewer to prepare the first report on the operation of this Act within a period of six months beginning with the end of the initial period.
(2) In subsection (1) “the initial period” is the period of four years and six months beginning with the day on which this Act is passed.
(3) Subsequent reports will be prepared every five years after the first report in subsection (1).
(4) Any report prepared by the Independent Reviewer must be laid before Parliament by the Secretary of State as soon as the Secretary of State is satisfied it will not prejudice any criminal proceedings.
(5) The Secretary of State may, out of money provided by Parliament, pay a person appointed under subsection (1), both his expenses and also such allowances as the Secretary of State determines.”
I inform the Committee that I consider clause 222 and new clause 23 to be alternatives. If the Committee decides that clause 222 should stand part of the Bill, I will not put the Question on new clause 23. If the Committee decides that clause 222 should not stand part, when the Committee comes to decisions on new clauses, I will put the necessary Questions on new clause 23 without debate.
Joanna Cherry
I take it, Ms Dorries, that I am entitled to make a submission as to why the clause should not stand part of the Bill, and should instead be replaced with new clause 23.
Joanna Cherry
In short, it is welcome that following the recommendation of the Joint Committee on the draft Bill, there is now some sort of sunset provision in the Bill. Those who sat on the Joint Committee or read its report will recall that various people who gave evidence made a strong case for a sunset provision in the legislation. The Information Commissioner summarised that case by saying:
“The draft Bill is far reaching and has the power to affect the lives of all citizens to differing degrees. For these reasons, the bill should include a sunset clause or other provisions requiring effective post legislative scrutiny. This would ensure that measures of this magnitude remain necessary, are targeted on the right areas and are effective in practice. To fail to make this provision risks undermining public trust and confidence. It will also enable the legislation to be considered in the light of the latest jurisprudence from the”
Court of Justice of the European Union and the European Court of Human Rights. Various variations on the Information Commissioner’s proposal were put to the Joint Committee by other witnesses, including medConfidential, Dr Paul Bernal, the right hon. Member for Haltemprice and Howden (Mr Davis), Privacy International and the Interception of Communications Commissioner’s Office.
The Home Secretary expressed reservations about having a sunset provision, but it is good to see that there is now some such provision in the Bill. What is missing from it, however, is an independent element.
Keir Starmer
I shall speak briefly in support of new clause 23. The essential difference between this new clause and clause 222 is, of course, that the new clause would provide for a review within an initial period of five years and for subsequent five-yearly reviews, and for the reviews to be carried out by the independent reviewer, which we submit is more appropriate.
I understand why this new clause has been tabled, but it puts me in a bit of a dilemma. Is a review by the Secretary of State a good thing? Yes. I would therefore support clause 222 if I could not get anything better. I would not want to vote against the Secretary of State reviewing the Act if I lost on new clause 23, because it is sensible to have a Secretary of State review it. In other words, clause 222 is good, but new clause 23 is better; that is the way I would put it. I am in a dilemma, because if I vote against clause 222, I am voting against a good clause that I would naturally support in principle, but if the vote on new clause 23 was not carried—and having looked at the voting record so far, I am not confident that it would be—
The Chair
Order. Mr Starmer, would it be helpful to say that you could table amendments to clause 222 on Report, if you wished to?
Keir Starmer
Yes, that is probably the way out of my dilemma, but really this is more for the record. I will not vote against clause 222, but that is not because I think it is preferable to new clause 23; I would like to have the new clause as well. We will reflect on how we deal with that apparent dilemma.
Mr Hayes
That was the most heartwarming qualified advocacy of an amendment that I have ever heard in Committee; I was quite touched by it. I could not help thinking that there must be countless Tory voters in Holborn and St Pancras who feel about the hon. and learned Gentleman as he feels about this clause. I know that he bathes in their generous acclamation on a daily basis. It was very decent of him to put his case in the way he did.
I will deal with the substance of the new clause and its purpose. The hon. and learned Gentleman is right that new clause 23 would replace the Government’s proposals for a review of the operation of the Act as set out in clause 222, and he is also right that the clause obliges the Secretary of State to report to Parliament on the operation of the Act within four to five years. He described the detail, and I will not tire Committee members by quoting it more specifically. The new clause proposes instead the appointment of an independent reviewer to report on the operation of the Act every five years, beginning five years after the Act is passed.
Where we find common cause is in thinking that both pre-legislative and post-legislative scrutiny are essential. One could make that argument for most legislation, but particularly for legislation in this field, for two reasons: first, its import; and, secondly, the changing circumstances that will doubtless apply, as regards both technology, which the Bill deals with expansively, and the threat we face. All we know about the changes that have taken place over recent years suggests that those changes will continue and may grow in character and speed.
I fully understand why the hon. and learned Gentleman wants the whole House to take a close look at these matters over time. Indeed, the Home Secretary, in her evidence to the Joint Committee on the draft Bill, said:
“As technology advances, it may be necessary to revisit the powers, the legislative framework and the safeguards that are available”.
That is eminently sensible, and something that the Government wholeheartedly support.
As I said, clause 222 provides for judicial review. The hon. and learned Gentleman did not mention it, but he will know that the Joint Committee looked at that, and said that
“the appropriate vehicle to do this would be a specially constituted joint committee of the two Houses. This work should begin within six months of the end of the fifth year after which the Bill is enacted. Although the appointment of such a committee would be a matter for the two Houses, a provision in the Bill would provide a clear mandate and guarantee the timescale for this review.”
The Joint Committee gave that quite careful consideration. The members of this Committee who were also members of that one will recall that they did so because of the shared determination, which the hon. and learned Gentleman has articulated well, that we should not assume that as time goes on we will not need to be reasonably flexible about the application of the powers.
The Solicitor General made a point about providing legislation that looks as far into the future as possible. Certainly, the purpose of the Bill is to not only draw existing legislation into a single place but, as far as one reasonably can, prepare for the future. However, in doing so, it is important to be mindful of what the Joint Committee said, reflecting the Home Secretary’s evidence.
The hon. and learned Member for Holborn and St Pancras will know that the Joint Committee went on to recognise that the Government cannot, in statute, require Parliament to appoint a post-legislative scrutiny Committee. Let me explain that a little more. Ms Dorries, as you will understand with your experience in the House, it is not for the Government to say what Select Committees might look at over time. It certainly would not be for the Government to dictate to the Intelligence and Security Committee, for example, how it should regard or review the legislation within its scope or purview. It would be a dangerous precedent to set to say that any particular Select Committee should, statutorily, consider matters at a particular point in time, or in a particular way.
The clause says that the report should take account of any other report on the operation of the Act, mindful of what I have just described—that is, that the ISC, other Select Committees, or Committees of both Houses could bring evidence to bear that would inform that review. In essence, it would be a matter for Parliament to decide precisely what was looked at and when, within the confines determined in the Bill, but it is essential that the Secretary of State is missioned to report on the Bill’s implementation in the timetable described. That is something that legislation can quite properly do; it both gives all kinds of powers to the Secretary of State, and confirms those powers.
While I can see why the hon. and learned Gentleman supports the new clause, it is unnecessary, not because of the intent, but because of the detail. Essentially, we are offering two different models in order to achieve the same end. A parliamentary Committee would be just as independent as a separately appointed reviewer—and it would avoid the argument, which I know Opposition Members would be quick to have, about who should be responsible for appointing the reviewer.
Keir Starmer
This may be blindingly obvious, and any Secretary of State, including the current one, would almost certainly take this into account anyway, but could we amend subsection (3) to make it absolutely clear that the Secretary of State must take into account reports of the independent reviewer in addition to those of Select Committees? While that is not precisely what the new clause would achieve, and while I am absolutely sure that any Secretary of State would do that in any event, it would weave in an element of the new clause’s intention. It would not presuppose that there would necessarily be a report, but if there were one, it would be taken into account.
Mr Hayes
I am not unsympathetic to that suggestion, but let me qualify that slightly. There is an argument to say that we would want another reviewer involved in the process, because what we want is as much empiricism as possible. We have neither the time nor the patience for a long debate about the philosophical character of empiricism, and I am not an empiricist, philosophically, but in terms of legislation, it matters. There is an argument for introducing still more independence into the process.
The hon. and learned Gentleman is right to say that, of course, the Secretary of State would want to take into account the views of all those in positions of authority who have taken a view on the Bill and its implementation and effects in her or his report. I certainly would not want to exclude from that consideration any of the authoritative reports published on the Bill. I think that probably meets the hon. and learned Gentleman halfway, and perhaps a little more than halfway.
Any parliamentary review would take evidence from a range of witnesses. It is, again, almost inconceivable that the independent reviewer would not be a key witness, as our current independent reviewer was to the Joint Committee and other Committees of the House. It would—again, as the Joint Committee did—be likely to appoint technical advisers, who would inform the process and work in concert with the ISC. While the Government support a post-legislative review of the Bill, that review should be conducted by Parliament—by legislators drawing on external expertise and evidence, as the Joint Committee recommended. I therefore invite hon. Members not to press the new clause to a vote.
Joanna Cherry
I will not press new clause 23 to a vote.
Question put and agreed to.
Clause 222 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Simon Kirby.)
Investigatory Powers Bill (Sixteenth sitting)
Tuesday 3rd May 2016
(8 years ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 3 May 2016 - (3 May 2016)
The Committee divided: - Ayes: 2 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 10 - Question accordingly negatived.
Joanna Cherry (Edinburgh South West) (SNP)
I beg to move amendment 869, in clause 223, page 172, line 41, leave out sub-paragraph (i) and insert—
‘(i) is about an entity to which a telecommunications service is provided by that telecommunications operator and relates to the provision of that service,”
This amendment clarifies the definition of communications data, limiting requirements on organisations to be providing data about the services that they supply.
It is a pleasure to welcome you back to the Chair, Mr Owen. This is an amendment to the interpretation clause dealing with telecommunications definitions, in particular subsection (5), which deals with the definition of communications data. The amendment would replace subsection (5)(a)(i) with the purpose of clarifying that the definition of communications data applies to the providers of the relevant telecommunications services, rather than allowing an organisation to be required to provide data about services it does not provide. Without the amendment, the definition of communications data is flawed because it does not tie the data to the provider of the telecommunications service and therefore seems set to encompass third-party data, which I know the Home Office denies is the intent.
The amendment would make two small changes. First, it specifies that the telecommunications service has to be provided by that telecommunications operator—in other words, it avoids pulling in third-party data. Secondly, it specifies that the data relate to the particular service provided and not to a different one. I will be interested to hear what the Solicitor General has to say about this amendment, which seeks to clarify and tighten up the clause.
The Solicitor General (Robert Buckland)
It is good to see you back in your place, Mr Owen. I look forward to a fruitful session.
I welcome the hon. and learned Lady’s remarks. We considered these issues in the context of part 4, in particular third-party data. I do not want to rehearse the arguments about why we consider the code of practice to be the appropriate place to enforce the commitment made by my right hon. Friend the Home Secretary on the Floor of the House on Second Reading. However, the Government note the strength of feeling on this issue, as evidenced by the outcome of the vote on an earlier amendment. We have heard that message loud and clear, so we are considering whether we could do more to make the commitment clear. I hope that that gives the hon. and learned Lady some reassurance that we are taking these matters seriously, and I am grateful to her for raising them.
The aim of the amendment appears to be to prevent a public authority from obtaining third-party data and to prevent a communications service provider from being required to retain those data. I am not sure that the amendment achieves that desired outcome. It would remove third-party data from one element but not from all elements of the definition of communications data. I do not think there is any debate about the need to get the definition of communications data right, but it must correctly and logically classify the data held by CSPs or what can be reasonably obtained by them. The principle of communications data is clear; changing the definition so that the classification of data changes depending on which provider holds it would cause a degree of confusion that I am sure the hon. and learned Lady does not intend.
My first argument is that the clause is not the right place to prevent public authorities from obtaining third-party data or to prevent a CSP from being required to retain them. Clause 53(5)(c) makes it clear that a communications data authorisation can provide for the obtaining of third-party data where that is reasonably practicable for the communications service provider. That maintains the existing provision under the Regulation of Investigatory Powers Act 2000. Where a CSP holds communications data, whether in relation to its services or those provided by a third party for its business purposes, or where it is able to obtain them, they should be available to the public authorities for the statutory purposes in the Bill. We should not put them out of the reach of law enforcement agencies, based solely upon which company holds the information.
I suspect that the hon. and learned Lady’s intent may be to stop a service provider being forced to comply with an unreasonable requirement relating to third-party data—[Interruption.] I am grateful to her for indicating her assent. I assure her and the Committee that, in my view, the Bill already does that. A provider is required to comply with a request for comms data, including third-party data, only where reasonably practicable for them to do so. There is no need to impose a further restriction on that basis.
I recognise the sensitivities of third-party data, but I am afraid that a blanket restriction on its acquisition is not the way forward. We consider that the Bill and the code of practice strike the right balance. On the basis of my earlier assurances to the hon. and learned Lady about getting the language clear, I invite her to withdraw the amendment.
Joanna Cherry
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 223 ordered to stand part of the Bill.
Clause 224 ordered to stand part of the Bill.
Clause 225
General definitions
Joanna Cherry
I beg to move amendment 870, in clause 225, page 177, line 11, at end insert—
‘(a) an advocate,
(b) a barrister,
(c) a solicitor.’
This amendment provides a definition of a “professional legal adviser” relating to use of the term in clauses 25, 100, 135 and 171.
I am grateful to the Law Society of Scotland for drawing my attention to the necessity of this amendment. When we debated the clauses on legal professional privilege—we have done so on a number of occasions during this Committee’s proceedings—I drew attention at an early stage to the Law Society of Scotland’s evidence to the Joint Committee. It gave evidence alongside the Law Society of England and Wales and expressed its shared and serious concerns about the requirement to provide for the protection of legal professional privilege on the face of the Bill. It is pleased that the Government have taken steps to do that, although it is not happy with the extent of the protection provided. That is perhaps a debate for another day.
The purpose of the amendment is to deal with the definition of items subject to legal privilege at line 29, on page 175. The amendment deals with the definition in relation to Scotland and would define a “professional legal adviser” as a person who is an advocate—that is, of course, the correct professional designation for counsel in Scotland or a Scottish barrister—a barrister or a solicitor. The aim is to avoid leaving the definition of a “professional legal adviser” open to too wide or ambiguous an interpretation. It will limit the definition of those who are qualified to provide professional legal services to advocates, solicitors and, in certain circumstances, barristers. I will be interested to hear what the Solicitor General has to say about the proposed definition of a “professional legal adviser”.
The Solicitor General
When I saw the amendment, I was reminded of points I made earlier regarding the dangers of over-defining either legal professional privilege itself or those who are subject to it. Let us remind ourselves that legal professional privilege exists not to create a special category of person—in this case, a lawyer—who is exempt from requirements by which the rest of us have to abide, but to protect the client and the integrity of the advice that a lawyer may give to their client. My concern about the proposed definition is that it limits the definition of what items would be subject to legal privilege. For example, legal executives might well be in the position where they are giving advice and are covered by legal professional privilege. Even paralegals could be, should be and would be covered by legal professional privilege.
I absolutely accept the intention behind the amendment, but however well intentioned it might be, trying to define “professional legal adviser” in the Bill would actually damage and undermine the importance of legal professional privilege. We have had many debates about it, but I think the Bill serves to protect that privilege. We are continuing to discuss the precise extent to which that is reflected in all parts of the Bill, but there is no doubt about the Government’s clear intention. I am proud to be a Minister supporting this approach because I always felt that RIPA was deficient in that respect—I held those views long before I became a member of the Government. I am pleased that we are making such progress.
Joanna Cherry
I am interested in the Solicitor General’s point about legal executives or paralegals. Does he agree that, in so far as communications with such individuals would require protection, they would be protected by subsection (1)(b)(ii), which specifies
“communications made in connection with, or in contemplation of, legal proceedings and for the purposes of those proceedings”?
The Solicitor General
That is a good point, but there is a danger that we overcomplicate the situation and end up restricting what is commonly understood as the important legal professional privilege that exists between lawyer and client. Instead of overcomplicating it, it would be far better to keep maters straight and reflect the position provided for in the Police and Criminal Evidence Act 1984, which applies here in England and Wales, the Police and Criminal Evidence (Northern Ireland) Order 1989 and the definitions relating to Scotland. The other statutes for England, Wales and Northern Ireland do not define “professional legal adviser” and I do not see a compelling need to do so here. As I have explained, the Bill goes a long way towards protecting that important legal privilege and serving the interests that that privilege is all about. It is not about the lawyers but the client. Fundamentally, it is that communication that merits special protection.
Joanna Cherry
I wholly accept that it is not about lawyers but about the client, but is there not a need to define what is meant by “professional legal adviser”? That is all this is about really.
The Solicitor General
The hon. and learned Lady puts her case with her customary spirit and brio, if I may say so, but despite her attempts to persuade me, I am concerned that if we seek to narrow the definition in the way the amendment would, the sort of unintended consequences that I know the hon. and learned Lady would be very reluctant to see happen might flow. We should not, in the context of primary legislation, start to define what is better explained in other ways. For that reason, I urge her to withdraw the amendment.
Joanna Cherry
I hear what the Solicitor General has to say, and in the circumstances I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 225 ordered to stand part of the Bill.
Clauses 226 to 231 ordered to stand part of the Bill.
Schedule 9 agreed to.
Clause 232 ordered to stand part of the Bill.
Schedule 10
Minor and consequential provision
The Minister for Security (Mr John Hayes)
I beg to move amendment 634, in schedule 10, page 235, line 33, leave out paragraph 46.
This amendment omits the amendments of paragraph 19ZD of Schedule 3 to the Police Reform Act 2002. Paragraph 19ZD is to be repealed by the Policing and Crime Bill.
Mr Hayes
This is a technical amendment that essentially removes the duplication of a consequential provision in another piece of legislation—the Policing and Crime Bill—that makes what is in this Bill unnecessary. It is entirely uncontentious and I will not tire the Committee by speaking for any longer.
Amendment 634 agreed to.
Schedule 10, as amended, agreed to.
Clause 233
Commencement, extent and short title
The Chair
With this it will be convenient to consider:
New clause 24—Duration of this Act—
“(1) This Act expires at the end of one year beginning with the day on which it is passed (but this is subject to subsection (2)).
(2) Her Majesty may by Order in Council provide that, instead of expiring at the time it would otherwise expire, this Act shall expire at the end of a period of not more than one year from that time.
(3) Such an Order may not provide for the continuation of this Act beyond the end of the year 2022.
(4) No recommendation may be made to Her Majesty in Council to make an Order under subsection (2) unless a draft of the Order has been laid before, and approved by a resolution of, each House of Parliament.”
Joanna Cherry
New clause 24 is a true sunset clause, modelled on clause 1 of the Armed Forces Bill currently before Parliament. We had a spirited debate before the break about potential replacements for clause 222, which is a clause of review. The new clause is another alternative—a sunset clause in the true meaning of the term, which would provide for the Act to expire at the end of a certain period, subject to certain provisos. I do not intend to push the new clause further at this point, given the position we took in relation to new clause 23.
Mr Hayes
Clearly, the sunset clause that the new clause proposes is being debated—briefly, I hope—as we approach the sunset of our consideration of this important Bill. A sunset provision is often a feature of emergency legislation and has indeed been appeared in legislation of the kind that we are now debating. It is usually because the legislation has been introduced to meet some particular short-term challenge and Parliament is given limited time in which to consider the legislation responding to that challenge. That is not the case in respect of this Bill, which has had extensive prelegislative scrutiny, both before its draft incarnation and since. It has now had considerable scrutiny by the Committee, and will no doubt continue to be scrutinised as it progresses through its further stages. I am therefore not sure a sunset clause is appropriate.
The hon. and learned Lady is well aware of the three independent reviews that preceded the publication of the Bill, and of the three Committees of this House that have considered the Bill in considerable detail since then. One of those—the Joint Committee—considered at length a sunset clause and a review of the legislation. We debated that a few minutes ago under an earlier group of amendments. As I said at that time, rather than proposing a sunset clause, the Joint Committee suggested a review of the legislation. I understand that suggestion, given the dynamism of the circumstances that the Bill is designed to address—the need to deal with changing technology and so on and so forth. Indeed, the Government, taking full account of the sagacity of the Joint Committee, have built that into the Bill in clause 222, which we have debated at some length.
The complexities of this legislation are acknowledged and understood. I can see why the hon. and learned Lady makes a case for this sort of consideration. In David Anderson’s report on these matters, which I will not quote at immense length unless the members of the Committee wish me to do so, he makes clear that although it is important to consider the effects of the Bill, it is not necessary to accelerate that process in the way that the new clause would. He also makes clear, as others have, that it is vital that the legislation stands the test of time and is fit for the future. I am therefore uncomfortable with introducing specific deadlines of the kind proposed in the new clause.
The hon. and learned Lady has repeatedly and rightly argued that many of the provisions of the Bill require considerable investment. The obligations such as those in respect to data retention require a lot of thought, a good deal of planning and an investment of time and effort from communications service providers and others. Putting that infrastructure into place is a testing business; it is the right thing to do, but it is testing none the less—a point made by the hon. Member for City of Chester and others during the course of the Committee’s consideration. Then to say that we are going to look at all of that again in 12 months’ time sends out a very unhelpful signal to those we are missioning to do that work. We have gone about this business thoroughly. We have discussed this at length with communications services providers throughout the process and time and again they have said that they want certainty; they want a reasonable degree of surety about what is expected of them. I think they would be reticent about investing in the way that they need to if they felt that this all might change in 12 months’ time.
The Home Secretary put the case as well as it can be put when she told the Joint Committee that “advances in technology” are not
“going to move according to sunset clauses established by Parliament.”
Although it is important that these matters are reviewed—as I said on clause 222, we have set into motion the means by which they will be reviewed—I do not think a sunset clause of the type proposed is the right way forward. On that basis, given the assurances that I have offered, I hope the hon. and learned Member for Edinburgh South West will see fit not to press the new clause.
Joanna Cherry
Yes, I confirm I will not press the new clause.
Question put and agreed to.
Clause 233 accordingly ordered to stand part of the Bill.
New Clause 12
Warrants: notification by Judicial Commissioner
“(1) Upon completion of conduct authorised by a warrant under this Part, or the cancellation of a warrant issued under this Part, a Judicial Commissioner must notify the affected party, in writing, of—
(a) the conduct that has taken place, and
(b) the provisions under which the conduct has taken place.
(2) The notification under subsection (1) must be sent within thirty days of the completion of the conduct or cancellation of the warrant.
(3) A Judicial Commissioner may postpone the notification under subsection (1) beyond the time limit under subsection (2) if the Judicial Commissioner assesses that notification may defeat the purposes of an ongoing serious crime or national security investigation relating to the affected party.
(4) A Judicial Commissioner must consult with the person to whom the warrant is addressed in order to fulfil an assessment under subsection (3).”.—(Joanna Cherry.)
This amendment would introduce a requirement that all equipment interference produces a verifiable audit trail. This will be particularly vital to the success and legitimacy of prosecutions. It is recommended that further provision for the independent verification of audit trails is included in Part 8 (Oversight Arrangements).
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss the following:
New clause 13—Audit trail of equipment interference—
“Any conduct authorised under a warrant issued under this Part must be conducted in a verifiable manner, so as to produce a chronological record of documentary evidence detailing the sequence of activities (referred to hereafter as ‘the audit trail’).”.
New clause 18—Notification by Intelligence and Surveillance Commissioner—
“(1) The Intelligence and Surveillance Commissioner is to notify the subject or subjects of investigative or surveillance conduct relating to the statutory functions identified in section 196, subsections (1), (2) and (3), including—
(a) the interception or examination of communications,
(b) the retention, accessing or examination of communications data or secondary data,
(c) equipment interference,
(d) access or examination of data retrieved from a bulk personal dataset,
(e) covert human intelligence sources,
(f) entry or interference with property.
(2) The Intelligence and Surveillance Commissioner must only notify subjects of surveillance under subsection (1) upon completion of the relevant conduct or the cancellation of the authorisation or warrant.
(3) The notification under subsection (1) must be sent by writing within 30 days of the completion of the relevant conduct or cancellation of the authorisation or warrant.
(4) The Intelligence and Surveillance Commissioner must issue the notification under subsection (1) in writing, including details of—
(a) the conduct that has taken place, and
(b) the provisions under which the conduct has taken place, and
(c) any known errors that took place within the course of the conduct.
(5) The Intelligence and Surveillance Commissioner may postpone the notification under subsection (1) beyond the time limit under subsection (3) if the Commissioner assesses that notification may defeat the purposes of an on-going serious crime or national security investigation relating to the subject of surveillance.
(6) The Intelligence and Surveillance Commissioner must consult with the person to whom the warrant is addressed in order to fulfil an assessment under subsection (5).”.
Joanna Cherry
The new clause relates to part 5 of the Bill, which deals with equipment interference—more colloquially known as “hacking”. The effect of the new clause would be to require that the targets of hacking, or the targets of equipment interference, are notified after the fact, as long as that does not compromise any ongoing investigation. The effect of the new clause would mean that the judicial commissioners were under a mandatory statutory duty to notify those subject to surveillance once a particular operation or investigation had ended. At present, unlawful surveillance only comes to light as the result of a chance leak, whistleblowing or public interest litigation of the sort brought by Liberty and other non-governmental organisations and concerned citizens. That is deeply unsatisfactory and is also potentially contrary to our obligations under the European convention on human rights. If a person’s article 8 and other Human Rights Act-protected rights have been infringed, in order to have access to an effective remedy, as required under human rights law, the person must first be made aware of a possible breach. This was stated by the Court in Strasbourg in Klass v. Federal Republic of Germany back in 1978 and reiterated more recently in Weber and Saravia v. Germany in 2006. In both cases, the European Court of Human Rights reiterated
“that the question of subsequent notification of surveillance measures is inextricably linked to the effectiveness of remedies before the courts and hence to the existence of effective safeguards against the abuse of monitoring powers, since there is in principle little scope for recourse to the courts by the individual concerned unless the latter is advised of the measures taken without his or her knowledge and thus able to challenge their legality retrospectively.”
More recently, in the case of Zakharov v. Russia in December 2015, the Grand Chamber of the European Court of Human Rights found that judicial remedies for those subjected to interception in Russia were generally ineffective, particularly in light of the total absence of any notification requirement with regard to the interception subject, which meant that there was no meaningful ability to mount retrospective challenges to surveillance measures, and therefore such provision as there was in Russia was ineffective. Do we want to be passing legislation that is as ineffective in the protection of our constituents’ rights as that in Russia?
The Bill, as it stands, provides a new power for the Investigatory Powers Commissioner to inform someone subjected to a surveillance error by a public authority, but not by a communications service provider, if the commissioner is made aware of it and considers it sufficiently serious, in the public interest, not prejudicial to national security, and so on. We debated that at some length last week. For an error to be serious, it must have caused significant prejudice or harm to the person concerned.
As we also discussed last week, the Bill states that a breach of the Human Rights Act is not, in itself, sufficient for an error to be considered serious, which is a serious shortcoming of the Bill. When notifying someone of an error, before making a decision the Investigatory Powers Commissioner must ask the public authority responsible for the error to make submissions to the commissioner about the matter concerned. That is a narrow, arbitrary and highly discretionary power that will relate only to the most serious errors that judicial commissioners discover during their very limited audit of the use of surveillance powers, which highlights the conflicted position in which judicial commissioners may find themselves, and it does not discharge the Government’s human rights obligations to provide post-notification by default unless they can justify continued secrecy. That is very significant because the security repercussions of hacking into a device or network create an even greater imperative for post-notification, as we discussed at length when we debated amendments and clauses under part 5.
When we debated part 5, it was noted by me and others that a hack, once it has been carried out, may compromise the security of the hacked device, leaving it open to further exploitation by criminals or even other Governments. It is the equivalent of the state breaking into a house, conducting a search and then leaving without locking the doors and without the resident realising that all that has happened. It is one thing for the state to hack into a device where it is strictly necessary and proportionate, but it is quite another for the state to leave the scene, leaving individuals vulnerable to criminal attacks with no way of protecting themselves. If the Government wish their security and law enforcement agencies to have this significant power, they must accept the concomitant responsibility. The purpose of new clause 12, put briefly, is to put the judicial commissioners under a mandatory statutory duty to notify persons after the fact, once an operation or investigation has ended, unless there are very good reasons not to do so.
The Solicitor General
I have listened with great care to the arguments of the hon. and learned Lady. I absolutely agree that, where a serious error has occurred in the use of investigatory powers, the commissioner should be able to inform those affected. We have clause 198(1) to deal with that. However, I do not agree with the principle that as a matter of course, everyone or anyone subject to the use of a lawful investigatory power should be notified of the use of those powers, even with the caveat “unless it would damage an ongoing serious crime or national security investigation”. Such a principle would mean that we could not exclude the possibility of having to notify suspected criminals and terrorists that powers had been used against them, just because a specific ongoing investigation had stalled or indeed ended with evidence of wrongdoing, but without sufficient evidence to meet the prosecution test.
As hon. Members will know, suspected criminals and terrorists will often appear on the radar of the police and security services at different times and in different contexts. Clearly, it would not be at all appropriate to inform them that investigatory powers had been used in one case, as that could prompt them to change how they behave or communicate and hamper subsequent investigation.
National security is particularly important in relation to this matter, because the amendment would require the commissioner to make the subject of interest aware of the conduct that had taken place. That would not only run contrary to the long-standing policy of successive Governments of neither confirming nor denying any specific activity by the security and intelligence agencies; it would essentially require the techniques that they use in specific cases to be made public. That cannot be in the public interest. It would assist terrorists and criminals in their operations, which I am sure cannot be the intention behind the amendment.
Furthermore, the commissioner can delay notification only on the basis of serious crime rather than of crime generally, meaning that the amendment would require the commissioner to inform suspects in active criminal investigations that their communications data had been acquired. One example is an investigation into stalking. It may well not meet the serious crime threshold, but as we have discussed in another context, communications data could be essential, because they could show contact between two parties. My worry about the amendment is that it would require the stalker to be informed that his communications data had been requested, which surely cannot be the intent.
Joanna Cherry
Does the Solicitor General agree that new clause 12(3) deals with the very problem that he has just identified? It says:
“A Judicial Commissioner may postpone the notification under subsection (1) beyond the time limit under subsection (2) if the Judicial Commissioner assesses that notification may defeat the purposes of an ongoing serious crime or national security investigation relating to the affected party.”
The Solicitor General
I am afraid that it does not, because it uses the words “serious crime”. I have given an example that might not be seen as a serious crime, although as we all know, stalking is absolutely no joke to the victims and can lead to extremely serious consequences for them. I know that the hon. and learned Lady agrees with me about all that.
Beyond the principled objections to the amendment, there are numerous practical problems. It would not be practical, for example, for the commissioner to make everyone whose data were subject to a data retention notice aware of that fact. The commissioner would have to require the relevant telecommunications operator to provide them with a list of all relevant customers, and that operator would have to inform the commissioner every time a new customer joined the service. I worry that it would be pretty easy for criminals to use that process to identify services that they could use to avoid detection, and that unreasonable burdens would be put on all the public authorities covered by the Bill.
Joanna Cherry
By way of probing, if we were to delete the word “serious”, so that the subsection read, “notification may defeat the purposes of an ongoing criminal investigation or a national security investigation,” would that deal with the Solicitor General’s concerns?
The Solicitor General
I am grateful to the hon. and learned Lady for the way in which she is seeking a reasonable compromise, but I worry that her proposed approach is, on that basis, unnecessary. We already have checks and balances in the framework of the Bill that allow for serious error to be properly identified and dealt with, and for those affected to be notified. As I was saying, I worry that we would end up placing unreasonable burdens on public authorities by requiring them constantly to make a case to the commissioner about whether what they were doing would hamper national security or crime investigations if suspects were told that investigatory powers were being used against them. It would be far better for the police to spend their time and money on getting on with the work of investigating criminals than on determining whether individuals should be informed about what we should not forget is perfectly lawful investigative activity, with the caveat I mentioned about serious error.
Furthermore, in the context of bulk warrants under parts 6 and 7 of the Bill, the public authority or commissioner would need to examine all the data collected under the warrant to identify those individuals whose data had been collected. That would be impracticable and would actually lead to greater intrusions into privacy, because, as we know, bulk data are not examined to that degree unless there is a specific purpose and a properly framed approach. I am sure that cannot be the intention of the amendment. These proposed new clauses are at best unnecessary and at worst frankly unhelpful, and risk undermining the work of our law enforcement and security and intelligence agencies.
On new clause 13 and the audit trail point, the draft code of practice, at paragraph 8.5, requires that
“When information obtained from equipment interference is used evidentially, the equipment interference agency should be able to demonstrate how the evidence has been recovered, showing each process through which the evidence was obtained.”
There will, however, be circumstances when equipment interference is used on an intelligence-only basis—that is, a non-evidential basis. Given those points, and given that it is in the interests of law enforcement and the intelligence agencies to ensure that where equipment interference is used to support a criminal investigation, that is done accordance with evidential standards, new clause 13 is, with respect, not necessary.
If that new clause is in fact about the enhancement of oversight, we have made it clear that while the powers of the new commissioner are being significantly increased, their resources will be greatly increased, which means that they will be able to audit, inspect and review equipment interference agencies as they see fit. In addition, the draft code of practice for equipment interference will require the relevant agencies to keep extensive records to support and enable oversight. There has been no suggestion from the current oversight commissioners in respect of property interference warrantry that a statutory requirement for an audit trail is necessary.
The hon. and learned Lady properly made reference to recent ECHR authorities, most notably Zakharov, a case that I have looked at in the context of these debates. We have to be careful about Zakharov, because it deals with the targeted interception regime—a particular aspect of the debate, as she knows—rather than the bulk regime, in relation to which it is sometimes prayed in aid. I give that caveat in the spirit of fairness, because of course the Zakharov case contained reference to Kennedy v. United Kingdom, a 2010 case in which the UK was found to be in compliance with article 8. In particular, the role of the Investigatory Powers Tribunal was seen as an important part of the checks-and-balances mechanism that allowed the Court to come to the conclusion that the article 8 requirements were satisfied.
Joanna Cherry
I would like to put my new clauses to the vote.
Question put, That the clause be read a Second time.
Joanna Cherry
I beg to move, That the clause be read a Second time.
The new clause relates to part 4 of the Bill, in particular clause 78, and to the retention of communications data. It would exclude the providers of rural or community access communication services and small service providers from the obligation to collect and retain data, which I believe would be in accordance with policy statements made by the Home Office. I am indebted to William Waites, Duncan Campbell and Adrian Kennard for drawing our attention to the need for this new clause and for assisting in its drafting. I can do no better than remind hon. Members of the statement submitted by Mr Waites on behalf of his organisation, HUBS CIC—document 53 in the written evidence submitted to the Committee—in which he explains:
“I am a founder and director of HUBS CIC, a Scottish Community Interest Company whose purpose is to facilitate broadband provision in rural and remote parts of the country outwith the reach of the large, well-known carriers.”
Hon. Members will be aware of this issue, which has been debated elsewhere in the House in this Session. The statement continues:
“HUBS’ members are small Internet Service Providers typically with tens to hundreds of individual end-user subscribers each. Together they provide the only available Internet service in large swathes of the West Highlands and the South of Scotland…HUBS does not provide service to end-users but instead makes bulk Internet services available to its members that would not otherwise be obtainable due to their small size.”
The members’ concern about clause 78
“is about how the data retention requirements…in particular, and the new obligations and duties on Telecommunications providers in general relate to service providers operating in the environment of HUBS’ membership…A typical member’s entire network infrastructure will cost on the order of tens or hundreds of thousands of pounds. It is optimised for lightweight, energy efficient operation. There are no data centres or indeed cabinets that have adequate physical security for safely storing the most intimate records of individuals’ on-line activities…Indeed it is recognised in general that keeping sensitive data secure is so important, that the best way to meet this obligation is simply to not record it.”
Therefore,
“Constructing facilities in each of these service providers to extract, record, securely store and make available any ‘Internet Connection Records’…would cost at least as much as their entire infrastructure…HUBS, though it is designed to enable the micro ISPs to benefit from economies of scale, cannot help here because it does not know the individual end users…Due regard should also be given to the social dynamics. If an ISP has a couple of dozen subscribers, two or three of which are actively involved in operating the network, data retention has a very different flavour.”
That is very often the position in rural and far-flung communities. It is like asking neighbour to spy on neighbour. I am sure that is not what the Government intend, but the new clause would spell that out. It would give providers of rural or community-access communication services and small service providers the reassurance they require in the Bill.
To put it shortly, the provisions in clause 78 are clearly designed for a very different environment from that which I have described, so those who operate within that environment are keen to have the Government’s assurance that they will be excepted from the requirements of the clause.
Mr Hayes
I think I can deal with this very briefly, because there are only two points to make. First, the amendment is flawed. The Department for Culture, Media and Sport tells us that the suggested designation is no longer used, if ever it was. That is a fundamental problem, but that is not a good enough argument alone. A better argument—my second point—is that restricting a retention notice to only large operators could result in large geographic gaps in capabilities or indicate to criminals that they should use only small providers. It is understandable that the hon. and learned Lady wants to defend the interests of small providers, but the provision could have unintended consequences of the sort I do not think she means.
Finally, the Joint Committee said:
“We believe that the definition of telecommunications service providers cannot explicitly rule out smaller providers without significantly compromising the data retention proposals as a whole.”
I appreciate the hon. and learned Lady’s intent, but I am not sure the form of the amendment is adequate or the arguments sufficient to be persuasive.
Joanna Cherry
I am not sure what the Minister is saying. Is he saying he could look at the amendment and make it better, or that the principle underlying it is not acceptable?
Mr Hayes
I am saying that it is not wise to designate providers based on their size. There will be niche market providers who may provide a particular function exclusively and there may be others providing in a particular area. Taking them out of the system would contradict the purpose of the legislation. Let me see if I can compromise. We have said throughout, and when we were debating an earlier group of amendments, that we understand that some smaller providers will face a significant challenge. I have also said that it is important to recognise that while large providers will have mechanisms to implement readily the changes we expect of them—
Joanna Cherry
Sorry, Mr Owen, I have lost my train of thought. The concern behind the amendment is that although certain assurances have been given, I have tried to explain that, without a guarantee that requirements will be placed on such providers, they may simply grind to a halt. Is there any way round that? That is the purpose of the amendment.
Mr Hayes
Let me try to make a more pithy intervention. Of course we understand that we need to support providers in meeting their obligations and we will take the steps necessary to do that. What I do not want to do is to exclude them in the Bill from the requirement because that would have consequences that the hon. and learned Lady does not intend.
Joanna Cherry
I am sure the last thing the denizens of the west or the south of Scotland want is some mass influx of terrorists to start using their small internet service providers. On the other hand, they do not want their hard-won and hard-fought-for internet access to be completely compromised by unreasonable requirements being put on it. They are concerned that, although assurances have been given, there is nothing in clause 17 to prevent the Government from putting what would be practically and financially crippling requirements on them. That is the purpose of the amendment.
Joanna Cherry
The arithmetic is inevitable, Mr Owen. I would like to think carefully about what the Minister has said, and go back to the organisations concerned and discuss it with them so I will withdraw the new clause for now.
Clause, by leave, withdrawn.
New Clause 25
Discharge of the powers, duties and functions: obligations
“The discharge of the powers, duties and functions under this Act is subject to an obligation to have due regard to the following—
(a) the public interest in protecting national security,
(b) the public interest in the prevention and detection of serious crime,
(c) the public interest in the protection of the privacy and the integrity of personal data,
(d) the public interest in the security and integrity of communications systems and networks,
(e) the principle of necessity,
(f) the principle of proportionality; and that no interference with privacy should be considered proportionate if the information which is sought could reasonably be obtained by other less intrusive means,
(g) the principle of due process, accountability and respect for the human rights of those affected by the exercise of powers under this Act, and
(h) the principle of notification and redress.”—(Keir Starmer.)
Brought up, and read the First time.
Keir Starmer (Holborn and St Pancras) (Lab)
I beg to move, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss the following:
New clause 26—Discharge of the powers, duties and functions: protection of national security—
“The discharge of the powers, duties and functions under this Act is subject to an obligation to have due regard to the public interest in protecting national security.”
New clause 27—Discharge of the powers, duties and functions: prevention and detection of serious crime—
“The discharge of the powers, duties and functions under this Act is subject to an obligation to have due regard to the public interest in the prevention and detection of serious crime.”
New clause 28—Discharge of the powers, duties and functions: protection of the privacy and integrity of personal data—
“The discharge of the powers, duties and functions under this Act is subject to an obligation to have due regard to the public interest in the protection of the privacy and the integrity of personal data.”
New clause 29—Discharge of the powers, duties and functions: security and integrity of communications systems and networks—
“The discharge of the powers, duties and functions under this Act is subject to an obligation to have due regard to the public interest in the security and integrity of communications systems and networks.”
New clause 30—Discharge of the powers, duties and functions: necessity—
“The discharge of the powers, duties and functions under this Act is subject to an obligation to have due regard to the principle of necessity.”
New clause 31—Discharge of the powers, duties and functions: proportionality—
“(1) The discharge of the powers, duties and functions under this Act is subject to an obligation to have due regard to the principle of proportionality.
(2) No interference with privacy should be considered proportionate if the information which is sought could reasonably be obtained by other less intrusive means.”
New clause 32—Discharge of the powers, duties and functions: process, accountability and respect for the human rights—
“The discharge of the powers, duties and functions under this Act is subject to an obligation to have due regard to the principle of due process, accountability and respect for the human rights of those affected by the exercise of powers under this Act.”
New clause 33—Discharge of the powers, duties and functions: notification and redress—
“The discharge of the powers, duties and functions under this Act is subject to an obligation to have due regard to the principle of notification and redress.”
Keir Starmer
I welcome you back to the Chair, Mr Owen, for what I anticipate will be our last debate in this Bill Committee as we take this clutch of new clauses together. I say it is our last debate, but in some ways new clause 25 concerns an issue that we have been debating throughout Committee, from the very opening sitting and through every sitting we have had since. The discussion has been to-ing and fro-ing over whether there ought to be more specific provision for weight to be given to privacy in each clause or each time a power is set out, or whether there ought to be some overriding clause.
The new clause is an overriding privacy clause that is consistent with the recommendation of the Intelligence and Security Committee. For the Labour party, it is an important provision, upon which we place considerable weight. In other words, somewhere in the Bill, there needs to be a recognition of the real rights and interests that are affected by the powers in the Bill. A clause is needed to ensure consistency through the Bill, as there are examples of different powers being dealt with in slightly different ways. That clause should also act as a reminder to decision makers about the key principles they are applying in pretty well all the decisions they make. Perhaps most importantly, the clause should reassure the public on the key principles that run through the Bill.
I will concentrate on new clause 25. Considerable thought has been given to how an overriding privacy clause could be put together in a way that has meaning—and therefore gives confidence to the public—but is not so detailed as to be impractical to operate as an overriding clause. The way that the new clause has been put together is that four important public interests are recognised in paragraphs (a) to (d).
First is the public interest in protecting national security. That runs through the Bill and is the starting point. The second is the national interest in preventing and detecting serious crime, which also runs through all the powers we have debated. Thirdly, there is the public interest in the protection of privacy and the integrity of personal data. Now and again that crops up in the Bill, although not consistently, but it is an overriding interest. Fourthly, there is the public interest in the security and integrity of communications systems and networks. Those are the four powerful public interests.
Paragraphs (e) to (h) deal with the principles to be applied, including the principle of necessity and the principle of proportionality. As we have heard, there are examples where, although the Minister and the Solicitor General understandably say, “Well, of course that would be the reference point for decision making,” they are not on the face of the Bill. The new clause would provide the reassurance that that was the framework against which decisions were made.
As far as the principle of proportionality is concerned, the second limb of paragraph (f) is taken directly from the code of practice. It has been thought through and put into the code of practice but, for reasons I have argued previously, ought to be on the face of the Bill. Paragraph (g) deals with
“the principle of due process, accountability and respect for the human rights of those affected by the exercise of powers under this Act”,
and paragraph (h) deals with
“the principle of notification and redress.”
Now, they are principles and therefore are not fixed. The principle of accountability does not mean that everything must, necessarily, be transparent in the way it might be for other powers and duties in other Acts. The principle of notification does not mean there must always be notification. These are broad principles to be applied through the Act.
Whenever one tries to devise an overarching clause such as this, it is a careful exercise, or a judgment call, to try to decide what ought to be in and what ought not to be in. That is why the new clauses that follow are in the nature of a menu or suite of options. I am grateful to the Public Bill Office for giving me guidance on how to devise a number of clauses that would allow the Committee as a whole to look at each of these eight provisions and take a view on which ones ought to be included in an overarching privacy clause. My strong preference is not to get to new clause 26 and onwards, because I do not think that would be a particularly satisfactory way of dealing with an overarching privacy clause.
May I indicate, absolutely clearly and transparently, that I will listen carefully to what the Government say? In other words, I do not pretend for a moment that these new clauses could not be improved upon by different drafting. The issue we are probing is whether in principle there ought to be an overarching privacy clause, or an overarching set of public interests and principles, and if so, what broadly speaking would be included in them.
In that sense, new clause 25 can be properly described as a strongly probing clause. In other words, what we want to draw out are the views of the Committee on what an overarching clause ought to have in it; and if it is then necessary to have another joint exercise at drafting such a clause, then so be it.
Lucy Frazer (South East Cambridgeshire) (Con)
I rise to speak as someone who, as a lawyer, will have interpreted clauses such as this to advance a particular case, giving weight to a particular clause or using it to enhance a case or stress a particular fact. To take paragraphs (g) or (h), for example, when we have already discussed notification perhaps not being necessary, they might be construed as saying that notification was necessary in a particular clause where it has no meaning at all. Will the hon. and learned Gentleman acknowledge that, in inserting in an overarching clause, we might be hostages to fortune, by including intentions that we did not intend in specific provisions?
Keir Starmer
I am grateful for that intervention; there are really two answers. The first is that it has been the constant refrain from the Minister that most of these principles run through the Bill and that therefore they are unnecessary, although I would say it is necessary to flush them out in this form.
To give another example, when the Human Rights Act was being passed, there was a real concern about how freedom of expression would operate in practice, and the Government of the day were persuaded that there ought to be a clause that really indicated to the courts that special consideration or weight ought to be given to freedom of expression.
All that has meant in practice is that the courts, when dealing with freedom of expression, have looked carefully at that clause and given it due weight. It works pretty well in practice; it does not tie the hands of a court. However, it is a reminder to a court of what the most important public interests were in the view of those passing the legislation and what the principles running through the Bill were. More importantly, it was a reminder to decision makers. For every case that goes to court, there are however many hundred thousand decisions that are made by decision makers on the ground.
I have some experience in Northern Ireland of working with the police over there in implementing the Human Rights Act. Counter-intuitively in many ways, having statements of necessity and proportionality built into the decision-making process really helped them, because they were able to assess, probably better than most others, why they thought what they were doing was necessary, and able to articulate why they thought it was proportionate, and they actually came to very good decisions as a result of what might be seen as broad principles being built into their decision-making process.
Such a provision would assure the public as to how the Bill is intended to operate and what the strong currents going through it are. I genuinely think it would help decision makers in the fine decisions, when they are not quite sure where the balance lies, and it would be a reminder to the courts of the particular public interests and principles that Parliament intended to lay down as running through the Bill. The danger of such a clause is always that it will be overused by lawyers, but I do not think that is what has happened in practice with similar provisions.
Christian Matheson (City of Chester) (Lab)
I can assure you, Mr Owen, that I will not detain you, the Minister or the Committee for long, save to endorse what my hon. and learned Friend the Member for Holborn and St Pancras has said.
If this is to be our final debate in Committee, I pay tribute to the forensic diligence exercised by my hon. and learned Friend throughout our proceedings and as exemplified by new clause 25 that he has tabled. The crux of so much of what we have discussed in Committee has been balance—where the right balance is between the protection of individual privacy and the ability of our security, intelligence and law enforcement agencies to protect us as a nation. We all have different beliefs about where the balance lies and it is the job of the Committee and the House to establish that balance.
As my hon. and learned Friend has made clear, adding this overarching new clause would give the public a level of comfort—a level of trust, indeed—that we have the balance correct. The new clause would remind us, right at the start of the Bill, of the principles that we think underpin the legislation. That would provide the public with the comfort that they require and also imbue a sense of trust in the final Act that we hand over to the judiciary, the Home Secretary and the agencies that are charged with protecting us. Given the structure of the Bill and the repeated application of certain measures to different areas of activity, an overarching clause would provide a solid foundation to the rest of the Bill’s structure.
I commend my hon. and learned Friend for his work, and in particular for the new clause, because it helps to achieve the balance between protection of privacy and the protection and defence of the realm. I hope that it goes a long way towards winning the support of more sceptical members of the public who might be looking for reasons why they should not support the Bill; now, we can give them a reason why they should.
Joanna Cherry
I add my support and that of the Scottish National party to the new clause. I will tell hon. Members about an example of such a clause in Scottish legislation, which they might wish to look at. In doing so, I pay generous tribute to honourable Labour and Liberal Democratic parties which passed it. In coalition in the first Session of the Scottish Parliament, they passed a wonderful piece of legislation, the Mental Health (Care and Treatment) (Scotland) Act 2003. It was based on a report produced by a committee chaired by the late right hon. Bruce Millan, a former Secretary of State for Scotland and a very distinguished gentleman.
The 2003 Act sought thoroughly to modernise and codify the law of Scotland on mental health and, in particular, to take into account the human rights of those who have mental health problems. To do that, it set out in section 1 of the Act general principles that everyone discharging functions under the legislation must stand by. It is a piece of legislation that has very much stood the test of time and it has greatly enhanced the protection of the human rights of those in Scotland with mental health problems. It has also balanced that against the protection of the public in certain situations. The new clause does not take a legislative approach that is without precedent. If Members want to see how it might be done, they can find a similar example to new clause 25 in section 1 of the Mental Health (Care and Treatment) (Scotland) Act 2003.
Mr Hayes
I have immense numbers of notes prepared for me by my officials. It will surprise neither them nor you, Mr Owen, that I intend to use very few of them.
It is fitting that our last debate in this Committee obliges us to consider the matter that lies at the heart of all that we have debated, which is the balance, to use the word used by the hon. Member for City of Chester, between personal interest and national interest—the balance between what I might describe as the defence of personal privacy and the underpinning of the common good. In those terms, communal wellbeing and individual fulfilment are for me inseparable, and the national interest can only be defined as the people’s interest. It is right that we should consider how that balance is reflected in the words before us.
The hon. and learned Member for Holborn and St Pancras has tabled a measured new clause that attempts to strike that balance. He is right that it is in keeping with and in sympathy with my view, expressed in our very first sitting, that privacy is woven into the Bill throughout its provisions. He is also right that the overarching emphasis we place on privacy is important.
I will draw my remarks into sharp focus simply by saying this: the Government will introduce a clause along the lines proposed, and the new clauses before us will serve to inform that. My hon. and learned Friend the Member for South East Cambridgeshire is right that that has to be done with some caution, because, as both she and the shadow Minister said, we must avoid the pitfall of it being used as a way of frustrating the intent of the Bill in all kinds of other ways. The delicacy of its construction is a matter of appropriate concern.
Nevertheless, I am convinced that the new clause makes things clear. It is a helpful addition to our scrutiny, and I will finish where I started by saying that the balance that the hon. Member for City of Chester described is critical not only to his thinking, but to that of the Government and the shadow Minister. On that basis, I hope that the shadow Minister will withdraw the new clause with the assurance that it will be central to my consideration as we bring forward measures of a precisely similar kind.
Keir Starmer
I am grateful to the Minister for how he has put his final observations. It was in keeping with how all our debates have been conducted over our various sittings. I will not press any new clause to a vote. Pretty much every time that my wife and I take our children into a restaurant, no matter how many options are on the menu, they inevitably want something that is not on the menu. That is the position I find myself in now. I am happy that the suggested ingredients will be taken away and put together in a way that reflects the clause that the Minister, I am glad to say, has said he will introduce. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Question proposed, That the Chair do report the Bill, as amended, to the House.
Mr Hayes
In summary, Mr Owen, perhaps I could say a few words of thanks. I start by saying that anyone who has examined what we have done over the last several days and weeks would agree that the interpolations have been posed without contumely and the responses offered without bombast; our consideration has been motivated by well-informed interest and our determination has been tempered by reasonableness. So it should be, for this Bill is of the greatest significance. It is fundamental that we protect our national security and public safety—one might say there is nothing more fundamental—and that is what the Bill attempts to do.
I thank you, Mr Owen, and your co-Chairs, for gluing the Committee together with both sagacity and generosity. I thank the Clerks for grouping the amendments with professional skill; the Hansard Reporters for glowing, as they always do, with expertise; the Doorkeepers for guarding us and honing their locking and unlocking skills—largely due to the hon. and learned Member for Edinburgh South West, by the way; the officials at the Home Office for their gaping and gasping, I hope in admiration at the performance of those they advise, but possibly with incredulity, I cannot quite work out which; and the Ministers and other members of the Committee, for groping for the light in the dusk if not the darkness of their imperfections.
I particularly thank the Members on my side of the Committee: three immensely learned Ladies and three honourable Gentlemen learning at their knee; an almost perfect Parliamentary Private Secretary; a wonderful Whip; and my dear friend, the Solicitor General.
It would be both unwise and ungenerous not to pay tribute to the Opposition on the Committee who have been remarkable for their diligence, their reasonableness and their good humour, and for the way in which they have gone about the business of trying to perfect the Bill. I pay tribute to the hon. and learned Member for Holborn and St Pancras. I know he does not like my saying this—I have said it twice before and he criticised me both times—but it is the first time that he has done this, despite his long experience of other related things. He has done himself proud, if I might say so. The hon. and learned Member for Edinburgh South West, with just as much diligence, has held the Government to account thoroughly, but always, as I said, in the right spirit.
The Bill leaves Committee in a much better place as a result of the deliberations, our discourse and the scrutiny we have enjoyed. I thank all those I have mentioned and any whom I have forgotten to mention for their help in making that happen.
The Chair
Before other hon. Members make comments, I would inform them that when the Division bell goes, I will put the Question, whether a Member is in full flow or not, so that we do not have to come back after the vote, which will take up to three-quarters of an hour.
Keir Starmer
Thank you, Mr Owen. I have been handed a note which says, “Vote shortly”, and I think that is an instruction not to take long, but it would be remiss of me not to pay tribute and to say thank you to so many people who have made this process work as well as it has worked.
I start of course with yourself, Mr Owen, and your co-chair, who have taken us through the proceedings in an efficient and orderly way and allowed the points to be debated in the way they needed to be debated and drawn out where they needed to be drawn out. We are genuinely grateful to you for that.
I also thank the Public Bill Office. This has been a huge exercise and, on occasion, amendments that we thought we had lodged were not lodged where we thought they had been lodged and therefore, at 10 o’clock and 11 o’clock at night, the team upstairs was working to find the amendments, put them back in the proper order and make sure that we had them for the next day’s deliberations. It was not just what we might consider the ordinary working hours.
I think I am right in saying that, for better or worse, more than 1,000 amendments have been tabled by Labour party, Scottish National party and Government Members. That is a pretty record number. I think we have had up to 40 Divisions on the Bill. There has been a huge amount of work over and above, and we are all grateful for it. We are grateful for the work done to ensure that Hansard properly reflects what has gone on in this debate, so that things are put on the record accurately and that others can see what was argued, why it was argued and how it was argued not only when the Bill progresses through the House but also if and when it becomes an Act. We are also grateful to the other staff—the Doorkeepers and so on—who have helped with the process.
May I thank the Home Office team? Although, in a sense, they provide the notes to Government Members, I know how hard they have to work behind the scenes to ensure that what appears, particularly from the Minister and the Solicitor General, is informed, up to the minute and seemly and deals with difficult and probing issues. That is a huge amount of work behind the scenes. They have been helpful to the Opposition as well—
Keir Starmer
And we finished a day early. I would like to pay tribute to both the Minister and the Solicitor General. There are different ways of doing this. I am not over-experienced in it, but I know that sometimes there can be trench warfare, where both sides simply dig in, fire their ammunition and little is achieved. They have both listened to what we have said by way of our submissions and agreed on a number of occasions to think again in relation to the Bill. That is genuine progress, although it may not be reflected in the number of votes we have won. This is my second Bill Committee, and the number of votes I have won is still a very round number. However, I genuinely think we have achieved through our dialogue and through the approach of both the Opposition and the Government something that will pay dividends and will strengthen the Bill when it becomes an Act.
I also want to pay tribute to the SNP team. As will have been evident, there has been a lot of work behind the scenes to ensure that we are not duplicating one another’s work and that we think through what we do. That has been very helpful.
The Chair
Order. I think the hon. and learned Gentleman should sit down and allow Ms Cherry to speak for herself, because we are going to a vote.
Keir Starmer
I will. I hope that the hon. and learned Lady will mention the non-governmental organisations that have helped us. Thank you.
Joanna Cherry
I add my thanks to all those who have been mentioned so far. It has been a true pleasure to work so closely with the hon. and learned Member for Holborn and St Pancras. I pay tribute to the people behind the scenes who have greatly assisted Opposition Members in our preparation for this Committee.
A number of non-governmental organisations have been mentioned. I will not mention any one in particular; they know who they are, and they have been of great assistance to us. I also want to thank my hon. Friend the Member for Paisley and Renfrewshire North. This is my first time on a Bill Committee, and without his assistance, I would have been in even more of a guddle than I was on some occasions. I am very grateful to him for keeping me right.
The Chair
I add my thanks to all members of the Committee, the Clerks in particular, officials, the Official Report, the Doorkeepers and so on.
Question put and agreed to.
Bill, as amended, accordingly to be reported.
Westminster Hall
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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Anti-corruption Summit
(8 years ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Nigel Mills (Amber Valley) (Con)
I beg to move,
That this House has considered the Anti-Corruption Summit.
Hon. Members, members of the public and people watching this debate will not be surprised to learn that tackling corruption is one of the biggest items on the agenda this year. Barely a day goes by without it hitting the news. As co-chair of the all-party group on anti-corruption, I was keen to hold this debate so we can air the issues that the Government hope to tackle in the important summit next week and subject the summit to parliamentary scrutiny.
I thank the Backbench Business Committee for awarding me this debate. Unusually for a Back-Bench debate, we are not here to criticise the Government. We may have some suggestions about how they can be a bit stronger, but we are here to congratulate the Prime Minister and the Government for holding the summit, for placing this issue at the top of the agenda and for consistently championing transparency and accountability as enablers of good governance. We want real actions and agreements from the summit next week, so that those important things can be taken forward and enforced. I will set the scene and explain how I see the agenda, and then I will ask the Minister some questions about how the summit will work, who will be there, what the key Government aims are and how we can enforce the actions that are agreed.
In next Thursday’s summit, international partners will, we hope, agree a package of practical steps to expose corruption, punish the perpetrators, support the victims and drive out the culture of corruption. That is clearly timely, given what we have seen in recent weeks and months. It is difficult to measure the impact of corruption, but the scale has never been more obvious: the FIFA scandal, the Unaoil leaks and the recent Panama papers gave us a glimpse of the far-reaching and egregious damage that bribery, fraud, grand corruption and tax evasion can cause. As the Prime Minister said last July,
“Corruption is one of the greatest enemies of progress in our time.”
Bribes, tax evasion and grand corruption destabilise development, keep the vulnerable in poverty, add significantly to the cost of doing business and fund terrorism. We all agree that we need to find a way of fixing those things.
Next week’s extraordinary summit is outside the usual gamut of United Nations, G20, G7 or even OECD processes. It is a one-off, stand-alone, unique summit, and we are all keen to understand how any actions that are agreed can be enforced. We do not want just warm words next week; real action must result from them.
It is right that the UK takes the lead on this issue, because we are uniquely exposed to corruption. Our status as a pre-eminent global financial centre and the unfortunate financial secrecy touted by our overseas territories and Crown dependencies make the UK seem a safe haven for the proceeds of corruption and the individuals and organisations that facilitate and benefit from financial crime and tax evasion. We ought to recognise that.
When MPs go around the world and look at the issues that developing countries face, we often think, “Isn’t it great that we’re not suffering from that level of day-to-day corruption? We don’t have to bribe public officials to get the service we want. We are not at risk of being stopped by the police and being asked for a charge to keep driving.” But the UK is not completely corruption-free. As a big financial centre, we are very exposed to corruption, and we are used as a way to launder money and hide the proceeds of corruption and crime elsewhere in the world.
It is right that we praise what the Government have done in that regard. We will soon be one of the first countries in the world, and the first in the European Union, to have a public register of beneficial ownership. That is a real step forward, which will allow us all to see who owns the companies that operate in the UK. I am sure that it will give us some extremely useful and interesting information. We all welcome the recent consultation on extending that transparency to property ownership. We also welcome the new anti-money laundering action plan, which, if fully implemented, will bolster the regulators’ enforcement powers and their ability to identify and freeze suspicious transactions.
Of course, we have issues with our overseas territories, and if we cannot convince them to get on board with this agenda, our reputation for being a truly anti-corruption jurisdiction will not be intact. As the Panama papers show, secret company ownership makes most cases of large-scale corruption, money laundering and terrorist financing possible. Without secrecy, much of that could not be done.
A World Bank review of more than 200 of the biggest corruption cases between 1980 and 2010 found that more than 70% relied on shadow entities that hide ownership. Sadly, company service providers in the UK and the Crown dependencies are second on the list of providing the shell entities that facilitate those awful crimes. This summit and our international reputation will prevail only if we secure commitments from all our overseas territories and dependencies to introduce public registers of beneficial ownership and strip companies of the secrecy that allows them to hide the proceeds of crime, corruption and tax evasion.
Success will depend on whether we tackle the risks that are somewhat closer to home. Trillions of pounds flow through the UK’s financial system every year, and sadly some of those transactions are less than clean. The National Crime Agency recently estimated that tens to hundreds of billions of pounds-worth of corrupt and illicit funds are laundered through the UK each year. Last week, the acting chief executive of the Financial Conduct Authority appeared before the Treasury Committee, and when asked whether the UK system is suitably hostile to money launderers, she could only reply, “We could do better.” Clearly, we could and must do better. The laundered funds that are used to buy property here get into the system through the secrecy that our overseas territories allow. It is harder to spot and stop such funds once they are in the system, so we need to prevent them from getting there in the first place.
We must tackle money laundering in the UK. We welcome the action plan, but having 27 different institutions to supervise the anti-money laundering rules in the bodies that they regulate is far too many. They cannot have a real picture of what is going on, what action is needed, the trends and who is not complying. Will the Minister say whether the Government plan to find a way to reduce the number of supervisors, so that we can be confident that the new rules and those that are already in place will be enforced?
Law enforcement authorities identify three sectors that do not adequately report suspicious activity: the legal sector, accountancy and estate agency. Property ownership is a topical issue, and the fact that only 0.05% of all suspicious activity reports came from estate agents in 2013-14 suggests that action is needed to make that sector transparent. Recent research from Transparency International and investigations from Global Witness show how London’s property market is used for corrupt ends. More than 36,000 properties in London are owned by companies registered in offshore jurisdictions, and almost 10% of the properties in Westminster are owned by anonymous companies. We clearly cannot allow that situation to continue.
Anonymity has a clear link to corruption. More than 75% of corruption cases involving property investigated by the Metropolitan police’s proceeds of corruption unit involved anonymous companies registered in secrecy jurisdictions, 78% of which were registered in the UK’s overseas territories or Crown dependencies. This huge problem is sadly centred in territories over which we have some influence, so it is imperative that we produce some action from them.
Senior figures at the National Crime Agency have reported that corrupt investment in London’s most expensive properties is driving up house prices across the board. So money laundering not only is a problem for the rich and powerful, but has an impact on everyday life here in London. The longer we allow London to be a kleptocrats’ playground, the worse off we are making ordinary people.
We have all those statistics to recount, and an APG inquiry is ongoing at which we have heard many anecdotes about how British firms working overseas are losing out on contracts to unscrupulous firms based in countries that do not have the same regulations and rules, and do not play fair, as we do. We are losing jobs and income here, because other countries around the world are not following the rules that they ought to be. It is right for us to make a stand. We do not want businesses bribing their way into contracts around the world. Where we find that happening, businesses and their executives will be punished, and serious action will be taken. We will not turn a blind eye to it. Recently, Ernst and Young’s 2016 global fraud survey of senior executives found that 98% of UK respondents believed that it was important to know who ultimately owns and controls the entities with which they do business. So this is not a minority interest; the business world agrees that we should all know about such things.
Turning to the summit next week, will the Minister confirm exactly which countries are attending and the level of their representation? How many of the overseas territories and Crown dependencies will be present? Perhaps he will list which ones will not be. According to the recent statement, the two territories that had not agreed to have even a closed register of official ownership were Guernsey, which had some excuse to do with having elections and so could not agree—has any progress been made?—and Anguilla. Has some sense prevailed in that small part of the world? Has it seen the light?
The Parliamentary Secretary, Cabinet Office (John Penrose)
I will try to answer the broader questions at the end, but I can confirm that Anguilla has signed up. Guernsey’s election was last week, so we expect discussions to begin in earnest very promptly.
Nigel Mills
At least we have all the territories over that first hurdle.
Next week, the important thing will be to get real commitments on beneficial ownership and a timeframe for the register to be transparent and public, so everyone can see who owns every company established in a jurisdiction. For law-enforcement providers to be able to find such information in a timely way may be of some use, but we also want everyone to be able to search the register—for example, campaign groups could trace right through the system and see who owns properties. I suspect that law enforcement does not have the resources, sadly, to do that proactively, whereas sunlight and transparency will give us far more progress than a closed register ever could.
Will the Minister confirm whether the summit agenda includes discussion of a certain time by which all those territories will have a publicly accessible register of who owns companies and, preferably, of trusts in the jurisdiction? I accept that trusts are more complicated, but we need to see some progress on them as well.
Last autumn, I attended a meeting at which the Government’s anti-corruption champion, my right hon. Friend the Member for Brentwood and Ongar (Sir Eric Pickles)—sadly, he cannot be present today—confirmed that the Prime Minister was pretty determined to get overseas territories on board with a public register. The words the anti-corruption champion used were
“through legislation, guidance or naked pressure”.
I am not sure whether the summit counts as guidance or naked pressure, but if those do not work, what other options do the Government have? My right hon. Friend said “legislation”—his word—so will the Government put that on the table? At some point, will they take action if the territories will not go as far as we want them to, or is that completely off the table?
What other major countries are turning up? Are the Americans sending anyone next week, because they clearly have an important role to play in sorting out the world financial system? Those of us who would like to see greater action on global tax avoidance realise that the Americans have a real and vital role in that situation, so are they turning up next week?
If some actions are agreed next week and, as we hope, they are specific and have a real timeframe, how will they be enforced? Presumably, there will be no binding global agreement, but are the Government conscious of that? We do not want to hear warm words and promises that have been made before, followed by years of drift; we want real, concrete actions that are reviewed, with a timescale and ways to enforce progress.
If there is an agreement next week and some territories subsequently resile from it, what actions will the Government propose taking to convince the territories otherwise? It is not encouraging to see the Government announce that everyone has agreed to a closed register, and then senior people from some of our overseas territories glory in being able to say, “We’ve won. We’ve got everything we wanted out of this,” implying that it will be business as usual—presumably, not what we were aiming for. We want any agreement next week to be meaningful and strong, not just hot air.
With those thoughts, I wish the Government and the Minister well at the summit next week. We hope that they will come out with a strong and binding agreement, which can take the agenda forward towards finding ways of materially reducing the amount of corrupt money that flows around the world, especially into the UK. Nations around the world should, rightly, keep the money that they earn and have the tax revenues necessary to grow their economies. Everyone throughout the world should be able to see our financial system moving in the direction of being open, transparent and honest, rather than corrupt.
Dame Margaret Hodge (Barking) (Lab)
I congratulate the hon. Member for Amber Valley (Nigel Mills) and my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) on securing today’s debate.
I welcome the Government’s commitment to tackling corruption and the leadership shown by the Prime Minister, but for this to end up as more than a public relations stunt, the Government need to take serious action. I want to focus on three issues: tax havens and the proposals on beneficial ownership registers; properties that are owned in the UK through shell companies that have been established in tax havens; and Britain’s own record in stamping out corruption at home.
First, on tax havens, transparency about who owns assets—whether in companies, trusts or other entities—is absolutely vital if we are serious about stamping out corruption. Most tax havens are UK Crown dependencies and overseas territories, which are countries that carry the Union Jack on their flags and whose citizens are given British passports. Yet the secrecy that surrounds tax havens, which is at the heart of how they operate, results in massive corruption and money laundering throughout the world. I agree with what the Prime Minister said during his recent trip to the Caribbean in the autumn of 2015 that
“if we want to break the business model of…stealing money and hiding it in places where it can’t be seen: transparency is the answer.”
I have looked at a whole range of data, research and evidence. The World Bank review, to which the hon. Member for Amber Valley referred, looked at 213 cases of corruption over a 30-year period, from 1980 to 2010: 70% of the cases relied on anonymous shell entities, and the UK, the Crown dependencies and the overseas territories were second on that list. In the Mossack Fonseca papers, we find that of the 214,000 corporate identities exposed, half were registered in the British Virgin Islands. Of the world’s top 200 global companies, 90% have a presence in the tax havens. Tax havens are being used to hide money and to enable money laundering and corruption, yet the Prime Minister has failed to secure what I thought he was setting out to do: to ensure that the Crown dependencies and the overseas territories have registers of beneficial ownership that are open to the public. The commitment that he gave when he came to the House to give a statement arising out of his own position on the Mossack Fonseca papers failed to give us that assurance.
We only have to look at the words of one of the leaders of the overseas territories, the Premier of the Cayman Islands, to see that they saw the Prime Minister’s statement as a victory. Premier McLaughlin said that the UK had caved in:
“As previously indicated this is not a central registry as beneficial ownership details will remain with the service providers managing them, but rather information will be accessed via a central technical platform. And it certainly will not be available publically or available directly by any UK or non-Cayman Islands agency.”
I am sure that the Minister is familiar with these words. The Premier went on to say:
“This is what we wanted, this is what we have been pushing for three years for, a disaggregated system which leaves the beneficial ownership information intact with the service providers but accessible by the general registry and accessible by the law enforcement agents in Cayman.”
This is what they wanted. Indeed, what is almost worse is that in that interview, which was published in the Cayman press on the day following the Prime Minister’s announcement here in the House of Commons, the Premier said that having reached the agreement gave the Cayman Islands a greater sense of confidence about the UK’s endorsement of the business that is transacted there.
By agreeing to what is not really a register but a secret gathering of information, we have ended up giving a veil of legitimacy to the bad practices in overseas territories that allow money laundering and corruption. I say to the Minister that that is simply unacceptable. It is vital that such registers are properly compiled and public. Only then will we know who owns the assets that are at present in companies in the tax havens. Practically, until we know that, any idea that the odd collection of information in the tax havens will benefit us is false. Our own enforcement agencies are far too poorly resourced to be able to come up with evidence to justify why a tax haven should tell them who owns a company, and there will be unequal access to the data required to tackle corruption, because developing countries have even fewer resources and are less capable of seeing whether they can access such information.
I say to the Minister that it is perfectly possible for us to insist that the overseas territories and Crown dependencies compile public registers of beneficial ownership. We have intervened on other issues, and if we are serious about tackling corruption, we should intervene on this issue. In a previous time, the Conservatives intervened through an Order in Council to ban capital punishment, and Labour, when it was in office, intervened through an Order in Council to outlaw discrimination on the grounds of sexuality. The UK public will believe that the Government mean what they say about tackling corruption only if they choose to use the powers available to them through the Privy Council to enforce transparency. The first issue I ask the Minister to comment on is whether he will do that—and if not, why not?
The second issue is the scandal at our own doorstep of the way money is laundered into the UK property market. Again, the data and research here are substantial. In a 2015 paper, Transparency International found that £180 million of property that is thought to have been bought with laundered money since 2004 is currently being investigated. It claims that that is the tip of the iceberg and, to go back to the first point, says that in three out of four of those cases, an offshore structure was used to hide the owner’s identity.
Transparency International also found in March 2015 that more than 40,000 properties in London alone were held by foreign companies and that 89% of them were held in secret tax havens such as the British Virgin Islands, Jersey, the Isle of Man and Guernsey. In 2014 the Evening Standard found 700 “ghost mansions” as it called them, worth about £3 billion, uninhabited in London. The Guardian looked at one street in Hampstead and found £350 million of vacant properties all owned by shell companies in tax havens and the brilliant investigations carried out by both Private Eye and Tax Justice Network found not only massive properties held in tax havens but that 120 former Crown Estate properties had ended up being owned in 14 tax havens. They established that one in six homes sold in Westminster and in Kensington and Chelsea in the three years before their 2015 report had been bought by offshore companies.
That is a scandal, which hikes up property prices here in London and distorts the housing market. Because that is at the top of the market, I am not sure whether that is taking away from many people in real housing need, but we therefore become the centre and focus of money laundering and bringing money into the London property market through shell companies in tax havens. The Minister and the Government are consulting on this issue, but we should insist on a publicly open register of ownership of all properties in London.
In the Minister’s proposals, he talks about potential fines and imprisonment provisions for those who do not provide information, but of course that is no good if the owner is sitting in the Cayman Islands or the British Virgin Islands. He therefore needs powers to confiscate property and bring it back on to the British housing market. That would be a much stronger power. In those proposals, is the Minister talking about properties acquired in the future? If so, what does he intend to do about the many current properties?
My third and final point is about our seriousness in fighting corruption, which must start with fighting corruption at home. It is interesting—I am sure the Minister noticed this—that the first three prosecutions brought under the Bribery Act 2010 were all against UK officials: one in the courts; one a taxi driver bribing a local government official to get a licence; and one an overseas student bribing a lecturer. Whenever I talk to people in other countries, I always feel nervous about the patronising, complacent attitude we show that we have got it all right at home. We have not. If we are to be serious about fighting corruption, we should start by establishing our own anti-corruption strategy in Britain.
I am particularly concerned about the role of the financial institutions in the UK. Banks, advisers and all those people are focused here because of the strength of our financial sector, and they are the very institutions that are facilitating money laundering and helping the corruption that takes place internationally. We saw in the Panama papers that the UK was the second most popular place with which Mossack Fonseca did business. We saw that nearly 2,000 of the so-called enablers—the lawyers or advisers—were located here. We also saw that HSBC was one of the biggest banks involved in the transactions revealed in those papers and that Coutts was second to it. HSBC was used 2,000 times and Coutts was used 500 times. I have argued before, and will argue again, that if the Government are serious about fighting corruption and limiting the role of all those advisers and banks in facilitating it, they ought to introduce a new offence on the advisers and banks and not just look at the culprits. It is the advisers who devise the schemes, and if we could cut that off at the root, we would not have problems later.
The rumoured proposal for the Serious Fraud Office to come under political control via the National Crime Agency at the Home Office is another concern. If we are serious about setting an example in the fight against corruption, we should not allow the Home Secretary to direct SFO investigations. Of course, proper resourcing—whether of the SFO or HMRC—is vital.
I was disturbed at the recent accusation from David Normington about the politicisation of public appointments. Corruption may be too strong a word, but this example, which comes from the Minister’s Department, shows how much we need to do at home to get our own house in order. David Normington accused Ministers of seeking to dismantle the existing system for making senior appointments to public bodies. He specifically accused the Secretary of State for Culture, Media and Sport of trying to fill a prominent position in the National Portrait Gallery with a Conservative. None of the five applicants deemed suitable by Ministers for the job had been put through for interview, although four of the five had substantial connections with the Conservative party, and the Secretary of State therefore refused to accept officials’ recommendations.
It is very disturbing to see the ConservativeHome website actively encouraging Conservative supporters to apply for key public appointments. That may be a little thing, but it is symbolic. If the Government are going to lead the fight against corruption in the world, they have to start by putting their own house in order. The summit next week is an opportunity for action. I hope that it does not turn into an exercise in public relations. The decision on which way we go is in the Government’s hands.
Damian Collins (Folkestone and Hythe) (Con)
This is a massive topic that will provoke a huge amount of interest today and in Parliament next week. I want to confine my remarks to corruption in global sport, which has been one of the major global corruption issues that we have debated and confronted over the past few years. I have been involved in this area through my work on the Select Committee on Culture, Media and Sport and as co-founder of the New FIFA Now group, which has campaigned alongside excellent organisations that care about the integrity of sport, such as Transparency International UK, for greater openness and transparency in the way global sports bodies are run, and in particular for reform of major organisations such as FIFA.
On the FIFA corruption scandal, I recall the exact words issued by the US Department of Justice in its indictment against FIFA, published last year. It said that corruption at FIFA was
“rampant, systemic, and deep-rooted”.
The scale of the investigation so far and the number of arrests and indictments against senior officials in FIFA underline the breadth, and what will come in time to be seen as the depth, of corruption within that global sporting body.
As with other areas of corporate corruption, the causes of corruption within sports organisations are reasonably clear and simple to understand. Corruption in sport is an important issue, and it is not only a question of the integrity of sporting competitions and the people who take part in them. That is important in its own right, but we have to recognise that serious criminal elements have used the opportunities that sport presents to move money all around the world, be it through laundering money through the football transfer system or people acquiring stakes and interests in clubs before seeking to hide their identity behind shell companies held overseas. That has been a major problem for a number of years, and the major corruption scandal at FIFA and in other sports has brought it to the forefront.
The reasons why corruption occurs are relatively easy to understand when there are organisations with poor internal governance, led by a group of people who are not really accountable to anyone else and who base themselves in hard-to-reach places, with little scrutiny of the way they use their money and power. If we look at the breadth of allegations of corruption against FIFA officials, they have largely been about people using the organisation’s resources to enrich themselves by taking a cut of contracts, broadcasting rights and marketing rights, or by using their power and wealth to buy the votes of other people in order to secure positions of prominence for themselves and their friends and even to determine where the World cup final is played.
There is not only a lack of transparency within FIFA and how it uses its resources; there is also a lack of any real opportunity for people within the organisation who have a concern to blow the whistle. There is nowhere for them to go, because they are largely making their complaints to the people who control the organisation and who, on the whole, are not that interested in those complaints.
During the FIFA scandal in 2011, David Triesman, a former Foreign Office Minister and the former chairman of the Football Association, who had been intimately involved in leading England’s bid to host the World cup championships in the process leading up to the voting for where the tournament should be played in 2010, used parliamentary privilege to lay before the Culture, Media and Sport Committee allegations of corruption against senior football officials such as Jack Warner, Ricardo Teixeira and Nicolas Leoz, suggesting that they had solicited bribes. Lord Triesman claimed that Jack Warner had asked the FA to pay him a sum of money to secure the rights to show World cup football matches in major stadiums in Haiti to people who had been affected by a recent earthquake. It transpired that Jack Warner was asking for payments from the FA for rights he already owned in an attempt to solicit money for himself personally, with the understanding that if he received that money, he might vote for England to win the right to host the World cup.
That is an example of information we have received. In the case of Lord Triesman’s allegations, which were dismissed at the time by FIFA and not taken seriously enough, the people he alleged were guilty of being involved in corrupt practices have subsequently been indicted by the FBI as part of its investigation. That poses the question: why did the Serious Fraud Office not do more at the time to investigate thoroughly the allegations that Lord Triesman put into the public domain? Are the resources available to ensure that such investigations can take place? Could more be done to reach out to other law enforcement agencies around the world in order to share intelligence and information where a suggestion of wrongdoing is put before the offices in this country?
Sharing of information and international co-operation is important. While it may well be more appropriate for a different international or national authority to take the lead in an investigation, we can still play a very important role in following up on it. I am concerned that there have been occasions in the past when whistleblowers have come forward with information but there has not been follow-through or action on it, and years have been lost that could have been spent going after the wrongdoers and taking a stand against them.
I want to use this opportunity to raise an example that relates to an allegation that was made in the course of the recent FIFA presidential elections but could not be discussed in public because of the action of the lawyers representing Sheikh Salman of Bahrain, who was a candidate for the FIFA presidency. This is an important illustration of the sort of case that needs to be discussed publicly and examined carefully by people who care about issues of corruption. There was a suggestion that Sheikh Salman had colluded with Sheikh Ahmad, who is head of the Olympic Council of Asia and a member of the FIFA executive committee and the International Olympic Committee, so that Sheikh Ahmad could use his financial position as head of the OCA to channel money to football associations in Asia in order to persuade them to vote for Sheikh Salman in the 2013 elections for the presidency of the Asian Football Confederation.
I would like to run through an exchange of emails between the various parties involved, to give an example of the sort of case that should be followed through and examined more closely. In this case, the Football Federation of the Kyrgyz Republic was in email contact with the Olympic Council of Asia. Sheikh Ahmad, the Kuwaiti head of the OCA since 1991, is a sporting kingmaker and a key powerbroker in Asia who is a close friend and associate of Sheikh Salman. The FFKR voted for Sheikh Salman in the AFC election on 2 May 2013, which he won by a landslide. On 26 April 2013, the FFKR’s executive director, Dastan Konokbaev, wrote to the private email address of the OCA’s IT manager, Amer Elalami, with details of flights that the FFKR’s delegation would be taking to and from Kuala Lumpur for the AFC vote. Addressing him as “Brother”, he listed the flights he would be taking with the president, Semetei Sultanov, and the vice-president of the organisation. On the previous day, he had sent an email with his security mobile number, saying,
“it is available any time”,
and wrote,
“this is my private email”.
Mr Elalami replied from his personal account with the signature,
“IT Manager, Olympic Council of Asia”,
and his own phone number. He wrote:
“Noted brother, will keep in touch, just let me know if required any assistance from our side”.
On 29 April 2013, three days before the vote, Mr Konokbaev emailed Mr Elalami at his private email address listing 53 projects and requesting the OCA’s financial support. The subject heading of the email was “About support for Kyrgyzstan football”. These projects included training camps, friendly matches, more than 300 air fares and the construction of a sports centre. The total value of the projects amounted to millions of pounds.
There seems to be no legitimate reason for the FFKR, which is part of FIFA, to seek funding from the OCA. The OCA’s IT manager had no grant-giving role and was using his private email address rather than his official one. Despite this, Mr Konokbaev wrote:
“Brother, I hope you are well! I would like to acquaint you with our plans for 2013 (here included preparatory cycle Kyrgyzstan’s National Team) and indicate”
where you need support. He continued:
“We have previously discussed, and even decide[d] many issues”.
Mr Elalami forwarded the email on to the OCA’s director general, a former pilot he referred to as “captain”. Mr Al-Musallam is Sheikh Ahmad’s right-hand man and the pair work closely together. Mr Elalami appears to have believed that Mr Al-Musallam was already aware of this request for funds, writing:
“Did you receive this email from Dastan?”,
and seeking advice on how to respond. He continued:
“They send a financial support till March next year, what I should reply. Please advise”.
The emails also show that Sheikh Ahmad, Mr Al-Musallam and Mr Elalami were among a 19-strong OCA delegation in Kuala Lumpur for the vote. Bizarrely, the OCA did not have accreditation from the AFC. Instead, it was accredited to football associations.
In a document headed “list of delegates—KL”, which was circulated among OCA officials, Mr Elalami’s name appeared alongside “KYR”, which is believed to mean Kyrgyzstan, in the “accreditation” column. Mr Elalami is a Kuwaiti who had no formal association with the FFKR. In 2009, the OCA had requested accreditation for the AFC Congress but, after being refused this, set up offices nearby and hosted a reception for 30 or so football associations on the day before a vote in which Sheikh Salman unsuccessfully stood for a position on FIFA’s executive committee. On 6 May, the day after flying back from the 2013 vote, the FFKR’s executive director sent a further email to Mr Elalami reminding him of the projects that needed funding. He said:
“Earlier, I sent you”
an email
“describing our needs and as you can see, there are issues that need to be addressed in the next few days [now] that all went according to plan”.
Beneath the projects he wrote:
“Which way you help? How much? Period of time?”
In some cases, he asked how the FFKR would be paid—“by bank transfer” or “in Kuwait”.
These issues warrant further investigation. In this case there is no direct proof that money changed hands between the OCA and this particular football association, but it is curious and suggests that there could be people who abuse their position in global sport to support each other, reward each other and share money between each other as a currency to secure political support. But where does anyone go with such allegations? Where can a whistleblower turn to ensure the proper investigation of such allegations? This has been at the heart of many corruption issues in sport.
Looking to the anti-corruption summit particularly, how can we ensure a gold standard for organisations operating in the sporting world to ensure they comply with high standards in auditing the way their money is used? There are questions for big global accountancy firms such as KPMG, which has audited FIFA’s accounts for many years. Despite its auditing of those accounts, it was possible for Sepp Blatter to pay Michel Platini 2 million Swiss francs, although that money was not accounted for in FIFA’s accounts. How can that be possible? How can major companies that work with global organisations sign off accounts if there concerns about them? What sort of faith can we have in that auditing process?
What sort of auditing is there? What sort of transparency is there in the way money and resources are used, and what sort of enforcement can be taken when there is a problem? Should there be a green light system for global organisations to say there are concerns about the lack of transparency in the organisation? Other commercial partners, whether sponsors or broadcasters that work with those organisations, should be mindful of those concerns when transacting with that organisation or seeking to do business with them.
Do we need some form of specialist unit in the National Crime Agency to look at sports corruption? There is a real problem with a lack of investigators working in this area. The Select Committee recently took evidence from the Tennis Integrity Unit, which has just two investigators looking at problems, largely involving gambling, and allegations of match fixing in tennis. I believe that FIFA had four people in its investigation unit. The UK’s Anti-Doping Agency has one person in its investigation unit.
Do we need greater resources for work across different sports and based in the NCA that can look at allegations of corruption in sport and act on them? Perhaps we need a unit of four or five officers working in the NCA and dedicated to looking at sports corruption, working with global sports governing bodies, having a direct relationship with their own internal integrity units and seeking to co-operate with the FBI and other investigatory bodies around the world. That additional resource would be welcome—
Sir Edward Leigh (in the Chair)
Order. I am becoming a bit worried about time. Given that we had long speeches by Back Benchers, it is only fair not to restrict Front Benchers. Perhaps the hon. Gentleman will start to bring his speech to a close and perhaps the next speaker will please keep an eye on the clock.
Damian Collins
I will wrap up.
Can we look at the way the NCA works and at its resources? Working with overseas territories has been an important question in the FIFA corruption scandal. Jeff Webb is one of the people indicted by the FBA and is based in the Cayman Islands. How easy is it for us here to request information from the Cayman Islands about people we are concerned about and who may have links with sports corruption scandals? I welcome what the Government have said about access to a register and I am interested to hear how the Minister believes that will change our ability to pursue such cases.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
As chair and co-founder of the all-party corruption group, chair of the parliamentary friends of CAFOD group, and a long-standing advocate for anti-corruption efforts, may I say that it is a pleasure to speak in today’s debate? I congratulate the hon. Member for Amber Valley (Nigel Mills) on securing it. It is important and timely. Hon. Members have made important speeches and I look forward to the Minister’s response to the questions that have been raised.
As we have heard, the forthcoming anti-corruption summit presents a unique opportunity for world leaders, business and civil society to come together and advance the international transparency and the anti-corruption agenda in a way that we have not seen for years. I agree with the hon. Gentleman that we are not here to criticise the Government, because we welcome the summit and the efforts made in that regard. However, as my right hon. Friend the Member for Barking (Dame Margaret Hodge) powerfully made clear, if we are going to call on the rest of the world to take action, we must get our own house in order.
Last summer, the Prime Minister said in Singapore:
“I’m determined that the UK must not become a safe haven for corrupt money from around the world...there is no place for dirty money in Britain”.
However, Transparency International said in its report, “Corruption on Your Doorstep”, that there is still a place for dirty money in the UK. Since 2004, over £180 million of property in the UK has been brought under criminal investigation as the suspected proceeds of corruption; over 36,000 properties are held by offshore companies based in tax havens—a point made by my right hon. Friend—and in 2011 alone, £3.8 billion of UK property was bought by companies registered in the British Virgin Islands. If we hope to see progress at an international level, we must lead by example. The Prime Minister has rightly given a commitment on public registers of beneficial ownership, and I hope we see that come to full fruition. It is critical that the Prime Minister turns this leadership into action and that we ensure the British overseas territories and Crown dependencies come on board with their own public registers—a point made by the hon. Member for Amber Valley.
The UK can lead by example in other areas, but what more can we do here at home on enforcement? The hon. Member for Folkestone and Hythe (Damian Collins) asked whether our enforcement agencies do enough. My key question is: do they have the right resources and legislative framework to do all they can to stamp down on corruption?
One of the first issues I want to raise is how we hold companies criminally liable for actions of their employees that facilitate corruption, tax evasion, money laundering and fraud. I have spoken about that previously. I have pressed various Ministers and the Prime Minister on the issue because, astonishingly, the UK remains one of the most popular places for the facilitation of all forms of corruption. The Panamanian firm Mossack Fonseca, of recent Panama papers fame, worked with almost 2,000 professional enablers in the UK—accountants, estate agents and lawyers—to set up companies, foundations and trusts, all or some of which could potentially have been used to launder money or facilitate illicit financial flows. The UK was the second most popular place for Mossack Fonseca to operate in. I do not think that is an achievement of which the Prime Minister is particularly proud.
Many factors are involved, but one key issue in the UK is the law on corporate criminal liability. Under UK law, it is extremely difficult to hold a company criminally liable for the actions of its employees in terms of corrupt acts or any similar offence. To do so, prosecutors have to prove who is the “controlling mind” of the company, with direct knowledge of those acts. Our law enforcement agencies, including the Serious Fraud Office, have raised the issue time and again. The SFO director, David Green, has said:
“That is difficult because inevitably the email trail tends to dry up at middle management and evidentially it is hard to prove.”
There is a potential solution. The Bribery Act 2010, introduced by the last Labour Government, sets a more reasonable evidential threshold for prosecuting companies where their employees have been involved in acts of bribery. It requires companies to prove that they have taken “adequate” steps within their organisation to prevent employees from committing such acts. The SFO secured its first prosecution and conviction for that new “failure to prevent” offence last December, and we understand that more prosecutions are on the way.
The Government recognise the effectiveness of the offence, because the Prime Minister recently announced, in the wake of the Panama papers revelations, that he would legislate to create a similar offence in respect of tax evasion, but he needs to go further and apply the new law to all forms of economic crime. I strongly urge the Minister, as I did a Treasury Minister two weeks ago, to look closely at part 2 of schedule 17 to the Crime and Courts Act 2013, because it contains an exhaustive list of offences, all of which cause immense harm both abroad and at home—they range from false accounting and forgery to fraudulent trading, bribery and money laundering—to which the Government could easily apply the new offence. That would send a clear message to the rest of the world that criminal corporate behaviour will not be tolerated in the UK and that the full force of our criminal justice system will bear down on corporate wrongdoing wherever it is found. I am sure that the Minister would like to send that message. The Prime Minister recently committed to “consider carefully” that proposal when I put it to him during his statement on the Panama papers. It would be helpful if the Minister updated us on whether the Prime Minister has been able to do that as of yet.
Ahead of next week’s summit, the Government could also commit to ensuring that our law enforcement agencies across the board have the tools they need to properly tackle the facilitators and enablers of corruption in this country. I have mentioned the SFO. Under the Roskill model, it is charged with investigating and prosecuting the most serious and complex crimes, much of which falls under the umbrella of corruption. That unique model of investigating and prosecuting crime, all under one roof, has proved to be highly effective, yet doubts still linger about the SFO’s future. I hope the Minister will today give a reassurance that the SFO will be provided with the support and resources it needs over the long term. There is always a question mark hanging over its future and whether it will be absorbed into the NCA. It is important that the SFO is able to concentrate on these very important matters, not the least of which are the issues that the hon. Member for Folkestone and Hythe raised.
Another great weakness in the armoury of our law enforcement agencies is their ability to recover stolen assets or the proceeds of crime. As Transparency International has highlighted, the UK’s asset recovery regime has not been up to the job. It is estimated that £23 billion to £57 billion of dirty money is laundered in the UK each year, given London’s role as a global financial centre, second only to the US. Against that, the National Audit Office estimates that only 25p out of every £100 is confiscated from organised criminals; a significant proportion of that sum is likely to be the proceeds of corruption. It is therefore extremely welcome that the Government say in their “Action Plan for anti-money laundering and counter-terrorist finance” that they are considering new legal powers
“to enable the quick and effective forfeiture of money held in bank accounts in cases where...there is suspicion that the funds are the proceeds of crime.”
Such powers are long overdue. In the light of that new impetus, can the Minister say whether asset recovery regimes will feature highly on the agenda of the Government’s summit next week? What aims do the Government have for increasing co-operation and joint working across national borders to ensure that those words on asset recovery are translated into action? At the end of the day, it is only through global co-operation and by demonstrating that there is nowhere to hide from law enforcement agencies that we will be able to disrupt and ultimately recover stolen assets and, hopefully, prevent this sort of crime.
I want to finish by reiterating a key point made by the hon. Member for Amber Valley and my right hon. Friend the Member for Barking: the central importance of public registers of beneficial ownership to the Government’s anti-corruption efforts. The Prime Minister himself said last September:
“If we’re to beat corruption, we need transparency.”
That means transparency over who owns properties, transparency over which companies own other companies and transparency over which individuals own those companies. It is simply not good enough for Ministers to accept assertions from overseas territories and Crown dependencies that providing access to beneficial ownership registers to law enforcement agencies alone is sufficient.
Catherine McKinnell
Okay. The Government need to do more and ensure that the public have access to the registers. We saw the power of public light falling on the Panama papers and we need to ensure that the public have the same right of access to the ownership registers. The summit is an extraordinary opportunity for the UK to press ahead with the anti-corruption agenda. There is much to do, including here at home, and we do not want this to be a missed opportunity, so I hope the Minister will provide reassurance this morning that it will not be.
Sir Edward Leigh (in the Chair)
I know that the next Member will be brief and to the point and will on no account speak beyond 10.35 am.
Patrick Grady (Glasgow North) (SNP)
It is a pleasure to serve under the chairmanship of a fellow member of the Procedure Committee, Sir Edward. Indeed, 10.35 is incredibly generous—I hope that is not an act of patronage or corruption because we are on the same Committee. I will endeavour to be as brief as I can. Many of the points that I wanted to make have already been very well made in the debate.
I want to consider the impact of corruption overseas, in developing countries, some of the steps that can be taken to address that issue and the leadership role that the UK Government have in that, but I will briefly reflect on the speech by the hon. Member for Folkestone and Hythe (Damian Collins) about FIFA. I do not know whether this is strictly within the limits or purview of the forthcoming summit, but in advance of the recent FIFA presidential election, I called for the Scottish Football Association to take an indicative vote of the members of its travel club, the Tartan army, on which of the candidates for the presidency they would prefer to see elected; perhaps it could inform the choice of its delegates. I do not think that necessarily happened, but it would be interesting to look at that kind of democratisation and shedding a bit of light on some of the processes of these great global bodies that control so much money and so much public interest but have so little accountability.
Let me move on to the specifics of the impact of tax dodging and corruption overseas. There is a tax gap in the UK between what it is estimated could be collected and what is actually collected. How much is lost through tax dodging and corruption? At least, however, we have a tax base to begin with. In developing countries, corruption and tax dodging can hit economies very badly indeed. Some estimates suggest that about $1 trillion flows out of developing countries via illicit financial flows every year. As a result, the continent of Africa is actually a net creditor to the world economy; that is not something that is generally understood.
The OECD has estimated that tax havens may be costing developing countries a sum that is up to three times the size of the global aid budget. In a few weeks, we are expected to debate the aid budget here in Westminster Hall. If people really want a reduction in global aid budgets, the money for resources to take people out of poverty in developing countries has to come from somewhere, and it has to come from developing countries being allowed to develop their own tax base. At the moment, the impact is there for all to see. A lack of infrastructure, development being held back, and weak health and education systems compound all the other development challenges that we so often hear about in Westminster Hall.
There is a particular challenge in the extractive industries. Addressing corruption in those industries must be a priority because a huge amount of resources and revenues for development is lost through bribery and corruption. In a sense, we are robbing some of the poorest countries in the world twice through a lack of accountability within the extractive industries: once when materials are extracted in poor labour conditions or in the shadow of conflict; and again when we allow tax to be dodged or profits to be siphoned off. Look at the Democratic Republic of the Congo. It should be one of the richest countries in the entire world—we all carry a little piece of the DRC around in our pockets in our mobile phones—yet it is one of the poorest. Tackling those financial flaws is crucial and ought to be a key priority for the summit.
Probably the most repeated phrase today is that we must get our own house in order. It is correct that we are not immune here in the UK, and we have heard about money laundering in the property market. People have suggested—I will not make any specific accusations, as that would be completely out of order—that there is a correlation between donations to political parties and seats in the House of Lords, right at the very heart of our so-called democratic system. The examples that we set to the rest of the world, including soft power and systems of patronage in the UK, must be looked at.
Alternatives do exist. Look at how the Scottish Government have taken forward the tax powers that they have been given. They have also introduced general anti-avoidance rules, described by various commentators as one of the strongest measures in the European Union. The convener of the Tax Law Sub-Committee of the Law Society of Scotland, Isobel d’Inverno, said:
“The general anti-avoidance rule that we have got in the Scottish legislation is much fiercer than the UK one. It’s a very much firmer ‘Keep off the grass’ sign than the UK one is. Revenue Scotland also appears very determined to collect all the tax that is due.”
It would be interesting to hear what discussions the Minister has had with his Scottish Government counterparts on that matter.
As we approach the EU referendum, it is worth reflecting on the benefits of EU membership to global anti-corruption efforts. The EU anti-money laundering directive launched in June 2015 has been a huge boost to international efforts and is one factor that has helped to drive the UK Government’s process of setting up beneficial ownership registers.
It falls to the UK Government to take action now and to show leadership through the summit. We have heard calls demanding action from the overseas territories in publishing beneficial ownership registers. We have also heard that there are precedents to do so, as the Government have previously required progress from the overseas territories. It would be useful to hear what the Government’s intentions are and whether they intend to set any kind of date for taking such steps.
The Government are in the process of reviewing the tax treaties they have with a number of developing countries. Scottish National party Members have spoken several times about the tax treaty with Malawi. It would be interesting to know how other tax treaties will be reviewed to ensure a fight against poverty and a fight against the flight of tax in an open and transparent way, and that extends to how we empower communities in developing countries to hold their own Governments to account.
It is important that the Department for International Development continues to support governance and civil society organisations to hold Governments to account and to ensure that they collect the tax they are due. It would be interesting to hear about that and about any other steps the Government will take, including on country-by-country reporting—requiring companies to publish the tax that they are paying in developing countries—especially regarding the extractive industries. Tax can be a key to unlocking resources in developing countries and a route out of poverty, and the summit is a chance for the Government to show leadership.
Tommy Sheppard (Edinburgh East) (SNP)
On behalf of the third party, I congratulate the people whose efforts have secured this timely debate. I also look forward to having debates in the main Chamber next week as we prepare for the summit.
Many people are mesmerised and bewildered when they consider the scale of what is happening and what we are talking about. It is estimated that $2 trillion of tax goes unpaid in the world economy. To put that in perspective, £1 in every £20 in circulation in the world is subject to some form of dubious practice and somebody trying not to do what they should do with it.
As my hon. Friend the Member for Glasgow North (Patrick Grady) stated, in developing countries, the amount of money that goes uncollected and is therefore unavailable to Governments in Africa is greater than the amount of international aid that that continent receives. Here in our own country, the amount of tax that is evaded or avoided by those who should be paying it is estimated to be in excess of £7 billion. If the Government were so minded and were able to collect that money, it would be enough to do away with all the proposed cuts to welfare and social security that we have spent many hours debating over the past couple of years. We really need to get a grip on this.
Something that has concerned me over the past few months is that there are those who will try not to justify what is happening, but to provide a smokescreen for some of it. They suggest that an awful lot of what is going on is perfectly legal, saying, “Ah, well, this is tax avoidance, which is lawful. This is not tax evasion.” A lot of members of the public get very confused about that, so we need to be clear about what is happening. For instance, people might decide to donate to a charity and to use the gift aid regulations to maximise their donations, or they might save for an ISA and get tax benefits out of that. That is not tax avoidance. That is using a legislative procedure for what it was meant to be used for. Tax avoidance is when companies use procedures for things that they were not designed to be used for in order to avoid their liabilities—something that most people in this country never even get the chance to contemplate.
With regard to doing something about the problem, I echo the comments of others. The most important thing is that we need to be able to follow the money and see where it is, so transparency is vital. I welcome the fact that, from next month, we will have a public register of beneficial interests in this country. We will be able to see what companies in this country own in this country. However, large parts of the land in the Scottish highlands are owned by companies that are registered in the Bahamas and elsewhere, so the register will not assist me or anyone else in understanding the transparency of property and land ownership in the areas we represent.
The most important thing in this whole debate is that our dependent territories and overseas areas be compelled in some way to be transparent. After all, as the right hon. Member for Barking (Dame Margaret Hodge) observed, the people that live in those areas are British citizens who also enjoy the protection and all the benefits of the Crown. Therefore, it is inconceivable that a situation can exist whereby the overseas territories and Crown dependencies are allowed to deprive Her Majesty’s Revenue and Customs of monies that it should, rightfully, hope to get. It is vital that action be taken. My question for the Minister, above all others, is: what leverage or sanction will be applied to the Administrations in those areas to ensure that they do not frustrate the objectives that this Parliament has set itself? There have been times in the past when we have not been shy about taking action to compel, and we need to know that those areas will be discussed at the summit.
Many people have talked about this country getting its house in order. I agree that we should not be too complacent about the situation here. There are some aspects that have not yet been mentioned and that we might want to revisit, including HMRC’s arrangements with large multinational companies regarding their tax liability—for example, the deal that was done with Google. If we are talking about transparency, we still need to know the details of that. In the absence of the facts and figures, we have to assume that a deal has been done to allow a very rich multinational company to pay an effective corporation tax rate of 3%. Many people who run businesses in this country will look at that and wonder how it can be that one of the world’s richest companies is charged 3% on its profits in the UK when they are paying many times that rate.
My hon. Friend also observed that we need to consider the general anti-avoidance rules. He is right that the Scottish GAAR has been lauded by many independent commentators as a stricter and more effective set of regulations than exist in the UK as a whole. The irony is that the Scotland Act 2016 will still cover only a minority of taxation and regulation in that country, but the UK Government could learn much from Scotland’s GAAR about toughening up the regulations.
Perhaps the Brexit debate is the elephant in the room. Much has been achieved in recent years at European level, through the EU, on anti-laundering legislation. I accept that, in theory, if we were to leave the EU, it would be possible to make bilateral or multilateral arrangements with other countries to try to do something about tax avoidance, but in the short term, and for an undefined period, the holes in the regulatory net would be widened if Brexit were achieved, so we need to consider the implications. Finally on putting our own house in order, there is still much more to be done on deploying resources and specialists to investigate malpractice, so I would like the Minister to talk about beefing up our capacity.
My final point is on leadership. As others have said, the Prime Minister has done a lot, but there is still more to do. For example, I would like a little more transparency on whether he has had any benefit from his father-in-law’s company that owns large parts of Jura, where the Prime Minister decided to holiday in 2015. More information on that would be welcome.
There has been a distraction in recent months. We debated this subject a couple of months ago, when everyone was having a feeding frenzy to get Ministers and MPs to publish their tax returns. Of course, it became apparent that, if anyone was up to no good, the last place we would find evidence of it is on a tax return. What we really need to know is the information that does not appear on tax returns. As Members of Parliament, we are in a position of trust as legislators. We are the custodians of the arrangements that our citizens have to follow, and we need to be beyond reproach. We need to register our interests in the Register of Members’ Financial Interests, and we need to consider whether Members should register any interests in offshore countries where they may be benefiting from the loopholes that we are trying to close.
The anti-corruption summit offers an opportunity for the Government to demonstrate global leadership. There are many decent people in this country who pay their taxes and who have never thought about doing anything else, and they are looking to the Government to do something about this massive international problem.
Jonathan Ashworth (Leicester South) (Lab)
I am delighted to serve under your chairmanship, Sir Edward. This issue is of such importance to me that I was determined to be here despite the ongoing celebrations in Leicester, the city I represent. I reassure you, Sir Edward, that I will be celebrating Leicester’s remarkable victory tonight.
I congratulate the hon. Member for Amber Valley (Nigel Mills) and my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell), both of whom have worked so hard on the all-party parliamentary group on anti-corruption, on being instrumental in securing this excellent debate. The hon. Gentleman, in particular, made a fine, well-considered speech that raised many key questions, and we look forward to hearing the answers from the Minister. Equally, my hon. Friend made a serious, heavyweight contribution with many good, practical suggestions, and I look forward to the Minister’s assessment of her points.
Obviously, my right hon. Friend the Member for Barking (Dame Margaret Hodge) made a typically forensic speech, and I pay tribute to all her work, both in her role on the Public Accounts Committee in the previous Parliament and in the role she continues to play in this Parliament on pushing these issues. Parliament is so much the better for her being here and for her work, and we are all grateful to her.
The hon. Member for Folkestone and Hythe (Damian Collins) made an interesting contribution, and he has shown great tenacity in pursuing corruption in sport. I hope that he continues to pursue those issues, and I look forward to seeing where his inquiries take him. There was much in his speech that is of concern to us all, and I hope that, if not this Minister, Ministers in the Department for Culture, Media and Sport will respond to him adequately. The hon. Member for Glasgow North (Patrick Grady) mentioned some of the issues that I will particularly address in my brief contribution, especially on the developing world.
There is consensus on both sides of the House on the importance of addressing corruption, and we would all agree with the Prime Minister and his strategy when he reminds us that corruption harms societies, undermines economic development and threatens democracy. In the past, he talked about the golden thread of conditions that allow countries to thrive, and the absence of corruption is one of those conditions. The Opposition welcome the summit because, as has been said many times in this debate, some campaigners estimate that illegal tax evasion, corrupt deals for natural resources and money laundering cause between $100 billion and $2 trillion-worth of money to flow out of developing countries every year. Estimates suggest that corruption equates to more than 5% of global GDP. The World Economic Forum’s analysis shows that corruption increases the cost of doing business by up to 10%, and it suggests that cutting corruption by just 10% could benefit the global economy by nearly $400 billion a year.
We welcome the summit, which is an opportunity for the Government to show leadership, as many Members have said. The summit meets against the backdrop of the Panama papers. Indeed, the full details of the papers will be released just three days before the summit. Surely, the test for the summit in the eyes of the public will now be how it responds to the issues raised by the Panama papers. There has been widespread revulsion at the revelations, which is understandable, and many people are interested in the impact of the Panama papers on our domestic scene and in the political fallout from the Prime Minister’s tax returns and the way that he had to come to Parliament and from the number of Tory party donors caught up in the Panama papers.
Interesting though that is, and we all accept that the Government probably still have more to answer, for me the biggest issue raised by the Panama papers was the revelation of chronic corruption that has helped people to siphon billions of pounds from Africa, stealing from some of the globe’s very poorest people. Africa is a continent rich in natural resources, yet its people are poor because, too often, foreign investment has been channelled through offshore centres such as the British Virgin Islands. Fortunes are being made and siphoned from Africa, rather than being spent on the schools, hospitals and infrastructure needed across the continent. Surely, it is obscene that, for example, a Jersey-based oil company can instruct Mossack Fonseca to shift its registration from the Bahamas to Mauritius, to avoid more than £280 million in tax on the sale of an oilfield in Uganda—£280 million is more than the Ugandan Government will spend this year on health services. Surely, it is a disgrace when major mining concessions in the Democratic Republic of the Congo are acquired at seemingly below market rates and sold on for $1.4 billion, which is almost double the combined annual budgets for health and education in a country with one of the world’s highest child mortality rates, by taking advantage of such offshore accounts.
Surely, the test for the summit now is how the UK deals with its overseas territories and Crown dependencies. As has been said throughout the debate, the Prime Minister has previously pledged to introduce a fully public register, and he has previously written to the overseas territories demanding such a register. I will not run through all the quotations because of time, but last year in Singapore he said
“when you have companies whose ownership isn’t known you allow a shroud of secrecy behind which people can do bad things, sometimes terrible things, with no accountability.”
On the overseas territories and Crown dependencies, he went on to boast that he would
“take concrete steps to force the pace.”
Sadly, those concrete steps have been smashed up. Just two months ago, the Financial Secretary to the Treasury said that the overseas territories and Crown dependencies are “not committed” to a public register of beneficial ownership:
“The United Kingdom is leading the way in respect of a public register of beneficial ownership, but other countries, including the overseas territories, are not committed to that.”—[Official Report, 1 March 2016; Vol. 606, c. 815.]
As many Members have said, is now not the time for the Government to insist that the overseas territories and Crown dependencies take the action necessary? To what extent will that be on the agenda for the summit, and will the summit agree a timetable to force those jurisdictions to publish central public registers of beneficial ownership? Not to do so would surely mean that the summit fails the test set for it by reasonable people. As the hon. Member for Amber Valley asked, which overseas territories and Crown dependencies will attend the summit?
Very quickly—I appreciate that the Minister will want time to sum up—as well as action on beneficial ownership, which is vital, we want action on tax reporting. It has been disappointing, given the summit’s aims and the Chancellor’s stated support, that past proposals in the European Parliament calling for published country-by-country reporting by companies of the details of where they earn their money and pay taxes have been defeated by Conservative MEPs. Does he not agree that it is now time for the Government to deliver on their promise to introduce country-by-country reporting for multinational companies, and can he tell us what progress will be made on that at the summit? My right hon. Friend the Member for Barking discussed money laundering. I will not go over that because of time, but again, will the Minister respond to those issues and detail what response we can expect at the summit?
The Minister has been asked a number of questions that I hope he can answer. As I said, we welcome the summit. We want concrete action on registers with respect to overseas territories and Crown dependencies. The Government can force action. There is a degree of consensus across the House, but when Governments tolerate large-scale tax avoidance by big corporations and the wealthy and fail to address legitimate concerns about tax havens, it is our constituents, public services and some of the poorest people in the world who suffer. If we refuse to act, we create the conditions for the inaction of others. The Government have an opportunity to show leadership at the summit; they must not squander it.
The Parliamentary Secretary, Cabinet Office (John Penrose)
Sir Edward, it is always a pleasure to have you in charge, ensuring that we behave ourselves during our debates. I join the chorus of plaudits for my hon. Friend the Member for Amber Valley (Nigel Mills) and the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), who have done so much to raise the issue as co-chairs of the all-party group on anti-corruption. I particularly thank my hon. Friend the Member for Amber Valley for organising this debate.
We have had a series of extremely carefully considered and very wide-ranging speeches, not only from a former Chair of the Select Committee on Public Accounts—you are one yourself, Sir Edward—but from members of the Select Committee on Culture, Media and Sport and many others. The debate shows the breadth of concern and the issues into which the tentacles of corruption can spread—everything from sport to international aid to public contracts and property ownership in Baker Street, among other places in this country and elsewhere.
I think that there is cross-party agreement that it is important for us all to remember—although I am pleased by and welcome everybody’s recognition that the Prime Minister and others have been instrumental in taking forward the agenda—that there is a great deal more to do. The effects of corruption are not felt only in other countries. My hon. Friend the Member for Amber Valley was right to say that, although we may be blessedly free of some of the more commonplace and in-your-face forms of petty corruption, such as people demanding bribes for everyday public services, that does not mean that any society, ours included, is safe.
The effects are widespread and pernicious. Corruption raises the costs of doing business, through bribes and friction costs. That is true not only in the UK but for our exporters trying to get contracts and trying to win jobs for our workers in exporting overseas, and consumers must put up with poorer quality goods, because if goods are purchased through a corrupt process, the chances are that they will be second best, either in quality or in value for money. Again, everybody suffers. Corruption drives up prices, not just in the UK—we heard the example of property prices here—but around the world as well. Most importantly, it is a fundamentally unjust way to run not only a country but global society in general. People cannot be sure that what they see on their TV screens and hear from their leaders or, indeed, their bosses is correct or fair. We are talking about a piece of social justice, so there is a huge amount to do.
In the limited time left, I will try to respond to some of the points raised, although I want to leave a couple of moments for my hon. Friend the Member for Amber Valley to sum up. He asked specifically what would be on the agenda for the summit and precisely who would be there. I can give him some guidance on that, but obviously, these matters are still under discussion, so I cannot give him a running commentary. He rightly pointed out that the summit’s overall aims are to expose corruption, punish those who perpetrate it and drive out the culture of corruption.
We have had a number of submissions from Members about how, for example, asset recovery could be improved; the right hon. Member for Barking (Dame Margaret Hodge) suggested confiscation, but other suggestions were made for other kinds of asset recovery as well. Suggestions were also made about better opportunities for whistleblowing and better governance in sport, which has been a potential channel for distributing ill-gotten gains around the world. All those things need to be discussed and will, I am sure, be on the agenda, but its precise details will be released nearer the time.
I can give my hon. Friend the Member for Amber Valley a little detail about who is invited. Again, the final guest list will be released nearer the time, but I can confirm that we have invited the G20 countries, leading international organisations in the field, including the UN, the World Bank, the OECD and the International Monetary Fund, and a wide range of other countries—I think this is where he was going; we will have more details, I am sure, as we get closer to the day—that are leading the fight against global corruption or have a pivotal role to play. I understand that John Kerry from the US will be there as well.
I should mention that there will be an event the day before with a broader invitation list, which will be run by the Department for Business, Innovation and Skills, for example. We will invite a number of companies and other non-governmental organisations, because there are many NGOs, companies and sectoral organisations that understand the reputational damage that corruption can cause. We must harness those who are willing to take a lead on the issue to set the right tone and take part in the three aims that I spoke of, particularly driving out corruption. Their co-operation and help will be essential in setting a tone for others to follow, not just in political leadership but in commercial and, potentially, third sector leadership as well. I hope that I have given my hon. Friend some extra detail. I am sure that more will come, and that he will want to hear more about it.
The right hon. Member for Barking asked whether we would be willing to use last resort powers. To summarise, they are a last resort. We do not want to have to use them; we want to ensure that people come as far as possible without any need for them. However, it is clear from all the submissions, suggestions and speeches that we have heard that there is a huge thirst and desire for the agenda to be taken further. We in this country are not unique in wanting to do so. We have taken some important leading steps, but we are far from the only ones who need to be involved, and far from the only ones who are. The issue needs to be taken forward on an international scale. The UK absolutely needs to play its part, and we have heard the reasons why we, particularly given our overseas and dependent territories, need to be a leading member of that international coalition.
This is clearly a developing agenda. The proposals and the progress made in the wake of the FIFA scandal, for example, show how much further international opinion has moved and still needs to move. The revelations in the wake of the Panama papers show how much further we can go and how much further public opinion, although it has moved, still needs to move. I am sure that this topic will continue to develop and that the rules and regulations and, most importantly, the ethos and culture of international business, investment and ownership, will continue to change and tighten. I am sure that everybody in this room and more broadly will welcome that on a cross-party basis, with open arms. I will leave a few seconds for my hon. Friend to respond to the debate.
Nigel Mills
I thank everyone who has taken part in this debate for their excellent speeches. I think it is clear to anyone watching that there is a strong consensus among all the parties here that we want the summit next week to be a success. We want strong action to be taken. We want real agreements to take the issue forward, and we want to ensure that things happen on a timely basis, so that we do not just drift along and forget about the issue in a few years. I wish the Minister and the Government well with the summit, and we look forward to seeing what actions are taken next week.
Motion lapsed (Standing Order No. 10(6)).
UK Foreign Policy on Libya
(8 years ago)
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Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)
I beg to move,
That this House has considered the effect of UK foreign policy on Libya.
It is a pleasure to serve under your chairmanship, Mr Hanson.
I start this debate by paying special tribute to Martin Kobler, special representative and head of the UN support mission in Libya, and to the British ambassador to Libya, who have both put an incredible amount of effort into bringing together competing institutions and encouraging them to form a single Government of national unity. However, the UK Government’s foreign policy legacy in Libya has been an unmitigated disaster. The lesson for the Government is that they reap what they sow. Today, Libya is in an extremely fragile state. The political and security crisis deepens, as two rival Governments—in Tripoli and Tobruk—compete for legitimacy. Meanwhile, countless rival militias and the spread of Daesh make for a troubled environment.
According to UN estimates, the violence in Libya has affected some 2.5 million people and displaced more than 430,000 people. It has also disrupted access to hospitals, schools and basic services, such as power, water and sanitation. However, a UN humanitarian appeal to provide basic services—including medical care, education and the protection of refugees and migrants—to 1.3 million people in Libya has just 1% of the funds that it requires.
In the absence of the rule of law and functioning institutions, refugees and asylum seekers are subjected to harassment, arbitrary detention, limited freedom of movement and other human rights violations. Libya continues to be the main transit and departure point for irregular sea migration to Europe from north Africa. In 2015, 151,000 arrivals to Italy were reported, with 90% of them departing from Libya. Meanwhile, the total number of detainees held by the department for combating illegal migration in Libya is between 2,500 and 4,000 people, including some 396 women and 52 children, who are held in eight detention centres.
We in the Scottish National party fully support Amnesty International’s call for the world to help to pull Libya out of its human rights chaos, five years after the uprising there began. Speaking in January, Said Boumedouha, deputy middle east and north Africa director at Amnesty, could not have been clearer when he said:
“World leaders, particularly those who took part in the NATO intervention that helped to overthrow Colonel Muammar al-Gaddafi in 2011, have a duty to ensure that those responsible for the horrors that have unfolded in Libya in its wake are held to account.”
I want to raise the European Parliament’s recent resolution on Libya, as it reminds us of the increasing threat of security spill-over of the Libyan conflict not only in Egypt and particularly Tunisia, but in Algeria and its oilfields. The resolution emphasises the role of the Libyan conflict in exacerbating extremism in Tunisia.
The growing presence of extremist organisations and movements in Libya is deeply worrying. The lesson of Libya, like the lesson of Iraq, is that countries cannot just bomb somewhere and move on. Thanks to the work of the Library staff and my hon. Friend for North East Fife (Stephen Gethins), we know that the UK Government spent 13 times more money on bombing Libya than on rebuilding it. Let us just consider those figures for a moment. The Library confirmed that £320 million was spent on military operations and bombing in Libya during NATO’s intervention in 2011. Meanwhile, separate UK Government figures show that a mere £25 million was spent on rebuilding infrastructure in the years following the war.
The legacy of that policy in Libya has meant that today we have a vacuum that is being filled by rival militias and a country that is struggling to provide for its desperate population. US intelligence agencies tell us that the number of Daesh fighters in Syria and Iraq has dropped to about 25,000 from a high of about 31,500. However, the number of Daesh fighters in Libya has roughly doubled in the same period to about 6,500.
The UK Government cannot shirk their responsibility to Libya. Leaving the country in a disastrous state after bombing it has undoubtedly created the conditions that Daesh needs to operate, as it terrorises local civilians and sets up home among the rubble of 2011. Indeed, the UK’s bombing of Syria—along with countless other military operations—is not defeating Daesh but merely displacing it across the wider region.
The UK Government’s involvement in Libya has been so catastrophic that even the US President himself has criticised the UK’s Prime Minister. During an interview in March, the President was forthright in his assessment of the military intervention in Libya, criticising the Prime Minister for the UK’s role in allowing Libya to degrade to its current state; in fact, the President used more colourful language than that. The President also suggested that the Prime Minister had taken his eye off Libya after being
“distracted by a range of other things”.
The US President’s comments do not paint the picture of a UK Prime Minister who is either up to the job of leading our forces in strategic military interventions or capable of international co-operation in multi-faceted actions. The President went on to admit that Libya was the worst mistake of his presidency. The Prime Minister could do with reflecting on his own actions and admitting the catastrophic failures of his premiership regarding Libya.
On 19 April, the Foreign Secretary, freshly returned from his visit to Tripoli, announced £10 million of funding to support the new Libyan Government of national accord. This money includes £1.5 million to tackle illegal migration, smuggling and organised crime, and £1.8 million to support counter-terrorism activities. The new cash follows an £11.5 million payment last year for development and humanitarian assistance.
We in the SNP welcome that funding, but it is too little, too late. Despite urgent calls to provide humanitarian assistance to an estimated 2.4 million Libyans in need of aid, the Department for International Development has set aside just £50,000 in aid this financial year to prevent food and medicine shortages in the country.
Understandably, that has led to much criticism. A UN official has described the UK’s humanitarian efforts as
“paltry bone-throwing from a European country whose bombers reaped so much destruction”.
The Government not only undertook military action with little in the way of long-term planning, but they have left the state and people of Libya paying a heavy price for that action. Humanitarian conditions in Libya have deteriorated since mid-2014, leaving an estimated 2.4 million people in need of humanitarian assistance, and some 1.28 million people across the country are at risk of food insecurity.
It has been widely reported that the Government are now preparing to deploy British troops in Libya. The Foreign Affairs Committee wrote to the Foreign Secretary about the prospect of Britain deploying 1,000 ground troops in training and security roles for the new Government of national accord in Tripoli, but the response it received was less than clear. The Chair of the Committee, the hon. Member for Reigate (Crispin Blunt), accused the Foreign Secretary of
“not dealing straightforwardly with Parliament”
and went on to describe the
“less-than-candid reply to my request for further detail on a rapidly developing situation that may require further active British engagement.”
That is hardly a ringing endorsement for a Government who are already struggling with their poor legacy in Libya.
Furthermore, a leaked memo from a confidential briefing to US members of Congress from King Abdullah of Jordan suggested that British SAS units are already operating in Libya. We urgently need honesty and transparency about the Government’s intentions in Libya. Our troops may soon be in Libya as part of training missions. How much of that training do the UK Government envisage taking place on Libyan soil? In 2013, the UK Government agreed to train up to 2,000 Libyan soldiers, who were part of the Libyan general purpose force, at Bassingbourn barracks near Cambridge. The first contingent arrived in 2014, but the programme was halted early after repeated allegations of disciplinary issues and of serious sexual assaults by Libyan personnel against civilians. The Government appear unclear whether they would again host Libyan training missions in the UK.
Will the Government ensure that a vote and full debate take place in the main Chamber before any deployment of UK troops on Libyan soil? The Prime Minister must seek approval from Parliament before deploying any UK forces and provide full disclosure of the Government’s plans. Given that Libya is extremely fragile, with numerous militias and the growing presence of Daesh, how do the Government envisage a training mission in Libya taking place?
We now know that NATO Secretary-General, Jens Stoltenberg, has ruled out any new combat operations, and that further highlights how unwise it would be for the UK to have any further military presence in Libya. The US President’s willingness even to partially admit he made a mistake is commendable, but only in that way will he and coalition partners learn from the errors of the past. It is time that the Prime Minister and his Government admitted their mistakes, and it is time that the Prime Minister was up front to Parliament about his Government’s plans in Libya. We need less military posturing and more long-term stability planning for Libya.
I conclude by posing some questions to the Minister. Why have the Government promised only £50,000 to the UN Office for the Co-ordination of Humanitarian Affairs, for humanitarian efforts? It has been said that Libya is a rich country, but surely that makes reconstruction efforts all the more important, so that in the future we can access that wealth. Will the Government be hosting any more Libyan training missions on UK soil, or does the Minister envisage that the new training missions will be held on Libyan soil? Where do the Minister and the Government stand on the deployment of 1,000 British troops to Libya, and will the Minister ensure that a full debate and a vote take place in the House before the deployment of UK troops on Libyan soil?
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
It is pleasure to work under your chairmanship, Mr Hanson. Given your interest in the matter, I know that you would probably want to participate in the debate, but we are pleased to have you in your seat.
As is customary—but also because it is important to give recognition—I begin by congratulating the hon. Member for West Aberdeenshire and Kincardine (Stuart Blair Donaldson) on securing the debate. It is important that the House take a firm interest in the matter, not least for the reasons he has outlined. Events are changing on a regular basis, so I am pleased to have the opportunity to bring the House up to date with the events and with Britain’s involvement.
The hon. Gentleman will understand that I completely disagree with his interpretation of recent—the past few years’—history. He glosses over many of the key elements that, sadly, allowed Libya to slip backwards after we had parliamentary and prime ministerial elections after Gaddafi was removed, but I will come to that in due course.
We must recognise that Libya has gone through a testing period since 2011, but we must also place into context the backdrop against which events have taken place. Libya is a relatively new country. It has a huge amount of history, going back thousands and thousands of years. It is where the Berbers, the Phoenicians, the Greeks, the Romans and not least the Ottoman empire and the Italians were. We were there for a period as well. As a modern state, however, 1951 is when it gained its independence. Gaddafi took over after the coup and spent 40 years deterring societal development. Over the years, all the institutions had been able to learn, to adjust, to adapt and to further themselves, but that did not take place under Gaddafi. That is one of the reasons why, when the Arab spring came along, the people of Libya were asking for something very different. Once Gaddafi was removed, however, it was tough to suddenly create the institutions that were needed for the country to move forward. That was the challenge we faced in 2011.
UN Security Council resolution 1973, which was adopted in March 2011 and allowed Operation Ellamy to take place, represented a legitimate cause to move in and support the people of Libya, because Gaddafi had made it clear that after Benghazi—the bloodbath he attempted to orchestrate there—he would have moved on to other cities where other Libyans were rising up and saying, “I’ve had enough of this dictator. I want something else”. It was right, therefore, that our Prime Minister and other leaders around the world stepped up to the plate and did the proper thing. We can look back on that and say that it absolutely was the right thing to do. As I mentioned, that led to the country holding parliamentary and prime ministerial elections, and creating its own leadership.
If we were to look back at that period and ask, “Is there more the international community could have done?”, we would answer, “Yes there are lessons to be learnt, absolutely”, but the country itself, the leaders themselves, pushed back—shrugged off—international support. They wanted to do it themselves and that, I am afraid, led to inertia from the centralised perspective. Decisions were not being made. When there is a vacuum of power, and we have seen this across other parts of the Maghreb—the middle east and north Africa—extremism takes a foothold. We have seen it with Daesh in places such as Derna and Sirte.
Last month’s visit by the Foreign Secretary, however, is an indication that we are moving into a new and cautiously optimistic chapter. The Foreign Secretary was able to meet Prime Minister Siraj in Tripoli itself. His first impressions were that the security the Prime Minister had around him meant that he was being accepted by the majority in both the House of Representatives and the State Council, and that this was allowing his own presidential council and the Government of national accord to take hold and start to re-establish the institutions that I spoke about earlier. It is important to place that into context, but the hon. Gentleman is correct that in the absence of strong central leadership extremism has taken a foothold. That has affected us here in Britain, because those who participated in organising and training the killers in Sousse in Tunisia were themselves trained in Libya. The matter is of concern to us because of that and because of the migration issues, which I shall come on to in a second.
Our Prime Minister very recently spoke with President Obama and other leaders about the concerns of the Libya challenge. There must be an international effort to ensure that we can support Prime Minister Siraj, and indeed Martin Kobler and the UN efforts there. The hon. Gentleman was right to praise the UN envoy. I speak to the envoy regularly, and I am pleased that our ambassador is able to provide support—the hon. Gentleman mentioned the funding we provide to his office. Nor should we overlook the Prime Minister’s envoy, Jonathan Powell, who has worked closely with Martin Kobler and his predecessor. Some £10 million has been allocated for technical support, and if there is a request for further funding we will of course consider it but I understand that such a request has not been forthcoming. The £10 million includes £1.8 million for counter-terrorism work, for exactly the reason I have mentioned, to prevent the vacuum from being taken over by extremism.
Patrick Grady (Glasgow North) (SNP)
I think that that is the same £10 million I asked the Foreign Secretary about—I asked whether it would be counted towards ODA. He said in the Chamber that he did not think it would, and then he had to write to me to clarify that it would. My question was actually whether it would be counted towards both ODA and the 2% NATO target. I do not know if the Minister has that knowledge to hand, but if he does not perhaps he will be able to clarify by correspondence.
Mr Ellwood
It can be the case that an allocation of funding qualifies for two budgets. There is nothing wrong with that, it is just the way it works. It can come from official development aid—as it is called—but also from the defence budget too. We should not assume that, because it is one allocation, oh my goodness, somehow we are double accounting. That is just the way the systems work.
The reason why we must always confirm whether funding is ODA-able—as it is called—is because the rules were written in the 1950s, as the hon. Gentleman might be aware. They are, therefore, slightly out of date and need updating. The work of stabilisation is not really included in the definitions; it was “humanitarian work” when the rules were created by the OECD. We have been pushing for the rules to be updated, to recognise that the British taxpayer would like to see the money spent on exactly that. But if the rules do not allow for that, that is probably why the Foreign Secretary—indeed, anyone involved—needs to double-check whether the allocation can be confirmed. I hope that that answers the hon. Gentleman’s question.
In addition, we also hosted a meeting of 47 countries last month in Tunisia. That goes back to the point I made earlier: it is important that the international community rallies together and recognises that, in Libya’s hour of need, we need to be ready to provide service and support to the new Prime Minister in a wide range of capacities. We co-hosted the meeting with the United Nations. It allowed all international communities to say what they can contribute, including the funding they can put forward and the packages they can offer to the Prime Minister. I make it clear that we have to be invited by the country to embark on any processes to improve, in the same way as happened back in 2012, when central Government’s wheels perhaps started to come off.
The hon. Member for West Aberdeenshire and Kincardine criticised the fact that things went wrong after Gaddafi was removed. I agree that the international community should have pressed for more, but ultimately the Libyan people need to recognise the challenges they face, the support on offer from the international community and the consequences of failing to show the leadership what they want. Extremism gets a footing when there is an absence of leadership. The meeting in April provided exactly that leadership: it brought together the international community and allowed us to provide some scope as to how we would provide support and security.
A lot of discussions will take place about the 1,000 or so troops. The Libyan international assistance mission is an Italian initiative in which Britain, Spain, Italy, France and other nations are likely to participate. There is planning for 1,000 troops or so, but we are yet to receive the invitation—the request—for any support. That support is likely to come, when it does, in the form of training and mentoring. Where that will take place is yet to be decided. It could very well be in Libya or somewhere else in the region, but it is unlikely to take place in Britain. It is training and mentoring; it is not an operational initiative, so there is no requirement for a vote in Parliament. Please do not expect one on the issue. That is the plan as we move forward, but I stress that we are yet to receive any request from the Prime Minister.
As was implied by the hon. Member for West Aberdeenshire and Kincardine, the challenge we face is with migratory patterns. We are seeing criminal gangs orchestrate ruthlessly efficient programmes, selling tickets and encouraging individuals with the promise that they will get to Europe. Libya is seen as the weak link from which they can get across the Mediterranean. We all know that they do not get across the Mediterranean. The gangs place them in rickety boats that barely make it out of Libyan waters. Operation Sophia, which is the European Union’s initiative, currently operates in international waters. We want to move things forward so that it can operate in Libyan territorial waters, too. That will mean that the boats do not venture so far out that they cannot be returned to Libya. Those people can return back there, thereby breaking the chain from which the criminal gangs are benefiting.
There is no doubt that the challenge of Libya will continue, or that Britain, working with our international partners, will ensure that we stand by the new Prime Minister, the new presidential council and the people of Libya. It has been a very difficult five years; everyone recognises that. It has been extremely challenging, but we must continue to work for peace and security in the country, not only because that is crucial for stability in the wider north African and Mediterranean regions, but because the United Kingdom has important interests, as I have outlined. After the revolution, the Libyan people expressed joy, enthusiasm and hope after 40 years of Gaddafi’s misrule, oppression and fear. They wanted freedom and democracy, and they held elections. The people of Libya want education and to continue to hear the inspiring stories of Libyans being able to succeed into the future. We want to stand by them, and we will continue to do so in the UK interest, ensuring that Libya emerges as a strong, peaceful and prosperous democracy. I pledge today our continuing support for the Prime Minister and the people of Libya.
Question put and agreed to.
Asylum Seeker Dispersal Policy
(8 years ago)
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Simon Danczuk (Rochdale) (Ind)
I beg to move,
That this House has considered asylum seeker dispersal policy.
It is a pleasure to serve under your chairmanship, Mr Hanson. I will begin by touching on the asylum application system as a whole. At present, the system is so inefficient and backlogged that asylum seekers are being housed in hotels and temporary accommodation while endless appeals are dragged out. In the Home Office legacy case statistics, there are people with cases dating back to 2004.
We see the majority of cases turning out to be bogus. In fact, I see many economic migrants who have come to this country illegally clogging up the system with doomed cases, slowing the process for those in genuine need. Statistics from 2012 to 2013 on asylum cases where outcomes have been determined show that only 32% of cases were accepted at the first stage of applying, while 57% were rejected and 11% were withdrawn. Of those cases that were not accepted, 70% were appealed. Of those appeals, 68% were dismissed and 7% were withdrawn. The system is clearly being abused and delayed by bogus claims of asylum, and that cannot continue.
Let me give the House a real-life case study from my constituency surgery on Friday. Hassan is a Sudanese national. He is currently living in Rochdale in a house with four other male asylum seekers. He was 17 when he entered the UK in September 2014 via a lorry from Calais. Before that, he had worked in Libya, earning money in construction. He travelled to Europe by boat. He got off a lorry in Dover. Fingerprints were taken and he was put in a hotel. He spent two months down south. He was then moved up to Rochdale. He has been in Rochdale for one year and five months.
Hassan has been trying to claim asylum. He says there is a conflict between two tribes in close proximity to his village and that a lot of people have been killed. Hassan was interviewed by the Home Office over a year ago in February 2015, but no decision has yet been taken on his case. He now says that he is bored here, has nothing to do and that, if he had the choice, he would return to Sudan. He said:
“I want to feel human, like a normal person.”
He then broke down in tears in my constituency office. That is the reality of the asylum system under this Government.
Whatever we make of this young man’s case, there is no denying that there are failures within the system, and we must remember that the asylum system exists for a very good reason. As a prosperous and tolerant nation, we must play our part in helping those fleeing persecution and horrors in their home country. Earlier this year, a young mother attended my constituency surgery. She had been persecuted because of her Ahmadiyya Muslim faith, and I believed it to be an open-and-shut case. She had been subjected to awful abuse in Pakistan. She was twice violently kidnapped for refusing to abandon her religion. Here was a straightforward case of someone unable to return to their country from fear for their own security. I would always be prepared to support that kind of asylum case. To my complete surprise, her asylum application was rejected. Even though Home Office guidance shows that such cases should be supported, this young woman was denied a safe haven.
I raise that case because it shows the growing strains on our asylum system, which is grinding to a halt. It is being clogged up with economic migrants submitting hopeless cases, while genuine people in need of refuge are told they have no right to sanctuary. The system needs an overhaul. We need a well-resourced and properly funded body that is able to deport quickly those who have no claim and assist those in genuine need of a life away from their home country. We cannot fulfil our moral duty to those in genuine need under the system now in place.
I now come to the issue at the heart of this debate: the unfair dispersal system for asylum seekers. In Rochdale, we have 1,044 asylum seekers at present. That figure represents 3.77% of the 27,650 asylum seekers in England. Rochdale has a population of just over 200,000, so one in every 204 people in Rochdale is an asylum seeker. The situation is worse only in Middlesbrough where there is one asylum seeker to every 152 people. Rochdale has been dumped with an unequal share of the burden. The Minister will say, as he has said previously to me, that this policy was introduced by the previous Labour Government, but that is simply not good enough. He and the rest of his party have been in government for six years now.
The COMPASS contracts introduced under his Government have made the situation worse. In 2012, when the contracts were introduced, Rochdale was responsible for 371 asylum seekers. At the beginning of 2014, this number went up to 550. By the end of 2015, we suddenly had 1,044. The problem does not stop with Rochdale. Ten local authorities in England have just under 40% of all asylum seekers in the country. That is just 10 out of 322 local authorities, according to research that my office has done. The north-west region has been bearing the brunt, taking 30% of all asylum seekers in England.
In correspondence, the Minister stated:
“Our dispersal policy ensures a reasonable spread amongst...local authorities.”
That is clearly not true. Certain regions and councils have done absolutely nothing. The Minister must answer why this problem has got worse under his Government and why he has done nothing about it. I must add that, if local authorities will not sign up voluntarily, why has the Minister not enforced this on the shirkers using sections 100 and 101 of the Immigration and Asylum Act 1999? The Act enshrines power in the Home Secretary to ensure that leaders of local authorities co-operate to provide support for asylum seekers. The problem has been growing and the Minister must answer why that power has not been used.
Next, I wish to touch on some of the details of the COMPASS contracts. Key performance indicators within the contracts were to factor in the capacity of local health, education and other support services and the risk of increased social tension if the number of asylum seekers increases within a given area. There has been a clear disregard for those factors. A recent report from the Joseph Roundtree Foundation found that 10 of the 12 struggling towns and cities in the UK are in the north of England. Number one in that analysis is Rochdale. We can argue with the methodology of the research, but there is no doubt that public services are vital for local people in our town. There is a greater strain on services, yet the Conservative Government have added more than 1,000 asylum seekers to the town. Combined with this, we have Serco dumping asylum seekers in our town with hardly any notice given to the local authority. There are waiting lists for housing in Rochdale and a limited number of school places. Some schools are already being challenged to improve performance, but cannot afford the added burden of even more languages to be learned. Waiting times for GPs and access to accident and emergency are already stretched beyond acceptability.
On the changes to spending power from 2015-16 to 2017-18, Rochdale is again among the hardest hit from Conservative Government cuts, which already affect its ability to fund its already overstretched public services. Between those years, Rochdale will have its spending power reduced from £177 million to £165 million: a reduction of £12 million.
Patrick Grady (Glasgow North) (SNP)
I caution the hon. Gentleman against the use of words such as “dumping” to describe the way in which human beings arrive in his constituency. Does he have a view on extending the right to work to asylum seekers? If asylum seekers are allowed to work and actively contribute to their communities, they would pay tax, including council tax, that would provide resources for local authorities. They would be seen to be actively contributing to communities, and that might help with integration.
Simon Danczuk
I thank the hon. Gentleman for his intervention. On the language used, it is not a reflection of the individual asylum seekers, but a reflection of how Serco and the Government treat these vulnerable people. I completely agree about the ability to work. I raised that issue with the then Secretary of State for Work and Pensions when I was a parliamentary candidate before the 2010 general election, so I have some sympathy with that view.
On spending power in Rochdale, not only are we predicted to lose £12 million, but on top of that there have been £200 million pound budget cuts to the local authority since 2010. I take no pride in saying that Rochdale is one of the most deprived places in the UK. It pains me to admit that. I, the council and other agencies are doing much more to change that, but we have overstretched public services and a very low wage economy. Asylum seekers, as the hon. Gentleman pointed out, are not allowed to work and that causes tension within communities. Groups of asylum seekers wander around town with nothing to do. As I mentioned earlier, the Minister’s Department is no good at processing their applications, so they are hanging around for literally years.
Rochdale is not the only example of such unfairness. The top five local authorities with the most asylum seekers are Birmingham, Liverpool, Manchester, Rochdale and Bolton. All will have their spending power over the next two years reduced by more than 5%, yet they have all taken in more than 1,000 asylum seekers each. So I must ask the Minister why no consideration has been given to the strain put on public services and why tension in the local community has not been factored in.
The irony is that some local authorities see a rise in their spending power and have no asylum seekers at all. It is completely and utterly unfair. I will give some examples. In the Prime Minister’s local authority area of West Oxfordshire, zero asylum seekers are accommodated, despite a healthy 1% increase in spending power over the coming years. The Secretary of State for Communities and Local Government’s leafy local authority of Tunbridge Wells is also not taking in any asylum seekers and is seeing only a 1% decrease in spending power. The Home Secretary’s area has taken in only three asylum seekers, despite this issue falling under her remit, and faces only a 1% reduction in local authority spending power over the coming years. The Chancellor’s local authority seems to be reluctant to take any asylum seekers at all.
When we look further into the details, we really start to get a picture of the inherent unfairness of the system under this Government. Labour authorities on average have taken in 244 asylum seekers, yet have been on the wrong side of an average 5% reduction in spending power between 2015-16 and 2017-18. In contrast, Conservative local authorities have taken in only six asylum seekers on average and have suffered a rather modest 1% reduction in spending power. What is evident here is that Labour-run authorities are clearly the more compassionate. When they see vulnerable people, they strive to help wherever they can. That is an attribute that should be celebrated by the Government. Yet those councils have been hit with the largest reductions in spending power. Rather than helping those local authorities, the Government seem hellbent on ensuring that they make things as hard as possible, letting them take in some of the most vulnerable people, while tying one hand behind their back. This is partisan politics at its worst. The Minister must take action to stop it.
The Minister can choose to put whatever spin he wants on the situation, but it is clear that the status quo is deeply unfair to the less well-off. Areas that are struggling the most under this Conservative Government have been made to carry the increasing burden of our overweight and slowing asylum system; they have been doing so while the local areas of the Prime Minister and the Secretary of State for Communities and Local Government have done nothing but shirk their responsibilities to the most vulnerable people in society, while shielding themselves from the worst cuts.
Labour-run local authorities have been doing more than their fair share, but Conservative authorities have been ignoring the plight of asylum seekers. The most unjust aspect of the whole situation is that it is Labour local authorities that are being punished the most with cuts, while Conservative authorities are being rewarded for sitting back and watching. I look forward to the Minister’s attempt to address each and every point raised in the debate.
Several hon. Members rose—
Mr David Hanson (in the Chair)
Order. Before I call Patrick Grady, I should say to the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald), who will be speaking from the Front Bench for Scottish National party, that we started early because both the mover of the motion and the Minister were present. The hon. Gentleman missed only the aperitif; he is here for the meat of the debate.
Patrick Grady (Glasgow North) (SNP)
I am grateful to have been called, Mr Hanson, having not indicated beforehand that I wanted to speak. Having seen how sparse the attendance was, I thought I should take the opportunity to reflect briefly on some of the points made by the hon. Member for Rochdale (Simon Danczuk).
Glasgow, part of which I represent, has approximately one asylum seeker per 217 residents, placing it in the top 10 centres of asylum seekers in the United Kingdom. The asylum seeker community has done nothing but benefit the society and culture of my city. We must recognise the huge contribution that people make to Scotland and the United Kingdom when they come here from all over the world for a wide range of reasons. It reflects well on the city of Glasgow when it extends the kind of welcome it has done to people coming from extremely vulnerable and distressing situations.
I pay tribute to the work of the integration networks in Glasgow. Community-based organisations play an incredibly valuable role in providing advice and support to asylum seekers. Since being elected last year, some of the most moving experiences I have had have been when I have encountered asylum seekers, either in formal settings facilitated by the likes of the Maryhill integration network in my constituency, or on a one-to-one basis when they have come to my constituency surgeries.
The hon. Member for Rochdale made the point that Cabinet Ministers lack first-hand experience of these issues because they simply do not have comparable numbers of constituents coming to their surgeries, and that does affect overall Government policy and attitude towards asylum seekers. There is nothing more humiliating for me as a Member of Parliament than sitting in a surgery and a constituent presenting me with a card that tells them, “You do not have the right to work.” That right is enshrined in human rights instruments around the world. It is one of the basic factors that allows people to express their human dignity by using their skills, attributes and strengths to earn a living for themselves. For them to be issued with a card from the Government that says, “You do not have the right to work,” is literally inhumane.
Likewise, when I see bits of paper that say, “You are liable to be lifted and deported and expelled from the country,” I am left literally speechless in front of these people, who have fled some of the most terrifying and difficult situations around the world. We heard about some of those situations in the previous debate about Libya—conflict situations in which, very often, the UK is complicit. There has to be an absolutely integrated and joined-up approach from the Government. Currently, such an approach is completely and utterly lacking.
Asylum seekers need to have the right to work. The Azure card, which allows people to buy things only from certain shops, should be abolished. Cash allowances would enable people to get culturally appropriate clothing, food or utensils, or whatever else they might need to provide for themselves or their families. Much asylum support is provided through the Home Office, rather than by the Department for Work and Pensions. From a practical point of view, could that be integrated between the Home Office and the DWP? That might help to address some of the challenges and issues we hear of.
On dispersal, it is appropriate that local authorities throughout the country find a way to take their fair share, but they have to know that they are going to get Government support. The right to work is particularly important because it would make it all the more attractive to local authorities if they thought that their revenue base, council tax base or whatever might grow. We create work and problems for ourselves when we bracket people and let them get trapped in a bureaucratic system that denies them basic human rights.
I am grateful to have been called, Mr Hanson, because I wanted to take the opportunity to offer some reflections on the issues. I look forward to hearing the Minister’s response.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
I congratulate the hon. Member for Rochdale (Simon Danczuk) on securing this debate and providing Members with the opportunity to scrutinise Government policy on the dispersal of asylum seekers at this important time in the development of that strand of policy. I am sorry to have missed the aperitif, but I certainly got the main substance of what the hon. Gentleman had to say.
Broadly, dispersal issues can be put into two categories. First, what exactly do we need to do and provide for those who have claimed asylum here? Secondly, where should that happen? To start with the second issue—the “where”, which is the meat of the debate—no one would now quibble with the Government’s stated ambition to expand the number of areas to which asylum seekers are being dispersed, although I certainly have sympathy with the hon. Gentleman’s argument that that should have happened long before now. More widespread dispersal is entirely the correct thing to do, from a number of different angles: it is fair that responsibility for providing housing and other support is shared around the country, and it is easier for local communities to adjust and for asylum seekers to integrate into those communities when responsibility is shared out in that way.
As we have heard, a number of authorities are shouldering a disproportionate share of the responsibility, including Middlesbrough—where the cluster limit of one asylum seeker for every 200 of the settled population has been exceeded—and Rochdale. As I understand it, the Home Office has written to other local authorities to encourage them to take part in the dispersal process; it would be useful to have information from the Minister on the response to that request. Many authorities are absolutely willing to play their part, but that willingness is conditional: they will play their part if, and only if, full and proper support comes from central Government. That is absolutely the correct approach.
That brings us to the other key issue: what exactly do we want to achieve through the dispersal process? It should not be about paying private companies to seek out the cheapest accommodation they can find in different corners of the country and then simply placing asylum seekers there willy-nilly, while leaving hard-pressed local authorities and other services to get on with it. That is not a sensible way ahead, but as the hon. Member for Rochdale said, sadly it sometimes appears to be all the COMPASS contract was designed to achieve and has achieved. Like the hon. Gentleman, I have made my misgivings about the contracts known in other debates; I will wait for the Home Affairs Committee to look at that issue more forensically in due course.
Dispersal should occur as sensibly and sensitively as possible, ensuring the provision of required support and finding communities where people fit. That means accommodating people and taking account of family circumstances, age, language and other factors. Most importantly, dispersal must occur where asylum seekers will have access to necessary support and services. Previously, COMPASS health assessments—for those dispersed to Glasgow, for example—were very easy to arrange: they took place in the same building in which many asylum seekers were initially accommodated. Sadly, under the current contract, providers are proving significantly less reliable at making support available to ensure that people can get where they need to go, and appointments are being missed. That is an extremely worrying development, particularly as those people often have complex health needs. Some are victims of torture, and many have mental health issues, such as post-traumatic stress disorder, as a result of the traumas that they have been through.
There is a range of other factors to be considered. When I practised as an immigration solicitor, there was—there still is—an experienced and capable group of immigration and asylum law practitioners in Glasgow, because it is a dispersal city and there is significant demand. However, that is not the case in other cities in Scotland and elsewhere, where dispersal has not yet taken place. We need to ensure that those who are dispersed to new towns and cities have access to quality advice, which is essential for their often complicated cases.
Local authorities in different parts of the UK have sought to go above and beyond what is required. The Scottish Government have funded the Scottish Refugee Council’s family keywork service to support newly arrived families with children aged up to eight during their first six months. It covers areas such as advice about the asylum system, education and health, and it co-ordinates the different services.
As the hon. Member for Rochdale said, it is vital to keep communities involved and on side. There can be no sudden appearance of large numbers of asylum seekers without warning, which has happened from time to time with initial dispersal accommodation. That does not work for anyone. Equally, leaving asylum seekers alone and isolated by placing them in ones or twos in different parts of cities is also not helpful.
I have touched on only a tiny number of the basic wrap-around services that need to be considered when dispersing asylum seekers. We could have a whole debate on the right to work; the Scottish National party voted last week in support of the right to work, and we will always do so. Local authorities think twice about getting involved because it requires proper planning, close partnership working and discussions among national, devolved and local governments. That requires not just planning but proper resourcing, and many local authorities feel that the current arrangements provide neither sufficiently. The model of using private contractors to provide accommodation without additional support services is not attractive to them.
As my hon. Friend the Member for Glasgow North (Patrick Grady) said, Glasgow has benefited over the years from the dispersal of asylum seekers in a number of ways, but when that policy was first introduced the council was contracted directly by the Home Office to provide accommodation and the funding was sufficient to develop a whole host of wrap-around services as well. The existing COMPASS contracts move away from that model. Glasgow can just about cope, because it already has well-developed infrastructure to support asylum seekers, but local authorities with no history of dispersal do not. If the Home Office attempts to expand the programme without adequate funding for developing services, we would be seriously concerned about the impact on public services and community cohesion. It is the same issue with unaccompanied asylum-seeking children: I understand that the Home Office is not paying a daily rate that covers the cost of supporting vulnerable young people.
Local authorities have willingly participated in the resettlement of refugees under the vulnerable persons scheme, and although there will always be differences in schemes’ requirements, the stark contrast in resourcing and planning cannot be justified. Why not learn lessons from the successes of the vulnerable persons scheme? Local authorities will ask why they should agree to take part in the dispersal programme and then have to shoulder the responsibility for funding services such as education.
We support the Government’s ambition to broaden dispersal, but their vision of what dispersal is all about requires much more work to convince us and, more importantly, local authorities. The Government should get down to that work quickly before contemplating using the powers in the Immigration and Asylum Act 1999 or the new powers in the Immigration Bill, which is currently going through Parliament.
Keir Starmer (Holborn and St Pancras) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hanson. I congratulate the hon. Member for Rochdale (Simon Danczuk) on securing this debate.
The asylum seekers dispersal policy and the contracts for providing accommodation have something of a sorry history. As we know, the six contracts were signed in March 2012 and taken up by G4S, Serco and Clearel. Only Clearel had any experience of the asylum housing sector, and that soon began to tell. The most significant findings of the National Audit Office’s January 2014 report were that G4S and Serco took on stock without inspecting it, that the Home Office did not apply the key performance indicators in the transition period and that, although the intention and hope was for savings of £140 million, the savings in the year 2012-13 amounted to just £8 million.
Those are not teething problems, but clearly ongoing problems with the current system. The Home Affairs Committee, the Public Accounts Committee and the National Audit Office all highlighted serious flaws in the operation of the current dispersal system. The use of red doors and wristbands in Middlesbrough and Cardiff, which arose earlier this year, led to disquiet among the public and in the media.
There are five big issues. The first is the standard of the accommodation being used, about which the Public Accounts Committee and the National Audit Office expressed concern. The Public Accounts Committee concluded that
“The standard of the accommodation provided was often unacceptably poor”.
I visited Oldham earlier this year—I will mention this a number of times in my speech—and I was struck by the quality of the accommodation provided on the ground in some of the towns in the north-west, where lots of asylum seekers are housed.
Secondly, there is a concern about the oversight and inspection regime. The Home Affairs Committee concluded that
“the complaints and inspection processes…appears to be flawed”.
Asylum seekers have little opportunity to make complaints, and the inspections by the local authorities and the Home Office are ineffective. The issues of the red doors and the wristbands exemplify the flaws in the system. In the end, those issues were exposed by the media, not the complaints and inspection regime, which is intended to deal with such issues.
Thirdly, there is the issue of clustering, which has been touched upon already. There are clearly marked differences in where asylum seekers are housed. Some local authorities take very large numbers—Glasgow has the highest, with some 3,000 or so—but 177 local authorities have refused to take any and a further 100 have taken five or fewer. There are clearly limits, which the Minister will point to, to the policy of not housing in London and the south-east and to the voluntary opt-in for local authorities—in other words, it cannot be mandated—but there are some marked differences. Let me take three examples at random. Swansea has rehoused 843 asylum seekers, whereas neighbouring Carmarthenshire has rehoused none and neighbouring Neath Port Talbot has rehoused only one. Middlesbrough has taken 917, whereas Redcar and Cleveland has taken just 10 and Hambleton has taken none. Glasgow, as I mentioned, has got 3,000, East Renfrewshire has got none and Renfrewshire has got just four. There are clearly big differences across the country.
Fourthly, there is a lack of appropriate support services. In other words, the dispersal of asylum seekers is not matched by appropriate support—whether healthcare, schooling or language classes—leaving asylum seekers isolated and vulnerable.
Fifthly, rising demand is outstripping housing and service supply. We all know that the number of asylum seekers has increased from about 18,000 in 2010 to 32,400 in 2015. All three providers of dispersal accommodation have emphasised that it is proving very difficult to get more accommodation for housing at a viable rate. The 2014 NAO report recommended that the Home Office share forecasts and flow with the contractors. I would be interested to hear from the Minister whether that is happening and, if so, how it is being managed.
The policy questions and issues that arise are these. We need to underline that the dispersal system should be fair, affordable and humane, and that it should protect and promote community cohesion. There is no doubt that, under the current scheme, none of those things are being achieved. I have real concerns about clustering. In Oldham—no doubt, the situation is the same in Rochdale and some of the other areas that have been touched on—I witnessed large numbers of asylum seekers being housed not only in one local authority, but in a particular area within the local authority, predominantly because housing is simply cheaper there than anywhere else. The high concentrations in the areas I visited in Oldham were causing real concern for the asylum seekers, who felt isolated because of how they were being housed, and for the people of Oldham, who felt that they were taking on too much, in one small area and more than they could cope with. So there are real problems for community cohesion in the way that the dispersal system works.
The system cannot be based purely on the bottom line. In other words, the cost of accommodation cannot be the driver—there has got to be a wider approach. Cheaper provision is not synonymous with better provision. A resonating question that has already been asked is, what are the Government doing to encourage more local authorities to take part in dispersal? To be clear, I am not suggesting that the Home Office should be mandating local authorities to take asylum seekers at this stage. I can see real problems with that if that is the fall-back position. Letters have been written, but what more can be done? In addition, what support is being offered to local authorities to make it more likely that more of them will offer to provide accommodation and other services?
What are the Government doing to improve oversight and inspection of dispersal accommodation? I have already mentioned the revelations in Middlesbrough and Cardiff; they throw up a failure of the complaints and inspection system, which needs to be looked at again.
I, too, would like an update on the savings. According to the NAO, the savings in 2012-13 were £8 million of the expected £140 million. We are now nearly four years into the contracts, and it is important for the Minister to give an update on what the savings have been, because they were the driver of the contracts.
It is time to review the overall costs, not only the cost of providing the accommodation now, compared with before the contracts, but the cost that takes the prohibition on work into account. That has been touched on. The only reason why many of the families and individuals who are seeking asylum need to be housed under such arrangements at all is that they are prohibited from working. They fall into the destitute category because they arrive with little in the way of cash or other assets and are prohibited from working. It is therefore inevitable that large numbers within that group must then be accommodated.
Measures have been taken to improve the period within which decisions are made, but many decisions are still not made or concluded within the six months—many more beyond the 12 months—so, for a prolonged period, asylum seekers are prohibited from working and are inevitably dependent upon housing at public expense, which they could otherwise pay for if they were working. All the evidence suggests that at the end of the process, if people are granted refugee status, there is a strong likelihood that they will stay within the local authority where they have been temporarily housed— perhaps inevitably. Furthermore, because they have not been able to work for the period it took for the decision to be made, the likelihood is that the local authority will still have to house them, because they will not be able to go straight into work at the end of it.
I have a probing question for the Minister. Is it time to step back and ask what the overall cost of the dispersal policy is, factoring in the prohibition on work? Would it be better in most, if not all, cases to allow people to work after a given period, so that they can pay for their own accommodation? They would not need to be in a particular local authority to do so.
That supports my wider call: it is now time to review the dispersal policy. There are clearly ongoing problems that have not been resolved. I think that the contracts expire in 2017, with a possible two-year extension, so there is a window of opportunity to review the situation before the contracts are renewed for either two years, or even longer in 2017.
The Minister for Immigration (James Brokenshire)
It is a pleasure to serve under your chairmanship, Mr Hanson, I believe for the first time. I welcome you to the Chair and to your role.
I congratulate the hon. Member for Rochdale (Simon Danczuk) on securing the debate, and on his probing questions and focus on the subject. He spoke about the impact on his community, given the pressure from the number of asylum seekers, and he has flagged some of the issues. Let me say at the outset that I hope that we will continue the discussion outside the Chamber, perhaps in meetings between Serco, my officials, him and his council about the pressures and the matters he has brought to the House’s attention this morning.
On the overall background, the UK has a long and proud history of offering sanctuary to those genuinely fleeing persecution. I confirm that the Government remain committed to providing an asylum system that protects and respects the fundamental rights of individuals who arrive on our shores seeking refuge from persecution. The Government also want to send a clear message to those who seek to exploit the system—a point that was clearly made by the hon. Gentleman.
For those asylum seekers who would otherwise be destitute, the Government provide access to support services, in accordance with our international obligations. The Government provide that support through the COMPASS contracts, which have been mentioned, with three contractors: Serco, G4S and Clearsprings Ready Homes. The contracts provide asylum seekers who claim to be destitute with full-board so-called initial accommodation while their means are assessed, and then with the dispersed accommodation throughout the UK.
The Home Office is working hard with its contractors to ensure that all the accommodation provided to asylum seekers is safe and secure, and that asylum seekers are treated with dignity and respect, taking account of their vulnerability. We are also ensuring that the system is effective and efficient, and provides value for money for the taxpayer. Since the new approach came into operation in 2012, standards in asylum seeker accommodation have improved.
The specific point that the hon. Gentleman focused on was the policy that follows the period of initial accommodation: the dispersal of supported asylum seekers across a number of areas in the United Kingdom. The Immigration and Asylum Act 1999 introduced the policy of national dispersal, which was designed to share the impact of asylum seekers across the whole of the UK. At the time, in how it was constructed, the policy was intended to ease the burden of numbers on London and the south-east.
Not all asylum seekers are supported by the Home Office. Many are accommodated by their friends or relatives throughout the UK, often in London and the south-east of England, which also has pressure on local services from unaccompanied asylum-seeking children—I might comment briefly on that matter later. The legislation was introduced to relieve the pressures on the local authorities that had previously shouldered a significant proportion of the asylum seekers, given their proximity to the main ports of entry into the UK. The dispersal policy aims to ensure a spread among UK local authorities, and we work to a maximum agreed dispersal cluster ratio of one asylum seeker per 200 head of total population. We would not normally go beyond that ratio without the agreement of the relevant local authority.
Historically, approximately 100 local authorities were signed up to asylum dispersal. We have been proactively engaging with all areas that to date have not participated in asylum dispersal, with a view to negotiating voluntary agreements for them to do so. The number of participants now stands at 103, with approximately 20 more signed up. We are engaging with areas that to date have not participated. Since 2015, 21 new local authority areas have agreed to become dispersal areas, with another 28 areas in discussion with us and our housing providers.
Through regional strategic migration partnerships—which basically group together the local authorities within a particular region and are Home Office-funded forums—we work with the contractors, local government and other local agencies to plan the most appropriate dispersal of asylum seekers. The partnerships consider the impact on communities and local services so that adjustments can be made where appropriate. This is intended to ensure that community cohesion, social welfare and safety issues are properly considered. We judge strategic migration partnerships to be the best mechanism to achieve that focus. We are working in particular with the strategic migration partnership in the north-west, where there have been particular pressures, so that local authorities in the surrounding areas can play their part in assisting the partnership.
Asylum seekers are placed in initial accommodation while their claims for support are addressed. Initial accommodation is short term and, after successfully claiming for support, asylum seekers are housed in dispersed accommodation. In initial accommodation, which tends to be hostel or halls of residence-style accommodation, service users are put in touch with support services and healthcare and provided with meals. Across the UK, there are initial accommodation centres in Croydon, Liverpool, London, Glasgow, Cardiff, Wakefield and Birmingham.
As has been indicated in a number of the contributions to the debate, and as I am sure hon. Members will recognise, global events have meant that the number of asylum seekers—many of them destitute and in need of our support—entering the UK has increased this year. That, and a change in the mix of the nationalities and characteristics of asylum seekers, means increased demand on the asylum accommodation system. As the hon. Member for Rochdale correctly said, the number of asylum seekers accommodated in Rochdale has increased in recent years. I pay tribute to the town for its participation in the asylum seeker dispersal scheme and the support it has provided to asylum seekers for many years.
We work closely with local authorities that raise concerns about dispersal to help to address those concerns. Indeed, my officials and I have met individual MPs to listen and respond to local concerns, and I extend an invitation to the hon. Member for Rochdale to meet us to pursue a number of the points that he has flagged. For example, we have listened to the concerns of the local authority and stakeholders in Prestwick and ceased the use of contingency accommodation there. In Middlesbrough, we have agreed with the Mayor to reduce the number of asylum seekers to the 1:200 dispersal ratio by the end of December, and the population there is already reducing. In Manchester, Birmingham and Cardiff, we have listened to the concerns of local authorities and MPs and our providers are reducing, in a gradual and balanced way, their use of hotels as temporary accommodation.
I remain convinced that increasing participation in the asylum seeker dispersal scheme is the strongest long-term solution for avoiding the use of contingency accommodation such as hotels. The director general of UK Visas and Immigration has written to local authority chief executives to ask them to participate in dispersal, and I plan to write again to local authority leaders following the local council elections.
Simon Danczuk
Am I right to say that the Department has the power to instruct local authorities as opposed to asking them to co-operate voluntarily, or does it not have that power to mandate?
James Brokenshire
The hon. Gentleman made a point in his contribution about the powers in the 1999 Act, which have not been used to date. Our preference is to continue to work with individual local authorities through the strategic migration partnerships to get buy-in from those authorities on broader dispersal. We would face challenges if we were to try to create, effectively, a mandated national dispersal mechanism, which other hon. Members have highlighted their reservations about. Therefore, our focus remains on working with local authorities to establish how we can expand the number of participating authorities; and, as I have indicated, we are starting to see progress. There is clearly more to do, which is why I intend to take further action by writing out following the local council elections.
Simon Danczuk
I do not want to be overly partisan, but my office’s analysis shows that Labour local authorities do take asylum seekers and Conservative local authorities do not. That is broadly the situation. Surely a Conservative Minister in a Conservative Government could apply some pressure on his local authorities and local representatives to get them to take some of the burden that Labour authorities carry.
James Brokenshire
I can say to the hon. Gentleman that my local authority is a dispersal area; equally, other Conservative authorities do take asylum seekers in dispersal. As I indicated, we seek to expand those numbers further and I will continue on that in the months ahead.
I want to respond to this point specifically: despite the increasing numbers, we continue to process claims promptly. Indeed, the inspection by the independent chief inspector of borders and immigration found that the Home Office had made significant improvements in the efficiency and effectiveness of its management of asylum casework during 2014-15. It had met its aim of deciding all straightforward claims made on or after April 2014 within six months, while successfully clearing all straightforward claims lodged before 1 April 2014 by 31 March 2015. The inspection also found that non-straightforward cases were being monitored effectively and decided quickly once barriers were removed.
We continue to focus on driving further improvement and ensuring that cases are determined promptly. Of course there are some more complex cases, where we may have concerns over issues of previous criminality or perhaps even war crimes that individuals may be linked to in some way. It is therefore appropriate that we consider matters carefully and cautiously in those circumstances. However, I am clear about the need for an efficient and effective service. We have been driving that through change over recent years and we intend to retain a focus on that.
On the COMPASS contracts, the suppliers are contractually required to provide safe, habitable, fit-for-purpose accommodation to comply with the Housing Act 2004 and the decent homes standards. All Home Office contracts include performance standards that are defined in the contract and managed using key performance indicators. Any failure in delivering the critical service levels may result in deductions against submitted invoices in the form of service credits. The Home Office and the providers regularly inspect asylum seeker accommodation. All three contractors are currently meeting the key performance indicators for property standards. When any defects are found through the inspection regime, such defects are being rectified promptly and within contractual time limits.
I stress the change we have made in the inspection regime. We are listening more closely to service users—I think we had not previously listened and had that rightful feedback from them to a sufficient degree—and working with non-governmental organisations to pick up on issues where they arise, so that we are better able to target the inspection regime and address any concerns about the quality of accommodation that asylum seekers use. The Home Office regularly inspects properties in Rochdale and did so only last week. The inspections found that the accommodation was of a good standard and that the asylum seekers living there felt adequately supported.
To take the point raised by the hon. and learned Member for Holborn and St Pancras (Keir Starmer), the COMPASS contracts, as well as improving accommodation standards, remain on target to deliver £136.4 million of financial benefits during their lifetime compared with the cost of the previous arrangements. As I made clear at the recent, passionate Westminster Hall debate on 19 April on unaccompanied children, the Home Office takes its
“responsibility for the welfare of children seriously.”—[Official Report, 19 April 2016; Vol. 608, c. 286WH.]
We have stringent and statutory policy safeguards in place regarding child welfare. Ensuring that we treat children with care and compassion is a priority.
Last year saw a 56% increase in the number of unaccompanied asylum-seeking children arriving in the UK, particularly in Kent. The Government are grateful to all those in Kent and to other local authorities meeting that challenge for the excellent way in which they have responded to those pressures and we are keen that there should be no repetition of the situation that occurred in Kent last summer. That is why I have announced that we will put in place a national transfer scheme this summer to ensure a fairer distribution of unaccompanied asylum-seeking children across the UK. I am extremely grateful for the collaborative way in which the Local Government Association and the Association of Directors of Children’s Services have engaged with that work. I will be writing to all local authorities again after the local elections to provide further information about the scheme and the support mechanisms.
I am sure hon. Members will agree that the outpouring of support we have seen in response to the Syrian crisis has been incredible, from local authorities that have volunteered to take refugees as part of the Syrian resettlement programme, to offers of help from the general public, businesses and voluntary organisations. Less visible is the ongoing support in communities such as Rochdale and what they have been doing to provide for asylum seekers over a number of years. I pay tribute to those communities.
Keir Starmer
I have said before that I think the scheme to resettle Syrian families is very good, but I have a growing concern about a two-tier system. I know that there is much greater financial support for local authorities that house Syrian families than for those that house other asylum-seeking individuals. Does the Minister share my concern that there is a growing perception of a two-tier asylum-seeking system evolving?
James Brokenshire
It is important to remember that those who are arriving into the UK through the Syrian resettlement scheme are given refugee status on arrival. There is a distinction to be drawn between those granted refugee status and those seeking a refugee status that has not yet been established.
On the hon. and learned Gentleman’s point, we need to ensure that we retain focus across the system, in respect of the asylum system and also resettlement programmes. We continue to do that. I work very closely with the Minister for Syrian refugees to ensure that we recognise the pressures that may build up in certain local authority areas from supporting asylum seekers, as well as pressures for those that are meeting responsibilities under the refugee scheme, including in relation to unaccompanied asylum-seeking children. There are a number of different pathways and factors that need to be viewed in their totality. That is precisely what the Government are doing and will continue to do. I pay tribute to those communities that are taking action, supporting asylum seekers in their communities and playing their part. I am keen that we build on that support and join up between resettlement and asylum wherever possible, so that all communities across the UK are able to support unaccompanied children, asylum seekers and refugees.
I agree with a number of hon. Members that we need to continue to widen the dispersal system across the UK. That is what we are seeking to do, and we have had some important successes. That is the best way for the towns and cities of the UK to offer protection to those who genuinely need it. I am grateful to the hon. Member for Rochdale for raising this debate, and I look forward to continuing the conversation.
Simon Danczuk
I will be brief. I thank you for chairing the debate, Mr Hanson, and I thank the Minister for his contribution and some of the answers he has given. I have concerns about the dispersal system, which is why I called for this debate. I appreciate that the Government are beginning to move towards a wider dispersal strategy, but some speed would be appreciated.
Question put and agreed to.
Resolved,
That this House has considered asylum seeker dispersal policy.
Burial or Cremation (Delays)
(8 years ago)
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Mark Pawsey (Rugby) (Con)
I beg to move,
That this House has considered delays between death and burial or cremation.
The purpose of this debate is to consider the increasing amount of time that is now occurring between a person dying and their subsequent burial or cremation. The subject was considered by the all-party parliamentary group on funerals and bereavement, which was founded in 2002 to examine issues of concern to parliamentarians and their constituents. Of course, the group brings together Members of both Houses, representatives of the funeral director profession and representatives of bereaved people. The report on delays originated in the previous Parliament at the instigation of Paul Goggins MP. We all remember him well as the Member for Wythenshawe and Sale East from 1997 until his untimely death in January 2014. At various meetings of the all-party group, he raised issues related to delays and their impact on people who had lost loved ones.
The report was commenced under the chairmanship of my predecessor as chair of the all-party group, Lorely Burt MP, now Baroness Burt. We held evidence sessions in July 2014 and January 2015, and we published our report in December 2015. We have had three ministerial responses since the publication of our report. The Under-Secretary of State for Health, my hon. Friend the Member for Ipswich (Ben Gummer), addressed death certification issues, including the role of the medical examiner within the national health service. The Under-Secretary of State for Communities and Local Government, my noble Friend Baroness Williams of Trafford, addressed crematoriums and burial facilities. We received an extensive reply from the Under-Secretary of State for Women and Equalities and Family Justice, my hon. Friend the Member for Gosport (Caroline Dinenage), and I am delighted that she is here today. She addressed legal issues and the provision of services that are legally required.
The objective of today’s debate is to highlight some of the issues raised in the report and, in addition, to provide an opportunity for the Minister to update the House on the measures she mentioned in her letter of three months ago. I note that she will respond purely on those matters for which the Ministry of Justice has responsibility. The all-party group will continue the dialogue it has already started with Ministers in other Departments.
At the outset, it is useful to consider why the report was necessary. It is accepted that the time taken between death and a funeral or cremation is getting longer. We received written evidence suggesting that the average time between death and burial or cremation is some 15 days, which was pretty standard in the submissions we received. Witnesses, however, noted that the time could vary significantly based on factors in the local area, whether the death was expected and whether the death occurred at home or in hospital. There was consensus among our witnesses that the time had increased in recent years. One witness suggested that the time had increased from some 10 days in 2003 to 15 days in 2013, which is an increase of five days, or half again as much, over a period of 10 years. Another witness noted that, between 2012 and 2014, an average of two days had been added to the process.
There is a problem in measuring the change in time, because central statistics are not collected. Although some funeral directors collect those data, the figures cannot easily be broken down to show which aspect of the process is causing delays. The national medical examiner told the all-party group that the new death certification system is likely to add half a day or so to the current average time. He was at pains to express it as an average so, in some instances, we can expect the process to take longer.
In 2015, the National Association of Funeral Directors surveyed its members and it identified that families were waiting increasingly long to see a registrar after a death. Almost 70% of members reported that waiting times had increased over the previous year, with 49% of families waiting at least three days for an appointment and 15% waiting more than five days. A survey of National Association of Funeral Directors members this month revealed a complex picture of the effectiveness of coronial services across England and Wales, with, regrettably, only 41% describing their local coronial service as good or very good. Thirty per cent. described their local coroner as providing a satisfactory service, and 27% described the service as unsatisfactory or very unsatisfactory. That is one area of concern.
The all-party group took evidence from a range of witnesses involved in the process, including bereavement support groups, funeral directors, faith groups and organisations representing coroners’ staff, pathologists, crematorium staff and cemetery management. There is consensus among those working in the sector on the increasing time between death and burial or cremation, and we heard a number of reasons for why that might be, including increased pressure on registration and death certification services, a lack of communication and co-ordination between the organisations involved in certifying a death, and a lack of core crematorium slots.
Our report contained 13 conclusions and recommendations, and I will pick out three key ones. First, we urged the Government to review their post-mortem arrangements. The implementation of death certification reforms provides an opportune moment to assess whether the current fee of £96.80 for a post-mortem examination is sustainable. The all-party group would welcome an assessment from the Government on whether sufficient pathologists are being trained in autopsy to cater for future demand, as the requirement to study a post-mortem module has been removed from the appropriate syllabus.
Secondly, the Government should undertake a comprehensive review of the current state of burial and cremation in the UK, including an assessment of the projected capacity needs for the next 50 years and a review of barriers to developing crematoriums and cemeteries. New crematoriums are being developed. I am proud that a new crematorium has opened in my constituency of Rugby in the past few years, and it is an excellent example of the local authority working jointly with the neighbouring authority, Daventry District Council. We have a facility in my constituency of which we can be proud, so it is possible for additional facilities to be provided.
Thirdly, we urged the Government to publish their proposals on death certification reform and to ensure that they address two key issues: reducing the number of people involved in the certification process; and enabling the provision of certification outside regular working hours. On the latter matter, since our report was published, we have held a feedback session with the various witnesses who came along to give evidence in order to review the responses we received from Ministers. Concerns were raised in that session about the comments of the national medical examiner, Professor Peter Furness, who said that, on average, the new death certification process
“is taking approximately half a day longer than the old one”.
There is a feeling that half a day is something of an underestimate. The all-party group is pleased that a number of consultations have been announced since the report’s publication. We are keen to see them resolved, particularly the consultation on death certification reform by the Department of Health and the consultation on crematorium provision and facilities by the Department for Communities and Local Government. We are also pleased that the Ministry of Justice has been consulting on an out of hours coroner service, and we are keen to see the outcome of that consultation; I hope that the Minister can provide us with an update.
As I said, we held a feedback session, which produced two conclusions. One conclusion that might be of concern to the Minister was the feeling among those in the sector that none of the ministerial responses inspired confidence that the Government understand that bereaved people, those who have lost a loved one, are at the centre of the system. The belief was that things are process-driven, that it is a matter of numbers and that there is a lack of understanding that people are affected. The feedback session’s second conclusion was that the Government must focus on ensuring that all Departments involved in the death process work together more coherently, and that that culture change must be instilled in every organisation involved, whether in central Government or local government.
We picked out one or two additional observations. In respect of the out of hours issue, we know that the NHS is moving more towards a seven-day service, and it is believed that death facilities should do the same, so that out of hours service is available for those who need it. Many attendees at our feedback meeting highlighted the lack of consistency among coroners’ offices in terms of contact practices and the ability to offer non-invasive autopsy options. In particular, some witnesses highlighted that some coroner offices would not speak to funeral directors but wanted email communication instead. They advised us that emails sometimes go unanswered.
A number of witnesses highlighted that they increasingly struggle to get access to some mortuaries when several are run by the same NHS trust. It is believed that, to save costs, some trusts reduce the opening hours for each mortuary, meaning that bodies can be unavailable for days at a time. Our attendees noted that, although 80% of deaths occur in hospitals, as far as they are aware, medical professionals are not given training in the death certification process and what best practice looks like. Our previous chair, Baroness Burt, disagreed with DWP Ministers’ assessment that the funeral payments system is fit for purpose.
I have a number of questions to which I hope the Minister can respond in the time available, particularly about improvements to the coroner out of hours service, to which I have referred and which we are interested to hear about. I understand that she has met with the Metropolitan Police Service to consider an across-London out of hours coroner service. If she cannot respond to my specific question now, perhaps she could respond in writing to the all-party group on that and on other questions in due course. Has her Department assessed how the coroner service and other organisations involved in the process will work alongside a seven-day NHS?
This issue came out of several of our meetings: would it be possible for a simple flowchart to be made available so that people could see clearly the process after death? It would give both bereaved people and policy makers a better understanding of what is going on to have some explanation of the path towards a funeral. A graphic representation may help policy makers to identify which processes are causing delay.
Our inquiry was interesting, and we came up with a number of recommendations and developments. It is clear that the delays are causing great distress to many people, not least many in our faith communities, who for faith reasons are anxious for burial or cremation to take place more promptly after death. I hope that, when the Minister rises to bring us up to date, she will be able to reassure the many people to whom we spoke that the Government take these issues seriously and that the delays that have increased in recent years might be reduced in order to minimise the distress caused to bereaved people.
Graham Stringer (in the Chair)
Before I call the hon. Member for Hendon, does he have permission to speak from both the proposer of the debate and the Minister?
Dr Offord
I am grateful to you for allowing me to speak, Mr Stringer. I am prompted by events this weekend. Both the Jewish and Muslim traditions require that burial take place as soon as possible after death, preferably within 24 hours, but the process is sometimes affected adversely by the unavailability of any coroner out of hours, the absence of an appropriate doctor or the lack of available facilities in local authorities for rapid registration. It has been a problem and a cause of concern in my constituency; I raised the issue on the Floor of the House only this January, asking what provisions the Government are making to ensure that such services are available.
In the last week, a constituent of mine has been involved in a very difficult process. Liora Rosenberg was on a life support machine in Hampstead at the Royal London hospital. Unfortunately, on Saturday night she died. To compound her untimely death at the age of 20, her parents were unable to obtain a death certificate over the weekend, meaning that burial is being delayed; the coroner for the Royal London hospital will not consider engaging with the issues surrounding Liora’s passing out of hours. It is adding to the grief of her family, who cannot commence the formal shiva—the Jewish period of mourning—until after the funeral, which can be conducted only after the coroner concludes her investigations.
I am aware that no one wants to interfere with the legal process, but we must be mindful of the problems faced by particular faith communities. As I said, I have raised specific cases in north London. Will the Minister continue with the coroner reform programme to ensure that an out of hours coroner service is available?
Within the Jewish tradition, there is a process called performing a mitzvah, a good deed on someone’s behalf. Lauren Rosenberg, Liora’s mother, has asked everyone to perform a mitzvah today. Will the Minister perform her mitzvah by ensuring that, in future, people have access to the coroner service and death certificates so that the dead can be buried appropriately and as soon as possible?
The Parliamentary Under-Secretary of State for Women and Equalities and Family Justice (Caroline Dinenage)
It is a great pleasure to serve under your chairmanship, Mr Stringer. I congratulate my hon. Friend the Member for Rugby (Mark Pawsey) on securing this important debate. As he said, he wrote to me on 16 December last year to bring my attention to the report by the all-party parliamentary group on funerals and bereavement, which set out 13 recommendations and conclusions that the all-party group wished the Government to consider and take forward. I start by commending the all-party group’s work in producing such a comprehensive report. I pay tribute to the late Paul Goggins, the former Member for Wythenshawe and Sale East, who was instrumental in instigating much of the work.
I am grateful for the opportunity to update hon. Members on the progress made since the report was published. I should probably start by saying that Members will be aware that responsibility for the period between death and burial or cremation lies across several different agencies—the Department of Health, local authorities, the police, coroners—all of which have different levels of autonomy. I think that I can safely say that if we were going to start from scratch and create a system anew, we probably would not organise it in quite that way. I certainly take on board my hon. Friend’s suggestion of a flowchart—I wish I had had one when I first took on this ministerial role—but I am keenly aware that, as he pointed out, at the heart of this process and all these authorities are people who are grieving and need to be supported through a particularly difficult time in their lives.
I will run through a few of the issues that have been raised today. My hon. Friends the Members for Rugby and for Hendon (Dr Offord) raised the issue of out of hours coroner services. As they and the all-party group are aware, the Ministry of Justice has been considering how an out of hours coroner service can be achieved. Of course, this is of concern to faith communities, particularly the Jewish and Muslim communities, because without it—as my hon. Friend the Member for Hendon has already highlighted—there can be a considerable delay, preventing the timely burial of loved ones that is required by certain faiths.
My right hon. Friend the Lord Chancellor and Secretary of State for Justice and I share that concern. Together, we have met members of the Jewish and Muslim communities, and separately I have met members of the Jewish community, and I have been working consistently with the London authorities, the Chief Coroner and the Metropolitan police to try to develop an out of hours service across London.
Some progress has been made. In particular, I sense that the Metropolitan police now appreciate the urgency of recruiting a full complement of coroner’s officers to work “in hours” in each of the seven coroner areas that it covers. However, more needs to be done to cover the out of hours service, and we are doing all that we can to bring the various constituent parties together to achieve that. It is absolutely fundamental that we allow bereaved people of whatever faith to make their funeral arrangements quickly, preventing the distress that can be caused by delay.
The all-party group drew attention to the sustainability of pathology services. I can report that the Health Education England commissioning and investment plan for 2016-17 shows a steady state of commissioning in the five pathology specialties. Health Education England is mandated by the Government to make sure that specific and targeted education and training are introduced for all pathologists, including taking forward the developments arising from the 2014 pathology quality assurance review by Dr Ian Barnes.
My hon. Friend the Member for Rugby mentioned post-mortem imaging. The all-party group recommended that the Government monitor the efficacy of post-mortem imaging, which in some cases can provide an alternative to the conventional invasive post-mortem examinations. The MOJ and the Department of Health are keeping up to date with developments in this procedure through their membership of the national post-mortem imaging board.
The all-party group highlighted the need for death certification reform. On 10 March, the Department of Health launched its consultation, which is entitled, “Introduction of Medical Examiners and Reforms to Death Certification in England and Wales: Policy and Draft Regulations”. As my hon. Friend has said, the proposed reforms will introduce, for the first time, a unified system of scrutiny by independent medical examiners of all deaths in England and Wales that are not investigated by a coroner. This development will strengthen safeguards for the public, make the process simpler and more transparent, and improve the quality of certification and mortality data. An eye is being kept on the delays that he has referred to; the Department of Health is watching that issue very closely. At the moment, it is probably too early to determine what the impact of the consultation will be, but the consultation is certainly on everyone’s horizon.
With regard to the civil registration service, the all-party group will know that the Home Office responded to its recommendations on civil registrations on 1 February, and undertook to raise awareness of the group’s report with local authorities, which it did via a circular on 1 March.
The Government are very pleased that the all-party group recognised the Government’s commitment to reviewing cremation legislation. The MOJ published our consultation on cremation on 16 December last year, seeking views on changes; the consultation was really aimed at improving cremation practice. The consultation closed on 9 March and the responses are now being analysed by a team in the MOJ. We plan to publish our response to the consultation as soon as possible.
On 16 March, the Department for Communities and Local Government published a consultation on the provision of crematoriums and related facilities, to establish whether they meet the demands and cultural requirements of all communities. This consultation closes on 26 May and DCLG will use it to establish whether the concerns that have been raised are as widespread as has been suggested.
We are aware that a number of new crematoriums have been established over the past three years—on average, one new crematorium is being built every three months—because new crematoriums have to report their opening to the Secretary of State for Justice. So we are keeping an eye on that issue, too.
With regard to coroner reforms, the need to place bereaved people at the heart of the coroner service was the key aim of the reforms implemented in 2013. One of those reforms introduced the post of Chief Coroner. Judge Peter Thornton QC was appointed as the first Chief Coroner, and he has played a central role in issuing guidance for coroners. Coroners are now required to conclude an inquest within six months of a death and they must report coroner investigations that last for more than 12 months to the Chief Coroner, so that he can refer to them in his annual report.
For bereaved people, probably the most significant development under the Coroners and Justice Act 2009 has been the “Guide to Coroner Services”, which is a booklet published by the MOJ. It sets out how a coroner’s investigation is likely to proceed, as well as the standards of service that bereaved people can expect to receive from a coroner’s office, and what they can do if those standards are not met.
As my hon. Friend the Member for Rugby generously pointed out, I have the coroners portfolio and I share his wishes that the matters he has raised are resolved as quickly as possible. However, he understands that the operational responsibility for coroners services is a matter for the appropriate local authority, while my Department has responsibility for coroner law and policy. As frustrating as that situation can sometimes be, it is for the relevant local authorities to decide how to fund and run their coroner service.
Mark Pawsey
My hon. Friend the Minister is drawing our attention to the very broad range of agencies that are involved in this area. Is there any way that these different authorities and Departments can be brought together to improve communication between them?
Caroline Dinenage
That is certainly the case in the pan-London service that we have been looking at; we have been bringing all the different constituent authorities together in one room to discuss matters. We hope that guidance on the lessons learned from that process can be rolled out to other parts of the country.
I am really very grateful to my hon. Friend, the other members of the all-party group and all those who provided evidence to the group’s report. It is a comprehensive analysis of the range of services that bereaved people may have to deal with when they are faced with the death of a loved one, and for me its recommendations underscore the need for the Government to ensure that these services meet the needs of users and bereaved families at what will always be a very difficult time. I am also very grateful to him for bringing this matter to the House today.
Question put and agreed to.
Ealing Hospital
(8 years ago)
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Mr Virendra Sharma (Ealing, Southall) (Lab)
I beg to move,
That this House has considered services at Ealing Hospital.
It is a great pleasure to have secured this debate and I am delighted to serve under your chairmanship, Mr Stringer. I am grateful to you and to Mr Speaker for providing the opportunity to debate this important matter. I am also delighted to see the Under-Secretary of State for Health, the hon. Member for Battersea (Jane Ellison), here in Westminster Hall today.
Last week, on 26 April, I presented in the main Chamber a petition organised by a local group in my constituency and signed by more than 100,000 people, which said:
“The petitioners therefore request the House of Commons urges the Government to reconsider the impact of the Shaping a Healthier Future programme on Ealing Hospital, Ealing and the surrounding boroughs that rely on Ealing Hospital to deliver high quality emergency care 24 hours a day.”—[Official Report, 26 April 2016; Vol. 608, c. 1404.]
I have outside the room quite a few organisers and other constituents who are visiting from Ealing and hope to see some outcome from the debate today.
The London Borough of Ealing is one of the fastest-growing areas in the city of London. West London is experiencing fantastic population growth, as people flock to join our vibrant multicultural business hub. Ealing, and Ealing hospital, are at the heart of that growth. London is a demanding city—we know that from living here—but it is not just demanding regarding lifestyle and culture, it makes demands on health and the population demands a lot from its healthcare providers. Across the west of the city, in particular, we have a high level of young people, but the area also suffers from one of the highest levels of lifestyle-led premature death. It is a scandal that we in this great city preside over such a high rate of child poverty, while London drives the British economy.
In 2011, in what I can only assume was a well-meant but ill-founded attempt to improve the situation, the “Shaping a healthier future” programme was implemented across Ealing and the surrounding boroughs. “Shaping a healthier future” looked to combine services in certain hospitals to make savings and to improve 24-hour care, but the reconfiguration and rationalisation were often little more than cover for closing services. For the past few years, local people—the Minister can see that many of them are here today—including people from different walks of life and different political backgrounds and beliefs, west London MPs, Ealing Council members and Dr Onkar Sahota, the Labour spokesperson on health in the London Assembly and chair of its health committee, have repeatedly spoken out against what is being done to Ealing hospital.
We were threatened with the loss of four of our local 24/7 blue-light A&E units. Ealing hospital is expected to lose its full A&E service and have it replaced by a service that is not fit for purpose and cannot guarantee the safety of Ealing residents. Despite the increasing birth rate across our area of London, we lost our maternity unit last summer. That loss means that no more children will be born in the London Borough of Ealing. I must declare my interest in Ealing hospital. Two of my three grandchildren, Aatish and Riah, were born there, and I can vouch for the quality services provided. The paediatric unit is scheduled to lose in-patient services this summer. The iniquity of cuts that threaten the health and wellbeing of our youngest is a betrayal of every Ealing resident.
Shirlyn, a single working mother in my constituency, wrote to me last week to ask me to
“do [my] best to fight this”.
She cannot believe that vulnerable children are being put at risk by cuts. Shirlyn is worried, just as every parent across Ealing must be, that in the case of an emergency the increased travelling time risks increasing the danger children are in. The loss of that key community asset means that the most vulnerable families, those that have children with serious long-term medical conditions, will spend longer travelling, which will threaten their ability to both work and see their sick child. What kind of society can stand by and make someone choose between putting food on the table and seeing their sick child? As Shirlyn says, we in Ealing have paid our taxes and we have not been listened to.
As each successive round of downgrades and closures is announced, public trust in the London North West Healthcare NHS Trust falls further. Public confidence is so low, and people so frustrated at being ignored, that many are worried the hospital will be completely closed and sold for housing. That creates an unsafe situation for the people of west London, and for my constituents in Ealing, Southall.
Accompanying investments were supposed to balance the situation, but as costs have spiralled to more than £1 billion, promised investments have been threatened with withdrawal. Part of the deal for Ealing hospital had been that a new, fit-for-purpose, community style hospital would be built, providing high-quality services in a modern, clean and safe environment. In 2014, Ealing Council, along with others served by the London North West Healthcare NHS Trust, established a commission headed by Michael Mansfield, QC. The independent commission almost universally condemned the results of “Shaping a healthier future”. It found that cuts were affecting the poorest in society most acutely, and that the public had not been properly consulted. Plans had been drawn up that just could not deliver for Ealing. There was no sustainable business plan and the reconfiguration did not offer value for money, and was not affordable or deliverable.
The most important adjustment that can be made now is that the Secretary of State step in and halt the current programme, which is risking lives. The experiment is failing my constituents in Ealing, Southall. Michael Mansfield, QC and his independent commission recommended that a full A&E service be reintroduced at Ealing hospital, and that the maternity unit be reopened. The report also noted that local GP and out-of-hospital services were overwhelmed. Investment in public health is the only way we can end this shame, and give back to Ealing residents the healthcare they deserve. By helping young people and those who are mentally ill, and not allowing thousands more to slip into homelessness—as the Mayor has across all of London—we can help the health of everyone.
In January last year, I asked the Prime Minister to consider implementing Labour’s plan to employ a further 8,000 GPs to ease the workload for the most stretched services. Despite agreeing that GP care is fundamental to providing proper healthcare, he dismissed the plan and we are now seeing the results of his complacency.
London does not just have younger people putting pressure on healthcare services. The population at the other end of the spectrum is growing, and by 2031 there will have been a 40% increase in the over-80s population. That means that London, and Ealing, have to be better than many other parts of the country. We have to face the challenges not as problems but as solutions to the significant health inequalities that exist in our city. In 2013, the Mayor of London launched the London Health Commission, which published its report near the end of 2014. Although it suggested many important changes to NHS services, and outlined many noble intentions, the picture for London is only worsening.
That is why the Government have to step in. I ask the Government, on behalf of the more than 100,000 people who signed the petition and the many more who could not sign it but are worried about the services, that the current programme of rationalisation be halted. Services that are not adequately supported must be supported and reopened. Patient safety has to be the ultimate litmus test, and currently that cannot be guaranteed. As my constituent said:
“Every child is important and this move is putting the lives of these children at risk. Children need A&E.”
The people of the London borough of Ealing and surrounding areas need fully resourced and supported hospitals that provide a full service. Those hospitals need to be supported by the Government for the benefit of the local community.
Several hon. Members rose—
Graham Stringer (in the Chair)
Order. Before I call Dr Rupa Huq, I would like to explain the timetable for this hour-long debate. I would like to call the Opposition spokesperson at approximately 2.15 pm, and I expect him to take five minutes. Then the Minister can respond, leaving a minute or so for the proposer of the debate to reply. We seem to have plenty of time.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
It is a pleasure to serve under your chairmanship, Mr Stringer. I congratulate my hon. Friend and parliamentary neighbour, the Member for Ealing, Southall (Mr Sharma), on securing this important debate. It was the consolation prize for a petition that had more than 100,000 signatures. Initially, that petition went to the Petitions Committee. The number of signatures demonstrates how the Ealing hospital issue has gone beyond being a little local difficulty. It is now a national scandal.
Mr Stringer, I do not know what it says in your diary for 18 May. For MPs from all parts of the House, it says, “State opening of Parliament”. Despite the legislative programme coming our way, it is usually a joyous occasion. It has pomp and circumstance, and we may get a sighting of Her Majesty the Queen. It is also, however, the day when the Ealing clinical commissioning group will take the decision to shut the door on children’s services at Ealing hospital. For people in Ealing, it will be a sad day.
It is not yet a year that I have been a Member of Parliament, but some of the subjects that come up in relation to Ealing hospital seem depressingly familiar, even to me as a newbie. We seem to have this common situation when the Government just will not budge. Their intransigence makes it all seem a bit like groundhog day. I was a Labour candidate for 18 months before I was elected, and the NHS was the No. 1 issue on the doorstep. We were told that we were fearmongering. I remember we had a big march—a demonstration—from Ealing hospital to Ealing common, which is a number of miles on the map. We warned that the A&Es at Hammersmith and Central Middlesex would be closed, and we were told that we were fearmongering. They have both gone now, closed in September 2014. That was euphemistically called “changes”. Everyone had a leaflet through the door talking about “changes” when it meant “closures”.
In the run-up to the election, I did several hustings where I warned that maternity was next for the chop at Ealing hospital. Again we were told that we were scaring people and that it was a scare story, but on the other side of my election that closure sadly came to pass. One of the first things I did as an MP was table an early-day motion about it, which my hon. Friend the Member for Ealing, Southall signed. I think my right hon. Friend the Member for Islington North (Jeremy Corbyn) was the first non-Ealing MP to sign that early-day motion, which asked for the Government to think again and condemned the closure.
As my hon. Friend the Member for Ealing, Southall pointed out, Ealing is a young borough. It needs maternity services. Those services closed at Ealing hospital in June, and paediatrics is next, because we cannot have a children’s ward without maternity services, and maternity is gone. There is a fear that there is a domino effect—that these things consequently happen one after another. It creates a climate of fear and uncertainty among the staff and the patients. Many of the mums who had births in the middle of last year were uncertain as to whether the maternity services would be there. The closures are demoralising and out of step with the needs of the wider west London area.
As an academic by trade, I believe in evidence-based policy, and the evidence is that Ealing borough has a population of 360,000 people and rising. That is as big as a city like Leeds. The borough needs accident and emergency services, maternity and a children’s ward. There was a meeting at Richmond House, which I think my hon. Friends the Members for Ealing, Southall and for Hammersmith (Andy Slaughter) attended, along with the Minister. It was a good meeting on the whole, but the PowerPoint we were shown confirmed that Charing Cross and Ealing will be downgraded to minor hospitals. The House of Commons Library confirmed to me this morning that the population of London as a whole is projected to rise to 10 million, so surely we need more capacity, not less.
The bill for the “Shaping a healthier future” reconfiguration programme keeps rising. I think it is £235 million at present. Some £35 million has been spent on management consultants, such as McKinsey and all those people. It does not look like good value for the taxpayer. We are living in an age where every pound of public money spent has to be justified, and the end result of this programme will be fewer acute beds and fewer hospitals, with A&Es in west London decimated. It is a bad deal all round. There is other evidence of that. I am not someone who likes to trot out loads of statistics, but waiting times are massively up at Northwick Park, which is seven miles away from bits of Acton in my constituency. In the immediate aftermath of the closure, it had the worst recorded A&E waiting times in England for six out of 15 months.
My hon. Friend the Member for Ealing, Southall has alluded to the Independent Healthcare Commission for North West London headed by Michael Mansfield, who is a respected QC and who has expressed concerns about the business case. Forget all the emotional stuff; he is looking at whether it is a good deal for the taxpayer, and he has called the business case “deeply flawed”. I pay tribute to the tireless work of Eve Turner and Oliver New, as well as to my constituents Arthur and Judy Breens, who have formed an organisation—it keeps changing names: it was Save Our Hospitals, then it was Save Ealing Hospital.
The petition, which was batted back by the Petitions Committee, talks about
“a peaceful occupation at the Maternity Wing Area”.
That is how bad things have got. It also states:
“Protests are growing and the anger is reaching boiling point amongst thousands of members of the community.”
These people were not political before this issue came up. It has politicised the chattering classes of Ealing behind their net curtains, not that I am dismissing people with net curtains. They are a completely valid form of internal decoration and I love them dearly. The issue has managed to inflame people who are not usually inflamed and who have never been on a demonstration.
Mr Virendra Sharma
I am sorry to intervene when my hon. Friend is in full flow, but it is important to make the point that the campaign is non-partisan. All the political parties on Ealing Council unanimously support it and more than 100,000 people signed the petition. Many hundreds of people actively went around their areas asking for signatures. It is important to understand that the campaign is not led by any political party.
Dr Huq
My hon. Friend puts it very well. I completely accept his point. The strength of feeling about this issue is palpable. It is a non-partisan thing; they are people who have never been on a protest march before.
Talking of protest marches, a couple of weeks ago I joined the junior doctors on the picket line outside Ealing hospital. Some of those people are in the Public Gallery today. We were last together on that day, so we have been reunited. Quite aside from imposing a contract on junior doctors—a contract is not a contract unless there is offer, acceptance and agreement—there are so many other issues with the junior doctors’ strike that should be raised here, such as the fact that they are patronisingly called junior doctors, as if they are the work experience person who makes the tea. They are very experienced people with years and years of clinical experience. Calling them junior doctors is almost a way of belittling them.
I raised the plight of those highly experienced, yet technically junior, doctors with the Prime Minister at Prime Minister’s questions recently. The Government’s equality impact assessment of the new contract shows that it discriminates disproportionately against women because childcare costs more at the weekend, and if weekend hours are counted as normal hours, women will have to pay. Again, the issue was batted back and just shoed away, which is disappointing because the Government’s own advice tells them about the costs. It feels as though junior doctors are being stretched ever thinner, and if something is stretched ever thinner, it can snap.
I wanted to be brief today because I have spoken many times on Ealing hospital both here and in the main Chamber. This morning I asked the Library staff whether they had a briefing pack on the 1.30 debate on Ealing hospital and they said, “Again? You’re always speaking on this. You had three hours on this subject on 24 March,” for which they did prepare a briefing. One would think that after umpteen debates, I would have said all I have to say on this subject, but the tale gets worse and worse.
I have mentioned before the cases of constituents facing long waits: for example, the Khorsandi and Anand families. The last time I faced the Minister in this Chamber, I mentioned my constituent Bree Robbins’s three-year wait for breast reconstruction. She was disappointed she did not get an answer last time, but maybe we can try again today. People have legitimate concerns.
Like my hon. Friend the Member for Ealing, Southall, for me Ealing hospital is personal. It is where I would have been born, but I was born in 1972 and it did not exist then. However, I remember that hospital going up with so much hope attached to it, and now I see it constantly being downgraded. As my hon. Friend says, the suspicion is that it is on the way out. I have been to the acute medical unit in the basement with my mum; I have been to the hospital as a mum; it is where in September 2014 my father breathed his last. So this hospital is not a hypothetical thing on a spreadsheet; it is something that I and family members use.
Recently, 11 north-west London Labour MPs, led by my hon. Friend the Member for Harrow West (Mr Thomas), signed a letter calling for the National Audit Office to investigate. There is a question of economics. We want the Minister to think again, consider the business case and halt the closure programme. The case simply does not add up.
As I said, I remember the hospital going up and I remember, as will my hon. Friend the Member for Ealing, Southall, several schools in the Borough of Ealing that were closed in the ’80s when rolls were falling. The place in Greenford—I cannot remember its name—where they send school governors on training courses is a disused school, but now schools in Greenford are having to be opened. The Priory Centre in Acton was a community centre in a disused school. Now it has been razed to the ground and a brand-new primary school built, because numbers are going up. The short-sightedness flies in the face of the evidence and ignores the fact that populations are rising.
I do not have any hospitals in my constituency, although I had several on the edges: Central Middlesex, where the A&E has gone, Hammersmith hospital, where the A&E has gone, and Charing Cross, in the constituency of my hon. Friend the Member for Hammersmith (Andy Slaughter), which is going to be downgraded. Although I do not have hospitals in my constituency, all those ones that were there on the edges are disappearing before our eyes, so I urge the Minister, who I know is a reasonable person and a London MP, to think again.
Andy Slaughter (Hammersmith) (Lab)
It is a pleasure to be here this afternoon under your chairmanship, Mr Stringer. Although the debate is difficult, it is a great pleasure to follow my two neighbours from the London Borough of Ealing, and I thank my hon. Friend the Member for Ealing, Southall (Mr Sharma) for securing this debate today. As the MP for Ealing hospital, no one has done more than he has to champion the cause of that hospital over the four years that it has been under threat. As we see from the petition that generated this debate—not the first petition of this size—he is admirably and clearly reflecting the view of the vast majority of people not only in Ealing borough but across west London.
Apart from their choice of Member of Parliament, the constituency of my hon. Friend the Member for Ealing Central and Acton (Dr Huq) may be one of the most unlucky in the country. To lose one A&E department may be considered unfortunate; to lose four must be an all-time record. Following the closures of Central Middlesex and Hammersmith and the downgrading of Ealing and Charing Cross to non-type 1 status, her constituents will be in a very difficult position, as will all our constituents.
I am here today for two reasons. I am not an Ealing MP, but I want to support my colleagues and I want to say—I think the Minister will accept this—that the proposals for Ealing hospital are inextricably linked, under the “Shaping a healthier future” programme, to the future of the eight other major hospitals in west and north-west London, four of which, as we have seen, will undergo substantial change and either closure or downgrading of services, or at least movement of services elsewhere.
As my hon. Friend the Member for Ealing Central and Acton said, we have debated this subject many times. I do not think that is surprising. I make no apology for that, given the importance of the issue. In the recent debate in March, which was an across-London debate, “Shaping a healthier future” was raised several times. One of the matters on which I and others pressed the Minister was when we would see the next developments. I was grateful when the Minister said that Members would have the next important document—the draft of the implementation business case—as soon as possible.
Since that debate we have also managed to fix a date, 25 May, for the 11 MPs to meet the health service management across north-west London. Unfortunately, I have been told by my clinical commissioning group that the document will not be available for the meeting, although it will be available later in the summer. The sooner we can see that document and have an update on what the proposals are for Ealing and the other hospitals, the better. I say that because this will be familiar not only to Members here, but to the many people in the Public Gallery. The difficulty we have had over the past four years is a lack of information.
We began with the bombshell proposals in the summer of 2012, which effectively proposed the closure of Ealing and Charing Cross hospitals, leaving just a primary care facility on the site. There was a modification when the final proposals were brought forward in February 2013. Those proposals—which most of us regarded as a fig leaf, albeit a very expensive fig leaf—were for the demolition and disposal of a substantial portion of the site, but with the building of new facilities, primarily for primary care and some other treatment, while still using the majority of emergency and acute services on the site. Since then, nothing. Indeed, we have been waiting a couple of years for the business case. In the place of factual information, rumours tend to spread. As was mentioned previously, nothing has changed.
As for Ealing hospital, the very strong rumour is that, given the poor financial condition of the NHS and the scepticism of the Treasury about the programme, it is likely that the service cuts and reconfigurations will go ahead, but also that the existing buildings will be retained. Those buildings were not designed for the purposes for which they will now be used and will not receive the funding to modernise them that was at least the mitigation in the previous proposals. The sooner we know one way or the other on that, the sooner we can have a proper discussion about it. The news that Imperial will have a £50 million deficit this year—I think the situation for north-west London hospitals is even worse—suggests that the financial imperative is continuing to drive this
Although the health service itself may have been quiet—certainly in what it has told Members and the public—my constituents and those of my hon. Friends have not been quiet over the past few years. As I say, the petition that generated this debate is not the first petition of more than 100,000 signatures that has been lodged. I hope that more attention is paid to this one than has been paid to previous ones. I pay tribute to the thousands of people who have not only signed petitions but been active in the campaign, which is going into its fifth year. The uncertainty is not helping anyone.
The public, the organised campaigns and the local authorities have acted responsibly. The local authorities commissioned the Mansfield report, a serious document that was not taken seriously enough by the NHS. The level of demoralisation is extremely high, and is combined with issues relating to the junior doctors’ dispute. Places such as the Imperial College school of medicine are centres of excellence for training junior doctors. I have spoken many times to the staff there and their morale is very low. All staff morale is very low because people do not know where they are going to be working or what job they will have. They do not know whether the facilities they are working in will survive, or whether they are going to be run down in the meantime. Consequently, we have a substantial overreliance on agency staff. That is not a good template for the NHS.
I appreciate the fact that there are financial difficulties throughout the country and that the situation in west and north-west London is not unique. Nevertheless, I do not think that any other areas have had to put up with this reorganisation—or whatever we want to call it—for as long as we have.
Dr Huq
When my hon. Friend made the point about the loss of four A&E departments, he reminded me of the saying, “Once is unfortunate, twice is a coincidence, but three times is beginning to look like a habit.” I do not believe that any saying even goes up to four. Does he agree that it is unprecedented to lose four A&E departments?
Andy Slaughter
Yes, I do. I anticipate that we are unlikely to get much by way of an answer from the Minister today, although I will be delighted if she does have some news to impart. I hope she will take the debate in the spirit it has been conducted, because there is genuine anxiety. What we are asking for and what will help is transparency. It may be that we do not like what we hear any more than we liked what we heard three or four years ago, but it is getting beyond a joke now.
We talk a lot about hundreds of millions of pounds of money and about people’s love for institutions such as hospitals, but if we are pragmatic about it, at the end of the day the important thing is whether individuals receive a good standard of care. By coincidence, this morning I spent half an hour on the phone to a constituent whose husband’s life was saved two years ago when he had a serious aneurism. They were told by the professor who operated on him that had they taken a few moments longer to reach Charing Cross hospital, which they live very close to, that would have been the end.
The rider to that is that last week the same gentleman was rushed to Charing Cross hospital again with a recurrence of that issue. He spent seven hours there before being transferred to St Mary’s in Paddington, where he again received very good treatment. I hear again and again that the system is beginning to break down and people are not necessarily taken to the right place at the right time or, when they do get there, they are not seen quickly enough. That is not a criticism of the staff, who are working extremely hard against the odds and are highly professional.
We are very lucky to have such world-class hospitals in west London. We do not take that for granted, but I have given just one example of the kind of story I could probably repeat every week. I worry about the future of the health service for my constituents and those of my colleagues if we do not get to grips with the situation quickly. We are drifting in a way that means that the excellent and superb levels of healthcare we have become used to over the years are no longer likely to be maintained.
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to serve under your chairmanship, Mr Stringer. I congratulate my hon. Friend the Member for Ealing, Southall (Mr Sharma) on securing this extremely important debate and on the eloquent way he introduced it. He is widely known in this place for championing issues on behalf of his constituents; his contribution today will only further enhance that reputation. He presented a comprehensive picture of his constituency, rightly highlighting the scandal of health inequalities there and his concern about the implications for patient safety of the Government’s proposals. He cited staggering figures for the growth in elderly population in his area—not unique, but by no means to be ignored. He expressed his concern that the most vulnerable and those whose children have long-term conditions will have to travel further to access services, with possible negative implications for their economic situation. It is clear from what he said that he and his constituents have lost confidence in the process.
I draw attention to the contribution from my hon. Friend the Member for Ealing Central and Acton (Dr Huq). She is new to this place but is fast gaining a reputation as a Member who assiduously represents her constituents. She described the Government’s response as intransigent. If that is her experience, I am sure it is no reflection of the effort she has put in. She compared Ealing to the city of Leeds, and it is unthinkable that a city the size of Leeds would not have such fundamental health services as those being discussed today. She described what has been presented to us over the past few years as a bad deal all round. As an academic, she has based her comments on the evidence she has seen, not on opinion. She and my hon. Friend the Member for Ealing, Southall both expressed concern that Ealing hospital is on the way out. Those were not careless comments thrown about for political gain but genuine anxieties born out of what they see and hear.
My hon. Friend the Member for Hammersmith (Andy Slaughter) correctly said that the sooner the business plan for further implementation is available, the better. He identified the lack of information as a factor that has made the situation far more difficult than it could have been. As he says, where there is a vacuum, something will fill it. In this case, the vacuum has been filled by rumours—rumours so strong that two of my hon. Friends have felt compelled to raise them here today. He said that transparency will help; I certainly agree with that. I also agree that our concerns are no reflection on the hard work and valuable contribution that our NHS staff make each and every day.
More than 100,000 people have now signed the petition to express their concern about service downgrades and what they see as a real threat to the future of Ealing hospital. Their concerns relate to the “Shaping a healthier future” programme, which was launched in 2011 by a group of what were then 10 primary care trusts,
“to reshape hospital and out of hospital health and care services in North West London.”
Following the abolition of primary care trusts, the North West London Collaboration of Clinical Commissioning Groups has led the programme. It has proposed a number of extremely significant changes, including the downgrading of accident and emergency services at a number of hospitals.
In 2013, Ealing Council’s health overview and scrutiny committee referred the programme to the Secretary of State, who concluded that changes to NHS services in north-west London should proceed. In a statement, the Secretary of State said that five of the nine hospitals—Hillingdon, Northwick Park, West Middlesex, Chelsea and Westminster, and St Mary’s—would provide comprehensive, seven-day-a-week acute emergency care. He also stated that A&E departments at Ealing and Charing Cross hospitals would remain open, although with what—as my hon. Friend the Member for Ealing Central and Acton pointed out—he euphemistically called changes to the “shape or size” of services. Those changes have probably not turned out as people hoped. Changes were recommended to replace the A&E services of Hammersmith and Central Middlesex hospitals with urgent care centres, which were subsequently implemented in September 2014.
In 2013, it was decided that maternity services would be consolidated on to six hospital sites and maternity deliveries at Ealing hospital would cease. We have heard from my hon. Friends how significant that has been for their communities. The maternity unit at Ealing hospital was closed in July 2015. It has now been recommended that in-patient paediatric services should also be moved to maintain appropriate staffing levels. These changes have, understandably, caused great public concern, which in 2014 led to Brent, Ealing, Hounslow, and Hammersmith and Fulham Councils establishing an independent commission under Michael Mansfield QC to review the impact of the changes to the north-west London health economy and to assess the impact of planned changes.
On 2 December 2015, the commission published its final report, which was extremely critical of the “Shaping a healthier future” programme, finding that inadequate consultation had been undertaken and that departments had been shut without providing adequate alternative healthcare. Its recommendations included halting the SHF programme and that local authorities should consider a legal challenge. The Government’s response states that they are
“clear that reconfiguration of front line health services is a matter for the local NHS.”
It is clear from answers to parliamentary questions and a Westminster Hall debate on 24 March that both the CCGs and the Government do not accept the review’s findings.
The principle that decisions should be made locally by clinicians is sound, but there seems to be an issue about accountability in this case, as there is a clear feeling among the public and local politicians that their concerns are simply not being heard. Those who gave evidence to the commission were not fly-by-nights. Many were working on the front line of the services under discussion. Indeed, they are the local clinicians the Government say should be making the decisions. What recourse do clinicians, the public and patients have if they disagree so fundamentally with what is being done as we have seen here?
The most successful service reconfigurations are those where consultation is most effectively carried out and where support from clinicians at all levels, local politicians and, of course, members of the public is secured. It is no coincidence that when public concern is at its present level in Ealing and the surrounding communities, we tend not to see successful changes in provision.
Such was the frustration and concern about the changes that four local councils thought it necessary to use local taxpayers’ money to commission an independent report. As my hon. Friend the Member for Hammersmith said, the local authorities involved have behaved responsibly in commissioning this report. I do not believe there is any suggestion that they have behaved irresponsibly, so surely the Minister must acknowledge that taking this extraordinary step means that something must have happened that deserves further examination.
I turn to some of the recommendations in the independent report. Serious concerns have been raised about the consultation in 2012. There has been no significant further consultation since. Given that we are now four years on from that point and that the scheme has undergone considerable changes, as has the demographic make-up of the communities, it seems reasonable to consider a further period of consultation.
Concern was also expressed in the Mansfield commission’s report and here today about transparency, particularly in the business case on which the SHF scheme is based. I would welcome the Minister’s observations on both points, and if, like me, she is not satisfied that there has been sufficient public involvement, will she step in and ensure that that takes place before further downgrades or closures and that it is genuine consultation predicated on release of the full business case? Genuine consultation cannot take place if vital information is withheld. Transparency is the key to meaningful engagement.
The commission was asked to look at deteriorating standards in three local NHS trusts that were consistently failing to meet key targets, including that 95% of patients attending A&E must be seen, treated and admitted or discharged within four hours. The Minister will be aware that after six years of a Conservative Government, February’s figures are the worst on record for A&E waiting times. The most recent figures confirm that all three NHS trusts covering this area are failing to meet their targets.
In major A&E units, London North West Healthcare NHS Trust saw just 76% of patients within four hours and Imperial College Healthcare NHS Trust saw 69.1%. Does the Minister agree with the commission that the closures of Hammersmith and Central Middlesex A&E departments are responsible for these appalling figures, or is the Government’s overall record to blame?
Finally, the other key principle to which all service reconfigurations should adhere is that they should be based on clinical rather than financial need. They must represent what is in the best interests of the patients who access the services and not simply be a tool to balance budgets at any cost. In this case, because the Government have fundamentally lost control of NHS finances with 75% of trusts now in deficit, local people are understandably asking whether the serious financial hardship that the trusts face is forcing the CCGs to consider changes that they otherwise would not. Can the Minister assure us that no decision will be made in this case or any other on the basis of finance alone and that the interests of patients will remain the central focus at all times? It is clear that public confidence has been lost in this case, and it is simply not good enough for the Government to wash their hands of it. We urgently need an acknowledgement of those concerns and concrete plans to address them.
Graham Stringer (in the Chair)
To clarify, the debate, although it started early, will finish at 2.30 pm. Could the Minister leave a minute or two at the end for the proposer?
The Parliamentary Under-Secretary of State for Health (Jane Ellison)
Of course, Mr Stringer. It is a pleasure to serve under your chairmanship. I congratulate the hon. Member for Ealing, Southall (Mr Sharma), a fellow London MP, on securing this debate on an issue that is of concern to him, to his constituents, as we can see from the attendance in the Public Gallery, and, of course, to colleagues in neighbouring constituencies, who also contributed to the debate—not for the first time.
Before I address the issues raised, I would like to echo the words of others and pay tribute to those who work in our national health service. Despite the debates that we have in this place about reconfigurations and the like, all of us are united in praise of the dedication of those working on the frontline to provide first-class services to all in their care.
There is of course considerable ongoing interest in the changes in north-west London proposed under the “Shaping a healthier future” reconfiguration programme. It is worth stressing that those are not just changes to acute hospitals, but planned changes to the whole of that health economy. The aim has been to look at how it can best provide in the future for the local population.
Of course I acknowledge the concern expressed among local people and in particular by the Save Ealing Hospital Community Action Group. The hon. Member for Ealing, Southall will know that I responded in January to a petition by the action group, and I will respond in writing in due course to the latest petition that he has presented. But I want to make it clear that proposals and change on so large a scale as that taking place in north-west London are inevitably controversial. Major change is inevitably controversial, but we have always stressed, as did the shadow Front-Bench spokesman, the hon. Member for Ellesmere Port and Neston (Justin Madders), that the reconfiguration of services is a matter for the local NHS. That is best organised and shaped by those who know the communities best, and with local clinicians right at its heart, rather than being dictated from Whitehall.
Let me deal with the Mansfield Commission report. On Thursday 14 January, the North West London Clinical Board considered the report of the Independent Healthcare Commission for North West London, and the view of the clinicians on the board—local doctors and health workers—is that the current programme, which was designed by doctors and based on significant clinical data, evidence and experience, continues to offer the best outcomes, experience and equality of access to NHS services for all our patients. That is a direct quote from what they said. Having read the Mansfield report, I am not surprised that that was the conclusion of local health leaders. I take issue with a number of things said about that report, not least about its independence, but I want to use some of the time that I have this afternoon to deal with some of the substance of the concerns raised about services for people in Ealing. Some of the language used was very strong, and I want to try to set a few minds at rest by talking about some of the new services.
Before moving on to specifics about Ealing, though, let me deal with the implementation of the programme itself. The hon. Member for Hammersmith (Andy Slaughter), perfectly reasonably, exposed the case why it is important that people have certainty and transparency. Some colleagues referred to the meeting that I chaired last summer to try to reboot this process after the general election—with a degree of success, in terms of the contacts between Members. But on the proposals for capital works for both Ealing and Charing Cross hospitals, I have been assured that local health and social care partners are working together to produce a sustainability and transformation plan by the end of June 2016, and it is anticipated that details for those two sites will be included in that.
I have been honest enough before to say that I share hon. Members’ frustrations about delay. I quite understand why they want more certainty and I fully expect NHS England and the “Shaping a healthier future” programme to keep me abreast of developments as we move towards the summer. I want to hear if there are any problems with hitting that timetable, because Members have a right to expect to get that information, so that they can respond to it, so please rest assured that I will continue to ask those questions.
The hon. Member for Hammersmith also talked about morale, and it is vital that we put on the record some of the ways in which good progress is already being made as part of the “Shaping a healthier future” programme. As I have said, better healthcare is not just about the acute sector, important though that is. For example, good progress has been made in developing primary and community services, and there are examples showing patients benefitting. GP practices across north-west London now offer more than 1 million people in the area extended opening hours on weekdays, from 8 until 8, and weekend access. That is vital for families’ peace of mind, as has been mentioned. GPs in Ealing now provide 19 new services, including anticoagulation services, electrocardiograms and some mental health services. Many more community services are now in place across all eight boroughs, so more patients can be seen closer to home.
Those are just some of the reasons why I do not recognise the description of the plans given by the hon. Member for Ealing, Southall. He used expressions such as “risking lives” and that is not what local doctors want to do or what the plans are about.
Jane Ellison
I am sorry; I will not, because the hon. Lady made a long speech and I must respond to it.
At the heart of the plans is the fact that local clinicians want to provide more and better services, although delivered differently, it is true, from the way they may sometimes have been delivered in the past. That brings me to the focus on Ealing hospital. Of course I recognise the concerns associated with such significant changes as are proposed, and I take the point entirely that uncertainty, both for Members of Parliament and members of the general public, gives rise to concerns.
Ealing hospital will be redesigned as a 21st century facility for the local community. The hospital will have a local A&E and a 24-hour GP-led urgent care centre, with access to 24-hour specialist care, as well as a range of specialist services designed with the needs of the community in mind, such as a diabetes centre of excellence. The hospital will be a centre of excellence for other areas of care, such as elderly patients, those with long-term conditions and the most vulnerable members of the community, by integrating primary and secondary care with community and social care. It is common ground between all parties that that is how we will help to keep people healthier in the future. So good news for patients is already beginning, in the changes.
On maternity services, some strong language was used in the opening speech about concerns for local mums and their babies. As has been pointed out, maternity services were consolidated in July across north-west London into six maternity units. Women from Ealing now have a choice in maternity services, with 30 antenatal sites across Ealing, including Ealing hospital, and six sites for delivery across north-west London. As a result, there has been a 10% increase in choice of midwifery-led units. I am told that 778 women had their maternity care safely transferred from Ealing to a new maternity unit of their choice with no incidents reported.
What is the benefit to Ealing women from the changes? Before the changes, Ealing hospital was achieving 60 hours of consultant cover—lower than all the neighbouring hospitals. Across north-west London before the transition, the average was 101 hours. North-west London has set out to achieve 123 hours in 2015-16, and it currently has 122 hours of consultant cover. Also, 100 new midwives have been recruited across north-west London as a result of the changes. Antenatal and postnatal care are still available at Ealing hospital, and as I said, the number of community midwives has also increased locally at 30 sites across Ealing. It is clear that a complex service change has been managed safely, with benefits to patients—mothers and their babies. It is telling—Members need not just listen to my words—that Ealing Council’s health and adult social services standing scrutiny meeting on 26 April heard from the Royal College of Midwives. That is not the Government. It endorsed the transition and congratulated the NHS in north-west London on the model of care and the detail in the transition. Again, I do not recognise that service in the words of the hon. Member for Ealing, Southall, although I know that he meant them with due concern for his community.
On paediatric in-patient services, good progress is being made on the implementation of changes. I am informed that that will ensure that children in north-west London will receive consistently high-quality seven-day care, with more paediatric nurses and specialist doctors available. Paediatric in-patient services, which are for children who require emergency treatment or an overnight stay, will move on 30 June from Ealing hospital to five other hospital sites in north-west London. That will significantly expand capacity—more beds, doctors and nurses, seven days a week.
The changes do not mean that all children services are moving from Ealing. Nearly three quarters of existing children’s services will continue on the Ealing hospital site and elsewhere in the borough. Services remaining include routine appointments and treatments that do not require an overnight stay, such as day care unit activity, so most children will be seen in the same place as they are now. Urgent care for minor injuries and out-of-hours GP appointments will also remain at Ealing hospital. The majority of children who are brought to Ealing’s A&E by their family or friends are already treated in the urgent care centre. Services for children with long-term conditions, such as asthma and epilepsy, and child and adolescent mental health services will also remain unchanged.
To reiterate, 75% of existing children’s services will continue to be delivered by the dedicated staff of Ealing hospital, but—this is an important “but”—the sickest children in north-west London will receive better care as a result of the changes. That is what we all care about the most.
It is right that local people have the chance to hear from their parliamentary representatives in such debates, so I welcome the fact that we have had the chance to debate the subject again. I suspect that we will do so again at some point in the future. As the programme moves through its implementation, I encourage those with particular concerns to continue to engage with the local NHS. I thank colleagues for doing so, as they have been, because that is the right way to proceed. I have reiterated to local health leaders the need to share plans in a timely fashion. I only ask of hon. Members that they also share the positive changes that are already visible to people in their communities, as I have illustrated today. I look forward to hearing how the meeting later this month goes—it was referred to earlier—and I will continue to engage positively with colleagues as they handle this important issue, which matters so much, as we can see, to local members of the public.
Mr Virendra Sharma
I thank the Minister, and I thank all my colleagues who have given their points of view on my side and supported what their local constituents want. I do not want to give the impression that we are only talking about hard-hitting, scaremongering practice; I am representing the true feelings at the grassroots—what people think of their services.
I, too, have experienced huge numbers of cuts in services, with a long waiting list, or people not getting appointments in time, or being sent home after hours of waiting, because a service cannot be given. There is a shortage of nursing and other staff members, so hospitals are unable to provide services. Northwick Park hospital, mainly used since Ealing hospital services closed down, has been declared to be the most inefficient hospital in west London. It came the very bottom of the league.
Something is therefore wrong, which is why we are making our points and asking the Minister to reconsider those values and to sympathise with those people who will be receiving the services on offer and with how they suffer the travelling and not knowing the system, which involves long waiting and not getting the services. In addition, there is sometimes a language problem for people from different communities without knowledge and experience of English.
I urge the Minister to reconsider, as my colleagues and I have requested. Again, I thank my colleagues and, in particular, my hon. Friend the Member for Ealing North (Stephen Pound), who unfortunately was unable to attend. He sends his support, of which he has spoken many times before.
Question put and agreed to.
Resolved,
That this House has considered services at Ealing Hospital.
Written Statement
Universal Credit
(8 years ago)
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The Secretary of State for Work and Pensions (Stephen Crabb)
I am pleased to inform the House that universal credit is now available in every Jobcentre across the country, having reached the final three Jobcentre Plus offices—Purley, Thornton Heath and Great Yarmouth—at the end of last month. This means universal credit is available for all new claims from single jobseekers wherever they are in Great Britain.
So far, over 450,000 people have made a claim to universal credit, with over 9,500 new claims made every week. The national roll-out means people in all parts of the country can now benefit from universal credit, which puts people at the heart of the welfare system for the first time.
As universal credit has rolled out, the positive difference it has made for those who claim it is clear. For example, those who are already receiving universal credit in comparison to a similar cohort receiving previous Jobseeker’s allowance, people on Universal Credit spend 50% more time looking for work, they are 8 percentage points more likely to have found work or to be in work and when they are in work, they are more likely to be earning more.
Universal credit makes it easier to start work and earn more because it:
Offers personalised support to progress in work
Under the old system, as soon as someone moved into work, they were on their own. But with universal credit they can still get support. For the first time ever, Jobcentre Plus work coaches continue to support claimants in work, helping people increase their hours, earn more and progress in their chosen career.
Mirrors the world of work
Like most jobs, universal credit is paid in a single monthly amount direct into people’s bank accounts, giving them control over their own money and making the move into work easier.
Helps with childcare costs
Under universal credit, working families can claim back up to 85% of their childcare costs each month. This can be claimed up to a month before starting a job so people can focus on getting ready for work and so their child can settle into a new routine. For families with two children this could be worth up to £13,000 a year.
Stays with people as they move into work
With universal credit, people’s claim remains open, even when they move into work. Unlike the old system, people can work as many hours as they want and take on short contracts without having to end their claim, helping to build up experience for a full time position.
Makes work pay
There are none of the cliff edges of the old system. As people’s earnings increase, their universal credit payments reduce at a steady rate, so they can be sure they will always be better off working and earning more.
With universal credit rolled out nationally, more people will now be able to take advantage of this support and the unique features of universal credit, which is making work pay and is sweeping away the complexities, traps, and confusions of the previous system. Our focus now is continuing its expansion to all claimants.
[HCWS709]
Schools: Academies
(8 years ago)
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Lord Watson of Invergowrie
To ask Her Majesty’s Government whether there is any evidence that academies automatically perform better than local authority maintained schools, particularly those that are already categorised as high-performing.
The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)
My Lords, schools that have chosen to convert to academies—that is, those that are high-performing—are obtaining better results, improving their results and more likely to be rated good or outstanding by Ofsted. Secondary converter academies are performing seven percentage points above the national average and continue to improve. Primary converter academies improved by one percentage point in 2015, and those open for two years or more by four percentage points since either 2012 or their last results as an LA-maintained school.
Lord Watson of Invergowrie (Lab)
My Lords, I thank the Minister for that reply. Academy status is appropriate for some schools, but there is simply no evidence that mere conversion in itself guarantees success, as the Education Select Committee reported last year. What counts is hard work and a clear plan for improvement, both of which can be achieved without conversion. The Government need to accept that they have failed to win the argument on mass academisation. They have, however, achieved a remarkable feat: since the publication of the White Paper we have seen the emergence of a broad alliance involving parents, head teachers, trade unions, local government leaders, both Labour and Conservative, and MPs, more of a few of whom are Conservatives—all implacably opposed to forced academisation. Can the Minister tell the House who, apart from existing academy chains, has come out in favour of the White Paper’s proposals?
Lord Nash
A great many people have come out in favour of the White Paper’s proposals. I am glad the noble Lord got to a question eventually; I think I answered his original point in my first Answer. There has been lot of international research. The Sutton Trust has told us that sponsored academies are doing better at closing the gap. Ofsted has said that attainment in sponsored academies has increased over time, with the longest-standing academies having the strongest performance. The NFER has told us that the attainment gap between pupils eligible for FSM and those not is narrower in converter academies than in similar maintained schools.
Lord Grocott (Lab)
Has the Minister seen the report of the National Audit Office and its serious criticisms of the accounts of the Department for Education in respect of academies, and the words of the head of the National Audit Office, who said:
“Providing Parliament with a clear view of academy trusts’ spending is a vital part of the Department for Education’s work—yet it is failing to do this”?
Should the Minister and his department not put their own house in order before they have a blanket development of new academies?
Lord Nash
I have seen that report. The issue is purely technical, based on different year-ends for schools and for the department, which will not be an issue this year because of methodology. I also saw the Audit Commission’s 2014 report, which found 200 cases of fraud in local authority-maintained schools in the previous year. Given that I walked into the Department for Education in 2010 to find a department completely financially out of control after 13 years of Labour government, I do not take lessons from the party opposite.
Lord Lexden (Con)
My Lords, there has been considerable concern about poorly performing primary schools. How many have been taken over by academy sponsors and with what results?
Lord Nash
There are 960 primary sponsored academies open as of April this year, many of which previously suffered from chronic underperformance. In 2015, the percentage of pupils in sponsored primary academies achieving the expected level in reading, writing and maths at the end of key stage 2 rose by four percentage points to 71%. Results in primary sponsored academies open for two years have improved on average by 10 percentage points since opening—more than double the improvement in local authority-maintained schools over the same period.
Baroness Hayman (CB)
My Lords, I listened carefully to the noble Lord’s answer. I thought that the noble Lord, Lord Watson, asked how many organisations had come out in favour of every school being forced to become an academy. The Minister made some comments on academies in general but I am not sure he answered that question.
Lord Nash
We make absolutely no apology for our belief in academies and multi-academy trusts, because of the substantial benefits of academy freedoms and working together in close families of schools. If noble Lords were to spend any time meeting the people who run academies or multi-academy trusts and saw the substantial benefits—for instance, for their staff and pupils—they would understand.
Baroness Farrington of Ribbleton (Lab)
My Lords, will the Minister explain to the House when answering a direct question became a matter of PR? Will he answer the concern of local authority and church voluntary-aided schools in counties such as Lancashire? Will he say that no small primary schools will be closed on financial grounds in his programme of academisation?
Lord Nash
I will give the noble Baroness an independent view from the chief inspector, who believes that every school should be an academy. As for local authorities, of course there are a lot of high-performing local authorities and we very much hope that people there will continue to be involved, by spinning out and setting up academy trusts. As I said in an Answer last week, no strong schools will close as a result of the policies in the White Paper. Indeed, we think that many rural schools will be much stronger working together in multi-academy trusts. There are very strict rules about the closure of small and rural schools, and I expect that all such considerations will continue in the future in relation to all rural schools.
Baroness Howarth of Breckland (CB)
My Lords, I have a slightly different angle on this Question. Where there is a playgroup that wishes to join a primary school that is an academy, because it wants to get that continuous stream of education through the playgroup, the primary school and into the secondary schools, what kind of help do the Government give to that playgroup?
Local Government Pension Scheme
Lord Whitty
To ask Her Majesty’s Government whether they intend to introduce any safeguards as part of their reform of the local government pension scheme (LGPS) in order to ensure that British wealth funds conduct their investment strategies solely in the interest of their LGPS members.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, the 90 pension fund authorities in England and Wales will continue to be responsible for determining their own investment strategy and for making strategic asset allocation decisions. Those responsible for making investment decisions must take proper investment advice and comply with their legal duty to act in the best long-term interests of scheme beneficiaries.
Lord Whitty (Lab)
My Lords, I thank the Minister for that Answer. However, does she understand that whatever the merits of the pooling and merging system between local authority funds, there is anxiety because of the way that the Government have designated them as British wealth assets, and a fear that they may be advised to move in directions which reflect the priorities of the Treasury rather than those of the members? In particular, why do she and the Government not accept the advice of the LGA and the Law Commission that this provision should be written specifically into the new regulations covering the combined schemes, particularly the reference to Article 18 of the IORP directive, which underlines the need to manage these schemes, and their investments, in the interests of their members and nobody else?
Baroness Williams of Trafford
My Lords, the funds have a duty to manage the schemes for their scheme beneficiaries—that is their first duty. I understand why the noble Lord has concerns at the pool level. However, the strategic direction will be set at the funding level and carried out at the pool level.
Baroness Janke (LD)
My Lords, will the wealth funds have the opportunity to prioritise investment outside London, where it is much needed? Will she also comment on nation-wide representation on the governing boards of wealth funds?
Baroness Williams of Trafford
My Lords, schemes should make decisions in the best interests of the beneficiaries, so wherever those decisions are best made is where those schemes should direct their strategies. As the noble Baroness will know, beneficiaries are now represented on those boards at local level. Because those boards represent the beneficiaries and set the strategic direction, the scheme beneficiaries are protected all the way along.
Lord Lea of Crondall (Lab)
My Lords, the Norwegian sovereign wealth fund, which is worth £850 billion, clearly believes that it has a role in looking at such issues as the role of remuneration committees in enterprises. Does the noble Baroness agree that large wealth funds have a number of responsibilities in society?
Baroness Williams of Trafford
I certainly agree with the noble Lord. In terms of pooling pension funds, we now have a huge opportunity in this country to do what other countries do so successfully, particularly Canada—namely, pool resources to invest in infrastructure.
Baroness Warsi (Con)
My Lords, will my noble friend explain whether the proposed changes result from cost-saving measures to ensure proper investment or a response to our obligations under a European directive?
Baroness Williams of Trafford
My noble friend raises an important point because pooling certainly has the potential to make the management of our pension funds more efficient. However, we also have to look at how we can maximise some of the returns for beneficiaries.
Lord Watts (Lab)
My Lords, can the Minister categorically deny that the Treasury will try to influence these decisions? That is the concern. What will be the Treasury’s role in investment strategy?
Baroness Williams of Trafford
I can categorically say that the investment strategy will be made at the fund level, which is the local level. As far as I know, the Treasury has no will to start meddling in local decisions as regards directing at pool level. However, the Secretary of State may intervene—that was one of the concerns—where funds have been managed poorly.
Sport: Governance Standards
Lord Triesman
To ask Her Majesty’s Government, in the light of the current and long-term crises in the governance of a number of sports, including allegations of corruption and doping, whether they intend to introduce legislation to establish standards by which sports governing bodies should conduct their affairs in order to restore public confidence in the fairness and efficacy of competition.
The Earl of Courtown (Con)
My Lords, Her Majesty’s Government have been concerned by recent sporting scandals. We are currently reviewing existing anti-doping legislation which will assess whether stronger criminal sanctions are necessary. The findings of the independent review into UK Anti-Doping’s processes, following recent Sunday Times allegations, will be considered as part of the process. Sports bodies must adhere to the highest standards of governance and the Government will introduce a new governance code for sport in the UK later this year.
Lord Triesman (Lab)
My Lords, I thank the Minister for that Answer. As an avid Spurs supporter, I congratulate Leicester City on a quite remarkable achievement—
Lord Triesman
—not entirely through gritted teeth. I mean it. Every sports fan wants to know that the fight is not fixed; that the athletes are competing with one another and not with some chemistry lab; and that when you bid for international tournaments the decision will be taken not on the basis of bribery but on merit. Governing bodies have promised ethical codes, action and transparency for decades and the truth is that they have never delivered. They always say they will do it and in fact they never do. They have probably drunk in the last chance saloon more times than any of the rest of us. Will the Government draw the only realistic conclusion in the forthcoming proposed legislation and set out the ground rules for acceptable conduct in law? Will the sports governing bodies have their legitimacy affirmed only if they agree to follow these rules, which the rest of us are expected to?
The Earl of Courtown
My Lords, the noble Lord, Lord Triesman, is correct in so much of what he says. The level playing field is so important for all sports and competing at all levels—not just elite level but grass-roots level. The noble Lord refers to the review, which will take all these matters into account with regard to criminalisation before it reports. It will report only once it is ready and the job is done properly. The governance code is part of the sport strategy, which will look at match-fixing and anti-doping, for example, and will cover a wide range of matters.
Lord Higgins (Con)
My Lords, does my noble friend agree that muscles built up by taking drugs enhance performance for an indefinite period, and short-term bans on cheats are therefore not effective? We must move towards bans for life, which ought not to be inhibited by considerations of human rights law, employment law or whatever.
The Earl of Courtown
My Lords, my noble friend is right that cheating in sport is desperately unfair on everybody else who takes part. Under the existing legislation—the Misuse of Drugs Act and the Medicines Act—the maximum sentence is 14 years, including for those who supply the drugs. The new code, consistent with WADA, which came into force in January 2015, gives an automatic ban of four years to cheats and support staff. Of course, once somebody is found guilty, all funding stops.
Lord Addington (LD)
My Lords, will the Government ensure that gambling cheating is brought up to the same level of intensity as doping and everything else? Will they also make sure that the athlete is made aware that if they take a bribe, they could be controlled for life and lose their livelihood?
The Earl of Courtown
Match-fixing is a problem that should be taken in the same context as athletes gaining an unfair advantage through performance-enhancing drugs. The sport strategy is looking at match-fixing as well as doping. We must also remember that my right honourable friend the Prime Minister is holding the Anti-Corruption Summit next week and sport will be on the agenda.
Baroness Grey-Thompson (CB)
My Lords, I declare an interest as I am currently doing some work for the Minister for Sport on duty of care for sports participants. Recent cases of the use of performance-enhancing drugs have come to light because the athletes have disclosed what they are using, or there has been a fallout among the manufacturers. The testing seems to fall far behind the prohibited list. What support or protection can Her Majesty’s Government give to those who have vital information who want to blow the whistle and expose drugs cheats?
The Earl of Courtown
My Lords, the noble Baroness is quite right. Particularly given her experience of sports administration, one should listen very carefully to what she has to say. Sports governing bodies are taking all these aspects into account, and they must establish methods and systems so that whistleblowers can carry out their role.
Lord Anderson of Swansea (Lab)
Does the noble Earl agree that my noble friend Lord Triesman deserves an apology from the relevant authorities, because he was right when it was not politic to be right about corruption? What efforts will the Government make to ensure greater transparency when there are major decisions to be taken on the location of events?
The Earl of Courtown
My Lords, I think the noble Lord is referring to matters that happened just over a year ago, particularly in relation to FIFA. At that point, I said in this place that accountability and clarity in these sports bodies were of absolutely paramount importance.
Baroness Heyhoe Flint (Con)
My Lords, is it not possible to divorce the testers of this corruption entirely from the governing bodies, whether they are national governing bodies or bodies such as FIFA? Can the Government also suggest a way in which they could add resources to the governing bodies, which are extremely stretched at the moment in self-policing this major problem, in order to drive out this corruption and cheating?
The Earl of Courtown
My noble friend Lady Heyhoe Flint makes important points. Testing has to keep up with the activity of cheats in sport. Testing will be down to UKAD working in conjunction with the sporting bodies.
Lord Stevenson of Balmacara (Lab)
My Lords, may I come back to the question just asked, because is that not the root of the problem? We are absolutely clear that the casualties here are clean sportspeople, but the only people who can investigate the problem are funded by the sports governing bodies, which have a responsibility for rooting out the malfeasance in the first place. The Minister must come up with a better answer than that.
The Earl of Courtown
I am not 100% sure where the noble Lord is going, but the testing is carried out by UKAD, which has one of the best names in international sport. I know there have been questions as far as the Sunday Times is concerned, but we will have to wait for the review put forward by my right honourable friend the Secretary of State. UKAD has a very good name and performs a very good job but as far as testing is concerned, it also has to keep up with the different drugs these cheats take.
Baroness Goldie (Con)
My Lords, sports men and women come from all parts of the United Kingdom; many of them proudly represent the United Kingdom. Would my noble friend the Minister think it helpful, within the proposed changes, to discuss with the devolved legislatures what contribution they might make to the process of improving regulation?
The Earl of Courtown
My Lords, I thank my noble friend for that question. I might need to write to her with a little more information but, as far as I am aware, UKAD will be in touch with all devolved bodies concerning its work.
The Duke of Montrose (Con)
My Lords, is the Minister aware that Andy Murray has suggested that sportspeople should consider publishing all the results of their tests? Can the Government offer any support on this?
The Earl of Courtown
My noble friend makes a very good point on publishing the results of drug tests. As he can probably guess, I do not have an answer in my folder so I will write to him.
Prison Safety
(8 years ago)
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Lord Marks of Henley-on-Thames
To ask Her Majesty’s Government, in the light of the latest figures on deaths in custody and prison violence, what plans they have to improve prison safety in the short term.
The Minister of State, Ministry of Justice (Lord Faulks) (Con)
My Lords, the Government recognise that our prisons need reform. There is much more to do to ensure that prisons are places of decency, hope and rehabilitation, and improving safety is fundamental. There is no single, simple solution to the increases in deaths and violence in prison, but we are taking action. This includes implementing the recommendations from the review of the process to support prisoners at risk of suicide and self-harm, and trialling the use of body-worn video cameras.
Lord Marks of Henley-on-Thames (LD)
My Lords, my Question was quite specific. We commend the Government’s commitment to long-term prison reform, but last week’s figures demand immediate action to reduce prison violence. Homicides, assaults on prisoners and staff, suicide and self-harm are all up, by roughly a quarter overall—and that is over the previous dreadful year’s figures. We urgently need more staff, fewer prisoners, less of prisoners’ time spent locked in cells and an end to cell cramming. What action will the Government take now?
Lord Faulks
The noble Lord will know, because his party was in government for five of the last six years, that what happens in prisons represents a real challenge for any Government. However, I can tell him that prison officers have increased in number by 440 this year. Further to that increase, we are continuing our drive for more prison officers; the training is improving—going from six to 10 weeks; we are cracking down on psychoactive substances and their importation into prison; and we are acting through a number of different initiatives to identify particular risk points for violence. We are doing everything we can to tackle these very real problems.
Lord Beecham (Lab)
My Lords, given the shocking revelations about the use of synthetic cannabis by prisoners, which the Chief Inspector of Prisons described as having a “devastating impact” on prisons, including 19 deaths between 2012 and 2014, when will the Government recognise the need to reduce the prison population substantially and to increase prison staffing substantially?
Lord Faulks
The prison population is of course a feature of the sentences passed by judges. We are as anxious as anyone else to reduce that prison population in a way that is consistent with the safety of the population and that respects the sentences that have been passed. I have already answered the question about increasing prison staff. As to psychoactive substances, we are world leaders in what we are doing to track the ingestion of these substances. We are trying a test to detect them in 34 different prisons. We hope, when that is proved successful, to roll it out through the prison estate, so that we have an offence and a test which should get this under control.
Baroness Finlay of Llandaff (CB)
My Lords, what is the Government’s policy in relation to terminally-ill prisoners and the delegated authority of the governor, particularly for remand prisoners, who are innocent until proven guilty? If they are terminally ill, they risk dying in the prison sick bay rather than spending their last days and weeks at home prior to a trial.
Lord Faulks
All prisons, whether remand prisons or others, should have in place appropriate procedures for supporting prisoners in that condition. There should be appropriate arrangements for palliative care. Prisoners should have contact with their families and they should be advised, where necessary, of the possibility of compassionate release—either permanent release or release for particular events. This is a matter of importance and I will be sure to convey the noble Baroness’s concern.
Lord Mackay of Clashfern (Con)
My Lords, would it not be a suitable idea to ensure that any young person coming into custody has a single officer in the Prison Service responsible for his or her welfare? This was a very important and useful proposal, and I gather the Government have not yet accepted it.
Lord Faulks
I think my noble and learned friend refers to one of the recommendations from the Harris review, which concerned suicide and self-harm by those aged between 18 and 24. The Government have not rejected this as a proposal. They understand the necessity of continuity of accountability, but are not yet convinced that that can be best represented by a single person. However, what lies behind the recommendation is of course important and should be reflected in the Government’s policy.
The Lord Bishop of Peterborough
My Lords, given the shocking 27% rise in suicides in prisons in the last year, what can the Minister tell us about the provision of psychiatric and psychotherapeutic care for vulnerable prisoners?
Lord Faulks
The Government are well aware of the profound difficulties for prisoners with various forms of mental illness. I think NICE has estimated that 90% of prisoners have some form of mental illness. It is a matter for NHS England to provide the appropriate facilities, but all prisons should make sure that these are available so far as possible. As to the question of assessment when prisoners arrive, NOMS has reviewed its assessment process to ensure that those at risk are properly assessed and appropriate steps are taken to try to deal with the risks that they represent.
Lord Harris of Haringey (Lab)
My Lords, I am grateful to the Minister for his reference to the review that I led, although I must say as the review’s author that the Government’s response read like a rejection of its central recommendation. The Minister talked about the welcome increase of 440, I think, prison officers. What are the projections for numbers, because 440 means that at any one time there may be one extra prison officer supervising 600 or more prisoners? Given that at the moment prisoners cannot be guaranteed an escort to take them to their psychiatric appointments within the prison and there is no guarantee that planned activities will take place because of staff shortages, surely the Government need to do better than 440.
Lord Faulks
As to the noble Lord’s first point, the Government accepted 62 of the 108 recommendations, and a further 12 are being considered alongside the reforms. Those that they did not accept were very useful and are part of the Government’s forward thinking. As to the question of staff, we are continuing our drive to attract more prison officers. We accepted in full the Prison Service Pay Review Body recommendation, which we hope will be an encouragement, although attracting prison officers to work in the south-east is difficult because of the challenges of accommodation. There is real commitment by a number of people to join the Prison Service; they have our admiration, and we hope that we can attract more to do this important work.
Viscount Hailsham (Con)
My Lords, does my noble friend accept that out-of-cell activity is one of the most important ways to enhance morale among prisoners and reduce stress, which itself leads to violence?
Lord Faulks
My noble friend is quite right about that. He may well have read the observations of the Secretary of State and the Prime Minister about the importance of out-of-cell activity. We hope that that will increase; it is very much part of our long-term plan to enable prisoners to have purposeful activities, which will help in the rehabilitation process.
Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016
The Earl of Courtown
That the draft Regulations laid before the House on 7 March be approved. Considered in Grand Committee on 27 April.
Education (Repeal of Arrangements for Vocational Qualifications Awarded or Authenticated in Northern Ireland) Order 2016
Baroness Chisholm of Owlpen
That the draft Order laid before the House on 11 March be approved. Considered in Grand Committee on 27 April.
Bank of England and Financial Services Bill [HL]
(8 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Ashton of Hyde
That this House do agree with the Commons in their Amendments 1 to 6.
“(b) the economy, efficiency and effectiveness with which a Bank company has used its resources in discharging its functions.”
““Bank company” means—
(a) a company which is a subsidiary undertaking of the Bank, within the meaning of section 1162 of the Companies Act 2006;
(b) a company not within paragraph (a) in respect of which a direction under section 7C(2) has effect;”
“( ) In the case of an examination under section 7D(1)(b), subsection (1) also applies to documents in the custody or under the control of—
(a) the company to which the examination relates;
(b) the auditor or auditors of that company.”
Lord Ashton of Hyde (Con)
My Lords, I beg to move that this House do agree with the Commons in their Amendments 1 to 6. In moving them, I shall speak also to Amendment 12.
In the other place, the Government made small changes to the provisions relating to the National Audit Office’s powers to carry out value-for-money studies of the Bank. As we have discussed in previous debates, these clauses deliver an important increase in the accountability of the Bank and its operations.
The NAO’s new powers are subject to a bespoke policy carve-out, designed to protect the independence of the Bank’s policy decisions. The Government have made two small but important technical changes to ensure that the NAO’s new powers are applied consistently across all areas of the Bank. These changes have been agreed by both the NAO and the Bank.
The original drafting of the Bill did not give the NAO the power to carry out value-for-money reviews of Bank subsidiaries unless they were indemnified by the Government. This was not the Government’s policy intention.
The first change ensures that the NAO is able to carry out value-for-money studies, not only of the Bank itself, but also of all the Bank’s subsidiaries, whether or not they are indemnified by the Government. The amended clauses will also allow the NAO to carry out value-for-money studies of any other company in which the Bank has an interest, but only if that company is indemnified by the Government.
The second change ensures that the policy carve-out applies consistently across all areas of the Bank. Under the previous drafting, the NAO’s powers to review the Bank’s indemnified subsidiaries and other companies came from the National Audit Act 1983. That means that its review of these companies would not be covered by the policy carve-out. The Government have amended the Bill to address this inconsistency.
On Amendment 12, the Government also made a small amendment to the clauses in the Bill relating to the Monetary Policy Committee. The Bill reduces the minimum frequency of MPC meetings from monthly meetings to “at least 8” meetings in every calendar year. The Warsh review assessed that this new timetable,
“strikes the balance between timeliness and probity”,
and brings the MPC into line with other leading central banks, including the US Federal Reserve and the European Central Bank. The amendment made in the other place adjusts the reporting requirements of the MPC to match the new meeting timetable. At the moment, it is required to submit a monthly report and so, without this change, the committee would be obliged to produce reports even when it has not had meetings.
I hope that noble Lords will agree that these are sensible changes, and I commend the amendments to the House.
Lord Higgins (Con)
My Lords, I had not realised until now that I am a wild enthusiast for a bespoke policy carve-out. The amendments reflect the considerable extended debates that we have had previously in your Lordships’ House, and I am very glad that they are now effectively implemented by the amendments that we have in front of us. There was a real problem with the relationship between the National Audit Office and the Bank of England. It is very fortunate that that seems to have been resolved now in a way that is satisfactory to both sides.
In a former incarnation, I was much involved in extending powers of the National Audit Office so that it did not merely act as an auditor but could look into the economy, efficiency and effectiveness of the bodies that it was investigating. I certainly think that there is a strong case for it including the Bank of England in its remit. To clarify one point on this, there are some aspects of the Bank’s operation that really need to be looked at. The present Governor of the Bank of England has taken to issuing forward guidance on interest rates, which I must say has not been an enormous success. Anyone who has followed that advice will almost certainly have lost money, depending on the precise timing. I think that he should consider very carefully whether it is an appropriate approach for the Bank to take—and perhaps the National Audit Office should do so, too.
I am not entirely clear what is covered by the expression “Bank company”. In particular, does it include the body—I have forgotten its name for a second—responsible for managing the enormous quantity of gilts purchased as a result of the quantitative easing operation? Will the National Audit Office have the power to inquire into how that very substantive—indeed, enormous—quantity of gilts is managed?
Overall, however, this is a very welcome change—and I am particularly glad that the Treasury is proposing to finance the operation. As it pointed out in the notes that come with the Bill, it should increase the likelihood of a value-for-money study being undertaken relative to the Bank of England. This change reflects the work that your Lordships did at earlier stages, and is very much to be welcomed.
Lord Davies of Oldham (Lab)
My Lords, we have come a considerable distance from what was in the original draft of the Bill that came before us on the role of the National Audit Office. Quite rightly, the Government have responded to the very strong opinion of this House that the proposals in the Bill were far from satisfactory, and we are grateful to them for the extent to which they have moved on these issues. This House played a significant role in identifying the real difficulties in their original Bill for the National Audit Office being remotely able to carry out its proper duty in assessing whether on all occasions the Bank of England was providing value for money.
The noble Lord, Lord Higgins, has moved across an important boundary in indicating that the NAO ought also to look at issues of policy regarding the Bank, which we know the Bank is resistant to. The Government still maintain that position, although we sought to press that here and my colleagues in the Commons were interested in the issue as well, not least if issues cropped up under freedom of information queries, where the role of the NAO in relation to the Bank would inevitably be limited under the proposal.
Nevertheless, the Government have moved a considerable distance on this matter. We are pleased to say that although not all our proposals, here and in the other place, were accepted by the Government, we nevertheless feel that significant progress has been made in that the NAO has been able to draw up with the Bank of England a memorandum of understanding on how these issues are to be tackled in future. We appreciate the fact that the Government have moved a considerable way from their original proposals to a much more satisfactory position, although I will listen with great interest to the Minister’s response to the noble Lord, Lord Higgins.
Lord Ashton of Hyde
My Lords, I am grateful to my noble friend Lord Higgins and the noble Lord, Lord Davies, for their comments and for their support for these amendments. My noble friend’s views on the governor’s role in giving forward views are well known; he has expressed them before in debate on the Bill. We have listened to his views but they are not specifically a part of this Bill. On the question of whether “Bank company” includes the asset purchase facility and therefore allows the NAO to make value-for-money reviews, the answer is yes. Amendment 3 is the amendment that deals with that.
I am glad that the noble Lord, Lord Davies, has acknowledged that we have been in listening mode and that we have moved. We are always happy to listen to sensible suggestions, and I am grateful for his acknowledgement of that.
Lord Bridges of Headley
Moved by
That this House do agree with the Commons in their Amendment 7.
“Appointment of Financial Conduct Authority chief executive
In Schedule 1ZA to the Financial Services and Markets Act 2000 (the Financial Conduct Authority), after paragraph 2 insert—
“2A(1) The term of office of a person appointed as chief executive under paragraph 2(2)(b) must not begin before—
(a) the person has, in connection with the appointment, appeared before the Treasury Committee of the House of Commons, or
(b) (if earlier) the end of the period of 3 months beginning with the day on which the appointment is made.
(2) Sub-paragraph (1) does not apply if the person is appointed as chief executive on an acting basis, pending a further appointment being made.
(3) The reference to the Treasury Committee of the House of Commons—
(a) if the name of that Committee is changed, is a reference to that Committee by its new name, and
(b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, is to be treated as a reference to the Committee by which the functions are exercisable.
(4) Any question arising under sub-paragraph (3) is to be determined by the Speaker of the House of Commons.””
The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con)
My Lords, I beg to move that this House do agree with the Commons in their Amendment 7—and on this, too, we have been in listening mode.
This amendment recognises the important role played by the Treasury Select Committee in its scrutiny of the Financial Conduct Authority and appointments to its top job. Through the committee’s programme of pre-commencement hearings it questions appointees to several posts before they start work. After appointees have started, as your Lordships will know, they appear regularly before the committee. The Government welcome this scrutiny of appointees.
Our amendment therefore ensures that the committee always has the chance to scrutinise a newly appointed chief executive of the Financial Conduct Authority before they start work. It provides that no one who is appointed as CEO of the FCA can start work until they have appeared before the TSC or three months have passed. This gives the TSC time to call them in, and once it has questioned the appointee in relation to the appointment, he or she can get to work. There is an exception to this if the appointment of a chief executive is made on an acting basis pending a further appointment; for example, where an appointment must be made urgently in response to a sudden vacancy. However, to appoint a permanent CEO, the Government must give the TSC the chance to hold a hearing.
As your Lordships will be aware, my right honourable friend the Chancellor and the chair of the Treasury Select Committee have reached an agreement that further reinforces the committee’s scrutiny role. This is set out in a letter from the Chancellor to the chair of the TSC, which has been published on the TSC’s website. It reads as follows:
“During the passage of the Bank of England and Financial Services Bill, we have considered the role of the Treasury Select Committee … in scrutinising the appointment of the Chief Executive of the Financial Conduct Authority … This scrutiny is important and welcome. I will therefore ensure that appointments to the Chief Executive of the FCA are made in such a way to ensure the TSC is able to hold a hearing, after the appointment is announced but before it is formalised. Should the TSC recommend in its report that the appointment be put as a motion to the whole House, the government will make time for this motion and respect the decision of the House. Additionally, I will seek, in a future Bill, to make a change to the legislation governing appointments to the FCA CEO to make the appointee subject to a fixed, renewable 5-year term. This would not apply to Andrew Bailey, who I recently announced as the new head of the FCA, but would first apply to his successor. I believe that these changes will reinforce the Treasury Committee’s important scrutiny role”.
This commitment, combined with this amendment, which ensures that the Treasury Committee always has the opportunity to hold a hearing with an appointee, serves as a strong recognition of the committee’s vital role in scrutinising the FCA and its CEO. I beg to move.
Lord Sharkey (LD)
My Lords, we support this amendment, but more precisely, we support this amendment with the commitments made in the Chancellor’s letter to the chair of the Treasury Select Committee. We are glad to see moves to buttress the independence of the FCA, and we think the amendment and the commitments will help do that. It is true that the FCA does need some help. In particular, it needs help in ending what is, or appears to be, interference by the Executive.
Recent times have not been happy. There was the early announcement of the non-renewal of Martin Wheatley’s contract; the Chancellor’s public announcement that Tracey McDermott was withdrawing her CEO application, before she had had a chance to tell her own people; and, then, the appointment of Andrew Bailey as CEO without benefit of a proper interview panel. I will not even mention that the search for the hard-to-find Mr Bailey cost £280,000.
To restore belief in its independence and its self-confidence and morale, the FCA needs to have a robustly and operationally independent CEO. We hope that this amendment and the Chancellor’s commitments will make that happen. This amendment and those commitments are of course the result—as the Minister has explained—of negotiations with Mr Tyrie, the chair of the Commons Treasury Select Committee. We would have preferred Mr Tyrie’s original amendment, which simply gave the Treasury Select Committee the power to approve, or not to approve, the appointment of the CEO of the FCA.
The government amendment, of course, does not go nearly that far. It simply says that the already appointed—although, I hope, not contractually bound—CEO must appear before the TSC before taking up his office. By itself, this is pretty feeble stuff. In fact, the important changes are not in this Bill at all; they are contained in the letter from the Chancellor to the chair of the TSC. The letter makes two commitments, as the Minister has explained. The first is that the Chancellor will,
“ensure that appointments to the Chief Executive of the FCA are made in such a way to ensure the TSC is able to hold a hearing, after the appointment is announced but before it is formalised. Should the TSC”,
as the Minister has said,
“recommend in its report that the appointment be put as a motion to the whole House, the government will make time for this motion and respect the decision of the House”.
Secondly, the Chancellor,
“will seek, in a future Bill, to make a change to the legislation governing appointments to the FCA CEO to make the appointee subject to a fixed, renewable 5-year term”.
This is all very cumbersome, and one must hope that the prospect of having your merits gently and tactfully debated in the Commons will not put applicants off. However, it is an improvement on the current situation.
There are some questions, though, and I would be grateful if the Minister could respond. Why are these two commitments not on the face of the Bill? Can the Minister confirm that the Chancellor’s commitment to ensure government time for a Treasury Select Committee Motion in the Commons is not binding on him or, more importantly, on his successors? Can the Minister say why the Chancellor will put the fixed term for the CEO into a future Bill but not the Commons vote on a Treasury Select Committee Motion? Will the Minister agree to consider incorporating both these elements into a future Bill? Finally, can the Minister assure us that any future selection process for the CEO of the FCA will involve the proper panel interviews, or at least something more closely resembling due process?
We believe that we need the protections and safeguards in this amendment and in the Chancellor’s letter. We believe that Andrew Bailey is a good choice as CEO and we wish him every success. We believe that both Mr Bailey and the FCA will benefit from less interference from the Executive and we support the amendment.
Lord Higgins
My Lords, as a former chair of the Liaison Committee in the House of Commons, which co-ordinates the work of the Select Committee system, as well as having been chairman of the Treasury and Civil Service Select Committee, I very much welcome the proposals put forward by the Government. Of course, there are various qualifications, which have just been mentioned, but I believe that this is a significant step forward and that it will improve the way in which the appointments system works within overall government. Therefore, I think that this is an excellent amendment and I heartily support it.
Lord Flight (Con)
My Lords, as I understand it, the proposed arrangements effectively give the Treasury Select Committee a sort of negative veto after the event. Why could this not be more straightforward, with senior appointments such as the head of the FCA requiring the approval of the Treasury Select Committee up front?
Baroness Kramer (LD)
My Lords, perhaps I may pick up on the point made by the noble Lord, Lord Flight. The FCA is one regulator. We understand that there is great pressure to move on this issue now because the FCA had lost so much confidence and so many people have questioned whether it is genuinely an independent regulator. However, the PRA, turning into the PRC, is an equal, if not more critical, regulator of our banking system, and of course appointments to the Bank of England—particularly that of governor—are also crucial. Therefore, can the Government tell us why they have not broadened out this change in approach, which is surely just a modernisation and a recognition of the significant interest that Parliament and the country have in these appointments?
Lord Davies of Oldham
My Lords, after those contributions I can keep my own fairly short. However, like the noble Baroness, Lady Kramer, I would have thought that this change would have applied in the whole approach of this Government and would have been taken into account when the Bill was drafted. Not only have the Government had strong representations from the Official Opposition and the Liberal party—we debated this matter very vigorously in this House—but it is clear that the Treasury Select Committee had very strong views on this. Ministers are all too well aware of the fact that the Treasury Select Committee contains members of all parties, several of whom enjoy very high reputations indeed—not just the chairman, although he too deserves his high reputation. How is it, then, that the Government should have thought that they could ignore the proper position of the Select Committee in relation to this appointment?
Of course we welcome the sinner who repenteth, and the Minister, I have no doubt, will indicate in a moment how carefully he has considered all issues. But it does somewhat surprise me that it needed such a weight of parliamentary opinion, to say nothing of opinion from outside too, before the Government recognised that they could not possibly put forward this appointment without there being a substantial degree of parliamentary scrutiny.
Lord Bridges of Headley
My Lords, I am delighted to hear the overall approval and support for the principles and thrust behind this amendment. Let me begin with the points that the noble Lord, Lord Sharkey, made. He spoke of interference by the Executive, a point he has made before. I will not rehearse the arguments again that the Government made in response to that, but we refuted many of those at the time. In response to the point that this should be made statutory, I simply point out that the commitments we have made have been affirmed by the Chancellor in writing, as I said, and by Ministers in both Houses. As the chair of the Treasury Select Committee himself points out in his letter to the Chancellor, there are several different means, both statutory and, crucially, non-statutory, for bolstering Select Committee scrutiny of appointments. Indeed, non-statutory provisions are the norm. The Cabinet Office and the Liaison Committee keep a list of some 50 appointments subject to pre-appointment hearings with varying arrangements, and the vast majority of those are by agreement.
Moving on, the noble Lord asked when we will bring forward the changes to length of term to make it fixed for five years. We are seeking the earliest opportunity, and the House authorities confirmed that it was not in scope for this stage of the Bill. That is why it is not in this Bill.
My noble friend Lord Flight and the noble Baroness, Lady Kramer, also made a point that I know others have made and which has rumbled around for a long time: whether or not an arrangement such as this should be made for other appointments in government. I know that there is a divergence of views on whether this should be done. The Government have previously set out their concerns about appointments to these posts, such as the ones that have been cited, and will address these in fuller detail in their response to the Treasury Select Committee’s report, which will be published in due course.
As well as looking forward to that response, it is worth reminding your Lordships just how we got here—this picks up on the point that the noble Lord, Lord Davies, just made. We are indeed responding to points raised during the passage of this Bill specifically concerning the appointment of the chief executive of the FCA. That is why the Government’s amendment and the agreement reached between the Chancellor and the chair of the Treasury Select Committee are focused on this particular appointment. I would further argue that this amendment and this agreement sit within the context of a Bill that significantly strengthens the governance, transparency and accountability of the Bank of England. This includes enhancing the accountability of the Bank to Parliament by making the whole Bank subject, for the first time, to NAO value-for-money reviews. I fully understand that the points made by the noble Baroness, Lady Kramer, and my noble friend Lord Flight will continue to rumble on. I commend the amendment to the House.
Lord Bridges of Headley
That this House do agree with the Commons in their Amendment 8.
“Illegal money lending
(1) The Financial Services and Markets Act 2000 is amended as follows.
(2) After Part 20A insert—
“PART 20B
ILLEGAL MONEY LENDING
333S Financial assistance for action against illegal money lending
(1) The Treasury may make grants or loans, or give any other form of financial assistance, to any person for the purpose of taking action against illegal money lending.
(2) Taking action against illegal money lending includes—
(a) investigating illegal money lending and offences connected with illegal money lending;
(b) prosecuting, or taking other enforcement action in respect of, illegal money lending and offences connected with illegal money lending;
(c) providing education, information and advice about illegal money lending, and providing support to victims of illegal money lending;
(d) undertaking or commissioning research into the effectiveness of activities of the kind described in paragraphs (a) to (c);
(e) providing advice, assistance and support (including financial support) to, and oversight of, persons engaged in activities of the kind described in paragraphs (a) to (c).
(3) A grant, loan or other form of financial assistance under subsection (1) may be made or given on such terms as the Treasury consider appropriate.
(4) “Illegal money lending” means carrying on a regulated activity
within Article 60B of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (regulated credit agreements) in circumstances which constitute an authorisation offence.
333T Funding of action against illegal money lending
(1) The Treasury must, from time to time, notify the FCA of the amount of the Treasury’s illegal money lending costs.
(2) The FCA must make rules requiring authorised persons, or any specified class of authorised person, to pay to the FCA specified amounts, or amounts calculated in a specified way, with a view to recovering the amount notified under subsection (1).
(3) The amounts to be paid under the rules may include a component to recover the expenses of the FCA in collecting the payments (“collection costs”).
(4) Before the FCA publishes a draft of the rules it must consult the Treasury.
(5) The rules may be made only with the consent of the Treasury.
(6) The Treasury may notify the FCA of matters that they will take into account when deciding whether or not to give consent for the purposes of subsection (5).
(7) The FCA must have regard to any matters notified under subsection (6) before publishing a draft of rules to be made under this section.
(8) The FCA must pay to the Treasury the amounts that it receives under rules made under this section apart from amounts in respect of its collection costs (which it may keep).
(9) The Treasury must pay into the Consolidated Fund the amounts received by them under subsection (8).
(10) In this section the “Treasury’s illegal money lending costs” means the expenses incurred, or expected to be incurred, by the Treasury—
(a) in connection with providing grants, loans, or other financial assistance to any person (under section 333S or otherwise) for the purpose of taking action against illegal money lending;
(b) in undertaking or commissioning research relating to taking action against illegal money lending.
(11) The Treasury may by regulations amend the definition of the “Treasury’s illegal money lending costs”.
(12) In this section “illegal money lending” and “taking action against illegal money lending” have the same meaning as in section 333S.”
(3) In section 138F (notification of rules), for “or 333R” substitute “, 333R or 333T”.
(4) In section 138I (consultation by FCA)—
(a) in subsection (6), after paragraph (cb) insert—
“(cc) section 333T;”;
(b) in subsection (10)(a), for “or 333R” substitute “, 333R or 333T”.
(5) In section 429(2) (regulations subject to affirmative procedure), for “or 333R” substitute “, 333R or 333T”.
(6) In paragraph 23 of Schedule 1ZA (FCA fees rules)—
(a) in sub-paragraph (1) for “and 333R” substitute “, 333R and 333T”;
(b) in sub-paragraph (2ZA)(b) for “section 333R” substitute “sections
333R and 333T”.”
Lord Bridges of Headley
My Lords, this amendment gives the Treasury a power to provide financial assistance to bodies for the purpose of taking action against illegal money lending. It also gives the FCA an obligation to raise a levy, which will apply to consumer credit firms, in order to fund this financial assistance.
Loan sharks prey on some of the most vulnerable people in society, cause untold misery to their victims and have a damaging impact on the communities in which they operate. As well as lending money illegally at high levels of interest without FCA authorisation, loan sharks frequently use blackmail, as well as violence, to intimidate their victims into repaying legally unenforceable debts.
Loan sharks are currently investigated and prosecuted by the England and Wales illegal money lending teams and the Scottish Illegal Money Lending Unit. The cost of the teams is around £4.7 million. While the FCA will consult on precisely how the levy will be apportioned and collected in its annual fees consultation, the cost of the new levy to individual firms in the £200 billion consumer credit market is anticipated to be small.
It is absolutely right that industry meets the modest costs of funding the teams—all participants in the consumer credit market benefit from their enforcement work. The teams ensure that the consumer credit market remains legitimate and credible by keeping illegal money lenders out of it. The amendment will ensure that the funding that the illegal money lending teams need to continue their crucial work is put on a sustainable, long-term footing. I beg to move.
Lord Harris of Haringey (Lab)
My Lords, I declare my interest as chair of the National Trading Standards board and welcome this government amendment to put the funding of the illegal money lending teams on a stable footing. As the Minister said, the teams do an enormous amount of extremely important and valuable work. A recent prosecution dealt with an individual who was charging those unfortunates whom he was offering allegedly to help interest rates of 400,000% per annum. Figures I have for England and Wales show that the work of the illegal money lending teams has led to the writing-off of debts in excess of £55 million. So the work is value for money and extremely important. It is quite right that the funding of these teams should now be put on a long-term, sustainable footing and it is entirely proper that the legitimate part of the lending industry should make sure that those who operate illegally and prey on people who are in a state of considerable distress are dealt with appropriately.
Lord Sharkey
My Lords, this is a very good amendment and we support it. Until now, funding for action against illegal money lending has come mostly from BIS with occasional help from the Treasury reserve. As Harriet Baldwin noted in the Commons committee, this funding was constantly being questioned in spending reviews and she rightly saw the need to protect it from the depredations of Chief Secretaries. This amendment does that by changing the funding mechanism to a levy on consumer credit firms. These firms benefit from being within a robustly enforced perimeter and we welcome this change. We welcome the move to provide sustainable and stable funding for the fight against illegal money lending.
Lord Davies of Oldham
My Lords, while we support the amendment, my colleagues in the other place made a strong argument which I want to rehearse now. Of course, we agree that it is right that there should be stable funding for operations against money lenders who take advantage of their position, but, as my noble friend Lord Harris indicated, loan sharks at their worst can levy the most extortionate charges on the people who come within their purview. We would have preferred a levy not on the industry but from general taxation, because our anxiety is that those at the bottom end of the market, who have the most ruthless operational relationship with the public, will pass on these costs by taking even more money from those who are vulnerable to them. We accept the amendment and of course will not contest it, but we would rather the levy came out of general taxation than being an impost, which we know some in the industry will pass on to others.
Lord Bridges of Headley
My Lords, I again thank noble Lords for their support in principle for much of this amendment; in particular, I thank the noble Lord, Lord Harris, for his comments given his experience in this area.
Clearly, we disagree with what the noble Lord, Lord Davies, said about why this is not being funded by taxation. As I said in my opening remarks, the current cost of the enforcement regime is around £4.7 million. Consequently, the costs to individual firms in the £200 billion consumer credit market is anticipated to be small. Therefore, it is unlikely that they will be passed on down the chain. With that in mind, I hope the amendment will be agreed.
Lord Ashton of Hyde
That this House do agree with the Commons in their Amendment 9.
“Money laundering
(1) In any regulations or orders transposing money laundering measures contained within Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 (or in relation to any subsequent EU amending or successor measure) the Secretary of State shall have a duty to ensure, insofar as such regulations relate to institutions regulated by the Financial Conduct Authority—
(a) reasonable regard and due prominence is given to—
(i) Preambular (33),
(ii) Article 13(2),
(iii) Article 15, and
(iv) Article 16 and Annex II;
(b) clarity is achieved with respect to the meaning and interpretation of “prominent public function” in the context of money laundering;
(c) reasonable regard and due prominence is given to Article 22 which recognises that a PEP may have no prominent public function; and
(d) any interpretation of “adequate” in Article 20(b)(ii), and “enhanced” in Article 20(b)(iii) takes account of, and gives due prominence to, the provisions in Article 13 on risk sensitivity.
(2) The Financial Services and Markets Act 2000 is amended as follows.
(3) After Part 20B insert—
“PART 20C
MONEY LAUNDERING
333U Anti-money laundering: guidance
(1) The FCA must, prior to relevant regulations coming into force, issue guidance to regulated entities on the definition of one or more categories of “politically exposed persons” (“PEPs”).
(2) Guidance under subsection (1) must include, but need not be limited to—
(a) a requirement to take a proportional, risk-based and differentiated approach to conducting transactions or business relationships with each category of PEP that may be defined; and
(b) specified categories of persons to be—
(i) included and
(ii) excluded
from any definitions of PEPs.
(3) The Secretary of State may, by regulation, make provision about—
(a) the guidance issued, amended and/or reissued under
subsection (1);
(b) arrangements for complaints about the treatment of individuals by regulated entities to be received, assessed and adjudicated by the FCA, where—
(i) a person was treated as though he or she was a PEP (and he or she was not),
(ii) a person who is a PEP was treated unreasonably in disregard of guidance under subsection (1), particularly in regard to specific elements required under subsection (2)(a), or
(iii) a person was refused a business relationship solely on the basis of that he or she is a PEP,
(c) circumstances in which—
(i) compensation payments are to be required from, or
(ii) financial penalties are to be imposed on regulated entities where complaints under paragraph (b) are upheld.
(4) For the purposes of subsection (1), “relevant regulations” means regulations transposing into UK law measures that EU Member States are required to implement to combat money-laundering (or subsequent regulations amending those regulations) that contain references to PEPs.
(5) The power to make regulations under subsection (3) is exercisable by statutory instrument which may only be made after a draft of any such instrument has been laid before, and approved by a resolution of, each House of Parliament.””
Lord Ashton of Hyde
My Lords, the amendment addresses the important question of how the banks are treating politically exposed persons, or PEPs, in the light of new global standards for anti-money-laundering and counterterrorist financing. I know that this issue has interested many noble Lords, directly and in respect of their families and close associates. I can tell the House that the Government share those concerns, which is why we have accepted this amendment to the Bill.
The Government intend to implement new money-laundering regulations by June 2017 at the latest. We will consult on the new regulations later this year. Organised crime, international corruption and terrorism cross national borders, so co-ordinating with our neighbours and Governments around the world is vital. We do this through the Financial Action Task Force, which revised its global minimum standards in 2012. At the same time as being robust, the UK’s anti-money-laundering and counterterrorist financing regime must be proportionate if it is to be effective and command public support. Resources must be focused on higher-risk areas and individuals, in line with accepted practice.
The Government have always encouraged banks to take a sensible and proportionate approach to this issue. They should apply appropriate “know your customer” measures that are tailored to reflect the risk posed by individual customers. I believe that several Members of this House and the other place have experienced difficulties with their bank accounts. No one should have their banking facilities refused simply because they have been identified as a PEP.
In addition to its focus on proportionality, the amendment addresses guidance on PEPs and the handling of certain PEP complaints. The Government will consult later this year on new money-laundering regulations and we will ask specific questions about the provision of guidance and the adjudication process. We will fully consider the letters that noble Lords have already sent to us on this topic when preparing our response to the consultation.
The Government’s anti-money laundering and counterterrorist financing regime is making the UK a more hostile environment for illicit finance. The amendment will ensure that a strong message is sent out about applying the rules in a proportionate and sensible manner and I commend it to the House. I beg to move.
Lord Sharkey
My Lords, as the Minister said, this House has frequently discussed the problems with the banks’ treatment of customers under their interpretation of the EU PEP rules. Each time we have done so, it has been quite clear that there are plenty of examples of banks frequently acting aggressively and disproportionately. It is quite clear that by unreasonably closing accounts, or threatening to, they cause real distress and the Government agree, as the Minister said, that the banks are ultimately at fault. In response to an Oral Question from my noble friend Lord Clement-Jones on 14 October 2014, the Minister, the noble Lord, Lord Deighton, said:
“I absolutely accept the criticisms that are made where banks behave disproportionately. It happens too often and we should work with them to fix that”.—[Official Report, 14/10/14; col. 115.]
It clearly has not been fixed and is probably getting worse as the banks anticipate the new EU directive.
Discussing this amendment on Report in the Commons on 19 April, Harriet Baldwin said that,
“if the transposition of the EU directive into domestic legislation is mishandled, a wide range of other people could be affected. It could adversely affect tens of thousands of people, including civil servants, city workers and even, as has been described, the families of armed forces officers serving our country abroad”.—[Official Report, Commons, 19/4/16; col. 853.]
The Minister was right to warn of this possibility.
On Sunday, the Sunday Times ran a large and prominent article on the case of Alan Charlton. Mr Charlton retired from the FCO three years ago after 35 years’ service. He is our former ambassador to Brazil. His bank threatened to shut down his account as part of what the paper describes as the bank’s “crack-down” on PEPs. It is a little ironic that the bank in question is HSBC, so recently fined $1.9 billion for being what the US Senate described as,
“a conduit for drug kingpins and rogue nations”.
It is a case of closing the wrong stable door.
Lord Flight
My Lords, I welcome the amendment but the issue of PEPs is by no means solved and there is still a lot of nonsense happening. The last ruling by the noble Lord, Lord Deighton, was, interestingly, that PEPs were politicians in countries outside the UK and not within it; that came as a great shock to all of us. The EU rules make it clear that that is not the case and that PEPs are to be treated as domestic. In theory, that includes all Members of this House and the House of Commons and many others. That is completely ridiculous. The bottom line is whether people have the power to engage in corruption. I suggest that Members of this House, or in the Commons, do not have the power to engage in corruption unless they are a Minister.
Banks are criticised, but operating a bank account for a PEP is a complete loss leader, because banks are obliged to always check the source of funds and question any payment into the account. This is completely ridiculous unless you are dealing with people who are potentially corrupt. Where is all this coming from? It is the FCA that is giving out very strict guidelines to banks on how the PEP rules should be implemented. As I understand it, those guidelines are, at the moment, contrary to the Government’s own arrangements and I fear they may remain too demanding in future.
Baroness Kramer
My Lords, the kind of language the Government may use in dealing with this in legislation may be limited, but I am very glad that they are taking action. Will they take on board, when talking with allies in other countries, the importance of how the concept of the PEP is handled? I am in the appalling situation of finding that my husband’s relatives in the United States have been challenged on opening accounts because they are related to me. How that relationship was disclosed, I find extraordinary. There must have been an awful lot of trawling through genealogical tables, or else someone is reading my emails. There is a serious issue about how this spreads to the families of Members of this House, of Members of the other place and of others who may rightly be regarded as politically exposed. Their relatives at many distances removed surely cannot be caught in that trap.
Lord Tunnicliffe (Lab)
My Lords, I, too, have some sympathy with the concern about PEPs. My bank managed to be very surprised that my son had repaid a debt. There is no question that banks have overreacted in this area. In general, banks seem to overreact to regulation. They do not seem properly to understand proportionality at individual level. It reminds one that one does not have a right to a bank account, and suddenly one realises that one would be a non-person without one. So it is right that we look for some protection for politically exposed persons—who could be in a very widespread group.
However, one must not lose sight of the fact that the Panama papers revealed just how widespread money laundering is and how much of it happens among politically exposed persons. As far as I know, no politically exposed person has been revealed in the UK, but in the wider world money laundering is a fact and it feeds terrorism and corruption.
We welcome this amendment as an effort to produce proper proportionality on this subject, but the balance must be maintained—and, just as we must be concerned about PEPs, we must be concerned about potential crime and the maintenance of public confidence in officials.
Lord Ashton of Hyde
My Lords, I am grateful to noble Lords who have replied. There seems to be unanimity that this is a serious issue that needs addressing and at least a partial acknowledgement that this is a start. We have accepted this amendment because we acknowledge that there needs to be a sensible approach to this problem.
The noble Lord, Lord Sharkey, mentioned that guidance exists already. In many of my replies to noble Lords, I am going to fall back on the fact that, having begun the process with this amendment, a lot will depend on the consultation about the regulations that we will bring in before 2017. I urge noble Lords to take part in that consultation so that all the points that have been made today and the concerns that people have heard about can be brought into that consultation so that we can get a sensible set of regulations, which this House will be able to look at, in place before 2017.
The noble Lord, Lord Sharkey, mentioned penalties. Again, the degree of penalties will obviously be part of the consultation and will be included in the regulations when they come in due course.
Baroness Browning (Con)
Can my noble friend confirm to the House that the consultation will not be a three-week consultation issued in the middle of the long Summer Recess?
Lord Ashton of Hyde
The consultation will be conducted under the Cabinet Office rules for consultations—so it will be more than three weeks. I cannot today tell noble Lords when it is going to start. The Treasury accepts that this is an important issue and has accepted the amendment. It wants people to contribute to the consultation—so, although I cannot give an exact date for when it will start, it will be a proper consultation.
Lord Naseby (Con)
My noble friend says that he is not in a position to indicate when the consultation shall start—but we are in May 2016, nearly half way through the year. That suggests that, if we are not very careful, it will be the back end of 2017 before anything happens. The noble Baroness, Lady Kramer, raised a particular family issue; and the noble Lord, Lord Wright, who is not in his place, raised one last year, if not the year before, relating to one son in Singapore and another in the USA. This is not a matter that we can just put into the long grass. I know that my noble friend is not doing that, but it is getting very near the outfield. I suggest that he should come back to the House and tell us exactly when the consultation will start and when we will get some substantive recommendations out of it.
Lord Ashton of Hyde
I can reassure my noble friend, because the date that the regulations have to be brought in is June 2017, so the consultation will take place in the second half of this year. It will be implemented before June 2017. I think that that is pretty clear and there is no question of it being put into the long grass. I have subsequently learned that the consultation will be 12 weeks and it will be after July—so I hope that my noble friend will be reassured by that.
My noble friend Lord Flight basically implied that any enhanced due diligence for all Peers, MPs and MEPs would be ridiculous. The directive and the Financial Action Task Force do not agree. They think that anyone who is an MP should have some form of enhanced due diligence. Of course, there is a huge range that can take place within enhanced due diligence. The point of the amendment and the regulations will be to make sure that there is a true difference. A Back-Bench Peer who may not have the position to influence corrupt acts—although every Peer and MP has access to people, so they are not exactly like every citizen—will have some form of enhanced due diligence, but it should be proportionate. The way that this will be done will ensure that.
The banks are in absolutely no doubt about the Government’s view on this. The Chancellor has personally written to the heads of the large banks, and the Economic Secretary to the Treasury has written to colleagues. Every bank now has a contact person with whom Peers, MPs and MEPs can get in touch if they feel that the enhanced due diligence is too great.
Lord Higgins
Before my noble friend comes to his peroration, perhaps I could ask this. All this consultation is taking place against the background of an impending referendum on whether we remain a member of the European Union. Am I wrong in thinking that all this depends on European directives, and that if the vote were to go in favour of our leaving the European Union we would have to look at the whole thing again?
Lord Ashton of Hyde
Even if that took place, we would be a member of the European Union for at least two years under the arrangements. But this is based on our staying in; if we did not, we would have to look at a great many things in addition to anti-money laundering procedures—and I am not sure that this would even be top of the list.
I am sorry to hear about the problems that the noble Baroness, Lady Kramer, has had with her family—but, as I said, the proportional nature of the enhanced due diligence for politically exposed people will be taken account of. The amendment is a good start and I commend it to the House.
Lord Bridges of Headley
That this House do agree with the Commons in their Amendment 10.
“Early exit pension charges
(1) The Financial Services and Markets Act 2000 is amended as follows.
(2) After section 137FBA (as inserted by section 30) insert—
“137FBB FCA general rules: early exit pension charges
(1) The FCA must make general rules prohibiting authorised persons from—
(a) imposing specified early exit charges on members of relevant pension schemes, and
(b) including in relevant pension schemes provision for the imposition of specified early exit charges on members of such schemes.
(2) The rules must be made with a view to securing, so far as is reasonably possible, an appropriate degree of protection for members of relevant pension schemes against early exit charges being a deterrent on taking, converting or transferring benefits under the schemes.
(3) The rules may specify early exit charges by reference to charges of a specified class or description, or by reference to charges which exceed a specified amount.
(4) The rules made by virtue of subsection (1)(a) must prohibit the imposition of the charges after those rules come into force, whether the relevant pension scheme was established before or after those rules (or this section) came into force.
(5) In relation to a charge which is imposed, or provision for the imposition of a charge which is included in a pension scheme, in contravention of the rules, the rules may (amongst other things)—
(a) provide for the obligation to pay the charge to be unenforceable or unenforceable to a specified extent;
(b) provide for the recovery of amounts paid in respect of the charge;
(c) provide for the payment of compensation for any losses incurred as a result of paying amounts in respect of the charge.
(6) Subject to subsection (8) an early exit charge, in relation to a member of a pension scheme, is a charge which—
(a) is imposed under the scheme when a member who has reached normal minimum pension age takes the action mentioned in subsection (7), but
(b) is only imposed, or only imposed to that extent, if the member takes that action before the member’s expected retirement date.
(7) The action is the member taking benefits under the scheme, converting benefits under the scheme into different benefits or transferring benefits under the scheme to another pension scheme.
(8) The Treasury may by regulations specify matters that are not to be treated as early exit charges for the purposes of this section.
(9) For the purposes of this section—
“charge”, in relation to a member of a pension scheme, includes a reduction in the value of the member’s benefits under the scheme;
“expected retirement date”, in relation to a member of a pension scheme, means the date determined by, or in accordance with, the scheme as the date on which the member’s benefits under the scheme are expected to be taken;
“normal minimum pension age” has the same meaning as in section 279(1) of the Finance Act 2004;
“relevant pension scheme” has the same meaning as in section 137FB;
and a reference to benefits includes all or any part of those benefits.”
(3) In section 138E(3) (contravention of rules which may make transaction void or unenforceable)—
(a) omit the “or” at the end of paragraph (a);
(b) at the end of paragraph (b) insert “or
(c) rules made by the FCA under section 137FBB.””
Lord Bridges of Headley
My Lords, Commons Amendment 10 places a duty on the Financial Conduct Authority to cap early exit charges that act as a deterrent to people accessing their pensions early under the new pension freedoms. The Government took the step of introducing this amendment in Committee in the Commons following detailed evidence-gathering exercises that showed the extent of consumer detriment caused by early exit charges and the imperative to act quickly in order to limit this.
Evidence from the FCA found that there is a small but significant cohort of people in contract-based pension schemes for whom early exit charges were posing a real barrier to accessing the freedoms. The FCA found that some 670,000 people over 55 in such schemes face an early exit charge, and for 66,000—almost one in 10—this charge would exceed 10% of the value of their pension pot. In some cases these charges would be high enough to make it uneconomic for an individual to access their pension flexibly, while in others, the presence of an early exit charge may have acted to discourage individuals from accessing their pension when it could have been the best thing to do in their circumstances.
It is therefore clear that the Government’s objective of ensuring that everyone who is eligible can access their pension savings flexibly is not being met and that action is needed to ensure that all consumers are able to make use of the freedoms. In order to ensure that the cap benefits current consumers who are eligible to use the freedoms now, subsection (4) of this clause provides that any cap will apply equally in relation to existing arrangements, as well as those entered into in the future. The decision to introduce a measure which will have retrospective effect in this way is not one that the Government have taken lightly; we recognise industry concerns about the way this cap will affect existing contractual agreements.
However, the Government’s view is that this action is warranted to ensure that individuals are not deterred from accessing their pension flexibly because of contractual terms they entered into long before the freedoms were introduced. These people would not have been in a position to make an informed decision about potential early exit charges when they signed up. Even some pension providers have conceded that industry practices have moved on and that the introduction of the pension freedoms means that these charges pose a much more significant barrier now than when they were agreed.
To be clear, this measure is about ensuring that consumers are adequately protected against early exit charges being imposed at a level so high as to deter them from accessing their pension early under the pension freedoms. This clause is not about determining the fairness of these, or other existing contractual terms and conditions more generally. That is a separate, wider issue which this Government have recently addressed in the Consumer Rights Act 2015, legislation which the FCA has the power to enforce against the firms it regulates.
It is important to consider the nature of the contractual terms affected through this measure. The Economic Secretary made it clear when introducing this clause in the other place that terms providing for market value reductions should not be subject to the cap on early exit charges. Subsection (8) of this clause gives the Treasury a power to introduce secondary legislation to provide for this exclusion to the FCA’s duty. FCA rules already place rules on how firms may apply a market value reduction, and the cap on early exit charges will not add to or modify these rules. Furthermore, in order to ensure that the level of any cap is fairly set, the FCA will determine the precise level of the cap, following further public consultation and cost-benefit analysis. The FCA will be setting out its next steps in this process shortly, with a view to implementing this cap before the end of March 2017.
This clause gives the FCA the flexibility to apply different rules to different classes or descriptions of charges if it finds that the evidence demands this, but the Government’s expectation is that any FCA cap or prohibition will apply equally for all those consumers accessing their pension aged 55 and above, up to their expected retirement date, rather than being set at different levels for different age groups. Although data collected by the Pensions Regulator suggest that early exit charges are less prevalent in trust-based pension schemes, we will also act to ensure that all members, regardless of scheme, are protected from excessive early exit charges, and the DWP and the Pensions Regulator will work alongside the FCA as they develop the design and level of the cap for contract-based pension schemes to ensure that this is possible.
The pension freedoms have given consumers much greater freedom of choice in the financial decisions they make at retirement. Commons Amendment 10 will provide important protections to consumers in contract-based pension schemes, ensuring that they are not deterred from using the pensions freedoms by excessive early exit charges. I beg to move.
Baroness Drake (Lab)
My Lords, I take this opportunity to thank the Minister for meeting my noble friend Lord McKenzie and me to discuss this amendment in detail. I am most grateful for that. As has been said, the amendment places a new duty on the FCA to make rules to prohibit or cap early exit charges that act as a deterrent to people accessing their savings under the new freedoms. This amendment is particularly interesting for two reasons. Unusually, it introduces legislation with retrospective effect on existing contracts and a new deterrent regime in addition to the existing fairness regime in financial conduct regulation—in effect, charges must not be at a level that deters people from accessing their savings.
The Government believe the legislation needs retrospective effect because of the need to protect existing and future consumers, and—more interestingly, when one reads the detail of their proposals—that fairness should not be determined solely by reference to whether or not it was fair to include a term in a pension contract a decade or decades ago, but that it has to be looked at against how unfair contracts legislation has evolved since those contracts were entered into, and through the new lens of the recent pension freedom reforms, all of which arguments I agree with. But given that the Government have taken the decision through this amendment to enable retrospective changes to existing pension contracts and recovery of amounts paid or payment of compensation for charges made in contravention of the new FCA rules coming into force in March 2017, and that the pension freedoms, which provide the new lens for looking at fairness, were introduced in April 2015, I cannot understand why the consumer protection in the new FCA duty does not apply with effect from April 2015. Why is it necessary to wait until March 2017 when the FCA rules are implemented—a full two years after the pension freedoms were introduced—before consumers are protected by the provisions on fair access to savings?
The Minister advised in his letter of 16 March that the Government are introducing this amendment,
“in light of detailed evidence gathering, and an imperative to act quickly in order to limit the extent of consumer detriment caused by early exit charges”.
The Government’s main defence for this two-year gap from April 2015 to March 2017 in protecting consumers is that savers who access savings between these two dates from a scheme whose early exit charges are considered excessive under FCA rules to be implemented in March 2017 cannot have been deterred by those charges and presumably are therefore not in need of retrospective protection. That argument simply does not sit comfortably with the Government’s view that some people are being denied fair access to their savings. It suggests that the new deterrent regime trumps fairness—in effect, if a person accessed their savings they have not been deterred, ergo the early access terms are fair.
There are many reasons why people may access their pension savings during that two-year gap, even though the charges may be excessive. There may be ill health or other compelling personal circumstances that override the deterrent effect. People may not be aware of, or understand, the excessive early exit charges, so do not make their decision on an informed basis. The FCA data reveal that 78% of affected consumers rated their pension provider’s explanation of the exit charge and its level as poor.
In his letter of 16 March, the Minister comments:
“In order to ensure that the provision benefits current consumers who are eligible to use the pension freedoms now … this clause provides that any prohibition or cap imposed by FCA rules applies equally in relation to existing pension contracts, as well as those entered into in future”.
In the light of that statement, it is most unfortunate that the amendment excludes from the protection consumers accessing their savings between April 2015 and March 2017, even though in other circumstances it allows for a retrospective effect.
Baroness Kramer
My Lords, I echo the objections just raised by the noble Baroness, Lady Drake. It is quite inexplicable that “retrospective” does not mean that the new regime will be recalculated from the date that people were able to access their pension pots. It seems equally unfair for people to have paid an inappropriate exit fee a year ago as it is for them to pay an inappropriate exit fee a year from now. Has the Minister considered how this will tend to inhibit decision-making by families until the new regulations are revealed? Instead of making the best decision for the family, there will be great pressure to delay that decision until the rules are clearer and, presumably, the exit fees are removed.
The amount of money involved in this process cannot be substantial but to the individual family that has been impacted, it is certainly significant. I really do not understand the Government’s thinking on this issue.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for his early warning of this amendment, for facilitating the meeting with officials and for addressing at that meeting some of the incisive and expert questions posed by my noble friend Lady Drake. As we have heard, the new clause places a requirement on the FCA to make rules to prohibit or cap certain early exit charges in regulated schemes which act as a deterrent to people accessing their pensions under the new pension freedoms. So far as it goes, this should be supported.
As the Minister’s letter of 16 March sets out,
“after the reforms took effect last April, it has become increasingly clear that early exit charges were preventing some people from accessing their pension flexibly under the freedoms”.
This was substantiated by the government consultation and evidence-gathering by the FCA and the Pensions Regulator. This process identified a number of weaknesses in the application of the freedoms policy: not just the early exit charges but a lack of clarity in the process for transferring pension savings and uncertainty around the need for financial advice when making transfers involving safeguarded benefits.
Although early exit charges are not an issue for the majority of those eligible to access freedoms, the Government have concluded that significant numbers of eligible individuals face charges which in absolute or relative terms present a “real barrier” to early access. This begs the obvious question of why this matter was not addressed as a fundamental component of the design of pensions flexibility in the first place. Why has it seemingly come as such a surprise to the Government that these early exit charges exist and could act as a deterrent? This is symptomatic of the rushed nature of the introduction of this policy more generally, which lacked the consultation and consensus-building that have typically characterised good pensions policy development.
It might be argued that before the introduction of the FCA cap—to be in place before the end of March 2017, as we have heard—there has been no detriment because by definition exit fees could not have been a deterrent to the 400,000 times that pension pots have been accessed to date. But it seems that exit fees could be a deterrent, making it less likely, weighed against other factors, that someone would access their pension pot, without these fees being an absolute bar. That is why, as my noble friend has argued, we consider that any capping should be applied not only to existing as well as new contracts but to pensions accessed from the start of the pension freedoms regime in 2015, a point supported by the noble Baroness, Lady Kramer.
Lord Bridges of Headley
My Lords, I thank noble Lords who have spoken in this debate. Let me pick up on the final point which was just made by the noble Lord, Lord McKenzie. I heed what he says about getting access to this amendment sooner but I would somewhat refute what he says about the rushed nature of the entire policy. When this problem was first identified the Government took immediate action to address it by embarking, as I have mentioned, on the FCA evidence-gathering exercise. However, I thank in particular the noble Lord and the noble Baroness, Lady Drake, for the time that they have spent discussing this clause and amendment with me. I have already committed to write to them shortly to address a number of the very forensic and detailed points that were made to me last week. I will do that as soon as I possibly can.
A number of your Lordships including the noble Baroness, Lady Kramer, raised a valid question about why we are not backdating this measure to 2015, when the pension freedoms came into effect, and not requiring providers to pay back the early exit charges which they received from customers in the period between April 2015 and when the cap comes into effect. I would make two points on this, as already outlined in my remarks. First, the purpose of this measure is not to require the FCA to assess the fairness of the contractual terms of historic pensions. The intent of the measure is to ensure that early exit charges are not imposed at an inappropriate level which deters consumers from accessing their pension early under the pension freedoms. Clearly, those who have decided, or will decide, to access their pension despite an early exit charge have not, or will not, have been deterred by the existence of such a charge.
Secondly, I accept the observation that, once in effect, this cap will obviously benefit some consumers who would not have been deterred by the early exit charge in their contract. However, the Government believe that it is an ordinary consequence of introducing a new measure of this sort that those—in this case, consumers—who take an action before the law comes into force do not benefit from the new law. Moreover, it is right that the Government do not rush to make legislation which has any sort of retrospective effect but that they do so only when there is clear and compelling evidence that it is in the public interest, and then make that retrospection as minimal as possible to ensure that the action is proportionate. That is what I and the Government believe that this clause achieves. It is proportionate and focused on those who greatly need it, and that is why I commend it to the House.
Baroness Drake
Before the Minister finishes, if I may, the defence is given that this is not a fairness regime but a deterrent regime and that there is therefore no evidence of deterrence and no need to make it retrospective. But on the FCA’s own evidence, the knowledge and understanding of these charges is quite poor. It is difficult to be deterred if you do not know that you are being exposed to excessive exit charges. People will not know that they are being exposed to them until the FCA has done its business, which will be by March 2017. It seems a little unfair. At the very least, perhaps the Government should be taking steps to ensure that companies and other agencies make consumers aware that if they wait until March next year, they may get a better deal.
Lord Bridges of Headley
The noble Baroness, as so often, makes a very valid point. This is precisely what the consultation sets out to address. It aims to ensure not just that consumers are properly protected but that they make informed and proper decisions. I will write to the noble Baroness to make these points in more detail.
Lord Ashton of Hyde
That this House do agree with the Commons in their Amendment 11.
Lord Bridges of Headley
That this House do agree with the Commons in their Amendment 12.
“( ) In paragraph 14 for “submit a monthly” substitute “, at least 8 times in each calendar year, submit a”.”
Syria: Aleppo
(8 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, with the leave of the House, I shall repeat a Statement made a short while ago in another place by my honourable friend Tobias Ellwood.
“The Syrian conflict has entered its sixth year. As a result of Assad’s brutality and the terror of Daesh, half the population have been displaced and more than 13 million people are in need of humanitarian aid. The UN special envoy, Staffan de Mistura, estimates that as many as 400,000 people may have been killed as a direct result of the conflict.
Our long-term goal is for Syria to become a stable, peaceful state with an inclusive Government capable of protecting their people from Daesh and other extremists. Only when that happens can stability be returned to the region, which is necessary to stem the flow of people fleeing Syria and seeking refuge in Europe.
We have been working hard to find a political solution to the conflict. There have been three rounds of UN-facilitated peace negotiations in Geneva this year: in February, March and April. The latest round concluded on 27 April without significant progress on the vital issue of political transition. We have always been clear that negotiations will make progress only if the cessation of hostilities is respected, full humanitarian access is granted and both sides are prepared to discuss political transition.
The escalating violence over the last two weeks, especially around Aleppo, has been an appalling breach of the cessation of hostilities agreement. On 27 April, Al Quds Hospital in Aleppo city was bombed, killing civilians, including two doctors, and destroying vital equipment. More than a dozen hospitals in Aleppo city had already been closed because of air strikes, leaving only a few operating. The humanitarian situation there is desperate. According to human rights monitors, at least 253 civilians—including 49 children—have been killed in the city in the last fortnight alone.
At midnight on Friday, following international diplomatic efforts between the US and Russia, a renewed cessation came into effect in Latakia and eastern Ghouta in Damascus. We understand that this has reduced some of the violence in Latakia but remains shaky in eastern Ghouta. The situation in Aleppo remains very fluid. The Assad regime continues to threaten a major offensive on the city. There were some reports of a cessation of attacks overnight, but we have received reports indicating that violence has continued this morning. We need swift action to stop the fighting. My right honourable friend the Foreign Secretary is speaking to Secretary Kerry today to discuss how we can preserve the cessation.
We look to Russia, with its unique influence over the regime, to ensure that the cessation of hostilities does not break down. It has set itself up as the protector of the Assad regime and it must now put real pressure on it to end these attacks. This is crucial if peace negotiations are to be resumed in Geneva. Those negotiations must deliver a political transition away from Assad to a legitimate Government who can support the needs and aspirations of all Syrians and put an end to the suffering of the Syrian people.
We also need to inject further momentum into political talks. We therefore support the UN envoy’s call for a ministerial meeting of the International Syria Support Group to facilitate a return to a process leading to a political transition in Syria. We hope that this can take place in the coming weeks. The UK is working strenuously to make that happen and we will continue to do so”.
Lord Collins of Highbury (Lab)
My Lords, I thank the Minister for repeating the Statement. The dreadful and appalling attacks and the scenes that we have seen in Aleppo appear to be a deliberate attempt to jeopardise the ceasefire and undermine the peace talks. As recognised by the Geneva Conventions, there is never any justification for attacking hospitals. I hope that the noble Baroness will assure the House that the UK is taking all steps, including gathering evidence, to ensure that those responsible will be held to account in future. As a member of the Syria support group, as she highlighted, Britain has a crucial role to play in the peace talks. US Secretary John Kerry yesterday met the Foreign Minister of Saudi Arabia, along with the UN special envoy, who agreed to make maximum efforts with the opposition to make certain that they are ready and prepared to go back to the table the minute a cessation is in place.
What steps are the UK Government taking to work with Saudi Arabia and other allies to encourage the Syrian opposition to recommit to the peace process and to ensure that all component groups of the coalition recognise the ceasefire agreements when they are in force? Finally, what progress is being made to ensure that humanitarian access is at the heart of any new ceasefire agreement?
Baroness Anelay of St Johns
My Lords, I give full assurance that we see it as our duty and that of our allies to ensure that evidence is gathered to ensure that perpetrators of breaches of international law and international humanitarian law are held to account. The UK is doing that specifically through projects which we support where very brave people are collecting and preserving information, and I applaud their personal courage in so doing.
The noble Lord is right: it is critical that we ensure that we work with our allies across the International Syria Support Group and generally to recommit to the political process, to ensure that it is taken forward. In particular, he mentions work to persuade the opposition to the regime in Syria to recommit to that process. We shall continue to do that, but I note that it is very difficult for them to recommit to that political process while the Assad regime—and, it appears from reports, the Russians—are showing that they have no care for the process of cessation of hostilities in Aleppo. If reports are correct that Russia itself is involved in bombing hospitals, the noble Lord is right to say that in no circumstances is there justification for the bombing of civilians.
Finally, with regard to humanitarian access, we give our full support to regaining it. For example, the regime is blocking access to humanitarian aid even to places such as Darayya, a few kilometres from Damascus and the UN. Road access is easy there; the UN could make it happen; the regime stops it.
Lord Campbell of Pittenweem (LD)
My Lords, it is difficult to imagine the effect of the kind of barbarity that the noble Baroness just described on a civilian population. It must be recognised that John Kerry, the Secretary of State, has strained every sinew to try to reach, if not an amicable, at least a temporarily stable solution. Does not all this give the lie to any suggestion—which apparently continues to be Russian policy—that somehow Mr Assad could be part of any kind of continuing Government in Syria?
Baroness Anelay of St Johns
My Lords, the Russians clearly have some influence on Assad; I want them to use it in a way that can ensure that the Syrian people have the hope of having a transitional process to peace. Assad continues to attack the very people for whom he should have a care. It is the case that brutality occurs at every turn, every day. I met those doctors and nurses who are treating people in hospitals in Syria, who have come out of Assad’s detention centre, having suffered the most appalling and barbaric torture, and I recall their words. They trained to be doctors, but they are faced with seeing every day the horrific results of what Assad commits on his own people.
Lord Howell of Guildford (Con)
My Lords, in seeking to persuade the Russians to change their attitude, has anyone confronted the Russian Ministers with the bald fact that their actions and Russian airstrikes have slaughtered a paediatrician and children in a children’s hospital in the latest attack in Aleppo? Have those facts been put to them at the level of trying to make the Russian people and Government understand that they are tarnishing themselves by pursuing these actions? Could the Minister say anything about reports that President Bashar al-Assad is actually colluding with Daesh in various ways, over oil supplies and other arrangements, in attacking Aleppo with Russian support? Finally, could she convey somehow to the Russian people that they are a very great people—that they have understandable problems and have suffered greatly in the past—but that their leadership now is taking on powers such that many people are coming to question whether Russia is a serious contributor to the society of nations or whether the leadership has gone completely mad?
Baroness Anelay of St Johns
My Lords, I understand, with regard to presenting to Russia the facts of the impact of its support and direct action in Syria, that that information has been transmitted. Staffan de Mistura is travelling, or has travelled today, to Russia to speak to Foreign Minister Lavrov, and I have no doubt that he will lay out those facts. We are concerned by patterns of co-ordination between the Syrian regime, Russian air forces, and indeed by some of the Syrian Kurdish forces, in their direct conflicts with elements of the moderate armed opposition. My noble friend is right to raise those concerns. It is important that the regime and Russia recognise that, in playing a part on the international stage to bring peace to Syria, it does not then kill the peace off at the start.
Lord Alton of Liverpool (CB)
My Lords, has the Minister had the chance to consider not just the appalling and shocking attacks on the hospitals and the killing of the last paediatrician in Aleppo but the specific targeting and revenge attacks on minority communities in Aleppo—particularly the attack on 26 April, which I mentioned in a Parliamentary Question that I tabled to her last week, where again several children were killed in an attack on the Syrian Christian quarter there? Has she had a chance to consider also the resolution of the Australian House of Representatives at the end of last week, joining the American House of Representatives, the British House of Commons, the European Parliament and the Parliamentary Assembly of the Council of Europe, in declaring these events to be a genocide, joining her ministerial colleague, Tobias Ellwood, who has said precisely the same thing? Would she consider arranging a meeting with the Foreign Secretary, Members of your Lordships’ House and Members in another place, who would like to see the judicial review of these events brought right up the agenda in the way that the noble Lord, Lord Collins, indicated in his intervention, so that those responsible for these events will be brought to justice?
Baroness Anelay of St Johns
My Lords, wanting to bring people to justice is, of course, a long-term commitment, not achieved by short-term statements. It is important that the noble Lord has raised today the issue of the targeting of groups within Syria and, particularly, Aleppo. I have looked at that. Indeed, in the past I have discussed with groups collecting information about the atrocities exactly what it means to individuals who are under attack—particularly the White Helmets, who make such a valuable effort in retrieving people from the rubble and who, while they do so, find themselves barrel bombed by Assad for trying to save lives.
This Government share the House of Commons’ condemnation of Daesh atrocities against minorities and the majority Muslim population in Iraq and Syria. That is why we mandated the UN Human Rights Council to investigate Daesh in 2014, and why we are doing everything we can to gather evidence for use by judicial bodies.
The noble Lord referred to the personal view put forward by my honourable friend Tobias Ellwood. Some people are announcing that there has been genocide but, while the Government agree that there may be a strong case, our view remains that the courts are best placed to judge criminal matters. That is why we are committed to working with our partners in the international community to gather that evidence in order to get that judicial decision as a possibility—to provide an opportunity for the judiciary to make the decision that is rightfully theirs to make.
Trade Union Bill
(8 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Neville-Rolfe
That this House do agree with the Commons in their Amendments 2A and 2B.
“Electronic balloting
Provision for electronic balloting: review and piloting scheme
(1) The Secretary of State shall commission an independent review, the report of which shall be laid before each House of Parliament, on the delivery of secure methods of electronic balloting for the purpose of ballots held under section 226 of the 1992 Act (requirement of ballot before action by trade union).
(2) The use of pilot schemes shall be permitted to inform the design and implementation of electronic balloting before it is rolled out across union strike ballots.
(3) The Secretary of State must consider the report and publish and lay before each House of Parliament a strategy for the rollout of secure electronic balloting.
(4) For the purpose of preparing the strategy under subsection (3), the Secretary of State must consult relevant organisations including professionals from expert associations to seek their advice and recommendations.
(5) The review under subsection (1) shall be commissioned within 6 months of the passing of this Act.”
Commons Agreement and Amendments to the Lords Amendment
The Commons agree with Lords Amendment No. 2 and do propose Amendments 2A and 2B thereto—
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)
My Lords, it is a pleasure to return to the Trade Union Bill, which I believe was much improved as a result of the expertise and attention to detail shown in this House. We have three groups before us today, on electronic balloting, trade union political fund opt-in and facility time, following changes made in the other place to the amendments made after votes here in the Lords.
We all agree that trade unions have an important role to play in the workplace. That includes helping to resolve workplace disputes without strikes, improving health and safety and encouraging skills development. We have already secured agreement in both Houses to the key aspects of this legislation, including ballot thresholds and mandates, reform of picketing and the Certification Officer. Following further discussions and debate in the other place, we are here today to consider the final elements of the Bill.
I turn first to electronic balloting. We have always been open to the principle but we have reservations, which I described in detail on Report, about its safety and security. I appreciate that some do not share my concerns and are satisfied that these issues can be easily resolved. That is why the noble Lord, Lord Kerslake, with widespread support across the House, proposed that an independent review be commissioned, after which e-balloting would be introduced. There have of course already been a number of reviews such as those by Electoral Reform Services, Webroots Democracy and the Speaker’s Commission on Digital Democracy. These have made encouraging comments about a move to electronic ballots but none has provided assurance on managing the risks. That is why we can see the merit in looking at the issues further and will be commissioning an independent review to do so.
The review will enable us to take a properly informed decision based on an assessment of the latest technology, made specifically in the context of electronic voting for industrial action ballots. It will take us closer to resolving the question of how both security and confidentiality can be preserved. This is important because it should enable us to get to the very heart of the matter. I am pleased that the Government have now agreed to accept your Lordships’ amendment for an independent review of e-balloting, with one important change: to replace the requirement to,
“consider the report and publish and lay before each House … a strategy for the rollout of secure electronic balloting”,
following the review, with a requirement for the Government to publish our response to the review. There is a simple and important reason for that change. We believe that the wording voted on in this House would prejudge the outcome of the review and irrevocably commit the Secretary of State to press ahead irrespective of the review’s findings. However, we have listened carefully to the strength of feeling in both Houses. We can see the merits of electronic voting being made available for industrial action ballots once the problems are addressed, and this review will enable us to make crucial progress. We already have the powers to introduce such ballots in Section 54 of the Employment Relations Act 2004.
The amendment before your Lordships today, supported by the other place, reflects the Government’s acceptance of the principle of electronic balloting while ensuring that we proceed prudently and on the basis of evidence. I beg to move.
Lord Collins of Highbury (Lab)
My Lords, I thank the Minister; I appreciate that the Government have moved substantially on this issue since we last debated it. I will try to encourage her to be a little more positive, because the fact is that the Government have publicly declared in favour of a review, which is important. It is important that she reassure the House that all interested parties will be publicly consulted in that review and will have the opportunity to put their case and the evidence in an open and transparent way. I hope this will include not only balloting agencies but the trade unions themselves and the TUC, which obviously have a wealth of experience. It may even be an opportunity for the Conservative Party to explain how well it gets on with electronic balloting, which it has used in the past. I therefore hope that the Minister will be able to give that commitment that evidence will be taken across the board.
I also noted the comments by Nick Boles in the other place about the pilots running as part of the review. I hope the Minister will be able to give the independent review a freer hand that will enable it to say, “Well, yes, we have evidence, but we want to test it”. That is important, because whatever the review’s conclusions, it matters that people have confidence in it. That is why all noble Lords were committed to the idea of a trial or pilots—to ensure that the review could assess its effectiveness.
Of course, no balloting process is completely secure, as we know from our own parliamentary system. However, I am fairly confident that the balloting agencies will be able to ensure that there is a strong case. We must not forget the reasons for this. It is about ensuring democracy, and if the Government are genuinely concerned about the rate of participation in elections—or, primarily, in industrial action ballots, where the thresholds have been put in place—it is their duty to ensure that all measures are taken to maximise this. Views were expressed across the House that this independent review should take place as speedily as possible and that the Government should consider fully its conclusions. I note what the Minister says but I hope that once that review is published, the Government will give proper consideration to its conclusions.
The Earl of Courtown (Con)
My Lords, the noble Lord, Lord Kerslake, was not in the Chamber until well after the Minister had started speaking. I do not know whether the House feels that he should be allowed to speak.
Lord King of Bridgwater (Con)
My Lords, can my noble friend say whether I am right in thinking that there has been some change in the order of business? I was under the impression that there would now be an Urgent Question on health. I myself arrived late in the Chamber, and that ought to be taken into account.
Baroness Neville-Rolfe
In the circumstances, it would be right to hear the noble Lord, Lord Kerslake.
Lord Kerslake
I am very grateful to the House for giving me the opportunity to speak. I was going to convey my apologies for lateness for the exact reason given by the noble Lord, Lord King—I had a different understanding of the timetable. All I can say is that I am learning fast.
I wholeheartedly welcome the movement on electronic balloting, and the Minister will know how passionately I feel about this. The fact is that it is both a secure and effective system for testing the opinion of different groups. It has been used on many occasions by many organisations for very important votes, and I believe passionately that it should be made available to the unions, particularly where we have set thresholds that must be met before they can take industrial action.
Lord Pannick (CB)
My Lords, I agree with what the noble Lord, Lord Kerslake, has just said. The Minister has repeated today that the Government are not opposed to electronic balloting in principle; they are concerned about the technicalities. I therefore hope that the Minister can tell the House that, if the independent review produces a positive response on the technicalities and the detail, the Government will be eager to implement the findings.
Lord Cormack (Con)
My Lords, I thank the Minister, as I do Mr Nick Boles for the very constructive part he played in another place. I just ask my noble friend to say something about the timescale.
Lord King of Bridgwater
My Lords, perhaps I may add to the comments of the noble Lord, Lord Kerslake, but, first, I also add my apologies for not being here when the Minister made her contribution. However, I think that some of us are entitled to an apology from whoever set out the business for today, as it has been taken in an order different from what we were previously advised.
I obviously apologise if my noble friend has already covered this matter clearly but I was very struck by the statement from the Minister, Mr Nick Boles, in response to a contribution from Mr David Davis, who has taken a keen interest in this matter. Mr Davis asked what assurance could be given about the outcome of a positive review. The Minister replied:
“I have made it clear that we have no objection in principle to e-balloting. If the research suggests that it is safe to embrace, we will proceed with it”.—[Official Report, Commons, 27/4/16; col. 1476.]
Interestingly, there was then considerable discussion about the Minister’s career prospects—whether it meant anything or whether it was merely the reflection of a Minister who was here today and gone tomorrow. He made it quite clear that he had made that statement on behalf of the Government and, regardless of who succeeded him, it was the Government’s position. It is to the Government’s credit that they recognise the validity of this argument. It is sensible to have a review and if it is positive, obviously there will be benefits in introducing it.
Lord Stoneham of Droxford (LD)
My Lords, I, too, must apologise for being a little late. I was brought up on the good trade union tradition that an agreement on procedure is an agreement, although clearly it was not this afternoon.
I want to add a couple of comments to the important speeches that we have already heard—particularly those from the Cross Benches—and to what the noble Lord, Lord King, said. We are seeking three things. The first is that the unions should be consulted as part of this review. Secondly, we would like to see some form of pilot as part of the review, bearing in mind that the Electoral Reform Services has conducted in the past year 2,000 polls and covered 1 million votes. There is a lot of experience out there, so this review does not actually need a lot of time. Therefore, our third requirement is that there should be some form of deadline. We are concerned that this will be heading for the long grass otherwise. The whole concept of electronic balloting is very important to the future of trade union democracy, not only for ballots for industrial action, but ballots for union leadership. Postal ballots were seen 20 or 30 years ago as essential reform, but now that turnouts in postal ballots are disappointingly low, we have to look at alternative methods of making such ballots more representative. Electronic balloting, as we have discussed in this Chamber, is now the next important reform. I hope the Government will exercise this review quickly and expediently and get a positive response.
Baroness Neville-Rolfe
My Lords, I believe that we have made significant progress today, despite the confusion over the timing of the Statement. The review will help to assess the rigour of the latest technology and address concerns about security, confidentiality and intimidation. It will allow us to consider again the case for e-balloting and ensure that we are making the right decision about whether to allow this method for conducting trade union ballots. I note what the noble Lord, Lord Collins, said about the value of increasing participation through e-balloting and the points made by the noble Lords, Lord Kerslake and Lord Pannick, about its value.
Let me first address the point raised by the noble Lord, Lord Stoneham, about pilot schemes. Pilots are always a good thing, and it is a pity they are not deployed more generally in public policy. How and when you use them in this area is not something that can be decided today. However, we have specifically mentioned them in the Bill and I appreciate from exchanges that we have had, including with the noble Lord, Lord Mendelsohn, that they are important.
I note the point made by the noble Lord, Lord Collins, about involving interested parties in the review, and in particular trade unions and the Trades Union Congress. This will of course be an independent review, and it will be for the chair to determine how best to conduct it. However, to my mind, it would make sense to involve trade unions, and indeed other relevant experts, and I am sure that he or she will come to the same view. Union input is very important, and in deciding how to set up the review we obviously need to avoid conflicts of interest.
My noble friend Lord King rightly quoted my honourable friend Nick Boles, who has done so much to progress this legislation, and the Government’s intentions, as set out recently. I cannot really add to that, but a number of noble Lords have asked about timing. I am pleased to provide reassurance that the review will be acted upon in due course and without delay.
Lord Forsyth of Drumlean (Con)
My Lords, I am most grateful to my noble friend the Minister. We did of course have extensive debates about the merits of this at an earlier stage of the Bill. Could she tell the House when and why the Government changed their mind on this matter?
Baroness Neville-Rolfe
My Lords, we discussed e-balloting in this House in Committee and at Report. There was a very widespread view that we should try to find a way forward on e-balloting. It is fair to say that we have been working since then to try to do just that. The Bill went back to the other place with amendments made by this House, most of which were accepted, and it was decided by the Government that we should bring forward a review of e-balloting in exactly the form that I have described today. I welcome that and welcome the progress that that has meant we are able to make on this Bill.
I shall not delay your Lordships long on this issue. I am very interested in all aspects of the advance of digitalisation—my friends know that—so I look forward to seeing the results of the review of e-balloting that we are agreeing today.
Lord Cormack
Could my noble friend please answer the question that I asked about timescale? She used the expression “in due course” et cetera, but it would be helpful to know when this review will commence, how long it will last and when we will therefore be in a position to draw conclusions from it.
Baroness Neville-Rolfe
I can repeat that we will act in due course and without delay. Those words were advised. Of course, I am not able to answer in detail on the exact timetable today, but I hope that noble Lords will feel that the direction of travel is right and that this amendment, which builds largely on the amendment passed in this House, is what we need and will agree that we should proceed with it.
Baroness Neville-Rolfe
That this House do not insist on its Amendments 7 and 8 and do agree with the Commons in their Amendments 7A, 7B, 7C, 7D, 7E and 7F.
“(1) A person who, after the transition period, joins a trade union that has a political fund at the time the person joins shall, on the trade union membership form (whether paper or electronic), be asked whether or not the person wishes to contribute to the political fund, and informed that the decision shall not affect any other aspects of the person’s membership.
(2) It shall be unlawful to require a person who joins a trade union after the transition period to make a contribution to any political fund of that trade union if the person has not given to the trade union notice—
(a) on the membership form (whether paper or electronic), or
(b) in accordance with subsection (6),
of the person’s willingness to contribute to that fund.
(3) It shall be unlawful for any trade union which does not have in force a political resolution under section 73 (political resolution) at the end of the transition period, but which subsequently passes a political resolution under that section, to require a member of the trade union to make a contribution to the political fund if the member has not given notice to the trade union in accordance with subsection (6) of the member’s willingness to contribute to that fund.
(4) A member of a trade union who contributes to a political fund but wishes to cease contributing to that political fund shall give notice to that effect to the trade union in accordance with subsection (6).
(5) A member of a trade union who gives notice under subsection (4) shall, after the end of the period of one month beginning with the day on which it is given, no longer be required to contribute to the political fund.
(6) Notice under subsection (2), (3) or (4) may be given to a trade union by being delivered—
(a) to the head office of the trade union, or
(b) to a branch office of the trade union,
in person, by any authorised agent, by post, or by electronic means.
(7) The Certification Officer shall, within six months of section 10 of the Trade Union Act 2016 coming into force, issue a code of practice which must set out the minimum level of communications which trade unions with political funds must have every year with political fund contributors about their right to cease contributing to the political fund.
(8) The Certification Officer must monitor the compliance of trade unions with political funds with the code of practice issued under subsection (7), and shall in their annual report under section 258 (annual report and accounts) set out their findings.
(9) In this Act “contributor”, in relation to the political fund of a trade union, means a member who makes a contribution to the political fund and has not given notice to the trade union under subsection (4).
(10) In this section “the transition period” means the period to be specified by the Secretary of State in regulations made by statutory instrument following consultation with the Certification Officer and all trade unions which have a political fund.
(11) The period to be specified by the Secretary of State under subsection (10) shall be no less than 12 months, and shall start on the day on which section 10 of the Trade Union Act 2016 comes into force.
(12) A statutory instrument containing regulations under subsection (10) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”
(a) the member has not given to the union notice of the member’s willingness to contribute to that fund (an “opt-in notice”); or
(b) an opt-in notice given by the member has been withdrawn in accordance with subsection (2).
(2) A member of a trade union who has given an opt-in notice may withdraw that notice by giving notice to the union (a “withdrawal notice”).
(3) A withdrawal notice takes effect at the end of the period of one month beginning with the day on which it is given.
(4) A member of a trade union may give an opt-in notice or a withdrawal notice—
(a) by delivering it (either personally or by an authorised agent or by post) at the head office or a branch office of the union;
(b) by sending it by e-mail to an address that the union has told its members can be used for sending such notices;
(c) by completing an electronic form provided by the union which sets out the notice, and sending it to the union by electronic means in accordance with instructions given by the union; or
(d) by such other electronic means as may be prescribed.
(5) In this Act “contributor”, in relation to the political fund of a trade union, means a member who has given to the union an opt-in notice that has not been withdrawn.””
“(1A) After that section insert—
“84A Information to members about contributing to political fund
(1) A trade union shall take all reasonable steps to secure that, not later than the end of the period of eight weeks beginning with the day on which the annual return of the union is sent to the Certification Officer, all the members of the union are notified of their right to give a withdrawal notice under section 84(2).
(2) The notification may be given —
(a) by sending individual copies of it to members; or
(b) by any other means (whether by including the notification in a publication of the union or otherwise) which it is the practice of the union to use when information of general interest to all its members needs to be provided to them;
and, in particular, the notification may be included with the statement required to be given by section 32A.
(3) A trade union shall send to the Certification Officer a copy of the notification which is provided to its members in pursuance of this section as soon as is reasonably practicable after it is so provided.
(4) Where the same form of notification is not provided to all the members of a trade union, the union shall send to the Certification Officer in accordance with subsection (3) a copy of each form of notification provided to any of them.
(5) Where the Certification Officer is satisfied that a trade union has failed to comply with a requirement of this section, the Officer may make such order for remedying the failure as he thinks just under the circumstances.
(6) Before deciding the matter the Certification Officer—
(a) may make such enquiries as the Officer thinks fit;
(b) must give the union, and any member of the union who made a complaint to the Officer regarding the matter, an opportunity to make written representations; and
(c) may give the union, and any such member as is mentioned in paragraph (b), an opportunity to make oral representations.”
“(2A) In section 82 of the 1992 Act (rules as to political fund), in subsection (1), for the word “and” at the end of paragraph (c) substitute—
“(ca) that, if the union has a political fund, any form (including an electronic form) that a person has to complete in order to become a member of the union shall include—
(i) a statement to the effect that the person may opt to be a contributor to the fund, and
(ii) a statement setting out the effect of paragraph (c); and”
“(3) The amendments made by subsections (1) to (2A) apply only after the end of the transition period, and only to a person—
(a) who after the end of that period joins a trade union that has a political fund, or
(b) who is a member of a trade union that has a political fund but did not have one immediately before the end of that period.
(4) In subsection (3) “the transition period” means a period of not less than 12 months, starting on the day on which this section comes into force, specified by the Secretary of State in regulations made by statutory instrument.
(5) Before making regulations under subsection (4) the Secretary of State must consult—
(a) the Certification Officer, and
(b) all trade unions that have a political fund.
(6) A statutory instrument containing regulations under subsection (4) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”
“( ) section 84A(5) (order on failure by union to provide required information to members about contributing to political fund);”
Baroness Neville-Rolfe
My Lords, we have debated at length the principle of how union members exercise their choice to opt either in or out of a political fund. I am particularly grateful to the noble Lord, Lord Burns, and the wider Select Committee for their deliberations on this complex issue. They were both careful and wise, and extraordinarily rapid because of what looked like an impossible five-week deadline.
I extend thanks in particular to my noble friends Lord Sherbourne, Lord De Mauley, Lord Robathan and Lord Callanan, who gave up their time to help the committee find a way forward on these very important matters and ensure that the principle of union members having a transparent and active choice to opt in was supported.
The Government have given careful consideration to the recommendations of the Select Committee and to the amendment tabled by the noble Lord, Lord Burns, which followed the majority view that opt-in should apply only to new members. We tabled an amendment in the other place, but concerns were expressed by a number of colleagues from both Benches in both Houses.
It was important to progress matters and get this Bill through the House and on to the statute book, and the Government subsequently tabled a new amendment, now before your Lordships following its acceptance by the other place, which like the original amendment of the noble Lord, Lord Burns, reflects the recommendations of the Select Committee on opting in.
The amendment corrects some legally defective drafting and, instead of the Certification Officer being required to issue a code of practice, places a statutory obligation directly on unions to provide an annual reminder to those new members who have opted in to the political fund. It is not usual for the Certification Officer to be involved with communications between unions and their members, and it provides more certainty to have this requirement in the Bill.
In the interests of finalising this important Bill for Royal Assent, I hope that noble Lords will support the amendment. I beg to move.
Lord Burns (CB)
My Lords, I am delighted to be able to thank the Minister for her statement and the amendments, and I hope that this will be the end of what has been the controversial issue of trade union political funds. As the Minister said, today’s proposals leave intact the substance of the amendment which was passed so comprehensively by your Lordships’ House. Noble Lords will recall that the amendment was designed to put into legislation the majority recommendations of the Select Committee on Trade Union Political Funds and Political Party Funding, which I had the honour to chair. I remind noble Lords that most of the recommendations reflected the unanimous view of the committee, although there was a difference of opinion about the treatment of existing members of unions with political funds.
In essence, after a transitional period of at least 12 months, all new members will be required to pay into political funds only if they have actively opted in. They will be reminded annually of their right to opt out. Opting in or out will be allowed electronically, there will be no renewal requirement every five years, and the requirement to opt in will not apply to existing members.
Lord Forsyth of Drumlean
In the noble Lord’s discussions with the Government about his amendment, at what stage was he told that the Government had changed their position? Was there a stage before that?
Lord Burns
Mr Nick Boles explained to the other place one day last week that he and I met last Monday evening and had a discussion. He put a proposal to me that I thought was rather unsatisfactory and fell somewhat short not only of the majority recommendation of the Select Committee but of the minority view. I explained that from my perspective it did not go far enough and that there would have to be further stages between the two Houses. Then I was subsequently told on Tuesday evening, the following day, that the revised proposal was being set down.
Lord Robathan (Con)
My Lords, I rise with some disappointment to speak on these amendments, but I start by paying tribute to my noble friend Lady Neville-Rolfe because throughout she has been exemplary in her courtesy and assistance. I know from past experience that sometimes as a Minister you hold to a line and then suddenly a hole appears in front of you into which you drop. I fear that she may be feeling slightly like that, and our honourable friend Mr Boles may feel the same.
I am disappointed not because this is a grand old Duke of York moment, although in the committee we were indeed marched up to the top of the hill, but because this is the wrong decision. The Bill that came to the House of Lords was frankly not a good Bill. There were three issues that I particularly seized on. One was electronic balloting and the unnecessary bureaucracy involved in the Bill—the need to write to people and people only being able to communicate by writing, which was nonsensical. The second was that there was just not enough time to do it in a matter of months. Any large organisation needs time to contact all its members. I am glad to see that, as a result of our deliberations, there will now be a 12-month window for transition. The third reason was that having to review the decision every five years was punitive, as the noble Lord, Lord Burns, who ably chaired the committee, has described it. Others in this Chamber will know better than me, but I wonder whether the Bill was stitched together by some special adviser who was being paid too much; some teenage scribbler who should, perhaps, have been given greater and wiser direction.
There were two reasons for my disappointment. First, this was a commitment in our manifesto, which specifically said that we would,
“ensure trade unions use a transparent opt-in process for union subscriptions”,
and not just for new members. The second reason is the very important issue of principle. If the principle is that people should opt in, rather than out, then that principle is right—would any noble Lord like to disagree with that? As we heard in our committee, presumed consent is no longer acceptable in financial services. In our earlier discussions on the Bank of England and Financial Services Bill, the Opposition were speaking ably and rightly about consumer protection. Why should trade unionists not have the same consumer protection as anybody else and not have to opt in rather than out?
These two reasons leave me gravely disappointed. I am sure it is not the case, but there is a hint that a deal may have been cut behind closed doors, which does not reflect well on this Government. They should have stuck by their principles and by the principle which I have mentioned. Politicians are much criticised for not keeping their promises and for inconsistency. By allowing these amendments to go forward, the Government have not kept their manifesto promise and have been inconsistent, and it pains me to say that.
Lord Tyler (LD)
My Lords, I too served on the Select Committee so ably led by the noble Lord, Lord Burns, and I am delighted to follow on from—and endorse—what he has said this afternoon. As one of the co-signatories, from every part of the House, for his amendment on Report, I warmly welcome what the Government have now decided to do. They have, albeit at the very last minute, recognised the validity of what the Select Committee recommended and the very strong support for it in all parts of this House. I note again that the Minister herself has referred to the committee as “careful” and “wise”. I take comfort from that description. I am not sure that she would have said it earlier on, but she has said it now.
It is also very gratifying that, when its work was being examined in the other place last Wednesday, there were also very considerable tributes to the noble Lord, Lord Burns, and the rest of the Select Committee. There was unanimous praise and support from Members on all sides. Not only the Minister, Nick Boles, but representatives of the opposition parties paid tribute to the work that was done at—as has been acknowledged—considerable speed and were united in expressing agreement with our broad conclusions. As the original proposer of this way to achieve some non-partisan, cross-party, independent scrutiny of this highly controversial part of the Bill, I took particular pleasure from that endorsement as I listened to the Commons debate. MPs on all sides made reference to the Select Committee’s wider recommendations, to which the noble Lord, Lord Burns, has referred, on the question of party funding reform. In paragraph 131, the committee quoted the double promise in the 2015 Conservative manifesto:
“In the next Parliament, we will legislate to ensure trade unions use a transparent opt-in process for subscriptions to political parties”.
And, it goes on, immediately:
“We will continue to seek agreement on a comprehensive package of party funding reform”.
I note what the noble Lord, Lord Robathan, said about manifesto promises, and I hope he endorses that promise with equal sincerity and strength.
In paragraph 138 of the report, the committee recommended to the House and the Government that:
“Whether or not clause 10 is enacted, in whatever form, the political parties should live up to their manifesto commitments and make a renewed and urgent effort to seek a comprehensive agreement on party funding reform. We urge the Government to take a decisive lead and convene talks itself, rather than waiting for them to emerge”.
This is where this business is now unfinished and where we must expect further explicit announcements from Ministers. Ministers simply cannot pretend that this issue is unimportant. That firm recommendation was supported unanimously in the Select Committee with forthright endorsement by all four Conservative members.
Members on all sides of your Lordships’ House have joined the Select Committee in highlighting public concern about the dominance of big money in British politics. The Select Committee took a lot of evidence on that point. Who can say that the public are wrong to be suspicious of favoured access, favoured influence and favoured patronage? It is often said, “He who pays the piper calls the tune”. Only this weekend, we have had a vivid reminder of how damaging to public confidence in our democracy this can be. The Conservative Party’s determination to inflame people’s fear, hatred and greed in the London mayoral election has been all too obvious. Powerful financial interests are clearly scared. I noticed in particular the comment of the noble Baroness, Lady Warsi, who rightly asked whether this disgraceful campaign really represents the true motives of the candidate. Whether or not it does, she was brave and right to call her party out on this deplorable campaign.
If our politics are to become more palatable to her and to the public, removing big money is an essential prerequisite. The changes we are making to the Bill this afternoon provide an opportunity to do just that if the Government will, as the committee unanimously recommended, once again institute serious cross-party talks and bring a Bill back to Parliament. There is a huge body of work on this essential element of reform, and it is now for the parties to live up to their promises about implementing a fair package. If Ministers today cannot give a complete and authoritative response to this crucial part of the Select Committee’s report, the House will surely expect to be told who will respond and when.
Lord Callanan (Con)
My Lords, I join my noble friend Lord Robathan in expressing my disappointment at the Government’s concessions on this amendment because the principle of opt-in was at the core of the Bill. We had robust discussions in the committee chaired by the noble Lord, Lord Burns, and I am grateful to the Minister for mentioning that in her opening speech, but all four of the Conservative members of that committee were very keen to make sure that existing members were included as part of the opt-in process, not least because this is a manifesto commitment. It was a badly worded manifesto commitment but, as Ministers in this House and in the other place have made clear, it was a firm manifesto commitment on which they were not going to compromise, right up until last week.
I served in the European Parliament for 15 years, and I expected Ministers to compromise to a certain degree on this. In the European Parliament, compromise is the spirit of the day as there are many parties from many different countries. I have spent many a happy, and sometimes not so happy, hour negotiating until the small hours of the morning on various Bills and other legislation. Of course you have to give ground, and I was perfectly prepared to see the Government give ground on the transition period and the length of the transitional measures. That was to be expected, but to see the whole thing junked completely is extremely disappointing because it still leaves millions of workers in this country contributing to political parties and political causes about which they have never been asked or consulted. That is the principle that we should be upholding.
My concern is not so much that the Government have climbed down on this. I am disappointed, but I could have accepted that as part of the normal parliamentary discourse. My bigger concern is the reason for the Government’s climb-down. I do not necessarily believe everything that I read in the media, but if media reports are to be believed the reason for this climb-down is part of a deal with the trade unions for financial and political support for the remain campaign in the EU referendum. I do not know whether that is true, but if it is it is disappointing and regrettable. We are well used to the party opposite doing deals with the trade unions on legislative changes in return for political donations. I really hope that the Government are not doing the same in this instance. It is another demonstration, if one were needed, of the hideous power of the EU to subvert our democratic process.
Lord Whitty (Lab)
My Lords, I had not intended to participate in the debate. I thought that it was going to go through smoothly and that a rather unfortunate period of legislation would have passed relatively quietly before the end of this parliamentary session. However, my former colleagues on the Select Committee have provoked me to intervene.
As the Minister pointed out, this is a compromise. All compromises are, by their nature, difficult for the parties. It is clear from the contributions of the noble Lords, Lord Robathan and Lord Callanan, that it is difficult for the hawks in the Conservative Party, who landed us with this proposition in the first place—but it is also difficult for the trade unions. There is more administration and considerable cost involved in this, and it is a difficult situation in the long run. But it is also a difficult compromise for the body politic because of the issue that the noble Lord, Lord Tyler—one of my other colleagues on the Select Committee—put forward.
I remind the House that we have spent hours on the issue of how trade unions deal with political contributions, but other organisations and extremely rich individuals make contributions. None of those organisations is required, like the Bill still requires trade unions, to have a separate political fund in the first place; to report precisely on how it uses and expends its political money; to give each of its members the possibility of an opt-out; and now to require future members to opt in rather than to opt out. In no other organisation in this land are those restraints put on political expenditure or involvement.
As was revealed in the Select Committee report, on the basis of figures given to us by the Electoral Commission, in the five years to 2015 the trade unions gave £64 million, the vast majority of it to the Labour Party. However, other organisations in this land gave £80 million—to, admittedly, a variety of parties, but predominantly and overwhelmingly to the Conservative Party. Yet none of those organisations was affected by previous legislation requiring separate political funds or opting out, or by new legislation requiring more detailed controls and more detailed reporting.
This relates to the points that the noble Lord, Lord Tyler, raised. If we are to come up with a democratic balance that is acceptable for a long-running constitutional settlement of this issue, we have to look at political funding in the round. As he said, the drafters of the Conservative Party manifesto recognised that and made a commitment that way. That has conveniently been dropped. Whatever the motivation for the compromise here—I do not particularly wish to go into that; it is possibly a matter for private grief within the Conservative Party—there is no reason now for the Conservative Government not to open those talks on political funding in the long run by organisations, individuals and the political parties themselves. That way we may get a balance in political funding that accords with democratic principles and is acceptable to the majority of the people. Without that, and despite this compromise, which I support, we will still have a seriously unbalanced situation once the Bill passes.
Lord Cormack
My Lords, I think we have to reflect, briefly, upon what has happened. We had a Motion, carried by a large majority, that the Select Committee should be established. I did not support it. I explained during the debate that I felt that the Bill was seriously impaired and that there was much unfairness in it, but I questioned whether a committee could, in the very short timescale that my noble friend Lady Neville-Rolfe has referred to today, produce a really good, definitive report. Thanks to the hard work of colleagues from all parts of the House and expert chairmanship, to which they all testified, by the noble Lord, Lord Burns, the deadline was met and a report was produced. It was signed up to by all the members of the committee—although, in the final, conclusive paragraph, there was, it was explained, a divergence of opinion.
The noble Lord, Lord Burns, decided to encapsulate that recommendation in the amendment which he moved on Report in your Lordships’ House. He moved the amendment with great skill and was supported by Members from other political parties as well as Members on the Cross Benches. My noble friend Lord Balfe and I voted enthusiastically for him. The names of a number of leading members of the Conservative Party will not be found in the Division list—I went through it carefully—because they felt that they could not oppose the amendment of the noble Lord, Lord Burns. It was carried by a large majority. The noble Lord, Lord Burns, explained that when he came to the negotiations at the beginning of last week, what was on offer not only did not meet his amendment but did not even meet the amendment to which my Conservative friends had signed up—in paragraph B, I think it was—so further negotiations were held.
What happened was very simply this. The parliamentary Session is coming to an end. The State Opening of Parliament has already been designated for 18 May—a fortnight tomorrow. So what was to happen? My noble friend Lady Neville-Rolfe and Mr Boles in another place decided that half a loaf was indeed better than no bread: that it would be far better to have a Bill that had widespread support—albeit that some of it is reluctant support. I myself do not think that this is the greatest Bill that the Government have placed before this House. Nevertheless, it is now, as far as one-nation Conservatives are concerned, a fairer, more decent and more equitable Bill, and one that has within it some recognition of the underlying dichotomy of party funding, because the Bill in its original state—and I used the words “unfairness” and “choice” many times in contributing to earlier debates—whether by accident or design, was penalising one of the great parties of state and not the others.
I believe that it is important that the second recommendation in the manifesto, which has already been alluded to two or three times in this debate, should be followed up. I hope that there will be something in the Queen’s Speech about it, because I do not like the way in which party politics is funded in this country—and I know that that view is widely shared in all parts of your Lordships’ House and in all parts of the country. But what we now have is a Bill that can go on to the statute book and which honours a number of the important pledges in last year’s manifesto. I accept that a manifesto Bill is different from another sort of Bill. Therefore, we have something in which the Government can take a degree of quiet satisfaction—and those of us who were concerned about the underlying unfairness of the original Bill can also feel that it has been improved.
I was only too glad to put my name—alongside that of my noble friend Lord Balfe—to the amendment of the noble Lord, Lord Burns. The noble Lord, Lord Tyler, also signed it. Your Lordships’ House gave that a very large majority, as I said. So the Government’s choice was a very simple one: should they go along with the will of your Lordships’ House as expressed in the Division Lobbies or should they invite further defeat, which could have jeopardised every particular of the Bill?
I think that the Government have made a wise, moderate and sensible decision. I pay unreserved tribute to the unfailing courtesy and diligence of my noble friend Lady Neville-Rolfe and to Mr Boles in another place. I hope that we can now move on. Last week, when we had the Third Reading, I said I hoped that the spirit of euphoria was not premature. I hope that it will not prove to have been premature and that we can now accept what is before us and get something on the statute book that is much more acceptable to those who have genuine concerns.
Lord Pannick
My Lords, we in this House often complain that the other place has ignored our views. It is unusual, and perhaps regrettable, that some noble Lords complained today that the other place listened attentively to the views of the committee of the noble Lord, Lord Burns, and to the vote in this House, which was supported all around the House, as the noble Lord, Lord Cormack, said, including on the government Benches. I do not know whether there was a deal, but whether or not there was, an act of political wisdom has occurred and we should welcome it.
Lord Forsyth of Drumlean
My Lords, I thank my noble friend not just for tabling this Motion, which I very much support, but for the way in which she has patiently conducted proceedings on the Bill and dealt with sometimes unhelpful contributions from people such as myself.
My concerns about the Bill were in relation to check-off and the proposals to change to an opting-in arrangement, which were coupled with an announcement by the Chancellor to cut Short money. It seemed to me that the Government were abusing their power in order to damage the funding of the Official Opposition. That is why I was opposed to these particular provisions of the Bill. I had a difficulty because there was a manifesto commitment in respect of the opt-in, opt-out proposals. However, as the noble Lord, Lord Tyler, and others have pointed out, that manifesto commitment was to look at the question of opting in and opting out in the context of overall party funding. I think it is wrong for a Government to use their power to dis their opponents or in a way which leaves open to question whether or not they are acting in the interests of the country as a whole or in the interests of a party. For years and years, I have made speeches attacking the Labour Party and suggesting that its dependence on trade union funds meant that policy could potentially be up for sale. Having listened patiently to the very persuasive arguments put forward by my noble friend to indicate why a change of policy should not be agreed, it was with some dismay that I heard suddenly—I believe I am not the only person who heard suddenly; I think some Front Bench people heard suddenly—that the Government’s position had changed completely.
Lord Robathan
My noble friend was a distinguished Cabinet Minister back in the 1990s. Is he not being unduly cynical? Surely he cannot believe that the Government would come up with a shoddy deal such as this.
Lord Forsyth of Drumlean
I am tempted to be sanctimonious about this. What I found most risible about the Government’s explanation for their somersault was when Nick Boles, when asked why he had changed his mind, said:
“I urge my hon. Friend to look at the people who spoke in the debate and voted, or very assertively chose not to vote, in support of the Government’s position. They included not just Lord Cormack and Lord Balfe but Lord Forsyth, who supports the same campaign on the European Union that my hon. Friend has supported”.—[Official Report, Commons, 28/4/16; col. 1545.]
I really do resent being cited in support of a very shoddy deal. Later he said—contrary to what my noble friend has been saying—that he did not want to listen to the arguments at all. He said:
“I did not want to listen at all. I am afraid I simply acknowledged that, faced by an array of forces—it is not just led by the noble Lord Burns, but includes most of the Cross Benchers, all the Liberal Democrats, all the members of Labour party and very influential Conservative peers, such as Lord Forsyth, Lord Deben, Lord Balfe and Lord Cormack—neophytes in this game like me perhaps need to concede defeat”.—[Official Report, Commons, 28/4/16; col. 1549.]
This is something I shall quote on many future occasions.
Lord Sherbourne of Didsbury (Con)
My Lords, I think my noble friend Lord Forsyth has unravelled a puzzle. I, too, am disappointed by what has happened. I assumed that when the Conservative Party put in its manifesto the commitment to move from opt-out to opt-in, it thought it was the right thing to do. When it appeared in the Bill, I thought it was the right thing to do. I thought the party thought it was the right policy, and I think it was the right policy.
I have heard the word “compromise” used today. The noble Lord, Lord Whitty, used it several times. I understand that we are at the end of the Session. I understand the need for compromise, concession and deals. But this is none of these things. This is the abandonment of a Conservative manifesto pledge, and we should say that. I notice that my honourable friend in the other place, Mr Nick Boles, turned what was a manifesto commitment into what he called a suggestion in the manifesto. It was not a suggestion; it was a promise. When we debated this last time, my noble friend the Minister said it was right for Governments to honour their commitments.
Of course I accept the decision of the other place. My noble friend Lord Forsyth has given his explanation of why this manifesto commitment was abandoned. I say only that junior Ministers in this Government, who are extremely able and good, often have a very hard task.
Lord Leigh of Hurley (Con)
My Lords, I will not speak for long because we have discussed this at length. I think we have all reached agreement as to why, as my noble friend Lord Sherbourne said, we are going from opt-out to opt-in. We have been through some people’s perception that there has been legislation in the past that has affected political disclosure, if not donations, and have discussed PPERA. But we have now reached a point where we have something before us. This time, unlike on previous occasions, I find myself agreeing with the noble Lord, Lord Cormack, on where we are.
I am grateful to the noble Lord, Lord Forsyth, for crystallising my mind: clearly I am not an influential Conservative Peer because my suggestions have not been adopted.
Lord Forsyth of Drumlean
My noble friend is extremely influential. It was Mr Boles who did not think to include him.
Lord Leigh of Hurley
I am grateful for that clarification. The noble Lord, Lord Robathan, has explained how Ministers approach these problems. Sadly, again, I have never had the honour of being a Minister. That is most unlikely. I come from more of a business background and in business when one wants to get things done invariably there has to be an element of compromise. Like the rest of the House, I congratulate the noble Lord, Lord Burns, on achieving a compromise. How and why it was achieved we will perhaps never know but it has been achieved. We will end up with an opt-in. It will take longer than other people thought appropriate but it will happen. The suggestion of the noble Lord, Lord Burns, of the publication of the opt-in levels achieved is excellent and to be welcomed. On all those grounds, I welcome these amendments.
Lord King of Bridgwater
My Lords, I think we are in for a pretty bad couple of months, in which conspiracy theories will abound and suspicions of motives will arise in every possible circumstance as we approach an interesting referendum. I notice the good humour in the Chamber today. I think that if these amendments had not been tabled, there might be a very different atmosphere indeed. I agree very much with what my noble friend Lord Forsyth and the noble Lord, Lord Cormack, have said.
Democratic power has to be used with discretion and responsibility. The noble Lord, Lord Whitty, referred to this, and I agree with aspects of what he said. I was worried about the way that the Bill, as originally drafted, was going to go. Whatever discussions there were in government and in another place when the amendments came forward and were considered, I hope that there was a bit of historical memory in them—I think that there was—because we have been here before.
I was there in 1984, when it was proposed that we would do something about opting-in. I do not think that I am breaking a great confidence if I tell the House that the noble Lord, Lord Jopling, who was then the Chief Whip, had an interesting discussion with the Labour Chief Whip of that time, Michael Cox, who some may remember. They were arranging the business, as Chief Whips do, in those awful usual channels. There was agreement and compromise at that time in the Session. Then the issue came up about opting in—and the message was delivered quite simply and clearly: “If you do that, there will be war”. That was because it is an essential problem of political funding, with which all parties have problems, that the trade union contribution is massively important to the Labour Party. A sudden change in that would have significantly affected the balance and would have seemed, to many eyes, to have been a pretty unfair action and maybe an abuse of majority political power at that time.
It was against that background that such a proposal was put forward. When we considered it in the Bill that became the Trade Union Act 1984, Mr Len Murray came to see me for the trade unions and we discussed the issue. He had previously had discussions with my predecessor and noble friend Lord Tebbit, who one could not call a soft touch on these matters. But my noble friend made it clear that if the Trades Union Congress wished to put forward alternative proposals, he would be prepared to consider them. It fell to my lot to consider those proposals. We agreed that we would not proceed with the opting-in proposals, on the strict understanding that actions would be taken by the TUC and all affiliated unions at that time. That is why I agree very much with the last comment of the noble Lord, Lord Burns, because we are where we are now. I support the actions in respect of new members coming in. That is an important step forward which did not exist before. We were not able to arrange it or go forward on it in my time; maybe we should have done.
I would like to read part of the statement that Len Murray—Lord Murray, as he was subsequently—gave when he came to see me and exchanged correspondence. He gave me a copy of the statement of guidance to the trade unions. It said:
“Following discussions between the TUC and the Secretary of State for Employment, the General Council have prepared the following Statement of Guidance on good trade union practice in respect of political fund arrangements and related matters for use by affiliated unions. Unions are asked to review their existing procedures as soon as possible to ensure that this guidance is acted upon”.
That guidance was satisfactory to me and to the Government because it made it clear that every affiliated union had given an undertaking that it would make sure that all its members were properly informed of what their rights were in these matters. The guidance ended with the statement:
“It is particularly important that unions’ procedures avoid the possibility of members being unaware of their rights in relation to the political fund or being unable to exercise them freely”.
On that understanding and on behalf of the Government, I agreed not to proceed with introducing changes to the situation on opting-out or opting-in.
The disappointment for me in the discussions on this Bill is to discover that only a very small number of the unions which were affiliated to the TUC ensured that the undertaking given to me on behalf of them all was actually carried out.
Lord King of Bridgwater
If I may just finish this point, I will then give way to the noble Lord. What I want to know is: has the TUC now repudiated that understanding or is it agreeing that it stands? In the light of the amendment which the Government have agreed to, which deals with new members, will the position of existing members be exactly as encouraged by the noble Lord, Lord Burns? Will it ensure that the undertakings given to me are honoured and that people are aware of that undertaking?
Lord Lea of Crondall
My former noble friend Lord Murray of Epping Forest was a man of great integrity. One of his straplines or catchphrases was, “We always deliver what we say we will deliver”. That was true of prices and incomes policy through the 1960s and 1970s. I challenge anybody to contest that point. It was not that there were no difficulties but, when we said that we had agreed something, we delivered. That was the first thing which Len Murray always said.
On this matter, my noble friend Lord Monks pointed out something that has never been refuted. He drew attention to this matter and the fact that there had been no complaint on it until it was suddenly dragged up in this House in relation to the Bill. If the Government had had evidence of this matter along these lines, the first thing that they should have done was to get in touch with the TUC and say that they were concerned about it. Did they get in touch with the TUC? No, they did not. I think that there are some crocodile tears here from the noble Lord, Lord King, who does not normally go in for such point-scoring. I ask him to be a bit more careful about the implications of what he says about the TUC’s actions on this matter.
Lord King of Bridgwater
I make it clear straightaway that I had the greatest respect for Lord Murray—Len Murray, as he was—and had extremely good relations with him. But I am grateful to the noble Lord, Lord Lea, for making the point that this should be honoured. If there is evidence that it has not been honoured, it will obviously be a concern for responsible people in the TUC to see that it is. As I understand it, the noble Lord is saying that in no sense has it been repudiated or has the TUC withdrawn that undertaking. My point today is simply about the giving of that undertaking. I agree with the noble Lord that the observance of it and the checking as to whether it was being followed seem to have been pretty slack. It is helpful this has been brought to the attention of us all and I hope that it can now be followed through.
Lord Richard (Lab)
My Lords, I am grateful to the noble Lord, Lord King, for his history lesson but, with great respect to him, I do not think it very relevant or apposite in considering this amendment. I really do not know where the House is going to on this. The noble Lord, Lord Forsyth, says that he agrees with it but then complains about the way in which it was done. I think that the noble Lord, Lord King, agrees with it but because of something that happened in 1984 he is not very happy with it. The Conservative Members who were actually on the committee disagreed with it—understandably, perhaps—because their view, which they expressed vigorously on the committee, was not upheld by this House and has not been upheld by the House of Commons. There is a certain amount of dispute on both sides but this really is a sensible compromise.
As an old Fabian, when I looked at this amendment and the difficulties that it is designed to deal with, the phrase which came to my mind was that of Beatrice Webb. She talked about the inevitability of gradualness. It seems to me that once you have established the principle that opting in is right for new members, the “inevitability of gradualness” principle will take over and, in due course, you will have a comprehensive opt-in. I suspect that it will be much sooner than a lot of people think. This is a sensible compromise and, for heaven’s sake, let us accept it.
Lord King of Bridgwater
The point that has been left out is the second half of what the noble Lord, Lord Burns, said, which was about opting in for new members but attention to right and proper communication with existing members.
Lord Richard
That is in the amendment. Of course there should be proper respect. Trade unions are being placed under an obligation to tell their members once a year. What more does the noble Lord want?
Lord Mendelsohn (Lab)
My Lords, never has my appearance been so welcome. Government Amendments 7A to 7F mark significant movement from the original provisions in the Bill. I associate myself with the masterly summary, as presented by the noble Lord, Lord Burns, of how these amendments meet the requirements of the amendments passed in this House, and are consistent with the requirements of the manifesto but with the removal of the most egregious and deficient elements. These changes are a result of hard work carried out by the members of the Select Committee, led ably by the noble Lord, Lord Burns. The committee’s recommendations on opting in received cross-party support and support from the Benches of no party. I thank the Select Committee members and the noble Lord, Lord Burns, again for their efforts, which have contributed to the progress we see today.
The debates that we have had in this House on Second Reading, in Committee and on Report, as well as the establishment of the Select Committee and the debate on that committee, demonstrated the very wide agreement that these provisions needed some change. The Select Committee has achieved that job very capably. Indeed, both the debate today and its tone demonstrate how this House has done a great service to everyone in ensuring that these measures were brought forward.
I also note that a great majority in the House was in favour of such a provision. That is an important distinction in many debates that take place, but this one had such a broad consensus that it really was a full expression of the whole House. I thank the Ministers—the noble Baroness, Lady Neville-Rolfe, the noble Lord, Lord Bridges, the noble Earl, Lord Courtown, and Mr Boles in another place—for the way that they considered, engaged with and were very open to the discussion and debates that we had.
I have one particular observation in relation to the process. The Select Committee report was extremely impressive, and introduced elements which added to the debates of this House and another place. Indeed, it identified some of the deficiencies in the original impact assessment. In particular, the use of behavioural economics and behavioural psychology to try to understand what the likely consequences of such a provision would be was extremely useful. I hope that the Minister will consider using that sort of insight much more widely in impact assessments, so that we can properly judge what the consequences of measures are likely to be.
It will come as no surprise that we on these Benches thought the Bill should not have contained any of these measures in the first place. However, we recognise that the Government’s new proposals are a substantial improvement from where we were just a few weeks ago. We hope that the other issues raised by the Select Committee, including the issue around cross-party talks and party funding reform, are not ignored and are taken up swiftly, and that we can move beyond using democratic power for narrow party advantage, which usually comes with terrible unintended consequences, and build a stronger political system with greater participation and confidence.
Baroness Neville-Rolfe
My Lords, I recognise the emotions that this Motion has elicited, and that opinions are divided, but take the opportunity to thank noble Lords from all sides of the House for the support that they have given me personally. It is a pleasure, sitting on the Front Bench, that occasionally you get support from all sides, including today from disappointed friends such as my noble friend Lord Robathan. I hope we have found a balance that allows us to move forward, as we have managed elsewhere on this contentious Bill. In particular, I am glad that when an individual joins a union they will have to be made aware of any political fund and give their consent to paying into it. When we did our research, which we shared with the committee, we were shocked, as my noble friend Lord King said, at how untransparent some unions were on the possibility of opt-out.
The Bill has been amended to reflect the Select Committee’s recommendations on opting in. The amendment in this place was, as has been said, carried by a majority. My noble friend Lord Cormack mentioned this, but the majority against the Government was 148—320 to 172—so I would say in response to my noble friend Lord Forsyth that I was not very persuasive. Our manifesto undertook to ensure that trade unions use a transparent opt-in process for union subscriptions. My honourable friend Nick Boles made it clear in the other place last week that the revised provision meets that commitment. I have nothing to add to what he said about the suggestion that these final changes reflect wider considerations. As far as I am concerned, we are adopting the proposals of the Select Committee. We have listened to common sense, including the comments made by my noble friend Lord Forsyth in January about how the opt-out would be unfair to the Labour Party, and the current clause meets our manifesto commitment.
My noble friend Lord Leigh and, on the other Benches, the noble Lord, Lord Richard, emphasised the point about compromise. In future, all new trade union members will have to make a transparent and active choice to contribute to the political fund through an opt-in. Over time, with membership churn and evolution, opt-in will become the norm. On a point of detail, I acknowledge that the spirit of the Select Committee’s recommendation was to extend annual reminders to all members, and we have not gone as far as we might have done in that respect. The statutory requirement in the Bill extends to new members only, but I expect and hope that unions will communicate with all their members at the same time. I agree with the noble Lord, Lord Burns, that the best way forward is to provide guidance on best practice and to encourage unions to ensure that their annual communications on rights to opt in and opt out are sent to all members.
I am always glad to hear from my noble friend Lord King. He has helped me through some very difficult moments on the Bill. Of course, the King-Murray agreement is still in place for existing contributors to political funds, and the TUC has issued guidance to all unions. This should mean that all unions will remind those currently contributing to political funds that they have a choice about contributing to the union’s political fund. I do not know what the TUC reply would be, but the guidance about good practice proposed by the noble Lord, Lord Burns, should obviously help to address the issue.
I hope that noble Lords will recognise the co-operation we have had on the Bill across the House and how accommodating the Government have been in responding to the Select Committee’s recommendations on opt-in. I hope this will be remembered should future Governments turn their minds to matters of party-political funding.
The noble Lords, Lord Tyler and Lord Whitty, raised the wider issue of party-political funding. The Government have a separate manifesto commitment relating to such funding, and we remain open to constructive debate and dialogue on how we can further strengthen confidence in our democratic process and increase transparency and accountability. However, this Bill is about trade union reform, and party funding is not in scope. I must therefore return the debate to the issues of this Bill.
Wherever noble Lords stand on trade union reform, I hope that they will recognise that the principle of the Select Committee’s recommendations has been taken on board. We are nearly at the end of the Bill process and approaching the end of the parliamentary Session with a number of Bills still outstanding, and I hope the House will feel able to bring this particular issue to a conclusion today.
Lord Bridges of Headley
That this House do not insist on its Amendment 17, to which the Commons have disagreed, and do agree with the Commons in their Amendments 17A, 17B and 17C to the words restored to the Bill by that disagreement.
Commons Disagreement and Amendments to the words so restored to the Bill
The Commons disagree with Lords Amendment No. 17, but do propose Amendments 17A, 17B and 17C to the words so restored to the Bill—
“(1) After the end of the period of three years beginning with the day on which the first regulations under section 172A come into force, a Minister of the Crown may exercise the reserve powers (see subsection (2)) if the Minister considers it appropriate to do so having regard to—
(a) information published by employers in accordance with publication requirements;
(b) the cost to public funds of facility time in relation to each of those employers;
(c) the nature of the various undertakings carried on by those employers;
(d) any particular features of those undertakings that are relevant to the reasonableness of the amount of facility time;
(e) any other matters that the Minister thinks relevant.
(1A) The reserve powers may not be exercised so as to apply to any particular employer unless—
(a) a Minister of the Crown has given notice in writing to the employer—
(i) setting out the Minister’s concerns about the amount of facility time in the employer’s case, and
(ii) informing the employer that the Minister is considering exercising the reserve powers in relation to that employer;
(b) the employer has had a reasonable opportunity to respond to the notice under paragraph (a) and to take any action that may be appropriate in view of the concerns set out in it;
and the powers may not be exercised until after the end of the period of 12 months beginning with the day on which the notice under paragraph (a) was given.”
“( ) The regulations may confer power on a Minister of the Crown, by notice in writing to a particular employer, to suspend the application of the regulations to that employer for such period and to such extent as the Minister may specify in the notice.”
The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con)
My Lords, there has been much debate over the Government’s wish to have a reserve power to place a cap on facility time. The Government have listened to that debate and, as I said last week, the amendments before your Lordships today reflect a number of points made in this House.
First, the amendments set out that the cap will not be exercised until three years have elapsed after transparency regulations come into force. Secondly, they ensure that, where there is cause for concern about levels of facility time, public sector employers will be put on notice and given at least a year from the date of such notice to make progress before a cap can be applied. Thirdly, they guarantee that the employer will have the opportunity to set out the reasons for their levels of facility time. Fourthly, they set out clear criteria that the Minister must have regard to when considering the exercise of the power. Fifthly, they provide employers with an opportunity to take action to meet the Minister’s concerns and to evidence it via their data. If there is insufficient progress, the Minister will then be at liberty to exercise the reserve power and make regulations to cap facility time for that employer or those employers.
These safeguards provide a high degree of comfort about the circumstances that must arise before the reserve power could be contemplated. They underline that this is very much a reserve power to be used in exceptional circumstances—only where valid concerns have been raised and inadequately addressed over a long period. I remind your Lordships that this measure would be exercised under the affirmative procedure.
I urge your Lordships to see these amendments as a reasonable, practical and balanced means of addressing concerns while enabling the Government to meet their objective. I beg to move.
Lord Kerslake
My Lords, I first declare my interest as president of the Local Government Association. Your Lordships will be aware that I moved an amendment to delete Clause 13 from the Bill. I did so because I was concerned about the extensive powers it gave to the Secretary of State for what, as far as I could see, was little justification. That is why I argued that this provision is necessary: so that the transparency provisions of Clause 12 will control expenditure and make visible the amount that public bodies spend.
My sense is still that there is no convincing case for why the clause is needed, but I acknowledge the considerable distance the Government have gone by introducing safeguards that will protect public bodies from arbitrary power in this situation. I absolutely welcome that movement, which reflects well on the Government and Ministers.
I hope that this is a reserve power that we never see used. I hope that the rational decisions of public bodies and the process that will now be put in place will ensure that we never need to impose this reserve power. I recognise that there are now proper safeguards, and I welcome that change.
Lord Stoneham of Droxford
I want to make just one brief point. We, too, welcome the amendment and the compromise which the Government are showing. However, having got rid of quite a lot of the powers, we are still left with a hell of a lot of bureaucracy—for no good purpose, as the noble Lord, Lord Kerslake, was suggesting. It is now a very complicated procedure and one wonders whether this will disappear into the long grass and be quietly forgotten. It would have been much better to have a one-off review to see what the problem is and deal with it through the management of the public sector, rather than setting up this ridiculous bureaucracy for no good purpose.
Baroness Hayter of Kentish Town (Lab)
My Lords, I thank the Minister for his clarity and brevity—after the previous debate—in introducing the amendment. I also thank him for taking the time to meet me and colleagues to discuss the possible introduction of a cap on facility time. He knows that we have serious concerns, which we retain, about the principle, and that we have even greater concerns about how it might work. How and when would a Minister decide that the amount of time taken needed to be restricted, and on what grounds? Would it be contrary to the desire of the relevant employer?
We raised the example of organisations going through contraction, restructuring, relocation or even growth, where more negotiating time with union reps is always needed. There is also the example of industries with particular safety issues or health issues—we discussed the health service—where safety reps might be needed more than average, thereby pushing up the overall amount of facility time recorded.
On the phrase,
“any other matters that the Minister thinks relevant”,
it would be helpful to hear from the Minister what sort of things he deems might be relevant. However, that is the only remaining issue, because the others we raised have been met by the safeguards he has just listed. They will spell out that particular instances can be given and that the employer will have time to give reasons.
The remaining issue is therefore one we discussed under the previous clause: whether charities might be caught by this provision. I acknowledge the discussions we have had and those that will now take place with the organisations likely to be affected, including with representatives of charities. We also recognise that we will be able to debate this further when the relevant regulations are brought forward.
These amendments show that the Government have clearly heard our original concerns. They have produced a schema which allows the relevant comparative data to be used and judged alongside similar industries and organisations, and which allows time for consultation with the employer, giving them the opportunity to explain the management practice that requires so much union reps’ time to do their work. We still concur with the view of the noble Lord, Lord Kerslake, that this is an unnecessary measure and would prefer the cap to be dead and buried. However, having recognised that we were not going to win that one, we acknowledge the change that the amendments have made and are happy to support them.
Lord Bridges of Headley
I thank the noble Baroness, the noble Lord, Lord Kerslake, and the noble Lord, Lord Stoneham, for their comments. Where there was discord, we have brought a bit more harmony, at least, on this point. There is clearly disagreement on the need for such a measure, but I would argue that that is precisely why we need the data. What the data will show will determine whether the reserve power needs to be exercised in exceptional circumstances. I very much hope that the assurances I have given today address a number of the concerns expressed by the noble Lord, Lord Kerslake, and others.
On the point made by the noble Lord, Lord Stoneham, about bureaucracy, I simply repeat that a considerable section of the public sector already considers publishing information on facility time to be best practice. I highlighted what is published in the local government transparency code and what the Department for Education recommends that all schools publish. His point about bureaucracy—ensuring that it is kept to a minimum—is of course one that every Government wish to heed.
The noble Baroness, Lady Hayter, raised the question of other issues that are deemed to be relevant. In essence, they must be relevant without being capable of being specified now, because that will be set out in the evidence given when the Government bring in regulations—which, as I said, would be debated by both Houses of Parliament.
With that, I am once again grateful to the noble Baroness, Lady Hayter, and the noble Lord, Lord Mendelsohn, for their constructive comments and the conversations we have had. I beg to move.
Lord Dykes (Non-Afl)
Before the Minister sits down, I intervene briefly to repeat the thanks already expressed by other Peers in the debate on these amendments today and on the previous occasion when the Bill was being considered. We give our thanks to the Government, to the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Bridges, particularly for their very helpful adjustments and changes in response to the earlier debates. It was an outstanding example of how the House of Lords can be genuinely useful to the British public in improving controversial legislation. We are grateful for that progress.
Baroness Neville-Rolfe
My Lords, last week at Third Reading I thanked at some length all those who have worked so hard and debated so eloquently throughout the passage of this Bill. I am glad to be able to thank today my noble friend Lord Bridges, and the noble Lords, Lord Mendelsohn and Lord Burns, as they are actually in the Chamber. It has been a small marathon of a Bill and I am delighted that it can now go forward for Royal Assent.
Southern Health NHS Foundation Trust
(8 years ago)
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The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)
My Lords, with permission I shall repeat as a Statement the Answer given to an Urgent Question in another place by my right honourable friend the Minister of State for Community and Social Care on Southern Health NHS Foundation Trust. The Statement is as follows:
“The whole House was profoundly shocked by the Mazars report into the failings at Southern Health NHS Foundation Trust following the tragic death of Connor Sparrowhawk in July 2013. The first duty to patients and their loved ones is to keep them safe. This applies to all of us with a role to play in the NHS, from the front line to this House; and the Government are therefore clear that we must learn the lessons of this report for the NHS as a whole. We must ensure that the trust itself continues to be scrutinised and supported to make rapid improvements in care. If that means intervention from the regulators, they will not hesitate to take the necessary action, and we will not hesitate to back them.
Last week’s CQC report followed a focused inspection announced by the Secretary of State in December 2015. The report from the CQC set out a number of concerns, including: a lack of robust governance arrangements to investigate incidents; a lack of effective arrangements to identify, record or respond to concerns about patient safety; and a need for immediate action to address safety issues in the trust environment. The report also found that the senior management and board agendas were not driven by the need to address these issues.
I would like to set out for the House the action that NHS Improvement has taken in recent months to address the issues at the trust. NHS Improvement has been working closely with the CQC and the trust over recent months. On 24 March, NHS Improvement, which was operating as Monitor at the time, appointed an improvement director to the trust. On 14 April, following a CQC warning notice on 6 April, NHSI placed an additional condition on the trust’s licence, asking it to make urgent patient safety improvements to address the issues found by the CQC. This condition gave NHS Improvement the power to make management changes at the trust if it does not make progress on fixing the concerns raised.
On 29 April, following the resignation of the trust chair, Mike Petter, NHS Improvement announced its intention to appoint Tim Smart as the chair of the trust. As chair, Mr Smart will have responsibility for looking at the adequacy of the trust’s leadership. Given the centrality of issues of governance to the CQC’s report, I welcome the action taken by NHS Improvement. The direct appointment of a new chair by a regulator is a relatively rare step, and reflects the seriousness of the issues at the trust.
NHS Improvement will continue to monitor the situation closely in the coming weeks and months. I understand that the CQC is considering the trust’s response to its warning notice and the risks it highlighted before deciding whether to take any further enforcement action. The notice required significant improvements by 27 April. NHS Improvement is working closely with CQC and the trust, and there are monthly progress meetings between NHS Improvement and the trust.
In addition to the action we are taking on Southern Health, it is vital that we learn the wider lessons for the NHS as a whole. First, I hope the whole House can agree that it is right that we have robust, expert-led inspection from an independent CQC that provides an objective view about issues of safety and leadership, and that this is backed with action from NHS Improvement when that is required. Only by facing problems in care can we hope to solve them.
Secondly, it is vital that we ensure that we take the issue of avoidable mortality as seriously for people with learning disabilities and mental health problems as we do for other members of our society. To that end, the learning disability mortality review programme has been put in place by NHS England to ensure there is a continual cycle of learning about the causes of premature mortality in people with learning disability. In addition, the CQC will be leading a review of how all deaths are investigated, including those of people with learning disabilities or mental health needs. There can be no question that the CQC report makes for disturbing reading, and that it demands action at local and national levels. We owe our most vulnerable people care that is safe and secure, and I am determined that we do all we can to learn the lessons and make the necessary improvements in the weeks and months to come”.
My Lords, that concludes the Statement.
Baroness Wheeler (Lab)
My Lords, I thank the Minister for reading the response to the UQ on the CQC’s serious concerns about the safety of mental health and learning disability patients at Southern Health Trust. The whole House is deeply shocked by the inadequate and completely ineffective response to the Mazars review’s findings, following the tragic death of Connor Sparrowhawk over two years ago. The CQC’s stark assessment that serious risk to patients in ensuring their safety was still not driving the senior management or board agenda beggars belief in the light of the Mazars review and the CQC’s repeated concerns and warning notices. There are still no robust governance arrangements in place to investigate incidents and there is still a lack of effective arrangements to identify, record or respond to concerns about patient safety raised by patients, their carers, staff and the CQC. A particular concern is the continuing failure to act over important specific safety concerns about ligature risks in acute inpatient mental health and learning disabilities services and, given the terrible cause of Connor’s death, the board’s failure to give urgency to approval of the specific protocol for safe bathing and showering of people with epilepsy. Can the Minister assure the House that these will receive urgent attention by the new chair in his task of building new leadership and direction for the board and in an urgent programme of action for the trust?
Patients and their families need to see robust, urgent action and real accountability. When the Secretary of State responded to December’s UQ on Southern Health, he rightly said that, more than anything, people will,
“want to know that the NHS learns from … tragedies”,—[Official Report, Commons, 10/12/15; col. 1141.]
such as these. That clearly has not happened, so I ask the Minister what guarantees he can give to current patients and their families in the care of Southern Health that they are safe. Where is the accountability, culpability and responsibility? Can the Minister tell the House about the content and timescale of the review of the adequacies of the trust’s leadership that the new chair has been tasked with undertaking? Finally, will he listen to the heartfelt pleas of victims’ families, campaigners and all those who are demanding a full public inquiry into Southern Health and into the broader failure in adequately investigating preventable deaths?
Baroness Tyler of Enfield (LD)
My Lords, I, too, thank the Minister for repeating the Statement. The original Mazars report highlighted two profoundly shocking issues: the tragic and preventable death of Connor Sparrowhawk and the fact that too many unexpected deaths among those of learning disabilities and older people with mental health problems were even being investigated. Why did a full three months elapse after the Mazars report was published—and, indeed, only after a BBC investigation covered it—before Monitor finally appointed an improvement director to go in to work with the trust on urgently needed improvement? Why the delay?
Secondly, despite a series of national reports—we have just heard about the CQC report—warning notices, monitoring and progress meetings, all referred to in the Statement, nothing has been said about the precise changes that have happened or improvements that have taken place in Southern Health Trust. When can we hope to hear about specific and tangible improvements to the care provided by Southern Health Trust to some very vulnerable people?
Thirdly, it is crystal clear that new leadership needs to be in place if the trust is to retain any credibility, particularly among the people and families who use its services. Why have there been different responses to Mid Staffs and Southern Health? Both are about the neglect and death of vulnerable people in NHS care. There have been serious consequences for those in leadership positions in Mid Staffs, but not so at Southern Health. What does that say about the value placed on the lives of people with learning disabilities and older people with mental health problems?
Lord Prior of Brampton
My Lords, a number of serious questions have been asked. I shall make a personal observation. This trust is the result of the merger of three trusts: a mental health care trust, a community trust and a learning disabilities trust, three very complex businesses being brought together as one. They have 250 separate locations with over 1 million patient contacts every year. The risk inherent in that kind of business at this time is huge. In putting in a governance structure, we have to be very careful that we do not just draw up such structures in a boardroom or come up with strategies that cannot be implemented.
In the report, I was very struck by the fact that now there is almost a tick-box approach to the duty of candour; you tick the box to say that you have done it. Culture is usually important in this. What is the culture in the trust? That is one of the big issues that the CQC report is trying to get at. In response to the question of whether we can give guarantees about patient safety: this is inherently a very risky activity. Putting in strong governance structures is very important, but much will depend on the culture within the trust.
I turn to some of the particular points. I, too, was struck by the fact that there were still problems with ligature points in some of the facilities, as had been pointed out by the CQC some time ago. I was struck by the fact that the epilepsy protocol for those being bathed or showered had not yet been approved two and half years after Connor Sparrowhawk’s death. Clearly, there were very significant problems at the trust. On the question of where accountability and responsibility lie, the chairman has resigned. The principal job over the next three or so months will be assessing the capability of the executive management. That seems the right way to approach this.
It is always tempting to call for a public inquiry; I understand that temptation. We have an independent regulator, the CQC. The inspection team was led by mental health professionals and is fully transparent. We now have to give the trust the chance to respond to the CQC’s report and watch for serious improvements.
The noble Baroness asks if there have been any improvements. There are some illustrations and examples in the CQC report of where there have been some improvements, but putting in a new governance structure, changing the whole culture about raising concerns about those kinds of issues, will not happen overnight. Of course, I appreciate that for Connor Sparrowhawk’s family this happened two and a half years ago, and one must never lose sight of that.
A question was asked about NHS Improvement. It put in an improvement director. These people do not grow on trees. If we are honest about the NHS, we are very short of highly qualified and highly skilled senior management, and it sometimes takes time to find the right people.
Baroness Bottomley of Nettlestone (Con)
My Lords, the history of people with learning disabilities and mental health problems and the institutions in which they live goes back a long way. Many appalling situations have taken place, and I do not want to belittle this deplorable situation. However, did the report also identify areas of very good-quality care and professional standards? The danger is that vilifying an institution—and even going on to a public inquiry, which prolongs the agony even further—does not give it the opportunity to build on its strengths and provide the quality of care that the hundreds of people working there wish to provide and wish to be proud of doing.
Lord Prior of Brampton
I am grateful to my noble friend for those comments. There are many examples in the CQC report of good care. In one of the domains that the CQC inspects, which is caring, it is clear that the vast majority of people who work for Southern Health are deeply caring, committed people. We have to be careful. I am afraid it is a question of the curate’s egg; the report is good in parts. I go back to what I said originally: an organisation this big is incredibly difficult to manage. That is one of the learnings that we need to take from this. The temptation to merge organisations to get centralised cost reduction, or whatever, is very tempting but leads to serious issues around governance.
Baroness Masham of Ilton (CB)
My Lords, where does Healthwatch come in? Should there not be far more openness and participation by the public to stop such things from happening? It is all very well having management, but one wants caring people from the community who will speak out on behalf of these people.
Lord Prior of Brampton
My Lords, this goes back to the culture of the trust. It is important that members of the public or Healthwatch have a right to go in and visit facilities, and that they are welcomed there, but that they do not go native at the same time—that they are truly independent, looking at it from the patients’ perspective. Healthwatch has an important part to play, and the relationship that it has locally with the CQC inspection team is very important.
Lord Foulkes of Cumnock (Lab)
My Lords, I am slightly perplexed. Why is it that, once again, it is only because an Urgent Question was tabled and agreed by the Speaker that Parliament knows all the details and is able to hold the Government to account? If, as the Minister says, the Government are so concerned about it, why did they not volunteer a Statement?
Lord Prior of Brampton
My Lords, the CQC report is in the public domain, as are all the CQC reports. To be honest with your Lordships, I am not technically sufficiently aware of the procedures of the House to know why it did not automatically come to the House but, as I say, I am here today.
Black and Minority Ethnic People: Workplace Issues
Baroness Neville-Rolfe
That this House takes note of the issues faced by black and minority ethnic people in the workplace in Britain.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)
My Lords, the driver for this debate is that earlier this year the Secretary of State asked my noble friend Lady McGregor-Smith to lead a review into the issues faced by business in developing black and minority talent from recruitment through to the executive level. We will be hearing from my noble friend shortly, and I know how much she will value noble Lords’ input into her review.
We need to move towards a world where ethnicity and indeed gender are not issues and only skills and experience count when it comes to assessing suitability for appointments. We are not there yet and there is much to do, but I believe that we have made progress. Consider my Secretary of State: the son of a bus driver in Rochdale and then living in a deprived part of Bristol, he rose through hard work to become a vice-president at Chase Manhattan at the age of 25 and the first BME Cabinet Minister at the age of 44.
My noble friend Lady McGregor-Smith herself is another extraordinary role model, the only Asian and female CEO of a £2 billion FTSE 250 company. She has championed change in the workplace by making the best use of female and ethnic minority talent. She has done that through her generous public contribution as a role model, first as chair to the Women’s Business Council and now as chair of the new BME talent review. Having a debate to gain insights into the issues she is addressing in this review, with secretarial support from BIS, at this early stage in her work is an excellent one. The review is looking at the business and economic case for employers to harness the potential from the widest pool of talent. I believe that we need to reach a situation where the prospects for BME individuals who want to progress at work are as good as those for their white counterparts in the same situation—neither better nor worse.
My noble friend’s review will look at obstacles to progress, including cultural and unconscious factors. I would like to make a small diversion to tell a story about how culture and attitudes can change for the better over time.
Richard Stokes MC was a brave and talented engineer who became a managing director of Ransomes & Rapier, the Ipswich engineering firm, at the age of 30. He tried to join the Conservative Party to fulfil his political aspirations, but it would not consider him as a candidate because he was a Roman Catholic. Wounded but not bowed, he joined the Labour Party instead and became MP for Ipswich, where the votes of his 2,500 employees were very useful in keeping his seat. He had a successful career, running the firm part-time and campaigning on important issues such as the inadequacy of Allied tank design; the justification—or lack of it—for the bombing of Dresden; and the ghastly forced repatriation of Yugoslavs after Yalta. He even served briefly in the Cabinet as Lord Privy Seal, before an early death. That man was my great-uncle, Uncle Dick. But the important point of the story for today’s purposes is that discrimination against Catholics, which he suffered from so acutely—in his case in the Conservative Party—has totally gone. A similar change in attitudes to BME is taking place, and that will continue.
There is evidence to that effect. I quote from the House of Lords Library Note of 29 April, produced for this very debate. It notes that the employment rate gap between the overall population and ethnic minorities is still at 11.1 percentage points. It goes on to add, significantly, that the gap has been decreasing, albeit gradually, since the series began in 1993. I believe that that accurately summarises where we are—moving in the right direction but still with a way to go.
Looking at our own House, it is a great pleasure to see my noble friends Lord Popat, Lord Sheikh and Lord Polak in their places today, each with a long history of serving business and their communities—they are role models for us all. The noble Lord, Lord Taylor, has also had a career full of challenging and high-profile roles. I am also delighted to see the noble Lord, Lord Adebowale, in his place today—he has campaigned tirelessly to improve the life chances of the homeless and unemployed—as well as the noble Baroness, Lady Hussein-Ece, who is a role model in community health. Moreover, no debate on the subject would be complete without the noble Lord, Lord Morris of Handsworth, whose passion for cricket I share. I also see the noble Lord, Lord Bilimoria, in his place; he and I used to work together on the UK India Business Council. Our debate today shows that ethnic minority talent is there for all to see on all sides of this House.
The review will also look at data and their role. I am opposed to quotas but I know that when the industry-led review by the noble Lord, Lord Davies, started to collect data and articulate good practice, it changed attitudes in companies. At Tesco, where I sat on the plc board as an executive, we used to monitor our top female talent and look out for opportunities to advance them. We also identified top talent of non-British origin. For us as an international company, it was important that we reflected, and were seen to reflect, the diversity of our operations. In an international company, a diverse board inspires a greater degree of solidarity within the company and a sense of fair play. One of my sons works for a French bank in the City of London, and I can tell noble Lords that that illustrates globalisation in action.
Another strand to the review’s work is promoting best practice. Sharing ideas is a great way to secure results and promote innovation, as we have seen with the Business in the Community Race Equality Awards. This year is the 10th round of annual awards, and some of the previous winners have truly inspiring stories.
Another important feature of best practice is understanding what does not work, which certainly leads to improvement. I know that my noble friend will be interested to hear of any examples that have not had the desired effect or, even worse, have hampered opportunities for ethnic minorities. As we know, the key to understanding what works and what does not is to monitor the impact of that activity and ensure buy-in from all levels of the business—something I know my noble friend is driving in her own company.
BME entrepreneurs can be rich sources of growth and of British success. In a recent debate in the other place, the Culture Minister Ed Vaizey spoke with great passion about the changes taking place in broadcasting and the opportunities it brings. This will no doubt be reflected in the BBC charter White Paper, which is due later this month.
However, for success we need better education and better training outcomes in this country. That is the best way of achieving opportunities for all. Quality apprenticeship schemes are an absolute priority for the Government. They will give us an opportunity for employer-led development and a route to success for people who do not want to go to university or who have not done well enough at school.
Improving our schools by a relentless focus especially on English and Maths means that all pupils, regardless of their background, are engaged and challenged to make the best use of their abilities. I was therefore glad to read that, for example, 81% of black African pupils achieved the expected level of attainment in reading, writing and maths at key stage 2, which is slightly above the national average of 80%.
Another important strand of the Government’s work is to encourage integration so that communities are brought together, celebrating our shared British values rather than focusing on what divides us. Work led by DCLG on cohesive communities is important. Louise Casey was asked to carry out a review of how to boost opportunity and integration in these communities, and that includes how we can ensure that people learn English. This is vital. In England and Wales, over 750,000 people have only poor or even no English. Unsurprisingly, migrants with fluent English are much more likely to be in employment and earn 20% more than those without such skills. Poor English appears to be a particular problem in Muslim communities. In 2011, 22% of Muslim women in England spoke poor or no English, compared with 2% of the overall female population.
Finally, fair recruitment matters, so that people do not feel discriminated against when they apply for a job. The announcement by the Prime Minister last October regarding the adoption of name-blind recruitment by a number of public and private sector employers is an important step in ensuring that this fairness exists and is seen to exist. Organisations such as HSBC, Deloitte, Virgin Money and KPMG, which are responsible for employing a combined 1.8 million people in the UK, joined public sector employers to show their commitment to fair recruitment.
This is an important debate and I look forward to learning a great deal from the experience and expertise of those assembled here this evening.
Baroness Howells of St Davids (Lab)
My Lords, I put on record my thanks to the Minister for raising this debate and for the eloquent way in which she set out her arguments. It affords me the opportunity to quote the words of Edmund Burke, who said:
“It is necessary only for the good man to do nothing for evil to triumph”.
There remain alive in this country today a number of African-Caribbean persons who can still recall a time in this nation when the Aryan myth of white superiority was displayed on the streets of Britain and when those whose skins are black, who were invited to this country to repair the ravages of the last two World Wars, were abused, insulted and treated less favourably by the bigots of this nation. Such bigotry was alien to these who endured it, even when the home of a well-known GP, David Pitt—who later became a Member of your Lordships’ House as Lord Pitt of Hampstead—was burned down. Lord Constantine was also abused by some, even though he was admired for his cricketing prowess.
Most of those people were willing to keep their heads down but others saw that the insults could not be tolerated when English men and women took to the streets to show how passionately they felt, feeding fears that this country would be taken over by immigrants. However, the mighty words of Edmund Burke came to the fore and steps were taken to counter the sad state of affairs that we were living through. I arrived in Britain in 1951 as a student and I saw immigration. Good men and women such as Lord Brockway took charge and lobbied against those voices, including even that of an MP, Enoch Powell, who talked of “rivers of blood”. Black people did something: they stood up and confronted the intolerance of this nation.
Progress has been made. Under Harold Wilson came the first Race Relations Act in 1965. Further Acts were introduced in 1968, 1976 and 2000. These Acts of Parliament had a major impact on overt racism. The Commission for Racial Equality was there to advise people on how best to take advantage of the legislation when they were confronted by such racism. It was surprising for many of us working in the field to find later that we had to deal with covert racism in a country which considered itself Christian and civilised.
The Equality and Human Rights Commission was set up, bringing together women, the disabled, people of different races, and gays and lesbians. The Commission for Racial Equality was wiped out completely and all the other institutions which were of help to those seeking justice quickly disappeared. It was felt that there was no need for such organisations. In some ways it is true that racial bigotry had been unlearned by some but, where it persists in the workplace, black employees talk among friends about their scars. According to an article in the Independent, engagement and progression by black people in the workforce have deteriorated over the last decade, despite evidence showing that black young people born in this country outperform white students.
The noble Baroness mentioned the awards that have been made. Omar Khan, director of the Runnymede Trust, says that it is time we stopped telling young people from different ethnic backgrounds that all they need to do is get better qualifications and integrate more and all will be fine Sadly, that is not true. The evidence shows that this generation does not have a problem with attitude or with bad grades, but it does have to deal with discrimination on grounds of race. I ask the Minister: what else explains the poor deals that these people get in the workplace?
I will refrain from relating stories that I hear daily and list a few things that happen in the workplace: bullying, which appears to be all about egos; lack of promotion, even though people from ethnic backgrounds are expected to train others who then overtake them because of the colour of their skin; and victimisation, where people are told, “You only got the job because you are black”.
I end by asking the Minister to consider very carefully what she hears today and to play her part, working with the black community to end the bigotry of the Aryan myth of white superiority, known as racism, in the world. All men are equal in the sight of the Creator and deserve better.
Baroness McGregor-Smith (Con)
My Lords, I thank my noble friend Lady Neville-Rolfe for introducing this important debate and for providing me with the opportunity to speak today.
When I was appointed chief executive of Mitie nine years ago, and thus became the first Asian FTSE chief executive, I did not really want to talk about gender or race. I had not even realised that there was anything special about my position. I had not realised that there was anything special about being female, being Asian, being from a Muslim family and looking quite different. More than anything, I just wanted to fit in and to be recognised for my talents. Having started with those intentions, I then began to think about how much these issues really mattered.
Since then, I have chaired the Women’s Business Council and am now hugely honoured to lead an independent review of the obstacles faced by BME individuals in progressing through the labour market. That is quite a departure from how I felt a few years ago, and the reason is that I was mistaken. I imagined a world where it was not news that I was Asian and leading a FTSE 350 company, but, sadly and unfortunately, it is. I imagined a world where only skills and experience were discussed, not ethnicity, gender or any challenges regarding diversity. I guess that I imagined a world that is still a long way off. But at least I think that we now know what success can really look like. I am thinking of a world that moves far beyond identities, with no more talk about quotas and targets, to a position where we start to talk about what people do with their talents. I hope that everyone—male or female, black or white—will one day have access to some of the same schools, the same professions and, more importantly, the same opportunities as everybody else. We are not anywhere near that place yet, but I am honoured to chair this review and to draw on my own experience to help bring about the changes that we need. The challenges that we face are significant.
The latest ONS statistics show that, at 62.7%, the BME employment rate is 13 points below the white employment rate. It is lower still when you look specifically at the Pakistani or Bangladeshi populations. Worse still, the biggest discrepancies exist in youth unemployment. White unemployment among 16 to 24 years-olds is 13%. Asian youth unemployment is 24% and black youth unemployment is higher still, at 27.5%.
As my experience has taught me, getting people into the workplace is not enough. We have to make sure that anyone of any background with the right skills can get into top management positions in business in the public sector. Currently, one in 10 employed people comes from a BME background but only one in 16 fills a top management position. We need to find out why these numbers do not match. We need to find out what the barriers are and break them down. There is very little BME representation at a senior level in business or in any public sector organisation today, and I do not think that that is acceptable.
For me, this is not just about opportunity for individuals; it is about a productivity dividend that will pay out for the whole UK economy. Ethnically diverse companies are higher performing. A 2015 McKinsey study found that firms in the top quartile for diversity were 35% more likely to outperform those in the bottom quartile. More diverse companies are able to win top talent, improve understanding of customers and increase employee satisfaction, all of which lead to increased returns. So whether any of us are interested in social justice and equality of opportunity, economic growth in the UK or just plain old profitability, this debate is seminal. The review that I am leading will look specifically at what employers can do to help and what issues they currently face in developing BME talent.
First, we need to build further the business case for change, asking what benefits the public and private sectors get from accessing the widest pool of talent available. Secondly, we need to be really clear about the obstacles that BME groups can face as they progress through the labour market. Thirdly, we need to ask what impact these obstacles have—why educational attainment does not always match up to executive positions. Fourthly, we need to bring together existing data to illustrate the scale of the issue, and to look at them in more depth. Are things different for different ethnicities, and how much is about economic circumstance as well as where you are from?
Fifthly, we need to look at best practice. Certainly I plan to draw on some of my own experience and that of others to highlight what works—there are some great examples of what can work—and encourage others to do the same. Here, we also need to consider how to replicate the success that many large, well-resourced companies have had in this area and spread this success to our SMEs. At Mitie, for example, we are starting to introduce aspirational, five-year diversity targets for all our businesses across the group. Personally I have been a fan of aspirational targets, as I think that they help to drive change. I am not a fan of quotas. I think that resorting to quotas says that we have failed. Instead, we have to take the actions that we need to take before getting to the challenge of quotas. Lastly, and most importantly, we need to make cost-effective recommendations to advance BME progression in the labour market.
I reassure noble Lords that the talent is out there—this is not just affirmative action—but we just need to go out and meet that talent in the middle. We need careers advisers to open doors to all the professions, and we need mentors to show BME employees that they can climb as high as they want. We need role models who look and feel like BME individuals to help inspire our young people, and we need to deal with the challenges of unconscious bias, which is a huge issue for all organisations.
The individuals whom I have worked for in organisations have always supported and mentored me. They believed in me and encouraged me to get to the top, telling me that I could do so. More and more, people at the top of their organisations need to do the same and understand that that is their role. They have to find the next generation of leaders and take this on as a real personal responsibility. I think that we are moving in the right direction. BME employment is the highest since records began 15 years ago, and we can narrow and close the gap on the challenges that we have. We can reach a world where we talk about our leaders not as black or white but with regard to what they are actually qualified in.
I will finish by referencing what Idris Elba said when he came recently to Parliament. He talked about diversity, specifically diversity of thought, and a casting director called Nina Gold who discovered John Boyega, a British African from Peckham. He said:
“Since when did the lead character in Star Wars come from Peckham? Since a woman with imagination became the casting director”.
I hope that in this place, in this debate, and indeed through my recommendations which will be published later this year, we can inspire everyone to show similar imagination and help Britain reap the benefits of all of its people.
Lord Adebowale (CB)
My Lords, it is a great pleasure to speak in this debate. I congratulate the Minister on calling the debate, and indeed the noble Baroness, Lady McGregor-Smith, on leading the review. I do not think that I have had the chance to welcome her to the House, so I say hello and welcome.
I want to say a few things. As we all know, the UK is a diverse and multicultural society, despite the grumblings of my good friend Trevor Phillips, who imagines that multiculturalism is a bit like putting milk in coffee and that you can un-mix it. It is what it is, and we need to start there. I am a non-executive at NHS England and the chief executive of a care organisation—one of very few of reasonable size. The great noble Baroness, Lady McGregor-Smith, is a notable business woman with a stellar track record, and there are many Members of this House whose track record is admirable by any standard. But one must consider that these are the exceptions that prove the rule.
It is important that we understand something. In the Minister’s opening address, she made the point that hard work and ambition should be the ticket to success. That needs to be corrected, in my view. I know many, many talented, hard-working BME community members whose dreams and careers have been thwarted by nothing less than racism. We have to face that head on. Given the statistics quoted by both the noble Baroness, Lady McGregor-Smith, and the noble Baroness, Lady Neville-Rolfe, I do not think that we can simply say to a number of our communities that hard work and ambition will get you there. It will not. The exceptions that prove the rule make that point admirably. We have to address the unfairness in the system.
Let us start with the title of this debate: to take note of the issues faced by black and minority ethnic people in the workplace. As has been pointed out, there are many members of black and minority ethnic communities who would love to experience the workplace but who have been discriminated against, which has led them to not be in the workplace. I must add that they are then victims of, in my view, a pretty cruel welfare system which considers that poverty in itself is an incentive. They are disproportionately represented in virtually every misery statistic that I have worked with over a 30-year career in public services: in homelessness, among children in care and in the criminal justice system. They are not overrepresented in the senior echelons of public, private or not-for-profit service delivery. That is unacceptable.
The Prime Minister’s pledge to increase the BME employment rate by 20% as part of the Government’s BME vision is welcome—but I have to say right now that that is going to be a challenge. Mr Cameron stated:
“For too many people, even a good education isn’t enough. There are other barriers that stand in their way”.
I wish he had just said “racism”. He said:
“Do you know that in our country today, even if they have exactly the same qualifications, people with white-sounding names are nearly twice as likely to get callbacks for jobs than people with ethnic-sounding names?”.
There can be only silence at that, because where I come from, the response to the speech was, “No ****, Sherlock”. The fact is that we have known about this challenge for many years. Successive Governments have known about this challenge for many years, as they have known about the disproportionality in employment rates between young BME people and their white counterparts.
This debate has a sense of urgency underpinning it because the demographics are not in our favour. If you look at the fastest-growing population in most of our major conurbations, you will see that they are people who look like me, the noble Baroness, Lady McGregor-Smith, and others in this House. This is not a challenge for BME groups. It is not a matter of morality, even—you do not have to care about any of this. This is a matter of economic survival and the sustainability of the country. We need to break barriers. The barrier to getting a job is challenge enough: 40% of jobs are not advertised. It is about “the network”; it is about who you know and how you know them; it is about access to the choice experiences that might get you into our media, our judiciary and our politics. It is all word of mouth. If you are in the network, you are in; if you are not, you are not. And although there are exceptions that prove the rule when these networks have worked for BME groups, the generality is that the opposite is the case. That is why we are having the debate.
I want to move to an age where there is no debate; where I can say that I am a black leader and it will be seen not as a political statement but a fact. We need to break down significant barriers. The recruitment process itself, where staff hire in their own image, limits people from BME communities entering the workforce in the first place. While there have been improvements, the statistics speak for themselves and they are not good enough. Sir Lenny Henry has commented on this in relation to the arts, both in administration behind the cameras and in front of the cameras. Look at the administrators and performers in the classical arts. The lack of BME representation is shameful. The work being done around women on boards is laudable. But the question I often ask myself is: which women? Where public money is concerned, there are questions that need to be asked of leaders, whether they be black or white, as to how they are managing the use of my tax money in making decisions as to who should lead the public services that we pay for.
The second barrier is lack of progression. After getting a job, being promoted within it is a major challenge. My experience as a board member of NHS England led me to help set up the workforce race equality strategy. As a result of information brought to the attention of the NHS by Yvonne Coghill, we now know that there is a direct correlation between BME leadership of hospitals and care organisations and the quality of care on the ground. Much work needs to be done. It was a real struggle setting up the workforce race equality strategy, because there was a lot of resistance. It was seen as a political intervention rather than one of good management and leadership.
I will end by making three requests. Although I welcome the review—it is long overdue and I hope that it receives cross-party support and engagement—there are three things that we need to do if we are to take this seriously. The first is that we should set up a structured way of observing government expenditure and intervention across departments and their influence. We must ask whether we are spending government money and using government leadership appropriately to lead the way. We should look at some of the initiatives that are currently out there and ask them to support such a cross-government observatory.
Secondly, the Government in setting up and holding inspectorates to account should require those inspectorates to ask simple questions. This is not about quotas and it is not about setting targets—although the notion of targets within businesses is to be welcomed. This is about asking leaders of public, private and not-for-profit organisations, particularly where they receive government funding, “What are you doing in this area?”. Where there are departments—and there are departments and institutions funded by government or receiving large amounts of money through tenders to government departments—which have never had a BME leader, the question should be asked as to why. There have been black people in this country since Roman times. We need a good answer.
So the future of this country lies in the things that we have not discussed. We have not discussed race enough and we have not been serious enough about the things that we need to do to provide a truly equitable society, a truly prosperous country and true economic prosperity for us all.
Baroness Bottomley of Nettlestone (Con)
My Lords, I applaud my noble friend for introducing this debate and, even more greatly perhaps, my other noble friend for agreeing to chair this vital taskforce. This is such an important subject and I am delighted to be able to make a contribution in the debate. I need first to declare all my interests, personal, political and professional, in the register. Many will know that this topic has been close to my heart for coming on 50 years.
I am pleased that our workplace is a lot better than it used to be. When I was first a Member of Parliament, there were 22 women out of 600 MPs—and women, after all, were the majority of the population. There are now darn near twice that number of minority ethnic Members of Parliament in the House of Commons. I am pleased about that because I do not know all their names; if there are so few of you that one knows all your names, you really are an endangered species. In this House, we have made good progress. It is not enough, but we should give the credit that is due. It is interesting to see the degree to which the police, fire and rescue and many other groups are realising that this matters.
The noble Lord, Lord Morris—I would like to say my noble friend—will speak after me. When he became General Secretary of the Transport and General Workers’ Union, I well recall that it was a time when many trade unions had an appalling attitude to race and to black and ethnic minorities.
We have learned a lot from the debate about women. I was against quotas, targets and all the rest of it, but there is no doubt that we now have a toolbox, and it has gone well. I am even more resentful of the fact, but recognise, that one had to have white men to really make this happen. My other noble friend, although on another Bench, the noble Baroness, Lady Howe, was an early campaigner for the role of women and their contribution. I spent a lot of time when I was Health Secretary saying, “This is the biggest employer of women in the country. We should do much more in terms of women’s development”. Our colleagues, the noble Baroness, Lady Fritchie, and my noble friend Lady Cumberlege, were my great allies. Then I realised that, of all the employers where the black and minority ethnic people are not on the shop floor but in the professions—in the NHS you had doctors, pharmacists, psychologists and nurses—how much more deplorable it was that those people were not being developed on an equal basis. I think it was the noble Baroness, Lady Fritchie, who coined the expression “stale, pale and male”. Neither the women nor the black and ethnic minorities were getting through.
My advice to anybody who does an intolerable job is to decide on two things that they really care about. I decided when I became Secretary of State that the BME issue really worried me. I convened a working group; we had lunch together every two months—people throughout the NHS from black and minority ethnic backgrounds. I was shocked by the experience. It seemed that the Patient’s Charter enabled patients to say exactly what they thought to people from black and minority ethnic groups—we know that black doctors get at least four times as much harassment and difficulty as other groups.
We then turned that into an action plan. I was pleased to hear the noble Lord, Lord Adebowale, say that he is involved in the important NHS programme that is under way, but I would not mind referring him to my 1993 statement, when I said:
“The programme I am … launching aims to address the barriers which face … ethnic minority staff … I want to stress that taking action to promote equality in employment is not just a matter of moral justice or of fairness to people from minority ethnic groups. It is good, sound common sense, and it makes business sense too … A workforce which is multi-racial at all levels is best placed to deliver the best possible health care to all sections of the community”.
I always took the view that, as a taxpayer-funded service, the NHS should reflect all taxpayers, particularly when it is available to all. The key issues were training, racial harassment, appointments to NHS boards, service delivery—and a particular programme relating to doctors. The noble Lord mentioned name-blind recruitment. The now Sir Sam Everington—then a rabid leader of the junior doctors—talked me through a programme in which junior doctors called Patel had eliminated their names and had received much better priority in the rotation. It was really shocking evidence that could not be avoided.
I remember in about 1992 asking all the presidents of the royal colleges to come up to the very grand room in which the Secretary of State lives at the Department of Health. I said, “There’s something I want to talk to you all about. Not once has there been a black or minority ethnic president of a medical royal college in this country”. It was not causal, but I am very pleased that our colleague, the noble Lord, Lord Patel, then became a president, along with my noble friend Lord Ribeiro and others. They were all first-generation, and these are all issues that matter. There is no job that a woman cannot do, and there should be no job that someone from a black or ethnic minority cannot do. I used to have great battles with the overseas doctors association. I said, “Well, you may be black doctors, but you’re not overseas doctors”. Eventually, they changed their name to the British International Doctors’ Association.
Why has more not happened? I want to endorse the importance of the Workforce Race Equality Standard—Simon Stevens chairs the diversity council within the NHS—and the work being done to a high professional standard building on the lessons that we know but must be repeated and reinforced.
Perhaps an area closer to the Minister’s responsibilities is the situation in universities. How good it is that we read that, now, a black student is more likely to go to university than the equivalent white student or pupil from school. Progress is being made, but I am not talking about access to services, whether it is the NHS or education. What I feel very strongly about is the career development of black and minority ethnic academics within the system. The noble Baroness, Lady Amos, has just been made the head of SOAS. She would be the first to say that she did not come up through an academic route, but at last we have one black—and female—head of an academic institution.
My first love is my role as Chancellor of the University of Hull—we are very privileged to have the noble Lord, Lord Parekh, as one of our most distinguished professors; he has been there a long time and may be able to add more about this. Work is under way to try to understand why there has been such a lack of progress in academic staff. It is not a monolithic picture; it is a heterogeneous picture of the highest people on the pay spine. Twenty-two per cent are Chinese—19% are white—15% are mixed race and 8% are black. All the relevant groups are put together in “black and minority ethnic”, but the high proportions of black and minority ethnic academics are in chemical engineering, clinical dentistry and electrical and computer engineering. There are very low rates in archaeology, marine and environmental sciences, agriculture, forestry and food sciences.
I ask my noble friend to give all the support she can to the Equality Challenge Unit, a charity funded by the UK higher education funding bodies, because of the work it is taking forward. Again, it is developing its own charter to recognise those institutions that meet the standard, just as we have seen with women. I am very pleased for the noble Lord that Staffordshire University meets that standard, as does UCL, King’s College London and Kingston. Eight universities in all now have the bronze standard, but we need the Athena SWAN programme to deliver this in practice. Why are we not seeing the advancement of more black and minority ethnic staff?
In her opening remarks, my noble friend referred to some of the work done by McKinsey. The McKinsey team in London, led by Vivian Hunt, herself a magnificent, formidable, deeply impressive black woman, has done a lot to throw light on some of the issues. My noble friend referred to this encouraging people to be customer-centric and to create a better workplace, but diverse teams also lead to diverse solutions. Monoclonal teams create monoclonal solutions. If the problems of the world today are the pace of change and the interconnectedness of the world, it is essential to have teams of people from different backgrounds, all of whom feel they can be themselves at work. Whether they are female, LGBT, black or ethnic minority, individuals need to feel at work that they can be free and liberated to be themselves, in order to give their employment and their tasks all that they can.
Mention was also made of Business in the Community. I hope noble Lords will read about that work, which has been undertaken in conjunction with YouGov. There are many familiar themes, but the most interesting thing was that 42% of the white people and 34% of the black and minority ethnic people interviewed felt that people were not comfortable talking about race in the workplace. That differentiates the debate from that around women. When I am trying to explain to a limited male about the issues around women, I simply say, “Don’t talk about girls and don’t talk about ladies. On the whole, if you stick to “female” or “woman”, you are fine”. But when it comes to black, Asian, minority ethnic, ethnic minority or BAME, people are nervous about the terms. I was talking to a leader in industry who was tremendously committed, but started to talk about coloured people. I said, “You cannot talk about coloured people. You mean people of colour”. Many people are nervous about how to even begin to get into the conversation.
Then there is the difference between different ethnic groups. There are huge differences of history and culture, attitude to work and attitude to families. In my humble view, the more you can create a debate and discussion, the better. On the female side, a lot of men became mentors to women—terribly patronising, in my view. But whatever the men taught the women, the women taught the men a huge amount. I am in favour now of mentoring and having leaders to develop people from black and minority ethnic groups, so that they can explain and help to highlight the issues that matter—unconscious bias, employee network groups and so forth.
Sandra Kerr at the Race for Opportunity team said:
“The terminology is part of the barrier, but not starting the conversation in the first place is the biggest barrier of all”.
The Nationwide has done a great deal—I do not work for the Nationwide and have no interest to declare. It has been a great role model. It says:
“We all own and shape organisational culture, but it’s led from the top. It therefore has to be us as leaders who set the tone. Any culture change programme, including work to advance race equality and wider diversity and inclusion, must be championed and delivered from the top. Having an active race champion is a powerful signal in any organisation and having one who also provides thought leadership and speaks publicly about race equality issues, even more so”.
I welcome this debate. We have reached a time when there is a critical mass of both achievement and dissatisfaction. It is imperative to ensure that we increase our productivity as a nation, drawing on the talents of all the citizens of the country, and I wish my noble friend well in her critically important taskforce.
Lord Morris of Handsworth (Lab)
My Lords, it is often said that in politics it takes courage to champion a minority cause. Why? Because there are no votes in it. So on this occasion I pay due tribute to the Minister for providing time and indeed support for this important and timely debate. From her experience outside the Westminster village, she will have concluded that people are the greatest assets of any organisation. Therefore, it is a debate that is long overdue and relevant to the current economic climate. One could say that it is a debate whose time has come.
It saddens me that in 2016, 15 years after the Race Relations Act and six years after the Equality Act, we are still taking note. Surely, by any standards of progress, it is time to take action, not just note. The good news is that the employment rate gap between the overall population and ethnic minorities has been decreasing gradually, but the slow improvement might not be seen as good news for those still unemployed—those from ethnic-minority communities join a longer and longer queue to wait for a job.
The evidence is clear that for many from the ethnic-minority communities, the problem starts not at the workplace necessarily, but with the CV submission. A senior manager of a leading recruitment agency reported that 90% of applicants with an unusual or foreign name were ignored by his clients. But that is not news to applicants from that group. Their school, birthplace or addresses can prevent the application going further. I do not have to tell noble Lords why. If they are lucky to land a job, what then? They will invariably earn less than their white counterparts and that is a repetitive and recurring example.
TUC research earlier this year showed that black workers with a degree earned 23% less on average than their white counterparts. Black workers with A-levels earned 14% less on average than their white counterparts, and black people who leave school with good GCSEs are typically paid 11% less than their white peers. Frances O’Grady, the general secretary of the TUC, said of the findings:
“This is not about education, but about the systemic disadvantages ethnic minority workers face in the UK … Even today race still plays a huge role in determining pay”.
In management, black employees also lose out. One in 10 people in the workplace is from a black or Asian background but only 13 hold a management position in the public or private sector. Black managers are mostly to be found in the middle tier of management where they are most vulnerable to reorganisation and outsourcing.
This debate invites the House to take note of the issues faced by black and minority people in the workplace. I have probably reminded this House before that when Bill Clinton became President he took a very long time to form his Administration, so much so that his chief of staff wanted a discussion about the delay. Having listened, Clinton sent a note back saying: “I want my Government to look like America”. That statement is also a test for our country. We have also failed. Neither our Parliament, our Government, nor our workplaces look remotely like the United Kingdom. As I speak, I can hear an imaginary conversation between the Cabinet Secretary and the Prime Minister. I can just about hear the Prime Minister saying: “I want my Government to look like Eton”.
Sadly, despite the good will of the Minister, some of us see this debate as the long journey continuing from the past: lots of words, but very little action. As members of the ethnic-minority community, all we ask is fairness, never favours. However, we also ask the question: how do we remove the barriers to progress of ethnic minorities in the workplace? Although the reviews led by the noble Baroness, Lady McGregor-Smith, and Sir John Parker are to be welcomed, the immediate challenge in the Motion before the House is not merely to take note but to take action. To deliver a tangible and practical agenda for progress, I strongly support the steps set out by the TUC on page 8 of the briefing notes supporting this debate. They reference some of the issues I have raised, as do the two reviews and the Government’s BME 2020 policy. I support the targets, the promises and the challenges wholeheartedly, but if Martin Luther King had a dream, I have a nightmare with the fear that I have been here before: lots of words; no action.
I began this speech by referring to the Race Relations Act which outlawed discrimination on the grounds of colour, race, ethnic or national origin, and the Equality Act which legally protected people from discrimination in the workplace and wider society. Yet we still we have discrimination as an impediment to human dignity, when all we ask is the right to be equal. We are at something of a crossroads. We can engage practical equality or we can engage discrimination to the point where the effect on our nation, our children and our future will be sad, dangerous and disturbing. All we want is an opportunity to serve and the right to be like the rest of the United Kingdom.
Lord Bilimoria (CB)
My Lords, one of the top two issues in the forthcoming EU referendum is immigration. Sadly, it is immigration in a negative way. Four years ago, I was proud to lead a debate in this House entitled Minority Ethnic and Religious Communities: Cultural and Economic Contribution. There were 26 speakers in that debate.
I am proud to be the first Zoroastrian Parsee to sit in your Lordships’ House. Before I made my maiden speech, the first thing I did was read the maiden speech of the first Member of Parliament from an ethnic minority. Dadabhai Naoroji, a Liberal, entered the House of Commons in 1892, against all odds. In fact, the then Prime Minister, Lord Salisbury, said that no British person would ever accept a black man as an MP. Just three years later, in 1895, the second Indian, Sir Mancherjee Bhownagree, a Conservative, was elected. The third—and the only one of the three Indians elected to the House of Commons before India’s independence—was Shapurji Saklatvala, or Comrade Sak, who was elected as a Communist with Labour support. All three were Zoroastrian Parsees—one a Liberal, one a Conservative and one Labour. I now sit, as a Zoroastrian Parsee, as an independent Cross-Bench Peer, squaring the circle. There was one ethnic minority Peer before India’s independence, and that was Lord Sinha.
When I came to this country for my higher education, as a 19 year-old in the early 1980s, I was told by my family and friends in India, “If you decide to stay on and work after your studies you will never get to the top. You will not be allowed to because, as a foreigner, there will be a glass ceiling”. I am sorry to say that, 35 years ago, they were absolutely right. In spite of what my noble friend Lord Adebowale said, I think that glass ceiling has been well and truly shattered. Minority ethnic and religious communities are now reaching the top in every field: sport, academia, the Civil Service and politics. Just look around this Chamber.
The day before I led that debate four years ago, we had a photograph taken on the steps of Westminster Hall to celebrate 25 years since the first four ethnic minority MPs were elected to the House of Commons in 1987. I was at Cambridge University at the time when one of them, Keith Vaz, was elected. Four years ago, there were 69 of us on those steps. Today, there are 92 ethnic minority MPs and Peers. We are making progress and I would go so far as to say that immigrants from all ethnic minorities and religions have been the making of the “Great” in Great Britain. They have been crucial to Britain’s success, contributing enormously to the economic and cultural life of Britain and enriching it in every way, often punching well above their weight.
The Asian community makes up 4% of the population of Britain yet contributes more than double that percentage to the economy, but the Government’s immigration policy has been affecting this country and our businesses. My own business, Cobra Beer, supplies over 98% of the curry restaurants—the so-called Indian restaurants—in this country. Well over two-thirds of them are actually owned and run by Bangladeshis, and the Bangladesh Caterers Association does tremendous work supporting them. Yet the Government do not listen and there is a skills shortage. We cannot bring in the chefs the industry needs because of the Immigration Rules, yet it is the nation’s favourite food. This industry has been an inspiration to me. It is made up of pioneering entrepreneurs who have come to this country as complete strangers, gone to every corner of Great Britain, to every high street, made friends, won customers and—most importantly—put back into their local communities.
I am often asked to express what Asian values are and I summarise them as the importance of hard work, family and education. Britain prides itself on being an open country and an open economy; a country that is secular, multicultural and plural, where all religions are allowed to be practised and where all races, communities and cultures exist side by side.
There is one word I do not like. We are not a “tolerant” nation. This diversity should not be tolerated but celebrated. We are renowned as a country with a sense of fairness where there is opportunity for all. That has allowed ethnic minorities to succeed and allowed this little country, with 1% of the world’s population, to be one of the five largest economies in the world.
I thank the Minister very much for initiating this debate. She spoke about integration. The Nobel laureate, and my friend, Professor Amartya Sen speaks about identity. He says that most of us have several identities, whether religious, ethnic, professional or national.
When I came to study here, my father, the late Lieutenant-General Bilimoria, said, “Son, you’re going to study abroad. You may stay in Britain, you may live in another part of the world, but wherever you live, integrate with the community you are in to the best of your ability, but never, ever, forget your roots”. I am proud to be a Zoroastrian Parsee. I am proud to be an Indian, I am proud to be an Asian in Britain and, most importantly, I am very, very proud to be British.
The noble Lord, Lord Dholakia, speaking in this debate four years ago, said:
“We should be proud of Britain’s record in race and community relations”.
He mentioned the Race Relations Act 1965 and said:
“We have been at the forefront of legislative and other machinery to establish equality of opportunity for all our citizens with a strong emphasis on disability, gender, age, faith and sexual orientation”,
but he said:
“We now need to move to the next stage. We need to examine changing patterns within all our communities. True multiculturalism is proactive and means that equality and diversity is at the core of everything we do, from government to individual responsibility. We need to take a much more pro-active stance towards combating racism and discrimination, really tackling inequality in all aspects of our society in social and economic matters and in civic participation, positively valuing—not merely tolerating—the contribution of different cultures and perspectives, and treating them with respect”.—[Official Report, 24/5/12; col. 873.]
Those are very wise words.
The noble Lord, Lord Kakkar, pointed out in that debate:
“We should not forget that some 44,000 out of 240,000 registered doctors in the United Kingdom declare themselves Asian or British Asian”.—[Official Report, 24/5/12; col. 879.]
That is nearly 20%. Where would we be without them? The noble Lord, Lord Ahmad of Wimbledon, said that,
“if you glance at the list of speakers, you will see that there are speakers not just from some defined minority communities but from all communities. That is what Britain represents today”.—[Official Report, 24/5/12; col. 880.]
He said that the strength of our diversity is visible and relevant. The noble Lord, Lord Alton, said it was a time,
“for celebrating our nation’s diversity—the whole world in one country. It is an important moment to insist that along with respect for difference and minorities must come a commitment by us all to do all we can, using all our energy, to promote the unity, democracy, freedom and justice that we treasure in this nation”.—[Official Report, 24/5/12; col. 889.]
One in seven companies are started by ethnic minority immigrant entrepreneurs, yet I faced prejudice 26 years ago when I started Cobra Beer. I would go to see buyers for big supermarket chains and big customers and they would say, “Indian beer?”, and turn their noses up at it. Well, I have got my own back. Cobra Beer has won 83 gold medals in the Monde Selection world quality awards. It is one of the beers with the most awards in the world and is a top 20 brand over here—so much for their prejudice.
The Minister and I served together when I was the founding chairman of the UK India Business Council. She spoke about the new report which Sajid Javid—I can call him my friend as he is my neighbour—the Secretary of State for Business, Innovation and Skills has commissioned. I wish the noble Baroness, Lady McGregor-Smith, all the best with it and welcome her to our House. There are lots of objectives in the report. One is to increase the number of BME students going to university by 20%. I am proud to be the first Indian chancellor of a Russell Group university, the University of Birmingham. However, I am the first; how many other ethnic minority chancellors are there? How many ethnic minority vice-chancellors are there in this country?
We talk about getting more ethnic minority students. Is the Minister aware of a programme called GEEMA? It is the Group to Encourage Ethnic Minority Applications and is for year 11 schoolchildren. It has a summer school at the University of Cambridge, and I addressed the opening course. I was inspired because it turned out that they were ethnic minority children whose families had never been to university. Many of them ended up getting into the University of Cambridge and other universities.
As the Minister said, there is an employment gap. It is a gap of more than 11% between BME people and the rest of the population. Two-thirds of FTSE 100 companies still have an all-white executive leadership. This is appalling. The research found that 10 people from ethnic and cultural minorities hold the top posts of chairman, chief executive or finance director, which is equivalent to 3.5% of the 289 jobs at that level, and 98% of FTSE 100 chairs, 96% of FTSE 100 chief executives and 95% of FTSE 100 CFOs are white. We have made progress, but there is so much more to be done. Thirteen per cent of the UK population is from an ethnic minority background, yet in Parliament we have almost 100 BME Members, which is still nowhere near 13% of the 650 Members of the House of Commons and more than 800 Members of this House. There is only one BME Cabinet Minister, my friend Sajid Javid. The first minority ethnic Minister was Lord Sinha, whom I mentioned earlier.
We talk about international comparisons. The noble Lord, Lord Morris, mentioned them. The US House of Representatives has 435 Members, of whom 20% are non-white, but only 6% of the 100 Senators are minority ethnic, so we are doing much better than the Americans, let alone on diversity because more than 50% of them are lawyers.
In the public sector, only 7% of the UK’s Armed Forces are ethnic minority, and less than 3% of officers, yet without the contribution of nearly 5 million people from India, south Asia, the Caribbean and Africa in First World War and the Second World War, we would not be here in the free world we have today. Of Premier League footballers, 25% are ethnic minority. That is the one area where we are ahead of the average.
Before I conclude, we have to talk about boards. I founded the Zoroastrian All-Party Parliamentary Group, which had an event called Faith-based Ethics in Business—the Cadbury and Tata Way. Tata Steel is now in the spotlight, but people forget the net employment that Tata has created through the success of Jaguar Land Rover and the enormous charitable work that it does. David Landsman, head of Tata Ltd in the UK, said that there is a clause in the Tata code of conduct about equality and non-discrimination on any grounds.
In 2003, I was a member of the Tyson task force on the recruitment and development of non-executive directors. The noble Baroness, Lady Bottomley, spoke about diverse teams. That task force, 13 years ago, very clearly said in its summary:
“Diversity in the backgrounds, skills, and experiences of NEDS enhances board effectiveness by bringing a wider range of perspectives and knowledge to bear on issues of company performance, strategy and risk”.
It is indisputable that broader, more rigorous and more transparent searching is needed to get there, yet this amazing lack of diversity exists at the moment. I have been the only ethnic minority member of the board of Booker, a FTSE 250 company—it is around number 125 at the moment—and the senior independent director for the past eight and half years. We have had two women on our board.
Success is not a destination, it is a journey. I have shown the huge lack of diversity that exists and the reason this report needs to be commissioned. Yet I have also shown how far we have come in the 35 years since I came here as a student. I am proud to say that London is the most diverse, vibrant, multicultural and cosmopolitan city in the world, but we need to continue to aspire and to achieve. As the Prime Minister said, and as I have said many times, there will be an Asian Prime Minister of this country soon.
Lord Polak (Con)
My Lords, I congratulate the Minister on this timely debate. I also congratulate my noble friend Lady McGregor-Smith and wish her well in her important review. I am no expert in this field, but I have some knowledge of issues faced in the workplace by some practising members of the Jewish community. In her opening remarks the Minister spoke about English being spoken, or perhaps not being spoken, by far too many people. It reminded me of visits to absorption centres—they sound like difficult places, but they are exactly the opposite—in Israel. When people immigrate to Israel, the first six to nine months are spent at an absorption centre where they are taught how to queue at a bank and how to go to the post office but, most importantly, they learn to speak Hebrew and are immersed in speaking Hebrew. That is something that we in this country have lost. When immigrants come into this country we should immerse them in speaking English.
I recall being on a candidates weekend to go on a list of prospective candidates for the party back in 1993. My sponsors suggested that I should not have to do a weekend. Let me explain. I am an Orthodox Jew; I do not travel on the Sabbath. In February, in the winter, the Sabbath comes in very early. I arrived with 48 other people and was told that we had a 1,000-word piece of writing to do. I looked at my watch and I realised that I had 23 minutes before the Sabbath came in to do my 1,000 words. I remember, too, that there was a mock debate on the Saturday morning. Everyone was taking notes except me; I was not allowed to take notes because it was my Sabbath. I got through the weekend, but this debate reminded me of the difficulties that one can sometimes have.
The British Jewish community, via the Board of Deputies of British Jews, has produced The Employer’s Guide to Judaism. It was produced in the belief that education is the best way to combat prejudice. The introduction talks of that problem that, for the “fully observant Jew”, Jewish law provides a “central model” for how to lead life. The guide states:
“This means that it is not possible for the observant Jew simply to waive, for example, observance of the Sabbath”,
as I described in my experience from 1993. It continues:
“However, in most cases reasonable adjustments”,
can be made and there can be,
“no conflict between being a fully observant Jew and a fully contributing member of the workforce … Many jobs require set working hours and this can cause a clash with the Sabbath”,
or the Jewish festivals.
The pamphlet has a headline “Jewish practices” and it goes on to explain them. It then has a section on the distribution of Jewish festivals around the calendar year. In my previous work in the 1980s, when I was education director of the Board of Deputies, I spent most of my time working with examination boards. In the May/June time there is a Jewish festival called Shavuot; it is two days for Orthodox Jews. Again, it is a time when people cannot write or travel. I spent time with all the examination boards talking about the problem of Jewish students doing GCSEs or A-levels when they fell on Shavuot. By the time I had finished my work, three examination boards—I think there were five at the time—did not have any exams on Shavuot at all. That is because we talked to them well in advance—years in advance.
The pamphlet carries on with “clothing and modesty”, “food”, “prayer”, “bereavement” and “UK law”. It ends with “additional human resources guidance” and it talks about the recruitment process. It says:
“It is imperative that discrimination does not occur at any point during the employment process, including during the interview before employment, or during the notice period at the end of employment. Employers must not discriminate against a Jewish candidate on the basis of their religion or religious requirements”.
One can insert any religious grouping instead of “Jewish” at this point. It continues:
“Employers should not ask personal questions, including those relating to religious affiliation, unless they are directly relevant”.
It goes on to talk about the “employee already in employment” and “conflict resolution”. This I found most interesting. It states:
“Managing time off for religious observance, in particular the festivals, can cause a problem in professions where it is expected that annual leave will be taken at certain periods of the year, most notably in schools and universities. There are practical solutions that can be used in solving this, including running extracurricular activities or trips to compensate for the time lost, scheduling lessons”.
But the key is that the information is given early.
The last point is on anti-Semitic discrimination in the workplace. This is a rather topical issue. The Community Security Trust reported that, in 2015, 26 anti-Semitic incidents took place in the workplace. That is 26 too many. The pamphlet says:
“Antisemitic discrimination can occur in the workplace in several contexts, including in the recruitment or promotion processes, in interactions between colleagues and from external sources, especially in roles involving interaction with customers. Whilst these instances cannot always be avoided completely, it is good practice for employers to supply adequate training to their staff on Judaism”.
I could add here “adequate training to their staff on Hinduism”, or on Islam.
Through education and information, some of the issues that I have raised can be dealt with. I recommend that my noble friends the Minister and Lady McGregor-Smith take a look at this guide. It may be helpful for other communities in Britain. Widespread distribution to the public and private sectors could be an extra piece of ammunition in ensuring diversity in the workplace.
Lord Parekh (Lab)
My Lords, I begin by congratulating the Minister on introducing the debate. I remember sponsoring a similar debate in this House about 12 to 13 years ago. I was struck by the fact that almost all the speakers came from the Lib Dem and Labour Benches, with hardly anyone from the Conservative side. The shadow Minister was the only one. In his sovereign loneliness he struck us as rather a strange figure. Today the Minister has not only spoken about the subject but initiated it. That says something about the kind of progress that we have made in this country. I compliment her in particular on speaking with such eloquence on some of the issues relating to the subject.
While we have made some progress, we still have a long way to go, as many noble Lords said. I will talk about those issues. I have been used to using the words “ethnic minorities” rather than the words “black and minority ethnic”, which are strange. I will continue to talk about ethnic minorities. According to the census of 2011, ethnic minorities constitute 19.5% of the population. However, they disproportionately bear the impact of unemployment. The rate of unemployment among them is not only higher; they are also most vulnerable to losing their jobs. The unemployment rate among the ethnic minorities is not evenly spread. Among the Indians it tends to be roughly the same as within the white population, but among the Afro-Caribbeans and others it is as high as 14% to 15%—three times the national average.
Degrees or higher qualifications do not seem to help. In fact, those with higher qualifications are two-and-a-half times more likely to be unemployed than their white counterparts. It is also striking that, for the same job, a black person applying would need higher qualifications than his white counterpart. This is what social scientists call the “ethnic penalty”: the same qualification does not take you to the same destination. In the case of ethnic minorities, a higher qualification is required.
If one looks at the FTSE index, the picture is even more disturbing. If one takes 100 companies, 98% of the chairs, 96% of the CEOs and 95% of the chief financial officers are white. If one looks at the Civil Service, again, the situation is not terribly good. Ethnic Dimension, a research consultancy, pointed out in 2014 what is wrong and at what stages ethnic minorities are to be found. It is quite striking, for example, that if one looks at the Civil Service and the various stages at which ethnic minorities operate, they are disproportionately represented on the lower rungs of the Civil Service hierarchy and very poorly represented among the Permanent Secretaries and others. If one looks at representation among the higher echelons of the diplomatic service, it is striking that the proportion is even smaller. If one looks at health trusts or the royal colleges, as many have pointed out, ethnic minority representation is extremely poor.
All this needs no elaboration except to show how much work remains to be done. It is this that I want to concentrate on during the five or six more minutes I have at my disposal. The Runnymede Trust’s Commission on the Future of Multi-Ethnic Britain, which I was privileged to chair and whose report was wrongly named after me, proposed a number of initiatives and I want to reiterate some of them and to elaborate on a few others which have come up since. I hope that the noble Baroness, Lady McGregor-Smith, when she undertakes her review, will look at the positive side of what can be done, what obstacles stand in the way of ethnic minorities and what we need to do to remove those obstacles. So, at the risk of sounding rather schematic, let me run through six or seven recommendations that we made and that I would like to make again.
First, it is very important that every organisation, every company and every business should be required to have a race equality strategy with specific targets but not quotas, aspirational goals but not a legal requirement of jobs to fill. Secondly, there is the old idea of contract compliance. It is very important that public sector contracts should be used to improve a company’s race equality practice. Thirdly, application forms should be anonymised. This should be standard practice in all areas of life, so that people are not singled out as representing a particular ethnic group by virtue of their name. Fourthly, recruitment procedures in organisations and various companies should be clearly monitored, so that there is no room for self-selection or only choosing people of one’s own colour.
It is also important that companies should be asked to submit, in their annual reports, staff ethnicity figures—what percentages belong to ethnic minorities, at what stage of the company hierarchy and in what forms. It is also very important that more ethnic minorities should be recruited in the field of higher education. Here, I certainly appreciate the Prime Minister’s desire to increase by 20% the proportion of ethnic minority students by 2020—but, as one of the Peers said, this is a big challenge and I do not think that it is likely to happen. Also, if we do bring them into higher education, the question is what areas of higher education and what kinds of jobs will be available to them.
It is also important that racial stereotyping should be avoided. It is very striking, in the briefing material given to us, that Afro-Caribbeans, for example, are singled out as sportsmen or entertainers but you can hardly see a black face as a senior professor, a researcher or a poet. One can easily begin to see what kind of images and impressions this creates in the minds of those who read such things. Finally, race has in some ways shifted its locus, so that we no longer talk simply about colour or culture, we also talk about religion. Muslims have, in many cases, become the target for this kind of discrimination and disadvantage. A recent survey, for example, showed that a Muslim name can invite discrimination, but that if the person was not wearing Muslim dress, such as a headscarf or whatever, he tended to escape any kind of disadvantage—dress becomes a site of contestation, a sign by which we recognise and identify people and discriminate against them. For all these reasons, I suggest not only that applications should be anonymised but as far as possible that discrimination and disadvantage of this kind should be eliminated.
These are some of the points also made by the noble Baroness, Lady Bottomley, and I commend them all yet again.
Lord Taylor of Warwick (Non-Afl)
My Lords, I thank the noble Baroness, Lady Neville-Rolfe, and the Government for making time for this important debate today. This issue is not a minority one. It concerns who we all are today in modern Britain. Whatever one’s view on immigration or Europe might be, Britain has changed and will continue to do so. If this change is embraced and not just endured, Britain will be all the stronger. Of the UK’s population of 63 million, 14% are black and ethnic minority. Over half of the BME communities live in three main cities—London, Manchester and Birmingham. Leicester is seen as one of the most diverse cities in Europe, and what a magnificent example of diversity in the workplace is Leicester City Football Club. Its first team squad has 12 different nationalities and an Afro-Caribbean captain and last night became Premier League champions. Mind you, since I support Aston Villa, recently relegated from the Premier League, I wish to move swiftly on from that observation.
We are all products of our experiences and I was just reflecting on some of mine. Back in 1990 I was a special adviser to the Home Secretary, and the Cheltenham Conservative Association was advertising for a parliamentary candidate to fight the next general election: this was an application for a job to be an MP in the political workplace. I submitted my CV along with 300 others. In those days, you did not have to submit a photograph with your application. My surname is Taylor. Taylor is, in fact, the name of the Bristolian sugar trader who owned the slave plantation that my ancestors worked on, so the name does not sound foreign. When I was shortlisted a few weeks later, I travelled to Cheltenham for the interview.
I was greeted at the front door by one of the committee members. The elderly gentleman looked rather startled to see me. When I introduced myself, he said, “Oh, you’re John Taylor—I didn’t realise you were b-b-based in Birmingham. Welcome”. I must admit I rather admired the nifty way he side-stepped a potentially embarrassing situation. I was eventually chosen as the candidate and the association treated me well, but I have often wondered whether, in those days, had the fact that I am Afro-Caribbean been known to the committee at the application stage, or had I a foreign-sounding name, I would even have been interviewed.
It is not only good for minorities to achieve in the workplace, it is good for the nation as a whole. Historically, there has been a negative perception issue acting as a bar to the workplace becoming more diverse. Some years ago I was invited to be a speaker at the Institute of Directors on the subject of diversity. I walked into the entrance hall in Pall Mall and said to the concierge doorman, “Lord Taylor of Warwick”. He said, “Ah, yes, we are expecting Lord Taylor. You timed it well. You the driver, mate? You’ll be okay on a single yellow line. Anything after 6.30 pm is fine”. I replied, “No, I’m Lord Taylor”. There was a famous hit song called “A Whiter Shade of Pale” by Procol Harum. Maybe they had this gentleman in mind when they wrote it, because he turned from white to very, very pale. I would like to think that nowadays that misunderstanding would not occur.
Unemployment in the black and ethnic minority community is going down, I accept that, but there is still so much untapped potential there. I have a particular interest in the black majority churches. Take, for example, the Nigerian Redeemed Christian Church of God, based here in the UK. In the five years to 2013, it started 296 new churches in the UK. Last year, the Prime Minister addressed an event of black Christians from that church, which thousands attended. I was a guest speaker at the equivalent event in Lagos, Nigeria, where a quarter of a million people attended the national stadium. The event started in Lagos at 8 pm and finished at 6 am the next morning, so it is vivid in my memory. But these people, like many, are transnational in their activities and contacts, and there are similar groups, of course, among the Muslim and Chinese communities in Britain. The point I wish to make here is that surely our local enterprise partnerships need to develop stronger working links with such diaspora groups, their religious leaders and business concerns. We need to harness that potential, which I think is being wasted.
The media and creative industries are very influential sectors of society, perhaps even more so than politicians. It is a pity that black actors such as Idris Elba and David Harewood had to go to America to establish themselves in the industry. Frankly, that is a disgrace. While television is using more black and Asian presenters, Directors UK claims that the number of BME directors working in UK TV is “critically low”. A sample of 55,000 programmes found that only 1.29% were made by black, Asian and minority ethnic directors. In some areas such as period dramas, talk shows, panel shows and sketch shows, not a single episode had been made by a BME director. That, frankly, is a disgrace. In the mid-1990s, I was a television producer at BBC White City. It got to the stage when I asked whether it was called White City because everyone else above kitchen level was white.
I recall making a TV consumer affairs series for BBC Two called “The Street”. I had the pleasure of working with Kirsty Young, who went on to much fame and fortune. We went up to the highlands of Scotland to make one episode. I did not think that there were any black people at all there. But while we were doing some outside filming, a young white lady came out with a mixed race boy of about 10 holding her hand. She came straight over to me and said, “My son was watching you from inside. He wanted to come and see you. His dad is African, but he left before the boy was even born. My boy’s had a rough time at school because of his colour. He is shy, but it would mean a lot to him if you would just talk to him for a few minutes”. The boy proceeded to ask me if I was his father. I quickly assured him that although I was not his father, I would be proud to have a son like him. I explained that I was at the BBC and we were filming in his street. He then said, “But I thought you had to be white to work on the telly”. Although inaccurate, that was his perception, and it was a very sad comment that I will never forget.
As for newspapers, Amol Rajan is the only ethnic minority editor of a national newspaper, the Independent. I note recently that even that paper has now gone online. City University’s survey in March this year found that British journalism as a whole is 94% white. Is that acceptable?
Our corporate boards are making progress in terms of gender diversity, but there is a lack of racial diversity on company boards. In fact over the last two years, the growth of BMEs on boards of FTSE 100 companies has slowed and gone backwards, going from a 0.7% growth rate to a meagre 0.1% from 2015 to 2016.
For 10 years, I was vice-president and on the board of the British Board of Film Classification. Although it treated me very well, it was a very white organisation when I first joined. If I achieved anything there, at least I encouraged it to place job opportunities at the BBFC in not only the mainstream papers but also the ethnic minority newspapers such as the Voice and the New Nation.
The sporting world has great success stories such as Mo Farah, Jessica Ennis-Hill and a very diverse professional soccer league. However, let us not kid ourselves—in soccer the diversity is only on the pitch. Around 30% of players in the Football League are from BME backgrounds, mostly black, but there are hardly any people of colour in the football boardrooms. Of the 92 managers in the Premier and Football League divisions, just six are non-white. This is not acceptable. In America, there is the Rooney Rule. This was led by Dan Rooney, a football club owner, who helped create a rule in the US whereby at least one non-white candidate must be interviewed when a manager’s job is vacant. Maybe it is time to look at this here.
We are celebrating the 400th anniversary of William Shakespeare’s life. A couple of years ago, I had the awesome privilege of playing the role of Hamlet, the Prince of Denmark, at London’s delightful Tudor Rose playhouse theatre. It was refreshing to me that no one questioned that such a role could be depicted by a black actor. When my parents came to Britain in the 1950s, there were signs in the windows, stating, “No blacks, no Irish, no dogs”. We have clearly come a long way since then. But for BME minorities in the workplace, there are still many barriers to break. Will Britain ever achieve real racial equality in the workplace? To quote Hamlet,
“To be, or not to be: that is the question”.
Lord Sheikh (Con)
My Lords, we are very lucky to live in such a diverse, multiracial and multicultural society. The variety of ethnicities, cultures and religions that comprise the British people make our country richer, more interesting and ultimately more successful. They benefit us socially, culturally and economically. The Office for National Statistics estimated last year that around 13% of our population are now from an ethnic minority background. This is a significant minority and as such it is important to consider the challenges they may face.
Since coming here from Uganda, I have generally found the United Kingdom to be an open, warm and welcoming country. This country is a land of opportunity and if one is prepared to use one’s initiative and work hard, one will do well and the sky is the limit in regard to advancement.
I would now like to talk briefly about myself. I was originally trained by a leading insurance company and obtained my qualifications in insurance and financial services. After my fellowship, I was involved in academic work and subsequently joined an organisation as a manager. I then became the chief executive and majority shareholder of this organisation. This company won 13 major insurance awards over a period of three years, an achievement which has not been equalled by any other organisation. Today, I am chairman of three companies. I have been a president of the Chartered Insurance Institute and chairman of the British Insurance Brokers’ Association. I was the first foreigner to hold these positions.
Ultimately, I had the honour of being made a Member of your Lordships’ House, as the first Muslim Peer from my party. I say this for a certain reason—to emphasise that I have personally not been subjected to any racial or religious prejudice. However, I am not at all complacent and emphasise that there are various challenges and issues facing people from BME backgrounds. I am actively involved in mentoring the BME community to achieve success in business. I have long encouraged members of the BME community to become involved in politics as well as in professional institutions. Furthermore, I encourage the community to enter the Armed Forces as well as the police. Unfortunately, ethnic minorities are underrepresented in most professions. This is particularly true at senior management levels. There are in fact only four non-white executives of FTSE 100 companies. One in 10 employed people comes from a BME background, yet only one in 16 top management positions and one in 13 management positions are held by people from ethnic backgrounds. According to analysis by the TUC, BME workers with degrees are two and a half times more likely to be unemployed than white graduates. The unemployment rate for white workers with degrees is 2.3% but this rises to 5.9% for BME workers.
Discrimination in the workplace occurs in many different sectors and professions. A 2014 report found that while the NHS in England is the largest employer of BME staff, with one in six NHS staff being from the community, BME staff in the NHS are discriminated against in several ways. For example, BME staff are grossly underrepresented at senior levels in the NHS, and their presence in these roles has declined despite the increasing number of BME nurses and doctors.
A report published last year by the Equality and Human Rights Commission found that unemployment in the United Kingdom in 2013 displayed a significant disparity by ethnicity: while nearly 75% of white people were employed, only 59% from ethnic minorities were. The employment rate in the Pakistani and Bangladeshi communities is particularly low. In 2015 the employment rate was 55%. That is, however, an increase since 2005, when it stood at 42%. For those in work, ethnic minority employees can still face workplace bias. In one year alone, 30% of BME workers witnessed or experienced racial harassment in the workplace. It should be noted that there is another issue: gender. Pakistani and Bangladeshi women are less than half as likely to be employed as other women. This is partly cultural but it can be improved by better education and by improving economic conditions in deprived areas.
We also need to consider the ethnicity pay gap. Recent analysis by the ONS Labour Force Survey found that ethnic minority employees educated to degree level face a 10% deficit in pay. This rises to 17% for those who leave education at 18. I applaud the Government’s drive to close the gender pay gap—perhaps a similar initiative could be considered to address ethnic differences.
I am an office holder of the All-Party Parliamentary Group for the Armed Forces and regularly meet senior officers from all three services, including those from ethnic minorities. I have been assured at very senior level that service men and women are appointed and promoted purely on merit, which is very encouraging. However, we need to make every effort to recruit, retain and promote officers from the BME communities.
It occurs to me that part of the challenge may be to promote greater awareness of these cultures and the values to which they adhere. If others are more knowledgeable, perhaps there will be less ignorance and misunderstanding. Of course, it is also imperative that we take positive steps to attain integration of the various communities. We must all work together to achieve better integration, which will result in better employment prospects for the BME communities.
Indeed, research has shown that companies with diverse workforces perform significantly better. The global consultancy firm McKinsey & Company reported last year that companies in the top quartile for racial and ethnic diversity are 35% more likely to produce above-average financial returns. It is also suggested that more diverse companies are better able to secure top talent, improve their customer orientation and increase levels of employee satisfaction and morale. I believe that companies gain through learning from each other’s experiences. People from different backgrounds see things from different perspectives and therefore can bring new and fresh ideas with them.
I am disturbed by the high number of Muslims convicted of criminal offences other than terrorist activity. They are in prison and not working. I used to be the chairman of the Conservative Muslim Forum and am now its president. We briefly looked at this issue but I feel we need to undertake an in-depth study of the patterns of offending and reoffending relating to Muslims. We can then perhaps look at the remedies. I ask my noble friend the Minister to comment on this issue and perhaps say whether the Government would support such a study.
It is important to note that legislation already exists to protect people from discrimination in the workplace. The Equality Act 2010 contains provisions on treatment with regard to race and ethnicity, as well as religion and other characteristics. Therefore, protection already exists with regard to these issues. However, we need to look more closely at how to address some of the wider, more implicit, often unintended forms of prejudice.
Thankfully, the Government are taking some action. I pay tribute to the Business Secretary Sajid Javid for asking my noble friend Lady McGregor-Smith to lead a review looking at the issues faced by businesses in developing BME talent. This forms part of the Government’s BME 2020 plan, which is aimed at improving labour market conditions for those from ethnic minority backgrounds. We have already heard about this review in detail from my noble friends the Minister and Lady McGregor-Smith. I wish my noble friend Lady McGregor-Smith success in her review and hope that, through the BME 2020 plan, the Government will be able to tackle the issue of workplace discrimination once and for all.
We enjoy great peace and harmony between cultures and religions in the United Kingdom. This country has successfully assimilated many people from abroad who have contributed to the advancement and well-being of this nation. I hope we can continue to identify issues relating to the BME population and ensure fair treatment for those from ethnic minority groups. We must encourage people from those cultures who have come to the United Kingdom to stay here, to make it their home and to help grow our economy further.
Baroness Warwick of Undercliffe (Lab)
My Lords, I thank the Minister for providing us with an opportunity to consider such an important subject ahead of the forthcoming review by the noble Baroness, Lady McGregor-Smith. The announcement of the review into the progression of black and minority ethnic people in the labour market, and the noble Baroness’s leadership of it, has been widely welcomed, and I found her insights today both fascinating and challenging.
As the noble Baroness, Lady Neville-Rolfe, has highlighted, we have some idea of the scale of the problem facing those from black and minority ethnic backgrounds when looking for work. One in eight of our working age population is from a black, Asian and minority ethnic background, yet only one in 10 is in the workplace. While the ONS figures released in April show that more people from ethnic minority backgrounds are in work since records began 15 years ago, their annual employment rate of 62.7% is almost 13 percentage points lower than the white employment rate of 75.4%.
Analysis of the ONS figures by the TUC gives us a fuller picture. The TUC says that at every level of education, jobless rates are much higher for black, Asian and minority ethnic workers. BAME workers with degrees are two and a half times more likely to be unemployed than white graduates. Those with A-level equivalents, including trade apprenticeships and vocational work, are more than three times more likely to be unemployed than their white counterparts, while BAME workers with GCSE equivalents and basic-level qualifications are more than twice as likely to be out of work. This is the harsh reality we face. As the TUC’s General Secretary, Frances O’Grady, has said, this is not only wrong, it is a huge waste of talent. Companies that recruit from only a narrow base are missing out on the wide range of experiences on offer from Britain’s many different communities.
Once in the workplace, there are data showing that people with a BME background face systemic disadvantages including lack of promotion, lack of role models and lower levels of pay. The TUC’s figures show that black workers with degrees are paid nearly a quarter less than their white peers—the equivalent of £4.33 an hour. Those with A-levels earn 14.3% less on average than their white counterparts, and black people who leave school with GCSEs typically get paid 11.4% less than their white peers. The pay gap between white graduates and all black, Asian and minority ethnic workers with degrees is 10.3%, the equivalent of £1.93 an hour. The pay gap with white workers for all groups, regardless of their educational attainment, is 5.6% for BAME workers and 12.8% for black workers.
Then there is the lack of promotion and lack of role models. The thought-provoking Race for Opportunity report, Race at Work 2015, published last November, tells us that while one in 10 employed people comes from a BME background, only one in 13 management positions and one in 16 top management positions are held by an ethnic minority person. As the noble Baroness, Lady McGregor-Smith, said, the media interest in her appointment as a CEO of a FTSE 200 company spoke volumes about its novelty.
The same report showed that BAME employees are less satisfied with their experiences of management and progression than white employees. Interest in taking part in a fast-track programme was significantly higher among BAME groups, jumping from 18% of white employees who would take part to 40% of BAME employees. Yet only 8% of BAME employees have been on fast-track programmes. The survey also revealed that 30% of BAME employees feel they have been overlooked for promotion, compared with 23% of white employees, and that British people with a BAME background are less likely to be rated as top performers compared with their white counterparts.
In the Civil Service, barriers to the progression of talented BME staff are seen as: a demoralising lack of BME role models; a lack of diversity in leadership; and unconscious bias and discrimination, leading to a lack of equal access to projects, promotions and secondments. One outcome has been Permanent Secretaries having specific responsibility for delivering measurable diversity outcomes.
I know we can all agree that employers need to reach the widest possible talent pool, and that companies can only benefit from creating a diverse workforce who reflect the clients, customers and communities they serve. It is entirely obvious that we must capitalise on the skills and talents of every individual in the workplace, regardless of their background. The question is, of course, how best to do that. As other noble Lords have noted, the Government’s ambitious 2020 plan is aimed at improving labour market outcomes for those from BME backgrounds. Its targets include increasing apprenticeship take-ups and university student numbers by 20% by 2020, awarding 20,000 start-up loans by 2020 and increasing BME employment by 20% by 2020.
I support those aims and believe in the power of targets to focus minds and provide impetus. Where the pace of change is slow, target setting can increase its speed, but I cannot help but feel that this 2020 vision has a headline-grabbing neatness which invites charges of tokenism. Targets can only be milestones on a longer journey. When we come to tackling issues facing BME people in the workplace, I hope we will be able to consider the wide range of options offered so powerfully by speakers in this debate, including my noble friends Lady Howells, Lord Morris and Lord Parekh.
Data are a powerful agent for change. Will the Minister take on board the recommendations by the TUC, Race for Opportunity and others that the Government should encourage employers to monitor the progress of BME candidates in recruitment and progression processes and should work with employers to improve the transparency of career progression? Does the Minister agree that to help make this happen, what is needed are “diversity champions”—senior roles within companies responsible for all aspects of diversity and inclusion? There is a strong view that every chief executive officer should be a diversity champion, because real culture change comes from the top. Yet according to a Business in the Community survey, one-third of all employees say their organisation does not have a senior leader who actively promotes equality and diversity in their workplace.
Leadership is of course key to tackling unfairness and discrimination in the workplace. It is vital that the leadership pipeline has sufficient BME talent to ensure that the senior management of the future reflects an increasingly diverse working population. In this respect, I am encouraged by the success of Women on Boards, the business-led initiative steered by the noble Lord, Lord Davies of Abersoch, to tackle the issue of low representation of women on FTSE boards. As the noble Baroness, Lady Neville-Rolfe, mentioned, in five years the representation of women has more than doubled: it now stands at 26.1% on FTSE 100 boards and 19.6% on FTSE 200 boards. There are no longer any all-male boards among FTSE 100 companies. The noble Lord rightly called this a,
“profound culture change at the heart of British business”.
When the Women on Boards report was published last October, the vice-chairman of KPMG, Melanie Richards, said:
“In order to remain relevant to our clients and communities, we need leaders who come from a wide range of backgrounds, each bringing different skills and views to the table, creating boardrooms that truly mirror our society. Without these different outlooks and diversity of skills and experiences, our businesses will simply not thrive in this fast-paced changing competitive world”.
I agree with her. What is true for the boardroom in this respect is surely also true for the workplace. The noble Baroness, Lady McGregor-Smith, has taken on a formidable challenge that is hugely important to the social and economic success of our country. I wish her well and look forward to the outcomes of her review.
Baroness Hussein-Ece (LD)
My Lords, I, too, thank the Minister for introducing this very timely debate. I also commend the Government for instigating the review which is to be led by the noble Baroness, Lady McGregor-Smith, who spoke very eloquently about her own background and experience.
I come to the debate feeling somewhat as if we have been here before. I did not put this in my report, but I have just remembered while sitting here that back in the late 1980s and early 1990s, in another life, I was a race equality officer. I could not have imagined, all these years later, that we would still be debating some of the issues that were very apparent at the time. The noble Lord, Lord Parekh, may remember Section 11 of the Race Relations Act—I think he might have referred to it. This demonstrates how we need to return to the principle of what we mean by race equality and that we must prioritise it, as it has somewhat slipped over the years. We thought we were probably doing quite well but we took our eye off the ball, so we have slipped right back. As other noble Lords have mentioned, great progress has been made on gender equality and in other areas, but we have very much taken our eye off the ball on this issue.
I, too, am a supporter of targets. I know many people are not and that there are many in my party and other parties who generally think targets are discriminatory in some way. However, they focus the mind and measure progress. Eventually, as in other areas, they can be set aside once progress has been made and equality has been achieved.
I want first to address BAME staff, management and board representation in the NHS. It is the largest employer in the country and the largest employer of people from black and minority-ethnic communities. It employs 1.4 million people, a very large number of whom are from BAME backgrounds. On 24 February, I asked the noble Lord, Lord Prior, why we have not been doing very well with BAME staff, management and board representation in the NHS. I commend him, because he was very honest and frank. He said:
“My Lords, it is outrageous that we have so few people from BME backgrounds in senior management and on NHS boards. We need to take action to improve the experiences of BME staff and their representation”.
He went on to give the House a few figures: some 22% of all staff in the NHS are from a BME or minority ethnic background, 28% of doctors and 40% of hospital doctors. Yet only 3% of medical directors are from BME backgrounds and 7% are in senior management roles. We have two chief executives and six chairmen from BME backgrounds out of 250 trusts. He said:
“So the performance across the NHS is … absolutely terrible and we have to take some serious action to change it”. —[Official Report, 24/2/16; 263-4.]
I was shocked by that: I knew it was bad, but I had not realised how bad, and how we have slipped back. Although the Minister should be commended for his approach and frankness on the issue, a 2015 survey of national bodies such as NHS Executive Search, Monitor and the NHS Trust Development Authority, whose boards are all subject to ministerial appointment, showed that none of their boards—at the time; I do not know if it has changed since—had any BME representation. The Minister was asked, as those appointments are in the gift of the Government, could they not take more action and lead by example? The Minister may not have the answer today, and I will be quite happy if she comes back to me on it, but is that still the case and what is being done to address that appalling deficit?
The NHS Equality and Diversity Council announced in 2014 that it had agreed to take action to ensure that employees from black and minority ethnic backgrounds have equal access to career opportunities and receive fair treatment in the workplace, so there has been an enormous amount of work in the interim. The extensive evidence of the benefits of diversity for innovation in leadership teams, which has been mentioned across the House today, is overwhelming. The case has been made. For the first time, the NHS has been required to demonstrate progress against a number of indicators of workforce equality, including a specific indicator to address the low levels of BME board representation. Despite this, as I mentioned, little progress has been made.
In The Snowy White Peaks of the NHS Executive Search Agencies, Roger Kline, a research fellow at Middlesex University, states that one of the known, visible aspects of conscious bias is the processes and practices used to recruit, develop and retain talent. In recruitment in particular, he points out, the lack of ethnic minority specialists operating in the executive search field, in the agencies who work with the NHS, has resulted in the “same sort of people” recruiting in their own image,
“with recruitment heavily influenced by candidate confidence as much as competence and by networks”.
The noble Lord, Lord Adebowale, mentioned that networks are far more important in securing senior management and board positions than knowledge and experience. If you are from a BME background and do not have extensive networks, you will not necessarily be successful when you apply to those boards. I say that with the caveat that there are of course some notable exceptions in the recruitment field—companies and organisations that are making great strides and trying very hard to address this issue.
In other words, there is continual fishing in the same, increasingly small pool. All the recruitment consultants seem to be fishing from a very narrow pool of candidates. I do not know whether the figures are available, but when we see an increase in women’s representation, I wonder how many of the same women are sitting on different boards. That is an issue as well. There is a lot of duplication—these are not unique numbers. You see board members on websites, and they seem to have an awful lot of other roles as well. That is another issue—that people go to the same people again.
Roger Kline mentions how change would,
“require trust and national level succession planning for executives—and the use of NHS Executive Search to provide candidate shortlists before trusts are allowed to consider”,
somebody outside over headhunters, who may not always look for diversity. So for the NHS as a whole, it seems much less likely that BME staff will be appointed from shortlisting than white staff will be. The absence or exclusion appears largely to be caused by discrimination in career support and the appointment process. The evidence is overwhelming that it takes much longer for BME staff to get promoted. I have heard of many instances of competent and long-serving BME staff leaving altogether after losing confidence and feeling completely demoralised over having any chance of career progression. What a waste of talent that is—all that experience going to waste.
Roger Kline also highlights in The Snowy White Peaks of the NHS Executive how:
“Large parts of the NHS still pay lip service to challenging discrimination in leadership and unlocking talent of women, BME and disabled people”.
Racism and discrimination against staff is a big factor—we have to talk about it. I hear what the noble Baroness, Lady Bottomley, said: that there is a fear of talking about it. But we have to talk about it, because we have to tackle it. It is a reality. According to the figures I have seen in one study, there has been a 65% increase in reported racist verbal and physical attacks against staff by patients in the five years up to 2013. According to recent figures, disappointingly, some hospital management actually collude and acquiesce. For example, in a case where a family said that they did not want their child treated by a black doctor, they gave in; these things are taking place. They may be going on beneath the radar, but they are happening—they are the reality.
The proportion of staff receiving well-structured appraisal support is also related to patient satisfaction, patient mortality, staff absenteeism and turnover, and a better performance on the annual health check. Working in well-structured teams helps to address staff absenteeism and turnover, as well as the annual health check performance, which is very important. Crucially, it is a factor in overall satisfaction in a hospital trust. Training and development is also a very important predictor. The more that employees receive training, learning and development that is relevant for the job and career progression, the better the outcomes. By giving staff clear direction and good support, treating them fairly and supportively, leaders create positive cultures of engagement, whereby dedicated NHS staff in turn can give their best in caring for patients.
Addressing the problems that many BME staff face will require a number of initiatives, but we need a multi-faceted approach and a complete rethink of senior leadership recruitment in terms of period of office and talent management. Much research points to what is required—dramatically widening the pool of talent and reminding these organisations that they are not a law unto themselves but public servants appointed to carry out a specific role for the benefit of patients, and funded by the taxpayer, as we were reminded earlier. I hope that the review to be carried out by the noble Baroness, Lady McGregor-Smith, will look closely at this area, as the NHS is such a large employer and a lot of lessons can be learned. However, as we have heard, the problem is not unique to the NHS.
I have a couple of other, wider points to make. As we know, BME communities have played a huge role in the NHS since its inception and throughout its history, socially and historically. We must ensure that they are not kept unfairly from proper career progression but are supported to play a full leadership role, as with all areas of public and private employment—as we have heard.
I also welcome what the Prime Minister said recently about the need to investigate why black people are more likely to be in prison than in top universities; he has appointed David Lammy MP to look into that. Nick Clegg, the former Deputy Prime Minister, talked about this issue a lot in the context of social mobility. It has not really bottomed out; it is a real scandal that it still exists in this country.
We need to take a long hard look at the realities of modern Britain. Why is it that 14% of the overall population are BME yet they make up one-quarter of the prison population? We must do better for all sections of our society and raise aspirations, not least through mentoring. All the aspects that have been discussed today are extremely positive and I welcome all of them. However, the whole issue of race equality now needs to be right at the top of the agenda, and I welcome the review.
Baroness Hayter of Kentish Town (Lab)
My Lords, I thank the Minister for introducing this today, and indeed for the story of her great-uncle who escaped from the problems that he had in being a Catholic by finding a home in the Labour Party. I am sorry that his great-niece managed to escape our clutches. She also paid tribute to her Secretary of State but of course we have the wonderful Sadiq Khan, for whom we have great hopes later this week. I am sure he will be a grand role model in future.
I pay tribute to the expertise, experience and, for some, the long record of those who have contributed today. The difficulties faced by BME people are at every level and in every sector. Those difficulties are in the public sector and in industry, from board level down to apprenticeships and the unskilled. The difficulties are perhaps more marked for women, but they are there all the time.
So when we champion and celebrate those who have broken perhaps not a glass ceiling but a brass ceiling, we should acknowledge the hurdles that they have overcome. The causes are wide, of course, and therefore the solutions will be too. They are societal, educational, attitudinal and legal, and we must start in all those fields. We need to raise aspirations as well as the educational and network support to equip all our citizens for a fair chance at work, but we also need to educate and train those who recruit to look out for—indeed, to search for—those who do not automatically come knocking at their door.
We need to support those in work by encouraging trade union membership, by training and mentoring or, yes, by a bit of positive discrimination in assisting them to apply for promotion and in developing their talents and opportunities within the workplace. We need to outlaw unfair employment practices and the systems that somehow always manage to pay BME employees less than their white colleagues, whether by bonuses, by pay grades, by access to special payments or access to overtime, by training opportunities or by proper recognition for their contribution.
As the noble Baroness, Lady McGregor-Smith, said, we need to ensure that there are role models at every level—among supervisors, union officials, managers, directors, Permanent Secretaries, safety reps, chairs of boards or any other elevated role, so it is clear that those positions are open to all. Those role models must start at the top, as others have said. Indeed, a target of no all-white FTSE boards by 2020 would be a worthwhile start. Today, as cited by the noble Lord, Lord Bilimoria, and others, 98% of FTSE 100 chairs being white is simply no reflection of the customers or the workforce of any of those companies. Just as the Companies Act now requires a breakdown of female employees on the board or in senior positions as well as in the wider company, we need to do that for ethnicity as well. Until businesses are confronted by their own poor record, they are unlikely to champion change.
As with any problem, we must start with ourselves. That means the public sector, funded by 100% of taxpayers, who come in all shapes, sizes, and colours, and in two genders. Yet the senior people they fund do not look or sound like them, as my noble friend Lord Morris said. The executive body of the Civil Service is completely white—and 85% male—while Whitehall’s corporate management board and ministerial team are similarly wholly white: and that team is responsible for diversity in the Civil Service.
This is not a matter of the skills and expertise not being available or a problem that can be sorted by education and training. As the 2014 research undertaken in the Civil Service, quoted by my noble friend Lady Warwick, showed,
“cultural and leadership climates are the main barriers to the progression of talented BAME staff”,
and:
“Unconscious bias and discrimination … means there is not always equal access to promotions … and secondments”.
Therefore, while we warmly welcome the noble Baroness’s review—no pressure there, of course—on increasing progression in the labour market by people from minority backgrounds, we must also look to our own workforce, within the Civil Service and the wider public sector. As the noble Baroness, Lady McGregor-Smith, said on her appointment:
“It has never been more important to … capitalise on the … talents of every individual in the workplace, regardless of their background”.
That applies to the public sector, with its myriad demands. As the TUC said, any loss of fair BME representation,
“is a huge waste of talent. Companies that only recruit from a narrow base are missing out on the wide range of experiences on offer from Britain’s many different communities. The government’s taskforce on racism must make it harder for discriminating employers to get away with their prejudices”.
As my noble friend Lady Howell said, it is time we stopped telling young people from different ethnic backgrounds that all they need to do is to get better qualified and all will be fine. No; we must get better at recruiting, promoting and paying these youngsters. As the noble Lord, Lord Adebowale, said, it is not their effort alone—it is effort on the part of the rest of us.
As regards the focus of the noble Baroness’s review, its objectives are worthy: increasing by 20% the proportion of apprenticeships taken by people from BME backgrounds; increasing by 20% the number of BME students at university; ensuring that 20,000 start-up loans are awarded to BME applicants by 2020; increasing by 20% BME employment; and increasing the diversity of the Armed Forces, which has been mentioned, and the diversity of police recruitment. In that list there is no mention of discriminatory employment practices, yet just last month, as the noble Lord, Lord Sheikh, and other noble Lords have said, the TUC showed that BAME workers with degrees are two and a half times more likely to be unemployed than white graduates. Indeed, at every level of education, jobless rates are much higher for BAME workers. Even those with A-level equivalents are three times more likely to be unemployed than their white counterparts, and those with GCSE equivalents and basic-level qualifications are twice as likely to be out of work. Across the workforce, the employment gap between the overall population and ethnic minorities is 11 percentage points, which we should all be ashamed of.
I am therefore delighted that the Prime Minister has set the goal of increasing by 20% the number of BME students in higher education and that the Government will require universities to publish admission and retention rate by gender, ethnic background and disadvantage. However, while I welcome action to get more BAME people into apprenticeships and universities, we must make sure that that does not just delay the discrimination until after graduation, when they then find it harder than their white contemporaries to find jobs.
The review also does not appear to cover remuneration where—to take just graduates, which other noble Lords have mentioned—black workers with degrees are paid nearly a quarter less than their white peers. More widely, not only are ethnic minorities more likely to be unemployed but those in work are more likely to be in accommodation and food services, retail, transport, health and social work—the low-paid sectors—and less likely to be in manufacturing and construction.
There is much work—and a lot of knowledge—in this area, and there are many activists making a difference, but, as with the Ethnic Minority Employment Stakeholder Group, to whose work I pay tribute, the time simply for their advice has gone. We need to take action, not just take note, as my noble friend Lord Morris said, on the recommendations that are already there.
My questions to the Minister are as follows. Will the Government develop a race equality strategy, not just with targets but with adequate resourcing? Will they use public sector contracts to improve companies’ race-equality practices, as suggested by my noble friend Lord Parekh and others? Will they ensure that anonymised or name-blind application forms are used across the public sector, as UCAS is now considering, and will they encourage private sector employers to do the same? Finally, will the Government require employers to include staff ethnicity figures in annual reports, alongside pay analysis across equality strands?
In the debate earlier today, as we finished the Trade Union Bill, we noticed that the Bill would require any publicly funded organisation to document the amounts of facility time, safety work and learning reps activity, so we think that asking for an annual breakdown of workforce numbers should not be too much to ask.
I thank the Minister for bringing forward this debate, and I congratulate the noble Baroness, Lady McGregor-Smith, on her appointment and wish her well. I think that she must already feel a lot of expectations on her shoulders.
Baroness Neville-Rolfe
My Lords, I am glad that this debate has been so widely welcomed. Today, we have heard some extraordinary insights into the important business of developing BME talent and those will feed into our review, which will be a great opportunity for us all. It was particularly good to hear from my noble friend Lady McGregor-Smith, who has taken on the new burden of leading the review. In response to the point raised by the noble Baroness, Lady Hayter, she will have good resourcing to assist with that process. My noble friend Lady McGregor-Smith said that success would come when the world had moved beyond talk of quotas and targets. I agree. The talent is out there. We need to reach out to it in many different ways and we need to use this review to find ways through.
This evening there have been a number of themes, which I thought I would pick up in summarising the debate. First, there was the theme of role models, which, as the noble Baroness, Lady Hayter, said, apply at every level. I have been very struck by how everyone, including the noble Baroness, Lady Howells, and my noble friend Lady Bottomley, has had different stories to tell and has made different suggestions about how to promote role models in this area.
A second theme was personal contribution by individuals. My noble friend Lady Bottomley talked about the two things that she had really cared about when she was a Minister in the health area. It seemed to me that the kinds of things that she was talking about, dating back to the 1990s, would lead to a good conversation with the noble Lord, Lord Adebowale, on what could be done in that area. I will of course write to the noble Baroness, Lady Hussein-Ece, about appointments in the NHS, because I do not have the information available to respond to her various questions.
Another important strand was diverse teams and their value in terms of success, growth and productivity. London is a vibrant example of their success. I should also add my congratulations to those of my noble friend Lord Taylor on the brilliant success of Leicester City. It is another example of diversity in teams.
The fourth theme was the importance of avoiding discrimination at interview and more generally in recruitment. My noble friend Lord Polak gave us examples from a Jewish perspective, which I found very interesting. Many spoke of the value of the use of blind recruitment, which I mentioned in my opening speech, and the noble Baroness, Lady Hayter, made some other suggestions in the area of recruitment. My fifth theme was unintended prejudice, which will be part of the McGregor-Smith review. The same was true of data, a sixth theme. Data as an agent of change was mentioned by the noble Baroness, Lady Warwick, who rightly mentioned the example of women on boards. I agree with her that that business-led initiative has achieved a lot.
I was particularly struck by the words of the noble Baroness, Lady Howells, who has had such an amazing career—in Grenada, in Washington and in Paris—and who contributed to work on equality to such an extent.
Perhaps I could add some wider context. The labour market is thriving and we have record levels of employment. The employment rate for October to December 2015 was 74%, the highest on record. The number of people in employment is the highest on record at 31.4 million and it has increased by over half a million compared to a year earlier. Both the number of men and the number of women in work have hit record levels, and unemployment is at 5%, which is the lowest rate since 2005. That is a positive context. But what about the future demographics? The proportion of people in the labour market from BME backgrounds is steadily increasing—indeed, at a record rate, according to my noble friend Lady McGregor-Smith. This reflects long-running and deep-seated changes that will lead, of course, to a more diverse society. The potential of these individuals must be harnessed as they make their way through the education system and into the labour market. It is the right thing for the individuals concerned, the right thing for business and, more importantly, the right thing for the country. It is partly to look ahead to this changing Britain that the Government have set up a new inter-ministerial group under my BIS colleague Sajid Javid, Secretary of State. The group met for the first time on 8 March.
Over the course of the last Parliament we created 2 million more jobs: that is 2 million more opportunities for people to go out and earn a living. This included a 20% increase in the number of people in work from black and minority ethnic backgrounds. The Prime Minister is therefore right to expect more progress in this Parliament and announced his ambition to further increase the number of ethnic minorities in employment by 2020. That is a challenge accepted by the Department for Work and Pensions. The noble Lord, Lord Adebowale, mentioned that 20%, and he feels that our record is not good enough.
Lord Adebowale
I hesitate to interrupt the Minister in full flow, but Adebowale is a good old Yorkshire name, and pronounced differently from how the Minister said it.
Baroness Neville-Rolfe
I am so grateful for that. People will know that I have a bit of a problem with pronunciation. That had foxed me, but now the noble Lord has taught me the way forward, for which I thank him. The noble Lord said that our record is not good enough. That is, of course, why we have set up our review.
As the noble Lord, Lord Morris of Handsworth, said, people are key to our success in this country. I know this from my experience as a huge employer working in lots of local communities. Our values included treating people equally and with respect. Frankly, that is what leads to success and, indeed, to productivity improvement. We are lucky in this country to have had race equality legislation for 50 years. But of course racism is unacceptable, and this Government are determined to ensure that everyone has the opportunity to get on in life, free from harassment and fear.
It is good news that 237,000 people with a BME background started one of the 2.4 million apprenticeships that began over the last Parliament. In this Parliament, we will go further, committing to 3 million starts. Of these, we aim to ensure that a greater proportion comes from black and ethnic minority backgrounds. This is a challenge that my colleague the Skills Minister has accepted.
For those who want to be their own boss, the introduction of start-up loans has made a huge difference, with more than 20% of loans in the last Parliament going to those with a BME background. We have set ourselves an ambitious target of 75,000 new loans over this Parliament, of which a greater proportion should go to ethnic minorities.
But it is not just getting a job that matters; it is ensuring that young people have the education they need to fulfil their potential. On this, there is a good story to tell on the progress of BME students into higher education, but we can do more. We will take action to increase the proportion of BME students progressing to higher education by 20% by 2020.
My noble friend Lady Bottomley rightly drew attention to the opportunities in universities among academics and in university appointments more generally. I join her in congratulating the noble Baroness, Lady Amos, on her appointment as head of SOAS. I was interested to hear about the Equity Challenge Unit. The noble Lord, Lord Bilimoria, mentioned GEEMA. I will pass on these thoughts to the Higher Education Minister, Jo Johnson, who is engaged on this issue.
I do not have the figures for Parliament, but I think that we agree that there has been a change here and that that is reflected in this House. I am grateful to the noble Lord, Lord Parekh—forgive my pronunciation again—both for his kind words and for pointing out how the situation has improved on the Conservative Benches. I was glad to hear from my noble friend Lord Sheikh that he has encouraged this trend, as I know have other noble friends.
The public sector is working hard, from efforts to increase diversity among the police and Armed Forces to initiatives to improve diversity in the Civil Service. Following research published in March last year, the Talent Action Plan has been launched, focused on building inclusion across the Civil Service and ensuring that groups that historically have been underrepresented are fully supported in the workplace and given support to progress. This includes an expansion of the Summer Diversity Internship Programme and widening the Positive Action Pathway. The senior leaders race network, launched earlier this year, will also make a difference, with role models—again that theme—inspiring the leaders of the future.
My noble friend Lord Sheikh asked about minorities in prisons. He will now be aware from what has been said that David Lammy MP’s inquiry into criminal justice issues has recently launched and put out a call for evidence. Perhaps my noble friend would be kind enough to feed in his concerns to that inquiry.
Many of us have touched on board-level work, which is closer to my own ministerial responsibilities. Sir John Parker’s group on BME representation on corporate boards, mentioned in the excellent and varied Library Note for this debate, has been looking at this issue. Sir John chairs Anglo American. His group includes David Tyler, who chairs Sainsbury’s, Trevor Phillips, president of John Lewis—both huge employers—and Ken Olisa, a non-executive director of the IoD who is also the first black Lord-Lieutenant of Greater London and another role model. The group’s aim is to end mono-cultural boards in the FTSE 100 by 2020, which may please the noble Baroness, Lady Hayter. The group will report in the autumn. Currently, 5% of CEOs and chairs in the FTSE 100 are from ethnic and minority backgrounds. The successes of these individuals reflect the entrepreneurial skills that we heard about from the noble Lord, Lord Bilimoria—again, a role-model point.
Only last week, as it happens, following a meeting with Sir John, I met members of his group and others including leading headhunters to look into the issue of data protection. Noble Lords will know that I have a taste for the practical. I say to the noble Lord, Lord Morris, that I tend to like action as much as words, which can be a problem when you are a government Minister. However, I discovered from Sir John and Trevor Phillips that recruiters were saying that they could not keep databases which allowed them to present lists of candidates without running into data restrictions. We met and agreed that in the short term the ICO—the Information Commissioner’s Office—in consultation with search firms and others should produce a practical guide on what to do that can be used by interested parties.
In closing, I add a few words about fundamentals—the philosophy of the subject if you like. What underlies everything that I have said is the desire that merit and accomplishment should be the only criterion for all appointments in public and commercial life. In other words, everyone’s attributes will be judged against the same criteria whatever their background. Sex, skin colour, social background, disability, religion and other irrelevant differentials should have nothing to do with it. In the reasonably near future—I hope not in the long run—that is the society we hope and expect to achieve. In such a society, there would be no need for special investigations to look at appointments against this or that social criterion nor to consider special measures to counteract barriers to labour market changes. One measure of our success as a society will be how quickly we can reach that position.