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Oral Answers to Questions
(7 years, 12 months ago)
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Luke Hall (Thornbury and Yate) (Con)
1. What assistance the Government have given farming businesses to increase their resilience.
The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)
We have put in place a range of measures to support our farmers and help build their resilience. Government investment in flood defence improvements will provide better protection for 1 million acres of agricultural land. We are investing in innovation, skills and capital items to boost the sector’s resilience, and we are working to introduce a dairy futures market to help farmers manage price volatility.
George Eustice
My hon. Friend makes an important point and we have acted to deal with that problem. From April this year the Government extended tax averaging for farmers to five years, up from the previous two years, so that they can better offset good years against bad years. In addition, Her Majesty’s Revenue and Customs has a number of schemes, such as the time to pay scheme, which means that it shows forbearance to farmers who are suffering cash-flow difficulties.
Rachael Maskell (York Central) (Lab/Co-op)
Eleven years ago this morning, terrorist attacks were unleashed on our city. We pay our respects today.
As an environmentalist, someone who campaigned in the aftermath of the floods, and a lover of the great outdoors, I am proud to represent Labour as shadow Secretary of State for Environment, Food and Rural Affairs. Many farming businesses depend on trade with the EU. Following the outcome of the referendum, the resilience of farming will be keenly tested. What immediate steps has the Secretary of State taken to ensure that trade relations with EU partners will remain unchanged for the foreseeable future?
George Eustice
I welcome the hon. Lady and her colleagues to the Front Bench of this diverse Department, and I associate myself with her comments about the terrorist attacks.
Following the decision to leave the European Union, we are holding a number of meetings with officials to plan for our next steps on trade—indeed, we will have a meeting today to hold such discussions. It will be a matter for a new Prime Minister and the Cabinet that they put in place, but early thinking and planning work is going on across the Government.
Rachael Maskell
I am concerned that resilience was not planned for by the Minister in advance of the EU referendum. Trade and regulations for our food and farming industry are linked to the EU more than in any other sector, yet the Government’s cuts to DEFRA up to 2020 will total a 57%—yes, 57%—reduction in its budget. In the light of that, will the Minister explain how his Department will have capacity to analyse the impact of the EU referendum, build resilience, and negotiate the way forward?
George Eustice
For the time being we remain in the European Union, and all existing arrangements continue. Only once we have concluded negotiations and left the European Union will we put future measures in place. On capacity in the civil service, some areas and some EU dossiers have a long-term horizon with which we will perhaps be less engaged and involved, and that will free up capacity for some of the planning work that we need for our own domestic policy.
Mrs Caroline Spelman (Meriden) (Con)
I record my thanks to my hon. Friend the Member for Colchester (Will Quince) for providing us with a taste of Colchester yesterday. One of his constituency’s soft fruit farmers emphasised his concern about his resilience, and his dependence on EU migrant labour. Are plans in place to ensure that farmers are supported should migrant labour be reduced?
George Eustice
As my right hon. Friend will know, I have worked in the soft fruit industry, and I am familiar with the challenges that certain agricultural sectors face with seasonal labour. Ultimately, the decision that she refers to will be for a new Prime Minister, the Cabinet they choose, and the negotiations that they seek. In recent years we have had models such as seasonal agricultural worker schemes, and there are ways to ensure that the required labour is available.
Kerry McCarthy (Bristol East) (Lab)
I tabled five written questions in the past week asking what assessment had been made of the impact of Brexit on a range of DEFRA-related areas, from air pollution to waste, water, rural payments, fisheries, food standards and food safety. I got one answer back that basically said that everything remains in place and the negotiations are up to the future Prime Minister, which to me shows a shocking degree of complacency. DEFRA, almost more than any other Department, will be affected by Brexit, and I am not reassured by what I have heard this morning that that work has started.
George Eustice
I disagree with the hon. Lady. The Government put forward an assessment of the potential impacts of leaving the European Union, which was hotly debated during the referendum. Ultimately, the British public made an assessment of what they wanted to do, and the assessment is that they want to leave the EU. The job of the Government now is to implement that decision.
Kevin Foster (Torbay) (Con)
2. What steps the Government are taking to prevent hunting trophies from threatened or endangered species being imported to the UK.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rory Stewart)
The Government are absolutely clear that we will not allow the import of trophies from critically endangered species when it is unsustainable—tigers, for example. We have also increased the protection and controls on six other species, ranging from elephants to polar bears. We remain absolutely committed to banning the import of lion trophies unless we have significant improvements in lion conservation.
Kevin Foster
I thank the Minister for that answer and the general thrust of it. Does he agree, however, that it is morally wrong to kill the most endangered species merely to put a trophy on the wall, and that it would make sense to look to ban more widely the importation of those trophies that come from the most endangered categories?
Rory Stewart
I agree absolutely. All hon. Members would agree strongly that, if a species is critically endangered, it is not suitable to be hunted, let alone put on a wall as a trophy. We will look closely at scientific evidence across the range of endangered species. It will be extremely relevant to focus on that, with September and October being the time for the CITES conference in Johannesburg.
Mr David Hanson (Delyn) (Lab)
Australia and France have both banned the use and import of lion products. What do they know that the Minister refuses to act upon?
Rory Stewart
We are looking closely at what Australia and France are doing. We have been working on a common EU-US position in order to change practices in Africa. It makes a huge difference that we do this together as 700 million people in the EU and the US rather than trying to do it individually.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
Following the EU referendum vote, we have no idea how the EU action plan against wildlife trafficking will be implemented by the UK Government. Is the Minister in a position to provide any assurances to the House today?
Rory Stewart
As my colleague the Minister of State has pointed out, the details of our position in relation to Europe will have to be determined by a future Prime Minister, but we played a very active role in drafting that plan and pushing for its contents. The hon. Lady will see in what we are doing in Vietnam our commitment to that plan. I reassure her that, certainly as long as I am in this position, the UK’s position is absolutely unequivocal.
Martyn Day (Linlithgow and East Falkirk) (SNP)
3. What assessment she has made of the potential effect of the UK leaving the EU on rural development programmes.
Patricia Gibson (North Ayrshire and Arran) (SNP)
6. What assessment she has made of the potential effect of the UK leaving the EU on rural development programmes.
The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)
Until negotiations conclude and the UK leaves the EU, all existing arrangements remain in place, including rural development programmes across the UK. It will be for a new Prime Minister and his or her Cabinet to consider the future shape of rural development once the UK leaves the EU.
Martyn Day
The Minister may recall that Scotland voted to remain in the EU in the referendum. Will he commit that nobody in Scotland who benefited from the Scottish rural development programme will lose out on funding?
George Eustice
As I have said, while we remain in the EU, all existing arrangements remain in place, including our current rural development programmes. Nothing changes until negotiations have been concluded and a new partnership with the EU is put in place.
Patricia Gibson
Agriculture plays a major part in Scotland’s £14 billion food and drink industry. Following the uncertainty created by the EU referendum result, what reassurances can the Minister give today to ease the concerns that the result has caused among Scotland’s farming communities?
George Eustice
I can give farmers throughout the UK the reassurance that, for the time being, we remain in the EU, and all existing arrangements remain in place, including all existing support payments, until we leave the EU, and until a new type of partnership and a new domestic agriculture policy are put in place.
Mr Philip Hollobone (Kettering) (Con)
I congratulate my hon. Friend on the energy, enthusiasm and intelligence he brought to the leave campaign. Having met farmers in my constituency in Kettering before the vote, it was clear to me that the senior leadership of the National Farmers Union had signed up to “Project Fear” and was trying to scare farmers and rural dwellers into voting for remain. Now that the result has been decided—in Kettering, we voted overwhelmingly to leave—can we make sure that everyone involved in rural communities and farming talks up rural communities and farming, because we have a very bright future ahead of us?
George Eustice
I thank my hon. Friend for his kind comments. It is important, now the debate has concluded and the country has made its decision, that we move on and focus on next steps and the future. This week, I visited the Livestock Event and had meetings with many farmers. What I find interesting is that once we get past the initial shock—for some—of the decision, people engage with the detail of what might be possible in the future and become more excited about the potential for our future.
Mr David Nuttall (Bury North) (Con)
Does the Minister agree that leaving the European Union will provide us with a tremendous opportunity to develop a tailor-made package of measures designed to support and help UK farmers? In fact, there is nothing to stop us starting to work on putting that package together right now.
George Eustice
My hon. Friend makes a very important point. I can reassure him that while no decisions will be made until there is a new Prime Minister who has chosen a new Cabinet, the Department is working on options that might be presented to the new Prime Minister.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
One claim from some leave campaigners was that Brexit would lower food prices. Now that Brexit is the decision the country has made, will the Minister tell us what options are available to deliver them?
George Eustice
Food prices are driven by a range of factors, most importantly energy prices, developments in weather around the world and exchange rates. Those are the key drivers of our food prices. I have always made clear that while food prices go up and down—they are down 7% over the past two years—they are driven by bigger events than EU membership.
Rebecca Pow (Taunton Deane) (Con)
Many farmers and landowners are about to sign higher-level stewardship contracts, but there is a dilemma for Natural England. Many are 10-year contracts and in these uncertain EU times they are being put on hold. Will the Minister give assurances that these precious pieces of environmental biodiversity will not be at risk and that something will happen to protect them?
George Eustice
My hon. Friend puts her finger on an important point, which is that there will be areas and elements where we need continuity. We are having discussions across Government about how to ensure we secure that continuity without prejudicing what a future Prime Minister might want to do.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Meirionnydd is the Sir Nawdd-Feature County at the Royal Welsh agricultural show this month and I hope Ministers will be able to attend. Will the Minister reassure the farmers of Meirionnydd and Wales by explaining what discussions he has had with colleagues in the Welsh Government regarding the funding of rural development and agricultural schemes in Wales?
George Eustice
I have regular discussions with my opposite numbers in the devolved Administrations. I hope I will be able to meet the new Welsh Administration when I next go to Council in Europe, which is in about two weeks’ time, and discuss these issues in more detail. I also hope to attend the Royal Welsh show this year.
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
I welcome the shadow Minister and her team to their place. Will the Minister confirm that his plans to ensure the fair allocation of the convergence uplift are on track? Will he tell us when Scottish farmers should expect to receive increased payments?
George Eustice
We have always had a commitment to review the allocation of common agricultural policy budgets—the so-called convergence uplift, as the hon. Gentleman refers to it—during 2016. I had a meeting and early discussions with NFU Scotland in January. Now that the Scottish elections are over and we have passed the referendum purdah, I would expect to be able to progress those discussions with the Scottish Government in the autumn.
Craig Whittaker (Calder Valley) (Con)
4. What progress her Department and its agencies have made on making data publicly available in the last 12 months.
The Secretary of State for Environment, Food and Rural Affairs (Elizabeth Truss)
Last summer, I set a target for DEFRA of releasing 8,000 datasets. By this summer, I am delighted to say that we have achieved 11,000 datasets, which means that more than a third of Government data is DEFRA data. This is bringing real benefits to people, providing information about air quality, better flooding data and landscape data for farmers and architects.
Craig Whittaker
As the Calder Valley assesses how to spend the much appreciated funding for flood defences, many community groups want to contribute to alleviating floods—doing things such as planting trees, building dams and upland management, to name but a few. Will my right hon. Friend confirm that information on all water flows held by the Environment Agency and Natural England will be made readily available to help community groups to decide where the schemes should be placed?
Elizabeth Truss
My hon. Friend has done a fantastic job in championing the Calder Valley. I want to ensure that all that information is available so that we can manage whole catchments, including the Calder, for flood defences. What happened over last year’s very difficult floods was that more information was made available to the public. For example, there were 19.5 million hits on our flood information service website. What I want to do is make even more information available to the public.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does the Secretary of State keep data on how many scientists are working in agricultural technology and on how much money is spent on agricultural technology and research? Is she not worried that, with ChemChina taking over Syngenta and the amazing Jealott’s Hill research capacity, there is a real danger of our research space being eroded?
Elizabeth Truss
The hon. Gentleman is absolutely right that our research base and our agri-tech are vitally important. That is the future of agriculture, with more precision farming and better use of data. I am determined to do all we can to protect and grow that. That is why we are investing £160 million in our agri-tech budget. Of course we need to plan even more for the future.
Rob Marris (Wolverhampton South West) (Lab)
Has the Department made available up-to-date data on the effect of the temporary neonicotinoid ban on both agricultural production and the health of bees, especially honey bees? If not, when will that data be available?
Elizabeth Truss
We are looking at further research in this area. More research is due to be published and there are already many published pieces of research. The hon. Gentleman will be aware that the decision on the use of neonicotinoids in the UK is made by the independent pesticides committee. It is made by Ministers, but we follow the scientific advice of that committee, whose minutes are fully published.
Graham Evans (Weaver Vale) (Con)
5. What recent steps the Great British Food Unit has taken to promote regional food and drink.
Sir Simon Burns (Chelmsford) (Con)
7. What recent steps the Great British Food Unit has taken to promote regional food and drink.
Richard Graham (Gloucester) (Con)
10. What progress her Department has made on promoting regional food and drink.
The Secretary of State for Environment, Food and Rural Affairs (Elizabeth Truss)
We launched the Great British Food Unit in January to promote our fantastic British produce around the world. In April, I was in the US working to open the market for beef and lamb, as well as promoting fantastic British products such as the classic gin and tonic.
Graham Evans
That sounds good, but for me it is a bit early for gin and tonic! Food and drink exports, not least the world-famous Cheshire cheese, are very important for the Cheshire economy. Given this country’s decision to leave the European Union, how important is the role of the Great British Food Unit in helping farmers in my constituency and indeed throughout the UK to get the necessary export markets?
Elizabeth Truss
In my opinion, it is never too early for a gin and tonic! I completely agree with my hon. Friend. Now that the British people have made the decision to leave the EU, the Great British Food Unit is even more important. We already have missions planned for the Gulf, China and Japan to open more markets for fantastic British food. I am going to increase the resources going into the Great British Food Unit to make sure that we turbo-charge our efforts to export more British food right around the world.
Sir Simon Burns
Does my right hon. Friend accept that Essex is home to some of the finest food, drink and countryside in the nation? What does she think is the link between food and tourism, and what more can be done to promote it?
Elizabeth Truss
We know that for a third of all visitors, food is a major factor in deciding where to visit. It is hugely important, which is why DEFRA is backing food tourism. We recently backed the “tour culinaire” to Yorkshire, which accompanied the cycle race and featured fantastic Yorkshire products such as liquorice. I would be delighted to discuss with my right hon. Friend how we could do something similar in Essex in respect of fantastic products such as Tiptree strawberry jam.
Richard Graham
The Secretary of State will be delighted to learn that, since she visited Gloucester Services in February, it has been given both a sustainability award and the first Royal Institute of British Architects award ever given to a motorway services station. Famously, while she was there she enjoyed a Gloucester Old Spot sausage for breakfast. I hope that she will now confirm that, during our renegotiations with the European Union, she will seek to extend the protections given to Gloucester Old Spot meat, Single Gloucester cheese, and other great British foods.
Elizabeth Truss
I thank my hon. Friend for a very enjoyable visit to Gloucester Services. I am delighted that its chief executive, Sarah Dunning, has agreed to be one of our food pioneers, promoting Great British food around Britain and around the world. I look forward to talking to my hon. Friend about how we can protect these great products when they are not just a matter for the European Union, but are more widely known around the world.
Nick Smith (Blaenau Gwent) (Lab)
Cheers, Mr Speaker. [Laughter.] I am glad that the food unit is showing success. However, while the Secretary of State boasts about her support for British food, DEFRA headquarters sources almost half its food from overseas, and other Departments are falling even further behind. Why is DEFRA not ensuring that Departments back our great British food?
Elizabeth Truss
We absolutely are ensuring that Departments are backing British food. For example, more than 90% of the dairy products sourced by the Government come from the United Kingdom. There are, of course, some products, such as coffee, that we cannot yet produce in the UK, although now that we are able to produce our own aubergines, tomatoes and chillies, I am sure we are not far away from that.
Alison Thewliss (Glasgow Central) (SNP)
One of the items on the Great British Food website is the promotion of the EU protected food name scheme. According to the site, 73 products in the United Kingdom are protected under the scheme. What will replace it once the UK Government have dragged us out of the European Union?
Elizabeth Truss
I think the number of protected food names has risen to 74, but the website may not have been updated.
This is an extremely important issue, and it is one of the issues on which we are working at the moment. However, I hope that we will develop a British protected food names status in the future.
Jim Shannon (Strangford) (DUP)
Armagh apples, Comber potatoes, Irish whiskey and Lough Neagh eels are just some of the protected food names that we have in Northern Ireland. What discussions has the Great British Food Unit had with Food NI to help promote those great foods and drinks throughout the United Kingdom of Great Britain and Northern Ireland?
Elizabeth Truss
I was delighted to visit Belfast and the huge show there, and to taste some of those products for myself. They are truly outstanding, and I am working closely with the Northern Irish Minister on promoting them throughout the world. They were heavily represented on our recent trade mission to China, and we will certainly be doing more work on that in the future.
Mr Speaker
As a Member has just left the Chamber while exchanges on the question to which he contributed were ongoing, may I gently point out to the House that Members should stay in the Chamber until all the exchanges on their question, or the question to which they contributed, have been completed? It is quite an elementary courtesy.
Ann Clwyd (Cynon Valley) (Lab)
8. What assessment she has made of the effectiveness of recent badger culls.
The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)
During 2015, badger control operations in Somerset, Gloucestershire and Dorset were all successful in meeting their targets. According to the Chief Veterinary Officer’s advice, the results show that industry-led badger control can deliver the level of effectiveness that will enable us to be confident of achieving disease control benefits.
Ann Clwyd
Badger culling in England costs about £7,000 per badger killed. In Wales, the badger vaccination programme costs about £700 per badger vaccinated. Lord Krebs, who is a renowned expert on the subject, has continually said that
“rolling out culling as a national policy to control TB in cattle is not really credible.”
Does the Minister accept that?
George Eustice
TB is costing the country £100 million a year, and that is why we have to act. The veterinary advice is clear—we cannot have a coherent strategy to eradicate TB without also tackling the disease in the wildlife population. Following advice from the World Health Organisation, the vaccination operations in Wales, as in England, have been suspended because there is a lack of vaccine.
Angela Smith (Penistone and Stocksbridge) (Lab)
9. If the Government will underwrite basic payment scheme payments at current levels until the end of 2020.
The Secretary of State for Environment, Food and Rural Affairs (Elizabeth Truss)
Until we leave the EU it will be business as usual; farmers will continue to receive support payments. We are developing options for future domestic policy. Ultimately this will be a decision for the new Prime Minister. I am working very closely with organisations such as the National Farmers Union, the Country Land and Business Association, and environmental groups, which will have a role to play in helping us develop these policies.
Angela Smith
I am very pleased to hear that groups such as the NFU and the CLA are going to be involved in finding a way out of this mess. Can the Minister guarantee that the CAP subsidy up to 2020 will be underwritten not just for the basic payment scheme but for pillar 2 schemes—agri-environment schemes?
Elizabeth Truss
As I said, until we leave the EU those schemes will be in place, but when leaving takes place, after article 50 is triggered and the process is gone through, this will be a decision for the new Prime Minister. It is not a decision I can make at this stage.
Neil Parish (Tiverton and Honiton) (Con)
It is not only important to keep the basic farm payment going but vital that we get it fixed, because the Rural Payments Agency is still having big problems. Lots of the payments to farmers have not been ratified and not properly made. What is actually happening with the Rural Payments Agency?
Elizabeth Truss
I can tell my hon. Friend that 99.6% of farmers have now received a payment. This year, for the first time, the system has had prepayment cheques to make sure that we did not overpay farmers and then end up having to claw back the money. That means that there will be a reconciliation period when we make the adjustments—that is taking place at the moment—so that farmers who had a problem in their application will receive the extra payment over the next few months. We are fully on track for payment on time next year.
Jessica Morden (Newport East) (Lab)
11. What assessment she has made of recent trends in food prices.
The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)
DEFRA monitors retail food prices through the consumer prices index. Year on year, food prices have continued to fall, with a 2.8% fall in the year to May 2016. We also monitor trends in household expenditure on food through the family food survey. Following a period of higher food price inflation, retail food prices have fallen by 7% since their peak in February 2014.
Jessica Morden
Last week I visited a very successful food supplier in my constituency that told me that it was already putting up its prices because of changes in the exchange rate hitting imports, and predicted food inflation of up to 8% within months, following the leave vote. Clearly there are real impacts now. How will the Minister respond to a spike in UK food prices, which is a crucial issue for consumers?
George Eustice
As I explained earlier, one of the factors that has an influence on food prices is exchange rates. A number of analysts have been saying that in fact the pound has been unsustainably high against the euro for some time, caused by concerns about the weaknesses of the eurozone, and that the correction we have seen was overdue anyway. Exchange rates go up and down, but the crucial thing is that we have a competitive food supply industry in this country.
Huw Merriman (Bexhill and Battle) (Con)
12. What recent steps the Government have taken to work with industry to increase the number of apprenticeships in the food, farming and agri-technology sector.
The Secretary of State for Environment, Food and Rural Affairs (Elizabeth Truss)
The Government are committed to trebling the number of apprentices in the food and farming sector by 2020. I am delighted that the Skills Minister has committed to the apprenticeship levy being used by major organisations such as supermarkets and food manufacturers through the food supply chain, so that they can help small and medium-sized enterprises and farmers to take on apprentices.
Huw Merriman
As chairman of the all-party parliamentary group on bees, I got a tremendous buzz from welcoming apprentices of British bee farmers who are completing an innovative three-year programme in an industry with sales of over £100 million per year. What steps are the Government taking to encourage more honey providers to take on apprentices?
Elizabeth Truss
I thank my hon. Friend for his question. Honey is an important product for our country, generating over £100 million. As I have said, the apprenticeships that are created through the apprenticeship levy can be found throughout the food chain. DEFRA has its own beekeeper apprentice helping to maintain our hives at Noble House—DEFRA’s headquarters—where we produce our own Whitehall honey.
Alec Shelbrooke (Elmet and Rothwell) (Con)
T1. If she will make a statement on her departmental responsibilities.
The Secretary of State for Environment, Food and Rural Affairs (Elizabeth Truss)
Two weeks ago, the British people voted to leave the European Union. I will be ensuring that food, farming and the environment have a strong voice in the exit negotiations and in establishing our new domestic policies. Until we leave the EU, it is business as usual for farmers and the environment, and I am meeting relevant organisations to assure them of that. DEFRA’s work continues: we will shortly be publishing the national flood resilience review; we will be continuing with our Great British Food campaign and our work to open up new markets; and we will be developing 14 local environment plans.
Alec Shelbrooke
Following the devastating Boxing day floods last year, will my right hon. Friend tell me and my constituents what long-term plans are being put in place to protect low-lying villages in my constituency, such as Methley, Mickletown, Allerton Bywater and Woodlesford?
Elizabeth Truss
I thank my hon. Friend for his question. He has been an assiduous advocate of his constituency, ensuring that towns and villages in his area are not adversely affected by flood defences upstream. We will be working on an overall plan for the River Aire catchment, through which we will manage the overall river flow instead of looking at individual places. That will form part of our national flood resilience review, which we will be announcing shortly.
Rachael Maskell (York Central) (Lab/Co-op)
The horticultural industry is particularly vulnerable following the leave vote due to the high proportion of EU seasonal workers in the sector. How will the Secretary of State ensure that our crops are harvested in this uncertain period by securing continued labour from the EU?
Elizabeth Truss
I thank the hon. Lady for her question and welcome her to the Dispatch Box. She was a fantastic advocate for her constituents during the difficult flooding in York, and I look forward to working with her.
As for agricultural workers, my constituency is a great producer of salad vegetables and onions, and I fully understand the importance of EU workers to our agricultural industry. It will be one of the key things that DEFRA will work on, putting the case across Government to ensure that we continue to have that supply of workers.
Rachael Maskell
It is evident from the Secretary of State’s responses that her Department did not make contingency plans for a leave vote, failing in its duty to protect not only one of our major industries, but those who work in it. Will the Secretary of State confirm that all EU citizens working in farming can remain in the UK, which the vote on yesterday’s Opposition day motion called for, and that she has already made representations to the Home Office?
Elizabeth Truss
It is absolutely clear that it is business as usual while we remain members of the EU and that those workers will continue to work in those areas. The reality is that I cannot make decisions for a future Prime Minister. That is the fundamental issue here and that is why my job over the coming months is to be a strong voice for farming and the environment in the overall negotiations.
John Stevenson (Carlisle) (Con)
T2. Following the floods in Carlisle, I am concerned that a group of leaseholders will not be able to get insurance under Flood Re. They consist of 68 long leaseholders with a management company as the freeholder with responsibility for insurance. That management company has not been able to obtain insurance so far. Will the Minister look into the issue and consider amending the legislation if necessary?
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rory Stewart)
In addition to welcoming the shadow Secretary of State to her position, may I also welcome my friend the hon. Member for Newport West (Paul Flynn) to his position?
As for the flooding in Carlisle, my hon. Friend the Member for Carlisle (John Stevenson) is a great champion of his constituency. If there is an individual leasehold property, it would be covered with affordable insurance under Flood Re. Unfortunately, when there is a larger number of properties, such as the more than 60 properties that the landlord has in this case, it would be classified as commercial insurance and would require a bespoke, tailored commercial insurance product from the insurance industry. I am happy to look at the individual case, and the British Insurance Brokers Association is also coming up with tailored products exactly to address such commercial risks.
John Nicolson (East Dunbartonshire) (SNP)
T4. Scotland’s food and drink industry exports £725 million-worth of produce to the European Union. Given the disastrous Brexit vote, what impact does the Minister believe any restrictions on the seasonal workforce will have on the industry north of the border?
Elizabeth Truss
I thank the hon. Gentleman for his question. It shows why we are turbo-charging the work of the Great British Food Unit, to make sure that we open up new markets and get more of our products out into the world, as well as into the European Union. I am clear that agriculture and food has major export growth potential, which is why I am having a meeting today with the Business Secretary to talk about our trade negotiations and making sure that food is a key part of those.
Luke Hall (Thornbury and Yate) (Con)
T3. Our farms have some of the highest livestock welfare standards in the world, so how will that be recognised in upcoming trade negotiations? We will be doing our farmers a disservice if cheap imported food produced with very little regard for livestock welfare comes into the UK.
The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)
My hon. Friend makes an important point. He will be aware that we have a manifesto commitment to recognise animal welfare standards in our trade negotiations. That is particularly important in sectors such as poultry meat during Transatlantic Trade and Investment Partnership discussions, and I can assure him that we make these representations to the European Commission.
Jeff Smith (Manchester, Withington) (Lab)
T8. The Government decided against using DEFRA funding to implement a clean air zone in Manchester. Greater Manchester is expected to miss our 2020 air quality targets, because of the high levels of nitrogen dioxide and particulate matter caused by road transport. Will the Government look again at a scrappage scheme for older vehicles and at incentives to encourage the use of hybrid and electric cars?
Elizabeth Truss
I thank the hon. Gentleman for his question. According to our projections, Greater Manchester will hit, by being below, the 40 mg target, which is why it has not been included in the mandatory clean air zones. We are shortly about to consult on those, but the legislation is in place for Greater Manchester to put in that clean air zone if it wishes to do so; I believe in devolution, and surely it is a matter for the local council if it wants to take that forward.
Rebecca Pow (Taunton Deane) (Con)
T5. The recent Environmental Audit Committee report on the important subject of soil highlighted that a significant proportion of our agricultural land will be become unproductive within a generation. Will the Minister therefore meet me to discuss the sustainable management of soils, so that emphasis is put on treating them as ecosystems, rather than as growing mediums? A monitoring scheme would really help.
Rory Stewart
My hon. Friend correctly says that soils are not just for short-term production; they are incredibly important stores of organic matter. There is a lot that we can do, and are doing, on precision farming and shelter belts. Rothamsted Research is also doing work on this issue, but I would be delighted to meet her and to make sure that this is central to our 25-year plan.
Lilian Greenwood (Nottingham South) (Lab)
More than half the population of England live within an hour of a national park, but many young people and their families struggle to get to them because rural bus services have been hit by devastating cuts and eye-watering fare rises. This is Catch the Bus week, so can the Secretary of State tell us what discussions she has had with the Transport Secretary about making our countryside accessible by public transport?
Rory Stewart
DEFRA takes that very seriously; we have a responsibility for rural affairs. We have very regular contact with the Department for Transport on this issue, and we supported it on developing community bus schemes. There is much more we can do. As the hon. Lady has pointed out, without communications connections, which buses are central to, rural areas will be disadvantaged.
Craig Whittaker (Calder Valley) (Con)
T6. On 27 April, the Prime Minister confirmed to my hon. Friend the Member for Selby and Ainsty (Nigel Adams) that the Government are working on a flood insurance plan for the many small and medium-sized businesses in flood-risk areas that are excluded from insurance cover. Will the Minister update the House on how those plans are going?
Rory Stewart
My hon. Friend has been an extraordinary champion for his constituency—indeed, he had a late Christmas day celebration a couple of days ago. I saw at first hand with him the devastation for businesses in Calder Valley, ranging from furniture shops to carpentry manufacturers. The problem on commercial insurance is, of course, that different businesses have different attitudes towards interruption payments and excesses. However, that is being addressed through the BIBA process and, most importantly, through the investment in flood defences.
Nia Griffith (Llanelli) (Lab)
I fully understand the 2009 cut-off date for Flood Re, of which developers and local authorities should have been fully aware, but what more can the Minister do to make it legally binding to inform purchasers that they will not be eligible for Flood Re? What about properties that are downhill of new developments that have subsequently become more at risk as a result of developments built since 2009?
Rory Stewart
Fundamentally, the answer to these issues is to ensure that we have good flood defences and that we build resilience in housing, but it is absolutely correct to say that we need to ensure that transparency is part of that. Somebody buying a house needs to know that it is at flood risk so that they can make an intelligent decision—ideally, it would be not to buy that house.
Andrew Stephenson (Pendle) (Con)
T7. The excellent annual Trawden show takes place on Sunday 14 August. Will my right hon. Friend join me in congratulating Trawden and District Agricultural Society on organising the event, and does she agree that agriculture shows in communities play a key role in promoting agriculture to a wider audience?
Elizabeth Truss
Agriculture shows are fantastic. I have been to a large number this year, culminating in the fantastic Norfolk show last week. I want to give my compliments to the Trawden show and wish it all the best for 14 August.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
Literally thousands of EU nationals play an indispensable role in fish processing and agriculture businesses in my constituency, yet this week the Government have failed to give any reassurance that these people will be allowed to live and work here post-Brexit. Will the Secretary of State and her Ministers make every effort to use all their influence with the Home Secretary to provide some certainty at an early stage for these people and these businesses?
Elizabeth Truss
As I said in response to an earlier question, I agree that the EU workers are an important part of both the agriculture and fishing sectors, and we are working on this at the moment.
Mark Menzies (Fylde) (Con)
The Royal Society for the Protection of Birds has a very important visitor centre at Fairhaven lake in my constituency. The Ribble estuary, one of the most important estuaries anywhere in the UK, attracts about 270,000 birds per year. What are the Government doing to ensure that local children are engaging with the RSPB and gaining bird knowledge?
Rory Stewart
That is a fantastic result—270,000 birds. The Environment Agency and Natural England are working very closely with the RSPB in the Ribble estuary. Connecting children to nature is absolutely essential. If we are to protect nature for the future, people need to love it. The key is to ensure that children not only access nature, but understand it and respond to it.
Several hon. Members rose—
Mr Speaker
Order. We come now to questions to the Second Church Estates Commissioner, the right hon. Member for Meriden (Mrs Spelman), representing the Church Commissioners, and to the right hon. Member for South West Devon—[Interruption.] I mean the hon. Member for South West Devon (Mr Streeter)—it is only a matter of time—representing the Speaker’s Committee on the Electoral Commission.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
1. What discussions the Church of England has had with the Government on plans to regulate out-of-school education settings.
Andrew Stephenson (Pendle)
3. What discussions the Church of England has had with the Government on plans to regulate out-of-school education settings.
The Second Church Estates Commissioner (Mrs Caroline Spelman)
Representatives of the Church of England have taken part in detailed consultations with the Government over the proposals to regulate out-of-school settings. I recently led a delegation of Back Benchers to a meeting at the Cabinet Office and we learned that this policy remains under review. I am hopeful that something will emerge that meets the key concerns that many of us have voiced.
Oliver Colvile
What discussions has my right hon. Friend had with the Government regarding the new portionality and the current role of existing regulations, such as data barring service checks, in out-of-school settings?.
Mrs Spelman
This is important because the Church of England provides 500,000 children with out-of-school education activities, which involves 80,000 volunteers. However, as hon. Members will know, anyone who works with children in out-of-school settings has to be subject to a careful check—the Disclosure and Barring Service check. There is no suggestion that our representations to Government in any way undermine our determination that children should be well protected, but we believe that they are in what the Church of England provides.
Andrew Stephenson
Religious organisations across Pendle, including Islamic education centres in Brierfield and Nelson, and the Barnoldswick Gospel Mission, which currently runs a Sunday school, have expressed concerns that the Government plans will be restrictive and prevent them from expanding their current educational work. In my right hon. Friend’s discussions with Government, has she received any further indications of a time scale for when these proposals may be brought forward?
Mrs Spelman
I am as anxious as my hon. Friend to have a rapid outcome on this decision, but, until a new Prime Minister is in place, Ministers are saying clearly that the final decision cannot be made. We received an assurance from the Minister for Schools that the Government have no intention of seeking to regulate religion or to interfere in parents’ right to teach children about their faith and their heritage.
Jim Shannon (Strangford) (DUP)
Does the right hon. Lady agree that any Church activities—Sunday schools, Brownies, or Boys or Girls Brigades, to name a few examples—must not be unduly affected by the Government’s plan for out-of-school regulation?
Mrs Spelman
We impressed on Ministers that the kind of out-of-school activities that the Church provides, which the hon. Gentleman has just cited, are subject to rigorous checking processes within the Church. Indeed, we reminded Ministers that providing such out-of-school education in a domestic setting is governed by childminding regulations.
Henry Smith (Crawley) (Con)
2. What recent steps have been taken by the Church of England to tackle human trafficking.
Mrs Spelman
The Bishop of Derby has been at the forefront of working to tackle human trafficking and modern slavery within the Church. I had the pleasure of serving with him on the pre-legislative scrutiny Joint Committee on the draft Modern Slavery Bill. He has set up and been part of the Santa Marta process to improve collaboration between Churches and police forces in the detection of instances of human trafficking.
Henry Smith
I am grateful to the right hon. Lady for that answer. What plans does the Church have to roll out that scheme to the rest of England. With Gatwick in my constituency, I would certainly like to see that.
Mrs Spelman
We all understand my hon. Friend’s concern because of his constituency’s location. The Church is building on the Bishop of Derby’s work and intends to launch the Clewer initiative against modern-day slavery in the autumn. It will be designed to combat modern-day slavery across England and provide parishes and dioceses with strategies to detect instances of modern-day slavery.
Mr Philip Hollobone (Kettering) (Con)
One of the most powerful ways to get any message across is from the personal testimony of victims. A lot of people are realising that human trafficking is hidden in local communities, so what efforts is the Church making to identify and encourage Christian victims of human trafficking to bear witness in their churches and communities?
Mrs Spelman
When I served on the Joint Committee on the draft Modern Slavery Bill, the hidden nature of trafficking became apparent, and Churches can lift the lid on the prevalence of trafficking in the society in which we live. It is incumbent on us all to have our eyes and ears open and to ask questions when we suspect that someone may be being exploited as result of trafficking.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
4. If the Electoral Commission will make an assessment of the merits of requiring lead campaign groups in referendum campaigns to publish manifestos.
Mr Gary Streeter (South West Devon)
Thank you for your earlier endorsement, Mr Speaker.
The Electoral Commission is collecting information to inform its statutory report on the EU referendum, and I will pass the hon. Lady’s suggestion to it for its consideration.
Dr Huq
Rapidly after the referendum results, central claims on both sides evaporated—the extra spending for the NHS, the emergency punitive Budget, and the UK being the fifth largest economy—so surely, if we are ever to conduct referendums again in this country, should not the lead campaigns on both sides publish measurable claims in a manifesto, so that truth is not the casualty of the scramble for votes?
Mr Streeter
The Electoral Commission has no desire whatsoever—it certainly has no such power at the moment—to sit in judgment on the truthfulness of any claim made in any campaign. The hon. Lady’s idea that lead campaigns should produce manifestos is an interesting one that I will pass on to the commission for its consideration of the referendum overall.
Mr David Nuttall (Bury North) (Con)
May I urge my hon. Friend to ensure that the Electoral Commission does not waste its time carrying out such an assessment? Manifestos are for political parties and, by definition, a referendum is on a single issue.
Mr Streeter
My hon. Friend makes a powerful point, but the Electoral Commission will carry out an assessment of the conduct of the EU referendum, including a survey of people’s levels of satisfaction of several aspects of the referendum, and that will be produced in the report, which will be made available to hon. Members.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
In advance of the Scottish independence referendum, the Government published “Scotland’s Future”—a comprehensive White Paper and blueprint for how the transition to independence would be managed. The complete lack of a coherent plan from the leave campaign and the chaos that has ensued has highlighted a huge disparity. What is the Government’s position on manifestos for referendums?
Mr Streeter
Certainly, prior to 9 September, I do not speak for the Government, and therefore it is not a matter for the Electoral Commission.
Kevin Foster (Torbay) (Con)
As my hon. Friend will know, and as my hon. Friend the Member for Bury North (Mr Nuttall) pointed out, referendums are about settling a single question, not electing a Government on a manifesto. However, one thing that many people do want is facts. Does my hon. Friend agree that it would be worth the Electoral Commission looking at whether a fact checker-style website could be a useful source of information, given the claims made in the Scottish and EU referendums?
Mr Streeter
It is important that the Electoral Commission remains independent in our political debates, and it has no desire whatever to sit in judgment on the truthfulness of any claim or counterclaim. It is important, however, that all sides are responsible in the claims they make, and there are various independent means of verifying claims, but that is not a matter for the Electoral Commission.
Alan Brown (Kilmarnock and Loudoun) (SNP)
5. If the Church of England will make it its policy that bishops sitting in the House of Lords do not participate in debates or vote on legislation that relates to Scotland.
The Second Church Estates Commissioner (Mrs Caroline Spelman)
I was slightly surprised by this question. I perfectly appreciate that the SNP is opposed to the House of Lords on ideological grounds, but I was unaware that it had adopted a narrow position on the Lords Spiritual. I expect the irony is not lost on the hon. Gentleman that he is exercising his right as a Member of this House representing a Scottish constituency to scrutinise the affairs of the Church of England—a scrutiny, I would add, that I welcome.
Alan Brown
I would point out that legislation on English votes for English laws means that I, as a Member of this House, cannot vote on issues that pertain to England only. [Interruption.] No, I cannot—my vote is discounted. I would therefore ask the right hon. Lady to reconsider the position on the Lords Spiritual participating in proceedings on legislation that affects Scotland.
Mrs Spelman
All Members of the other place are able to take part in proceedings on legislation put before Parliament, and bishops take that duty very seriously. They are independent, and they do not take the party Whip, so these things are up to each of them. At least two of them have family links to Scotland, which may give them a reason to have a closer interest. This may be the moment for me to come out in the Chamber as a half-Scot—my maiden name was Cormack, from the Clan Buchanan. I think that demonstrates the point that there are Members in all parties and in both Houses who have a great love for Scotland.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
6. What steps the Church of England is taking to encourage the appointment of more women bishops.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
7. What plans the Church of England has to promote women in leadership positions.
Mrs Spelman
As the hon. Member for Huddersfield (Mr Sheerman) has assiduously asked me this question on several occasions, I am delighted to be able to inform him that a further six women have been appointed as bishops: the diocesan Bishop of Newcastle, with a seat in another place, and five suffragan bishops—of Taunton, Aston, Sherborne, Repton and Dorking.
Mr Sheerman
I thank the right hon. Lady for that excellent answer. As she mentioned, this is a bit of a campaign on my part. I want to fill the churches, and one of the ways we do that is by having more women bishops. However, how many are there out of the total number? What is the percentage? There are some very good women who have not been promoted yet.
Mrs Spelman
This is a campaign the hon. Gentleman is well able to take some credit for, and I am sure my predecessor is too. Some 18 suffragan bishops have been appointed, eight of whom have been women, which is 45% of all appointments.
Michael Tomlinson
Will my right hon. Friend join me in welcoming the new Bishop of Sherborne, Karen Gorham, to her place? Her first official engagement was a confirmation service in Lytchett Minster parish church, at which, I am proud to say, my son was one of the candidates. However, does my right hon. Friend agree that Karen Gorham’s appointment will encourage other women into leadership positions in the Church of England?
Mrs Spelman
Yes, indeed, and I congratulate my hon. Friend on his son’s confirmation. An increasing number of younger women have indeed entered the priesthood. Some 47% of the clergy ordained in 2015 were female, and 22% of the women ordained in 2015 were under 40.
Mr Speaker
I hope the whole House wishes to congratulate Tomlinson junior. That is now on the record.
Derek Thomas (St Ives) (Con)
8. What work the Church of England is undertaking to help improve the life chances of people in disadvantaged communities.
Mrs Spelman
The Church of England’s House of Bishops recently published a new discussion paper, “Thinking afresh about welfare”, which is intended to help discussion across the Church as it engages with the Government’s life chances agenda.
Derek Thomas
The Church of England and other denominations and faith groups have always led the way in helping our most vulnerable people. Does my right hon. Friend agree that faith groups and voluntary organisations are ideally placed to help the Government improve life chances for all, including the homeless, young people and people with disabilities?
Mrs Spelman
Yes. The diocese of Truro is particularly committed to improving the life chances of children and young people living there, including on the Isles of Scilly. That is lived out principally through the schools, which are committed to building character and improving employment skills. However, I did just notice that there is a homeless breakfast initiative in Penzance, so these efforts are not confined to children, but also extend to adults.
John Mann (Bassetlaw) (Lab)
9. What assessment the Church Commissioners have made of the adequacy of toilet provision for visitors to historic churches.
Mrs Spelman
The Church Buildings Council has been promoting through its “Open and Sustainable Churches” initiative how parishes can adapt their buildings for wider community use. Most schemes for work in church buildings that the Church Buildings Council now see will include installing an accessible toilet if there is not one already present.
John Mann
Mr Speaker, imagine that you came to visit the historic Scrooby church to celebrate the 400th anniversary of the Pilgrim Fathers, and, as a modern man, drank tea or coffee on the way, which people did not do when these historic churches were built. It would be easy to be caught short. Many of these great historic churches lack toilets. Should not a fund be created somewhere to allow visitors the comfort break that may be required, given that we live in a modern coffee and tea-drinking era?
Mr Speaker
The House is very expectant. We really want to hear this answer.
Mrs Spelman
I am delighted to be able to say that the Church is making great progress with the provision of the facilities that the hon. Gentleman describes. Currently, 55% of the 31 listed Church of England churches in his constituency have installed new toilet and kitchen facilities.
Business of the House
(7 years, 12 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Paul Flynn (Newport West) (Lab)
Will the Leader of the House give us the business for next week?
The Leader of the House of Commons (Chris Grayling)
The business for next week is as follows:
Monday 11 July—Conclusion of consideration in Committee of the Wales Bill.
Tuesday 12 July—Opposition day (5th allotted day). There will be a debate on an Opposition motion. Subject to be announced.
Wednesday 13 July—Motion to approve a statutory instrument relating to terrorism, followed by general debate on the report of the Iraq inquiry (day 1).
Thursday 14 July—Conclusion of the general debate on the report of the Iraq inquiry.
Friday 15 July—The House will not be sitting.
I should also like to inform the House that the business in Westminster Hall for 18 July will be:
Monday 18 July—Debate on an e-petition relating to changes to the student loans agreement.
Paul Flynn
I thank the Leader of the House for that information. As the Speaker now processes majestically from the Chair to Speaker’s House, I wonder whether he has been issued with a parliamentary umbrella. Last week, I noticed two yellow buckets on the route to collect the rain, and today there is one white bucket. Will the Leader of the House tell us when we are going to get this palace into a habitable state? Can he also remind us which party promised to fix the roof while the sun was shining?
The House is grateful, as ever, to the right hon. and learned Member for Rushcliffe (Mr Clarke). He is a rarity on the Government Back Benches as a man who is occasionally caught in possession of an intelligent thought, and who speaks real English—the language that the rest of us speak. This week, he gave us vital intelligence on the three remaining candidates for the leadership of the Tory party: one of them is “bloody difficult”; one does not expect to deliver on the extremely stupid things she has been saying; and one would declare war on at least three countries. We have a legitimate interest in this, because the winner of this race will also be the Prime Minister.
I suggest to the Conservatives that they perhaps repeat the great success that they had in Totnes, where they introduced the system of a primary vote in which everyone took part. It would be wonderful to have the chance to write-in a candidate such as the right hon. and learned Member for Rushcliffe. Happily, at his time of life, he has passed beyond the stages of ambition and vanity that afflict many in political life. If he is reluctant to return to the Dispatch Box because he is of a certain age, let me remind him of what I have discovered: the Dispatch Box is a vital support and a wonderful alternative to a Zimmer frame.
Two days next week are given to a matter of the highest importance. Chilcot concluded that the UK chose to join the war in Iraq before the peaceful options were exhausted. We must not let artifice, denial, spin, delusions and expensive barrister-created obfuscation mask the vital Chilcot truths. Chilcot concluded that Government, Opposition and three Select Committees of this House were wrong in 2003, and our decisions led to an avoidable war.
Our reputation as politicians fell to rock bottom during the expenses scandal, but since then it has fallen further and it is now subterranean. We need to recognise the whole truths of Chilcot. We should debate this next week in a very serious atmosphere. We did it; the decisions were taken in this House. I and many other Members were here at the time. Our mood should be one of humility, penitence and respect for all those who put their lives at risk at our command.
The dedication, professionalism and courage of our servicemen were as great and splendid as any in our entire proud military history. We want to express in those two days next week our profound gratitude to all who have given their lives and their service, and who have been maimed in body and mind by the experience of going to the wars, some of which—Kosovo and Sierra Leone—were magnificent achievements in the extension of peace and human rights around the world.
There is another group that we need to bear in mind next week. Our heartfelt sympathy goes out to the loved ones who were bereaved by the war. We saw yesterday that they were forced to revisit their grief with the added pain of the knowledge from Chilcot that their loved ones possibly died in vain. To them, Parliament should offer our heartfelt sympathy, our regrets and our apologies, because we know that the responsibility was ours. We should hope above all that the spirits of all who died as a result of our decisions may now rest in peace.
Chris Grayling
It is worth the whole House remembering that today is 7 July, and it is appropriate to remember the victims of the terrorist attacks that took place on this day in 2005. It is also appropriate to send our good wishes and commiserations to the Welsh football team. They have done this country proud and they have done Wales proud. They have exceeded all expectations, and I hope and believe that they will go on to great things at the World cup, when the time comes.
I congratulate the hon. Member for Newport West (Paul Flynn) on being here again. I was not entirely certain whether he would still be with us this week, because there have been so many changes in the Opposition. Not only is he still here, but he has another job; he is now also the shadow Welsh Secretary. I congratulate him on that appointment and on becoming one of the longest-serving members of the shadow Cabinet. I hope to see him here again next week.
On the Chilcot report, we all acknowledge that it is a substantial piece of work and all involved in its preparation deserve a lot of credit. It has taken a long time to come, and we have had lots of discussions in this place about when it would arrive, but I do not think that anybody could say that it is not an exhaustive piece of analysis that has set out for us all the rights and wrongs of what took place 10 years ago.
I know that the hon. Gentleman feels immensely strongly about this issue. He has been a consistent advocate for the point of view that he has just articulated, and I commend him for that. I hope that the fact that the Government have provided a two-day debate on this matter next week is a sign of how seriously we take it, and how seriously we take the need to understand the rights and wrongs of the decisions that were taken a decade ago. He is absolutely right to say that it is an appropriate moment for this House to pay tribute to our armed forces, to those who lost their lives, to those who were injured and to their families. In all circumstances we should recognise the enormous contribution that our armed forces make, the bravery of the people in them, and the bravery of their families.
The hon. Gentleman referred to fixing the roof while the sun is shining. A large programme is taking place to restore some of the Victorian roofing. The Committee looking at the restoration and renewal project is heading towards the completion of its work. Over the coming years, we will all have to work together to make sure that this building is made fit for this century. It is the heart of our democracy. He is right to identify that many things are currently wrong with it but we have a duty to sustain it as the heart of our democracy and protect it for future generations.
The hon. Gentleman mentioned the comments of my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke). I suspect that the Home Secretary will not be distressed by being likened to Margaret Thatcher. I understand the hon. Gentleman’s enthusiasm for taking part in the Conservative leadership election, and for being able to express a view on who our next Prime Minister will be. To be honest, if I was on the Opposition Benches I would want to take part in our leadership contest as well, because try as it might, no matter how hard it struggles, the Labour party does not seem to be able to have one itself.
Philip Davies (Shipley) (Con)
May we have a debate on flooding? It seems a long time since my constituency and many others were affected by the terrible floods over Christmas, but we should not forget the people affected just because it is now summer and the weather is better. Many people are still not back in their homes. Many of the flood defences required to make sure that that situation does not happen again have not been put in place. We could either have a debate or the Leader of the House could ask the Secretary of State for the Environment, Food and Rural Affairs to make a statement on the progress made in helping those affected and the work needed so that people do not have to suffer the same distress again.
Chris Grayling
My hon. Friend will be aware that I visited the Colne valley soon after the floods and am acutely aware of the impact that that period of heavy rain had on homes and businesses in and around West Yorkshire, as well as in other parts of the country. I know this matter is of great concern to the Secretary of State and will make sure that she is aware that these concerns have been raised again today. We clearly want to do the right thing for those affected by flooding. Since 2010 we have continued to spend money on flood defences and will continue to do so.
Pete Wishart (Perth and North Perthshire) (SNP)
I also thank the Leader of the House for announcing the business for next week. He is absolutely correct that it is right and appropriate that we remember the victims of 7/7 today on the 11th anniversary of that appalling and dreadful act.
It is also right and proper that business next week is dominated by the Chilcot report. We are all grateful that the Leader of the House has listened to the many representations made on all sides of the House for that debate to be extended to two days. Although we are grateful for the debate, most of us are starting to think about what will happen beyond it and in particular what means are available to hold those responsible for the disaster to account. The only people who have thus far lost their jobs in this whole calamity are two BBC journalists. I am sure that the public are now appalled and sickened after listening to Tony Blair—his defiance of the report, his lack of contrition and his half-hearted meaningless apology, with no recognition of the scale of the disaster. Will the Leader of the House explain what means and methods we have to hold those responsible to account in this House?
Although we are having two days of debate on the last Labour Government’s era-defining disaster, we still have not had one on this Government’s one. In the two weeks since this country made the decision on the European Union there has been no Government-sponsored debate on the EU referendum or Brexit. It is almost a dereliction of duty. I do not know whether it is a case of denial from the Government or they genuinely do not have a clue, although I suspect it is a combination of the two.
This morning we have heard all sorts of rumours on social media about a decision on Trident. Will the Leader of the House now explain when we will have the vote on Trident rather than leaving it to rumour and hearsay?
Lastly, may we have a debate on the overthrow of elites, in political parties in particular? This morning I looked up the definition of coup. Apparently it is the sudden appropriation of leadership or power and its replacement by other elites within the state apparatus. Today there is almost a physical boundary on the Opposition Benches between the two sides of the Labour party—we can see the barrier there. The chicken coupers must be the most inept coupers ever: no strategy, no challenger, just spineless inertia, with the vain hope that their Front-Bench team will somehow just go. Let us have that debate and see whether they can learn from the hand of history.
Chris Grayling
On the Chilcot report, I reiterate that it is right and proper that we have a two-day debate. That is the job of this House. It is not for this House to consider whether there are specific measures that can be taken against individuals. That is a matter for the relevant authorities, and it is not for us as a Parliament to debate those matters. There will be plenty of opportunity for this House to express its opinions about the role played by individuals and organisations in that process and that decision making. Sir John Chilcot has provided for everyone in this House a detailed range of information that can be drawn on for that debate, and I have no doubt that the hon. Gentleman and his colleagues will play an active part in it.
On the EU referendum, the country has just had a four-month debate, and we have had a verdict from the United Kingdom. I know the hon. Gentleman still cannot get to grips with the fact that we are part of the United Kingdom together. I value being part of the United Kingdom Parliament with him. He adds something extra to this institution, and long may that continue. We have just had a very lengthy debate on the referendum. There are plenty of opportunities to debate this—virtually every day at oral questions and when the Prime Minister is here. We have had statements on the outcome of the referendum, we have had Opposition day debates, and we will be debating the matter for some months to come.
As I have been clear over the months, we will have a debate on the future of Trident, and I can assure the hon. Gentleman that when we are ready to announce the date for that, we will do so to this House.
The hon. Gentleman mentions the overthrow of elites. It is nice to find something on which we have a common view. Until he mentioned it, I had not spotted the completely empty row on the Labour Benches, but it is a bit surreal. It is as if the whole thing has turned upside down. [Interruption.] It is like “Alice Through the Looking Glass”—the Front Benchers have moved to the Back Bench, and the Back Benchers have moved to the Front Bench. Who would ever have imagined the Front-Bench team that we see there now? Never in our wildest imagination did we imagine that the Labour Opposition could find themselves in such a predicament. The hon. Gentleman is right—they cannot even organise their own coup or their own leadership contest. If they cannot do that, they are utterly unfit ever to run the country.
Bob Blackman (Harrow East) (Con)
I rise on behalf of the hon. Member for Gateshead (Ian Mearns), who is attending the opening of a section of the A1M. Unfortunately, the A1M was built over a disused mine shaft and a 30-foot sinkhole has appeared, but don’t worry—officials are looking into it.
As a consequence of the two-day debate on the Chilcot report, a Back-Bench business day has been lost. On behalf of the Backbench Business Committee, may I ask the Leader of the House to confirm as soon as possible that 21 July, the last sitting day before we rise, will be allotted to the Backbench Business Committee so that we can publicise the pre-recess Adjournment debates?
I speak now on my own behalf. An excellent report was published this week by the Royal Commonwealth Society on introducing two-year visas for people from India. Will the Leader of the House arrange for a debate in Government time on visa requirements for people from India and other countries outside the European Union so that we can grasp the opportunities to set and control our own borders?
Chris Grayling
On the earlier point, we will do everything we can to make sure that we provide information about allocated days in a timely way and that we make provision for the Backbench Business Committee, as is normal. My hon. Friend will not be surprised to learn that the Government felt that next week it is important to have the debate on the Chilcot report and to have that debate across a two-day period. I hope the Backbench Business Committee will understand that.
With regard to visas, I am sure that the Home Secretary will have noted the points that my hon. Friend makes. It is important now, given the decision that this country has taken to leave the European Union, that we maximise the opportunities that we have to forge free trade links around the world. It is encouraging that a number of our Commonwealth friends in particular have come forward and said that they believe that free trade arrangements between us and them will be beneficial for the future.
Diana Johnson (Kingston upon Hull North) (Lab)
I thank the Government for producing a written statement on cremations and baby ashes, and I pay tribute to the Under-Secretary of State for Women and Equalities and Family Justice for her work on that issue. I also thank Action for Ashes, and my constituent, Tina Trowhill, and other families up and down the land who are involved with this matter. Will the Leader of the House have a word with the three Cabinet Ministers who wrote to Hull City Council to ask it to hold a local inquiry into baby ashes in the Hull area? The chief executive of the council wrote back to ask for clarification on the terms of reference, and whether any financial support was available to pay for the local inquiry. We have not yet received a response, and families want to get the matter under way as soon as possible.
Chris Grayling
This is a deeply sensitive issue, and I pay tribute to those families who have been brave enough to campaign for an improved situation, given the difficulties they have been through. I will certainly chase up that response for the hon. Lady, and try to ensure that it is sent as quickly as possible.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
One thing that unites this House is the abhorrence of modern slavery. The Commonwealth Parliamentary Association UK, of which I am chairman, is working on a report on that issue. However, the funding we need is being held up by the Home Office, so we have not done it. The work done by the right hon. Member for Birkenhead (Frank Field) has been superb over many years. In the absence of receiving that money, could we have a debate in Government time to discuss an issue that I know brings the House together, so that we can send a united voice across the world to say that we do not approve of modern slavery and that the entire House says that it must stop now?
Chris Grayling
Members across the House should be proud that this country passed the Modern Slavery Act 2015, and we have taken a lead on this issue. My hon. Friend’s work with the right hon. Member for Birkenhead (Frank Field) in an area where there is no political difference and on which we are politically united is an example of this House at its best. We are often only seen by the public debating with each other in a lively way, but great work takes place across the House, and long may it continue.
Mr John Spellar (Warley) (Lab)
In the light of Brexit, I asked all Departments what steps they are taking to ensure that their purchasing policies support British industry and agriculture. The reply, which was centrally generated by the Government although it came from a number of Departments, stated:
“The Department’s purchasing policies support the Government’s commitment to do all it can to ensure UK suppliers can compete effectively for public sector contracts, in line with our current international obligations and guidance issued by the Crown Commercial Service.”
That is a totally inadequate response to the situation we are facing. Clearly, the civil service still does not get it. May we have a debate to explore how we will back British industry, British agriculture and British workers?
Chris Grayling
The Government have given the right hon. Gentleman a legally accurate response to the current situation. When we have left the European Union, we will be freer to take decisions about procurement in the United Kingdom and the services, goods and products produced here. I am a great believer in doing everything we can to procure locally, but we are subject to procurement rules with which we must conform.
Mark Pritchard (The Wrekin) (Con)
Whether west, east or sub-Saharan Africa, Commonwealth or non-Commonwealth, the world’s fastest growing economies are on that continent. May we have a debate about what more the Government can do to reach out to those growing economies?
Chris Grayling
My hon. Friend makes an important point, and we should all be pleased with the way that the African continent is developing. More and more people are being lifted out of poverty, and there is more economic development. We have historic ties with many of those countries, and we should seek to strengthen those ties in a variety of ways, including the development of free trade deals with them in the future.
Mr Nigel Dodds (Belfast North) (DUP)
May we have a debate or statement on justice for all war widows? An anomaly means that those whose partners died in service between 1973 and 2005 are not able to claim the war widows pension if they remarry. The hon. Member for Leeds North West (Greg Mulholland) recently hosted a protest at which that issue was highlighted, and it is an important matter, especially in the week of the Chilcot report.
Chris Grayling
All hon. Members would want to support war widows. The right hon. Gentleman makes an important point and I will ensure that his concerns are raised with the Ministry of Defence after business questions.
Dr Matthew Offord (Hendon) (Con)
The European Union, including the United Kingdom, recognises a difference between the military and political wings of Hezbollah, but such a distinction does not appear to be recognised by the organisation itself. Therefore, in the light of the confusion about the legality of demonstrators displaying Hezbollah flags on the streets of London last Sunday, may we have a statement on the legality of displaying them and any flag associated with a proscribed terrorist organisation?
Chris Grayling
I agree with my hon. Friend that if an organisation is proscribed in the UK, it should not be allowed to publicise itself in the UK, whether through flags, placards or anything else. I will ensure that the Home Secretary is aware of the concerns he raises. If an organisation is illegal in the UK, it should not manifest itself in the UK.
Robert Flello (Stoke-on-Trent South) (Lab)
For too long, Twitter, Facebook and other forms of social media have become more and more like the wild west, with people thinking they can post anything and say anything. My hon. Friend the Member for Redcar (Anna Turley) has a private Member’s Bill, but we need the Government to take much more drastic action, because the problem is spilling out into the wider world, as has been said previously. May we have a statement or a debate in Government time about what they will do both to tackle Twitter, Facebook and other forums, and to clamp down on what is happening in the public realm?
Chris Grayling
This is an issue for Members on both sides of the House and I share the hon. Gentleman’s view, but it is not simply about Members of Parliament—it also affects people in society. I have a more straightforward view than his. It is very simple: if Members of the House or other people receive threats that they are going to be raped, murdered or whatever, the police should arrest the perpetrators and put them in court. That might send a message to those who carry out that kind of disgraceful behaviour that there are consequences. My message to our police is: if that happens, prosecute.
Mark Pawsey (Rugby) (Con)
When it comes to sport, my constituency is best known for the game associated with the oval ball, but we have some great football teams, including Rugby Town juniors, who have just received a grant of £371,000 from Sport England towards a 3G astroturf pitch for use by their 700 or so members. The Leader of the House has praised the achievements of the Wales team, but may we have a debate on how investment in grassroots football of the type taking place in Rugby can inspire our national team at the highest level?
Chris Grayling
No English Member is in any doubt this week that we need a strong grassroots youth development system for the future. Having been outshone by the Welsh, we would like to get our own back at some point, but we definitely need new young players to come through. We know that from our strongest local, non-league and amateur clubs can come stars of the future. Let us hope some of them come from Rugby.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I thank the Leader of the House for his warm tribute to the achievements of the Welsh national football team. I tweeted last night that I will die a happy man, hopefully many years from now, having had the privilege of supporting that great Welsh national side.
Last month, the people of the UK took probably the most important political decision in my lifetime, and I turned 40 in April, yet over lunch yesterday, I had a discussion with Speaker Boothroyd, who informed me that the other place has had two days of debates on the implications of Brexit. When will the House have the opportunity to debate the implications? The fact that there is no plan to deal with what has happened in the last month is no reason to sweep it under the carpet.
Chris Grayling
I simply assure the hon. Gentleman that there will be plenty of opportunities in the coming months for us to debate these matters. We need to elect a new Prime Minister, complete the preparatory work, start negotiations and ensure that the House has every opportunity to debate those matters. I give him that absolute assurance.
I have one regret on the football front. As a Manchester United supporter, I just wish Gareth Bale would come home and join the reds.
Henry Smith (Crawley) (Con)
The Kurdish peshmerga have very much been at the front line of the battle against Daesh in northern Iraq, and I am proud that the Government have supported them militarily, but may we have a debate on the medical support that is needed by injured fighters against Daesh, including our allies in the peshmerga and others?
Chris Grayling
My hon. Friend makes an important point. We clearly need to do more than simply provide military support. A huge amount of humanitarian effort is going in to support those affected by the war, but I will ensure that the Secretary of State for International Development is aware of his concern so that it can be a focus.
Mr Chuka Umunna (Streatham) (Lab)
We have reached the end of the track in terms of my constituents’ patience with one of the worst train operating companies in the world, Govia Thameslink Railway, which runs Thameslink and Southern lines that are currently masquerading as train services. In its latest attempt to reduce disruption on the Southern line, it is going to cancel up to 350 trains. That is simply unacceptable. It is causing people to lose their jobs, students to miss exams and untold stress. Will the Leader of the House arrange for the Transport Secretary to come and give an urgent statement, and for goodness sake strip this company of this franchise and do so now?
Chris Grayling
May I say first of all that, as someone who also shares GTR routes, I am well aware of the issue? I have every sympathy with what the hon. Gentleman has just said and I have constituents who share his anger. There is a debate on this matter in Westminster Hall next week. I have already spoken to the rail Minister, who is acutely aware of the issue. What is happening at the moment is simply unacceptable and has to be sorted out.
Andrew Stephenson (Pendle) (Con)
Parts of my constituency are being blighted by young men driving high-performance luxury vehicles, often at dangerously high speeds. There have been a series of accidents, near misses and hit-and-runs in recent months. As most of these vehicles are hired, usually for just a day at a time, local residents and Pendle Council are calling for action to prevent hire car companies from putting high performance supercars in the hands of young drivers. Will my right hon. Friend make time for a debate on this issue?
Chris Grayling
My hon. Friend makes an important point. I am surprised the hire companies want to do that, because high-performance cars tend to be high-value cars and I presume they want to get them back intact afterwards. It is clearly a bizarre situation and I do not know why those businesses are taking the approach he describes. He should certainly put pressure on them locally, but I will make sure his concerns are drawn to the attention of the Transport Secretary.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Those of us who are regular, proper Back Benchers value business questions. I hope the Leader of the House will have a word with the other Front Benchers and bring it back to what it should be about: business questions. We had a Welsh shadow Leader of the House who could not even mention the Welsh team today, which I think he should have done, but business questions is for important future business. My constituents are deeply worried about the closure of the A&E at Huddersfield Royal Infirmary. That is of prime importance. They are worried about the quality of management by GPs who become managers in clinical commissioning groups. Those are the sorts of things we want a debate on and we want it soon.
Chris Grayling
I am not sure whether to congratulate, or commiserate with the hon. Gentleman on the fact that he is still on the Back Benches. Only he will be able to tell us whether he has been offered a job as, for example, shadow Education Secretary. I know it has been a challenge to fill that post recently.
Chris Grayling
Well that is a bit of a snub, isn’t it? The hon. Gentleman makes an important point about his constituency. I have been a champion of A&E and maternity services in my constituency. Regular opportunities exist through Adjournment debates and Backbench Business debates to bring a Minister before the House. With his long experience, he knows how best to use those systems to get Ministers here and hold them to account.
Martin Vickers (Cleethorpes) (Con)
The changing face of retail is having a major impact on the vibrancy of our town centres. We do not want a situation in which our provincial towns becoming derelict with more empty shop units. Will the Leader of the House find time for a debate on how the Government will support local authorities to regenerate provincial town centres?
Chris Grayling
The big thing we have done this year is to change business rates, which I hope will make a difference in places like Cleethorpes. My hon. Friend and I have walked up the main street in Cleethorpes on many occasions. It is a great town. It is a really important part of the community and the area he represents. I hope the changes we have made to business rates will help to strengthen the businesses in that high street. I also hope we get some good weather, so that Cleethorpes fills with tourists in the coming six weeks.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Last week, when I challenged the Leader of the House, he yet again defended the rights of the more than 800 unelected bureaucrats in the place next door. He has previously defended the voting system in this place yet this morning, with no sense of irony, he talks about making this place suitable for a modern democracy. Therefore, in the vein of a modern democracy, I will narrow it down a wee bit. Will he make a statement outlining why he thinks it is appropriate to have 26 Church of England bishops taking part in the legislative process, and why they are able to vote on legislation that affects Scotland?
Chris Grayling
The thing that puzzles me is that the Scottish National party has a substantial number of private Members’ Bills opportunities, having been in the top 10 in this year’s draw. Has there been a Bill to make any change whatever to the House of Lords? No.
Ben Howlett (Bath) (Con)
On Tuesday evening, a Bath mum, Kerry Parkinson, was travelling home and was hit in the face after confronting a passenger who told their son to “Shut up, or we will send you to Istanbul with the other Muslims to join Isis.” I am sure that whole House will join me in condemning such disgusting racist views and in congratulating Kerry on standing up against hate. Will my right hon. Friend speak to the Home Secretary to see what more can be done to tackle xenophobia in our society and look at staging further debates in the House?
Chris Grayling
That instance is absolutely shocking. We send all our good wishes to my hon. Friend’s constituent for what she has done. Let us be absolutely clear: the Muslim community plays a valuable role in our communities up and down the country. The Muslim community is full of people who have made a real difference to our society, and we should support them. The fact that there are a small number of people in the Islamic world who pursue an ideology of hate that we all stand up against should not in any way tarnish the good, hard-working decent Muslims of this country. We should abhor, tackle and prosecute insults and attacks against them.
Lilian Greenwood (Nottingham South) (Lab)
Some 5% of students and 15% of staff at British universities come from other EU countries, along with £800 million a year in research grants. Our universities are deeply worried about the impact of Brexit on their future academic competitiveness, and in cities like Nottingham our universities play a vital role in the success of the local economy. Will the right hon. Gentleman ensure that the Business Secretary makes an urgent statement on how he intends to protect our higher education sector in the negotiations on Britain’s withdrawal from the EU?
Chris Grayling
I will of course ensure that what the hon. Lady says is drawn to the attention of the Business Secretary. Let me make two points. First, particularly in science where these issues have been raised, the European science network, which is a partnership of academic institutions across Europe, includes countries such as Israel that are not part of the European Union in any way, shape or form. There is no reason why our universities cannot continue to play the part they do today in joint international research projects. Secondly, it is worth remembering that we pay a substantial amount of money into the European Union. In future, that money will not be paid, and there is no reason why we cannot continue to provide the money directly and cut out the middle man.
John Mann (Bassetlaw) (Lab)
When we discuss Brexit, may we have the opportunity of conducting some sectional debates, so that we can look at how, now that the power exists for Parliament to vote through renationalising the rail industries, we could rejuvenate football as well—and not just the English football team? The Bosman ruling will be abolished, which will allow local football clubs in England and Scotland to rejuvenate themselves rather lose all their best players to the premier league.
Chris Grayling
The hon. Gentleman, of course, comes to the issue of Britain’s future outside the European Union from a different perspective from mine, but he highlights how, once we have left, we will be able to do in the future the things that we are constrained from doing now. On Bosman and English football, of course we want to see a new generation of bright young players coming through—and possibly from Rugby, as we heard earlier.
Andy Slaughter (Hammersmith) (Lab)
We learned yesterday about five walk-outs from five separate prisons in the last five months by prison officers who do not feel safe at work. There has been a 30% increase in serious assaults on staff this year. With so much else going on, it is easy to ignore that, but the Leader of House cannot ignore it because he largely caused the problem. Will he get the Justice Secretary, who should have more time on his hands after today, to come and make a statement about why we cannot get right something as fundamental as security and safety in our prisons and the protection of prisoners and prison staff from harm?
Chris Grayling
I simply remind the hon. Gentleman that the current structure of staffing in prisons was designed by the Prison Officers Association and the Prison Governors Association three years ago. What we implemented was their advice about how to proceed to staff our prisons.
Kirsty Blackman (Aberdeen North) (SNP)
Last week, Aberdeen City Council held a summit on the problems in the oil and gas industry. The Government managed to appear to appear via a 30-minute video link, but no Government Minister was sent. The Minister of State, Department of Energy and Climate Change, the hon. Member for South Northamptonshire (Andrea Leadsom) is currently chasing her leadership ambitions and might be doing so for the next couple of months, so can the Government give a commitment that somebody in government will, in view of the current rocky climate, give more than passing attention to the oil industry?
Chris Grayling
Absolutely. The oil industry is very important to us. I know that in recent months the Chancellor, in particular, has taken an active interest in how we can best ease the pressures on it, but when the oil price has fallen to such a degree, there are no easy solutions.
Valerie Vaz (Walsall South) (Lab)
May we have an urgent statement on Care.data? The Government announced today that they were scrapping the scheme. We need to know how much it cost the public purse, and whether all our constituents’ information will be shredded.
Chris Grayling
I will ensure that the hon. Lady receives a response from the Department of Health.
Jim Shannon (Strangford) (DUP)
The issue of forced organ harvesting in China has concerned us for some time. It involves people who have been jailed for campaigning for civil liberties, for being Christians and practising their religion, or for following the meditation practices of Falun Gong, which is a wonderful form of meditation whose values are truth, compassion and tolerance. Will the Leader of the House arrange a debate, in the Chamber or in Westminster Hall, on the horrific, brutal surgical removal of vital organs from prisoners of conscience, and could we also debate the issue of organ tourism? People travel from the United Kingdom to China to receive those organs. I believe that a subject of such importance should be debated.
Chris Grayling
The hon. Gentleman has raised a very serious issue. He will be able to raise it directly with the Foreign Secretary during Foreign Office questions on Tuesday, but let me say to him now that, while we seek to engage with China and strengthen our partnerships with it, we always take opportunities to raise the question of human rights, and we want to see standards of human rights in China improve.
Nick Smith (Blaenau Gwent) (Lab)
My hon. Friend the Member for Walsall South (Valerie Vaz) asked about yesterday’s decision to scrap the Care.data scheme. Experts say that access to patient data is vital to better understanding of the causes of disease. It should be possible both to get data security right and to give researchers access to data. We really need to discuss this issue in the House.
Chris Grayling
I will ensure that the Health Secretary is aware of the concerns that have been raised. It is clearly important for us to protect individual data, as it always has been, but I will ask Ministers to give a proper response to both the hon. Gentleman and the hon. Member for Walsall South (Valerie Vaz).
Ruth Smeeth (Stoke-on-Trent North) (Lab)
Several constituents have contacted me in the last month about ridiculous delays in assessments for employment and support allowance. Some have been waiting not for the 13 weeks for which they should be waiting, but for as long as eight or even 11 months. Given the importance of the issue to the lives of my constituents and their ability to feed themselves, may we have a debate in Government time about how long the process is taking and what is going wrong with the Department involved?
Chris Grayling
Fortunately, the Secretary of State for Work and Pensions will be here on Monday for oral questions. I will alert him in advance, and if the hon. Lady wants to raise the issue in the House again, I will ask him to provide her with a proper response.
Paula Sherriff (Dewsbury) (Lab)
On this very poignant anniversary, I am sure that the whole House will wish to join me in expressing gratitude to our incredible emergency services, who are simply the best in the world. However, I am alarmed to learn that cuts in our fire services now pose a real threat to public safety, and that, following the cutting of more than 7,000 firefighters since 2010, response times are at their longest for more than 20 years. May we have an urgent further debate on the issue?
Chris Grayling
Of course I join the hon. Lady in paying tribute to our emergency services. Yes, there have been changes, and there have been improvements. One of the changes that is taking place at the moment is a move to bring fire services together with local police services under the umbrella of the police and crime commissioners, because we think that will achieve efficiencies, both operational and financial. Obviously I will ensure that the Department is aware of the hon. Lady’s concern, but she may choose to initiate an end-of-day Adjournment debate so that a Minister can deal with the issue directly.
Melanie Onn (Great Grimsby) (Lab)
Will the Leader of the House join me in congratulating John Whitgift Academy on securing a People’s Postcode lottery grant so that it can lead and inspire young people through the Dame Kelly Holmes Trust’s On Track to Achieve programme? That will give an important boost to pupils and teachers in a school that was recently given an “inadequate” rating by Ofsted. May we have an urgent debate on the importance of sport and sport mentoring in schools?
Chris Grayling
Let me begin by paying tribute to the hon. Lady for what she did as shadow Leader of the House. We on these Benches are sorry to see her move back three rows, but I am sure that she will not be in that row forever—unless things carry on as they are. I also pay tribute to those in her constituency who are doing so much work for young people and sporting achievement, which makes such a difference to their development. The work she has described is enormously valuable.
Jeff Smith (Manchester, Withington) (Lab)
Recent NHS figures show that 142 people per 100,000 in Manchester die prematurely from cardiovascular diseases. Someone is more likely to die prematurely from a heart attack or a stroke in Manchester than anywhere else in the country. May we have a debate on how to address high rates of cardiovascular disease in cities such as Manchester?
Chris Grayling
That is a very good example of why Manchester will benefit from having greater control over healthcare services in the area as a result of our devolution package. There are clearly particular problems that are found in some of our great cities, and devolution of responsibility to those cities will enable local solutions to be put in place that can make a difference.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
This week, the European Commission announced that national Parliaments will be given the chance to vote on the comprehensive economic and trade agreement with Canada. Can the Leader of the House give any further detail on when Members of this place can expect to debate, scrutinise and vote on this important deal?
Chris Grayling
No, I cannot do that as yet. This is a long and convoluted process. I very much hope that in future we will be able to conclude trade agreements in a much quicker time frame, in a way that benefits our economy.
Chris Law (Dundee West) (SNP)
It has come to my attention that a private memo has been sent by the Department for Work and Pensions to the work capability assessment providers warning them not to direct claimants to appeal against decisions wrongfully made on their entitlements. It is clear as day that it is critical that benefit claimants can access appeal rights, and indeed claim their benefits, where they are so entitled. May we have a debate on this issue to ensure that these restrictive policies are not being enforced by the DWP?
Chris Grayling
I understand the concern that the hon. Gentleman raises. The Secretary of State will be here for questions on Monday, and I suggest that he puts his point directly to Ministers at that session.
Vernon Coaker (Gedling) (Lab)
Is it possible for the Leader of the House to organise an urgent debate, in Government time, on prosecution policy? Over the past few weeks, we have seen a disgraceful rise in the number of race hate crime incidents, as we heard from the hon. Member for Bath (Ben Howlett). It is quite right that we all abhor that, but do we not need to take a stand as a society and prosecute people who take part in such behaviour? It is not enough to be angry and to say that we abhor it; these people need to be brought before the courts and prosecuted, and that will help to stop it.
Chris Grayling
I wholly agree with the hon. Gentleman. One of the most extraordinary things is that British Asians, who have had nothing whatever to do with the debates in recent weeks, should be singled out in this way. That is a sign of a streak of opinion in our society. I believe that we are as tolerant a society as any in the world, but we none the less have a core of people whose beliefs are disgraceful and whose actions are disgraceful, and when they act in the way that we have seen in recent weeks, there is absolutely no excuse for our police and our prosecuting authorities not to put them in court where they belong.
Madam Deputy Speaker (Natascha Engel)
We now come to the Select Committee statement. Dr Julian Lewis will speak on his subject for up to 10 minutes, during which no interventions may be taken. At the conclusion of his statement, I will call Members to put questions on the subject of the statement and call Dr Julian Lewis to respond to those in turn. Members can expect to be called only once. Interventions should be questions and should be brief. Front Benchers may take part in questioning.
Russia: Implications for UK Defence and Security
Select Committee on Defence
(7 years, 12 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Dr Julian Lewis (New Forest East) (Con)
I am grateful for this opportunity to lay before the House the Defence Committee’s new report entitled, “Russia: Implications for UK defence and security”, which has been produced on the eve of the Warsaw NATO summit and which highlights the need for that major event to focus on defence and deterrence, but also on dialogue.
I am extremely grateful to all the members of the Defence Committee for their contributions to the genesis of this report. We held four oral evidence sessions and received 18 pieces of written evidence. A delegation from the Committee, ably led by my hon. Friend the Member for North Wiltshire (Mr Gray), visited Moscow, where they attempted to engage with the Russian authorities. Because of the current state of relations, Russian Government authorities were reluctant to engage, but the delegation acquired much other useful information on that visit.
Russia’s annexation of Crimea and invasion of eastern Ukraine have undermined the post-cold war assumption of a stable Europe in which the military threat to NATO is low. The north Atlantic alliance must therefore restore its defences, review its deterrence and reopen its dialogue with the Russian authorities. The fact that NATO and the UK were taken by surprise by the interventions in Ukraine shows a failure to comprehend President Putin’s determination to maintain a sphere of influence beyond Russia’s own borders and to do so by force if necessary. His stance directly contradicts the rules-based international order that western democracies seek to promote.
Russia has become increasingly active not only in conventional warfare, but in unconventional methods, often deniable, which are designed to fall below the threshold that would trigger NATO’s article 5 guarantee—the undertaking to consider an armed attack against one NATO member state as an attack against them all. The creation of the very high readiness joint taskforce—VJTF—among NATO member states and the enhanced forward presence on NATO’s contested eastern flank are steps in the right direction, but our report warns that the VJTF was formed only recently and that its capacity to deploy the necessary forces within the required timeframe is as yet unproven.
The report’s recommendations include the following. First, the MOD should recognise the extent of Russian remilitarisation and respond to it robustly. Secondly, it should review the effectiveness of current deterrence policy against nuclear, conventional and hybrid or multidimensional warfare. Thirdly, NATO should determine whether the 1987 intermediate-range nuclear forces treaty is in need of repair or replacement in the light of allegations that Russia has breached its provisions. Fourthly, a timetable should be set out for the Trident Successor submarine debate and the decision in Parliament “without further delay”—indeed, that debate should be held before the summer recess. Fifthly, the renewal of EU-wide sanctions against Russia should be encouraged and possibly extended to a larger group among the Kremlin leadership. Sixthly, it should be accepted that
“it is perfectly possible to confront and constrain an adversary in a region where our interests clash, whilst cooperating with him, to some degree, in a region where they coincide.”
We regard the threat posed by Daesh, al-Qaeda and other international terrorists as a relevant example of the latter: the convergence, to a considerable extent, of NATO and Russian interests. I am glad to see the Under-Secretary of State for Defence, my hon. Friend the Member for Canterbury (Mr Brazier), assenting to that proposition.
The Committee believes that Russian cyber-attacks across Europe and territorial seizures in Georgia and Ukraine may not be isolated actions and may be symptomatic of a wider ambition to restore Moscow’s global influence. However, because Russia is a global power, there remain opportunities for co-operation if we can but grasp them. Yet with relations at what the Russian ambassador to London has described as an “all time low”, our report concludes that the UK must urgently boost its cadre of Russian specialists. We must restore and maintain a high level of expertise for the foreseeable future. Given the current climate, the defence attaché’s office in Moscow, for example, must be properly staffed by the end of the year.
Since the end of the cold war, Russia has not been a UK priority and our expertise in this field has withered on the vine. The UK needs a vastly strengthened body of experts who can help provide an effective response to the challenges Russia now poses. We cannot hope to understand Russia without a forthright dialogue, and in the current conditions of mistrust we run the risk of blundering into conflicts that may be preventable through better communication. The cold war was characterised not only by military confrontation, but by the then Soviet Union’s promotion of Marxism-Leninism, with its formidable appeal to impressionable minds inside the Kremlin’s targeted countries. No such totalitarian doctrine applies to present-day Russia, which, for all its nationalist and expansionist tendencies, is itself under threat from revolutionary Islamism, the brutal successor to the equally brutal Nazi and communist creeds which blighted so much of the 20th century. Therein lies the basis for potential co-operation, provided that our dialogue with Russia is from a position of strength, based on sound defences and credible deterrence.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
May I say that it is a privilege to serve on the Defence Committee, which is so ably chaired by the right hon. Member for New Forest East (Dr Lewis)? I hope he will agree that one thing that is clear from our report is a lack of dialogue and understanding between our colleagues in Russia and ourselves, in terms of not only language, but shared history. Does he agree that, in the light of the upcoming NATO summit, we need to review that as part of our wider engagement with Russia, including how it perceives the threat from NATO, too?
Dr Lewis
Yes, indeed, and I thank the hon. Lady for that. She is a tremendously supportive member of the Committee; this is her first parliamentary term, but she has made a great start. I re-emphasise what I said about the importance of dialogue with Russia. The fact remains that different societies develop at different stages and go through different phases in their attitude to their relationships with the rest of the world. One mistake that the west clearly made after the downfall of communism was to evoke a degree of triumphalism at a time when magnanimity would have been more appropriate. Those in the west make a terrible mistake if they fail to recognise that Russia is and always has been a great power, and what we have to do is reach out the hand of friendship, while trying to discourage those aspects of the Russian tradition that seek to dominate lands beyond its own borders. Russia is a pretty large landmass and one would hope that the Russians could make a success of running their own country without feeling the need to impose their will on their neighbours.
Mr James Gray (North Wiltshire) (Con)
Potential Russian expansionism must be deterred by NATO with a fist of steel—there is no question about that, as we cannot let them do it—but one encased in a velvet glove. At the moment, we do not understand Russia and what it is doing. We must find better ways of understanding the Russians and talking to them about it. Does my right hon. Friend agree that one area where we simply do not know what they are doing is in the high north—in the Arctic? Russia is, without question, expanding its military capabilities up there and we do not quite know why. Does he agree that that was one area the report was not able to look into, and is there not room for further work on that?
Dr Lewis
I agree with every word my hon. Friend has said. Our report drops a very broad hint that the Arctic—the high north—deserves special attention, and I strongly suspect that if and when the Committee takes a decision to give it that special attention, my hon. Friend, who has led the way, with his all-party group for polar regions, in alerting the country to the significance of this area, will be playing a very prominent part indeed.
Clive Lewis (Norwich South) (Lab)
First, let me thank the right hon. Gentleman and his fellow Committee members for a comprehensive and thorough report on this important area of the UK’s and Europe’s defence and security. I note that this inquiry did not have time to consider the implications of Brexit in full. However, given that the Putin regime’s tactics are often geared towards destabilising Europe as a whole, does he agree that it is vital for the UK to ensure, particularly at the upcoming Warsaw summit, that Brexit does not undermine the political cohesion of NATO? I am going to assume that the answer to that is yes. As such, has the Committee given any preliminary thoughts as to how this might come about?
Dr Lewis
I welcome the hon. Member for Norwich South (Clive Lewis) to his new responsibilities. May I say a personal message of appreciation for his past service in the Territorial Army, which included a spell of active service in Afghanistan? I hold the members of the armed forces, particularly those who have seen active service in dangerous parts of the world, in the highest respect. I am sure that we will all listen with very great attention to his contributions.
In relation to the implications of Brexit, I do not think that I am giving up any trade secrets when I say that that has been discussed as one of the major strands of the forthcoming work of the Committee. It is certainly the case that there should be no need for anyone to feel that security arrangements have been undermined in any way if only because of the almost complete overlap between the membership of the EU and the membership of the North Atlantic Treaty Organisation. I am quite certain that the structures of NATO will be perfectly capable of carrying forward the security relationships without any form of distortion by any other organisation that might have been tempted to duplicate them. NATO will indeed be one of the principal forums for ensuring that the communications that are so important between the United Kingdom and our friends and allies on the continent will be able to proceed absolutely uninterruptedly as a result of the change that will take place.
The Parliamentary Under-Secretary of State for Defence (Mr Julian Brazier)
May I also welcome the hon. Member for Norwich South (Clive Lewis) to his new role, and say that we served in the same reserve infantry unit, although, unlike me, he saw active service during his time there?
I congratulate my right hon. Friend and his Committee on a heavyweight report. Clearly, we will be responding to it, and we will look carefully at each of the recommendations. It is above my pay grade to give a date for the Trident debate, but we will be looking carefully at it. May I congratulate the Committee on the very careful balance that it has struck between stressing the real and growing dangers from the Soviet Union—sorry, that was a Freudian slip; I meant from Russia—and stressing the political situation that exists now as compared with the old Soviet Union? I am talking about the lack of ideology now, and the fact that that may provide us with some constructive opportunities, particularly as we share a horrid threat from Daesh.
Dr Lewis
I am very grateful to the Minister for his encouraging remarks. He is spot on when he says that we must take a balanced view with regard to Russia. If we look back over the history of Anglo-Russian relations throughout the 20th century, we will see that they are terrible switchback rides of periods of great hostility and then close alliance and then great hostility once again. It is a pity—I will put it no more strongly than that—that we cannot order our affairs to see that, in reality, there are prospects for co-operation between developed powers that vastly outweigh any sectional advantage that might be sought by one of them trying to steal a march on the other. I understand the reasons why Russia feels affronted by its treatment after the end of the cold war, but that is no excuse for ripping up the international rule book and trampling on the rights of its neighbours.
Mr Nigel Dodds (Belfast North) (DUP)
May I commend the Chairman and the members of his Committee for producing an excellent report in the run-up to the NATO summit later this week? I entirely agree with the need for more dialogue and co-operation through the NATO-Russia Council and by other means, and also with the Committee’s recommendation about recognising the Russian threat and the need to respond to it robustly. In that context, does the Chairman of the Committee share my concern about the recent remarks by the German Foreign Minister who described the recent 10-day NATO exercise in Poland as “warmongering” and “counterproductive” to regional security? Is there not a need for the member states of NATO to stand together and send a united clear message to Putin that we will not be divided? More work needs to be done by our own Government and other like-minded Governments to ensure that everybody recognises the need to stand united, otherwise Putin will exploit the differences.
Dr Lewis
I share the right hon. Gentleman’s concern. This is why some of us—I speak more personally in this respect—have been worried about the creation of a separate defence identity in Europe outside the NATO arena. What he says is entirely right: NATO is the forum in which our security concerns should be aired with our European friends, neighbours and allies. We should try to arrive at a unified perceptions of the situation and articulate them appropriately.
Sir Gerald Howarth (Aldershot) (Con)
May I congratulate my right hon. Friend and his Committee on producing an excellent and timely report? Does he agree that we have seen recently that President Putin has been able to exploit our weaknesses, that he does so ruthlessly and that he has been able to act with impunity? As chairman of the all-party Ukraine group, I am particularly conscious of his flouting of the Budapest memorandum of 1996, and he has done that with complete impunity. He respects strength, so it is absolutely right that NATO is reinforcing its position in the Baltic states. That is a demonstration of strength and resolve on the part of NATO. Does my right hon. Friend agree that it is capabilities, not intentions, that count? Intentions can change overnight; capabilities cannot. Particularly today, given the complexity of modern defence technology, we cannot produce aircraft, tanks and ships overnight. Therefore, NATO’s upcoming meeting should focus on delivering the extra spending to deliver the capabilities.
I strongly applaud my right hon. Friend’s argument about dialogue. I had a meeting with the Russian ambassador here in London, and I said, “We have a common interest. Our common interest is that we are both facing Islamic fundamentalism, and that is where we need to co-operate.” Will my right hon. Friend therefore share with the House how he thinks we can not only show that we have absolute determination and resolve in resisting Putin’s advances but engage with him and his Government? Where else might we do so apart from on the mutual threat that we face from Islamic fundamentalism?
Dr Lewis
What a cornucopia of questions, but all of them typically sound and well directed, given my hon. Friend’s distinguished record in the field of defence and security. I believe that there is nothing new about the dilemma of how we gauge our relations with the Russians. I remember in my years as a researcher coming across a paper by the joint intelligence sub-committee—it was then a sub-committee of the chiefs of staff—called “Relations with the Russians”, which was written in 1945, and it said then exactly what we are saying today: “They respect you if you stand up to them, if you show you’re strong, but if you engage with them as well. They do not respect you if you give signs of weakness.”
I believe that there is a shared threat, but there are potential threats that Russia is beginning to show, once again, towards its most immediate neighbours, and that is why it is important that there is a NATO military presence in the most vulnerable front-line states, particularly the Baltic states and Poland. Russia must be left in no doubt that NATO membership means that article 5 applies, and article 5 means that there should be no question of Russia thinking that it can pick off any weaker or more exposed NATO member state and that the other NATO countries will not come to its aid. That is why, conversely, we must be careful not to extend NATO membership or article 5 guarantees to countries where it is simply not realistic to believe that NATO would go to war to defend them.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. We are quite a lot over time now, so I am going to ask for very short, very quick questions, but also very short, very quick answers.
Douglas Chapman (Dunfermline and West Fife) (SNP)
We spent most of yesterday discussing the political and military miscalculation and misadventure in Iraq. We hope a debate on Trident looms large, but the report emphasises the need to consider the cost-effectiveness, desirability and affordability of the Successor programme. In the light of Brexit and the financial uncertainty it might bring, does the right hon. Gentleman agree that there are many approaches and non-nuclear deterrents we could introduce to create stability with Russia, but that Trident skews every single defence budget to unacceptable levels? Its extension could lead to a financial miscalculation and to a military misadventure that would make Iraq look like a bit of a walk in the park.
Dr Lewis
Bearing in mind your instruction to be concise, Madam Deputy Speaker, I will just share with the House what the hon. Gentleman said to me when he first joined the Committee. He said, “Julian, you and I are never going to agree about the nuclear deterrent, but I am sure we can co-operate to mutual advantage on many other defence issues,” and he has been as good as his word. I respect his concerns and his doubts about the Trident Successor programme, and I am sure that the sooner we have the debate, the sooner we will be able to engage in the arguments.
Jim Shannon (Strangford) (DUP)
I commend the right hon. Gentleman on his chairmanship and leadership of the Defence Committee. When I think of Russia, I think of the saying, “Speak softly, but carry a big stick”—in other words, we have to have dialogue, but we also have to be able to respond. One of the concerns I and the Committee have is about the National Guard, which comes under the direct control of the President—in other words, he can use it to combat terrorism and organised crime but also to control protests. Does the Chairman share the concern I and many others have that President Putin is no longer prepared to tolerate any opposition whatever? Do we also need to look at the ability of NATO and the British Army to respond quickly? Russia can respond within 24 hours or 48 hours, but we seem to take at least another three days. It is critical that we can engage with Russia on those two issues at every level to make sure we protect our people.
Dr Lewis
The hon. Gentleman makes an enormous and extremely valuable contribution to the work of the Committee, and I agree with him: the announcement of the creation of this new National Guard, which can muster hundreds of thousands of troops, according to some reports, but which, interestingly enough, also includes special forces, is a cause for concern. As it is directly responsible to the President, one can only wonder whether it has something to do with shoring up his position domestically, as well as with exerting power beyond Russia’s borders. The report says—I mentioned this in my statement—that the creation of the very high readiness joint taskforce is a step in the right direction, but the numbers that can be generated at short notice by the Russian armed forces seem to be substantially in excess of what NATO could generate now or in the immediate future, and we need to be able to do better in the medium and long terms.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
I welcome the report, but I do get concerned when I hear Russia being spoken of in a certain fashion in the House and, critically, when we do not speak of the communities in Russia, who have to live with the daily experience of the Russian state.
It is now clear that the Russian Federation views the United Kingdom’s global strength as profoundly weakened not only by the issues raised in the Committee’s report, but by Brexit. Does the right hon. Gentleman agree that the lack of investigation by the Committee into the consequences of Brexit was an oversight and only gives succour to the idea in the Kremlin that the United Kingdom does not have a Scooby what it is doing when it comes to working with like-minded European nations to deal with the profound threats posed by the Russian Federation?
Dr Lewis
What a pleasure it is, after all those very supportive questions, to be able to say that I utterly disagree with the question that has just been asked. When did Brexit occur? It was a matter of days ago, but the Committee is to be coruscated and condemned because it has not already carried out a full-scale investigation of the consequences of something that the hon. Gentleman was hoping would never happen. Some of us hoped that it would happen, although I must say that a majority on the Committee hoped that it would not. The hon. Gentleman can be perfectly sure that the consequences of Brexit feature high up on our future programme of work. Indeed, I am surprised only that he thinks we should have carried out the research into the consequences of Brexit before we even knew that it was going to take place.
Backbench Business
Online Abuse
Mrs Maria Miller (Basingstoke) (Con)
I beg to move,
That this House notes the increasing number of cases where the internet, social media and mobile phone technology are used to bully, harass, intimidate and humiliate individuals including children and vulnerable adults; calls on the Government to ensure that clear legislation is in place that recognises the true impact and nature of online abuse, as distinct to offline abuse; and further calls on the Government to put in place appropriate legal and criminal sanctions, police training, guidance to the CPS and education for young people relating to such abuse.
Without digital connectivity and an online world, our lives would be poorer. The reason for this debate today is that our responsibility as elected representatives is clear: the internet needs to be a force for good, not for ill. I believe we all have a clear duty to come together and demand of the Government that they do more to address the problems of online abuse in all its forms. More than three quarters of our constituents use the internet almost every day, and more than half use their mobile phones to access it. Half of all crimes committed in this country have a digital component, and the police are overwhelmed by its scale and diversity, particularly the nature and impact of online abuse.
Rightly, the focus of the Government in the past has primarily been on online abuse that involves child abuse images, and I applaud the Prime Minister for his clear and personal resolve to outlaw that abhorrent crime. However, online abuse is much more than that, for both children and adults, and includes homophobic, transphobic, anti-Muslim and anti-Semitic hate crime, and image-based sexual abuse, to name but a few. Too often, those forms of online abuse and others continue to go unchallenged, because reporting mechanisms are unreliable or obscure, because the law was designed for an analogue age, and because the police are not properly trained to identify online abuse and then collect the evidence to make a case stick. We have to reject all forms of online abuse and show zero-tolerance through our legal systems, our police force and the things that we teach our children in schools.
It is for us to determine what sort of society we live in, not faceless corporate organisations, often many thousands of miles away. We cannot sit by and simply allow online abuse, in all its forms, to become an accepted norm in our society. With the blurring of the online and offline worlds, it is very easy to see how that might end. What is allowed to become an accepted form of online abuse could simply spill over into face-to-face life.
Like every other Member of this House, I believe in freedom of speech, but that freedom of speech has never been an unqualified right. Freedom of speech comes with responsibilities. At present, we are not ensuring that people who are expressing themselves online understand that fact.
The facts show the direction of travel. Today, one in four young people say they have been targeted with online hate because of their gender, sexual orientation, race, religion, disability or transgender identity. Three quarters say that that has had a chilling effect on how they then used the internet in the future for their free exchange of ideas. Teachers have reported a 40% increase in cybercrime in the past five years, with the perpetrators openly finding new ways to abuse their victims by skirting around the law. Parents have found it almost impossible to get rid of “baiting out” footage on YouTube, making the lives of many teenagers unbearable.
Jim Shannon (Strangford) (DUP)
I thank the right hon. Lady for bringing this vital issue to the House for consideration. There will not be one MP who has not had a constituent—especially young people—approach them about this very issue. I commend the right hon. Lady for making the point about young people being trolled in the digital world. It impacts not just upon that young person’s personality and how they respond, but in some cases in Northern Ireland and across the United Kingdom it has led to suicide. Is it not time for legislation that responds to this, so that we can put those trolls behind bars, where they should be?
Mrs Miller
I know from our conversations that the hon. Gentleman has a long-standing interest in the matter. He is right to say that the law is not protecting many young people who feel vulnerable, and that has led them, in some tragic cases, to take their own lives. We have to take this issue far more seriously and make sure that our laws are robust.
We have to deal with some very unpleasant truths, particularly the growth of peer-to-peer trading of sexual images. That is going unchecked in many cases, for fear of criminalising teenagers, but we know that about one in 10 of those cases could well involve an adult. That leaves young people at real risk of sexual exploitation, while the police find it difficult to know how to cope.
Anna Turley (Redcar) (Lab/Co-op)
Does the right hon. Lady agree that one of the greatest concerns is the under-reporting by young people of these issues? Often, we and the police see only the tip of the iceberg. It is important that we look at the cultural issues.
Mrs Miller
That is a very good point about under-reporting. Even when those crimes are reported, the police might find it almost impossible to know how to tackle them. That might be because the law is inadequate, but it might also be because their training is inadequate.
I was recently given some evidence by “Good Morning Britain” of a freedom of information request that it made, which uncovered the fact that one in six crimes reported under revenge pornography laws involves children under the age of 18. That is not revenge pornography; that is child abuse. It is potentially misattributed in that way by the police. That leads, exactly as the hon. Lady said, to the under-reporting of one of the most appalling crimes in existence.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
I welcome the work that the right hon. Lady has done on this subject. She and I are both involved in the Reclaim the Internet campaign to bring together the police, social media and organisations and individuals across the country to tackle online abuse. I agree that there are big questions for the law and for policing, particularly when it comes to protecting young people. Does she agree that much stronger responsibility is needed from everyone, including other organisations, individuals and social media platforms? Does she welcome the work that Stonewall and Facebook have been doing to tackle online bullying, LGBT discrimination and homophobia, and that they are launching a new online guide tomorrow?
Mrs Miller
I thank the right hon. Lady for highlighting the work that is going on. I pay tribute to Reclaim the Internet, the cross-party campaign that she started to make sure that we can come together and find a solution to one of the biggest that the country faces. Online abuse, as she rightly says, does not simply affect one group of people. It goes across society, and it is wrecking the lives of adults, too. The Government must be applauded for being one of the first in the world to recognise online image-based sexual abuse in their revenge pornography laws. The Leader of the House, when he was Lord Chancellor, was instrumental in putting those laws into place.
That action has been vindicated, because there have been more than 3,000 calls to the revenge pornography helpline since the laws were enacted—laws that I was told were not needed because there was adequate law in place already. There were 1,000 reported incidents in just six months last year. There is much more to do to make the laws effective and to enable the police to prosecute effectively, but I think it shows that the Government are open to persuasion on the matter, and I hope it demonstrates an open-mindedness for the future. Now is the time for a very clear strategy to tackle these problems. Every person in the country, regardless of their age, should have an expectation that that they will be able to use social media platforms and mobile technology without being subject to criminal abuse.
The online world is part of everybody’s lives. The Minister for Culture and the Digital Economy, my hon. Friend the Member for Wantage (Mr Vaizey), who is sitting on the Front Bench, has a deep interest in and knowledge of these issues. I know the personal work that he has done behind the scenes to try to press forward on many of these issues, and he should be commended for that. I know that the proposals in the Digital Economy Bill on stopping under-age access to pornography will have been subject to a great deal of attention from him. Those proposals are very welcome, but reinforce, I feel, the piecemeal approach to the problem. Experts have already made it clear that children will be, frankly, more than well equipped to get around most barriers put up to stop them getting access to pornography.
The approach in the Bill may well help in stopping younger children inadvertently coming across pornography—an issue I know the National Society for the Prevention of Cruelty to Children has highlighted in recent research—but if the Government’s policy is to be effective, it must be part of a much broader and clearer strategic plan, including mandatory sex and relationship education in all state-funded schools to give children the opportunity to understand how to make the right choices for them and put any pornography they may see into the proper perspective in their lives.
Mr Nigel Dodds (Belfast North) (DUP)
I join others in commending the right hon. Lady on securing this debate. She mentioned a multifaceted approach. When I hear about cases in my constituency, one issue that concerns me is the irresponsibility—if we can call it that—of some parents, who give media and digital platform devices to their kids at a very young age and then leave them to it. Surely we need to do more to educate parents about their responsibilities and how they can teach their children to manage such devices responsibly.
Mrs Miller
The right hon. Gentleman is absolutely right. We find it easy to talk about putting responsibilities on schools to teach, but he is right that it starts with all of us as parents. If we give our children these devices—including gaming devices, as there are clear problems there with regard to the grooming of children—we have to take responsibility for ensuring that they are knowledgeable about the risks and can start to make informed choices from what, as he says, can be a very early age. That can be easily reinforced at school. In the past I have been very open about the fact that I felt that sex and relationship education should be determined by schools, but as we move into the online world the very real dangers and problems encountered by children have changed my view on the need to make that education compulsory.
Some of the best and brightest people work on the online world. It is an incredibly creative industry, and the response to the problems of child abuse images shows that, if we are clear about our terms of engagement, when pressure is applied the industry can react quite swiftly. This debate enables Parliament to send a clear message to the industry, social media and the online world that enough is enough; our constituents deserve better and we will fight—as the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) says with her campaign—to reclaim the internet for them.
I would like to take the opportunity to thank the Backbench Business Committee for recognising the importance of this debate and allowing me and my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) to co-sponsor it. I also thank the myriad organisations that have worked with us to prepare for the debate: Durham University, Professor Sonia Livingstone of the London School of Economics, Stonewall, Galop, the NSPCC, Victim Support, the Internet Watch Foundation—the list goes on, because so many organisations have a deep concern about the direction of travel.
Social media platforms and internet providers are facilitators. Like many other organisations in our country, they provide a service, whereby they are able to gather our personal details to sell them for advertising opportunities. It can be quite astonishing to view a pair of shoes on one website and then see them pop up on another website two hours later in an entirely different context. I really take my hat off to the people who are able to do that. It is a sophisticated industry with sensitive and well developed ways of gathering information, selling sales opportunities and so making successful businesses. Today, I call for some of that incredible talent and expertise to be focused on stopping online abuse.
There are four issues that need to be addressed. First, we need to make sure that we have laws that are fit for purpose. I pay tribute to the work done by Durham University, particularly by Professor Clare McGlynn, and Holly Dustin. We need to clarify what constitutes online abuse. We need better and clearer harassment laws that can be effectively applied online. We need an image-based sexual abuse law that clearly makes illegal all forms of image-based sexual abuse shared in a non-consensual manner. We need to end complete anonymity in the UK, and we need to insist that platforms have a legal duty to be able to identify the people who use their products in our country.
Secondly, we need to make it clear to those platforms and providers that they have to abide by a common standard for reporting mechanisms. They should provide accurate and transparent figures on the cases of reported abuse. When they are developing products, that needs to be done in a way that builds out abuse in the future, rather than building it in at the starting point.
Thirdly, we must be clear to online providers in our country that if they fail to take sensible measures to reduce online abuse, we as a Parliament will consider putting in place a levy to cover the costs of policing that are incurred purely as a result of online abuse crimes. That has been done in other areas—for example, the payments that are made by football teams for the policing of football stadiums. This is not a new idea, but it might concentrate minds when it comes to online abuse in the future.
Last but by no means least, we need to see a change in culture. Consent, respect and dignity should be at the heart of compulsorily delivered sex and relationship education in all our schools. Beyond that, campaigns should be run to make sure that people understand their own responsibilities to act sensibly and within the law while using the internet. That will be driven greatly by removing the veil of anonymity which currently cloaks so many inputs into social media.
Where there is a will, there is a way. I know that the Minister will want to show the House today that there is a clear will on the part of Government. More than four years ago the Prime Minister made it clear that there was no tolerance for child abuse online. At that point the industry had said that it could do little about it. Now, there is a clear strategy and clear protocols, and images are removed swiftly. With a worrying increase in online hate crime, perhaps even spilling out into the offline world already, we need to act swiftly. We need to make sure that cyberbullying and the newly formed concept of online baiting are shown short shrift.
Now is the time to act, and I call on the Minister to show us that he has an understanding of the need for a clear strategy to tackle online abuse in its totality. In the Digital Economy Bill which he published this week, he has just the legislative vehicle he needs to make any changes that such a strategy might call for. My hon. Friend is a good man. He knows that the online world needs a clear message from this House. I hope he listens intently to the debate today and takes back to his Department and to the industry the message that now is the time for change.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. If everybody takes about eight minutes and no longer, I will not have to impose a time limit and everybody will get in.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
I thank the right hon. Member for Basingstoke (Mrs Miller) for securing this debate, and I thank the Backbench Business Committee for granting it. She has done a great deal in her role as Chair of the Women and Equalities Committee, and before that on the problem of the online abuse that is increasingly experienced by women. I commend her particularly for her work on the revenge porn legislation.
We know that online abuse takes various forms—cruel comments and messages, the sharing of photos without consent, being sent unwanted images, or threats of sexual or physical violence. Although there is a range of forms of online abuse, one thing is clear: online abuse is happening consistently across all social media platforms, and more needs to be done to stop it.
I am very pleased to be supporting, along with other Members, the Reclaim the Internet campaign of my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper). It demands change so that voices are not silenced by misogyny, sexism, racism, homophobia, transphobia or any other form of intimidation online. I understand that the campaign was launched last year, but it will have its first big event on Monday 18 July, bringing together anti-bullying campaigners, groups that focus on online protection and members of the industry to see what steps can be taken to stop abusive behaviour. I hope that all Members get behind this campaign.
Online abuse affects many people and groups in society, but it seems that women are subject to particular vitriol online, and I want to focus my comments on women. Online abuse of women contains frequent use of threats of sexual violence and derogatory comments about women’s appearance and bodies. Women are the major victims of revenge porn, where explicit photos or videos are shared without consent, and those individuals who perpetrate online abuse seem to take even greater pleasure in shouting down women who speak out against it. We must address this.
I am sure that many of my fellow female Members from across the House are, unfortunately, all too familiar with this kind of online abuse. The anonymity and distance that people think social media gives them enables them to say things online that I hope they would never say face to face, but this online abuse must be tackled so that it does not prevent women from wanting to get involved in public life.
When it comes to young people and online abuse, it is young women who are disproportionately affected. A study by the Pew Research Centre in the United States found that 25% of women aged 18 to 24 had been targeted with online sexual harassment and 26% of women had been stalked online—that is one in four women. It is appalling. It needs to be made clear that this kind of behaviour is as unacceptable online as it is offline. The study also found that men are more likely than women to report online abuse, so there is some disconnect, whereby women do not feel able to report the abuse, or maybe feel that it is not even a reportable crime. We must address the issue of enabling women to take their complaints to the police.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The hon. Lady is right to identify the need to get more women to come forward and actively complain. Does she agree that one thing that could make a real difference is giving anonymity to the victims of revenge porn? That would bring more people forward to make complaints, which could lead to prosecutions.
Dr Blackman-Woods
The right hon. Gentleman makes a very interesting point, and we in this House need to look at it in more detail.
This issue affects younger women, and particularly young women who are still at school. One way in which online abuse was first brought to my attention was by head teachers in my constituency who came to see me to tell me how much of a problem online abuse is in school. They asked me to raise the issue in Parliament to see what could be done to help head teachers and others in schools to tackle it.
I am also a member of the Commonwealth Women Parliamentarians, a branch of the Commonwealth Parliamentary Association, and we have looked in great detail at the issue of violence against women, in particular the rise of online abuse as a form of violence against women. This is becoming such a significant element of the experience of women in public life that we made it one of the key themes of our international conference in 2015. We heard from groups, such as Internet Watch Foundation, that outlined the difficulty of tackling the prolific online abuse of women, along with legal professionals who pointed out that the current legislation is simply not where it needs to be to address this issue. The conference identified online abuse as a global phenomenon, and we now want to work with partners in other countries to get the best legislation possible. That work is ongoing.
I wish to praise my own constabulary in Durham and our Chief Constable Mike Barton, who has been at the forefront of speaking out on this issue from the policing perspective and has highlighted how long the police spend dealing with online incidents. He has talked about the need to clarify legislation to make it much easier for the police to deal with complaints about online abuse and to know how to tackle the problem and when to categorise incidents as criminal. We have to make sure that our police are equipped to deal with the ever-changing nature of crime and the new world of online harassment. In particular, we need to make sure that they have the necessary resources and training. At the moment, only about 7,500 out of 100,000 police officers in England and Wales have been trained.
I welcome the Government’s moves in this area, and I know that the Minister will be listening today, but we need to make sure that our laws reflect our increasingly technological society. I again pay tribute to the work being done at Durham University to outline to legislators how we need to consolidate and update existing legislation and then adopt a clear strategy on how it is implemented and enforced. Only when we do that will we—I hope—get the culture change that the right hon. Member for Basingstoke stressed and that we need if we are to stop all forms of online abuse.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
I thank the Backbench Business Committee and my right hon. Friend the Member for Basingstoke (Mrs Miller) for giving us the opportunity to talk about this issue. Like many others, I suspect, I came to it as a result of a few incidents being reported in my constituency. I thought I was on the brink of uncovering a fairly limited, isolated and occasional problem, but on looking more deeply into the subject, I quickly discovered that it was a huge issue affecting vast numbers of people, young and old, and not just in my own patch of west Wales but across the UK.
The extent of the problem is well illustrated by information from Victim Support, which has worked with more than 12,000 children in schools over the last three years. It tells us that 56% of those kids were identified as victims of online crime—a staggering and worrying statistic; that 41% reported persistent and targeted bullying online from their peers; and that a third reported being sent non-requested online pornography. That is probably a significant underestimation of the problem, because, as we know, many people might be fearful of reporting abuse or might not know how or where to go to make a complaint.
I do not want to repeat my right hon. Friend’s contribution word for word, but this problem does not just impact on young people and their families. We are talking about racism, gender issues, homophobia, anti-Semitic abuse, disability issues and prejudice and intimidation, including in respect of religion, shape, style, sexual orientation and, in some cases, people’s everyday beliefs. YouGov recently surveyed just over 2,000 adults: 81% reported bullying as commonplace in school; 56% reported it as commonplace at work; and 64% believed it was widespread throughout society. I wonder what the contrast would have been had YouGov undertaken that survey five or 10 years ago.
Online abuse knows no boundaries: it affects the old, the young, the vulnerable, and it can, these days, be worryingly anonymous. It was described to me the other day as being like a persistent headache from which one simply cannot escape—there is no safe place or private little haven where one can escape the impact of the online bully. It can lead to reputational damage, financial loss, job loss, mental health issues, relationship breakdown, isolation and even, in the worst cases, suicide.
As we have discovered, part of the problem is that no one knows exactly how big the issue is. This is what we are trying understand. With over 30 pieces of legislation covering a variety of crimes, it is difficult to get a clear picture. The closest we got were statistics, courtesy of the Library, on the number of prosecutions under section 127 of the Communications Act 2003. In 2004, 143 people were cautioned, proceeded against and found guilty under this section. In 2014, that had risen to 1,209, and that represented an 18% increase on 2013. One figure on which we can rely, therefore, is the dramatic increase in the number of prosecutions under that one single piece—out of 30 pieces—of legislation.
There is a concern about consistent terminology. We seem unable to define clearly exactly what online abuse is. We all have our own private views, but there seems to be some misunderstanding within the law over exactly what “online abuse” means. Without that definition, there can be inconsistencies in the application of the law and in the assistance people get from those charged with protecting us from online abuse. We welcome the Crown Prosecution Service interim revised guidelines, but, as I will come to, there remains a question about whether they go far enough.
I am a little concerned that the Government earlier this year said that they
“did not intend to introduce specific additional legislation to address online harassment and internet trolling”.
The reason they gave was that they did not want young people to be unnecessarily criminalised. That is an entirely justifiable position, but it demonstrates a narrow awareness of the true scale of the problem and does not take into account the many other target groups of people who find themselves victims of this problem. Previously in the House, the Under-Secretary of State for the Home Department, my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley), referring to the 30 laws, went so far as to say:
“It is imperative that these laws are rigorously enforced.”—[Official Report, 29 June 2016; Vol. 612, c. 327.]
We will have to address that issue with those charged with enforcement.
How does this harassment take place? As we have heard, it is abusive messages online, texts and emails, social media, digital photos used to embarrass the victim, account hacking, sexual grooming, extortion, blackmail and anything else these people can think of. The national stalking helpline, which has been referred to already, has statistics showing that most abusive behaviour is now digital rather than offline. As we become more dependent on online activity, so children and adults find themselves in a world in which there is no escape from this kind of activity.
I have some questions. Do we know the scale of the problem? It seems not. How many people are too afraid to report it? We do not know, except we know there are thousands. How many people do not know how to report it or who to report it to? We do not know that either, other than that it is probably plenty. Are schools equipped to spot the signs, and should the responsibility lie exclusively with schools? I do not think we know that either. Are the police trained? Do they have the resources? Are they serious about dealing with reports? We do not know. Are existing laws satisfactorily enforced? It appears from the Minister that there are further enforcement issues to address.
Do the social media platforms take their responsibilities seriously enough? As mentioned earlier, organisations such as Facebook and Twitter have done a great deal to improve the situation and take the problem seriously, but back when most communication was through printed newspapers—some of us will remember those days—if anyone had written a letter to an editor in the old days when that was possible, containing some of the stuff it now appears perfectly reasonable to put on Facebook or Twitter, there would have been no question of it seeing the light of day; it would have been torn up and chucked in the bin. Now, however, some of those platforms are facilitating some pretty disgusting material, and sort of saying, “Well, it’s up to the victim to complain to the police if they wish.” I am not sure that social media platforms, good work though they have done, are yet in a position that can be called fully responsible.
It is good that the CPS has acknowledged concerns, but bad that the Government do not feel obliged to do anything further at this stage. It is good that such a wide collection of charities, organisations and groups have helped us and are bringing the issue to public attention, and that His Royal Highness the Duke of Cambridge is behind the taskforce on the prevention of cyberbullying. As he put it, we need to stand up to bullies, not stand by.
I am worried that we live in a world where the kind of language, tone, and incidents we read about are becoming so widespread and common that they are almost becoming normal. If they become normal, what hope can we have for children and vulnerable adults who live in that kind of cyber-world? For that reason, I and my right hon. Friend the Member for Basingstoke thought it appropriate to bring the issue to the attention of the House today.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
I congratulate the right hon. Member for Basingstoke (Mrs Miller) on securing this important debate.
This is a serious and growing problem for all in modern society, and it spans all age groups and demographics. Research commissioned by Demos found that in three weeks, 10,000 tweets were sent from UK accounts that aggressively attacked someone for being a “slut” or a “whore”. Revenge Porn Helpline received 4,000 calls in the last year, with cases affecting children as young as 11 years old being reported. According to the NASUWT, the largest teaching union in the UK, more than half of teachers also report receiving online abuse.
In February this year, the UK Safer Internet Centre published a study that found that of the 13 to 18-year-olds surveyed, 24% had been targeted owing to their gender, sexual orientation, race, religion, disability, or transgender identity. One in 25 said that they were singled out for abuse all or most of the time. Although such abuse has spanned all of society, teenagers with disabilities, and those from African, Caribbean, Asian, middle eastern and other minority ethnic groups were more likely to encounter cyber-bullying. Parliament and Governments across the UK have a responsibility to face up to that issue and take appropriate action to prevent and address it.
In Scotland, our First Minister has been vocal in condemning this issue, and the Scottish Government have provided full funding for Respectme, Scotland’s anti-bullying service, which is managed by the Scottish Association for Mental Health. That vital service works with adults who are involved in the lives of children and young people, to give them the practical skills and confidence to deal with children who are bullied and those who bully others. It is important that those of us in public life provide leadership on this issue, and Members will agree that no one should have to accept online abuse, and that those who have been subject to it should report it to the police. They must not suffer in silence or alone.
I want to use my personal experience of this issue to encourage the public to stand up to online abuse, and I ask those in public life to show stronger leadership in the conduct of our public debates. When I decided to stand for Parliament, I did so because I wanted to make a positive difference to the lives of people in my constituency and across the country. I did so in full knowledge that by standing up for what I believe, I would hold myself open to challenge from those who do not share my political beliefs. A robust, honest, political debate about our views and deeds is a vital part of any democracy, and we should embrace it. As we saw from the report published by Sir John Chilcot yesterday, an absence of critical debate in Parliament, Government, and our democratic system can have disastrous consequences. I therefore came here with the full knowledge and expectation that my words and actions would be held up to public scrutiny, and that is right.
What has sometimes taken my breath away, shocked my family, and reduced me to tears, is the vitriolic, hateful, and sometimes criminal levels of personal abuse that I and colleagues across the House have faced. I have received hateful handwritten letters that contained sexual slurs, phone calls to my office threatening violence towards me or my staff, and racist emails stating what people want to do to people like me who are Muslim. Although such communications are all too common, they are not an everyday experience, and I am grateful—as we should all be—to the police at Westminster, in Scotland, and across the UK, for their work to help and support those who fall victim to these crimes, and to investigate the perpetrators. The police provide a sympathetic level of support to victims, no matter what their background or circumstances, and it is important to encourage people to report such abuse at every stage.
I know that I am not alone in my determination to make myself open and available to those to whom I am accountable, and in the 21st century that means being active on social media. I agree with Scotland’s First Minster, who recently said that thanks to the positive power of Twitter and Facebook we can now communicate directly with our constituents about the work we are doing on their behalf, and hear their views without a filter or barrier between us. However, the great tragedy of that new technology has been the advancement in online bullying, abuse and threats, and that horrific experience is not confined to those of us who sit in this Chamber. Let me say directly to all those watching from outside Parliament who have been victims of online abuse, that all of us here today are standing right beside you. We know how it feels because we understand the pain you have been through, and we will do our best to address this horrendous issue.
In the past 14 months, I have been called a Nazi, received messages that called for me to be shot as a traitor, and read in tears as strangers attacked my father who passed away two years ago. Recently I spoke to the Sunday Mail newspaper, and I am grateful for the article it published, which included some of the dreadful things that have been said to me, none of which are worthy of being repeated because of the status and stature of this Chamber. However, my husband sees those messages, my children read this garbage, and my staff are required to wade through this sickening filth each day to get to the important information they need to do their jobs.
Mrs Helen Grant (Maidstone and The Weald) (Con)
The hon. Lady is making a powerful point. Does she agree that all victims, including politicians, should be given all the help and support that they need and deserve to move on with their life and careers, and to bring the perpetrators to justice?
Ms Ahmed-Sheikh
I agree entirely with the hon. Lady, and this abuse is difficult for anyone who faces it. There is an anticipation and expectation that we must be strong, but perhaps we are not and some people have more strength than others. Support mechanisms must exist, and we must help people to move on. No matter who is the victim, such abuse is disgusting and vile, which is why I support the honourable aims and objectives of the Reclaim the Internet campaign. I congratulate all those who have been involved in setting that up across the Chamber and beyond on seizing the initiative.
We must examine the role of the police and prosecutors, and be clear about when threats and harassment become crimes. Social media and publishing platforms must accept this serious issue, and take steps to address it. We are entitled to expect more from Facebook and Twitter in their handling of these issues. We must consider how best to provide support for victims and how to take on the trolls, and we must empower and educate our young people about these issues and how to address them.
Individual Members of Parliament are not responsible for the specific content of tweets or Facebook posts by others, but we are responsible for setting the tone of the national debate. I believe we are at a vital point in our politics. We have recently made, and will continue to make, significant and defining decisions about the type of country and society we want to be. We can embrace the politics of hope, or the politics of hate, and it is our role as elected representatives to show leadership and conduct ourselves in a way that defines the political debate. To those who may be watching this debate and dealing out abuse on the internet, perhaps even as we speak, I say this: you are the cowards, but we will stand up for the brave.
Rebecca Harris (Castle Point) (Con)
Tragically, online abuse has become part of all our lives. I have been subject to it, although I am not a member of a minority religion or race. Like many hon. Members I have received online abuse. Nothing has really hurt or affected me terribly, but on one occasion I simply posted some comments about boy racers who were causing antisocial behaviour. Within about an hour I was being abused from all round the globe, by boy racers who had obviously noticed a deficit in my sex life, and who were offering a wide range of suggestions to improve it, some of which would have ended in certain death. I had to take the post down—not because I was personally offended or concerned, but because I simply could not monitor it to ensure that that level of foul and abusive language was not left on my Facebook page for people to see. It is becoming clear to me from my mailbox how much online and internet abuse is affecting my residents—it is growing all the time, and includes women and children who face stalking online from ex-partners.
I have noticed within the past two years an enormous improvement in the police response. Whereas two years ago I found that the police suggested to women that they should simply come off Facebook or stop being online, they now more often have a more appropriate response—they now recognise that, in the modern age, people should be as safe online as they are when they walk down the street—but we have some way to go. I am pleased that, today, Her Majesty’s inspectorate of constabulary has recognised Essex police and the work of my excellent chief constable, and rated them as effective and reliable in their treatment of vulnerable victims.
It is incredibly important that we get the legislation right—the Minister is listening. Chief Constable Stephen Kavanagh of Essex police has said, as has been pointed out, that the police deal with 30 different pieces of legislation that simply do not work for victims. The legislation is either out of date or does not go far enough and the police need to be properly prepared and trained to deal with the magnitude of cases of online abuse. Our role must be to future-proof the recently announced Digital Economy Bill, so that we are not permanently playing catch-up. The digital economy is growing more sophisticated all the time, and its pace of change outstrips that of all kinds of other technologies.
On a wider point about our culture, which was mentioned by my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart), we see the vile comments underneath stories in local or even national newspapers, and foul comments on Twitter, and in the past week, post-Brexit, we have seen an appalling upsurge in racial comments, all of which are vile and rightly should be prosecuted. Another shocking thing in the wake of Brexit is that nice, normally liberal-minded people—people who would profess to be progressives—also think it is reasonable to abuse 17 million of their fellow countrymen, including 73% of my constituents, as being clearly stupid or racist. It is no less illiberal or intolerant to think that all people of a certain race are of one set of opinions or one viewpoint. In our culture, people—seriously liberal, intelligent and educated people—think they can say those things online. They turn into keyboard warriors and say things that they would never dream of saying face to face to an individual.
We have a responsibility to deal with that abuse in our culture. If that is acceptable and if it is seen day by day, no wonder women do not come forward and they take attacks for granted; no wonder children think it is all right to be abused and attacked online; and no wonder the perpetrators and genuine criminals feel emboldened and that their behaviour is normal. I would say to everyone who goes online that they should post nothing that they would not write if they are not prepared to give their full name and address. It is a cultural issue, and legislation alone will never tackle it unless we take personal responsibility for changing our culture in this country.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
It is a cliché to say that the internet has changed the world we live in, but it is a cliché because it is true. It is not possible to list the changes the internet has brought about because, over the past quarter of a century, it has simply become all pervasive. It has now reached the stage where, with smartphones, we carry it around in our pockets.
I know I am labouring a very obvious truth, but it is important in the debate to take a moment to reflect on just how central the internet has become to our daily lives. For my generation, the internet is a technical marvel, but for young people growing up today, the internet and the things that happen online are just another normal, everyday part of their world. That is why it is so important to have this debate. We cannot stand by and watch the sort of abuse and harassment that a small minority of internet users inflict on the rest of us become normalised. It is not too much of a wild prediction to say that the internet, social media and smartphones are here to stay, so it is vital that we do all we can to combat and prevent the abhorrent misuse of what are, when all is said and done, powerful tools for communicating thoughts and ideas.
Melanie Onn (Great Grimsby) (Lab)
Does my hon. Friend believe the Government should consider the additional costs incurred as a result of the bullying, trolling and abuse that people experience online? A few years ago in my area, there was a 25% increase in referrals to child and adolescent mental health services, so abuse clearly has a bigger societal impact, and a financial one.
Gill Furniss
I agree with my hon. Friend that that must be considered.
The sheer scale of the problem is daunting. As public figures, I am sure that many if not all hon. Members have been on the receiving end. To give just a few statistics, a Greater London Authority report suggests that only 9% of online hate crimes were investigated nationwide. Back in 2014, the charity Beat Bullying reported that a third of young people have experienced bullying online, including one in five eight to eleven-year-olds, while one in 13 was subjected to relentless abuse over a period of weeks, months or even years. Last year, the Revenge Porn Helpline received nearly 4,000 calls.
Similarly, the nature of the problem means there are no quick fixes. The anonymity that the internet allows means that users can choose to ignore the normal social conventions on what it is acceptable and not acceptable to say to someone, safe behind the mask of a fake username. Facebook did not create misogyny, nor did Twitter invent racism. People who use those and other online platforms to vent their hatred and abuse hold those views in the real world, and are simply taking advantage of the anonymity of cyberspace.
As much as we might like to pass a law that does away with intolerance, we cannot, but that is not to say that we are helpless, either as a Parliament or as a society. We might be unable to flick a legislative switch, but there are steps we can take to start tackling the problem of online abuse, including in respect of online platforms, for instance. Over the past few years, Facebook, Twitter and Google have begun engaging with their users and made it easier to report and counter online abuse. They are to be commended for that, but there are serious concerns that none of those companies is fully transparent about the measures it is taking internally to get to grips with the problem of people using its site for abuse. Twitter, for instance, claims that it employs more than 100 staff to deal with reported abuse, who presumably cover the entire network of 320 million users. Likewise, Facebook says it has several hundred people monitoring reported abuse. That sounds impressive, but we should remember that the site has 1.6 billion users.
Too often, users are unclear on how to report abuse, and how it will be dealt with when they do. As a starting point, we need greater transparency from such platforms on how they enforce their terms of use. I urge the Government to work constructively with them to encourage them to be more open about the scale of the problem and their responses.
On what we can do as lawmakers, there are practical responses that Ministers should consider. First and foremost, we need legislation that clearly defines online abuse—that is called for in the motion—and that consolidates our existing laws. According to Digital-Trust, more than 30 pieces of legislation are currently used to tackle online crimes including, of all things, the Offences Against the Person Act 1861. As much as we thank Viscount Palmerston, it is time we ended our piecemeal approach and provided the public with confidence and the police with the clarity they need to bring to book those who commit offences online.
The fragmented nature of the law means that the criminal justice system is often unsure whether an offence has been committed, and is thus not able to provide victims with the service and protection they expect and deserve. A consolidation of the legislation can be of value only if it includes a clear and consistent definition of exactly what constitutes online abuse. Our current mish-mash approach means that many malicious and abusive communications, which any reasonable person would judge to be unacceptable, often do not reach the legal threshold and so complaints against them cannot be progressed. A clearer definition would go a long way to eliminating this problem, and would build public trust that those in breach of the law can be held accountable.
It is obvious that the police are under incredible pressure trying to deal with even the small proportion of online abuse reported to them. It is estimated that half of all crimes reported to the police have some digital element, and they expect this to rise to 70% in the next five years. However, just 7.5% of officers in England and Wales are trained to investigate digital crime. The scale of the problem is such that all police officers need to be in a position to tackle online abuse: to know how to investigate it and secure evidence. A consolidation of legislation must be backed up by a corresponding overhaul of enforcement if we are to make any headway, and that means not only a review of the training given to officers but a serious rethink about approaches to police recruitment. I appreciate the strain on police budgets, but unless we dramatically expand our police’s ability to clamp down on online crime, we will be stuck trying to apply 20th-century methods to 21st-century problems.
It is encouraging that online safety is now part of the national curriculum. We cannot underestimate the importance of education in dealing with online abuse. As much as we expect our children to learn the difference between right and wrong in the real world, and expect them to get along with one another at school, so we must press home, and press home early, that the same standards should apply online. Clearly, there is no magic bullet for dealing with online abuse, but that does not mean the Government should shy away from confronting it. It will take a broad strategy, worked out across Departments and implemented with service providers, charities and many others. Such plans are not cobbled together overnight, but I press the Minister to take today’s debate as a starting point. If we have shown anything, it is that there is a strong desire for action across the House and beyond. I sincerely hope the Government will be bold in their response to a problem that we simply cannot allow to fester.
Caroline Ansell (Eastbourne) (Con)
I thank my right hon. Friend the Member for Basingstoke (Mrs Miller) and my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) for securing this important debate.
This is an issue of utmost importance to me, made all the more personal after a high profile case of revenge porn, which grabbed national headlines, involving a perpetrator and victims from my home town and constituency back in April. In the wake of that case, lessons have been learned locally. I am very pleased to say that the police and crime commissioner and the chief constable are reviewing awareness training for those on the frontline to improve the experience of victims, secure greater justice for them, and to better reflect how serious and how damaging online abuse is. We need that change in culture so that online abuse is recognised as real world, causing as it does emotional, psychological and physical damage. A freedom of information inquiry by the BBC found that in over 1,000 cases, 11% of offenders were charged and 7% received a caution.
I would like to share a victim’s plea to us. Her perpetrator was one of the 7%.
“This is an open letter to those who have the power to lobby for change. This is my story.
The perpetrator was my manager. We stayed in contact long after I left my job, remaining friendly acquaintances via social media. It wasn’t until April this year that I discovered a message on my social media alerting me to a website that contained my images. This website allowed individuals from all over the world to upload and view pictures of unsuspecting victims, many of them children, and using those images as fodder for torture fantasies. My page, which had been created in October 2015, revealed my full name, my personal Facebook account, a picture of my toddler daughter. Alongside these images, there were captions and incitements such as ‘would love to beat her’, ‘she deserves to be gang raped’, and urging people to find me, make contact and show me what I ‘deserve’.
I felt demeaned, exposed, utterly humiliated and embarrassed. Someone out there held all the power. I wasn’t even in control of my own image any more. I needed to take back control, so I put on my investigator hat and after many, many hours of trawling I thought I had found the perpetrator. Initially, I felt relief and I contacted the police the next morning believing I had caught a criminal red-handed. The police operator told me that there was ‘nothing they could do’ as it was not a police matter, it was a Facebook issue. I was advised just to block him, as he obviously wasn’t my friend. I hung up the phone feeling bitterly let down and confused. I was told I wouldn’t be getting a crime number, as my case ‘isn’t a real crime’ and more of a civil matter, and perhaps I should seek legal advice. That legal advice told me that the definitions of the new law regarding revenge porn and its phrasing meant that my case wouldn’t be suitable.
Since I have chosen to bring this subject to the public’s attention, I have had mixed reactions to the whole episode. I have had random strangers come up to me in the street and start talking to me about it, which I do still find embarrassing. I have had people talk to me about it at parties, where I should be enjoying myself. I have had customers ask me where they recognise me from, then give me a sympathetic, pitying look when I confirm from where. Overall, I have been treated like a victim by everyone apart from the law.
Perpetrators surely need to fear that their online actions will have real consequences. My photos are still online. I am sick of being a victim. What I ask is that, with your help, never again will I and others be made to feel insignificant when reporting an online abuse crime.”
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I thank the right hon. Member for Basingstoke (Mrs Miller) and the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) for securing the debate. We have already heard many striking and distressing personal accounts today and I am honoured to follow the hon. Member for Eastbourne (Caroline Ansell).
As we have heard, there has been a frightening increase in online abuse, digital crime and hate crime. Many Members have been affected, as have numberless people outside this House. Children, too, have been affected. The national police lead said last November that 50% of all reported crime now has an online component. It is evident that the law has not kept up with criminal activity. Online platform providers are, at best, slow to address abuse. They should be far more effective and rigorous in holding both abusers and themselves to account.
For all those reasons, in March this year I introduced a ten-minute rule Bill on this very issue, drafted by Harry Fletcher of the Digital-Trust. There are over 30 statutes passed over many decades that cover online abuse crime. My Bill would place responsibility on the Government to consolidate them all. Many online activities may or may not be against the law—the Bill would clarify that. For example, it would be an offence to install a webcam on a person without their permission or without legitimate reason. In addition, it would be illegal to repeatedly locate, listen to or watch a person without legitimate purpose. The Bill would restrict the sale of spyware to persons over 16 only. It would also be wrong for a person to take multiple images of a person, unless it was in the public interest to do so, without that person’s permission and where the intent was not legitimate—we have heard about a number of such cases today. The Bill would make the law stronger on abusive content. Again, police officers are uncertain about what is and is not a crime, and they are overwhelmed by the sheer volume of abuse they see. We have also heard about inconsistencies of approach by the police. The Bill would make it clear that it is an offence to post images online where the intention is to humiliate or abuse the victim. It would also create an offence to post any message that is discriminatory or would incite abusive activity. All those new offences would, if put into action, carry on conviction a sentence of up to 12 months’ custody.
Any new powers for the police or the Crown Prosecution Service would, of course, have limited impact without changes to culture and training. The police must take online abuse and hate crime seriously. The Bill would therefore place a responsibility on the Secretary of State for Education to ensure that all establishments include sessions that warn children and students of the risks of online services. We know that this is happening in our schools and that it is an ongoing issue. Tokenistic approaches to the curriculum will not be sufficient. The Home Office would be tasked with ensuring that the police are trained and that they record complaints of digital hate crimes and abuse.
Finally, the Bill would place duties on providers of online services to adhere to codes of professional standards, to publish safety impact assessments and to co-operate fully with the police in any ongoing investigation. The relevant Ministers should ensure that the best quality standards are followed across the industry.
I am sure that we all have a number of case studies that we could discuss. Someone who contacted me wishes to remain anonymous, so I shall respect that, but I very much wanted to raise his case because it involves Facebook. The gentleman in question is a teacher. Before I was fortunate enough to arrive in this place about a year ago, I was also a teacher. I was very much aware of how vulnerable teachers are to comments from pupils and others and also, given the importance of child protection, how that vulnerability can be used against teachers and how little protection they have.
This gentleman contacted me earlier this week to express his frustration at Facebook. Despite having no Facebook account himself, pupils had stolen images from his websites and used them to create a false Facebook page in his name. This page then attracted other pupils at the school. At one stage, the headteacher, who not unusually had little understanding or experience of Facebook, suspected the teacher of deliberately attracting pupils. If the pupils had not finally admitted to creating the false page, the teacher could easily have lost his job. He was effectively unable to prove that he was not responsible for the page.
In this instance, the victim stated that the police could only advise him to contact Facebook, but in his experience Facebook was unhelpful—here I am summarising the magnitude of the problems he had with it. First, the teacher had to get the password details from the pupils before the page could be taken down. Secondly and importantly, in raising questions about data protection, it became apparent that the teacher had to apply to the Data Protection Commissioner of Ireland, because that is where Facebook’s international office is based. All law, except that of the United States and Canada, has to be handled through that data protection commissioner. It seems that Facebook has broad expectations of users’ behaviour, but is unwilling to take much responsibility, if any, as a platform for that behaviour. There is a worrying lack of procedures to take down false sites, with the onus entirely on the victims to prove their identity. Facebook and other sites need to be held to account for the nature of the services they provide to users, and for whether those services incorporate proper care for both customers and the public at large.
It is not good enough for Twitter to tell me how to hide myself away and block messages from certain people—I had one of these messages when I last looked at Twitter about 20 minutes ago. I want those people and Twitter held to account if there are unacceptable messages on my Twitter account. Finally, I believe that the nature of how social media providers fulfil their duty of care to private individuals requires far fuller parliamentary scrutiny, and I await the Minister’s response.
Caroline Nokes (Romsey and Southampton North) (Con)
I add my thanks to the Backbench Business Committee for granting this debate, and I thank my right hon. Friend the Member for Basingstoke (Mrs Miller) and my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) for securing it. I am sure that many Members of all parties will, like me, have met in their surgeries the victims of online abuse—or, more often than not, their parents, who come to us seeking some form of redress or often just some ongoing safety for their children. It is interesting to note that organisations such as the Girl Guides with their annual girls’ attitude survey have ascertained that cyberbullying is in the top three concerns of girls between the ages of 15 and 20. It is growing in its significance and impact on its victims.
Abuse is abuse, wherever and however it happens. Just because it is online does not make it any less awful, but it does make it significantly harder to identify perpetrators and bring them to justice. It is simply not good enough to shrug one’s shoulders and dismiss the internet as some sort of wild west—ungovernable and devoid of social norms and the laws of the physical world. As my right hon. Friend the Member for Basingstoke said, we must bring an end to anonymity.
We must remember that many of the victims are children. I vividly recall my daughter’s transition from primary to secondary school, now some years ago, when her headteacher got parents together to talk about the perils of Facebook. At that time, social media was growing in popularity, but was still relatively small. There was not the multitude of platforms that there are today. The phrase the headteacher used will always stick with me—that, frankly, in her view children were losing the ability to empathise. They were making their unpleasant comments online from their smartphone, and unlike in the playground, they could not see the reaction in someone’s eyes. People are not learning about the hurt caused, but simply banging out a message that can have a terrible impact. The ability to understand and comprehend the hurt that has been caused is disappearing.
It is not just children who are losing the ability to empathise. People often say the most dreadful things online, which they would never repeat in person or even on the telephone. If I receive an abusive email, I sometimes find that the best tactic is to phone up the person. Suddenly, they turn into the most polite and delightful constituent that I could ever encounter.
Rebecca Harris
Does my hon. Friend agree that we could take that slightly further? I have knocked on the doors of people who have been particularly abusive, and they crumble.
Caroline Nokes
My hon. Friend is slightly braver than I am. She earlier used the phrase “keyboard warriors” who we find are incredibly brave in the sanctuary of their own homes, but much more timid in the real world. When online trolls are arrested and we see their pictures in the newspapers, I always think how terribly inadequate they look. The monsters they have made of themselves in people’s minds are often not borne out in real life. They simply do not understand the terror that they can cause.
I have had my own experience and vividly remember a Facebook message from someone purporting to be a woman, hiding behind the photograph of a dead lady whose death had been covered in the newspaper. I was sent the most terrible message, threatening me with rape, torture and, ultimately, death. The greatest lesson I learned from that is that it can take many months to wheedle identities out of Facebook. Facebook appears to have become the bogeyman of this debate, but I think deservedly so. When we find the actual identities, it brings a sense of relief, because they are an identifiable person, albeit not necessarily someone who lives anywhere nearby. Such messages can still be absolutely terrifying however.
Simon Hart
Newspapers are not allowed to print libels or defamatory or slanderous comments that somebody else makes. Why can that not apply to social media platforms too?
Caroline Nokes
My hon. Friend is absolutely right that it should apply to social media platforms, and we as individuals should be able to take action against them much more quickly and effectively. As I said, it is as if the internet has become a wild west. Companies are often registered in the Republic of Ireland and it is difficult from here to get the redress that we want.
Sadly, in this place, we have come to expect the trolling, the bile often spat in the dead of night, sometimes even from professional people, who we might have hoped would value their own reputations and know better. We know that the bar is set higher for Members of Parliament: we are in the public eye and we have to expect a bit of knockabout, as it were. Actually, though, it has gone a great deal further than that.
I pay tribute to the work of the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) to reclaim the internet. If someone sends me something pernicious, one of my favourite tactics, inspired by the hon. Member for Birmingham, Yardley (Jess Phillips), who is not in her place today, is to reply with a picture of a kitten. I presume I will now get trolled for that. We have to reclaim the internet; we have to be bold enough to stand up for ourselves and try to engender a bit of humour and kindness. That is a key point: there is no kindness on the internet, but when did it become okay to play the man and not the ball?
My right hon. Friend the Member for Basingstoke advanced some very cogent and sensible arguments. I know that Ministers have worked hard with some of the leading companies in trying to find practical solutions to the problems of reporting and identifying perpetrators. As we have heard, there are laws relating to harassment and grooming, but there are real anxieties about how victims can report crimes easily and ensure that their voices are heard.
Mrs Miller
Does my hon. Friend think that we should look to countries such as Australia and New Zealand, which have established websites to facilitate reporting? Indeed, there is a risk that their ways of tackling the problem are leaving the United Kingdom behind.
Caroline Nokes
My hon. Friend is absolutely right. We must not be left behind; we must find better methods of reporting, particularly where children are concerned. Let me reinforce my right hon. Friend’s earlier plea. There need to be safe spaces for children, and mechanisms that enable young people to know who they can turn to. A critical part of that can take place in schools, through personal, social, health and economic education and, in particular, sexual relationships education.
Young people need to learn about consent. They need to learn what is okay in a relationship and what is not, and they also need to be able to turn to responsible adults who can ensure that they are adequately safeguarded and protected. We want them to be confident in themselves, and to know who they can turn to in a crisis. That is one of the reasons why I am so keen on compulsory PSHE and SRE. We need young people to be able to recognise what constitutes an abusive relationship, we need people whom they know they can tell, and we need teachers who are equipped to deal with these subjects. We know that they are not easy subjects to teach, so they should be made statutory, and teachers should be trained so that they themselves will be confident in their ability to deliver excellent quality in this respect.
My right hon. Friend described the blurring of offline and online worlds. We desperately need to plot a path towards ensuring that our children are much more secure and protected.
Liz McInnes (Heywood and Middleton) (Lab)
I, too, thank the right hon. Member for Basingstoke (Mrs Miller) for initiating the debate. I also thank the Backbench Business Committee. I think it very important for us to raise these issues. I have been shocked by some of the examples that have been given today, but I am afraid I am going to add to them.
Online abuse is not a technological problem; it is a social problem that just happens to be powered by technology. I will not deny that social media can be a force for good, disseminating information and allowing people to share jokes or simply keep in contact with friends and relatives. As has already been pointed out, we, as MPs, are encouraged to be as accessible as possible—to be out there with websites and our Facebook and Twitter pages, staying connected to our constituents and keeping them as well informed as possible—but more and more, especially in the case of female MPs, our “out-thereness” makes us a target for online abuse. Indeed, most prominent women in any field will have stories of vile comments posted to or about them, usually by anonymous sources. When it is allowed to rampage unchecked and unmoderated, social media becomes much more accurately titled “unsocial media”.
There is, of course, the “free speech” argument, which unfortunately appears to many people to be the divine right to say whatever is on one’s mind without any regard for the consequences. With free speech, however, comes the responsibility to deal with the consequences of one’s words. What concerns me, particularly in the case of Twitter and Facebook, is the apparent lack of a coherent policy on what constitutes “online abuse”. Let me give a few examples.
Twitter policy states:
“We do not tolerate behaviour that crosses the line into abuse, including behaviour that harasses, intimidates, or uses fear to silence another user’s voice.”
With that in mind, when I received a threat on Twitter during the referendum debate—
“We’ll see what you say when an immigrant rapes you or one of your kids”—
I reported it to Twitter, using its online pro forma. Surely this racist, violent and targeted abuse crossed the line into behaviour that harasses and intimidates, which Twitter policy claims to be against. But no; the response that I received from Twitter was
“it’s not currently violating the Twitter rules”.
The killers of Lee Rigby, who was from Middleton in my constituency, posted explicitly on Facebook what they were planning, yet that was never picked up and investigated. I recently reported a vile and misogynistic comment made about another female MP on Facebook. It read—and I quote selectively—
“She looks like”
an effing
“mutant and should be burnt at the stake”.
That comment, with its foul language and its violent categorisation of women as “witches” who need to be disposed of, received the following comment from Facebook:
“We’ve reviewed the comment you reported for promoting graphic violence and found that it doesn’t violate our community standards.”
The reply continued:
“Please let us know if you see anything else that concerns you. We want to keep Facebook safe and welcoming for everyone.”
Well, if that is Facebook’s idea of a safe and welcoming environment, I would not like to see what it considers to be a no-go area.
Seriously—and I am being 100% serious—the responsible thing for Twitter and Facebook to do is to use algorithms to identify hate speech. Words such as “Islamophobe”, “murder” and “rape” could then be picked up, and the accounts in question could be investigated. It is totally irresponsible of social media platforms to allow unchecked and unregulated discourse. That would not happen in any other walk of life.
Twitter and Facebook appear to rely solely on reports by users of abuse and hate speech. They place the responsibility entirely on the user, and even then the pro-forma reporting procedure is often too simplistic to allow the actual problems and concerns to be accurately conveyed. Yes, the police can be notified, but we are all aware of the diminution in police numbers that has taken place under this Government and the previous coalition. I call on the Government to make funds available for training, and to increase police numbers in order to deal with online abuse. I was interested by my right hon. Friend’s suggestion that social media platforms should be asked to provide a levy to pay for those measures.
I have concentrated on abuse directed at female politicians, although I accept that online abuse takes many other forms and that many other groups are targeted, because this does seem to be a gender issue. Abuse is directed more towards female politicians than towards our male counterparts, and studies have shown that, in the United Kingdom, 82% of the abuse that is recorded comes from male sources. Social networks could take a strong and meaningful stance against harassment simply by applying the standards that we already apply in our public and professional lives. Wishing rape or other violence on women, or using derogatory slurs, would be unacceptable in most workplaces or communities, and those who engaged in such vitriol would be reprimanded or asked to leave. Why should that not be the response in our online lives?
Let us never forget that words carry weight, and that language has a consequence. Once it has been said, it cannot be unsaid. Whether it be uttered face to face or typed from behind a social media avatar, there is no hiding from meaning, and we should confront now the ever-spreading plague of misogyny, abuse and threats online.
Seema Kennedy (South Ribble) (Con)
I pay tribute to my right hon. Friend the Member for Basingstoke (Mrs Miller), and to the Backbench Business Committee. My right hon. Friend is a great champion of causes such as this, and I think that the passion that is being expressed in every speech shows how important the issue is.
Twenty-one years ago, I sat with a wise and, I now realise, very farsighted friend, and we talked about a new phenomenon called the internet. All that I knew about it was that the scientists at university used it to send messages to each other, but he said that we would live through a revolution as great and thrilling as that wrought by the proliferation of newsprint in the 17th century, which would lead to a new way of communicating— indeed, a complete shift in social discourse—and so it has proved. I have returned to that conversation many times over the past two decades, and never more so than in preparing for this debate. We, as legislators, are print children, on the whole, but we need to draft laws for our digital children.
I would like to quote from Lord Toulson’s dissenting judgment in the case of PJS v. News Group Newspapers. I am sure that hon. Members know of that case. It involves a celebrity couple who were trying to stop the publication of their identities in print form, even though their names were widely quoted on the internet. Lord Toulson said:
“The court must live in the world as it is and not as it would like it to be”
and
“the court needs to be very cautious about granting an injunction preventing publication of what is widely known, if it is not to lose public respect for the law by giving the appearance of being out of touch with reality.”
I am not passing comment on the rights or wrongs of that particular case, but making the point that we, as legislators, must adapt to the new lives, and threats, that face all of us today.
Online abuse is crime. It is not banter, it is not teasing, and it is not fair exercise of free speech. The hon. Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) spoke very powerfully. Indeed, many hon. Members—females, although I am glad now to see some men in the Chamber—have talked about their own experiences. I pay tribute to them, as I do to the victim statement that we heard from my hon. Friend the Member for Eastbourne (Caroline Ansell). Online abuse, in and of itself, is a crime in terms of the effects that it has on its victims: anxiety, depression, and changes in everyday behaviour resulting in people staying at home and not being able to go to their jobs. Sometimes it leads to suicide. Crucially, online abuse is a gateway to real-world stalking, physical and sexual abuse, and even murder. Digital-Trust has highlighted the murders of Angela Hoyt, Ildiko Dohany, Lorna Smith and Sofyen Belamouadden, all of which began in the virtual world. Like many hon. Members, I am sure, every time I meet teachers they report online abuse as one of the factors in the growth of mental health problems in the young over the past decade.
In terms of crime prevention and reduction, there need to be constant changes to environmental and societal attitudes which run in parallel with, or sometimes slightly behind, changes in the law. Many hon. Members have said that there needs to be cultural change as well as legislative change, but looking back on social changes over the past half century, often we in this place are the leaders and society follows us.
Anna Turley
I am very grateful for the strength of feeling expressed across the House. I have introduced a private Member’s Bill, to be debated in March, to address malicious communications on social media. I would be delighted to work with colleagues from across the House and, I hope, Ministers, to see whether we can use that as a vehicle for the legislative change that the hon. Lady talks about.
Seema Kennedy
I applaud the hon. Lady’s private Member’s Bill, and I am sure that lots of people will support her next year.
On legislative and societal changes going in step together, let us think about the strides that have been taken over the past 40 years in changing society’s attitudes to physical and sexual violence against women and children. When I started at law school, rape in marriage was still allowed. When we were all at primary school, our teachers were allowed to smack us around the head. We had to legislate on these things before society followed us. It is incumbent on us, as legislators, to lead that charge.
Schools now take very seriously their duties to children with regard to bullying and what happens in the playground, but we must also make the virtual playground where many of our children and grandchildren spend so much time—indeed, we all do—a safe space for them. The internet, as compared with the real world, is still largely ungoverned. Some people argue that it is an ungovernable space where an online abuser’s odious views go unchallenged. In fact, they are not just unchallenged but reinforced, amplified and nurtured.
Having spoken to my area’s chief constable in Lancashire, I know how much time he and all his colleagues take in dealing with online abuse, yet, try as they might, they need more support. Victim Support has said—many hon. Members have quoted these statistics—that only 7,500 out of 125,000 police officers have been specially trained to investigate digital crime. I ask the Minister to make representations to Home Office Ministers about plans to increase that number.
There is currently a plethora of laws that deal with online abuse. My right hon. Friend the Member for Basingstoke, very politely, used the word “piecemeal”. I think we might better call it a ragbag of laws. I urge the Government to carry out a wholesale review of these laws so that we are not out of touch with reality. I wholeheartedly echo and agree with my right hon. Friend’s suggested changes.
Our current law of libel had its origins in the 17th century proliferation of newsprint. We need to respond to the current revolution in communication and social discourse by legislating, in the words of Lord Toulson, for
“the world as it is and not as”
we
“would like it to be.”
Patricia Gibson (North Ayrshire and Arran) (SNP)
I am grateful, Mr Deputy Speaker, for being escalated up the speaker’s list to allow me to leave the debate to attend a Committee.
I extend my thanks to the right hon. Member for Basingstoke (Mrs Miller) for securing this debate, and also thank the Backbench Business Committee. It strikes me that the Chamber is dominated by a female presence. I think that confirms what we might not know scientifically but know instinctively—that this issue confronts female MPs far more often than it should, and much of it, at its heart, is based on misogyny.
We have heard from a number of speakers, and we all understand that online abuse is a serious and growing problem. Unfortunately, we live in a world where it is deemed acceptable for some people—“keyboard warriors”, as they would be called—to hide behind their computer or tablet and target abuse and aggression towards people they do not like, simply because they can. The anonymity and the distance from which the abuse is hurled gives the sender of these messages courage that they would not otherwise feel, with the added bonus that it is felt that whatever one wishes to say, however hurtful, aggressive, threatening or nasty, can be said with impunity. How cowardly! I applaud and fully support the work of the Reclaim the Internet campaign, which is a call for action to challenge abuse online, bringing together groups from across civic society to signal that enough is enough. Such online abuse is not acceptable, and anyone responsible for it must be held accountable.
One of the most pernicious aspects of online abuse is that it seeks to normalise bullying and intimidation of other people. We would not tolerate such abuse offline, so it must not be tolerated online. What kind of world are we building for our younger people when the UK Safer Internet Centre has published a study that found that of the 13 to 18-year-olds surveyed, 24% had been targeted due to their gender, sexual orientation, race, religion or disability? Victim Support has found that 41% of young people have reported persistent and targeted bullying online from their peers. Those who send such messages are clearly intending to hurt, frighten or distress the recipients. Do they think of the consequences—the impact that their abuse has on the recipient? Sadly, I believe, they simply do not care.
In the political sphere, too, people use the internet to threaten violence, hurl vile abuse, or seek to silence the voice of others through intimidation. This is simply not acceptable, and that is the message that must go out from this place. Robust political debate is part of our public life, and we must foster and cherish it, but what cannot be tolerated is the lowering of political debate to threats of violence or to insults based on misogyny, homophobia, sexism, racism or disability. We must all counter the idea that it is legitimate to abuse someone online simply because they are in public life. That just erodes and cheapens democracy and ultimately legitimises abusive behaviour in wider society.
Regardless of political differences, debates must be conducted with respect, but too many people have forgotten that over the past couple of years. Online abuse can be just as destructive, distressing, upsetting and disempowering as physical abuse. As far as I can see, the perpetrator of such abuse seeks to shut up, close down, and silence the voice of the person they choose to abuse. The police are working hard to adapt practices to cope with the new world in which we live, where the internet has added a new dimension to criminal acts—and make no mistake, criminal acts are what we are talking about here.
Online abuse is currently covered by at least 30 different pieces of legislation. The legislation must be fully utilised, and Victim Support is calling for a review to identify any possible gaps. That is an important point because it is estimated that 70% of all crime will be cyber-enabled in around five years’ time, and the criminal justice system must be in a position to respond flexibly and adequately and to support victims when required. I would like to hear the Minister’s thoughts on that.
The everyday, casual online abuse seen by too many people must not be viewed as harmless, or dismissed and deleted. It must be sought out and challenged. Like so many of my colleagues and too many of the ordinary hard-working people whom we represent, we have to face this casual abuse and, like so many others, I have until recently simply pressed the delete or block buttons whenever I have been in receipt of such nastiness. Now, however, I report abuse to the police and have had cause to do so recently in the light of the appalling and dreadful murder of the late Member for Batley and Spen.
No one should have to tolerate abuse or bullying—no matter what their line of work or what justification the sender of such abuse might have. It is not on. It seems that the most common victims of such abuse are women and children, but the problem is widespread and affects others outside those groups. If we are to seek any credibility in this place, we all need to send out a clear message and use our position as MPs and as leaders of political parties to condemn this behaviour unequivocally, as the First Minister of Scotland has done, wherever it comes from.
Like many hon. Members, I used to think that deleting such messages was enough, but no longer. MPs have a duty to ensure that messages are challenged and that doing so deters those who would engage in such activity. I sincerely hope that this debate will send a clear message to those who feel that they can abuse any person they choose by typing nasty and abusive comments with their keyboard that there is no hiding place. Such behaviour is cowardly and reprehensible, and we must encourage and support all victims of abuse to report it to the police. We as MPs must ensure that we do the same. It is time to reclaim social media from those who use it with impunity as a vehicle for working out their personal frustrations and tendency to bully. Enough is enough.
Kit Malthouse (North West Hampshire) (Con)
I have met my fair share of bullies in my time. As you may have noticed, Mr Deputy Speaker, I am, as they used to say in my home town of Liverpool, a chap who is built like a brick outhouse—I think that is the parliamentary version of the term—so bullies have not really bothered me much over the years. However, I am aware, not least as a father, that the internet and social media have brought about two big changes that have meant that I probably would not have avoided bullying were I a teenager now.
First, bullying is now 24/7. As other Members have said, it is inescapable. There is no refuge from bullying these days—no chance to get home, shut the back door and sit down to your fish fingers safe in the knowledge that it will not occur again, at least for a few hours. Secondly, social media has unfortunately decreased our children’s resilience, creating a whole host of exploitable vulnerabilities, including eating disorders, self-harm, harmful sexual behaviour, depression and anxiety. For teenagers, many of whom are hard-wired to take the judgments of others to heart, the amplification of bullying that the online world allows will obviously lead to more permanent damage.
As many Members have said, it is pretty shocking that we have allowed things to get to this stage. We seem to have sleepwalked into an epidemic of terrible mental health, particularly among children, whose self-confidence has been wrecked by social media with its unrealistic expectations and the kind of digital solipsism that it seems to encourage. Perhaps it is because we have been too wrapped up in our own smartphones to notice their obsession—too wrapped up to remember that there are two distinct types of people in society: adults and children. It is the job of adults to make decisions about the boundaries that protect children from harm even when they do not always like it. Instead, I fear that we have become carried away by technology, which has led us to become too indulgent to be seen to be backtracking.
The current generation of teenagers are glued, perhaps irreversibly, to a social media world filled with images of continuously perfect, happy people—so obviously fictional—paired with the unavoidable realisation that they can never attain that ideal. The result is both an insatiable sense of entitlement combined with a crushing hopelessness, which can only lead to self-loathing and anger. They are too often made to feel like failures. Throw into that mix the pressure of exams and the signal sent to children that their entire future and value as a person rests on their academic performance and social standing at school, and it is no wonder that cyber-bullying is the trigger for a whole host of problems. Such pressures contribute to deep unhappiness and many feel the need to put on a brave face and not burden their families, which compounds the isolation. As the president of ChildLine, Esther Rantzen, wrote recently, unhappiness and low self-esteem are the main new phenomena that the organisation is seeing. It only appeared in the top five of children’s worries a couple of years ago but accounted for 35,244 of their counselling sessions last year alone. Make no mistake, we have done little to halt the trend and it is only going to get worse. We must not consign the next generation of teenagers to the same fate.
Turning to the main subject of the debate, the resilience-sapping effect of social media and the addiction to smartphones are far more fundamental and intractable than the cyber-bullying issue, which is a product of them. There is much to be said about how we tackle cyber-bullying. Many people need to be involved in that conversation and consultation, which will have to include the mega-corporations, such as Facebook, that are the common platforms on which the problem occurs. We have let the resilience issue get out of control as a result of complacency in Parliament and an inertia in law, and we need to address them with more urgency than the bullying.
Like many Members, I hope that the response to the bullying issue will take the shape of a new online offences Act, which would replace the 30-plus pieces of legislation currently covering online abuse. It would include, among other things, a specific online abuse offence as well as an extensive definition of the duties of internet service providers in relation to young people. On resilience, we also need to get on with a children and young persons Act that is fit for this age, in which we can clearly define the duties of parents, in law, to help them cope with the impact of social media on their children. It is plainly not right that under-16s spend an average of three hours a day online, making them, according to experts, much more likely to suffer mental health problems, or that two in three 12 to l5-year-olds have their own smartphone given that parents have no idea what they are doing on them.
Spending too much time on social media has been shown to inhibit personal development by many different researchers, including in research carried out by the Government. We must be less complacent about the evidence. The change has been allowed to happen partly owing to parliamentary complacency, but also parental naivety and short-sightedness, and we need to put things right. No one is particularly to blame. That this House has failed to consider the issue properly is down to the same reason that parents across the country and around the world get caught out so badly by the change. Nothing comparable was around when we were growing up, and we are not equipped with the knowledge or understanding to guide children in their use of social media, especially as children themselves seem to be driving the evolution of the platforms on a daily basis.
The pace of change also explains how the main pieces of legislation on children are so out of date. The Children and Young Persons Act 1933 and the Children Act 1989 constructed the framework under which we still operate today, but obviously they do not have anything to say about parents’ duties to children in the social media age or about cyber-bullying. Making it harder still, it appears that getting the guidance and supervision right requires a level of intrusiveness that was not commonplace among parents of previous generations, one that children today will certainly resent and resist. Understandably, given where we are now, any group of teenagers would react with horror at the idea of handing their smartphones in at the beginning of the school day and picking them up at home time.
Seema Kennedy
My hon. Friend says that teenagers might resist that, but he began by saying that there are two groups of people in this world—adults and children—and surely it is incumbent on us adults to make them give these things up.
Kit Malthouse
Exactly, as I was about to say. Let me continue: but I will be firm here and say that the reason we have not done something in a systematic way, when teachers and experts on children have been telling us for some time that there was trouble brewing, is down to an increased weakness of parents and some teachers who act as though it was the children who should set the rules. Once again, adults seem to be unwilling to act as adults, meaning action has been weak or tentative. However, given the gravity of the situation in children’s mental health, in particular, we obviously cannot afford for that to continue. We need a new direction from which to approach this important area, but it is right to deal with the causes as well as the fallout.
I fear that this situation is again down to an indulgence that leads people to the conclusion that we can never declare that what someone is doing is harmful or bad for them, even when that person is not yet an adult and cannot be expected to understand properly what is good for them. Increased funding for talking therapies for distressed young people, which everybody has been pushing for over the past few months, is right, but no amount of therapy will stem the tide of the children’s mental health crisis if the root cause of why we need this resilience is not addressed.
I agree with many hon. Members who have spoken today about the need for legislation to clarify and consolidate the law relating to offences committed online. More fundamentally, however, we need to look more seriously at the resilience of children, at availability and at the time they spend online, and decide for ourselves, as parents and as a country, whether we should set firmer boundaries about what they can and cannot do in their own time.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
I thank the right hon. Member for Basingstoke (Mrs Miller) for securing this debate, through the Backbench Business Committee. We have heard some powerful and personal accounts from Members from across the Chamber, and it goes without saying that online abuse is a severe and expanding issue. It is one that the Scottish National party utterly condemns, and my party supports any measures that may ensure that those responsible for this abuse are held accountable for their actions. I know those sentiments are carried throughout this place, on a cross-party basis, and the consensus on this issue is important in order to tackle it. The scale of online abuse is truly shocking; there is much evidence to suggest that it has become incredibly widespread. The chief executive of the College of Policing, Alex Marshall, has stated that there is anecdotal evidence to suggest that complaints relating to social media now make up at least half of all calls to the police.
There has been equally widespread coverage of online abuse, particularly in the tabloid press, although some may contend that this has the potential to add to the problem, rather than address it. Sometimes the headlines and tabloid splashes can detract from the severity of the reality of online abuse. The think tank Demos has conducted research suggesting that about 12,000 threatening tweets containing the word “rape” were sent from UK accounts in one year. That is just one example of the plethora of misogynist and aggressively abusive tweets sent to women online. The recent Gamergate controversy showed some horrific online abuse of women in the video game industry. What was truly shocking was the herd mentality and the co-ordinated campaigns of abuse targeting individuals. Gamergate garnered much media attention stateside, and measures to tackle online harassment are being taken more seriously by Congress as a result.
This abuse is often vicious and nasty. Although most of us will have the strength of character to deal with it, it does not make it any more acceptable. We also have a duty of care to our young people, many of whom will not be well placed to deal with this abuse and cyber-bullying. I commend the Department for Education’s efforts in this area, particularly the advice it issues to help deal with cyber-bullying. The work of organisations such as ChildLine and the National Society for the Prevention of Cruelty to Children is even more praiseworthy; their freephone helplines are an invaluable resource, as is their online advice for those being bullied. I would also like to take this opportunity to commend the work of the Time for Inclusive Education campaign in Scotland. In a very short space of time, the campaign has managed to garner the support of the main political parties and of high-profile figures across Scotland. Equality training is an important measure in our schools. Teachers need to be trained on LGBTI+, lesbian, gay, bisexual, transgender and intersex+, issues, and that includes recognising the signs of bullying and cyber-bullying, so that they may act to put a stop to individual cases.
The repercussions of cyber-bullying are serious; young and impressionable people can suffer very serious losses in confidence. More seriously, it can lead to depression and self-harm, and, tragically and regrettably, as we have heard, it has led to young people taking their lives. I welcome any efforts that would strengthen legislation in this place, or in the devolved institutions, to help tackle this abuse. I would also like to reiterate today to anyone listening to this debate who is the victim of online abuse or bullying: you are not alone, speak to someone you trust and do not hesitate to contact the police to report it.
We have a duty here to work together to tackle cyber-abuse and bullying proactively. As high-profile individuals, we have no doubt all experienced some form of it ourselves, and can no doubt empathise with all victims of this kind of abuse. We are their voices, and we must use our voices to effect real change.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I thank the right hon. Member for Basingstoke (Mrs Miller) and the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) for securing this debate, through the Backbench Business Committee. Let me start my contribution by saying how much I value social media. As an MP, it allows me to engage directly with constituents, enabling me to promote the work I do. Social media also makes it easier for my constituents to contact me and for me to hear at first hand from my constituents about the issues that are important to them. I also know that the general public value their use of social media. It has become a staple part of our daily lives—my wife would probably say it has become far too much of a staple. Tools such as Facebook and Twitter allow people to keep in touch with one another regardless of whether they are in different corners of the globe or, sadly, just in different corners of the living room. In the UK, Facebook has 32 million users and Twitter now has 16 million users tweeting on a daily basis. The vast majority of people who use social media do so in a respectable and proper manner. They engage with other users in a friendly and cordial manner. As a politician, I can testify that the overwhelming majority of people who talk to me online, even those who disagree, do so with respect—or something close to it. However, as with a lot of things, there are always a few who ruin it for everyone else, and unfortunately social media and other online forums do have a small but significant minority who engage in abusive and poisonous behaviour.
Like every other political party, the SNP condemns all online abuse and supports any measure to ensure that those involved are held to account by the security and policing authorities. The First Minister of Scotland has addressed this issue and is one of UK politics’ best users of Twitter to communicate and engage with the electorate. She has previously said that robust political debate forms an important part of a democracy, but that debate and discussion must be conducted in a polite and appropriate manner. I think that is a message that we can all agree on. I do not accept the view that public servants are fair game to be abused and that such abuse is part and parcel of being a politician. Any abuse, no matter who is on the receiving end of it, should be condemned—that includes threats to politicians. Like many Members in this Chamber, I have had some abuse, but the cowards that troll online are usually men who reserve some of their worst abuse for female Members. These are not real men hiding behind their keyboards and their anonymous user names, but small and pathetic men whose actions can ultimately have serious and tragic repercussions.
Politicians are not the abuser’s only target. It appears that no one can escape the poison that blights the internet. I spoke in the debate during carers’ week and mentioned that a lot of carers were tweeting about their experiences of caring for a loved one. That online campaign was incredibly informative and provided an insight into the issues that carers face. However, it is shameful that even carers cannot escape the abuse from the trolls.
We need to get to the bottom of why so many people think it is okay to send abusive online messages. In 2014, 1,209 people were convicted of internet trolling under section 127 of the Communications Act 2003. Of those convicted, only 155 were jailed for sending messages or other material that were grossly offensive or of an indecent, obscene or menacing character. The truth is that there are far, far more people engaging in abusive activity than the 1,200 people who were convicted, let alone the 155 who served some jail time. The scale of the problem is unclear. The think-tank Demos found that 10,000 tweets aggressively attacking someone were sent from UK accounts over a three-week period.
As a father of two young girls, I am particularly concerned about the increasing incidence of children being bullied online. The rise of cyber-bullying has allowed bullies to extend their vicious behaviour beyond the classroom. There are currently no official statistics on the number of children who are bullied, but from research studies and from what children tell us, we know that bullying is an issue that affects almost all children in some way. DoSomething.org, one of the largest organisations for young people on social change, suggests that nearly 43% of children have been bullied online, with this abusive behaviour occurring on more than one occasion.
Equally worrying is that 90% of teens who witness social media bullying say that they have ignored it. Kids who are lesbian, gay, bisexual, transgender, transsexual and intersexed, who have a disability, and who are from African, Caribbean, Asian, middle eastern and other minority groups are far more likely to encounter such cyber-bullying.
We must also consider why people on the receiving end of such abusive online behaviour choose to ignore it. We simply would not accept it if we witnessed abuse in person in the street or in the classroom. We should send a message that cyber-bullying and any form of online abuse cannot be tolerated and should be reported at every opportunity.
As I mentioned earlier, the rise of the internet and social media has made it easier for women to be attacked and abused. The revenge porn helpline has received almost 4,000 calls in the past year from people receiving sexually abusive messages online. Reported cases of revenge porn—the sharing of explicit or sexual images without consent—have risen markedly, with alleged victims ranging from 11 years old to pensioners. Two thirds of the incidents involved women under the age of 30, with suspects mainly being former partners. There were eight complaints from females to every one complaint from a male. Such statistics sound all too similar to the incidence of domestic violence.
Undoubtedly, this is an extremely difficult problem to solve, but work is being done to reduce cyber-bullying. For instance, the Scottish National party Government have funded Respectme, which was mentioned earlier. Scotland’s anti-bullying service, which acts as a source of information for young people in Scotland, has created and made available publications to raise awareness on the issues of cyber-bullying. Respectme has highlighted the fact that bullying is bullying whether it takes place in the street, in the playground or online and we should treat it all with equal import.
We need to develop effective policies to tackle online bullying in all its various forms. We should send out a central message that anyone who has been a victim of online abuse should not hesitate to report it to the police immediately. I agree with the hon. Member for Heywood and Middleton (Liz McInnes) that companies such as Facebook and Twitter could and should do much more to investigate or block abusive posts. No one should have to go home from work or school and experience online bullying. As well as offering support to the victims of online bullying, we must also take serious action to deal with the perpetrators of this vicious, poisonous and, ultimately, cowardly behaviour.
Ruth Cadbury (Brentford and Isleworth) (Lab)
My apologies, Mr Deputy Speaker, for stepping out of the Chamber, but I was involved in a school visit. I thank the right hon. Member for Basingstoke (Mrs Miller) and the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) for securing this very important debate. I also thank all those Members who have spoken before me and whom I have been able to hear.
Technology is a central part of our lives today; it is a tool. Sadly, used maliciously, it can be turned into a weapon that can have, and indeed has had, damaging and sometimes devastating consequences for victims. As others have mentioned, Members of this House have been victims of such abuse, and some have been sufficiently frightened by the abuse that they have been afraid to go home at the weekend. Most victims do not have the benefit of the police and parliamentary support that we have here. Like all bullying, bullies tend to target people who already feel vulnerable. Members have rightly acknowledged the gaps and the need for action, legislation, police and prosecutors, and, most importantly, awareness.
I want to focus my contribution on online abuse and harassment in schools and the importance of effective and consistent school management and curriculum policies to complement the effective legislation that we also need. I am honoured to be on the Women and Equalities Committee under the chairmanship of the right hon. Member for Basingstoke. We have been addressing the issue of sexual harassment and violence in schools. Our report is not quite ready, but I am sure that my Chair will not mind if I give a little flavour of what we have experienced. We were shocked by the extent that sexual imagery, abusive sexual relationships and objectification of women have been normalised by young people. We had two sessions—one with young men and the other with young women—in which we were told about the experiences of young people of the use and misuse of technology in and around the school environment. If we do not understand and address that misogyny, homophobia, Islamophobia, racism and all the other kinds of abuse, we risk turning victims into criminals, which means that they will not get the support that they so badly need.
I wish to focus my remarks on the experience brought to me by one of my constituents, a headteacher at a successful and thriving secondary school. Recent safeguarding investigations introduced him to the shocking mobile and cyber-world in which virtually every child in his school and, he presumes, in other local schools and therefore nationally seem to be engaged for unfeasibly large proportions of their days and nights. What happened in his school started with the exchange of photos between two students who were in a consensual relationship, but it escalated. The images got out. There was blackmail and violence, and the police were involved. Criminal charges were considered. What started as a consensual relationship ended up as truly violent abuse, and it could have been prevented.
The situation raised some really important aspects of child online and mobile safety and the equalities agenda, which appear to be being ignored. The headteacher is seeking a body of work in some key areas that has cross-party and organisational support that can help schools and parents to safeguard children much more effectively.
It is right to focus on strengthening the law, but we need to look at a parallel solution if we are not to put thousands of teenagers at risk of criminal charges when education and child protection are more in order. Although tackling offenders and strengthening the law are very important, they are only a small part of what needs to be done and are not on their own a real solution. If we do not want young people to be needlessly and unfairly criminalised, elements of the law and the context of the online abuse must be thoroughly analysed before changes are made. We must focus not so much on reaction, but on prevention. The law is not always the correct tool, and it must not be used when young people are engaging in unwise activities—as so many do—which relate to the expectation and culture of a mobile and cyber environment in which appropriate adults have virtually no presence and where, too often, we leave them abandoned and to fend for themselves.
My constituent contends that a strong positive culture must dominate any community, including the online and mobile community, because when it is absent, there will never be a vacuum—a “street culture” will fill the void. Alas, he fears and he sees that this is the case with the mobile and cyber-worlds that our children spend so much of their day and night lives inhabiting. We need to take care not to end up targeting and criminalising young people who are, in fact, victims. This will require significant training and support for the police, as other Members have mentioned, and for others whose response to such crime already appears to be under-confident and very variable.
My constituent subscribes to a restorative justice approach in his school, and that might be appropriate in cases where mitigating factors are considered. He asserts that the ignored fact is that the vast majority of young people are already mobile and online victims in a largely unsupervised cyber-world. Although the internet gets considerable attention from safeguarding organisations and in training, mobile activity and mobile-based abuse are, in fact, even more rife but more neglected by us adults. Parents, teachers and other adults normally responsible for the routine safety of children are best placed to supervise and guide young people, yet they are largely absent from the potentially dangerous environment and too little is being done to address that omission.
There is an over-focus on the internet and the wrong applications, such as Facebook, because they are what we older people use and are familiar with. The mobile world and the dark web get less attention, yet they are part of most children’s experiences—perhaps the dark web to a lesser degree. There are lots of apps. I know Snapchat, but I do not use it. Hon. Members have probably never even heard of other apps unless we have asked our kids to tell us, and that does not always happen. The mobile and online culture in which our children live and grow up—the ground is established in the primary years for some of them but in early secondary for many more—is their normality.
This normalisation, with no appropriate adult presence to challenge it, is what leads to the lack of reporting of sexual and other mobile, online and cyber-abuse. We must deal with the issue that young people do not want to go to court, or they do not want perpetrators to be punished. The idea that abuse is not worth reporting is not necessarily an indictment of the criminal justice system, but it may not be considered worth reporting when it is seen as normalised.
Data from police forces and court proceedings are only a small subset of the true or possible dataset. The reality is that the relative lack of adult presence in the mobile and cyber-worlds of children, including the practitioners responsible for keeping children safe, means that conclusions drawn on available quantitative data must be received cautiously. We need to establish a different online, mobile and cyber-culture and skill-up children, parents and other adults.
Police, children’s services, health and education staff need consistent training on child exploitation and on how to support victims. In short, parents and other responsible adults just do not know how to be part of the mobile and cyber-world. Schools have a responsibility in this debate and in the remedies. Some suggestions that come from the work that our headteachers have done include every school having an equalities and safeguarding committee and updating the behaviour policy to have a strong safeguarding structure and training for parents, staff and, of course, students. Students should be engaged in this work and in policy development and roll out in an equal ratio to adults.
Heads suggest using up-to-date information and communications technology and security in the school ICT environment; ensuring staff, students and parents are clear on the law and people’s rights; and encouraging a transparent culture where children welcome parents and school staff interrogating their mobile devices as a matter of course. That is a challenge for parents, but we need to think about that in the context of an overall policy.
Heads also suggest developing clear, consistent procedures and guidance for investigating safeguarding, social media, sexual exploitation and mobile and online incidents, including the protection of staff investigating such incidents, while taking account of pupil privacy and so on; working with relevant organisations such as the police, the Child Exploitation and Online Protection Centre and others; and using pupil ICT champions to keep schools up to date with developments in social media and portable apps and to help inform e-safety curriculum developments.
Kit Malthouse
The hon. Lady refers to the difficulty with teenagers. Does she agree that we should perhaps look as a House at whether parents should have a legal duty to be aware of what their children are doing online, in the same way as we have legal duties to ensure that our children are not exposed to other dangers?
Ruth Cadbury
The hon. Gentleman raises an interesting issue. As a parent of two young adults, I have always wondered why all sorts of people are required to do all sorts of things in respect of the children in their care, yet there seems to be no legal duty that a woman signs when she pops out a baby. I am sure that people far more legally qualified than I am can respond in detail to the hon. Gentleman’s interesting and pertinent question.
I have concluded my core points. We need to address online bullying and abuse with a whole raft of mixed approaches that include not only enforcement, criminal charges and policing but public policy and education policy solutions, so that victims are not criminalised.
Nigel Huddleston (Mid Worcestershire) (Con)
I congratulate my right hon. Friend the Member for Basingstoke (Mrs Miller) on securing this debate. I will not go on too long and dilute the quality of the debate. I promise to make a short speech. [Interruption.] Yes, I am sure that hon. Members will appreciate that. In another short speech—my maiden speech—I said that I would be an advocate in this place for the internet and online sector of the British economy because it creates lots of jobs. That does not mean that I am an apologist for that sector or, indeed, that I excuse some of the negative consequences that have occurred.
All the stakeholders in the internet economy and, indeed, we as legislators and all other players have an awesome responsibility to ensure that we create a safe environment for our children in particular. The internet has created an environment in which adults behave like children and children behave like adults in a way that we have never really understood before.
Many Members have commented previously on the great work being undertaken in schools in educating children about online bullying. I have seen such programmes in action in schools in my constituency, and I applaud the great work of teachers, as do many other Members.
Members have mentioned the prevalence of children having mobile phones these days. Parents often find it difficult to lock or unlock mobile phones, or to work out how to make them secure in the way that they perhaps have confidence in doing with computers. The average Brit looks at their mobile phone 100 times a day. More people would be willing give up chocolate, showers or, indeed, sex than their mobile phones.
Nigel Huddleston
All.
I will leave hon. Members with this comment: today is the first time in my entire time in Parliament when I have not looked at my mobile phone to see abuse on Twitter, Facebook or in an email. I lost my mobile phone 14 hours ago. It has been one of the most relaxing and productive days of my time in Parliament, and I highly recommend it.
John Nicolson (East Dunbartonshire) (SNP)
I congratulate the right hon. Member for Basingstoke (Mrs Miller) on securing this debate and outlining at the beginning the homophobic and racist abuse and the horrors of child abuse that we often see on the internet. The hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) described the many ways in which abuse can take place.
The hon. Member for Romsey and Southampton North (Caroline Nokes) issued a stark warning that children were losing their ability to empathise which we all found striking and interesting. I was particularly happy to hear her description of her doorstep visits to trolls. For a moment, I almost felt sorry for the pathetic creatures when I imagined her turning up and remonstrating with them.
Members have made a variety of speeches describing their personal experiences. I was struck by the hon. Member for Eastbourne (Caroline Ansell) describing a victim’s terrifying experience online. Particularly moving, I thought, was my hon. Friend the Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) talking about her experiences of being at the receiving end of abuse from online cowards.
Today, we are all connected. We use the internet to conduct business, for entertainment and to connect with our friends through social media. Our mobile phones in our pockets ensure that we are available anytime, anywhere and that we can instantly share photos with family, friends and complete strangers. For the vast majority of people, that connectivity has enhanced our lives, but as the historian Melvin Kranzberg wrote in the first of his six laws of technology,
“Technology is neither good nor bad; nor is it neutral.”
As we have heard, online abuse is one of the negative consequences of advances in online technology.
While social media can be a platform to share a happy family photograph, it can also be a platform to share content intended to humiliate with as large an audience as possible. While an iPhone can be a helpful tool in keeping in touch with friends, it can also be an instrument through which an individual is harassed and intimidated. While Twitter can provide an opportunity for witty banter, as Members of this House well know, it can also be used by cowardly bullies hiding behind anonymity to send abuse. As the debate has shown, all political parties have sent out strong and clear messages that this behaviour must be strenuously tackled, and we must consider every possible method of dealing with it, including strengthening existing legislation.
Children and young people are often the first to embrace and adapt to changes in technology. However, that also means that they are more likely to be victims of online abuse. Much of that abuse can come from their peers, and it has been exacerbated by the use of social media and the widespread availability of smartphones with cameras. In late 2004, happy slapping became a youth craze throughout the United Kingdom—many people have forgotten about it, but it was covered widely in the tabloids at the time. It involved filming minor acts of violence, such as hitting or slapping a victim, and then circulating the videos via Bluetooth on mobile phones. However, it escalated into more serious assaults, sexual assaults and, in some instances, manslaughter. Social media sites such as Facebook and Twitter have provided further platforms for cowards. The intention of such videos is clearly to humiliate and intimidate the victim, to make them feel small and worthless, and to share their misery with the world, increasing the feeling that the whole world is against them. Rightly, these videos are roundly condemned. They are removed—sometimes—by site administrators. They are sometimes, but not often enough, investigated by the police.
Other types of abuse are more subtle and more difficult to act against. Embarrassing pictures or videos, altered photos, or photos and videos taken without an individual’s permission can be widely shared without consent. Classic bullying behaviour can manifest itself much more easily online. Victims can be ridiculed and singled out in group messages, rumours can be spread quickly and widely, and victims can be excluded from online activity. The ability to go online does not create bullying, but it helps it to go unnoticed away from the classroom and the playground.
Similarly, those who are most often targeted by conventional bullying are also targeted by online abuse. In February 2016 the UK Safer Internet Centre published a study that found that 24% of those 13 to 18-year-olds surveyed had been targeted due to their gender, sexual orientation, race, religion or disability, or due to the fact that they were transgendered.
Kit Malthouse
The hon. Gentleman is making a powerful contribution. One key aspect of this abuse, which he has illustrated so well, is the ability for people on the internet to be anonymous. Is it time for the House to come to a view about whether we should allow internet anonymity to persist in this country?
John Nicolson
It is an interesting issue: do we have an entitlement to anonymity? Perhaps we do, and perhaps we should preserve that. However, I would have to think about that. My answer is I am not sure. I was interested in the suggestion by a Labour Member that Facebook and Twitter should use technology to identify certain troll words and that using them should result automatically in the suspension of the accounts concerned. Perhaps the Minister will address those issues, among others, in his speech, and perhaps he can go away and look at them later.
One in 25 of the young people who spoke about this issue in a variety of surveys said they were singled out for abuse all or most of the time. That is a horrendous thing for young people to have to deal with. Teenagers with disabilities, and especially teenagers from African-Caribbean, Asian, middle eastern and other minority groups, were much more likely to encounter cyber-bullying.
To target cyber-bullying north of the border, the Scottish Government have funded Respectme—an anti-bullying service that acts as a source of information for young people. It has created and made available publications to raise awareness of cyber-bullying. The service works particularly well with adults involved in the lives of children and young people, giving them the practical skills and confidence to deal with children who are bullied and those who bully others. Respectme is keen to stress that, no matter where bullying takes place, it needs to be challenged, and that is a message worth repeating: anyone suffering from bullying, whether online or not, must report it and stand up to it.
Online, children and young people are also in danger of sexual abuse. A recent study by UNICEF, which was published in June 2016, suggested that eight out of 10 18-year-olds worldwide believe they or their friends are in danger of being sexually abused or taken advantage of as a result of online activity. The ability to remain anonymous online, or to take on another identity, is a contributory factor; it leads to an increased likelihood of people receiving unwanted sexual comments, unsolicited explicit material or pressure to participate in sexual activity. As we have heard from many speakers today, that problem is also experienced by adult women, with applications such as Snapchat and Tinder often providing an easy way for men to harass them.
Another increasing phenomenon is revenge porn, which involves sharing private sexual images and recordings without consent and with the intention of causing harm. The revenge porn helpline has received almost 4,000 calls in the last year alone, with cases reported involving children as young as 11 years old. Furthermore, attempts to stigmatise women are extremely common. The think-tank Demos found that 10,000 tweets were sent from UK accounts in a single three-week period aggressively attacking individuals as a “slut” or a “whore”.
Women in public life are often prime targets for online abuse. In Scotland, the three largest political parties are led by women, two of them gay. All three women have to deal routinely with sexist, misogynistic and homophobic tweets. The Scottish Conservative party leader, Ruth Davidson, has suffered horrendous homophobic abuse, and has handled it with humour, honesty and courage.
Kit Malthouse
One revelation that has come out of the awful murder of Jo Cox is the amount of online abuse directed at Members of Parliament, but particularly female Members of Parliament—or, indeed, anybody who is not a heterosexual white male. Would it be appropriate for the parliamentary authorities to publish an annual report on the levels, content and types of abuse Members of Parliament receive? It comes as a surprise to most right-thinking members of the public to know that their Member of Parliament receives that kind of material.
John Nicolson
That is an absolutely excellent idea. One of the great things about this debate is that people have been able to share their experiences. I suspect that many Members—especially some of the men—are quite surprised to discover just how widespread the problem is, so that would be an excellent thing for the House to do.
In many ways, the online world has enhanced our democracy by allowing people to interact with politicians in a way they could not before. Robust political debate is part of our public life, and we must cherish it, even when it uses language we might not personally use. What cannot be tolerated, however, is people debasing political debate with threats of violence, insults and abuse based on misogyny, homophobia, sexism and racism.
Opposition to online abuse is something that unites all our political parties. However, it is not just politicians who suffer such online abuse when they are famous. High-profile television personalities, journalists, academics, actors and sports people are all subject to abuse, whether it is petty and crude or threatening and vicious.
Online, many people seem to lose a sense of themselves and say things that they would never dream of saying in person. Quite often when I get abuse, I make a point of writing to people to ask whether they can imagine saying such things to me in real life. Of course they cannot imagine it, so why on earth do they feel free to say it simply because it is online? However, hiding behind a pseudonym and a cartoon profile picture does not make the abuse any less real. We have a duty of care as politicians, and it is vital that we send out a strong message that online abuse is wrong always.
One clear message from this debate is that, as we have heard repeatedly, Twitter and Facebook are hopelessly inadequate when it comes to their response to online, and sometimes very violent, bullying. It seems that the House, across both sides and all parties, wants the Minister to tackle Facebook and Twitter on our behalf and, much more importantly, on behalf of all our constituents. I look forward to hearing what he has to say on the matter.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I, too, thank the Backbench Business Committee for granting this important debate. I congratulate the right hon. Member for Basingstoke (Mrs Miller) and the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) on securing it. The contributions have been characterised by reasonable, well-informed arguments that reflect the consensus around the House and a desire for a constructive improvement in the situation that many of our constituents, and we as Members of Parliament, face.
I may have mentioned it in the past but before entering this House I spent many years as an engineer, building the networks that eventually formed the internet. I did that because I see technology as democratising and enabling, as my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss) also emphasised: technology as something that builds bridges and connects people rather than something that bullies and snoops on people. I spend a lot of time in this House and outside it talking about the positive benefits that technology, and particularly the internet, can bring if harnessed properly. For most of us, the internet is a window on the world. It is a place to learn about what is happening, to keep in touch with friends or make new ones, to buy something, to find a new job, to study or to play games. However, the increasing presence of online abuse means that, all too often, the internet is a place where people do not feel safe. As my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) said, technology is a tool that can be turned into a weapon.
As we become ever more connected, there are fewer safe spaces from bullying and harassment. The hon. Member for Carmarthen West and South Pembrokeshire reminded us of some of the horrifying statistics on cyber-bullying. One third of children have been a victim, a quarter have come across racist or sexist messages online and, according to the Safer Internet Centre, four in five teenagers saw or heard online hate in 2015; that is 80% of our children. The hon. Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) emphasised that online porn is available that targets children as young as 11, and the hon. Member for North West Hampshire (Kit Malthouse) suggested that we are sleep-walking into a mental health epidemic because of the impact of bullying and online hate on our young people.
Citizens in this country enjoy the right to walk down the street without being attacked or harassed. When that happens, the police act. Digital citizens should enjoy the same rights online. As the hon. Member for South Ribble (Seema Kennedy) said, we need to protect our digital citizens. In his short but powerful contribution, the hon. Member for Mid Worcestershire (Nigel Huddleston) said that we should focus on our duty to protect young people. To coin a phrase, digital citizens deserve digital rights.
It is the Government’s primary responsibility to keep their citizens safe, but they are failing to do that for citizens online. This is not a tech issue. As the right hon. Member for Basingstoke emphasised, it is about standards, interoperability, protocols, control, industry co-operation, self-regulation and, if necessary, legislation. We cannot just look at what we have now and try to patch over the problems. As well as the Government, internet companies also have a responsibility to keep the internet safe. I welcome the fact that the big internet firms are beginning to take that responsibility seriously, particularly when it comes to children. However, in my view, and in the view of many on both sides of the House, they have been too slow and are still not doing enough. It was great news that Twitter decided to add a button to report abuse, for example, but why on earth did it take seven years to think of it?
It is important that we get the principles right, rather than just trying to keep up with the latest technology, putting regulatory sticking plasters over whatever the latest innovation is. We cannot keep having this battle with every new internet giant or ubiquitous application.
As a woman engineer in a predominantly male industry, and particularly when I worked for Ofcom, the communications regulator, I remember the outrage voiced by many in the tech sector when asked simply to consider taking responsibility for content. Their main accusation was of undermining freedom of speech, as my hon. Friend the Member for Heywood and Middleton (Liz McInnes) highlighted. They also called parents irresponsible if their children found porn online, and accused women in particular of being over-sensitive when we objected to violent images of rape or to misogynist threats. As my hon. Friend the Member for City of Durham (Dr Blackman-Woods) reminded us, it is women who are often victims of online hate. The hon. Member for Romsey and Southampton North (Caroline Nokes) has a very robust approach to challenging online abuse, but unfortunately we cannot all emulate that.
I remind the industry players of the period when many championed what I would call a wild west approach to online safety. I do not want to undermine the work that they are doing now, and which I will come to, but to highlight that some of the lack of trust in the internet and the reluctance of many to go online can be traced to those early mistakes, when the right support and protection for consumers was not put in place. We now face a new frontier in citizen data control, and many of the same industry players—Facebook, Twitter, Google and so on—are still on the back foot on this. We need to give citizens and consumers control of their data.
On the subject of online outrage, the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) highlighted the Gamergate scandal. A recent period of online vilification came when I had the audacity to suggest that misogyny in games could perhaps be signposted; not necessarily regulated or eliminated, but simply signposted. That caused outrage among many in the industry, who still do not recognise the importance of social responsibility when it comes to the internet.
As has been said, there are many very bright people in this sector. If they can build algorithms to snoop on our email or phonebook, or to tell us who to be friends with or what washing machine to buy, they should be able to crack down more effectively on abuse and harassment and put me in control of my own data. The new platforms need to understand that. Perhaps it is not seen as a major priority because it does not come with a revenue stream attached, but safeguarding people should always be the No. 1 priority. That is not only because it is the right thing to do, but because if we allow the internet to become a place where only those who shout the loudest or who use the most appalling abuse can have a voice, people will turn away from using it. As the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) said, those involved in such abuse must be held to account.
I am particularly pleased that the motion makes reference to training and education for the police and for young people. I welcome the recent Stand Up to Bullying Day, held on 5 July and organised by the Diana Award, which seeks to build digital resilience. I also welcome the work done by many third sector organisations. This is not a problem that will take care of itself without significant and sustained action from industry and Government.
I also welcome the Reclaim the Internet campaign on which many across the House, including my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), are working. I am sure that my right hon. Friend looked to the Digital Economy Bill to provide some appropriate responses to online abuse, but I am afraid that we did not see any. I hope the Minister will be delighted to learn that Labour Members intend to make significant improvements to the Bill. A successful digital economy requires its citizens and consumers to be protected and empowered. Governments and platforms need to use technology to support citizens, instead of leaving the haters to attack them.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
I am grateful to have the chance to speak. I have no idea how long I have got at the Dispatch Box, but I will keep going until you indicate otherwise, Mr Deputy Speaker.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I can help the Minister by saying that if he works on the basis of around 10 minutes, I think we will all be happy.
Mr Vaizey
Let us go for the 10-minute special, then.
I thank my right hon. Friend the Member for Basingstoke (Mrs Miller) for calling this important debate. I was lucky enough to work with her when she was Secretary of State. She took on two important issues at that time: Leveson and the issue of press regulation, and equal marriage. She handled both with aplomb, and she has since shown the House how one transitions from such a position to a new role. She has taken a huge and leading role in the House on women and equalities issues. She has certainly pushed forward the important agenda of online abuse, so it is no surprise at all to find her leading this debate and setting out for the Government some very clear approaches and suggestions, which it behoves us to take seriously.
It is worth recalling that when the matter has been raised in the House—for example, when my hon. Friend the Member for Devizes (Claire Perry) first raised the question of children’s access to adult content online—it has resulted in action. Debates in this House may sometimes appear to be simply an exchange of views between Government and Members of the House, but, because this agenda is so fast moving, the House has a great deal of influence on the direction of Government policy. Without wishing to single out individuals too much, I have to say that my right hon. Friend the Member for Basingstoke has pushed the matter forward, not least the change in legislation on revenge pornography last year.
It would be remiss of me to go through every speech that has been made. Some 18 or 19 hon. Members have made contributions, all of which have been serious and worth while. Because this was a lengthy and detailed debate, I appreciated the odd moment of light-heartedness, not least when my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) told us that she responds to online abuse with a picture of a kitten. That particularly appealed to me, because I have a picture, which is now well known, of a kitten sitting on my shoulder when I visited Battersea Dogs and Cats Home. I will use that in future to respond to my online trolls.
I was also amused when my right hon. Friend the hon. Member for North West Hampshire (Kit Malthouse) complained that teenagers now live in a world in which they are surrounded by perfect people who are wonderful to look at. I wondered why he thought that that was a problem when we all exist in the perfect world of the Palace of Westminster, where people are charming and lovely, as we have particularly found during the last week or so.
Four clear issues emerged from the debate. Let me briefly pause to put them in context. The Government are, quite rightly, committed to an open internet. When I attend international forums, I find that it is very important that the UK, along with our allies, is committed to what we call the multi-stakeholder approach for internet governance. That involves civic society, business and Governments working together to keep the internet open and free. Authoritarian-inclined regimes would like to regulate the internet, restrict freedom of speech and clamp down on innovation. The Government of this country do, however, regard things that are illegal and wrong offline to be illegal and wrong online. Hon. Members have made the point that some people seem to believe that the rules of behaviour and the legal rules that we all live by in the physical world somehow do not apply on the internet. That is absolutely not the case.
The UK has led the way in approaching the issue from a perspective of self-regulation rather than legislation. Self-regulation works because it brings about partnerships and helps us to move forward more quickly. A good example is the creation of the Internet Watch Foundation, which was the first charity to focus on dealing with images of child sexual abuse. It is a model that has been copied around the world, and it became incredibly important in driving forward the recent work with search engines, such as Google, to make searching for and discovering images of child abuse online much, much more difficult. We have worked with the Internet Watch Foundation to ensure that internet service providers had the funding to increase their capacity, and we have worked with technology providers on the use of technology that enables images to be matched and traced, and that makes it easier to catch and trace perpetrators.
Similarly, by working with industry we were able to secure family-friendly filters; the default-on option means that people who log on must actively disable the filters that prevent harmful content from reaching, for example, young people. We have also worked with industry on an important and generously funded campaign, “Internet Matters”. The previous Labour Government set up the UK Council for Child Internet safety, which brings together 200 stakeholders who work on these issues. It has an important effect on driving forward policy. We continue to make progress on matters such as increasing police capability, the creation of the first Minister for Internet Safety and Security—my colleague Baroness Joanna Shields—and, with the Digital Economy Bill, the introduction of legislation to secure age verification for adult content.
As I have said, four clear issues that the Government should take forward emerged from the debate. First, although there was welcome praise for the Essex and Durham constabularies, there was an absolute recognition of the need to skill up the police force. We have the Child Exploitation and Online Protection Centre and different arrangements in the national police service, but for cybercrime in general—it is often financial crime—and this kind of crime in particular, it should be possible to create specialist units with national capability.
The police should also think very hard about the people they recruit. There is no need for them to recruit only for conventional police training—people who can walk the beat or perform the traditional roles of policing; there is every opportunity to recruit people with specialist skills that may not be transferable to the rest of the police service but who could be recruited relatively quickly to do this work.
There was a clear call from the House for legislative clarity, both clarity in defining online abuse and clarity about the myriad different Acts and statutes that come to bear in this area. The new Government under the new Prime Minister will want to make clarifying and consolidating that legislation a priority. That was a clear call from the House that must be taken forward.
The issue of anonymity was raised, with the hon. Member for East Dunbartonshire (John Nicolson) debating whether it should come under our consideration. I would not want to legislate to remove anonymity. Whether to allow anonymous users should be a matter for individual platforms, just as I would not require the Royal Mail to refuse to handle any letter that had been sent anonymously. That kind of interference would be unjustified,
That point leads me on to the role of platforms. It is interesting to consider that in the online world we now suddenly have companies that in many respects are bigger and more influential than many nation states—Facebook has a population of 1.2 billion, and Twitter has a population of 300 million—yet to a certain extent are left to their own devices to create their own rules, society and regulation, without the role of Government or of civic society as a whole being taken into account. Platforms must work with Governments and civic society to create rules. I support my right hon. Friend the Member for Basingstoke in her call for something I have been keen to make progress on, namely a clear code of conduct within the UK that clarifies what constitutes online abuse, and, even more importantly for users, gives clarity on the rapid remedies available to people who are abused in this way. We have heard some really horrific examples, but of course we all know of those examples because we see them day in, day out, either on the news or because we ourselves or our friends are being attacked.
Kit Malthouse
Will the Minister address the specific point raised by a number of Members about whether there should be legislation to place specific duties—in particular, a duty on child protection—on some of the very large companies that he mentioned? There was a general theme in contributions from across the House that we would either like existing legislation to be consolidated in one Bill that we could then look at in the round or we would like measures on this issue to be brought forward in the Digital Economy Bill. Is any of that likely to happen?
Mr Vaizey
I should have said earlier that the views of my hon. Friend need to be taken very seriously. He has very serious experience from his time as deputy mayor for policing in London. I listen to him very seriously indeed. How can I put this? I want to get the Digital Economy Bill through the House. It has a specific focus, so I would be cautious about inviting him or any other Member to load additional responsibilities on to it, particularly on issues that need careful thought and planning. But I would certainly welcome discussions with him and would never rule out appropriate regulation to push the responsibility for some of the appalling abuse that we see day in, day out on to social media. It is not enough—this also applies to issues such as intellectual property and the online theft of music and film—to view platforms as passive vehicles. They are extremely wealthy companies that rely on a large number of users to generate the advertising that creates their shareholders’ wealth. There needs to be partnership, and I do not rule out regulation.
Having said that, given a post-Brexit situation in which we are keen to encourage inward investment, I do not want to frighten the horses of companies that provide a great deal of direct and indirect employment in the UK. We need to work with the companies, and we need clear guidelines on, and definitions of, online abuse. Even more importantly, we need very quick reactions, so that all of us as constituency MPs do not have to sit in surgeries with people who are clearly utterly distressed because of online material—their lives are sometimes in absolute pieces—and cannot get any adequate response from the platform hosting it.
This has been an extremely helpful and useful debate, and I look forward to moving seamlessly into the next debate, which I am also responding to.
Mrs Miller
I thank Members for supporting this debate with such superb contributions. I also thank the Minister, who has sat in his place listening throughout. The debate has demonstrated the strength of feeling that he has seen among Members across the House.
The UK led the way in tackling some of the early challenges online, working with European and US partners to put in place a global approach to outlawing child abuse images. We also passed some of the first legislation in the world to make it a crime to post revenge pornography. But we are now at real risk of falling behind. It is clear from the debate that there is universal condemnation of online abuse, so why have we not seen this Government present laws in Parliament to update our position?
There is cross-party support for specific laws to tackle online abuse and to consider specific duties on the police, schools, social network platforms, search engines and internet providers—duties that will show zero tolerance to online abuse. I must wholeheartedly disagree with my very great friend the Minister on anonymity. We have to lift the veil of anonymity in this country to make sure that people are responsible for what they say. We do it in every other part of our lives, so why not online?
The Minister is fortunate that the Digital Economy Bill has already been introduced to the House; it is a means of making the sort of changes that have been called for by Members of all parties here today. Those changes need to be part of a coherent cross-Government strategy. He should take Members’ concerns back to his Department and call for action now.
Question put and agreed to.
Resolved,
That this House notes the increasing number of cases where the internet, social media and mobile phone technology are used to bully, harass, intimidate and humiliate individuals including children and vulnerable adults; calls on the Government to ensure that clear legislation is in place that recognises the true impact and nature of online abuse, as distinct to offline abuse; and further calls on the Government to put in place appropriate legal and criminal sanctions, police training, guidance to the CPS and education for young people relating to such abuse.
Creative Industries
Julie Elliott (Sunderland Central) (Lab)
I beg to move,
That this House has considered support for the UK’s creative industries and their contribution to the economy.
It is a pleasure to begin this debate. I applied to the Backbench Business Committee with the hon. Members for Warwick and Leamington (Chris White), for Edinburgh West (Michelle Thomson) and for Dundee West (Chris Law) because this House needs to recognise the vital role the creative industries play in our culture and economy. The issue has not been debated in this Chamber for some considerable time, and I thank hon. Members from all parts of the House who supported the application.
I also put on record that I am on the steering committee for Sunderland 2021, our bid to be the 2021 capital of culture. Although the role is unpaid, I feel I should note it, as I will be referring to Sunderland 2021’s work in our bid to become the UK city of culture.
The UK is a world hub for the creative industries. They showcase the best of our country. They are outward looking, innovative and successful. Their achievements can be seen throughout the length and breadth of our country, and I am sure hon. Members from all parts of the House will speak about the wonderful creative elements of the constituencies they represent, just as I will discuss the vast creativity in Sunderland Central.
John Howell (Henley) (Con)
The hon. Lady has started in a very positive fashion, which I much appreciate. I used to be the chief executive of a film and video production company that had a rule that 40% of our income must come from overseas. Has she thought about the contribution of the creative industries to this country’s exports?
Julie Elliott
Absolutely. The creative industries are almost a hidden gem because they are so good at creating wealth and turnover, exports and imports, but they are not as glamorous as the manufacturing industries. I entirely accept the hon. Gentleman’s point.
The creative industries comprise many sub-sectors—advertising, architecture, arts, crafts, design, fashion, film, music, performing arts, publishing, television, research and development, software, toys, games, radio and video games, and the list goes on. Part of the reason why the creative industries are hidden is that the range is so vast. I sincerely hope that today the House will pay tribute to the essential role that they all play in helping to drive innovation and growth. We are world leaders in these fields and there are many, many success stories. The BBC, as recent debates in this Chamber and elsewhere have shown, is envied and renowned around the world, creating a staggering £8 billion of economic value for our country. Every £1 spent on the BBC through the licence fee produces £2 worth of value through employment, economic opportunities and expenditure.
The fashion sector is the largest employer among the creative industries, supporting almost 800,000 jobs. In 2014 the direct value of the UK fashion industry to our economy was estimated to be £26 billion. Many of our authors are facing economic uncertainty, but they are among the most talented in the world, providing engaging scripts for TV, film and theatre, producing literary gems and submitting content for interactive products and services. Our authors play a key role in the UK being a nation of readers.
Just this week the Department for Culture, Media and Sport announced that the UK’s creative sector is booming. Jobs in the creative industries have increased three times faster than the UK average in other sectors. It is estimated that those industries generate almost £10 million an hour for the UK economy, totalling an incredible £84 billion a year. The figures are staggering.
In 2015 there were 1.9 million jobs in the creative industries, up 19.5% since 2011, accounting for one in 11 of all jobs in the UK. More than 60% of the jobs in and around the creative sector are skilled to degree level or above. It is therefore extremely concerning that the University of Sunderland in my constituency has reported that there has been a reduction in the number of applications that it has received from students wishing to study arts, culture and creative subjects. Last month Ofqual announced that entries for GCSEs in arts subjects have fallen by 46,000 this year, compared with 2015.
Mrs Maria Miller (Basingstoke) (Con)
Before coming to this place, I worked in the creative industries for almost 20 years. As a graduate in economics, may I gently point out that it is not only those who have studied pure arts subjects who can contribute to the creative industries, which form one of the greatest exports this country has?
Julie Elliott
I totally accept that point. The figures that I have quoted on the value of the creative industries to the economy show their importance. We certainly need people with other skills, including economists, to be part of that. However, it is a worrying sign that applications for creative subjects have gone down. I hope the Government will act to promote creative subjects at GCSE, A-level and BTEC, and champion the many universities that offer thriving creative programmes.
I want to focus on the brilliant creativity and culture in Sunderland Central, the constituency that I live in and represent. Sunderland has been a centre for culture and higher learning since the 7th century. Benedict Biscop built St Peter’s church and monastery in 674 AD on the site that is now occupied by Sunderland University’s riverside campus. Among the earliest students at the monastery was the renowned author and scholar, the Venerable Bede. Sunderland’s proud history in glassmaking and glass art dates back to this period, when the first stained glass ever made in England was created for St Peter’s church by craftsmen who had come to Sunderland from France. The National Glass Centre, which has undergone a £2.5 million redesign, is located in my constituency and tells the story of our city’s glass production heritage and attracts more than 200,000 visitors every year. As well as teaching and research in glass and ceramics, the centre continues to manufacture glass.
As I mentioned earlier, in order for the creative industries to continue to thrive, we need to ensure that creative subjects are not side-lined in our schools, and that our universities continue to aid students’ creative development. I am proud that in my home city we have a fantastic institution for higher education at the University of Sunderland, which specialises in courses that equip graduates with the skills that the creative sector needs. Over the past 10 years the university has invested in cultural and creative education, including the Northern Centre of Photography, the David Puttnam media centre, Spark FM, the Priestman fine art and form studios, and the mediaHUB.
This year construction has begun on a new centre for enterprise and innovation at the university’s city campus. This hub, which will become home to the north-east’s first FabLab, will support businesses in Sunderland and the wider region, allowing companies the space that they need and providing them with access to a higher level of professional and academic expertise. No doubt the new centre will build on the university’s strong track record in support for innovation in my city.
It is fair to say that the creative industries are growing in our country, in large part due to the digital economy. In Sunderland we used to be renowned for our coalmining and shipbuilding industries. Now, Sunderland is leading the way in the north-east, with a thriving software sector comprising 150 firms in the city, with a vision for future expansion. The major success story has been Sunderland Software City, an ambitious partnership between the public and private sectors and the university. Its aim is to support innovation and growth in the north-east software industry. Since it was established in 2009 it has assisted over 300 software businesses and helped 150 start-ups. It has sought to attract investment and skilled workers to our region. Now more than 32,000 people are employed in the north-east’s IT sector, and global tech companies have established permanent bases in Sunderland, providing high-skilled, quality jobs and promising career paths for our young people.
As I said earlier, I am a member of the Sunderland 2021 steering group—a group of stakeholders from culture, education, business, media, health and economic regeneration, working to steer the strategic direction of the bid and help to build a compelling vision for the development of culture in Sunderland over the next decade. Our city’s bid to become the city of culture in 2021 showcases the very best of Sunderland, particularly its creativity. It is a shining light on our vibrant home-grown music scene. Sunderland-based bands, such as Field Music, the Lake Poets, Lilliput, Hyde & Beast, the Futureheads and Frankie and the Heartstrings, have generated almost £1 million-worth of worldwide record sales. The bid also has the support of our famous sons and daughters, such as Dave Stewart, previously of the Eurythmics, and Lauren Laverne.
Sunderland has wonderful venues for musicians in which many talented artists have performed. I pay tribute to the tireless work of those who sustain live music venues in Sunderland, and to the Stadium of Light, usually home to Sunderland football club. In the summer it has been hosting concerts from some of the biggest names in world music since 2009. Last week Beyoncé kicked off the UK leg of her tour at the Stadium of Light. The stadium is built on the site of the last big coal mine in the city.
I pay tribute, too, to the fantastic work of Sunderland Music, Arts and Culture Trust, better known as the MAC Trust, which has been a driving force for the many wonderful things happening in arts and regeneration at the heart of the Sunderland 2021 bid. Since 2012, the trust has sought to implement ambitious plans that are now coming to fruition, with a vision for Sunderland’s future as a vibrant, creative, exciting place where the arts, music and culture flourish. The trust is establishing a cultural quarter in the heart of our city by converting some of Sunderland’s historic buildings into cultural hubs. The trust is also behind the cultural spring project, working with the university and the Customs House Trust to transform the way in which the people of my constituency and the constituencies of my hon. Friends the Members for South Shields (Mrs Lewell-Buck) and for Washington and Sunderland West (Mrs Hodgson) view, experience and make art.
I am immensely proud of the work that is going on in Sunderland and I am delighted that I have had the chance to showcase the wonderful role that creative industries play in our local culture and economy, and the importance of this sector to the national economy. This debate will also give other Members the opportunity to show the immense breadth and diversity in this sector, which all too often is not talked about, in terms of the economic benefit we can get from the industries.
Chris White (Warwick and Leamington) (Con)
I am delighted to follow the hon. Member for Sunderland Central (Julie Elliott) and to have listened to her remarks. I thank the Backbench Business Committee for allowing us to secure this debate, which we have called to highlight the significant contribution the creative industries make to the UK and to stress the importance of its continued support whether through investment, financial measures or general wider awareness.
The hon. Lady mentioned various lists in her speech. Creative industries cover a number of iconic and diverse national treasures including the Tate, Pinewood Studios, the British Library, Adele—my favourite, rather than Beyoncé—and the BBC. It is also important to consider the wider economic benefits. The creative industries contributed £84.1 billion to the UK economy in 2014, equivalent to £9.6 million every hour, with an annual growth rate of nearly 10%.
This debate offers us an opportunity to celebrate our creative industries and consider how best to make sure the sector’s potential is realised. It is clear that the creative industries are flourishing and are playing an ever-increasing role in our economy, with growth outstripping that of the finance and insurance sectors and employment up by 5%, significantly higher than the 2.1% UK average. With this in mind as well as Nesta’s estimation that 35% of all occupations will become automated in the next two decades, a highly skilled and creative workforce, where human ingenuity cannot be replaced by robotics, will become even more important. It is perhaps appropriate at this juncture to congratulate the Minister on being the longest serving arts Minister in our nation’s great history.
Recent figures show that the number of jobs in the creative industries increased by 3.2%, which is about 1.9 million jobs. The increase since 2011 has been nearly 20%. These headline statistics are important, but we must also nurture skills and the flow of talent into the sector. It is therefore vital that we continue to encourage and inspire our young people to become more involved in, and aware of, the sector. In this context, I commend the Government on introducing coding to the curriculum in 2014.
We must continue to allow and help businesses to hire skilled individuals, and to do so from a strong UK base of talent. It follows that, with such a high growth rate for the creative industries, we must not allow a skills gap to develop in this sector. From primary school level through to our colleges and universities, I urge us to nurture creative talent, to allow the UK to become internationally renowned as the place to do business in the creative sphere.
In my constituency, Warwickshire College sets a strong example, offering a wide range of courses in related subject areas to ensure that students are able to develop skills, and this approach should be taken up more widely. The United Nations defines the UK’s creative industries sector as being at the crossroads between the arts, business and technology. We are at the forefront of the sector internationally and I suggest that our global ranking of 1st in terms of soft power is largely due to the rich culture and cultural sector of our country. Joseph Nye, originator of the concept, highlighted three pillars that contribute to a nation’s soft power, one of which is culture. Our creative industries underpin this success.
As co-chair of the all-party group on video games, it would be remiss of me not to mention that sector and its huge contribution to our economy. I am pleased to see my fellow co-chair, the hon. Member for Dundee West (Chris Law), in his place, and I look forward to hearing his remarks.
The industry employs 24,000 people across 12 clusters in the UK, with a significant number of games companies based in my constituency. The UK games industry blends the best of British technology, creating games that are exported around the world. With the global market expected to expand by 8% annually over the next five years, we cannot ignore it.
An important point to put on record is the need for the video games sector to be seen in the context of contributing to our cultural make-up, and I believe it is right that it is put on the same footing as film and television in terms of investment and the way it is perceived for its cultural contribution to our society. Parliament can and must do more to champion games as a mainstream creative tech industry right across the UK, and funding should equitably recognise the sector as such.
Warwick and Leamington is home to 40 companies providing 1,200 jobs, and has acquired the nickname of “silicon spa”, which I am beginning to feel is unfortunate. Video games tax credits have been a major boost for the business both locally and nationally and I encourage the Government, after the good work they have done on tax credits, to make sure the industry is far more aware of the advantage this will give. We need to push for greater awareness of games developers’ access to tax credits. Some 237 games were approved for tax relief in 2015, and that number must surely increase to help other companies working hard in this industry.
We must also continue to invest in the arts, following on from a long tradition of doing so and maintaining world-class museums and galleries. The UK now invests, unfortunately, a smaller percentage of its GDP in arts and culture than the EU average and less than competitors such as France and Germany. This is something we should talk about in the coming months.
The arts foster an environment in which ideas are cultivated, and our tourism trade, which is such a prominent feature of our economy, benefits enormously. London theatres generated nearly £100 million in VAT receipts in 2013, which was a record. Furthermore, spend on Arts Council England represents 0.1% of total public spend in England, yet arts and culture contribute 0.4% of UK gross value added. Public investment yields excellent returns, and I hope that the Minister will indicate the Government’s intention to look more closely at increasing such investment. With more investment comes greater diversity and increased opportunities for ideas to become commercial success stories. The exponential growth of creative industries also needs to be recognised in Whitehall, especially by the Department for Business, Innovation and Skills, which fails to note the sector as part of its industrial growth data.
This ties into my contribution to the most recent Queen’s Speech debate, in which I called for the implementation of an industrial strategy. As part of that cohesive and concise document, which I envisage to be a rolling progress report from the Cabinet Office, the Government should outline their promotion and support across the creative and cultural sectors. The Government’s export target of £1 trillion annually by 2020 is very welcome, but we must allow industries with such significant growth potential to flourish. Industry leaders have put forward proposals that could add £31 billion by 2020 to our exports.
Turning briefly to the digital economy, I note the Digital Economy Bill introduced to the House on Tuesday. The drive to rapidly improve our infrastructure will have very positive impacts on our ability to innovate, to create and to improve productivity. Digital technology is embedded in much of what we do, and I support the Government in providing our wealth creators with the ability to produce world-class products. The digital economy strategy produced by Innovate UK seeks to take inspiration from the creative industries, which have been at the forefront of innovation in many aspects of life. Of course, confidence to invest is key, not least in industries that require long-term decision making, so I urge that the creative industries be a major consideration as we enter negotiations with the EU.
In sum, I am pleased that we have the opportunity today to raise the profile of our creative industries. The statistics speak for themselves in the tremendous contribution the sector makes to our economy, and I call on the Government to support and recognise this and to allow the potential of the creative industries to be realised. The UK can, and should, be seen as a creative powerhouse.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. If everyone sticks to nine minutes, everyone will get an equal amount of time.
Fiona Mactaggart (Slough) (Lab)
In his autumn statement, the Chancellor said:
“Britain is not just brilliant at science; it is brilliant at culture too. One of the best investments we can make as a nation is in our extraordinary arts, museums, heritage, media and sport.”—[Official Report, 25 November 2015; Vol. 602, c. 1368.]
If we do not also invest in education that prepares children to play roles in those industries, we will slide backwards. Many of the people in this debate participated in the Westminster Hall debate earlier this week about the impact of the EBacc on education, theatre, art, drama, music and other expressive arts. Our concern during that debate was that there is a direct relationship between the introduction of a mandatory EBacc in a limited number of subjects including none of the aforementioned, and the reduction in the number of students taking GCSEs, A-levels and other examinations in those creative subjects.
The Minister for Schools, in arguing that there had been no such decline, relied on figures that were at least a year old to sustain his argument. He said:
“My assertion is that there will be no significant fall in the arts subjects as a consequence of the EBacc figure of 90%.”—[Official Report, 4 July 2016; Vol. 612, c. 215WH.]
I have seen evidence that such a fall is already occurring. If our figures are correct and if there continues to be a decline, I want the Minister for Culture and the Digital Economy to meet his colleagues in the Department for Education and persuade them of what I am certain is the unintended consequence of the EBacc proposal. Ministers say that we need the EBacc to get us to the same level as Iceland, Ontario and many countries which frankly are nowhere near ours when it comes to the performance of their creative industries. Will he agree to meet the Minister for Schools and ask him, if the decline continues, to include at least one of these expressive subjects—students should be able to choose which—within the suite of mandatory GCSE subjects? If we do not do that, we will slide backwards. There is no doubt that our brilliant creative industries depend enormously on children having experience of drama, dance, art, and music in school, and on the creativity that has traditionally been part of UK education.
A number of things that are now part of the creative industries were not invented when I was at school: video games, beatbox, Twitter—those things simply did not exist. Indeed, email did not exist. We must ensure that young people get experience at school of the creativity that is possible, and of the disciplines and craft that lie at the heart of many of our creative industries. Earlier, the right hon. Member for Basingstoke (Mrs Miller) said that it is not necessary to study those subjects professionally to be creative, which is absolutely true. However, it is necessary to have experience of them, and I am concerned about the number of children—specifically those in the least privileged communities—who are losing contact with those experiences.
There are wonderful opportunities. Earlier this week I was at the National Theatre watching the Connections youth drama festival. It showed outstanding work done by young people in theatre groups around Britain. However, many young people have never had the opportunity to participate in a live performance of music or theatre, and many have not experienced or learned from someone who is employed in a creative industry.
When the Minister responds to the debate, will he commit to discussing with the Department for Education whether my prediction about what is happening to expressive arts subjects in our schools is correct? Will he speak directly to Ministers about ways to end that decline, and will he ensure an opportunity in our schools for children to experience live theatre, and for every child to visit a museum and hear directly from someone who is employed in a creative industry and who makes their living through creating things?
As a previous primary school teacher, I know that children are creative. Play is children creating things, but often that creativity is driven out by the way we teach them. Instead of driving out their creativity, we must give children the skills that allow their innate creativity to be developed. That means not just investing in education, but for the Minister to expect all arts organisations to take their responsibility to young people seriously. I am not saying that arts organisations do not do that—I have just cited an example of one of our premier arts institutions that does exactly that. A few days ago I went to the Barbican, and children were part of the performance of Sir Peter Maxwell Davies’s last opera. There are lots of good things to be proud of, but every child should have an opportunity to engage with some of our great creative institutions and learn from them, so that in future our creative industries can make the most of that talent.
I refer the Minister to Dickens’s “Hard Times”. Sissy Jupe, who knew everything there was to know about horses because she worked in a circus and her dad ran it, was unable in a single sentence to define a horse because it was such an exciting animal, whereas Bitzer, pupil No. 6, came up with the right answer: “Quadruped. Graminivorous,” he said. That is what we are heading for in our system. We reward the Bitzers of this world and do not nurture Sissy Jupe’s understanding. I know the Minister would like to do that. He could interact with the Department for Education to change its Gradgrind approach and ensure that every child in Britain has a chance to learn how best to use their creativity.
Nigel Adams (Selby and Ainsty) (Con)
I thank the Backbench Business Committee for the debate and the hon. Member for Sunderland Central (Julie Elliott) for pushing for it. It is crucial to have time in the House to discuss the creative industries and their contribution to the economy. It is a broad topic, and rightly so given the immense variety of roles within the creative industries. As chairman of the all-party parliamentary group on music, I will focus my brief remarks on that sector. I fear I might be spoiling the Minister, who has had to listen to me talk about this subject twice in two days. I am sure he can cope; he has held the brief for a long time.
I should like to highlight statistics from the recently released reports from UK Music, the representative body that does such a great job in supporting parliamentarians and in other work within the industry. The reports demonstrate how vibrant and productive the music scene is in the UK today. The “Measuring Music 2015” report showed that the music industry contributed £4.1 billion to the UK economy in 2014, and that it involves 117,000 full-time jobs. A huge number of those jobs are creative: musicians, composers, songwriters and lyricists alone accounted for £1.9 billion.
Not only is music vital to our economy in the UK; it is also our face to the outside world. The report found that music exports accounted for £2.1 billion in annual revenue, which is more than half the industry’s gross value added, as compared with about 30% in the economy as a whole. One in seven of all global album sales were for British artists, and five of the top 10 selling albums in 2014 were by British artists—that is before artists including Adele delivered another blockbuster year in 2015.
The “Wish You Were Here 2015” report reinforced that message. Direct and indirect spend from music tourism in 2014 was some £3.7 billion. Many right hon. and hon. Members will enjoy festivals around the country this summer—I have already seen the Secretary of State at a festival. I am disappointed he is not here, but he may very well be at a festival somewhere in the UK, and I am sure the Minister will do a fantastic job in replying. That £3.7 billion is a 7% increase on the previous year. Some 38% of our live music audience were music tourists who came here seeking out their favourite British artists. They spend an average of £852 in the UK, all of which sustains more than 39,000 full-time jobs in Britain.
UK Music is undertaking a census of the live music scene in key UK cities, which has never been done before, so that policy makers, planners, local authorities and others for the first time have access to the data they need to assess the impact of decisions on the music industry in their areas. The first report is the Bristol census—I note that the hon. Member for Bristol East (Kerry McCarthy) is in her place—which showed that, in that city alone, live music generated £123 million of revenue in 2014. I look forward to more reporting so that we have the knowledge rather than just the desire to do right by our music scene and those who work in it.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
The Scottish Affairs Committee’s report on the creative industries in Scotland, published in February, recommends that the UK Government work with representatives of the creative industries in Scotland to assess how creative tax reliefs could be adapted so as to be of greater benefit to Scotland. That could include variable rates of tax relief for different parts of the UK, creating a tax relief for the music industry and piloting a tax relief for small and medium-sized enterprises working in the creative sector. Will the hon. Gentleman join me in calling on the UK Government to disclose what measures have been taken in this area so far?
Nigel Adams
That is a reasonable thing to ask. Unfortunately, the Minister is not in his place, but I shall remind him. Perhaps the hon. Lady could intervene on him later. It is absolutely right we do whatever we can, right across the UK, to ensure creative industries are given all the tools necessary to continue to grow this part of our economy.
When we speak of the contribution to the economy, we must remember that the economy is not just some vague term. The economy means people’s jobs and their ability to make a living. Yesterday, I held a Westminster Hall debate on the subject of remuneration for artists for online play and streaming. It is important to state that this is not just an issue for the big well-known names. This is an issue for songwriters, producers and others who put work into a song. They rely on the revenue that comes from plays far more than someone who has a profile. I was pleased that colleagues from my own party, the Labour party, the Scottish National party and the Democratic Unionist party all came to take part in a productive discussion about what remains a relatively new policy area, over which we will soon have significantly more power as the UK exits the EU.
Recently, I spoke with one songwriter who had seen the princely sum of less than £6 in revenue from some 3.2 million plays of his song on YouTube. It is therefore not hard to imagine the despair of someone who sees their life’s work available for free on the internet, with little or no prospect of financial reward.
At this point, I want to commend BBC radio, which has done so much not only to give new artists exposure but to ensure they are paid for airplay. The BBC takes risks on new artists, providing exposure for the music of new and emerging artists before release, helping them to drive record sales and build their profile. The BBC also plays a vital role in the development and promotion of UK music both culturally and economically. What it does for unsigned acts, with its “Introducing” initiative, is amazingly successful. It is not just Radio 1; Radio 2 hosts an unrivalled range of specialist programming, helping audiences to discover new music and helping to break new British artists in specialist genres. A bit more of this spirit of nurturing creative talent across the industry as a priority would be welcome.
The British Phonographic Industry reports that in 2015 there was more revenue raised from the 2.1 million vinyl LP sales by British artists than the 27 billion music video streams on YouTube and similar platforms. This discussion is not about shutting down technologies; it is about striking the right balance. To me, it is clear we have not yet done so. As the well-known manager, Brian Message, said:
“The advent of the digital era introduced an opportunity for those involved in the music business to pull together for the economic benefit of all stakeholders. To our collective detriment, this did not come to pass.”
I would welcome all contributions from colleagues to ongoing discussions in the all-party group on where the right balance will lie and to pick up more of the themes we discussed yesterday morning in Westminster Hall. We need additional support, in particular from local authorities, to ensure we have the infrastructure to produce great music here in the UK. There is an issue around business rates being levied on festivals, sometimes retrospectively. That could have a huge detrimental impact on the festival industry right across the country.
The studios that can accommodate the orchestras needed to record film soundtracks are very rare. I believe we have only two here in London. I am sure the Minister will correct me if that is not accurate. That is minimum capacity; such must often be booked on short notice. If we lose that capability, that kind of recording will be taken elsewhere, and the work will not be available for British musicians.
Finally, we must remember that to make successful financially viable careers and to be ambassadors for Britain and bring fans here as our tourists, our artists need the ability to be successful abroad, particularly in the States. To be globally successful, they really need to break the American market, but the current visa system for UK musicians wishing to perform there is complex to the point of being unworkable. It costs hundreds of thousands or thousands of pounds and requires expensive overnight visits for interviews with officials. The equivalent system for foreign musicians to come here and perform in the UK entails only a small fraction of the cost.
I know Ministers have heard from me before on this subject, but I reiterate the point that support does not always mean Government spending. In this area, musicians could really use the support of colleagues right across the House, but particularly of those on the Government Front Bench in the Foreign Office as well as in the Department for Culture, Media and Sport, to try to simplify this process. A small but vitally few helpful steps in the first instance would involve convincing the US immigration service to establish a dedicated liaison team for the music industry which could provide relevant advice and answers for artists, provide timed appointments for visas so that artists could avoid expensive overnight stays in London or Belfast, and clarify the position on ESTA waivers and communicate it clearly to all border forces to avoid inconsistent application.
Our creative industries are making huge contributions. I am pleased with the work our all-party group has done on identifying where support is most needed thus far. I would now warmly welcome the engagement of all colleagues and Ministers to help put that into practice so that our music industry can continue to inspire the creativity of our young people, the interest of our music fans and the imagination of the world.
Chris Law (Dundee West) (SNP)
Frankly, in any discussion of the creative industries, it is essential to begin by reminding ourselves of the deep complexity and real significance of the activities that this topic covers. Yes, the creative industries include large enterprises in areas such as film-making, computer games, fashion and publishing, and they have many thousands of employees and trade globally. And yes, the creative industries involve countless numbers of individuals and groups who are active in fields such as art, music, dance, poetry and many other things. In addition, however, there are those who support the creative industries through their contribution as teachers, curators of galleries, event organisers and other support roles. All of that adds up to the colourful, diverse and beautiful tapestry that makes our lives so enriched. I am sure that everyone in the House is wholly thankful for the wonderful contribution that those people make to our lives.
It has been estimated that the creative industries employ 1.9 million people in the UK as a whole, and 174,000 of those are in Scotland. Believe it or not, the creative industries are worth more than £9 million pounds an hour to the UK economy and this is the fastest growing sector in the UK. Yet it is not sufficient for us as legislators and policy makers to view the creative industries purely in economic terms. The key message is that the health and vitality of the creative industries should be an issue that is of crucial significance to this House.
Where better, of course, to reflect upon this than in my own constituency of Dundee—quelle surprise!—which has a long and distinguished history in leading the creative industries. Within the University of Dundee, for example, Duncan of Jordanstone College of Art and Design, first established in the 19th century, is now one of the leading art schools in the UK. This creative hub is now the centre of a thriving network of studios, artists, designers and architects and has been instrumental in supporting the development of the Dundee Contemporary Arts centre, which opened at the end of the last millennium.
As part of the current £1 billion regeneration of our waterfront, Dundee was chosen, out of all other cities in the UK, to build the new Victoria and Albert design museum, which will be completed in two years’ time. I would welcome all Members visiting us. The Dundee repertory theatre is home to both Scotland’s only full-time company of actors and the Scottish dance theatre. Dundee is also well known as the home of many iconic and best-selling children’s comics, such as The Beano, The Dandy, the Judy and the Jackie, which is now a west end musical. I recommend all Members to see it at their earliest opportunity. If they visit Dundee today, they will find an iconic trail of 55 sculptures of one of our famous comic characters—Oor Wullie. After all, he is Oor Wullie, Your Wullie and A’body’s Wullie!
In 2014, Dundee was the first UK city to win the UNESCO City of Design award.
Patrick Grady (Glasgow North) (SNP)
My hon. Friend has name-checked a number of important characters and creations emanating from Dundee, including Oor Wullie, but I think he forgot to mention The Broons.
Chris Law
I must apologise to the House. My hon. Friend is absolutely right. Ma and Pa Broon would be disgusted with me for forgetting to mention them. “The Broons Annual” is a fantastic Christmas present.
Believe it or not, in addition to all that, there is more. With the assistance of investment and facilities at Abertay University, Dundee’s creative tradition has found a new outlet. The city is now an internationally renowned centre for video game development, and the birthplace of some of the biggest names in game history. Abertay offered the first computer games degree in the world, in 1997. That bold move was subsequently copied by higher education institutions around the world, and helped to cement Dundee’s reputation as a centre of excellence for video games.
Let me give a few examples. In the 1990s, the Dundee company DMA Design created the game “Lemmings”, which sold over 50 million copies on multiple formats. It also developed “Grand Theft Auto”, which today is the biggest selling game in the world. I urge you to get your hands on a copy as soon as possible, Mr Deputy Speaker. Most recently, Chris Van Der Kuyl’s 4J Studios developed the global gaming sensation “Minecraft”. There are now more than 100 video games companies based in Dundee, and I am pleased to say that the number is growing rapidly.
As we heard earlier from the hon. Member for Warwick and Leamington (Chris White)—he and I co-chair the all-party parliamentary group on video games—the video games industry is vital to the UK economy. As a whole, games companies generate high-quality, high-productivity jobs. The UK boasts the highest number of mobile games jobs in the EU, with 5,000 full-time employees, and 64% of all registered games companies in the UK have been incorporated in the last five years alone.
These are just some of the examples of industries and businesses that give Dundee its creative pulse, and are reflected in many other areas of Scotland and the rest of the UK. So how do we support these activities that are so important both to our individual wellbeing and to economic prosperity? Artists, designers, musicians and games programmers are not merely creative individuals; they also need to be entrepreneurs. Like other small businesses and start-ups, they need advice, information, and access to funding and financial support.
In Scotland, we have a more culturally ambitious Government than ever before. Set up by the Scottish Government, Creative Scotland promotes enjoyment of the arts, and helps to identify and develop talent. It also chairs Scotland’s Creative Industries Partnership, in which public agencies work together to share intelligence and research on the creative industries, co-ordinate opportunities, and clarify and signpost agency support. However, only some aspects of creative industries are devolved to Scotland.
In January this year, the Scottish Affairs Committee, on which I have the privilege to serve along with two of my colleagues who are present—very fine colleagues indeed—published a report on the creative industries in Scotland. It identified three key issues: tax incentives, broadcasting, and links with the EU.
A number of tax reliefs are available to the creative industries. There are film, animation, television, video games and theatre reliefs. They allow qualifying companies to claim a deduction when calculating their taxable profits, and they are very valuable to the creative industries as a whole. However, we found that they had been of limited use to the creative industries in Scotland, partly owing to the smaller scale of most creative enterprises in Scotland and partly because tax reliefs do not incentivise the locating of production outside existing industry hubs, which are predominantly London-based.
Our report made a number of specific recommendations for enhancing the responsiveness of tax relief regulations to the specific needs of the creative industries in Scotland. I urge the Minister, and his colleagues in the Treasury, to treat this as a matter of the utmost priority, and to consider the possibility that the most effective means of resolving these issues would be to devolve responsibility for tax reliefs for creative industries to the Scottish Government.
Public service broadcasting, in the form of the activities of the BBC, represents a crucial driver of the creative industries in Scotland, as well as representing a central pillar of our cultural life. There is widespread dissatisfaction with the output of BBC Scotland. There is also a striking economic imbalance, with licence-fee income of over £320 million generated in Scotland, but a BBC Scotland budget of less than £200 million.
The BBC has been slow to respond to these issues and has been less than transparent in its decision-making process around them. Within the past few days, a report from the inquiry “A Future for Public Service Television”, chaired by Lord David Puttnam, has been published. It recommends that the only effective solution to the growing mismatch between the needs and aspirations of the Scottish people in respect of public service broadcasting and their increasing frustration with the BBC is to devolve an appropriate proportion of the overall BBC budget to Scotland, and allow BBC Scotland to commission programmes and design schedules as it sees fit. While acknowledging the independence of the BBC from Government, I urge the Minister to express clear and unequivocal support for this proposal, which has the potential to allow Scotland to develop as a hub for high-quality television and film output and contribute to an expansion of employment in this field. I share Lord Puttnam’s view that little in the BBC reflects
“the current constitutional settlement with Scotland.”
The recent Scottish Affairs Committee report devoted little attention to the EU dimension of creative industries because, other than in areas of intellectual property, the individuals and organisations that we consulted were largely satisfied with the opportunities and benefits to the creative industries that flowed from EU membership. However, all this has changed due to the fear and uncertainty created by this Government in their misguided EU referendum. This is a troubling situation. Many aspects of the creative industries in Scotland are embedded in our broader cultural European tradition, which requires ongoing collaboration with colleagues in other countries. At the very least, this situation requires that the creative industries should have full and active representation in future negotiations with the EU, and that the particular needs of the creative industries in Scotland should be specifically championed through the presence of members of the Scottish Government.
Having talked briefly about the issues and challenges facing the creative industries in Scotland, I would like to sum up by making one final point. Scotland is undoubtedly an outward-looking, internationalist and progressive society—a “mongrel nation” where all Jock Tamson’s bairns reside—yet it is also distinctive and different, and demands to be heard. However, cultural life, and the funding decisions that go with it, are still dominated by London, stifling Scotland’s creative industries as a result. This is not a zero-sum game, however. Successful broadcasting, film-making, computer games and festivals in Scotland reach out to an international market, and do not diminish the significance of London and Manchester as global centres of creative endeavour. In this, we can all be winners.
Sir David Amess (Southend West) (Con)
I congratulate the hon. Member for Sunderland Central (Julie Elliott) on initiating this debate. My goodness, she has chosen an excellent time to do so, because creative industries throughout the United Kingdom are doing extremely well. Only three weeks ago, I was in Scotland, ostensibly going to Edinburgh and Balmoral, but because my sat-nav went wrong I practically toured the whole of Scotland, and it looked pretty good to me. I have a daughter who performed at the Edinburgh festival, so I am bit biased. It is wonderful. The creative industries in London are also doing extremely well.
Before going on to the main part of my speech about Southend-on-Sea being the alternative city of culture, I want to remind the House that the United Kingdom is a global leader in creative industries, which promote everything that is great about this country and generate £8.8 million an hour—absolutely amazing. The United Kingdom’s success in this field is ranked at No. 2 in the 2016 Soft Power rankings and third in the 2015 Anholt-GfK Roper nation brands index, which records the value of the positive perceptions that consumers worldwide have of individual countries. May I say how good it is to see a star of MP4, the hon. Member for Perth and North Perthshire (Pete Wishart), in the Chamber this afternoon? Members of Parliament really do have an interest in this subject.
Southend, of course, is no exception to the United Kingdom’s success in the creative industries. The upcoming Southend alternative city of culture next year will exemplify the United Kingdom’s strengths in media, music and the arts. It can already be seen that Southend has a consistent record of exhibiting new, forward-thinking arts and cultural projects. NetPark in Southend is the first digital art park in the world. I am delighted that my right hon. Friend the Secretary of State for Culture, Media and Sport visited the park at the beginning of the year. It was developed by a wonderful arts organisation called Metal and transformed empty or derelict spaces into vibrant cultural community hubs. It is a new visitor attraction for Southend and presented a collection of specially commissioned digital artworks and stories at Chalkwell park. All the works are experienced through a smart device, such as an iPad, an iPhone or an Android device. The inaugural collection has five artworks created by artists following an open-call selection process and five site-specific stories created by Southend school pupils working with writers and illustrators. In addition, the project includes an on-site digital education centre, the Metal Art School, equipped with both hardware and software, enabling ongoing R and D by artists and a range of digital creative learning in the curriculum.
Other projects by Metal in Southend include the Thames estuary biennial festival, the aim of which is to celebrate the outstanding cultural contribution of the 40-mile stretch of the iconic Thames estuary. Aren’t we Members lucky to be here in this wonderful place, enjoying all that the beautiful River Thames can offer? Working with partners on both the north and south banks, the festival will occur biennially, with the first event due to take place in September this year. It will promote the planned new museum of the Thames estuary on the banks of the estuary in Southend, where—similar to Leicester—we found a Saxon buried beneath one of our parks.
Southend’s contribution to the creative industries shows why the UK is an innovation-driven economy. We are renowned for breaking convention and being bold and daring in our creative industries. Yet we always do it with professionalism, style and swagger, and there are plenty of talented groups in Southend that display those qualities. The Southend Festival Chorus, the Eastwood Chorale, the Leigh Orpheus Male Voice Choir, of which I am a patron and which is the biggest male voice choir in the country, the South Essex Youth Symphony Orchestra, the Purple Goat Theatre group and the team behind the Southend Book and Arts fair provide just a snapshot of Southend’s flourishing creative industries. The launch of the alternative city of culture happens in Southend this Sunday and somewhere in the House of Commons next week. What a good thing it is to be able to have such wonderful events in the Jubilee Room, showing off the creative talents of all parts of the United Kingdom.
Hull will be the city of culture next year and has arranged four main events in line with the seasons. Southend will have one specific theme each month, so it will be interesting to see how both parts of the country run their events. The monthly themes include music, the arts, fashion, media, culture, food, architecture, and military events. Creative groups will play their part in how the wider world perceives the UK as a thriving cultural nation.
We have touched on the referendum a little bit—Scotland was not too happy with it—but I want us to be positive about the outcome. I hope that the House can be united in the belief that creative industries should not be daunted by the result. The UK’s creative industries are still open for business, and there are many financial incentives to investing in the UK’s creative sector, including tax reliefs that allow film productions to access a rebate of up to 25% of qualifying expenditure. Southend has high-end locations for films, such as the British gangster film “Essex Boys” and the James Bond film “Goldfinger”, which featured the airport. Southend has also been used for popular music videos by artists including Oasis, Morrissey and George Michael. Long may Southend continue to be a location where great films, dramas and soap operas are shot—I would be happy to appear in any of them.
Even in the post-Brexit world in which we now find ourselves, creative industries will continue to thrive and take advantage of new opportunities to do business across the world. Those who are uncertain about the regulation of creative industries following our decision to leave the European Union should be reassured—the excellent Minister will do his best to reassure the House—by the potential for the UK’s creative industries, especially those in Southend, to lead post-Brexit economic growth. I welcome the Secretary of State for Culture, Media and Sport’s comment that the success of the UK’s creative industries
“is built upon the extraordinary talent which exists in this country, an amazing cultural heritage, the English language”—
Scottish, Welsh and Northern Irish—
“and a tax system designed to support and encourage growth in the creative sector.”
Given that this country is gifted with being creative and has a rich cultural heritage, we can have confidence that there can and will be a bright future for the UK’s creative industries. The Southend alternative city of culture 2017 should be a benchmark for showing why it is so important for this Government and any Government to invest and provide the necessary incentives for creative industries to thrive and prosper.
Kerry McCarthy (Bristol East) (Lab)
I congratulate my hon. Friend the Member for Sunderland Central (Julie Elliott) on leading this debate. She has, however, made me feel guilty, as she made such an excellent case for Sunderland’s bid to be capital of culture 2021. Bristol also wants that title—I will have to put in for an Adjournment debate at some point.
Today, I want to focus on the impact leaving the EU could have on our creative industries and on what the Minister will do to deliver on his promise to give the arts a “voice in Brexit Britain”. A Creative Industries Federation survey found that a staggering 96% of its members voted to stay in the EU, with 84% saying that EU membership was important to the future of their organisation. Before the vote, the prospect of leaving the EU was variously described as a “nightmare”, “artistic isolation” and a “huge creative step backwards” by arts leaders. A joint letter from 250 actors, artists, musicians and writers praising EU funding and collaboration in the run-up to the referendum was dismissed by the Brexit camp as the concerns of “luvvies”. I know that if the Minister was in his place—he will return—he would not dismiss the luvvies so lightly. I am sure he would agree that it is vital that issues such as access to markets, freedom of movement, intellectual property protection and EU funding for the creative sector are considered during the Brexit negotiations.
Before I go into detail, I want to namecheck Laura Snapes for an excellent article on Pitchfork.com, which has been the source for quite a bit of my material and quotes. On access to EU markets, the value of services exported by the UK creative industries in 2014 was nearly £20 billion, an increase of nearly 11% from the previous year. The EU is, at 56%, our largest export market for that sector. Currently, we can trade tariff-free and barrier-free across 28 countries; we have unrestricted access to 560 million potential customers. Before we entered the Common Market, there were tariffs: some form of import duty for us and export duty if we wanted to send products over to Europe. Let me give just one example. There has been a bit of a vinyl revival recently, and the majority of the vinyl we buy is made in plants in mainland Europe. The cost could now escalate, both at the point of manufacture and sale. Small and independent businesses have real concerns about this, because small margins make a huge difference to their survival.
I know people on the leave side have argued that leaving the EU would be a spur to developing better cultural and economic links with Commonwealth nations and emerging economies. But as Michael McClatchey, co-founder of Moshi Moshi Records, says:
“As a nation, switching our focus from trading with Europe to trading with Brazil, China, and India doesn't really work for the music industry because we’re making very small inroads there, and I'm skeptical about how much we can enter these markets when they have such a different pop market and a strong historic music identity of their own”.
Copyright and intellectual property issues are incredibly important to the sector. There have been at least three European directives protecting the IP rights of artists and ensuring they receive remuneration for their work. Indeed, we discussed some of this in yesterday’s Westminster Hall debate. The EU’s copyright regime has been crucial in ensuring we have a creative industry at all. With the well-known fervour of Brexiteers for any opportunity to slash so-called red-tape, there are real worries that the life of artists will get worse without the copyright protections the EU provides.
I know that many in the industry have felt the EU is much more willing and able than the UK to take on the big technology companies, which have much less respect for copyright. Gregor Pryor, co-chair of Entertainment and Media Industry Group, says:
“I think some countries in Europe are perceived by rights holders as being more benevolent towards them. France is the best example because France holds intellectual property in such high regard, and from a legal perspective, tends to give broader rights to creators. I think it’s fair to say that the UK government hasn’t been as warm or receptive as some of the other governments in other European countries. I think the European Commission has been far more sympathetic to rights-holders than the UK government would be.”
Free movement is a massive concern. There is no doubt that free movement across mainland Europe has made touring easier and less expensive for British artists and musicians. Access to locations and mobility have also benefited our thriving film and TV industries. Musicians are really worried that Brexit could mean individual visas to enter each EU country, and the reintroduction of the carnet, a document detailing every single piece of equipment on deck to prevent the import or exports of products without paying VAT. We know that that would create a real barrier for musicians and other artists. The hon. Member for Selby and Ainsty (Nigel Adams) mentioned the horrible difficulties that musicians encounter when they are touring the US—he has met a good friend of mine to discuss that matter. Some have to cancel gigs and even whole tours because visas are not processed in time, resulting in considerable financial losses.
Colin Roberts of Big Life Management says:
“Getting visas is an absolute minefield and it costs a lot of money, and it’s the reason that a lot of people don’t get to tour America…A large part of the PRS fund goes towards helping bands get to America. Are we going to be at a point where they’ll have to start a fund to get people into Europe?”
That is a good question. If it starts getting more difficult to export things that the UK is good at, what additional investment will be needed to help showcase British bands abroad in future? Roberts goes on to say that
“not only would our acts struggle—and it’s the small acts that would really struggle—but we would miss out on a hell of a lot of interesting artists that potentially wouldn’t be able to come to the UK either.”
Fabien Miclet is the co-ordinator of Liveurope, which is EU-funded and provides a music platform for new European talent, getting them support slots at bigger shows. He says:
“The UK is the beating heart of the European music scene—you can’t work on a European music project without the UK...Very often playing the UK is the step that allows small or young bands to get big.”
Will the UK still be part of programmes such as Liveurope if we leave the EU? Paul Reed, from the Association of Independent Festivals, warns that we could also see a reduction in music tourism, which in 2014 generated more than £3 billion for the UK economy.
Cross-border creative collaboration and the movement of talent across the EU are critical to the UK’s role as a creative hub. Many performers who are resident in the UK but nationals of other European countries are deeply concerned about their future here. Areas with especially high proportions of EU and international workers include dance—ballet and contemporary—opera, circus and the audio and music industry, which includes video games. Brexit could cause real problems for Sadler’s Wells and for our orchestras. I know that we debated that yesterday, but I reaffirm the need for real reassurance from the Government for EU nationals currently living and working in the creative sector that they should be allowed to remain here in the UK. Obviously, that works both ways, with many UK nationals working in the creative industries and arts in other EU countries. Will Brexit mean that they have to come home?
There is also considerable uncertainty in the sector about how the UK will compensate for loss of access to EU funding. I could go into quite a lot of detail on that, but I will give just one example. The Creative Europe fund has supported 228 UK cultural and creative organisations and audio-visual companies and the cinema distribution of 84 UK films in other European countries with grants totalling €40 million. If the UK leaves the EU, does the Minister share the concern of many that, in all likelihood, this funding will no longer be available to the UK? Finally, many of us have been really upset about what the vote on 23 June says about Britain to the rest of Europe and the world. I hope that we can find a way through the next few years that shows that we have not pulled up the drawbridge. Let me again quote Fabien Miclet from Liveurope. He says:
“We try to encourage a positive feeling about Europe. Music, culture, traveling, discovering: that’s what makes us Europeans. People don’t really get enthusiastic about the common agricultural policy or the directive on car tyres. What people, especially the younger generations, need today is to share something simple and positive together. Live music can do this.”
Will the Minister say today which civil servant from the Department for Culture, Media and Sport will be appointed to the new EU unit co-ordinated by the Cabinet Office, when will he or she join negotiations and on which issues will they lead? Will he tell us what organisational arrangements DCMS is putting in place for Brexit negotiations and how many officials in the Department are working on preparations? What seems like a complete lack of post-Brexit contingency planning or, indeed, vision is causing considerable uncertainty, and I hope that the Minister today will give some much-needed reassurance.
I also hope that over the long term we will consider what role arts and culture can play in those parts of the UK, particularly highlighted by the referendum result, that do not feel listened to, do not feel part of the UK success story and are not benefiting from the growth of these high-skill sectors. Arts, culture and creativity can play a huge role in regeneration and are important to identity—just look at a cities such as Manchester, Liverpool or Bristol. This is about identity not just as a place, but as a person: feeling part of things, feeling proud of something and people feeling good about themselves as a result. So I hope that we can negotiate the Brexit minefield and emerge with an even more positive story to tell.
Patrick Grady (Glasgow North) (SNP)
I congratulate the Members who secured the debate, particularly my hon. Friends the Members for Dundee West (Chris Law) and for Edinburgh West (Michelle Thomson). As other Members have said, it has come at quite a timely moment, given the other debates that have taken place in Westminster Hall this week and the fact that a number of the industry bodies have been holding their annual receptions on the Terrace, in the function rooms or elsewhere.
On Monday, the Creative Industries Council held a reception in the Members’ Dining Room. Last night, my hon. Friend the Member for Dundee West and several other Members here today were in the National Liberal Club for the UK interactive entertainment reception—the National Liberal Club perhaps being slightly less interactive surroundings than the video games that were on display. Of course, as other Members have said, the festival season is well under way across the country.
I have a large number of personal and constituency interests that I will probably cover in my speech. I want to look at the vast scope of what we mean by the creative industries. I want to look particularly at how they play out in my constituency and the wider city of Glasgow and look at some of the policy challenges and opportunities, which have been covered in quite a bit of detail. By definition, creative industries are forever changing and renewing themselves and adapting and evolving. It is important to consider the impact of the traditional areas—music, art, writing and dance and so on—but as a number of Members have said, online and digital forums are growing in importance for accessing creativity and as a source of creativity.
My hon. Friend the Member for Dundee West has spoken about the huge importance of the computer gaming industry. The number of games companies operating in Scotland has increased by 600% in the past five years. Yesterday, at the UK reception, I was fascinated to learn more about the increasing importance of what some people call e-sports, which were just called computer games in my day. Essentially, the industry covers professional or competitive computer gaming.
In July, the Scottish exhibition and conference centre in Glasgow will welcome the Resonate festival, when thousands of people from across Scotland and, indeed, Europe and probably the world will come together to watch other people—leaders in their fields and really talented people who have invested an awful lot of time in this—demonstrating their skills in a whole range of different e-sports or interactive computer games. My hon. Friend mentioned “Lemmings”. Of course, we do not need to pay money to watch other people play the computer game, “Lemmings”, when we can we watch a live action version taking place in front of us over there on the Labour Benches, but I recognise that this is supposed to be a consensual debate, so I will not go too far down that line.
E-sports are attracting more than 256 million unique viewers a year. By 2018, that figures is expected to overtake the number of people who watch the US national football league, which is the largest watched sport or entertainment in the world.
If I can be creative with the definition of creative industries, I want to make a pitch for Scotland’s No. 1 craft product—the water of life, uisce beatha—because the new and experimental distillers that we see coming on line, especially those who are producing gin, are involved in a unique and creative process. Glasgow has its own distiller company, and Makar gin is named after the Scots word for a creator or poet, so I thought that that was worth noting as well.
Glasgow is, as I mentioned in my maiden speech, the home and the focus of so many of these industries. Now, there is nothing in Glasgow quite on the scale of the Edinburgh international festival, but it has benefited over the years from a range of different designations. In that respect, I wish all the cities bidding for the title of city of culture the very best, because when Glasgow became the European capital of culture in 1990, it began something of a cultural renaissance, the benefits of which are still being felt today. The roots of that can be traced to the empire exhibition in 1938 and the garden festival in 1988, but we also went on to be the city of architecture and design in 1999, and we were designated as a UNESCO city of music in 2008—one of only nine in the world.
The city is a real musical melting pot. It has produced countless artists. We should not read out lists in the House, and that is just as well, because I could use up the rest of my time simply reeling off the names of the bands that have formed in Glasgow or emerged directly from the Glasgow music scene. It has also provided the stage, as has been said, that has allowed bands to break out into the Scottish, the UK and the wider European scenes.
King Tut’s Wah Wah Hut is in the constituency of my hon. Friend the Member for Glasgow Central (Alison Thewliss), who also has the Hydro—
Patrick Grady
My hon. Friend could perhaps intervene and list some of the venues in her constituency. However, the Canadian band the Barenaked Ladies, for example, had their break in King Tut’s, and I saw my brother-in-law’s band, Tallahassee Falls, there just a few weeks ago.
In Glasgow North, we have the likes of Cottiers, the Oran Mor and the Kelvingrove bandstand—my hon. Friend the Member for Glasgow Central has most of the Kelvingrove Park, but I have the bandstand, and I am looking forward to seeing Tom Jones there in a few weeks’ time. Cottiers has just finished its excellent dance and chamber projects, and I was delighted to get a little light relief by going to one of the performances there just before the EU referendum.
Glasgow is also home to the annual Celtic Connections festival, which has global brand recognition now. It is a real contributor to some of the statistics mentioned earlier in UK Music’s “Wish You Were Here” report. Some 1.4 million people attended music events in Glasgow in 2015, with 450,000 tourists generating £105 million and sustaining more than 1,000 jobs in the city.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
Next Monday and Tuesday, the Culture, Media and Sport Committee is visiting Glasgow to take evidence for our forthcoming culture inquiry, which will include the creative industries. Clearly, copyright is very important in this day and age to sustain creativity—UK Music backs the music industry, and on the literary side there is the Authors Licensing and Collecting Society. I do not know whether the hon. Gentleman is going to talk about a rival to the Edinburgh festival, but does he agree that it is really important in terms of sustaining creativity and the roots of our creative industries, that the many people who do not have great commercial backing have protection from unfair contract terms, so that they can benefit from the fruits of their work? Does he see a role for the Government in improving that situation?
Patrick Grady
Those are very fair points, and the hon. Member for Bristol East (Kerry McCarthy) made similar points about the importance of European regulation. In terms of online and digital expansion—I am aware there was a debate about some of this in Westminster Hall—these are all issues that are being challenged. The hon. Gentleman’s Committee is welcome to visit Glasgow, and if it would like such some suggestions of where they can sample the cultural scene or indeed some of the craft products I mentioned earlier, we would be happy to provide some.
There are also things that we as individual parliamentarians can do. In my office, I make space on the wall for a rotating display of works by local artists. In the past year, I have had Chris Stephens—not the one who represents Glasgow South West, but a street artist and designer from Nautilus Inkworks; Michelle Campbell, who does geometric renderings; Andy Peutherer, who does landscapes; Frances Corr, who depicts everyday items; and John Martin, who captures characters, including our current and former First Ministers. There is therefore a range of ways in which we can sport a creative industries.
It is important as well that local authorities do the same. This year, the West End Festival in Glasgow was sadly curtailed because of a lack of funding and support, and the famous parade that goes down the Byers Road was unable to take place. However, I was pleased that the Scottish Government agreed that an area of land in my constituency, Kelvin meadow and the Children’s wood, should not be designated for housing because one Member made a point about its importance for children and young people. This is a space where they can have creative and wild play. It is very important that we protect those open spaces, especially in urban areas, so that young people can nurture their creative talent.
There is also responsibility for the devolved Governments in supporting education and tackling the skills gap, as was mentioned earlier. The Scottish Government are also putting money into a film studio in Scotland.
The greatest unknown is Brexit, which many Members have touched on. I agree wholeheartedly with almost every word that the hon. Member for Bristol East said, and so do not feel the need to repeat it.
Alison Thewliss
Does my hon. Friend agree that for specialist institutions in Glasgow, such as the Glasgow School of Art and the Royal Conservatoire, there is a great deal of risk for their students from Brexit? At the moment, the Conservatoire offers a unique melting pot of trad, jazz and classical, with pipers playing alongside ballerinas—there are all kinds of things in the mix. However, all that is under threat if the Conservatoire can no longer be the international institution that it would like to be.
Patrick Grady
That is absolutely correct. The artistic and musical communities are very concerned about the impact that Brexit will have, especially on the free movement of people and their ability to travel to festivals, either as artists or participants.
I am aware that other Members are very keen to speak and so will conclude. It is hugely important to nurture future generations, especially in the context of the Brexit result. We have a duty to open and expand our cultural horizons, and I hope that today’s debate goes some way towards that.
Deidre Brock (Edinburgh North and Leith) (SNP)
I congratulate the Members involved on bringing this very important debate to the House. I want to highlight the creative industries for which the city of Edinburgh, the world’s first UNESCO City of Literature, is renowned: writing and publishing.
Books might be changing as the electronic world takes over, but one thing will remain constant: the creation of new works will always need writers. However, writing is a less viable occupation now, with average incomes down to about £11,000 in 2014. We can romanticise the image of the artist in the garret reheating gruel—or porridge—for sustenance, but that is no way for someone to live in the 21st century, and we should be concerned.
The Authors’ Licensing and Collecting Society highlights the economic contribution of writers. In 2014, it was £84 billion of gross value added, which is a year-on-year increase of 8.9%. The Publishers Association tells me that published material earned £4.4 billion last year, three quarters of that in books, and boosted the balance of payments, with 43% of publishers’ sales being exports. Those are serious economic benefits. Last year, 254 million books were exported; a stack 13,000 miles high. If laid down with their spines up, those books would go more than halfway round the world. There are also online journals, e-books and other digital content. Where would the games industry be without talented storytellers? We must support our writers and publishers; together they make a massive economic contribution.
There is another, even more important reason to support them: we need writers. We need artists of all trades, because art is what makes life, but writers are special. Without them there would be no new books, plays, short stories or poetry. There would be no great speeches for party leaders, no new films at the cinema and no new dramas on television. “Coronation Street”, “Eastenders” and “River City” would judder to a halt, and time would be up for “Dr Who” and “Outlander”—
Deidre Brock
Indeed. Both those shows make welcome contributions to the local economy and tourism, which would be lost.
Writers fill the space around us with art. They create our environment and enhance our lives. They should at least get the chance of earning a living. Some make it big, such as Irvine Welsh, who hails from my constituency and who has had substantial success. He did it the hard way, learning his trade while working other jobs. He was helped by Kevin Williamson, who still lives in Leith and who was a one-man dynamo in the early 1990s. Williamson’s publishing efforts changed the face of Scottish literature. Without him, we might not have had Welsh, Laura Hird, Alan Warner or Toni Davidson. Rebel Inc. altered the direction of Scottish writing, and Kevin Williamson’s contribution should be marked.
Irvine Welsh is an exception, however. Most writers make only a very modest income from their trade. Writers are vital, but we do not support them enough. As the hon. Member for Bristol East (Kerry McCarthy) has helpfully mentioned, we have created a less helpful environment for the creative industries by voting to leave the EU. This was not discussed during the campaigns, but as is the case for other industries, cutting the creative industries off from a potential workforce and potential clients must be damaging, and, as has been mentioned, those are not the only things that will be lost. For example, Creative Edinburgh, in my constituency, is engaged in a two-year project funded by the European Commission partnering creative hubs around Europe with the European Business Network to promote and support the creative economy. That two-year project may be safe from the storms of Brexit, but what will replace such projects in the little Britain of the future?
My constituency is full of extraordinarily talented people, such as novelist Val McDermid, artists Ruth Nicol and Joyce Gunn Cairns, the creatives behind LeithLate and Citizen Curator, people in successful software, digital and advertising companies and more than 11,000 people employed in design. The computer gaming industry, which was mentioned by my hon. Friend the Member for Dundee West (Chris Law) and which is already a major part of the Dundee economy, is becoming a serious and growing part of Edinburgh’s economy. These creative hubs attract people from all over these islands and from abroad.
Creative businesses flourish in my constituency: independent art galleries, shops such as Flux that sell handmade and unique products, and Kalypso Collective working in the fields of conceptual art, scenography and visual art. Will their viability survive Brexit? When the melting pot, which so many Members have referred to, cools and the exchange of ideas slows, creativity is stunted and output shrinks. Artistic viability becomes strained and economic benefits are reduced and perhaps extinguished. We need to stimulate the creative industries, and I look forward to hearing the Minister’s comments about how exactly the Government propose to do that in the current situation.
The Chancellor could start, for example, with greater and better-targeted tax breaks for the creative industry. As my hon. Friend the Member for Dundee West mentioned, devolving control of those to Scotland would be extremely helpful. Then the Chancellor could loosen the austerity noose that is strangling public services, to see whether the support that central and local government offered the arts could be restored.
Since we are heading down the EU exit ramp, we must secure the flow of people who make our creative industries viable. We need immigration policies that will bring people here and let them study, work and make their homes here. We need easier immigration, and more of it. The creative industries need more Government support for exports and help to open markets and guarantee payments. If the arms exporters can get it, why not creatives? We need creatives to be high up the agenda on overseas missions, with Government selling the ideas and products. These creatives are making a damn fine fist of it, and it is about time they got much more recognition and assistance.
Joanna Cherry (Edinburgh South West) (SNP)
I congratulate the hon. Members who obtained this important debate. I would like to address the role of the university sector in the creative industries. In doing so, I am indebted for their assistance to Universities Scotland and, in particular, to Edinburgh Napier University, which is situated in my constituency.
Scotland has always been a creative nation, and Scotland’s universities have always been at the heart of that creativity. Scottish creativity, as we have heard this afternoon, punches far above its weight on the global stage. World-leading talent has emerged from Glasgow School of Art, including Turner prize winners such as Duncan Campbell. Acclaimed stars of stage and screen, including Alan Cumming, David Tennant and James McAvoy, have all studied at the Royal Conservatoire of Scotland. We are very proud in Scotland of the literary success of novelists such as Ian Rankin, a graduate of the University of Edinburgh, which is my own alma mater. We are also proud of Scotland’s previous makar—that is our poet laureate—Liz Lochhead, who was a writer in residence at Duncan of Jordanstone College of Art and Design and the University of Glasgow.
Several of my hon. Friends have mentioned the video game “Lemmings”, invented by a Scottish graduate, Mike Dailly, which first put the great city of Dundee on the map for computer games. My hon. Friend the Member for Glasgow North (Patrick Grady) was a little unkind in suggesting that members of Her Majesty’s Official Opposition could presently be described as lemmings; lemmings put me more in mind of Brexiteers, and it was very amusing to watch some of them attempt to scrabble back up the cliff face in the debate on EU nationals yesterday. I also want to mention Scottish fashion graduate Rachael Barrett, whose designs were chosen and worn by Lady Gaga.
Edinburgh Napier University in my constituency prepares graduates for employment in a significant number of the creative industries, through undergraduate and postgraduate degrees and programmes in its school of arts and creative industries, its school of computing and its business school. It engages proactively with industry and professional bodies through knowledge exchange activities, continuing professional development programmes and provision of advice and support. In particular, it hosts Screen Academy Scotland, a joint venture with the University of Edinburgh that is recognised as a centre of excellence in film practice and has celebrated 10 years of its prestigious status as one of just three film academies in the UK accredited by Creative Skillset.
John Howell
I intervene as a fellow graduate of the University of Edinburgh. Does the hon. and learned Lady think there is something in the water in Edinburgh that has helped create those creative industries, or is it just the hard work of the university, which has concentrated on the creative industries and achieved so much for them?
Joanna Cherry
Edinburgh of course now hosts more than one university. Its oldest university is our joint alma mater, but it also has Napier University in my constituency, which I have just been talking about, and Heriot-Watt University. Possibly what the hon. Gentleman refers to is due to those universities, but it is also very much due to an atmosphere across the education sector in Edinburgh, which fosters interest in music and the arts.
Of course, we are also very privileged to host the greatest international festival anywhere in the world. Growing up in Edinburgh and getting to attend events at the festival and fringe as a wee girl was the sort of opportunity that not all children get. In my constituency, we have tried to ensure that the festival reaches out beyond Edinburgh city centre to the suburbs and housing schemes. That has resulted in some very vibrant arts activity in Wester Hailes, a big housing scheme in my constituency.
Edinburgh Napier is just up the road from Wester Hailes. Many of its students and graduates have achieved considerable success and external recognition, which they have built on to achieve strong careers in the creative industries. Its students’ work features regularly at international film festivals, including Berlin, Venice, Cannes, Beijing, Kolkata and—closer to home—Edinburgh. Graduates of Napier have won awards in journalism and advertising. Its music students have been awarded or shortlisted for national and international prizes, including first prize in the international Jean Sibelius composition competition.
Importantly, Edinburgh Napier offers businesses opportunities to link up with a diverse range of creative students for freelance assignments. That ensures that students develop their skills in a business environment and the businesses themselves benefit from the students’ professional output. The success of Screen Academy Scotland demonstrates how universities can support the continued professional development of those working in the industry. Illustrious graduates of Edinburgh Napier include the film director Lynne Ramsay, the photographers David Eustace and Colin Baxter, and the BBC broadcaster Catriona Shearer, to name just a few.
The creative industries thrive on talent and depend on a well-educated workforce. Universities are a rich source of that talent. Analysis recently published by the Department for Culture, Media and Sport showed that last year more than half of jobs in the creative industries—almost 60%—were filled by people with at least a degree or equivalent qualification, compared with 30% of all jobs in the UK.
There is often a view that creative talent is innate, but that is not the case. Talent must be nurtured and developed, and that is what higher education does. Scotland’s universities collaborate directly with creative companies and industry bodies in the design and development of courses at undergraduate and postgraduate level. However, there is a problem with the skills gap, and it is that issue which I would like the Minister to address. Research carried out by Creative Skillset found that 28% of companies in the creative media industries report skills gaps within the existing workforce across the UK, with a slightly higher proportion in Scotland—31%—reporting such skills gaps.
It is interesting to note that only 12% of those studying creative industry-related subjects at postgraduate level in Scotland are from Scotland, compared with the proportion of non-EU postgraduate students studying in Scotland, which is 70%. This means that Scotland needs to retain its creative graduates, regardless of where they are from. We need to encourage people who have come to Scotland to study creative subjects to stay in Scotland after they graduate. These graduates are innovative, enterprising and ambitious, and will contribute not only to the Scottish economy, but more broadly to the social, cultural and economic life and development of Scotland. It is important to ensure, therefore, that the needs of the creative industries and the broader creative and knowledge economy is not lost through the post-study work route.
The UK Government’s immigration policy—specifically, the proposals for tier 2—is the major deterrent to greater flows of talent coming from outside the European Union into Scotland and the UK. I fear that if the Brexit vote is to be implemented, the problem will only get worse, as students coming from the European Union will also be affected.
Alison Thewliss
My hon. and learned Friend is making an excellent case about the visas for students who are studying in Scotland. I was made aware by Glasgow School of Art of a case where an expert in a specific field who was visiting Glasgow on holiday wanted to come in and share his expertise with students at Glasgow School of Art, but the school had to refuse that request because it would have had serious implications for its own visa status. Does my hon. and learned Friend agree that much more flexibility is needed to allow people to come and share their talent and expertise, without the necessity for formal visas in such situations?
Joanna Cherry
I entirely agree. Every country requires some sort of immigration policy, but we need to look at what is of benefit to our country and our economy. Flexibility of visas in that situation is clearly desirable.
The rules surrounding the UK’s current student immigration policy in relation to employment are often prohibitively restrictive for graduates from creative disciplines, because the starting salary threshold is based on average salaries in other sectors, such as accounting and engineering. We all know that graduates in the creative industries, at least in the early stages of their career, will earn considerably less than that. Such graduates tend not to be in full time employment; rather, they freelance. They may work as a barista, a waiter or a waitress and support their portfolio careers with part-time jobs. It is interesting to observe that our major English-speaking competitors—Canada, the USA, Australia and New Zealand—do not have that minimum earnings threshold.
For a number of years Universities Scotland has been making a positive case for a more competitive post-study work visa for Scotland, because it would be a significant benefit to universities both as employers and as recruiters of students. There is support for a change in immigration policy in Scotland among university principals, staff and students, among business leaders and across all political parties in the Scottish Parliament, including the Conservative and Unionist party.
The Scottish Affairs Committee of this Parliament in its recent report found that current rules for students studying in Scotland to remain in Scotland are too restrictive and are preventing businesses from finding skilled workers. It is clear that in order to support the creative industries in Scotland and beyond, throughout the UK, the Government need to reintroduce post-study work visas. I urge the Minister to address this issue in his summing up today.
Pete Wishart (Perth and North Perthshire) (SNP)
It is a great pleasure to be summing up for the Scottish National party in what has been a very fine debate. It feels like we have been on some sort of geographic cultural tour de force, as we have learned about the delights of the many bidding cities for European city of culture, as well as the other cultural delights of many other cities. We are all enriched by learning about some of the great cultural facets of all these different and differing parts of the UK. I, of course, declare my interest as a former recording artist and refer to my entries in the Register of Members’ Financial Interests.
I have spoken in practically every single debate on the creative industries in my 15 years in this House. It is always fantastic to come to these debates and just learn and see how many more Members are taking an interest in their creative industries and the things that underpin them, such as intellectual property and some of the fiscal levers we have at our disposal.
I congratulate those who opened the debate; I forgot to mention the hon. Member for Sunderland Central (Julie Elliott). It is worth reminding ourselves how fantastically we do in this country. The UK is the largest cultural economy in the world relative to GDP. We are the largest producer of TV and radio content in Europe. We are the largest producer of recorded music in Europe and the second largest in the world. We have the third largest filmed entertainment market globally. As chair of the all-party group on writers, it was also fantastic for me to hear from my hon. Friend the Member for Edinburgh North and Leith (Deidre Brock) about her wonderful authors and writers, and it is great to know that we are the largest publishing market in Europe.
The creative industries are growing almost twice as fast as the wider economy. I think it was the Minister who first mentioned, in a tweet, that we are now worth £10 million an hour to the UK economy. Many have subsequently picked up that figure. The creative industries are also a huge employer, and the number of jobs in them increased by 5.5% between 2013 and 2014.
There is incredible growth in our creative sector and its industries, therefore. When so many of our sectors are flatlining, we are practically reindustrialising this nation on the imagination, creativity and talent of the people of this country. What a wonderful way to grow our economy, based on those virtues.
Alison Thewliss
I do not know whether my hon. Friend is aware that the artists studios in Glasgow are so successful that they are having to expand and expand. I visited the Briggait in my constituency. They are planning their expansion because they have filled the space they have, as have Wasp Studios. Does my hon. Friend agree that we need further support from Government for the artists studios in the city?
Pete Wishart
Absolutely. We are all seeing and experiencing—as we have heard in most of the contributions and interventions today—that every constituency and community now has some form of creative hub, providing highly skilled jobs, giving opportunities to young people, employing people and encouraging them, and culturally enriching their communities. I pay tribute to the wonderful work done in my hon. Friend’s constituency and in those of so many other Members.
This is about much more than the hard economics, important though they are in assessing the contribution the creative industries make. The creative industries provide a conduit which allows for the cultural enrichment of our nation and communities. We are successful in this country primarily because we are fantastically good at producing this stuff. We are also successful because we have managed to provide the conditions that allow talent to develop and grow. I have always said that one of our major responsibilities as legislators and Members of this House is to try to create the conditions that allow the optimum environment for our artists and those who invest in our talent and build our creative industries, so that they can continue to develop, thrive and grow. We have been successful in that, because up to this point we have managed to provide the frameworks that allow our creative industries to grow.
There are certain things that need to be in place in order to have a successful creative industries sector. Some of them are fiscal, and some are at the disposal of this Government. We have already heard about the difference some of the tax reliefs have made to various sectors, particularly computer games, about which my hon. Friend the Member for Dundee West (Chris Law) made such a good point and recognised. When we deploy these things, we get a massive return and a massive hit. Some of the support is resourcing, therefore, such as ensuring that funds are available for what are mainly small and medium-sized enterprises to develop and grow. There is so much more we can do to incentivise our SMEs, to ensure we continue to create that optimal environment for development in these sectors.
Other things are probably a bit more difficult to achieve, and they are what I want to address. I want us to ensure that the artists who are prepared to use their talent are properly rewarded for the work they produce and those who invest in it are properly rewarded for the investment they make. We must strive to make that always the case and to ensure that those who produce this wonderful work, which we see and experience and love so much, are rewarded properly. This is why we need to ensure that the intellectual property rights of those involved in our creative sector are always respected and progressed.
Our creative industries inhabit a part of the economy that is fast changing, developing all the time and always open to technological innovation, and more than anything we are seeing the migration to digitisation in the online environment. That presents probably a bigger challenge to our creative industries than to any other sector of the economy, which is why we must be ever vigilant around the demands and needs of the creative economy and sector. Even though the creative industries are a huge success story—we can see the contribution they make to our economy—many people in music, film and television production, publishing and design still struggle to be rewarded properly for their efforts. We have to design a properly functioning digital market that enables creators and rights holders to secure the full value of their work online.
It has to be said again that the market is being distorted by the tech giants. The likes of Google and YouTube—the gateways to online content—distort the market and make it difficult for artists and those who invest in their talent to be rewarded for their work. Google is a fantastic facility—I am sure we all use it—but it makes such a big impression on the market and makes life so difficult for those in the creative sector. We have to get on top of that. So often, searches on Google and through other big tech companies still direct people towards sites that are either illegal or do not properly reward artists and musicians. That must now stop.
That facilitates the worries about the growing “value gap” between rising creative consumption and decreasing revenues, which undermine the incomes of people in the sector. I think mainly of the streaming sites, on which we had a helpful debate yesterday—several people in this debate spoke then about the remuneration of artists online. We have to look at these issues, and I am sure the Minister took away some valuable points that helped to shape that debate. Someone is growing rich from the creative endeavours of our wonderful artists, but it is not the artists. Parasite companies—little more than hosts with algorithms that store content—are growing rich on the back of the creativity of the people of this country. Somehow we have to re-tilt the balance much more in favour of the artists, creators and inventors—the talent—and those prepared to invest in them.
I have to turn finally to the EU debate. We really enjoyed the remarks from the hon. Member for Bristol East (Kerry McCarthy). She was spot on. This is a potential catastrophe for our creative industries. We cannot mince our words: being taken out of the EU would be really serious for our creative sector. We have heard the issues about the single market, about how these wonderful products will be placed properly without further tariffs within the EU, and about the impact on our creative sector and its product placement, but there is also the movement of people. One reason our creative industries are so successful and why London is probably the creative hub not just of Europe but of the whole globe is the fact that it has been able to draw talent from the EU uninhibited by any concerns about visa arrangements. There is a real concern, therefore, about what will happen to the people employed in our creative sector, particularly in cities such as London, and also Edinburgh, which is dependent on talent from overseas.
The biggest innovation at the moment—the one that will make the biggest difference to how we use and access online content—is perhaps the digital single market, but we will not be part of it. The Minister said yesterday that we could somehow—I do not know how—have proxy conversations with France and Germany about it. If we leave the European Union we will be excluded from that and have no say in it whatsoever.
Thankfully, most copyright laws that were designed in Europe have been incorporated into UK law, so we need not concern ourselves too much with the protection of artists, writers and creators as those laws have now been subsumed. However, a massive debate is going on in Europe about innovation and new copyright laws, and we will be excluded from that, which will be of massive detriment to our creative industries.
The hon. Member for Bristol East touched on the issue of what leaving the European Union will do to us psychologically, and where it leaves us culturally. If anything, music, cultural works, and things that we enjoy are about sharing and working communally. We have lost something quite profound in how we talk about ourselves as a nation and how we share all the wonderful culture that we produce. It is as if we have stepped aside and walked away from our partners, and that will have a profound impact and psychological effect on artists up and down the country. I do not know how we recover from that or start to address it, but we can almost sense the depression in our artistic and creative community.
On Tuesday night I hosted a meeting of the all-party group on intellectual property, and all that people were talking about was leaving the EU and the impact and depression that that has introduced into the sector. We must work hard to address that and think about how we can excite the sector. That is down to the Minister, because it will be his job and responsibility. Unlike the Secretary of State, who went against almost 99% of the people he is notionally supposed to represent in the creative industries and who desperately wanted to remain in the European Union, the Minister was on the remain side and he must try to design a way forward for the country. There are a couple of opportunities and ways in which he may be able to do that. For example, with the Digital Economy Bill he must reassure everybody in the sector that he will try to offset some of the difficulties and harm that will be done when we leave the European Union. He cannot do much about immigration, but he can speak to his colleagues about what we can do to secure and retain talent.
The Digital Economy Bill is great, and it honours the commitment made by the Conservatives to ensure universal access to broadband. I am grateful for that, as I am for the inclusion of intellectual property rights that state that online crime will be of the same nature and stature as offline crime. However, we need a big job to ensure that we start to rebuild some of the confidence that has taken such a heavy knock over the past few weeks.
I am sure the Minister saw the fine report on the creative industries in Scotland—my colleagues have referred to it a few times. I am delighted that so much time was spent on the city of Dundee, and to learn what happened there and what underpinned the success of the creative economy. However, I was disappointed by the response—I thought that we might have secured membership of the UK-wide Creative Industries Council, but that has been turned down. I was also disappointed that there was no recognition of how tax reliefs in the creative sector apply across the United Kingdom, and I urge the Minister to consider those issues again.
This has been a fantastic debate, and it is great to see so much interest. I wish everybody well in any competitions that their various cities many be in—such as that for city of culture. It has been fantastic to learn about the wonderful cultural activities taking place. We should keep an interest in this sector as it is important for our economy. We have troubles now, but it is up to us to try to design a way forward. Let us hear what we can do; I look forward to hearing from the Minister.
Kelvin Hopkins (Luton North) (Lab)
I congratulate my hon. Friend the Member for Sunderland Central (Julie Elliott) on securing this important debate, and on her excellent and interesting speech, which set out a lot of fascinating facts, particularly about her constituency and fine home town of Sunderland. When I was four years old, we lived next door to people from Sunderland, which I thought was a country before I was corrected. It is clearly a very fine place with rich culture and history, and she is obviously and rightly proud of it. I also congratulate other hon. Members from both sides of the Chamber on supporting my hon. Friend in securing the debate, and Members who have made such thoughtful and interesting contributions this afternoon.
I have to make my contribution today from the Dispatch Box, but I should say that I have a passionate and long-standing personal interest in the creative industries, especially those relating to the arts and most especially music, in which this country is a world leader in just about every sphere. As I said in the Westminster Hall debate yesterday, to which much reference has been made—the Minister will respond to this debate, as he did yesterday—I was a part-time jazz musician in my youth, as well as a member of the Musicians Union. I should perhaps declare an interest in that the union has provided support to my constituency party in past elections. I also said in yesterday’s debate that I secured my very first Adjournment debate some 18 years ago on the subject of public funding for jazz, which was and remains far too low. Public funding for the arts across the board is vital. Perhaps only the commercially successful field of popular music can be self-sustaining. Even with that, online rip-offs are making inroads into incomes, as we heard yesterday.
We in Britain are astonishingly good with music. We have several of the finest orchestras and many of the finest classical musicians anywhere in the world. To gauge just how talented a musical nation we are, I refer to the situation some 35 or so years ago, when a European youth orchestra was formed. Auditions for the orchestra were held across Europe. If the best musicians had been chosen, all the chairs would have been filled by young British musicians. In the event, half the seats were allocated to the British and the others were shared out between the other European nations.
In the field of popular music, Britain has been a dominant force for decades. From The Beatles to Adele, we bestride the world with a seemingly unending stream of brilliance. It has to be said that we are helped because English is the major international language—that undoubtedly helps our creative exports across the piece—but music is essentially about harmonious sounds that do not require translation. When it comes to melody and harmony, and indeed rhythm, we can match the best.
To return to jazz, we have produced brilliant musicians and superb music for many decades. For some 15 years, I was a board member of the National Youth Jazz Orchestra. I have seen scores and possibly hundreds of breathtakingly great young musicians pass through the NYJO ranks. I know jazz music only too well, so I know just how good those young musicians are. Amy Winehouse sang with NYJO in her teens, as did another wonderful singer called Sumudu Jayatilaka, who Members may have seen singing in the millennium celebrations at the O2 Arena at midnight on that day.
I have perhaps over-indulged my musical interests, but Britain has great success in other fields. We continue to make some of the finest films in the world, and our film studios, actors, directors, technicians and all the skills in the industry bring in substantial revenues, while they entertain, educate and enthral us all.
In theatre, we draw in millions of tourists from across the world, especially to London, to watch our great actors perform in top-class productions. There has been a recent British boom even in dance and choreography, in all styles. In broadcasting, our radio and television is arguably the best in the world, and drama and documentary exports are money-spinners for us. I once had the misfortune to watch the Olympic games on holiday in an unnamed foreign country. The presentation was dismal—I was used to the superb sports coverage of the BBC, which was light years away in quality.
I could continue to wax lyrical about our creative industries—I have not covered some fields in the time allowed, for which I apologise. We have superb museums, a great heritage sector and great writers—this is the land of Shakespeare, no less. However, I wish to make serious points about sustaining our success for the future. It is vital to give every young person with the talent and potential to develop as a musician, an actor or an artist the myriad technical skills needed across the sector. The seedcorn of talent in our young must be nurtured and supported, which means appropriate and necessary state funding. In music, instruments and tuition are expensive, and squeezing the budgets of local authorities and of education has meant cuts in provision. Music must not become the preserve only of the children of affluent parents, who simply pay for their children’s instruments and tuition—as, indeed, happened in my own case. Instruments must be available for all young people to borrow and tuition must be free for children of school age.
Young people from all backgrounds must be given their chance to develop and shine, not just for themselves but for our future success as a creative nation. Our recent colleague and successful actor, the brilliant Glenda Jackson, said in this place that she could never have attended drama school without a full state grant and not having to pay fees. I wish to see education funding restored to the way it was when I was a student in the 1960s and have said so many times from the Back Benches.
We must also defend and sustain public service broadcasting, a vital and civilising feature of Britain, which, like the NHS, is the envy of the world. Public support, wherever it is needed, should be provided with generous state funding for the future of our industries and the magnificent contribution they make to our lives, our culture and our economy. We are a brilliant nation and we should continue to shine.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
I am very grateful to have the opportunity to appear before you, Madam Deputy Speaker, in this important debate. I congratulate the hon. Member for Sunderland Central (Julie Elliott) on securing it. This is a wonderful opportunity to debate our hugely successful creative industries. I would also like to use this opportunity to welcome the official culture spokesman for the Labour party, the hon. Member for Luton North (Kelvin Hopkins). I had the chance to welcome him in a Westminster Hall debate yesterday. I made the point that when I made my maiden speech on the Opposition Benches in June 2005, he was on the Government Benches and he followed me in the debate, so he has always had a special place in my heart. Yesterday, I discovered that he is a part-time jazz musician—I am playing for time while I find my notes, by the way—and so brings considerable skill and knowledge to the debate.
The hon. Member for Sunderland Central made a brilliant opening speech, in which she talked about Software City in Sunderland, set up in 2009. It was a brilliant speech because she brought home to me something I found out on referendum day, 23 June, when I went to Newcastle to do my bit to secure the spectacular result we ended up with. I met businesses from Newcastle and Sunderland. One point they made to me was that they felt very strongly that, although they had a lot of support and investment from around the country, in the north-east region it was not well known enough how successful Sunderland and Newcastle are in terms of hi-tech industries. The point they were trying to get across, of course, was that they want to encourage kids at school, or those leaving school to go to college, further education or university, to consider these industries. I went away with a promise, as it were, that I would do all I could to help.
Wes Streeting (Ilford North) (Lab)
Given that the Minister is talking about young people in particular, he might reflect on some of the challenges around social mobility and making sure that access to creative industries is available to young people from the most disadvantaged backgrounds.
Mr Vaizey
I completely support the hon. Gentleman on that. I commend in particular the Next Gen group, started by Ian Livingstone, the well-known promoter of the games industry and the founder of many successful games companies. I have also been to some fantastic courses, supported by companies such as Microsoft in further education colleges, which reach out to people from different backgrounds and give them the hands-on skills they need to go straight into employment. The great challenge the creative industries face is giving young people the skills they need. Too often, the courses in further education and universities are too far removed from the world of work in the creative industries. It is changing so fast because of the change in technology, but let me return to some of the excellent speeches in the debate.
Fiona Mactaggart
Will the Minister, who kindly came to the agency events hosted by Battersea arts centre here in the House, reflect on the concept of using creative organisations such as Battersea arts centre to enable and provide mentoring for young people to implement creative ideas?
Mr Vaizey
We are certainly going to look at that. We published a culture White Paper a couple of months ago, which I shall come on to in some detail. Let me first say that one reason why I found myself in difficulty earlier relates to what I have discovered in two debates with the hon. Member for Luton North—that he gives commendably short speeches. I see the hon. Member for Perth and North Perthshire (Pete Wishart) nodding with some understanding. I strongly commend the hon. Member for Luton North for this particular ability. Short speeches are more than welcome in this place.
Let me say how much I enjoyed hearing the speech of my hon. Friend the Member for Warwick and Leamington (Chris White), who has done so much to promote the video games industry. I thank him for talking about the arts and widening the scope of this debate. The right hon. Member for Slough spoke about the importance of arts education, to which I shall return in a few minutes. Sadly, I was not in my place to hear the entire speech of my hon. Friend the Member for Selby and Ainsty (Nigel Adams), but I heard him in yesterday’s debate, when he talked so eloquently about copyright. Today, he widened his remarks to include general support for the music industry and particularly for live music. The hon. Member for Dundee West (Chris Law), who is the other co-chair of the all-party group on video games, spoke about Dundee as one of the great homes of video games development. He made yet another valiant bid on behalf of the SNP to take yet more powers from the Westminster Government.
I was not here for the full speech of my hon. Friend the Member for Southend West (Sir David Amess). I was about to say that he was an “unlikely champion” of the arts, but that would be unfair. At Prime Minister’s Questions yesterday, he commended Southend yet again. I have worked out why. When I was drinking in a pub with Tracey Emin a few weeks ago—[Interruption.] Did I say Tracey Emin? The pub landlady came out and told me what a huge fan she was of Margaret Thatcher. On the day that we learn that we were about to get a second female Prime Minister, I recall her saying that she was a huge fan of Margaret Thatcher. She showed me a picture that featured the landlady, Margaret Thatcher and my hon. Friend the Member for Southend West. He has promised me that he will find out where that photograph was taken. We wait to hear, but I think that was the beginning of my hon. Friend’s cultural career.
I commend the hon. Member for Glasgow North (Patrick Grady), particularly for mentioning e-sports, which I passionately support. I am worried that the French are taking e-sports extremely seriously, and we need to promote them here. I was delighted to hear the hon. Gentleman mention them, particularly on a day when Manchester City have signed Kieran “Kez” Brown as its first e-sports professional football player. I also appreciated the hon. Gentleman’s point about local council support. I suspect that the sub-text was an attack on a Labour council from an SNP Member. Nevertheless, the support of local authorities is vital.
Let me thank the hon. Member for Edinburgh North and Leith (Deidre Brock) for mentioning our very successful publishing industry. We do not talk enough about it, partly because it does not receive the sort of support that the Government give to, say, film and video games. As she rightly pointed out, this is our most successful creative industry. Indeed, Scotland supplies some of our greatest authors. The hon. and learned Member for Edinburgh South West (Joanna Cherry) expanded the debate even wider, talking about the fashion industry, as well as importantly about work visas, general access to skills and immigration issues post-Brexit.
A number of themes emerged in the debate. One was the unmitigated success of the longest-serving creative industries Minister in recent history! In the last six years, we have seen the exponential growth of the creative industries. Let me try to make a serious point here. These are our most successful industries, growing at three times the rate of the economy. Having done this job in opposition and in government, I have seen an increasing number of colleagues in this place who realise the importance of the creative industries and take them so seriously, and this has been reflected in the contributions of hon. Members today.
The creative industries are affected by very specific issues—including intellectual property protection, about which the hon. Member for Perth and North Perthshire has spoken eloquently for many years, and access to skills, which has also been raised in the Chamber—but they are highly successful. They are partly turbo-charged by tax credits for film, games and animation, which also extend to the arts, supporting theatre and galleries.
The right hon. Member for Slough rightly drew attention to the importance of arts education. We will differ on the question of whether the arts are being excluded from schools, and I expect that there will be constant debate about it. I personally reject the idea. People may think that an increased focus on science and technology, which perhaps has not been as strong as it could have been over the last few years, somehow means that the arts will suffer, but no one is preventing a headteacher from focusing on the arts and culture. Indeed, I would encourage it. Certainly, working with the present Secretary of State for Education and her predecessor, I have been able to secure important funding for music education and the creation of music education hubs, as well as a number of important programmes to promote heritage and culture.
We are also working on diversity, with the aim of reaching out to more and more people to extend cultural experiences. Our Culture White Paper—the first to be published for more than 50 years—focuses on the cultural citizens programme. We hope to launch a pilot in the autumn, embedding a cohort of young people from schools around the country with arts organisations and giving them a wide experience of the arts.
Wes Streeting
I am grateful to the Minister for giving way again. I especially welcome the work that the Government have done on music hubs. Redbridge Music Service is one of the participants, and it does an outstanding job. May I urge the Minister and his Department to keep a close eye on the consequences of local government funding cuts for many arts and cultural programmes, which are coming under enormous pressure because of the strain on councils’ finances?
Mr Vaizey
I thank the hon. Gentleman for his kind words. He has allowed me to make a further point about the culture White Paper, in which we announced our proposed Great Place scheme. We have seen the huge success of Liverpool’s designation as European capital of culture, and the huge success of the city of culture scheme, initiated by the last Labour Government, which first benefited Derry/Londonderry and will benefit Hull next year. The Great Place scheme is designed to allow local authorities a small amount of funding to create a cultural strategy. The North East Culture Partnership was one of the inspirations for the idea. In the NECP, 12 councils and five universities have come together to create a coherent vision for culture in the north-east. It is important to note that it is a long-term vision, covering not just the next 12 months but the next 15 years.
I agree with the hon. Member for Glasgow North that we should encourage councils to understand the importance of culture in shaping places, creating jobs and bringing communities together, but also in improving health and wellbeing and contributing to education.
Kelvin Hopkins
I agree with the Minister that we should encourage councils to support culture, but when their funding is being squeezed, they have to cut because there is no alternative. Does the Minister not agree that we must provide the funds as well as the encouragement?
Mr Vaizey
I do not want to range too far from my brief and start commenting on local authority funding, but, in my view, that is possible. I object to the fact that culture is always at the back of the queue, and that when it comes to making savings, it is the first thing that some councils look at. However, many imaginative councils—Labour and Conservative, and possibly even SNP—have shown that it is possible to continue to fund culture, and to embed it in many different areas rather than simply putting it in a silo labelled “culture”.
I think that I have covered quite a lot of ground in a slightly bitty way. I have not really put together the narrative that I hoped to put together, partly because I was slightly discombobulated by the pithiness of the remarks of the hon. Member for Luton North, but let me say this. I think that we in the United Kingdom are incredibly lucky to have such extraordinary cultural and creative industries, driven by some remarkable people. They have been supported strongly by Government, particularly through tax reliefs, and also in focusing on skills and a wider strategy.
We must make sure that in a Brexit world we work with the arts and creative industries, which are the calling cards of this fantastic country. We must ensure that they are part of the debate. We must ensure that, as the hon. Member for Bristol East (Kerry McCarthy) said, they have a voice in a practical way. I can tell her that I came here from a meeting this morning of the inter-ministerial group, where we discussed DCMS-relevant sectors, looking at key business areas across Government. Tourism, the creative industries, the media, and arts and culture were all part of that debate. We have already seconded one very senior civil servant to the Brexit unit. We will make sure, in a practical way, that culture and the creative industries are taken account of, but also, in a more wide-ranging way, that the voices of our artists and creators are heard as we forge a new way forward for the United Kingdom.
Julie Elliott
The Minister was very creative after he lost his notes. I was highly impressed with his recall of some of my speech. I have to say, however, that if he visited any pub in Sunderland, a photograph of the former Prime Minister would be the last thing he is likely to find behind the bar; it would not be welcome in my city.
This has been a very interesting and informative debate with contributions from Members in all parts of the House. We have ranged from Scotland, to Slough, to Southend, to Sunderland—
Julie Elliott
I am coming to Bristol. These are all parts of the UK with very diverse economies. The creative industries are very important to all parts of the country. Although many Members from Scotland contributed, they did not mention my favourite festival in Scotland, which my son-in-law introduced me to—the Worlds, the big pipe band competition at the beginning of August, which he has played at on occasion. The contribution made to our national economy by the creative industries is enormous, but often almost silent. For that reason alone, it is important that this debate has happened.
Education has been mentioned, including access to learning and the number of people applying for qualifications. We have significant concerns about the latter, and it is one thing I disagree with the Minister on. It is an issue that we and the Government need to watch. I would love to see a call for an industrial strategy on all levels.
On the impact of Brexit, the outstanding contribution was made by my hon. Friend the Member for Bristol East (Kerry McCarthy). This is what is worrying us most about these industries. With regard to visas, when I talked to people before the referendum, I heard about the struggle that some of our artists have in getting to America. If that replicates itself in Europe, we will have very serious problems. I welcome what the Minister said about somebody having been seconded to the Brexit unit, because we cannot over-emphasise the importance of these matters.
I hope the Government do not overlook this growing, diverse and economically important area of policy, and the impacts that Brexit will have. I feel slightly reassured by what the Minister said about that. Members of all parties in the House would help if there is anything we can do, because that is important not just to the creativity in our country but to the thriving, growing industries that the creative industries are.
Question put and agreed to.
Resolved,
That this House has considered support for the UK’s creative industries and their contribution to the economy.
Business without Debate
Sri Lanka: Human Rights
(7 years, 12 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Wes Streeting (Ilford North) (Lab)
I am grateful for the opportunity to discuss the serious issue of human rights in Sri Lanka, with particular reference to the most recent session of the United Nations Human Rights Council and progress against the resolution that was agreed unanimously last year. I have taken a great interest in this issue since joining the House last year as vice-chair of the all-party parliamentary group for Tamils, not least because of the significant Tamil population in my constituency, whose lives have been directly affected by the atrocities of the Sri Lankan civil war. I should also draw the House’s attention to my entry in the Register of Members’ Financial Interests relating to my visit to the UNHRC in Geneva last year to lobby for that resolution.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
I want to commend the hon. Gentleman’s passion in championing the rights of the Tamil people. Only this week, the Sri Lankan Foreign Minister claimed that his Government plan to set up a special court by next year to hear allegations of abuses during the brutal civil war. Does the hon. Gentleman share my concern that the Sri Lankan Government are merely paying lip service to the international community?
Wes Streeting
I am grateful to the hon. Lady for her intervention. That is the specific issue that I want to spend some time addressing this afternoon, particularly international involvement in the prosecution of alleged war crimes from the civil war.
I am delighted to see so many members of the all-party parliamentary group here this afternoon, but I want to pay particular tribute to our chair, the hon. Member for Kingston and Surbiton (James Berry), who would be here were it not for important constituency engagements. He has worked hard in his first year in office to champion the issues that I will be discussing this afternoon.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I echo the praise for my hon. Friend’s interest in this importance matter. My constituency also has one of the largest populations of Tamils, who are particularly concerned about the fact that the north and east of Sri Lanka remain heavily militarised. It appears that the Sri Lankan Government still have no serious plan to facilitate the return home of the largely Tamils and Muslims who have been displaced by the conflict.
Wes Streeting
My hon. Friend is absolutely right to highlight the ongoing challenges. I will begin by talking about the history of the Sri Lankan civil war, but it is important to remember this afternoon that there are ongoing issues, such as human rights abuses, that need to be taken seriously by the international community and this House.
Jim Shannon (Strangford) (DUP)
The hon. Gentleman is most gracious in giving way—I did ask his permission beforehand. We should not forget the other human rights abuses that are happening in Sri Lanka. The National Christian Evangelical Alliance of Sri Lanka has documented an estimated 450 incidents against Christian minorities since 2009. Since 2015, 130 incidents of intimidation, discrimination and violence against Christians have been recorded, and a campaign to close churches continues to this very day. Although the war has ended, does the hon. Gentleman agree that we need assurances from the UK Government and the Minister that they will do everything in their power to ensure that Sri Lanka moves further towards religious freedom for all, not away from it?
Wes Streeting
The hon. Gentleman is a long-standing champion in this House of highlighting the persecution of Christians and demanding, quite rightly, that the issue gets greater Government focus and attention. Although a smaller religious minority in Sri Lanka, the Christian population is there none the less and also faces human rights abuses that must be recognised, tackled and dealt with effectively.
The Sri Lankan civil war ended in May 2009 and lasted some 26 years. It was primarily between the LTTE—the Tamil Tigers—and the Sri Lankan Government army. It is estimated that up to 100,000 people were killed during the course of the bloody conflict. In 2009, the then Foreign Secretary, David Miliband, described the brutality in the north of the country as a “war without witness”. Since the conclusion of the civil war, so much of that witness testimony has come forward. In my constituency surgery, I have been horrified by the descriptions of what people have suffered, and I have met constituents who bear not only the mental scars, but the physical scars of that conflict. Serious allegations of human rights abuses have been made by both sides of the conflict, including allegations of murder, sexual violence, torture, disappearances, the use of civilians as human shields and the use of child soldiers. Mines were used in the conflict, although many have been removed since the war ended. Many of the people at the top of Sri Lankan society—Ministers, military leaders, and figures in the judiciary and in wider civil society—are suspected of being complicit in many of the atrocities that took place.
Mike Gapes (Ilford South) (Lab/Co-op)
As my hon. Friend knows, there are more Tamil constituents in the south of our borough than in the north. But we also have Sri Lankans living in London, and in other parts of Britain, who have come from the other communities. It is important that in this process we try also to get reconciliation in the diaspora. Does he agree that one way to bring that about would be if the Sri Lankan Government could guarantee that people from the UK, or elsewhere in the world, from the diaspora who wish to go back to visit their place of birth or their family will be protected? There is enormous fear, for understandable reasons, among many people living in this country that things will happen to them or to their relatives if they do return.
Wes Streeting
I certainly agree with my hon. Friend and neighbour about that. One thing I find encouraging about the Tamil and Sinhalese population in my constituency is that a number of events are held throughout the year where they come together. That is the spirit of reconciliation we need to promote, not just in the diaspora, but in Sri Lanka. We are pushing for a process of truth, justice and reconciliation. Indeed, in the 2009 speech I mentioned earlier, David Miliband told this House:
“How the conflict is ended will have a direct bearing on the prospects for long-term peace in the country. The Government there must win the peace as well as the war.”—[Official Report, 30 April 2009; Vol. 491, c. 1050.]
Members in the Chamber this afternoon will be aware that the closing weeks and days of the Sri Lankan civil war were among some of the most brutal and bloody, and certainly the Government of Rajapaksa gave very little encouragement that we could find that process of truth, justice and reconciliation. The election of President Sirisena last year offered some hope that there would be an opportunity for Sri Lanka to move forward, as he pledged both reform and reconciliation. I acknowledge that progress has been made under that Government, but what I will set out this afternoon is the fact that the demands of the UN Human Rights Council resolution passed in October 2015 are not yet being fully implemented. The progress being made by the Sri Lankan Government is too slow. Many of the public statements made by senior Government figures are directly contrary to the demands of that resolution, particularly in respect of international involvement in the prosecution of historical alleged war crimes.
That resolution set out judicial and non-judicial measures needed to advance accountability, reconciliation, human rights and the rule of law. It was very encouraging that the Sri Lankan Government co-sponsored that resolution and that it passed unanimously. Although the resolution did not go as far as many of us would have wanted, the compromise was worth while, in binding the Sri Lankan Government to that resolution. That is why we must make sure that it is delivered to the letter.
Although it should be acknowledged that some initial progress has been made, with the release of civilian land and the establishment of an office of missing persons, the update produced by the Human Rights Commissioner last month shows that there is still much more progress to be made if the resolution is to be met and justice is to be obtained. Much more needs to be done to speed up efforts to investigate missing persons and to provide confidence to their families that the search is serious. The UN working group on enforced or involuntary disappearances ranks Sri Lanka as the country with the second highest number of disappearances in the history of its tenure,
The Sri Lankan Government must also do more to improve transparency and communication in relation to their consultations, having promised to engage in broad terms in national consultations and created a consultation taskforce on reconciliation mechanisms in February 2016. Progress in this area has again been slow. The taskforce has not yet begun regional consultations, which, given the nature of the geography and the demography of Sri Lanka, are absolutely essential, and the UN special rapporteur on transitional justice has criticised the process. Indeed, there are many people in the diaspora, including those in my constituency and, I suspect, in other constituencies, who want their voices to be heard and who also deserve to have their say in the consultation process.
It is also worth noting that those consultations that have taken place, for example on the creation of the Office for Missing Persons, have been short and their findings not shared with the public. Instead, in this particular case, they were shared only with a small number of civil society groups, which were given just two weeks to respond. Given the gravity of the issues being discussed, that is wholly unsatisfactory.
The delay in the implementation of the UN Human Rights Council resolution has to be addressed if confidence in the process is to be maintained. This afternoon, there are three key areas to which I wish the Minister to respond. First, there is the issue of international involvement in the prosecution of war crimes. Despite agreeing to
“the importance of participation in a Sri Lankan judicial mechanism, including the special counsel’s office, of Commonwealth and other foreign judges, defence lawyers and authorised prosecutors and investigators”,
public statements have been made by the President and the Prime Minister of Sri Lanka stating that the judicial process will be domestic with no foreign or international involvement, which is wholly unacceptable. It is completely contrary to the resolution that was passed and the resolution that the Governor of Sri Lanka set up.
Anne McLaughlin (Glasgow North East) (SNP)
I congratulate the hon. Gentleman on bringing this really important issue to the House. Does he agree that we cannot accept the Minister saying that we will not push for international involvement because, after all, the President today may be better than the President before, but President Sirisena was still part of Rajapaksa’s Government when he bombed innocent people who had done absolutely nothing to deserve it? I just want to add my voice to push for that.
Wes Streeting
I am grateful to the hon. Lady.
The international involvement is important for two key reasons. First, the framework for the prosecution of war crimes as serious as these simply does not exist in Sri Lankan law. The judicial mechanism needed to prosecute such serious crimes simply does not exist. The second reason is about confidence. Tamil people in Sri Lanka, in this country and in other countries around the world must have confidence that there will be a fair and due process, that the courts are properly equipped to prosecute crimes of this nature, and that the people who were responsible are properly held to account. Without not just the truth, but the justice, the reconciliation will not follow, and that would be an absolute travesty for a country that has so much promise and a potentially bright future ahead of it after such a dark and devastating conflict.
I hope that we will bring appropriate pressure to bear on the Sri Lankan Government to reverse this stance and that we will work with the international community to ensure that agreements are honoured. Will the Minister tell me what representations the UK Government have made to the Sri Lankan Government on this issue, and what steps our Government will take with our international partners to increase pressure in this area? I know that the Minister is familiar with these issues. He has recently returned from Sri Lanka and is optimistic about the progress that is being made, but he must be firm with the Government of Sri Lanka and say that our bilateral relationship would be damaged if they do not honour the commitments that were made at the UN Human Rights Council, bearing in mind that the Prime Minister was heavily criticised, particularly by Labour Members, when he chose to visit Sri Lanka as part of the Commonwealth Heads of Government Meeting. He visited the north and met the Tamil community. Although I had misgivings at the time, it is only fair to acknowledge that the Prime Minister’s visit did shine a spotlight on the issues and helped us to apply pressure, but that visit will have been in vain if we do not see progress. I hope that, before he leaves office, the Prime Minister can bring some pressure to bear on the matter and that his successor will do the same.
I also want to raise the allegations of ongoing human rights abuses. It is simply unacceptable that, despite agreeing to the UN Human Rights Council resolution and the public statements made on this issue, we are still hearing about cases of torture, illegal detention and sexual violence. Human rights organisations such as Amnesty International, Human Rights Watch and the International Truth and Justice Project in Sri Lanka have all raised concerns about recent abuses and a lack of progress in this area. The charity, Freedom from Torture, has also produced evidence of the torture of Tamils occurring in 2015, including after resolution 30/1 was passed. The all-party parliamentary group for Tamils has not yet seen any evidence that these allegations have been investigated.
More recently, we learned that Velauthapillai Renukaruban, a British citizen of Tamil descent who visited the country to get married, was beaten and imprisoned on false charges. We must not allow British citizens to be treated in that way. Where these abuses take place, we must use every bit of our diplomatic muscle to ensure that British citizens are protected—never mind the fact that Tamil people who do not have the British citizenship also deserve to go about their lives with dignity and freedom.
With those worrying cases in mind, will the Minister inform us of the action he is taking to make it clear to his counterparts in the Sri Lankan Government that these abuses cannot be allowed to continue? Will he also inform the House what funding arrangements the Foreign and Commonwealth Office has in place to promote human rights abroad and how much of those funds is spent on Sri Lanka and for what purpose?
Many members of the Tamil community have raised with me the issue of deportations from the United Kingdom to Sri Lanka. When a person reaches the United Kingdom as an asylum seeker, we must do all we can to make sure that they are treated with respect and dignity. It is clear that the UK Government must look again at their policy in respect of Tamil asylum seekers. The ongoing human rights abuses and the evidence of torture of political dissidents in Sri Lanka should be a wake-up call that this issue must be treated with more seriousness than has been the case recently, particularly by giving more weight to the risks to individuals.
With this in mind, will the Minister ensure that he has further discussions with the Home Office to underline the dangers that people may face if they are returned to Sri Lanka? Will he provide an update on policy in this area, given that the UN Committee Against Torture expressed concerns about this issue nearly three years ago, in 2013?
We in this House should not forget our duty to help those in need. We should remember that this issue continues to affect the lives of people living in the UK and around the world. Many of them have seen horrific acts of abuse take place against friends and family or have been the victims of unspeakable crimes themselves. Human rights, the rule of law and reconciliation must be given the full weight and backing of the international community to force the Sri Lankan Government to speed up their work in this area.
In this week, when the UK has had to reflect on the devastating impact of a botched intervention in Iraq, it is worth reflecting on the consequences of failing to act when human rights abuses occur. There is absolutely no doubt in my mind that, during the 26 years of the Sri Lankan civil war, as people were being brutalised and tortured in the most appalling ways, the international community chose to look the other way. The House must also reflect on our failure and this country’s failure in looking the other way and failing to act when we arguably could and should have done more.
We cannot turn back the clock, but we can make sure today that we do not fail all the peoples of Sri Lanka again in the future as we have done in the past. With that hope, I hope that the Minister will rise to the Dispatch Box and assure us that the Government will do all they can to ensure that truth justice and reconciliation lead to the bright future for all the peoples of Sri Lanka that we all want to see.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
I genuinely congratulate the hon. Member for Ilford North (Wes Streeting) on securing this debate and on his continuing commitment to the all-party parliamentary group for Tamils and its valuable work in maintaining the focus on human rights in Sri Lanka and on Tamil rights in particular. I also thank all hon. Members for their contributions, and I will try to address as many of their points as I can in the time available to me.
This debate comes at an historic time for Sri Lanka. Last October, President Sirisena’s Government took the significant step of co-sponsoring Human Rights Council resolution 30/1. In his update to the Human Rights Council last week, High Commissioner Zeid recognised where progress has been made, identified where more could have been done and set out the need for a comprehensive strategy to make further progress. I fully agree with his assessment.
The Sri Lankan Government’s response demonstrated their commitment to addressing the legacy of conflict. Foreign Minister Samaraweera set out to the UN Human Rights Council on 29 June what his Government would be doing to fulfil the commitments they made in Geneva last October. Their approach addresses the core issues that have marred Sri Lanka’s history and scarred its society: human rights, reconciliation and transitional justice. I welcome the Government of Sri Lanka’s determination and commitment to deal with these complex and sensitive issues in a comprehensive and systematic way.
We should not, however, underestimate the challenges of dealing with the legacy of a 30-year conflict. Foreign Minister Samaraweera said last week in Geneva:
“Reconciliation does not happen overnight. It requires effort, hard work, commitment, and careful, continuous, concrete action. It is a journey that requires constant striving.”
I wholeheartedly agree. We should remember that Sri Lanka has been on a remarkable journey in the last 18 months, since President Sirisena was elected. The country is, I believe, now in a far better place than anyone could have imagined.
I have spoken before about the striking differences between the Sri Lanka I saw in November 2013 and the one I visited in January this year. The elections last August were the most democratic in living memory, and resulted in the formation of a national unity Government committed to reconciliation and peacebuilding. The constitutional reform process Sri Lanka has now embarked on is an essential foundation for the country’s future stability—a foundation on which to build its democracy, its development and its political reconciliation. The devolution of political authority that the authorities are seeking to enshrine within that process will be crucial for Sri Lanka’s long-term governance and prosperity.
The hon. Gentleman emphasised the need for Sri Lanka to make timely progress on its commitments. At the Human Rights Council session on 29 June, the UK urged Sri Lanka to deliver on those commitments, including by putting in place credible transitional justice mechanisms underpinned by meaningful consultations and effective witness protection. In that respect, we welcome the Government’s announcement that they will establish an Office of Missing Persons. We remain committed to the full implementation of resolution 30/1, and we stand ready to support the Sri Lankan Government to that end.
Although progress has been slower than we and many others had hoped, it has been encouraging to see Sri Lanka’s renewed openness and engagement with the UN. We welcomed Sri Lanka’s invitations to High Commissioner Zeid and various UN special rapporteurs to visit and to discuss torture, disappearances, and the independence of judges. However, we recognise that much remains to be done, in particular in improving the rights of all the country’s citizens.
The hon. Gentleman raised the issue of allegations of ongoing human rights abuses. We have been clear with the Sri Lankan Government about the need to do more. I discussed our concerns with High Commissioner Zeid in Geneva last month, and again with Foreign Minister Samaraweera in London last week. I set out clearly the areas we felt were important for Sri Lanka to focus on: torture, land reform and transitional justice.
Kerry McCarthy (Bristol East) (Lab)
Did the Minister have the opportunity to discuss with the Sri Lankan Foreign Minister this week’s announcement that Sri Lanka intends to demilitarise by 2018, which would be a very welcome step? As the Minister will know, the Sri Lankan military is involved in running everything in the north from beauty parlours to hotels to food companies, and dealing with that is an important part of putting the north back on a stable footing.
Mr Swire
The hon. Lady makes a very credible point. I have been to the north twice and seen that for myself. An army has no reason to be in business in a civilian structure or to be on other people’s land, and I will come to that in just a minute.
The hon. Gentleman asked about our funding arrangements to promote human rights abroad. Our £6.6 million three-year conflict, security and stabilisation funding for Sri Lanka focuses on reform, interfaith dialogue—the hon. Member for Strangford (Jim Shannon), with his ongoing support for Christian communities around the world, will be pleased to hear that—transitional justice, de-mining and anti-corruption. Through the Magna Carta fund and our bilateral programme budget, we are also supporting a number of other human rights and reconciliation projects. Our programmes in Sri Lanka aim to strengthen democratic institutions, support reconciliation and protect human rights.
On land reforms, which the hon. Lady just raised, more land returns are essential, both to build confidence and to allow the resettlement of displaced Tamils. I was encouraged that a further 701 acres were released two weeks ago, and that Foreign Minister Samaraweera has said that the Government have instructed the military to release all land obtained from civilians by 2018. The British Government are clear that land releases must be accompanied by adequate housing and support for resettled communities. We continue to support de-mining programmes, one of which I have seen, and housing and resettlement through our contributions to multilateral agencies.
We will continue to encourage the Government of Sri Lanka to prioritise the reform of their security sector, not least with the repeal of the Prevention of Terrorism Act. All forms of sexual and gender-based violence and torture must be addressed. The President has taken steps to address this and has issued guidance to all security forces that emphasises the absolute prohibition of torture or other ill-treatment, including sexual violence. The Government, with our assistance, are also putting in place training programmes for the police and other measures aimed at combating and eliminating torture. This includes addressing the need for the prosecution and conviction of perpetrators.
There are other areas of concern. These include issues of freedom of speech and movement, the remaining detainees held under the Prevention of Terrorism Act and the continued involvement of the military in commercial life in the north. Through diplomatic pressure and targeted projects, we will continue to encourage the Government to address these issues.
The hon. Member for Ilford North highlighted the issue of international involvement in the prosecution of war crimes. The British Government have always been clear that any accountability mechanism needs to be credible and meet international standards. We therefore welcomed Sri Lanka’s co-sponsorship of UNHRC resolution 30/1. We have reiterated our commitment to its full implementation on a number of occasions, most recently in Geneva last month.
Wes Streeting
Very briefly, will the Minister give his reaction to the remarks of the President and the Prime Minister in refusing to implement those aspects of the resolution specifically about international involvement in the prosecution of war crimes?
Mr Swire
I agree with the hon. Gentleman that to reassure the communities in Sri Lanka and to show the international community that this is a credible process, there needs to be an international element. That is what we continue to stress with the Government, with Ranil Wickremesinghe, the Prime Minister, with Mangala Samaraweera, the Foreign Minister, and through Prince Zeid. I am hopeful that the message is getting through and think that something will happen in that respect.
The hon. Gentleman also asked about the asylums return policy; this is important. The Home Office country information and guidance on Sri Lanka was updated in May 2016, and we will have further discussions with the Home Office on these issues.
The United Kingdom remains committed to supporting Sri Lanka to take further steps towards peace and prosperity for all its citizens. We do so in a spirit of friendship and co-operation, and I am proud of the role that the UK continues to play. That includes, as the hon. Gentleman was generous enough to say, the visit to the north of that country by the Prime Minister during CHOGM, which I believe began to unlock this process. There are many challenges ahead and progress may be slower than some of us would hope, but we will continue to build on the good work done so far and help Sri Lanka stay the course, for the benefit of all its people.
Question put and agreed to.
Draft Petroleum (Transfer of Functions) Regulations 2016
(7 years, 12 months ago)
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The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
I beg to move,
That the Committee has considered the draft Petroleum (Transfer of Functions) Regulations 2016.
It is a great pleasure to serve under your chairmanship for the first time, Ms Ryan. I am pleased to open the debate on the regulations, which will transfer certain functions relating to the licensing and taxation of oil and gas from the Secretary of State for Energy and Climate Change to the Oil and Gas Authority. With the recent debate on the Energy Act 2016 no doubt still fresh in hon. Members’ minds, I am sure that most will be familiar with the background to the establishment of the OGA and Sir Ian Wood’s review into maximising the economic recovery of petroleum from the UK continental shelf. However, for the sake of coherence, I will outline briefly where we have got to.
The benefit of the oil and gas industry to the UK is not in doubt: it has extracted around 43 billion barrels of oil, paid more than £330 billion of taxes and supported many hundreds of thousands of jobs. However, as one of the most mature regions in that global industry, the UK now faces new challenges, with remaining reserves increasingly dispersed and more difficult and potentially expensive to exploit. Notwithstanding that and the additional pressures resulting from low prices, great value can still be extracted. The Wood review recommended that delivering that value would require a new approach and the focused attention of a new independent regulator and asset steward. In response, the Government legislated to establish the principle of “maximising economic recovery” or MER UK, and have set out a strategy to deliver that. The industry and the OGA are now required to act in accordance with that strategy when going about their business.
The OGA has been established as an Executive agency of the Department of Energy and Climate Change and has made great progress. The successful passage of the Energy Act enables the OGA to be set up as a Government company and empowered with a broader range of tools to meet the challenge of MER UK, as envisaged by the Wood review. A central part of the establishment of the OGA is the transfer to it of essential functions currently exercised by the Secretary of State.
Hon. Members may recall that schedule 1 to the Energy Act provides for the transfer of the majority of those functions, including some relating to offshore oil and gas infrastructure as well as the licensing of carbon dioxide and gas storage. However, it was decided that certain core functions in relation to petroleum licensing and taxation would not be transferred by that Act, due to interdependencies with the new devolution settlements for Scotland and Wales, as outlined in the Scotland Act 2016 and the Wales Bill respectively. Specifically, both those settlements include provision to devolve such functions in the onshore area, and that requires us to amend the same part of the Petroleum Act 1998. Due to the complexities caused by the sequencing of those measures, it was decided that we would transfer those specific functions via regulations under the Energy Act to allow greater flexibility. The regulations seek to effect that transfer.
The rationale for transferring those functions to the OGA is the same as for transferring the functions transferred by the Energy Act: the effective establishment and operation of the OGA as regulator and asset steward of the UK continental shelf. The only difference in this case is the legislative vehicle by which the functions are formally transferred. It is worth noting that, as with the functions transferred by the Energy Act, the functions that will be transferred by the regulations are all currently being exercised by the OGA in its capacity as an Executive agency of the Department of Energy and Climate Change. However, once the OGA is established as a Government company, it will be legally distinct from the Department. In order to continue to carry out its functions, they will need to be formally transferred to it.
In conclusion, the regulations make relatively minor amendments to legislation governing petroleum licensing and taxation to enable the OGA to continue its important work of regulating the oil and gas sector and to ensure a smooth transfer of functions to Scottish and Welsh Ministers in due course. I commend the regulations to the Committee.
Barry Gardiner (Brent North) (Lab)
Ms Ryan, it is always a delight to see you in the Chair. Some hon. Members from the Minister’s party have encouraged me to detain her in Committee for as long as is reasonably possible this morning. In respect of their wishes, I have searched back through the Petroleum Act 1998, section 3: licences to search and bore for and get petroleum, and section 4: licences for further provisions. I have gone to the Oil Taxation Act 1975, section 3: allowance of expenditure (other than expenditure on long-term assets and abortive exploration expenditure), and to schedule 2, which talks about the management and collection of petroleum revenue tax returns by participators. I am sad to say that I have not been able to find any cause to detain the Committee longer.
My party has agreed with the findings of Sir Ian Wood’s review. The OGA’s new powers and oversight to ensure that decommissioning is used to best advantage in the North sea seems to us entirely right. Decommissioning should not operate in the short-term interests of those involved, but in the longer-term interests of the co-operative use of the infrastructure. That is a point I wish to make particularly for the benefit of not only those who are involved in future production in more marginal fields over this coming period, but the future possible use of the North sea as one of the world’s finest repositories for carbon capture and storage.
I regret that the Government have abandoned their funding for the development of the CCS programme. I think that is a devastating shame. We have the finest repositories in the world and they are going to be there awaiting CCS technology. Although, in terms of our own emissions reduction capacity and our own climate commitments, CCS is not critical for our infrastructure in the immediate future, it could have been marketed across the world through the technology and skills that Britain could have exported. For that reason, I regret the loss of funding. However, it does not give me cause to detain the Committee longer or to press the matter to a vote.
John Mc Nally (Falkirk) (SNP)
I am happy to agree and am satisfied with the progression of the legislation. I think the speech by the hon. Member for Brent North was excellent; he has obviously done a lot of research for what seems very little reward. We are happy and satisfied with the transfer of powers going forward.
Andrea Leadsom
I am delighted that there is unanimous agreement. I am grateful to hon. Members for their contributions and particularly grateful to the hon. Member for Brent North for his thorough research. That is always important.
As we have discussed, the regulations are largely procedural in nature, but they are an important central part of the establishment of the OGA as an arm’s length regulator and steward of the UK continental shelf. The transfer of responsibility from the Secretary of State to the OGA is essential if the OGA is to continue to exercise the functions it has been set up to deliver once it is formally established as a Government company.
Question put and agreed to.
Independent Parliamentary Standards Authority
(7 years, 12 months ago)
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The Deputy Leader of the House of Commons (Dr Thérèse Coffey)
I beg to move,
That the Committee has considered the motion, That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint Jenny Willott to the office of ordinary member of the Independent Parliamentary Standards Authority with effect from 7 August 2016 for the period ending 31 December 2020.
It is a pleasure to serve under your chairmanship, Mr Bone. I welcome the hon. Member for Newport West to the Front Bench. My right hon. Friend the Leader of the House has already welcomed him, but this is the first time I have served in Committee with him.
The motion proposes that an humble Address be presented to Her Majesty, praying that she will appoint Jenny Willott to the Independent Parliamentary Standards Authority from 7 August 2016 until 31 December 2020.
The appointment has arisen as a result of the decision by the current parliamentary member, Lord Thurso, to step down from the board of IPSA following his election to the House of Lords as a hereditary peer. He submitted his resignation on 8 May and it will take effect from 7 August.
Members of IPSA are appointed under the Parliamentary Standards Act 2009. Under the Act, the Speaker is responsible for overseeing the selection of candidates for appointment to IPSA, and the names of any candidates to be a member of IPSA must be approved by the Speaker’s Committee for IPSA, known as SCIPSA.
The Speaker has had regard to the Commissioner for Public Appointments code of practice for ministerial appointments to public bodies, which allows for the appointment of a candidate from the reserve list when a vacancy occurs within 12 months of a previous recruitment process. The Speaker’s Committee met on 14 June to discuss how to proceed and agreed to offer the position of parliamentary member of the IPSA board to Jenny Willott, the Member of Parliament for Cardiff Central from 2005 to 2015, who was identified as an appointable candidate in the previous recruitment process.
If the appointment is made, Jenny Willott will serve on the IPSA board until 31 December 2020. The Speaker’s Committee has produced a report—its second report of 2016—in relation to the motion, which was circulated yesterday to members of this Committee. I hope that the Committee, and ultimately the House, will support the appointment. We wish Mrs Willott well as she takes up her new post.
Paul Flynn (Newport West) (Lab)
It is a pleasure to support the motion. Many of us have known Jenny Willott for many years for her splendid service in the House. She served with great distinction as the Member for a neighbouring constituency to mine, sometimes called Cardiff Central, but known to us as Newport Far West.
It is fascinating that in the protozoan world of mini-democracy, Viscount Thurso has gone because he was in an election where the entire group of possible candidates was seven, the electorate was three and he gained 100% of the vote. Following that triumph of democracy, it is a pleasure to see Jenny Willott take his place. We welcome her and wish her well in her duties.
Question put and agreed to.
Draft Water and Sewerage Undertakers (Exit from non-household Retail Market) Regulations 2016
(7 years, 12 months ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rory Stewart)
I beg to move,
That the Committee has considered the draft Water and Sewerage Undertakers (Exit from Non-household Retail Market) Regulations 2016.
It is a great privilege to serve under your chairmanship, Mr Streeter. I warmly welcome the new shadow Secretary of State for Environment, Food and Rural Affairs, the hon. Member for York Central.
For the Committee’s benefit, let me provide a brief introduction to the regulations. They are set within the context of the Water Act 2014. People who were in the House at the time or who have taken an interest will remember that the Act basically did three things. The first thing was that it provided affordable flood insurance under the Flood Re process, which guarantees that people in a flood-vulnerable area are able to access flood insurance at affordable rates that are attached to their council tax bands. The second thing was that the Act provided for reform to the upstream water markets, which is complicated work that relates to what happens right up at the source of the water. The third thing, which is what the regulations are specifically relevant to, is the non-household retail end: the Act provided, not for individual houses but for businesses and others, an ability to have more efficient services. That involves billing, meter reading, handling of calls, complaint handling and water efficiency services.
I will give a couple of examples to show how the regulations are relevant to people. An organisation such as Tesco that has a lot of stores spread out across the country would be able for the first time to get a package to cover its thousands of stores and to get all its efficiency services—controlling the amount of water used, its bills and its complaints—handled centrally. That is also relevant to large water users. Imagine an electricity utility company or a brewer that uses a huge amount of water. Suddenly there is a market opportunity for a retailer to turn up and offer it a specific package. All Members present will be able to think of analogies, such as the way in which, in the electricity and gas markets, new people enter the market and are able to offer more tailored, more efficient and more affordable services.
Specifically, the regulations come out of an amendment to the 2014 Act. They focus on two things: one is the process that a retailer that wishes to offer such services has to follow in order to get approved, and the other—their exact focus—is the exit of the previous holder. Let us imagine that there were a water company in my constituency of Penrith that currently provides those retail services. The regulations define the conditions under which that existing company can leave the market and somebody else can come in.
This has been a very serious piece of parliamentary drafting, which has been going on for almost two years. The conditions that have been set out essentially revolve around five key principles that drive this type of regulation. The first, which is very important, is equivalence, which means that you as a customer will be able to get the same service from the new entrant that you had from the previous retailer—it is a guarantee for the customer. The second is what I would call a principle of competence, to assure that the acquiring retailer, which has been licensed by Ofwat, is competent to take over the service. The third is what I would call a principle of universality, to ensure that nobody is left out; to return to my example of a non-household customer in my constituency of Penrith, it is essential that when the transfer takes place they do not get left out of the system, so these regulations provide for that guarantee of universality. The fourth principle is one of control, allowing Ofwat to regulate the terms and conditions of transfer to customers. The final principle is what I would call a principle of transparency, to ensure that customers are kept fully informed through the process.
The regulations are all backed up by the provisions of the 2014 Act, which provides the framework under which Ofwat issues those licences. There has been a very thorough consultation process. Parliamentary counsel, as well as DEFRA lawyers and policy teams, have been engaged in great detail to make sure that we have tested all the principles, both with business and consumers, and that the regulations meet the needs of the age. These are sensible, well drafted regulations, which I am pleased to present to the Committee.
Rachael Maskell (York Central) (Lab/Co-op)
It is always a pleasure to serve under your chairmanship, Mr Streeter, and I thank the Minister for his kind remarks.
I would like to speak on behalf of the Opposition today on these regulations. I first want to put on record my thanks for the enormity of work that has already been put in place in order to bring us to the point we are at today. Although I recognise that the 2014 Act has made it permissive to increase competition in the water and sewage industry for 1.2 million businesses, charities and public sector organisations, I want to ensure that we are thorough in our scrutiny of the regulations today. I therefore want to forward a number of questions to the Minister, to ensure that everything is watertight.
To start with, my questions are essentially on consumer protection. I want to know how long it is proposed that the exit process will take, bearing in mind that customers will need to be guaranteed the provision of the retailer before the exit is granted.
Secondly, I would like to ask how much notice a customer receives of their undertaker withdrawing from the market, since they may choose to continue a service with the retailer who has taken over the customers of the undertaker, or the customer may need time to choose an alternative retailer.
Thirdly, as the guidance notes say, there should be minimal disruption to the customer, but when it talks about minimum disruption, will there be any disruption and, if so, what disruption does the Minister envisage behind that?
Fourthly, I would like to ask about process, so that there is not confusion over billing, as has been seen elsewhere in the energy market when somebody exits the market and there is a change in licensee providing the service.
Finally on this point, I would like to know how customers will be communicated with about the changes of service provision, to enable them to maximise their choices.
Rory Stewart
I should be grateful if the shadow Secretary of State could clarify her fourth question on process, which I did not fully understand. There was a question on notice, a question on minimum disruption and then I missed the question on process.
Rachael Maskell
I am more than happy to clarify that point. The question is so there is not confusion around billing between the different organisations. When somebody exits the market, there will obviously be a new licensee who is providing that service, and, as has been seen elsewhere in the energy market, there has been confusion about the billing process. We need to make sure that customers are able to be communicated with by one organisation and be clear that they are not billed twice.
It is also essential that customers experience no detriment and, while I recognise the principle of equivalence, detriment could occur to non-household customers. I therefore seek further reassurance on behalf of customers. For example, while outstanding complaints will be passed to the new licensee, the guidance is silent as to how potential liabilities will be addressed. That could result in remedies being less favourable to the customer. Can the Minister bring clarity to that, since the guidance simply states that this is dependent on the commercial agreement drawn up? A current customer would want confidence that the terms on which they raised their complaint would result in no less favourable outcome.
For customers whose undertaker withdraws from the market, can the Minister confirm that, should they choose to deal with a different licensee from that which took over the customer base from the undertaker, they will have two years through which to switch from and back to them again, should they choose? Again, this is slightly ambiguous, but I know was raised in the debate on the regulations in the other place.
With regard to the risks identified, I note that there is expected to be an increased financial risk both to Ofwat and to DEFRA. What assessment has been made of the size of the risk in the light of the already severe cuts to the Department?
Finally, I would like the Minister to clarify a couple of questions on consequential issues appertaining to the measure. One of the most important areas of work in the industry looks at water-saving initiatives. Clearly these must be across the whole water and sewerage industry, and not just seen as a customer responsibility. How will the undertakers and the licensees work together to ensure that water conservation remains a priority in this new fragmented environment?
The second consequential issue appertains to householders. Although these regulations do not appertain to householders, householders and non-householders currently deal with the same water companies. After April next year, that may not be the case. I note that in the other place’s scrutiny of these regulations, the Minister said that they would be subject to the current cost basis for their water and sewerage in this five-year cycle. However, what risk assessment has been made on the impact on households? If none has been undertaken, will the Minister look into the matter?
Labour recognises that the Government’s ambition is to protect the consumer in the light of the permissible action available from the 2014 Act through these regulations. Although we have concerns about further marketisation and fragmentation of the water and sewerage industry, we believe that, subject to the Minister’s response today, we will not be calling for the Committee to divide.
Rory Stewart
You can understand why I welcomed the shadow Secretary of State to her position, Mr Streeter. I think I have nine different questions here, which I will try to deal with one by one. If I miss anything, I am very happy to continue the debate through interventions.
I think the first question was around time and notice. The notice provisions are covered under regulation 12, as the shadow Secretary of State will be aware. Regulation 12(4) clarifies that,
“notice must be given…in the case of a person who is a customer immediately before the Secretary of State grants permission for the relevant undertaker to withdraw from the non-household retail market, at least 2 months before the exit date”.
On disruption, and the process we follow in terms of customer bills, the industry has set up a new company called Market Operator Services Ltd whose job is to build and manage a database of accurate information to enable switching and settlement.
There was a question on detriment and, in particular, complaints. This subject is dealt with in regulation 17, “Transfer of outstanding complaints”, at paragraph (3). As the shadow Secretary of State presumably knows, it went through a great deal of debate, both within the Department and with the parliamentary draftsman. Paragraphs (1) and (2) are largely laying out the terminology; the key to regulation 17 is paragraph (3), which states:
“Anything done by or in relation to the relevant undertaker in connection with the complaint is to be treated, on and after the exit date, as having been done by or in relation to the acquiring licensee.”
Clearly we all believe that excess words turn septic. The decision was that that was the clearest way of laying out the complaint. To return to my Penrith example, had I lodged a complaint as a non-household customer against the hypothetical Penrith Water Company that existed previously, at the date on which the exit takes place my complaint would become a complaint against the new company and would be treated as such.
Rachael Maskell
On that very point, although I understand that the complaint will be dealt with, as with the old undertaker, by the new licensee, can the Minister confirm that the remedy will be the same with the new licensee, as per the commercial agreement?
Rory Stewart
This is a very important technical question. The understanding of the Department and our legal experts is that this would be governed through normal legal contract arrangements. That is why it has been left as a very short sentence, as we believe that the existing procedures, regulated by Ofwat, will be sufficient to ensure that the complaint process is properly handled. We believe that putting in excess words and trying to micro-manage the detail of the process will not end up in as good and transparent a result for the customer as simply making it clear that normal complaint procedures are followed for the new company, regulated by Ofwat, as they would have been for the pre-existing Penrith company. I am confident that this is the best and most straightforward way of proceeding, but I understand the shadow Secretary of State’s anxiety.
On the question of switching, there are two key principles that underlie the regulations: completion and permanence. Although there were some suggestions during the debate in the other place, as the shadow Secretary of State pointed out, that it might be possible for a customer to leave and return—to leave my putative Penrith company and then hop back to them later—we decided, after a great deal of consultation, that that is not the correct way to proceed. The correct way to proceed is that it is complete and it is permanent. The Penrith company leaves, the new entrant enters and that is the end of it. There is no way for the Penrith company to then come back into that market or for an individual non-household customer to move back and forth between their previous provider and the new one. That is very important in order to have the market opportunity and flexibility for a new entrant. Let us imagine that a Scottish retailer wished to come into the retail market. It would need to be able to pick up a critical mass of customers and would not be able to do that unless there was a clear and completed exit procedure that meant the customer could not switch back.
The shadow Secretary of State made an additional point about the financial risks to DEFRA and Ofwat. We have looked at that in considerable detail. We do not believe that there are any financial risks to DEFRA. The costs, in so far as they fall, will fall on the industry. There is a very detailed cost-benefit analysis of what that will mean for the industry. Our assessment, based on our best evidence from a team of economists, and agreed by the industry, is that instead of being a net cost for the industry, the benefits over a 30-year period are in the order of £200 million.
Rachael Maskell
Could I just clarify the point about additional financial risks for DEFRA? My understanding is that the application to exit the market needs to be made to the Department. Therefore, surely that will mean that there are consequential risks as a result of administering the process.
Rory Stewart
The shadow Secretary of State is absolutely right. The applications are made to the Department, will be cleared by departmental officials and signed off by the Secretary of State, but as she will be aware, the application for determination is a relatively straightforward process. The Secretary of State must grant permission, unless it is contrary to the interests of the public or the relevant undertaker has failed to comply with regulation 9. The bulk of the due diligence is done through Ofwat granting a licence to the individual, and Ofwat has a serious process in place to decide whether somebody is a competent operator. If that individual has received a licence from Ofwat—in other words, they are a competent operator approved by Ofwat—all our Department will be looking for in that process is that the proper notifications to the public have gone through, that the proper forms have been filled in, and that there is a clear agreement on who is exiting and who is taking over that market to provide the universal service to the customer.
The final issue raised was about the issue of water conservation and household customers. Household customers is a future piece of business. We are now talking about that issue, but it is not covered by these regulations. I am very happy to talk to members of the Committee and to the shadow Secretary of State about the detail of household customers in future, when that comes forward. These regulations cover non-household customers.
Water conservation is central to our strategic work and we have to consider it in every way, on both the supply side, such as leakage from pipes, and the demand side, such as how to reduce water use. One of the things that these measures should do, particularly for big water users—I give the example of utility companies, brewers or Tesco—is to provide really good incentives to reduce water use. There is more that we could do right across this issue. Water meters will be an important part of reducing demand. Finally, we have a huge process going forward, led by the water industry but with DEFRA closely involved, that is looking at long- term infrastructure investments—that could include interconnecting pipes and new reservoir systems—to provide for the possibility of drought and climate change in the future.
Question put and agreed to.
Draft Civil Proceedings, First-tier Tribunal, Upper Tribunal and Employment Tribunals Fees (Amendment) Order 2016
(7 years, 12 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 9 / Noes: 5 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
I beg to move,
That the Committee has considered the draft Civil Proceedings, First-tier Tribunal, Upper Tribunal and Employment Tribunals Fees (Amendment) Order 2016.
May I say what a pleasure it is to serve under your chairmanship this morning, Mr Nuttall? The purpose of the draft order is to make changes to the fees payable in proceedings in the civil courts and tribunals. Specifically, the order will uplift a number of fees charged in the civil and magistrates courts by 10%.
Mr Andrew Smith (Oxford East) (Lab)
The Minister says that the fees are being increased by 10%. How does he justify such a large increase over and above inflation? Does that not put at risk the process of, and access to, justice?
Mr Vara
The right hon. Gentleman asks a good question, but he will be aware that running the courts and tribunals system costs a lot of money. Given the economic difficulties that the country is in, we have found it necessary to impose fees that will contribute towards the cost of keeping Her Majesty’s Courts and Tribunals Service operating.
As I was saying, the order will uplift a number of fees charged in the civil and magistrates courts by 10%. That will include all the fees that are currently at full cost recovery levels including, for example, the fees for judicial review proceedings, but the uplift will not apply to fees in civil proceedings that are already set above cost. The uplift will also apply to judicial review proceedings heard in the immigration and asylum chamber of the upper tribunal to ensure that the fees in judicial review proceedings are consistent across jurisdictions.
The order also introduces a new, consistent fee-charging approach across the property chamber of the first-tier tribunal. The current structure that operates in the tribunal is complex and inconsistent, with a range of different fees charged for some application types and no fees charged for others. Our changes will simplify and standardise the approach, reducing the burden on the general taxpayer by raising the overall recovery rate in the tribunal from about 4% to about 10% and sharing that burden more equally between all those who use the tribunal.
As we announced in our consultation response last December, the target is to recover about 25% of cost from fees in the property chamber. Achieving that aim will require us to revisit our specific proposals relating to leasehold enfranchisement cases, and we will make an announcement on our plans for fees in those proceedings in due course.
Finally, the order will change the default classification of two new appeal rights that have been created in the employment tribunals from a type B claim, which attracts the higher fee, to a type A claim, for which the fee is lower. The normal rule is that when those who use a public service are charged a fee to access them, the fee should be set at a level designed to cover the full costs of the service. The civil and family courts have operated on that basis for a number of years.
Section 180 of the Anti-social Behaviour, Crime and Policing Act 2014 provides the Lord Chancellor with the power to prescribe fees above cost, but requires that those fees are used to
“finance an efficient and effective system of courts and tribunals”.
That power was used for the first time in March last year to increase the fees for money claims, and again earlier this year to increase the fees for possession claims, general applications in civil proceedings and applications for a divorce or dissolution of a civil partnership. The power will be exercised again in this order to increase the fees in a range of civil proceedings by 10%, which will take those fees above cost recovery levels.
The fee changes that affect the property chamber of the first-tier tribunal and employment tribunals will be made under section 42 of the Tribunals, Courts and Enforcement Act 2007, given that even after these changes, the fees will remain well below cost recovery levels.
The case for revisiting the fees that we charge in courts and tribunals is based firmly on the need to ensure that Her Majesty’s Courts and Tribunals Service is properly funded to protect the vital principle of access to justice.
Chris Stephens (Glasgow South West) (SNP)
Can the Minister confirm that the fees recovered in the last year were about 12.5% of Ministry of Justice income?
Mr Vara
I am not familiar with the precise figure and I am keen to ensure that the hon. Gentleman gets it, so I am happy to write to him with the details of whether the figure is 12.5% or more or less than that.
A fully functioning and properly funded justice system is the cornerstone of our democratic society. It should provide everyone with the ability to redress their problems in an efficient and effective forum, and it should also underpin our economy. The Government have committed to an historic, once-in-a-generation investment of more than £700 million to transform our courts and tribunals system. The scale of that investment and the ambition of our reform plan will enable us to build a justice system that is simpler, swifter and more efficient, using modern technology.
In a tough financial climate, there is only so much that can be delivered through spending cuts and efficiencies. That is why we have had to look again at the balance between what users pay towards the overall cost of court and tribunal services and the financial burden that falls on the taxpayer. We estimate that the measures set out in the order will generate about £6 million per annum in additional income, with every pound collected being spent on providing our system of courts and tribunals. I recognise that no one will ever welcome an increase in fees, but I hope that right hon. and hon. Members will recognise that increases are required so that we can ensure that the courts and tribunals are properly funded and access to justice is protected.
May I take this opportunity to congratulate the hon. Member for Leeds East on his appointment as shadow Lord Chancellor and Secretary of State for Justice? I look forward to having debates with him on many occasions, and I hope that the debates will be constructive for the benefit of all those who need access to justice.
Richard Burgon (Leeds East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Nuttall. I thank the Minister for his kind remarks, and I look forward to having many a constructive conversation and debate with him and his colleagues.
This is our second opportunity this week to debate court and tribunal fees, following the debate on Monday in the Chamber, during which we had the opportunity to discuss the Select Committee on Justice’s recent report on the issue. Hon. Members will recall that although it was an estimates vote on Monday night, Labour decided to treat it as a vote on tribunal fees in order to make clear our opposition to the Government’s policy on employment tribunal fees, so strong is our belief that they are a barrier to justice. Today we have an opportunity to make another clear statement on barriers to access to justice, as we discuss the proposed increases in court and tribunal fees set out in the order.
On Monday, I made it clear that I see it as my priority in my new role as shadow Justice Secretary to speak up for all those whose access to justice has been deliberately obstructed by this Government and the coalition Government who preceded them. We will assess the order on two grounds: affordability in providing access to justice and the Government’s evidence base for the proposals.
In principle, we can be in no doubt whatever that civil litigation fees discourage claims, particularly from those least well placed to afford them, such as people in receipt of benefits, whether unemployed or on low pay, women, black or minority ethnic individuals, the disabled and those seeking asylum. The introduction of fees in employment tribunals has coincided with an enormous fall of 70% or thereabouts in claims being brought, particularly those relating to sex discrimination, pregnancy or maternity rights, race discrimination and disability discrimination.
Chris Stephens
Is the shadow Secretary of State aware that there has also been a 70% drop in workers pursuing claims for non-payment of the national minimum wage?
Richard Burgon
The hon. Gentleman makes an important and alarming point. The reason for the drop in claims, whether those for enforcement of the national minimum wage or the other claims that I have outlined, is not that bad employment practices have suddenly become much rarer since the introduction of employment tribunal fees; it is that the fees are deterring people from making claims. That is not good for anybody, because employment tribunals deter bad employers from following bad practices and even protect employees who would never dream of making a claim themselves.
Today, the Government are proposing a 10% increase in civil litigation fees across the board. When did anyone who has to pay those fees have a 10% pay rise? I know from my previous brief as shadow City Minister that there are some people who might expect a 10% pay rise, but which council worker, health worker or factory worker—which of our constituents—last received a 10% pay increase? We need to be clear: this inflation-busting increase will lift access to justice further out of the reach of ordinary people on ordinary pay who receive ordinary pay awards. My right hon. Friend the Member for Oxford East put that point well in his intervention.
Today’s debate is also about the principle of court fees and how the legal system is increasingly used, in the words of the Law Society, as “a profit centre”. On Monday, I highlighted in the Chamber how concerned I was that litigants are increasingly treated as customers. As I said, I remember the first time, as an employment lawyer, I assisted a claimant to make a claim following the introduction of employment tribunal fees. I was sickened to see the following words on the Employment Tribunals Service website: “Customer, please enter your credit card details”. I was shocked and saddened to see that we are not treating people as citizens trying to assert their statutory rights; we are increasingly seeing them as consumers or customers. That shows the wrong priorities on the Government’s part.
We also need to be clear that the fee remission system in employment tribunals often requires people to provide a humiliating level of detail. I remember receiving remission forms requiring bank statements, and on one claimant’s remission form the Employment Tribunals Service had highlighted the fact that in December they had received a bank transfer of £12 from a relative. They were asked to explain what that £12 was for and why it was sent to them. If I remember correctly, it was money relating to a Christmas present, but that is the kind of intrusion that people are subjected to. It is almost as though the service did not want people to apply for fee remissions. Of those who do apply, only about 3.7% get any joy.
So why are the Government doing this? On Monday we discussed employment tribunal fees, which contribute something like £7 million of the £70 million-plus that it costs to run the Employment Tribunals Service. Today we are discussing a measure that the Government’s impact assessment says will bring in £5.9 million, but which will see fees leap up in a way that will make individuals think twice before applying. Some of those increases are as follows. A request to reconsider at a hearing a decision on permission in the immigration and asylum chamber will increase from £350 to £385; the High Court fee will increase from £480 to £528; and the fee for a contested hearing in the magistrates court will increase from £515 to £567. In the civil court, the fee for permission to proceed with a judicial review will increase from £700 to £770. Those increases are simply unfair and will deny access to justice.
The Government are clearly concerned enough by the fall in applications to employment tribunals that they have agreed, correctly, to initiate a review of the impact of employment tribunal fees. They are yet to produce or publish that report, five months after it was given to the Minister. Now they wish to push ahead with increasing civil litigation fees in a number of areas—including the property chamber, the immigration and asylum chamber and others—without publishing their review of employment tribunal fees or carrying out a further review of the affordability of civil court fees and the fee remission system. Such a review should take place, and it is not just those on the Labour Benches saying that. A number of stakeholders advocated that approach in response to the Government’s consultation. I am sad to say that the Government do not seem to be listening to those stakeholders.
The Government conducted a consultation on the increases in court and tribunal fees, following which they concluded that they still wished to impose a general 10% increase in civil litigation fees. That decision flies in the face of the submitted evidence. I would argue that the key question in that consultation was the one that asked:
“Do you agree with the proposal to uplift all civil fees not affected by one of the other specific proposals by 10%?”
The Government’s response noted that of 82 responses to that question, four agreed and 78 disagreed, and stated:
“Those who disagreed raised a number of opposing arguments,”
including that
“it would deter people from bringing claims”
and
“prevent people from accessing justice”.
There were 46 responses to the question:
“Do you agree with Government’s proposal to increase the fees charged for proceedings in the First-tier Tribunal (Immigration and Asylum Chamber)?”
Some 37 of those responses disagreed with that proposal, saying that
“people seeking asylum in many cases were vulnerable and would be unable to afford the fees”,
and that
“the fees would prevent access to justice”.
The Justice Committee report, the words of which should weigh heavily on Members from all parts of the House, highlighted considerable concern at the Government’s proposals to set immigration fees at a cost recovery level.
I wish to highlight some of the arguments that the Law Society set out in opposition to the increase in fees in its submissions to the Government consultation and the Select Committee inquiry. I will quote the Law Society at some length, because it is worth listening to. It said:
“It is wrong in principle for the court service to be treated as a profit centre—the courts have a vital social function which it is for the State to provide, and should not be treated as a commercial activity to subsidise other work…The Government’s decision will discourage people from bringing legitimate cases, thus reducing access to justice…The proposals are not supported by any evidence or concrete proposals to indicate how the Government will use the money gained to improve the court service ... The research on which the decision was based is inadequate.”
The submission says that there is limited evidence of the impact on the poor in society, particularly in the immigration field.
The submission continues to say that
“fee increases will shift the burden of responsibility and costs onto innocent parties, deterring individuals from seeking redress and creating another barrier to access to justice…The income level at which fee remissions is available is far too low to be of any assistance to the majority of individuals—it is below the threshold for eligibility for civil legal aid…Increased fees could lead to the prospect of clients having to take out loans to fund court fees. This will only serve to create a further barrier to justice as many clients will not want to take out a loan or will not meet banks’ lending criteria. Those who do take out loans will have to pay interest…The process of applying for the remission of court fees is also highly complicated, designed seemingly to deter ordinary people from applying and in urgent need of simplification.”
I apologise for quoting at such length, but it is important that the Law Society’s comments are heard, heeded and put on record. They are damning words from a respected body of professionals who keep our legal system running.
I will also take a moment to highlight the concerns of the Immigration Law Practitioners Association. It highlighted the fact that the Immigration Act 2014 dramatically reduced rights of appeal in immigration and asylum cases. It said to me that in many cases, access to judicial review
“will provide the only remedy to challenge the certification of a case as one in which the appeal may be conducted from outside the UK without leading to a breach of human rights including serious and irreversible harm”.
It said that access to judicial review
“will therefore be an essential safeguard against poor quality decision-making in this context and the risk of removal leading to breaches of human rights breaches.”
It concluded that in many cases, applicants
“will be facing imminent removal. Finding the funds to pay court fees or completing complicated applications for remission of the fees”
is complicated by the urgency of their cases. It also blames the Home Office for creating those court costs through
“poor decisions with (high overturn rates on appeal), to create delays in immigration proceedings and to fail consistently and timeously to give effect to the decisions of the courts.”
On the back of those concerns, we also have the latest proposal to increase immigration and asylum chamber fees, but I will leave that point there.
The one positive item in the order is the proposal to reclassify posted workers’ claims against employers in the employment tribunal as type A rather than type B claims, meaning that a lower fee will be payable. But one swallow does not make a summer, and in any event we remain committed to the abolition of employment tribunal fees under a Labour Government.
The Law Society has advised me that
“in light of the damning report from the Justice Select Committee on the impact of fee increases, the Law Society believes that any further increases should not be implemented until at the very least the MoJ has responded to that report, and preferably until a proper review has been carried out of the impact.”
I agree. I therefore ask the Minister the following. Will he listen to stakeholders from across the legal profession and conduct a review of the impact of civil litigation fees? Since it is three days since our last debate, is there any news on when he will publish the review of employment tribunal fees?
Given the evidence that court fees are a barrier to justice and given that the Government have refused to conduct or publish sufficient reviews of the impact of court fees, I confirm that we will divide the Committee to demonstrate the Opposition’s commitment to access to justice and to oppose the across-the-board, inflation-busting increase of 10% that my right hon. Friend the Member for Oxford East so eloquently described.
Chris Stephens
It is a pleasure, as always, to serve under your chairmanship, Mr Nuttall. I welcome the hon. Member for Leeds East and congratulate him on his new role and responsibilities.
At a time when maternity discrimination and the number of workers being made redundant are on the increase and, according to the National Audit Office, 209,000 workers were not paid the minimum wage last year and a further 56,000 are awaiting payment of national minimum wage arrears, an above-inflation increase will price low-paid workers out of justice. That is exactly what has taken place since employment tribunal fees were introduced.
The Trades Union Congress report “At what price justice?” shows that the introduction of fees in July 2013 has led to a 79% fall in the overall number of claims being taken to employment tribunals. Women are already the biggest losers: there has been an 80% fall in the number of women pursuing sex discrimination cases. Just 1,222 women made such claims between January and March 2014, compared with 6,017 in the same period in 2013. In addition, race discrimination and sexual orientation claims both fell by 60% in that timeframe, and there was a 46% year-on-year reduction in disability claims.
The TUC also argues that workers are being cheated out of wages. There has been a 70% drop in the number of workers pursuing claims for non-payment of the national minimum wage, and in many cases claims for unpaid wages are lower than the fees themselves. That is another barrier to workers pursuing justice. Working time directive claims are down 78%; unfair dismissal claims are down 72%; equal pay claims are down 58%; breach of contract claims are down 75%; and as I said earlier, sex discrimination claims are down 68%.
I think I misspoke slightly when I asked the Minister about the Ministry of Justice accounts. I understand from a Unison report that the introduction of fees has contributed a net 12.5% gain in revenue: income from fees is £9 million, compared with the Employment Tribunals Service’s total budget of £71.4 million.
On tribunal fees, as has been said, the order adds claims under the new Posted Workers (Enforcement of Employment Rights) Regulations 2016, but there is evidence in the Justice Committee’s recent report on access to employment tribunals that there has been a drop in access to justice in that regard. The Committee agreed with that evidence. The fact that there is sometimes no automatic financial award for successful tribunal claims also does not seem to have been taken into account. Some claims that are lodged—for example, those relating to written pay statements and written statements of reasons for dismissal—do not attract such a monetary award.
Statutory employment rights exist to ensure minimum standards of treatment in the workplace. Rights such as the minimum wage, paid annual leave and paid time off for maternity, paternity or parental reasons, and the rights not to be discriminated against or unfairly dismissed, are important and have social and economic benefits. If observed, they help to ensure decent standards of living, stability of income, job security and equality of opportunity. They can also contribute to the creation of a committed and engaged workforce, help to reduce sickness absence and support the retention of skilled workers—all things that boost productivity.
We are also concerned about the proposed increase in fees for the immigration and asylum chamber. As the hon. Member for Leeds East pointed out, the Immigration Law Practitioners Association has consistently argued that there should be a “polluter pays” approach, and in its view, the Home Office
“continues to make poor decisions (with high overturn rates on appeal), to create delays in immigration proceedings and to fail consistently and timeously to give effect to the decisions of the courts. If the Home Office were to bear the costs of these myriad failings, not only would court costs (and legal aid payments) be reduced but there would be a strong incentive for immigration and asylum decision-making to improve, and thus for savings in all cases.”
The cases that we are talking about are challenges to the lawfulness of detention; challenges to the validity of legislation, including incompatibility with the Human Rights Act; and challenges relating to the inclusion of sponsors on the register of sponsors for the points-based system and to nationality law and citizenship.
The Scottish Government will be removing employment tribunal fees in Scotland. I agree with that, and the trade union movement, the citizens advice service and many other organisations share that view. It is our view that the order will have an impact on the most vulnerable in our society and therefore does not deserve our support.
John Mann (Bassetlaw) (Lab)
We all know who is behind this order: a Chancellor of the Exchequer who is totally discredited. All his proposals should be taken off the table now. He has failed to introduce his promised emergency Budget that he said was necessary, and now he is punishing the most vulnerable people in society, probably because of the way that they voted in the referendum.
I am no lawyer, but I take employment tribunal cases for constituents like Alan Hardwick, who has spent 15 years working for the same employer. He gets locked out and then finds that some new agency workers who happen to be new migrant workers in the country are taking his job. They are there the next day, being paid a lot less, and he has to go to a tribunal to try to get anything out of it. The law is already far too weak for people like Mr Alan Hardwick.
Or there is Michaela Lake, who is 16 years old. She and her colleague are in their first ever job, working in a hairdresser’s. They work for four weeks and do not get paid. The owner disappears, and they have still never been paid. I track him down on a Tory website, because he is a Tory donor and activist in Gosport, but what can Michaela and her colleague do? How can they pay the fees? Michaela Lake had not been paid; that was why she was going to a tribunal. Not a penny was paid in her first job—welcome to flexible labour market Britain. Welcome to fairness Britain. And some people wonder why there is a bit of a people’s rebellion going on at the moment. Why should she have to pay anything? Why should she have to pay more to go to a tribunal?
What about John Anderton, a driver with Eddie Stobart, or Brian Jackson, or 50 others who were slung out as the company was restructured? Every one of them has to pay a fee to go to tribunal to get the money they are owed, never mind compensation or the redundancy they have not been given. They have to pay a fee to get their holiday pay and their wages from the last week they worked. Stobart is not a tiny little employer like that Tory from Gosport, but employers like that still do the same thing. The balance of power is wrong.
The law is too weak, yet Parliament chooses not to listen to what is going on out there and not to get a glimmer of inspiration from the people. Many of them have never voted before, but they are now participating in politics in this country, and look at how they voted. Brian Jackson had a big poster up when I went past his house in Langold village, which voted 85% in a certain direction.
Tory Members voted in different ways, so I am just appealing to those of them who want to remain in contact with the wider public. I say to them, vote with your conscience. Here is an opportunity to knock back the Chancellor of the Exchequer, who hits the wrong people in the wrong way. Let us make a little mark by standing up for the little man, the little woman and the 16-year-old who has not been paid. Let us stand up for people’s rights and for empowerment, because that is what this is about.
Of course the money matters, but this is about empowerment and what we say to people about how they are being forced to pay, and then pay more, for their basic human rights. There are people who work at 16 years old and do not get paid at all. What kind of country are we living in where it is not automatic that their employer should be jailed, never mind taken to a tribunal? That 16-year-old should be paid to go to a tribunal, never mind having to pay fees to go to it. That goes for Alan Hardwick too, and for Brian Jackson, John Anderton and many more of my constituents. Those are just the ones I have represented in tribunals. Sometimes nobody bothers turning up, or sometimes there are fancy lawyers there who are paid lots of money to defend the indefensible, minimise the situation, talk about the technicalities of how the forms are filled in and grab back the money that is due to decent people from my constituency. That is why this is so important.
I see that heads are down on the Conservative Benches, but I want to look into the eyes of the Tories who want to stay in touch with the world. There could be an election coming up; they have to be careful. My advice is to listen to what the people are saying and, on this occasion, vote with the Opposition parties.
Mr Vara
I start by thanking the hon. Members for Leeds East, for Glasgow South West and for Bassetlaw for their contributions. Much of what was said is not relevant to the debate, because the order is about the narrow confines of the order, but I will take a moment or two to reply to some points that have been raised, for the sake of balance in Hansard.
On the need for fees, which the shadow Lord Chancellor raised, I reiterate that we live in difficult times and it is necessary to take measures to deal with the economic and financial climate in which we are living. The total cost of the courts and tribunals system in 2014-15 was £1.8 billion and the fee income was £700 million, leaving a net cost to the taxpayer of about £1.1 billion. I hear loud and clear the criticisms that have been made about fees, but there is a deafening silence on Opposition Members’ alternative for getting the money to meet the £1.1 billion shortfall. I suppose that the luxury of opposition is the ability to make grand promises and be critical without having to take the tough decisions that government requires.
Chris Stephens
The Minister would surely concede that the Scottish Government have taken a more enlightened approach, and have indicated that they will abolish employment tribunal fees. At least one part of the United Kingdom is taking a different approach, and the Scottish Government will find that in their budget.
Mr Vara
The hon. Gentleman is right that the Scottish Government have taken a different approach. However, there has been a distinct lack of any mention of where they will get the money from. From which other budget will they take it? Until that response is given, the promise of scrapping one set of fees is somewhat hollow, commendable though it is. There is an element of balancing budgets here.
It is not unreasonable to charge people who use the courts and tribunals system so that they make a contribution for that use. The order is not about profit—it is simply wrong to say that it is. In fact, it shows a complete lack of understanding of how the courts and tribunals system operates. It is abundantly clear that the fees will be used to help run the courts and tribunals system and will go towards the additional £700 million that the Chancellor has made available to ensure that we have a 21st-century, first-class courts system that is the envy of the world. There is simply not a bottomless pit of money, and we must remember that we are talking about taxpayers’ money.
The issue of employment tribunal fees is not relevant to this debate, but I will briefly make one or two comments to rebut some points that have been made. As the hon. Member for Glasgow South West said, the latest figure for the cost of employment tribunals was £71 million a year. It is therefore not unreasonable that the public should contribute towards the use of those tribunals. What has not been taken note of, however, is that some 83,000 people have used the ACAS early conciliation scheme, which is free.
It is ironic that some Members here claim to represent the public, given what they have said today. Indeed, the hon. Member for Bassetlaw said that we are not in touch with the public. He is the one who is not in touch with the public, because he is seeking to scrap fees. We are instead encouraging people to use a system that is absolutely free, with no lawyers’ fees, no court fees—no anything. We have the irony that these people are standing up and advocating a system of people going to employment tribunals, which would necessitate cost.
John Mann
Irony? The irony is that people are required to go to ACAS. Does the Minister think that in the cases that I take, we do not go to ACAS? The employers, like that Gosport Tory, refuse to answer the phone calls and letters from ACAS. Of course we go through ACAS. These bad employers do not settle in ACAS. I do not suggest that the taxpayer should be funding the service—of course the taxpayer should not be funding it. There should instead be proper fines for employers that break the law. That is how the tribunal system ought to operate, and that—enforcing and strengthening the law—would be easy to do.
Chris Stephens
As the hon. Member for Bassetlaw indicated, settlement in ACAS relies on the employer also joining ACAS and playing ball. In many cases, rogue employers do not play ball. ACAS is one route, but that relies on the employer going to ACAS and joining the discussion, which does not happen often enough.
Richard Burgon
On the subject of lawyers, which my hon. Friend the Member for Bassetlaw mentioned, I have been thinking about what the Minister said earlier. He said that to say that fees were about treating courts as a profit centre showed—I think these were his words, as Hansard will show—“a complete misunderstanding” of the court system. If I remember correctly, the quote to which he was responding was from the Law Society. Is he saying that the Law Society has a complete misunderstanding of the court system?
Mr Vara
There are various stakeholders involved in this debate and there are a variety of views. I disagree with the views that have been put forward, and that is why these fees are being introduced. I simply say as far as fees are concerned—this applies to employment tribunal fees as well as all the other fees that are relevant to the order—that a remission process exists. Subject to meeting the right criteria, people can apply for remission of the fees.
The Government estimate that the measures in the order will generate about £6 million per annum in additional income, with every pound that is collected being spent on providing an efficient and effective courts and tribunals system. The purpose of these reforms is to increase fee income and so reduce the costs of the courts to the taxpayer, and to ensure that access to justice and to the Courts and Tribunals Service is protected. I commend the draft order to the Committee.
Question put.
Finance Bill (Fifth sitting)
(7 years, 12 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Rebecca Long Bailey (Salford and Eccles) (Lab)
I will keep my comments brief on this clause, which amends the Value Added Tax Act 1994 to enable public bodies to get VAT refunds when they enter into cost-sharing arrangements. I hope that the Minister can address a few points. First, the explanatory note indicates that some bodies will lose some of their existing funding as a result of the clause. It would be helpful if he could explain the criteria that the Government will apply. Secondly, can he give us more detail on the areas where the Government are encouraging shared services specifically? The tax information and impact note states:
“To date these services have mainly been in the fields of HR, recruitment and training, and IT services.”
Will the Minister confirm whether the Government plan to encourage shared services in other areas?
The Financial Secretary to the Treasury (Mr David Gauke)
It is a great pleasure to welcome you back to the Chair, Sir Roger. As we have heard, the clause will allow named non-departmental public bodies and similar bodies to claim a refund on VAT they incur as part of a shared service arrangement. That will encourage public bodies to share back-office services where doing so results in greater efficiencies of scale. Non-departmental public bodies such as the research councils and some NHS bodies cannot always recover the VAT they pay on the purchase of goods and supplies because they do not always undertake business activities—for example, those activities where an onward charge is made. That includes VAT charged when one such body supplies services to others under a shared services arrangement.
Current UK VAT legislation allows Government Departments and NHS bodies to recover the VAT they pay on outsourced or shared services, and we are now extending that scheme to non-departmental public bodies and similar arm’s length bodies. That will ensure VAT does not act as a barrier to those organisations outsourcing and sharing services, which will encourage efficiency savings and deliver better value for taxpayers’ money.
Tax liabilities, including VAT, are catered for in departmental spending settlements. To ensure that there is no double counting, it will be necessary for the Treasury to be satisfied that public funding of those bodies is adjusted where VAT has already been compensated for. Otherwise, the Exchequer could be paying twice. We will also require eligible bodies to claim VAT in the same financial year in which the purchase was made, and not in a later year. The change will affect around 124 departmental bodies.
The hon. Member for Salford and Eccles asked whether some bodies will lose funding. If a non-departmental public body gets its VAT back, the Department’s spending profile will be adjusted accordingly, making it revenue-neutral. Bodies are therefore not losing out as a consequence of the clause. She also asked for more details on how the Government are encouraging shared services. We will accept bids and make decisions on a case-by-case basis. It is difficult for me to say much more at this point, but if efficiencies can be found, any sensible Government would want to find them, and we would not want the VAT system to get in the way.
The clause will allow named non-departmental and similar bodies to claim a refund of the VAT they incur as part of a shared service arrangement used to support their non-business activities, which will ensure that VAT is not a disincentive for public bodies to share back-office services and will encourage better value for money.
Question put and agreed to.
Clause 111 accordingly ordered to stand part of the Bill.
Clause 112
VAT: representatives and security
Question proposed, That the clause stand part of the Bill.
Rebecca Long Bailey
These clauses are part of a package of anti-fraud measures announced at Budget 2016 to address online VAT fraud, of which I have direct experience. A business in my constituency has suffered from overseas sellers on platforms such as Amazon and eBay undercutting its prices by avoiding payment of VAT. Indeed, I have corresponded directly with the Minister on that issue, so I am pleased that the Government have decided to take note of my concerns.
Clause 112 will allow Her Majesty’s Revenue and Customs to require a person established in a country outside the EU to appoint a representative to account for VAT on sales to consumers and non-taxable persons in the UK. It will also permit HMRC to require security from the seller for payment of the tax. The appointment of a representative to account for VAT is used in other circumstances, so the change simply extends the circumstances in which HMRC can exercise that power.
The Opposition have long called on the Government to go faster and further in cracking down on tax evasion, so we welcome the intention. However, we are concerned that the measure might not be fully effective because HMRC first has to identify that a person is not accounting for VAT on sales into the UK and then it has to direct them to appoint a representative who is prepared to act. That may be difficult because the representative will then be responsible for accounting for VAT if the supplier does not do so and may be liable for the tax. It would be helpful if the Minister could specifically address that point. Furthermore, it seems possible for a determined fraudster to use different companies or aliases to avoid the impact of an HMRC direction. Will the Minister tell us today how the Government intend HMRC to take effective enforcement action on that?
Clause 113 will impose joint and several liability on the operators of online marketplaces to account for VAT on sales by overseas sellers to UK consumers and non-taxable persons. As with clause 112, the clause suffers from the defect that HMRC’s powers take effect only if the overseas seller has failed to comply with VAT rules and if HMRC issues a direction, which essentially means that VAT is likely to be lost, and may continue to be lost for some time, before HMRC acts. Will the Minister tell us today how he intends to address that problem?
Also of note is that clause 113 applies to any overseas business—in other words, other EU and non-EU businesses—but the measures are meant to be targeted at non-EU businesses only. HMRC states that, in practice, it will use the power only
“where overseas businesses do not have a genuine business establishment in the EU.”
However, there is a view that the legislation should reflect what is intended in practice and that the current drafting raises the question of whether the measure is actually compatible with EU law. EU-established businesses could be caught by the legislation despite there already being local rules for them to comply with and mutual assistance procedures for the UK to use. Can the Minister assure us that such businesses will not be affected? One way to address the situation would be to amend clause 113 to mirror clause 112 to cover only non-EU established businesses. What is the Minister’s view on that suggestion? Are the Government considering any further amendments?
A consultation was launched alongside these two clauses at Budget 2016 as part of a package of measures to address the issue. It was a live consultation on what due diligence should be undertaken by online marketplaces to ensure that overseas sellers are registered for VAT and account for it on their sales. We support HMRC taking action to target abuse and non-compliance in this area, but business groups have expressed concern that the primary target should be those who seek to evade the tax, rather than legitimate businesses that unwittingly deal with them. Can the Minister reassure those businesses on that point?
Her Majesty’s Treasury estimates the VAT loss attributable to sales by overseas businesses via online marketplaces to have been as much as £1 billion to £1.5 billion in 2015-16. Acknowledging that the amounts involved are only estimated, but still significant, it would be helpful if the Government could expand on how that estimate has been reached.
The Labour party is prepared to offer support for a crackdown on VAT fraud but, given the understandable concerns of business about the administrative burdens, the Government need to be very clear about the amounts involved and the benefits to the taxpayer. Similarly, we hope that Ministers will report back to Parliament on the success of the scheme as well as on wider action to narrow the tax gap so that we can measure such success. Although the Government have estimated that they will receive an additional £365 million in revenue as a result of the measures by the end of the Parliament, that figure is obviously some way short of £1 billion. Will the Minister tell us why such a gap will remain and what further action the Government are considering?
On the detail of the proposed due diligence scheme, the primary concern that businesses expressed to us is that the scheme targets intermediaries in the supply chain, not those failing to comply. That places an additional burden on legitimate business and, although that may be justifiable to collect tax owed, there is a danger that it gives a message to potential tax evaders that they will not be pursued by HMRC. We support HMRC’s aim of minimising the burdens on legitimate business arising from the scheme and limiting them to only those that are necessary and proportionate, but HMRC should also take account of the resources available to different businesses to meet the compliance burden. For example, small and medium-sized enterprises might struggle with compliance and need special protection to avoid an adverse impact on cross-border trade.
It is clear that enforcement is a fundamental issue for HMRC. Although there is a risk of missing trader fraud and misdeclarations in any VAT system, there can be no substitute for HMRC providing effective monitoring and enforcement. For the measures to be effective, HMRC must retain the role of primary enforcer, and it needs to be sufficiently resourced to monitor, investigate and administer trade in the area. With that in mind, does the Minister believe that HMRC currently has adequate resources to do that, given the cuts it has borne?
The Minister will be aware that in some EU member states the problem is avoided by making the online marketplace responsible for accounting for VAT. That is likely to be effective where the marketplace actually collects the selling price for the seller. Of course, it may not be effective if all the marketplace does is act as an intermediary.
Finally, there may be anomalies, for example when an overseas individual sells personal goods, which are not subject to VAT, to UK purchasers, as VAT should not be charged in such circumstances. Any thoughts that the Minister has on lessons from elsewhere and the Government’s evaluation of other systems for collecting VAT would be helpful for us to consider.
Opposition Members are pleased that the Government are taking action to tackle online VAT fraud, and we are fully supportive of the clauses in principle. However, I would be grateful if the Minister addressed some of the many issues I have raised with the legislation and the wider strategy for tackling online fraud generally.
Mr Gauke
As we have heard from the hon. Member for Salford and Eccles, the clauses make changes to ensure that the high street and online businesses that pay UK VAT can compete on a level playing field with overseas sellers that, on occasion, do not. The clauses will ensure that more VAT is paid by overseas sellers who store their goods in UK fulfilment houses and sell those goods via online marketplaces, will give HMRC stronger powers to make overseas business appoint a UK tax representative, and will ensure that online marketplaces are part of the solution to the problem. The measures are forecast to reduce VAT evasion and raise £875 million in extra tax over the next five years, as certified by the independent Office for Budget Responsibility.
A recent survey by the British Retail Consortium shows that more than 20% of non-food retail spending now occurs online, which means that the UK public can now buy goods faster and cheaper than ever before. British businesses also have an online platform to enter markets they could normally never have imagined. A small village business can now supply high-quality local goods across the United Kingdom and even the world. However, that small business is competing with thousands of online sellers overseas, some of which are evading VAT. That abuse has grown significantly and now costs the UK taxpayer between £1 billion and £1.5 billion per year. Those overseas sellers are competing with all businesses trading in the UK, abusing the trust of UK consumers and depriving the Exchequer of significant revenue.
Rebecca Long Bailey
Committee members will be pleased to know that my comments on this clause will be very brief. The clause simply puts it beyond doubt that charities in the Isle of Man jurisdiction may qualify for the VAT release available to other charities in the UK. This provision gives effect to the principal VAT directive and the 1979 customs and excise agreement with the Isle of Man. It would be helpful if the Minister could confirm whether he has yet had any discussions with the Government that suggest that, following Brexit, the principal VAT directive will not—subject, of course, to the terms of any subsequent trade deal—apply to the UK.
The Minister may also like to clarify any early thinking about how Brexit may affect general trade relations, such as those with the Isle of Man, which is not a member of the EU or the European economic area. It has access to the single market in goods only, and only through its relationship with the UK. Presumably, the Government have no plans to alter the customs and excise agreement, but it would be helpful if the Minister could briefly expand on that point in relation to matters within the scope of the Bill.
The clause is largely a technical provision designed to clarify rather than change the law, and we take no issue with it.
Mr Gauke
Clause 114 makes changes to ensure that charities subject to the jurisdiction of the High Court of the Isle of Man are able to obtain the same VAT release as charities in the United Kingdom. As the hon. Lady says, it is a largely technical clause, and I am not surprised that it is uncontroversial.
The hon. Lady raises the perfectly fair issue of the future of VAT in the light of the Brexit vote. That is indeed one of the issues that we will have to wrestle with. All I can say at the moment is that it is something that we will have to consider. It will depend very much on the nature of the relationship that we have with the European Union, and of course that will be a matter for negotiation, and for decision by the next Prime Minister. Although the hon. Lady raises a fair question, and her point is well made, I fear at this point I am not able to provide any clarity for her.
Question put and agreed to.
Clause 114 accordingly ordered to stand part of the Bill.
Clause 115
VAT: women’s sanitary products
Kirsty Blackman (Aberdeen North) (SNP)
I beg to move amendment 1, in clause 115, page 162, line 8, leave out from “liners” to end of line 9.
The Chair
With this it will be convenient to discuss the following:
Amendment 2, in clause 115, page 162, line 10, at end insert—
“(d) products that are designed, and marketed, as being solely for use for absorbing breastmilk”.
Amendment 5, in clause 115, page 162, line 14, after “after” insert
“1 April 2017, or on any prior”.
Clause stand part.
Kirsty Blackman
I want to start by thanking the Government. I am pleased that it is hoped that clause 115 will stand part of the Bill; it is a good move by the Government. I welcome the huge amount of hard work done last year by my hon. Friend the Member for Glasgow Central (Alison Thewliss) and by Members across the House on raising this matter. I appreciate the work that was done, and the fact that the Government have included this clause in the Bill.
I want to talk about our intention. In amendment 1 we are looking at the removal of the exemption from the zero rate for incontinence products. I understand that the Government’s proposal does not include incontinence products. There is some technical language in VAT legislation relating to people with disabilities and their ability to claim zero-rate VAT on incontinence products. However, that does not apply across the board to everybody who has incontinence problems; it applies only to those who meet the specific criteria that were drafted.
We have real concerns about that. Just because somebody is not registered disabled does not mean that they do not need to use incontinence products. That is a serious issue and the Government should not charge VAT in that case. If somebody has problems with incontinence, these products are necessary for their wellbeing and in their everyday life. The Government need to look again at the earlier legislation.
If we could have broadened the clause to include men’s incontinence products as well as women’s, we would have done that. However, because the clause was titled “VAT: women’s sanitary products”, we could not. That is why we are broadening it to include only women’s incontinence products. For clarity, we are talking about incontinence products that women are required to use but that do not fall into the exemption categories in the original VAT legislation.
Amendment 2 concerns products for the absorption of breast milk. I assume neither of the Ministers here has breastfed, so they may not know all the ins and outs of how this works. I breastfed both my children for about three years in total, so I have some experience. The amendment proposes that
“products that are designed, and marketed, as being solely for use for absorbing breastmilk”
be zero-rated for VAT.
Breastfeeding is incredibly important and has huge health benefits for mother and child. It is completely and totally natural and is what a woman’s body expects to happen after she has had a child. When breastfeeding a child, it takes a while for the milk supply and the child’s feeding to balance. There is a period where the mother has too much or too little milk—usually too much, so there is an awful lot of leaking of milk. People do not usually talk about this in public, but there are stories about it all over the internet. In one case, a woman was at a job interview, at which somebody mentioned children, and suddenly there was a let-down, which means milk coming out at speed. Absorption products are absolutely necessary. It is vital for women to have breast pads that go inside the bra and absorb breast milk when that let-down happens. That happens not to all women, but to a huge number.
These products are required; they are not in any way a luxury. They are not something that women could do without, unless they were willing to bring several changes of clothes with them, which is not particularly practical when they are already doing absolute heaps of washing because they have a new baby.
Rebecca Long Bailey
Clause 115 is designed to implement the Government’s pledge to abolish the so-called tampon tax, following a long-standing campaign by women’s groups, as well as by my hon. Friend the Member for Dewsbury (Paula Sherriff) and other Members from all parties. As we have heard, among those other Members was the hon. Member for Glasgow Central, who represented the Scottish National party on last year’s Finance Bill Committee, and whom I will describe as “the hon. sister” for today’s purposes.
It has taken us some time to get where we are. The EU rules have allowed countries to keep VAT exemptions and reduced rates—including zero rates—where those rates and exemptions were negotiated at the point of their joining the EU. However, there were significant restrictions on removing goods and services from VAT, which meant that under existing rules the UK had been able to reduce VAT to 5% but not remove it altogether. That is what the previous Labour Government chose to do for women’s sanitary products; following a campaign by women Labour MPs, the then Paymaster General, Dawn Primarolo, reduced the rate to the 5% minimum—but that 5% rate was left in force.
More recently, there was a grassroots campaign to remove the VAT. Prominent in that campaign was a petition, started by feminist campaigner Laura Coryton, that attracted hundreds of thousands of signatures. Similar campaigns have been run in other countries. The issue was raised in this place by the hon. Member for Glasgow Central in the Finance Bill Committee last year, and by my hon. Friend the Member for Dewsbury, who then tabled an amendment to the Bill on Report. That amendment attracted considerable cross-party support, including from several Conservative Members.
The Government announced some concessions, which included finally starting negotiations on the issue at European level. Nevertheless, the matter was largely ignored during the Prime Minister’s EU renegotiation, as the Government focused on issues such as defending the interests of the City of London. The issue was finally addressed only when Ministers were staring into the face of defeat over the ultra-shambles Budget. I know that the Minister will appreciate my saying that the Chancellor became the first in history to accept not one but two amendments to his own Budget resolution: one was in my name, on green energy VAT, and the other was, of course, in the name of my hon. Friend the Member for Dewsbury. Do not worry, I have more to say on green energy VAT later in Committee.
The amendment to the Budget resolution led to the Minister raising the issue at the European Council and it being addressed in the Council communiqué. In April, the European Commission published an action plan on VAT. That was a move further towards a single European VAT system based on the destination principle—the principle that goods and services are taxed in the country where they are consumed. The European Commission also announced a consultation with member states on proposals to allow countries to vary their reduced VAT rates on items including women’s sanitary products. One option would see the establishment of a list of goods and services on which reduced—including zero—rates could be introduced by any country. Another option would simply give member states complete freedom to select any goods they favour for reduced rates.
Of course, those steps at European level have been somewhat overtaken by the vote to leave the EU, although, as we know, European law may remain in force for some years to come. None the less, the EU VAT action plan anticipated concluding the reforms by 2018, even if we had not completed the process of leaving by that stage, so it would be helpful if the Minister could say whether the UK will now have a say on the options put forward in the EU VAT action plan and, if so, what option is favoured. I hope that he can confirm that in either case, the tampon tax would be abolished, full stop.
A pledge to abolish the tampon tax was made by the Vote Leave campaign during the referendum campaigning season. It was even suggested that that would be included in a mini-Queen’s Speech following a Brexit vote. However, as we have the Bill before us today, we can take steps without that being strictly necessary; I am sure that the Minister understands the clear, basic point.
The explanatory notes, which were of course written before the referendum vote, state :
“This clause reduces the VAT rate on the supply of women's sanitary products from 5% to zero %.”
However, I hope that the Minister will acknowledge that that is not really the case. The clause does not zero-rate women’s sanitary products; it merely provides the Treasury with enabling powers to do so, if it chooses to, at a time of its choosing. The clause leaves open the question of not only when it will do so, but whether it will so so.
That is the issue dealt with in amendment 5, which my hon. Friend the Member for Dewsbury tabled and which I have signed. There is no reason to leave the matter open-ended, given the possibility that Ministers will simply never get round to abolishing the tampon tax once the heat is off. The amendment would impose a hard deadline. If for any reason it could not be met—if we were still negotiating Brexit and the EU VAT action plan had not been concluded with the necessary reform—the Government would have to return the matter to the House by way of an amendment to a future Finance Bill, and explain why they had failed to follow through at that stage. A firm date will hold the Government’s feet to the fire and set a clear objective and a legislative backdrop, to prevent sliding.
Sadly, my hon. Friend the Member for Dewsbury was of course not chosen for this Committee. I will not press the amendment to a vote if the Minister does not accept it, but I think my hon. Friend will want to raise the issue later, depending on the Minister’s response. It is only fair to add that I suspect that the whole House will not provide the Government with a majority as solid as the one that the Minister has in Committee. I hope that he will give some sort of positive answer today, because the change was a key pledge of the Vote Leave campaign. Other pledges seem to be unravelling fast. I hope that Conservative Members who supported Brexit will at the very least feel an obligation to follow through on the pledge. Otherwise they will be judged very badly by constituents who voted in the referendum.
It would be helpful if the Minister would address another issue, although we have not at this stage tabled an amendment on it. It is about the women’s charities that received funding from the tampon tax fund. It is understandable that many people criticised the use of a tax on women to pay for support that they often needed as a result of male violence. None the less, that money was still better than nothing while the tax continued. Now that it will be abolished, what consideration has the Treasury given to ensuring that there will in the future be stable funding for the vital work of the organisations in question?
My hon. Friend the Member for Dewsbury previously raised another issue with the Minister, and I want to press him on that again today. That is the fact that the benefit of zero rates is not always passed on to consumers in full. It depends largely on the market. There is evidence, for example, that in France a similar tax cut was not passed on to women, but simply bolstered the profits of retailers and manufacturers. When the rate of VAT on sanitary products was reduced to 5%, the Government said they would monitor whether the benefits were passed on to consumers here. It would be interesting, if possible, to compare the margins at that time with the margins now, to see whether that happened. Can the Minister give any information about that today, or by way of a written response later, and provide the full data from any assessment?
My hon. Friend the Member for Dewsbury, in her usual hands-on manner, has grasped the issue directly, and has herself negotiated a deal with leading retailers: they will pass on the cut in full. I understand, however, that some smaller retailers have yet to make that commitment, and there are others in the supply chain who could also benefit, theoretically. Will the Minister join me in urging these businesses to pass on the tax cut in full and to sign up to the arrangement that my hon. Friend has reached? Will the Minister also outline what he intends to do where companies do not pass on the benefits to women? Will he speak out against them and make it clear that the Government anticipate that this tax cut will benefit female customers, not big business shareholders, and will he consider tougher sanctions if they do not pass on the benefits? For example, is there an argument for including an enabling provision for a windfall tax in this Bill? Even if there is no current intention to use such a power, it might have a useful effect if companies know that the option to use it is in the Bill. It is sometimes easier for politicians to talk quietly if they carry a big stick. The Minister is a very effective talker, even though he does not have his stick with him this week. His thoughts on this issue would be very welcome.
We note that the Scottish National party has tabled two amendments, and the arguments for them were put forward articulately today. The amendments seek to expand the definition of “women’s sanitary products” for VAT purposes. We start from a position of sympathy, and we will support any amendments on these matters that the SNP Members choose to push to a vote.
In conclusion, we will support the clause, which has come about largely as a consequence of the campaigning of Labour Members and other Members in this House. The Government are not right to say, “job done.” On the contrary, this is a case of, “We now have the tools, and we may do the job later if we feel like it”, and that really is not good enough to meet the promises made by European leaders, the Prime Minister, his Government and the winning side in the recent referendum. It is not good enough for women. I hope that the Minister will accept the amendment tabled by my hon. Friend the Member for Dewsbury. I look forward to hearing what he has to say on the other issues that I have raised.
Mr Gauke
Clause 115 makes provision to ensure that women’s sanitary products will be zero-rated for VAT as soon as possible after the Finance Bill receives Royal Assent. Introducing a zero rate of VAT on sanitary products has been an issue raised and supported by hon. Members from all parties in the House. The Government have listened to their views, and we accept the argument put forward by many hon. Members that we should not apply VAT, even at the current 5% reduced rate, to these products.
We have been active in pursuing this change in the European Union. In the autumn statement in 2015, the Chancellor announced that while the UK sought to change the rules for the application of VAT zero rates with the EU, £15 million a year—an amount equivalent to the revenue accrued from VAT on these products—would be spent on supporting women’s charities. So far, this fund has supported 25 charities that are making a significant impact on the lives of women and girls in the United Kingdom.
The Chancellor announced in the autumn statement that initial donations from the tampon tax fund, totalling £5 million, would support the Eve Appeal, Safelives, Women’s Aid, and the Haven. Further grants totalling £12 million were announced at the Budget this year to support a range of charities. This included £5.2 million allocated to Comic Relief and Rosa to disburse over the coming year to a range of grassroots women’s organisations across the UK.
The Prime Minister took this issue to the European Council in March and secured the agreement of all EU Heads of State, who welcomed Commission action in this area, including giving member states the option of zero-rating sanitary products. In May, ECOFIN unanimously agreed that the Commission should bring forward proposals as soon as possible to allow member states to apply a zero rate to women’s sanitary products. The next step in the process is for a proposal to be published by the Commission, which it has committed to do before the end of this year. We are working with the Commission to expedite that process, so that the proposal is brought forward as soon as possible. To ensure that there is no delay in zero-rating women’s sanitary products for VAT at the earliest opportunity, we have included this clause in this year’s Bill.
Let me turn to amendments 1 and 2, the case for which was argued today by the hon. Member for Aberdeen North. She proposes that the provisions in the clause be extended to pads used to absorb breast milk and other products. The Government have taken decisive action to gain agreement across the EU on bringing forward a proposal on VAT on sanitary products, but it needs to be remembered that VAT applies to the vast majority of purchases of goods and supplies, including everyday items such as toilet paper, and it makes a significant contribution to the public finances. Extending the relief in the way that the amendment proposes is not possible under any feasible proposal from the Commission. Seeking to extend the scope of any new zero rate would introduce further complications to what are already delicate and complex discussions with the European Commission.
Kirsty Blackman
I am not 100% sure of the protocol here. Given the Minister’s suggestion that a future Government might look into the matter, and as he has listened to what we have said, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 115 ordered to stand part of the Bill.
Clause 116
SDLT: calculating tax on non-residential and mixed transactions
Question proposed, That the clause stand part of the Bill.
Kirsty Blackman
On a point of order, Sir Roger. We were sent a list of various territories to which these provisions apply. Some are for Scotland only, some are for Scotland and Northern Ireland, and some are for England and Wales. I am unsure how we proceed to consider this in terms of English votes for English laws. Any guidance you can give us, Sir Roger, would be hugely appreciated.
The Chair
I am advised that English votes for English laws does not apply in Committee. If such issues arise, they will be addressed on the Floor of the House. I hope that is satisfactory.
Rebecca Long Bailey
Clauses 116 and 121 introduce changes to the way stamp duty land tax is calculated for non-residential property transactions and transactions involving a mixture of residential and non-residential properties. I do not plan to go into a lot of detail, but there are a few questions that I want to ask the Minister. According to the policy paper, the change is expected to increase Exchequer revenue by £385 million in this financial year, rising to £590 million by 2020-21. The paper states:
“There are approximately 100,000 non-residential and mixed property transactions per year… As a result of these changes over 90% of non-residential property transactions will pay the same or less in SDLT.”
It also says:
“All non-residential freehold and lease premium transactions worth less than £1.05 million will pay the same SDLT or less compared to the current system. For leasehold…transactions, those with a NPV of up to £5 million will pay the same in SDLT as under the current system.”
Will the Minister confirm what the Government expect the impact to be on the remaining 10% who pay more in SDLT? What assessments have been carried out?
Clause 121 makes minor consequential amendments and we are quite happy to accept clauses 116 and 121. However, the Chartered Institute of Taxation has highlighted that the changes made by the clauses were introduced without consultation. I understand that the measures are transitional provision, but perhaps the Minister will take the opportunity to ease stakeholders’ concerns and identify what the consultative process entailed.
Mr Gauke
Clause 116 makes changes to the non-residential rates of stamp duty land tax. In the 2014 autumn statement the Government announced a radical reform of residential SDLT, which improved the efficiency of the tax by removing the distortive slab structure that led to large increases in SDLT when homeowners pay just £1 over a tax threshold. The changes to non-residential SDLT follow on from those successful reforms and also form part of the business tax roadmap, which sets out the Government’s plans for business taxes over the Parliament and will give businesses the clarity they need to invest with confidence. Tackling the deficit is essential for businesses, which can only grow and thrive if we have economic security.
The UK’s commercial property market was worth £787 billion in 2014, having experienced 15% growth in that year alone. As that market develops, the Government must ensure that non-residential SDLT is modern, efficient and helps the commercial property market to continue to grow. The clause improves the economic efficiency of SDLT and will provide a tax cut for the large majority of businesses purchasing commercial property. SDLT on non-residential property transactions contains two elements, depending on whether property is purchased or leased with payment upfront, or whether payment is via rental payments over time. The clause makes changes to both aspects and changes will raise just over £2.5 billion over the scorecard period.
Since 17 March, SDLT on freehold and lease premium non-residential transactions has been payable on the portion of the transaction value that falls within each tax band, rather than the tax being due at one rate on the entire value. The new structure has a nil-rate band up to £150,000; a 2% rate between £150,001 and £250,000; and a top rate of 5% above £250,000. SDLT on leasehold rent transactions has also changed to include the new 2% rate for transactions in which the NPV—net present value—of the rental payments is above £5 million. The new structure will have a nil-rate band of up to £150,000; a 1% band between £150,001 and £5 million; and a top rate of 2% for those high-value leasings with an NPV above £5 million.
As a result of the changes, over 90% of non-residential property transactions will pay the same or less in SDLT, as the hon. Lady has said. Businesses purchasing the most expensive properties have a contribution to make and the purchasers of the most expensive properties will pay more tax. However, the increase in SDLT at the top of the market is modest. The maximum tax increase from the reforms for a very expensive property is a tax rise of a single percentage point. In the context of the wider public finances and the performance of the commercial property market in recent years, I think that is reasonable.
With regard to consultation, the reforms to SDLT came into force from midnight following the Budget. That early introduction was needed to minimise any distortions in the commercial property market, including the impact on construction and development projects, that may have resulted from early announcement or consultation of a future change to non-residential SDLT. Recognising that some purchasers will have entered into legal agreements to purchase property, and to further minimise any potential market distortion, the Government are putting into place transitional rules for purchasers who have exchanged contracts but not completed their purchase before 17 March in order to ensure they do not lose out. The legislation for those changes is receiving scrutiny today. I hope that the Committee will support the clause, which will improve the economic efficiency of non-residential rates and builds on the successful changes that the Government have previously made to residential rates of SDLT.
Question put and agreed to.
Clause 116 accordingly ordered to stand part of the Bill.
Clause 117
SDLT: higher rates for additional dwellings etc
The Chair
With this it will be convenient to discuss the following:
Government amendments 30 to 42.
Clause stand part.
Mr Gauke
Let me say a word about clause 117, which introduces higher rates of stamp duty land tax on purchasers of additional residential properties. Owning a home is an aspiration for millions of people in our country. The Government are committed to helping people achieve that aspiration by supporting those who want to work hard, save and buy their own home. Home ownership is also a key part of the Government’s plan to provide economic security for working people at every stage of their lives.
In the previous Parliament the Government took significant steps to support housing supply and low-cost home ownership, and in the spending review and autumn statement in 2015 we went further by announcing a bold five-point plan for housing. The plan refocuses support for housing towards low-cost home ownership for first-time buyers. Alongside delivering 400,000 affordable housing starts by 2020-21, extending the right to buy to housing association tenants, accelerating housing supply and introducing the London Help to Buy scheme, the five-point plan includes the introduction of higher rates of SDLT on purchases of additional residential properties such as second homes and buy-to-let properties.
The higher rates are designed to help redress the balance between those people who are struggling to buy their first home and those who are able to invest in additional properties. The higher rates are 3% above the standard SDLT rate and took effect on 1 April 2016. The Government will use some of the additional tax collected to provide £60 million for communities in England where the impact of second homes is particularly acute. The tax receipts will also help towards doubling the affordable housing budget, which will help first-time buyers.
Rebecca Long Bailey
As we have heard, clause 117 implements the higher rates of SDLT, or the 3% surcharge, on the purchase of additional residential properties by individuals and the purchase of any residential properties by companies. The measure has effect from 1 April 2016. The Government’s stated intention is to support home ownership and first-time buyers. The measure is expected to bring in £3.7 billion in additional revenues between this financial year and 2020-21. Clearly it is an important measure and we are broadly supportive. However, as ever, clarification on some points would be welcome.
The Government have stated that they will use some of the tax take
“to provide £60 million for communities in England where the impact of second homes is particularly acute”
and that the receipts
“will help towards doubling the affordable housing budget.”
I would like to press the Minister on those points. As I am sure he knows, Labour Members are not impressed with the present and previous Governments’ track records on housing. They have presided over six years of failure to tackle the crisis in the market. There are 201,000 fewer home-owning households than in 2010, and home ownership has fallen from 67.4% in 2009-10 to 63.6% in 2014-15. Most drastically, the number of under-35s who own a home has fallen by 20% since 2009-10.
The Government’s record on affordable housing is equally disappointing. Last year the number of affordable homes built was the smallest in more than two decades: 9,590 homes for social rent, compared with 33,180 delivered during Labour’s last year in office. This Government have failed to deliver one-for-one replacements for homes sold through the right to buy; instead, only one is being built for every eight sold. Their “affordable rent” is not affordable for many families, particularly in London, where it could swallow up to 84% of the earnings of a family on the average income and require a salary of up to £74,000. Will the Minister clarify how the doubling of the affordable housing budget will be used effectively to support home ownership across the country? Will he also identify specifically which communities in England are in line for the £60 million fund, and in what form?
The Government conducted a consultation on these measures from December 2015 to February this year, a process that the Chartered Institute of Taxation has labelled inadequate. Stakeholders are concerned that the consultation ran for only five weeks and that the draft legislation was not published until two weeks before the measure took effect on 1 April 2016. Can the Minister provide some assurance that due consultation has taken place on these big changes to the SDLT regime?
Furthermore, there have been queries about what will happen in cases of joint purchase. If a property is purchased by more than one buyer and the higher rates apply to any one of them, the surcharge will apply to the whole of the chargeable consideration. The Government say that the measure is meant to support home ownership and first-time buyers, but does this provision not bring parents assisting their children to buy a first home into the scope of the surcharge, as the Institute of Chartered Accountants has suggested?
While Labour Members welcome efforts to cool the buy-to-let market in favour of first-time buyers, the new legislation will make an already-complex tax even more complex. It would be sensible to keep the issue of joint ownership by parents and children under review, as their options for assisting each other to purchase property are significantly restricted by the new legislation. I would welcome the Minister’s thoughts on that.
Finally, before I turn to Government amendments 29 to 42, clause 117(16)(1) provides that ownership of a dwelling outside the UK shall be taken into account in deciding whether the surcharge applies to the purchase of a dwelling in the UK. The Chartered Institute of Taxation highlighted some practical difficulties with determining ownership of a property in certain jurisdictions, and whether it is a main residence. I am therefore concerned about compliance. As we know, there is a large problem in the UK property market, especially in London, where non-UK nationals buying property are pushing up house prices. Will the Minister therefore confirm what measures are in place to ensure compliance by overseas property owners?
I note that Government amendments 29 to 39 take action to address the tax treatment of dwellings with annexes or granny flats, as discussed. The changes mean that the surcharge will not be applicable when a granny flat is the only reason the higher rate would apply. I am aware of what stakeholders say and of wider reports in the media about the issue, and I am pleased that the Government have taken steps to address it.
Government amendment 40 clarifies the situation for dwellings purchased under alternative finance arrangements, so that where the surcharge is applicable the higher rates apply to the person occupying the property, not to the financial institution. Again, that is sensible, and it mirrors the situation with annual tax on enveloped dwelling. Finally, Government amendments 41 and 42, according to the explanatory note, will give the Treasury powers to change the rules on what is a higher rates transaction for the purpose of removing transactions from the higher rates.
To conclude, we support all the measures in this group, although we do have some concerns, which I have highlighted. I hope that the Minister will provide assurance.
Mr Gauke
The hon. Lady made a number of points about housing that we could spend a long time debating. I will try to resist that temptation, but let me make one point: in the previous Parliament, more council homes were built than in the whole period of the previous two Labour Governments. We are committed to delivering a large number of affordable homes. Annual housing starts are at an eight-year high, and last year housing completions rose by more than 10%. A £1 billion loan fund will provide funds to small and medium-sized enterprises, such as small house builders. I could say more, but I will resist the temptation.
A number of technical points were made about the measures covered by this group. First, there was a point about how we deal with joint purchasers. We were asked why we do not use an apportionment approach for joint purchasers. A move to an apportionment system would increase complexity in the tax system and increase the risk of non-compliance. The Government’s approach is simpler than an apportionment system and has been settled on after careful consideration. Where a property is purchased jointly, the higher rates will apply if the property is an additional property of one or more purchasers.
As to whether that is unfair to parents trying to help their children on to the property ladder, I do not think so. Parents may help their children on to the property ladder without being subject to the higher rates of SDLT—for example, a parent can offer direct financial support, or become the guarantor of the child’s mortgage—but if the parent purchases a property jointly with the child, the transaction may be subject to the higher rate if the purchase is an additional property for the parent. Offering exemption for properties purchased jointly with children would add complexity to the tax system, reduce revenue and increase compliance risks.
On the impact on the buy-to-let market, the policy is not expected to have an effect on rents. SDLT will be paid only once, when the property is purchased. I was asked why the consultation period was short. Let me reassure the Committee that the consultation process was full and open, and that respondents’ views were taken into account. I accept that the consultation period was shorter than 12 weeks, but that was so that we could properly analyse the responses in time for the final policy design to be confirmed, and for the policy to be in force, by 1 April. We recognise the effects on the property market of pre-announcing changes to SDLT rules, so there was a careful balance to be struck between providing stakeholders with the chance to have their say and not prolonging market disruption.
On treating homes abroad in the same way as homes in the UK, SDLT is a self-assessed tax, and those making returns need to complete returns honestly. It would be unfair to treat those with first homes abroad more beneficially than those with first homes in the UK. Her Majesty’s Revenue and Customs monitors compliance and will check returns carefully.
The Department for Communities and Local Government is consulting on how the £60 million will be spent in communities with a large number of second homes. I am not sure that there is much more I can say on that at this point. It is a matter DCLG is leading on. I hope that those points are helpful to the hon. Member for Salford and Eccles and the Committee. I hope the clause and the amendments to it will stand part of the Bill.
Amendment 29 agreed to.
Amendments made: 30, in clause 117, page 167, line 21, at end insert
“meet conditions A, B and C”
Amendment 31, in clause 117, page 167, line 22, leave out
“Condition A is that the portion”
and insert
“A purchased dwelling meets condition A if the amount”
Amendment 32, in clause 117, page 167, line 25, leave out “Condition B is that” and insert
“A purchased dwelling meets condition B if”
Amendment 33, in clause 117, page 167, line 30, at end insert—
‘(4) A purchased dwelling meets condition C if it is not subsidiary to any of the other purchased dwellings.
(5) One of the purchased dwellings (“dwelling A”) is subsidiary to another of the purchased dwellings (“dwelling B”) if—
(a) dwelling A is situated within the grounds of, or within the same building as, dwelling B, and
(b) the amount of the chargeable consideration for the transaction which is attributable on a just and reasonable basis to dwelling B is equal to, or greater than, two thirds of the amount of the chargeable consideration for the transaction which is attributable on a just and reasonable basis to the following combined—
(i) dwelling A,
(ii) dwelling B, and
(iii) each of the other purchased dwellings (if any) which are situated within the grounds of, or within the same building as, dwelling B.”
Amendment 34, in clause 117, page 167, line 36, leave out from beginning to “one” and insert “only”.
Amendment 35, in clause 117, page 167, line 37, after “dwellings” insert
“meets conditions A, B and C”.
Amendment 36, in clause 117, page 167, line 38, leave out from “dwelling” to “is” in line 39 and insert “which meets those conditions”.
Amendment 37, in clause 117, page 167, line 48, at end insert—
‘( ) Sub-paragraphs (2) to (5) of paragraph 5 apply for the purposes of sub-paragraph (1)(c) of this paragraph as they apply for the purposes of sub-paragraph (1)(c) of that paragraph.”
Amendment 38, in clause 117, page 168, line 9, leave out from beginning to “at”.
Amendment 39, in clause 117, page 168, line 10, at end insert
“meets conditions A and B.
‘( ) Sub-paragraphs (2) and (3) of paragraph 5 apply for the purposes of sub-paragraph (1)(c) of this paragraph as they apply for the purposes of sub-paragraph (1)(c) of that paragraph.”
Amendment 40, in clause 117, page 171, line 8, at end insert—
“Alternative finance arrangements
14A (1) This paragraph applies in relation to a chargeable transaction which is the first transaction under an alternative finance arrangement entered into between a person and a financial institution.
(2) The person (rather than the institution) is to be treated for the purposes of this Schedule as the purchaser in relation to the transaction.
(3) In this paragraph—
“alternative finance arrangement” means an arrangement of a kind mentioned in section 71A(1) or 73(1);
“financial institution” has the meaning it has in those sections (see section 73BA);
“first transaction”, in relation to an alternative finance arrangement, has the meaning given by section 71A(1)(a) or (as the case may be) section 73(1)(a)(i).”
Amendment 41, in clause 117, page 173, line 23, at end insert—
“Power to modify this Schedule
18 (1) The Treasury may by regulations amend or otherwise modify this Schedule for the purpose of preventing certain chargeable transactions from being higher rates transactions for the purposes of paragraph 1.
(2) The provision which may be included in regulations under this paragraph by reason of section 114(6)(c) includes incidental or consequential provision which may cause a chargeable transaction to be a higher rates transaction for the purposes of paragraph 1.”
Amendment 42, in clause 117, page 174, line 7, at end insert—
‘( ) Paragraph 14A of Schedule 4ZA to FA 2003 does not apply in relation to a land transaction of which the effective date is, or is before, the date on which this Act is passed if the effect of its application would be that the transaction is a higher rates transaction for the purposes of paragraph 1 of that Schedule.”—(Mr Gauke.)
Clause 117, as amended, ordered to stand part of the Bill.
Clause 118
SDLT higher rate: land purchased for commercial use
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss clauses 119 and 120 and 123 to 125 stand part.
Mr Gauke
Clause 118 to 120 and clauses 123 to 124 extend the reliefs available from the annual tax on enveloped dwellings—ATED—and the 15% higher rate of stamp duty land tax. Clause 125 corrects a minor technical amendment. ATED and the 15% rate of SDLT were introduced as part of a package of measures to tackle tax avoidance. They will ensure that individuals who envelope residential properties by owning or purchasing them through corporate structures without a commercial purpose pay a fair share of tax. The intention is to discourage future enveloping and encourage those who have enveloped to take the properties they own out of those structures. The 15% higher rate is charged on the enveloping of the property, and ATED is charged annually for as long as the property remains within the envelope.
There are a series of reliefs from ATED and the 15% rate, aimed at genuine commercial use of the property. If the conditions for any particular relief are met, the 15% rate is reduced to the rate of SDLT that would ordinarily apply, and the ATED charge can be reduced to nil. Initially, when these taxes were introduced, they applied to properties valued at more than £2 million. However, legislative changes introduced in the Finance Act 2014 reduced that threshold to £500,000 from 1 April 2016. Following that reduction in the threshold, certain legitimate business activities have been identified where these taxes can apply. The clauses intend to provide relief for those cases.
Clause 118 resolves a problem that arose only in relation to the 15% rate of SDLT. Currently, where a residential property is acquired with the intention of using it for business premises—for example, as offices from which to run the trade or business—or for conversion or demolition or use for one or more relievable purposes, the 15% rate applies. The clause will relieve those types of business activity from the 15% rate to guard against abuse. If, within a three-year period, the property is no longer held exclusively for a relievable purpose, relief is withdrawn.
Clauses 119 and 123 provide relief from both the 15% rate and ATED in situations where a residential property is acquired or held exclusively for the purposes of an equity release scheme, referred to as a regulated home reversion plan. Those plans are typically offered by insurance companies to older people. The company buys all or part of their property in exchange for an annuity and a lifetime tenancy. The result of that can be that by having an interest in a residential property, the insurance company can become liable to the 15% rate and ATED where the value exceeds £500,000. Clauses 119 and 123 relieve home reversion plans from the charges. However, in order to protect against abuse, where the conditions are no longer met, relief will not be available.
In relation to clauses 120 and 124, relief is currently given where a property is made available to an employee of a trade, or where a property is rented out. However, no relief is available where a property is used by an employee of a property rental business or where a tenant-run flat management company permits one of the flats to be occupied by a caretaker. These clauses extend the current reliefs to remove those gaps. Similarly, where the conditions are no longer met, relief will no longer be available. For the 15% rate, it will be withdrawn if the property is no longer held exclusively for a relievable purpose. Those changes came into effect on 1 April 2016.
Clause 125 ensures that the ATED regime continues to function effectively following the introduction of the land buildings transaction tax in Scotland.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
Very briefly, I want to commend the Minister. We fully support clause 125.
Mr Gauke
I am grateful to the hon. Gentleman for putting that on the record.
These reliefs ensure that the 15% rate of SDLT and ATED work together effectively as intended to tackle avoidance, while supporting genuine businesses. I hope that these clauses can stand part of the Bill.
Question put and agreed to.
Clause 118 accordingly ordered to stand part of the Bill.
Clauses 119 to 121 ordered to stand part of the Bill.
Clause 122
SDLT: property authorised investment funds and co-ownership authorised contractual schemes
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss that schedule 16 be the Sixteenth schedule to the Bill.
Rebecca Long Bailey
This clause and schedule introduce a relief from SDLT for certain property funds and co-ownership schemes. The relief aims to remove barriers to the use of particular ways of investing in property. The transfer of property into property authorised investment funds and co-ownership authorised contractual schemes is currently subject to stamp duty.
As set out in the HMRC policy paper, this clause and schedule introduce a 100% relief from stamp duty land tax for the initial transfer, or seeding, of properties into an authorised PAIF or COACS. The measure also introduces changes to the SDLT treatment of COACSs, so that there will not be a SDLT charge on transactions in units.
In the 2014 Budget, the Government announced that they would consult on the SDLT treatment of the seeding of property authorised investment funds and the wider SDLT treatment of co-ownership authorised contractual schemes. That was in reaction to stakeholder suggestions that relieving stamp duty
“in certain circumstances could encourage more property funds to set up in the UK and facilitate greater collective investment in UK property.”
The Government therefore carried out a consultation in July 2014, to seek views on the case for action on design features for a potential seeding relief and targeted stamp duty rules for co-ownership authorised contractual schemes. Subsequently, in the 2014 autumn statement, it was announced that those changes would be made subject to the resolution of potential avoidance issues.
The explanatory note to the clause states:
“The legislation includes anti-avoidance measures to limit the application of the relief to authorised funds with a broad base of investors and a sizeable portfolio of seeded properties. This aims to minimise SDLT avoidance via the ‘enveloping’ of properties within such funds.”
We do not seek to divide the Committee on this measure, but I would like the Minister to expand on that point. Can he explain what safeguards are in place to prevent the avoidance of stamp duty through this relief? What is the Treasury’s estimate of the risk of avoidance through this relief? Are there any plans in place to review the relief after a given time to assess whether the safeguards are working?
According to HMRC’s policy paper, this measure is expected to cost £10 million in this financial year, rising to £15 million next year, and then dropping to £5 million by 2019-20. The expected impact is minimal, other than on
“life and pension companies, charities and other tax exempt investors that invest in property. They will all benefit as a result of SDLT cost reductions which may subsequently be passed on to beneficiaries of these organisations.”
However, accountants Smith & Williamson noted that the measure is likely to affect only substantial property portfolios. It stated:
“it will be interesting to see whether it will be extended to other tax-favoured property investment vehicles such as real estate investment trusts”.
Do the Government have any plans to extend the relief in any way?
We do not oppose this clause and schedule, but I hope the Minister can assure me that this new relief will not be used as a tax-avoidance scam, and that the Government have taken all possible action to ensure that it will not be.
Mr Gauke
As we have heard, clause 122 makes changes to ensure that the tax system supports UK competitiveness and makes the UK a more attractive location for fund management and domicile. The UK investment management industry is an important and successful part of the economy. It is a significant employer that accounts for 1% of GDP and is a key part of the wider financial services sector.
Property funds are an important part of the industry, so it is right that they are taxed fairly and appropriately, and in a way that supports the aim of the Government’s investment management strategy. The Government have received many representations from the industry saying that SDLT rules do not work for two types of property funds: property authorised investment funds and co-ownership authorised contractual schemes.
Under current rules, an SDLT liability can arise even when economic ownership of properties has not changed and properties have not been bought or sold. That discourages the use of funds and is a barrier to UK competitiveness in this important area. The changes made by clause 122 and schedule 16 will ensure that property authorised investment funds and co-ownership authorised contractual schemes are treated fairly in the SDLT system.
A SDLT relief for property that is transferred into a new fund will be introduced where the underlying property has not changed economic ownership, and there will not be a SDLT charge when investors transfer units in a co-authorised contractual scheme. Those funds will continue to pay the appropriate levels of SDLT when purchasing property, but these changes will mean that SDLT will not be due when the underlying economic ownership of the property has not changed. That is an appropriate and fair outcome, costing £40 million over the scorecard period.
Under the previous Government, an SDLT exemption for the initial transfer of property to a unit trust scheme was repealed due to widespread tax avoidance and abuse of the rules. This Government are committed to addressing that kind of tax avoidance, and there are a number of crucial safeguards as part of the rules. For example, the property portfolio must be of a certain size and value to qualify for this relief. If units in the fund are sold to third-party investors within a three-year period, the SDLT relieved will be paid back to the Exchequer.
Those safeguards were not in place for the previous exemption for unit trusts and will minimise any potential tax avoidance issues. Of course, all taxes are kept under review in the normal way and the costings for this take into account the risk of avoidance.
An argument is sometimes made for extending such a measure to real estate investment trusts. Our view was that there was a clear benefit to the investment management industry and the wider economy from making these changes for the two types of funds that benefit. Evidence that similar effects would occur if the changes were extended to REITs has not yet been presented but, again, we keep all taxes under review.
In summary, the clause improves UK competitiveness in an important industry, encourages property funds to be managed and domiciled in the UK and to invest in UK property assets, and makes the UK tax system fairer. I hope that this clause and schedule can stand part of the Bill.
Question put and agreed to.
Clause 122 accordingly ordered to stand part of the Bill.
Schedule 16 agreed to.
Clauses 123 to 125 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.— (Mel Stride.)
Finance Bill (Sixth sitting)
(7 years, 12 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 5 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 11 - Question accordingly negatived.
Rebecca Long Bailey (Salford and Eccles) (Lab)
These clauses relate to the rates of stamp duty and stamp duty reserve tax that are to be applied to share transactions and to options to buy and sell shares. Once again we are in the realm of financial derivatives, which members of the Committee will know I get quite excited about, given my remarks earlier in the week. I said that the Government need, for the national good, to identify the principles that will apply to the taxation and regulation of those markets after we leave the EU.
The clauses take steps to tackle tax avoidance by putting a stop to option arrangements that are being used to pay a lower rate of tax on the sale of shares. Such option arrangements are known as deep-in-the-money options—DITMs—which provide an option to buy shares with a strike price far below market value. DITMs are being used for tax avoidance purposes, as the Government’s tax information and impact note explains. Her Majesty’s Revenue and Customs is aware of an increasing amount of avoidance in which DITMs are created in order to transfer shares to depository receipt issuers and clearance services. The result of that avoidance is that tax is payable only on the very low strike price, rather than the full market value of the shares. The measure makes the tax system fairer by removing the opportunity for avoidance arising from the transfer of shares using a DITM.
In order to tackle that kind of avoidance, clauses 126 and 127 ensure that shares transferred to a depository receipt issuer or clearance service as a result of the exercise of an option will now be charged the 1.5% higher rate of stamp duty or SDRT based on either their market value or the option strike price—whichever is higher. The change has effect from 23 March 2016 and applies to options exercised on or after 23 March 2016 that were entered into on or after 25 November 2015. I am pleased that the Government have taken the time to consult on the provisions, which they did between 9 September 2015 and 3 February this year. However, a summary of the responses does not appear to be available. Will the Minister therefore provide some assurance that the legislation will reflect comments made by respondents in the consultation?
The Government’s impact note expects the measure to generate £200 million in Exchequer revenue by 2020-21. Given that Treasury receipts from stamp taxes on shares are expected to total £3 billion in this financial year, rising to £3.5 billion by 2020-21, the measure is relatively small fish. However, the Opposition really support it, along with any other measures to tackle tax avoidance, especially those that Ernst and Young suggests will have a significant impact on deep-in-the-money options activity. We therefore support clauses 126 and 127.
Finally, will the Minister address what appears to be something of a peculiarity of the modern age and tell me the rationale for having a lower rate of duty for transactions that involve certificates than for transactions that are completed digitally?
The Financial Secretary to the Treasury (Mr David Gauke)
As we have heard, clauses 126 and 127 make changes to stop the avoidance of stamp duty on shares, which will raise £155 million over the rest of this Parliament. They will ensure that the tax system operates fairly by closing an increasingly exploited loophole in which deep-in-the-money options are used to transfer shares to financial institutions or clearance services that then issue depository receipts that represent those shares and can be traded. The measure was announced by the Chancellor in the autumn statement. Stamp duty or stamp duty reserve tax, together referred to as stamp tax on shares, are charged on the purchase of shares in UK companies at 0.5% of their price. When shares are transferred to a depository receipt issuer or clearance service, a higher rate of 1.5% applies, reflecting the fact that subsequent transactions will no longer be taxed.
HMRC has become aware of a practice of deep-in-the-money options being used to avoid the higher rate charge and the Government have acted to stop it. A call option over shares gives their holder the right to buy the shares at a given price—the strike price—on or before a specified date. The price paid for the option is its premium. Deep-in-the-money call options have a strike price significantly below their market value and a high premium, which means the premium reflects the vast majority of the underlying value of the shares. When shares are transferred using an option, stamp tax is currently charged on the strike price and not on the premium, with the result that when purchasing shares using a deep-in-the-money option, tax could be based on the strike price of only a few pence when each share is really worth much more.
Deep-in-the-money options are being artificially created and then exercised immediately to transfer shares to depository receipt issuers or clearance services, avoiding a significant tax charge. Clearly that is not fair. As a result of the changes being made, the 1.5% higher rate stamp tax charge now applies to either the market value of the shares or the option strike price, whichever is greater. The measure applies to all options entered into on or after 25 November 2015 if they were exercised on or after 23 March 2016. This is a targeted response that will apply to a relatively small number of transactions where HMRC has identified clear evidence of tax avoidance. The change will apply only to transfers of shares to clearance services or depository receipt issuers and only when options are settled with shares, not cash. HMRC carried out public consultation following the autumn statement and no wider market impacts were identified.
The technical consultation was open from 9 December 2015 to 3 February 2016 and received three responses. Stakeholders questioned whether there was evidence of avoidance and the magnitude of the costing. HMRC has clear evidence that the Office for Budget Responsibility certified the costing so no changes were made as a result. Separately, meetings with industry bodies and depository receipt issuers have not indicated wider issues with the measure.
The rationale for costs for the differential rates is that stamp duty and stamp duty reserve tax apply the same rates to paper and electronic share transfers. I hope that that provides some clarity.
In conclusion, the Government have acted quickly to close a new tax loophole. Clauses 126 and 127 will stop avoidance of stamp tax on shares, raising a significant sum for the Exchequer and ensuring that the tax rules operate fairly.
Question put and agreed to.
Clause 126 accordingly ordered to stand part of the Bill.
Clauses 127 and 128 ordered to stand part of the Bill.
Kirsty Blackman (Aberdeen North) (SNP)
On a point of order, Mr Howarth. Should we not be dealing with new clauses 3 and 6 with clause 128, or will we vote on them at the end? You have taken clauses 127 and 128 together.
The Chair
The hon. Lady is quite right and I beg her pardon. The script I am reading from slightly misled me.
Kirsty Blackman
We debated the new clauses on Tuesday morning, but I would appreciate it if we could withdraw new clause 3 and have a vote on new clause 6, or will we do that at the end? That is what I am trying to ascertain.
The Chair
The vote on new clause 3 will be at the end. We will now move on, with the greatest clarity available to me, to clause 130.
Clause 130
Landfill tax: rates from 1 April 2017
Question proposed, That the clause stand part of the Bill.
Rebecca Long Bailey
I will be very brief. Clauses 130 and 131 increase the rates of landfill tax in line with retail prices index inflation from 1 April 2017 and 1 April 2018. We have no issues with that change and support the clauses. However, it would be helpful if the Minister could provide the latest figures for the levels of waste being sent to landfill in comparison with last year. After all, the purpose of the tax is to reduce the amount of waste sent to landfill, so it would be good to know if it is working in practice.
On a similar note, the 2016 Budget announced a consultation on landfill tax reform over the summer. I understand that there is an intention to consult on amending the definition of a taxable disposal of waste at a landfill site and clarifying the scope of the tax. According to the ENTRUST website, full proposals are being set out in a document later in 2016 and any changes legislated for in the Finance Bill 2017. Will the Minister confirm the exact timetable, if he is aware of it, for that consultation?
Finally, as the Financial Secretary and the Exchequer Secretary will no doubt be aware, the Government carried out a consultation on reforming the landfill communities fund last year. The LCF provides funding for certain specified projects in an area affected by a landfill site. Draft regulations were then published that would make a detrimental change to the way the fund operates. The regulations proposed the removal of provisions for third parties to contribute 10% of landfill operators’ contributions to projects, and instead make it compulsory for landfill operators to fund the 10% themselves.
As the scheme is voluntary, stakeholders were rightly concerned that landfill operators would simply withdraw from the scheme and that an important funding stream would be lost. I wrote a submission to the consultation on the regulations, and I am pleased to say that the Government withdrew that particular part of the regulations, which were subsequently laid before the House on Budget day. I would like to take this opportunity to thank the Ministers for taking my advice.
The Exchequer Secretary to the Treasury (Damian Hinds)
It is a pleasure to serve under your chairmanship once again, Mr Howarth. As the hon. Lady said, clauses 130 and 131 increase both the standard and lower rates of landfill tax in England, Wales and Northern Ireland in line with RPI from April 2017 and again from April 2018. She asked how successful landfill tax has been in reducing the amount of waste sent to landfill. Although I do not have the year-on-year figures in front of me, since 1996, when landfill tax was introduced, the amount of waste disposed of at landfill sites has nearly halved, while recycling rates have increased threefold. Of course, reducing landfilling of waste benefits the economy, as we make better use of valuable resources rather than throwing them away. At the same time it helps us reduce greenhouse gas emissions from decomposing waste and meet our climate change targets.
When disposed of at a landfill site, each tonne of standard-rated material is currently taxed at £84.40. Less environmentally damaging waste pays the lower rate of £2.65 per tonne. The clauses make amendments to the Finance Act 1996 to increase the standard and lower rates of landfill tax in line with inflation, based on the RPI, rounded to the nearest 5p. The changes will therefore see rates per tonne of £86.10 and £2.70 respectively from 1 April 2017 and £88.95 and £2.80 respectively from 1 April 2018.
Landfill tax already provides a disincentive to landfill by making it an expensive waste treatment method compared with alternatives. By increasing rates in line with inflation, we maintain the incentive for industry to continue the move towards a more sustainable circular economy. In addition, we know that certainty is important to the waste management industry. The clauses will mean that businesses can have the confidence to invest in new facilities and technology, knowing that those will offer a long-term, economically viable alternative to landfill. That is why the changes will set rates as far ahead as March 2019. The clauses provide certainty on both the standard and lower rates of landfill tax, confirming that they will not be eroded by inflation and maintaining the incentives to invest in more sustainable waste treatment.
I note the hon. Lady’s comments on the landfill communities fund. Of course, the Government decided to retain and reform that fund, and she is correct about the changes made and then adapted on the 10% contribution. The guidance from ENTRUST does encourage operators to make that type of contribution. The hon. Lady also asked about the consultation on the definitions for types of waste. The consultation runs from 26 May until 18 August.
Rebecca Long Bailey
The clause increases the rates of band B air passenger duty in line with RPI. Band B rates apply to journeys more than 2,000 miles from London. From 1 April 2016 the reduced rate for the lowest class of travel will increase to £73 and the standard rate will increase to £146.
APD is currently charged on all passenger flights from airports in the UK except in Northern Ireland. It was introduced in 1993 and came into effect on 1 November 1994. Powers to set APD have subsequently been devolved to Northern Ireland and are in the process of being devolved to Scotland. APD raises a significant amount of revenue for the Treasury: £3.2 billion in this financial year according to the latest OBR forecasts. The measure is not expected to have an Exchequer impact but, as ever, businesses may incur a negligible one-off cost to update their systems, according to the tax information and impact note.
The increase with inflation has become standard practice, and with APD having been increased in this way for both 2013-14 and 2014-15, I see no reason to oppose it today. However, I want to use this opportunity to push the Minister on support for English regional airports, following the devolution of APD to Scotland and Northern Ireland. As he will be aware, the Scotland Act 2016 devolved powers to set the rate of APD and the Scottish National party intends to halve Scotland’s rates. Northern Ireland already has a rate of zero. During the passage of the Scotland Bill several MPs from both sides raised concerns that further devolution would put regional airports in England at a significant disadvantage and create a distortion of competition.
HM Treasury published a discussion paper in July 2015 outlining three possible options for tackling the issue: devolving APD within England; varying APD rates within England; or providing aid to regional airports. It invited comments by 8 September, but to date no Government response has been published.
When I took part in a Westminster Hall debate on the issue on 20 October last year, in my former capacity as shadow Exchequer Secretary, the Financial Secretary told me that the response would be published in due course, but to date I cannot see a summary of responses. In a recent written answer he stated:
“The Government is carefully considering the responses received to the discussion paper on options to support English regional airports from the potential impacts of air passenger duty devolution and will respond in due course.”
Perhaps he could take this opportunity to provide an exact date, if possible, for publication of the Government’s strategy to support regional airports. Aside from that and the other matters I have discussed, we will not oppose the clause.
Christian Matheson (City of Chester) (Lab)
It is a pleasure to see you in the chair once again, Mr Howarth. I wish to speak only briefly. My hon. Friend the Member for Salford and Eccles reminds us that the Scottish National party Government in Scotland have chosen to reduce APD. It is nice to hear that for once they have actually done something with the tax powers they have been given, because of course they have been dodging other tax powers despite having the authority to exercise them.
May I echo the words of my hon. Friend the Member for Salford and Eccles? The tourism industry across the UK is crying out for clarity on APD, because of the devolution issues. The differences in air passenger duty now make it financially viable for a family of five to drive from the north-west of England, the area that I—and your good self, Mr Howarth—represent, up to Scotland to save money. Those price differentials now mean that that makes sense, so they are damaging the tourism industry and the airport sector outside London.
The impression of the tourism industry—fairly held, I think—is that Treasury Ministers have been kicking the issue into the long grass for a long while. They have been looking for a solution, not finding one and then having a further review. My hon. Friend has outlined some of that. I therefore stress to Ministers again that there has to be a long-term and sustainable answer to those variables in air passenger duty. The existing situation is not sustainable, so the sooner we get a consistent and sustainable balance that the tourism industry can live with, the better for our economy as a whole.
Damian Hinds
Clause 137 makes changes to ensure that the rates of APD for 2016-17 increase in line with RPI, so that the aviation sector continues to play its part in contributing towards general taxation and reducing the deficit.
As the hon. Member for Salford and Eccles rightly said, APD raises a little more than £3 billion annually, so it is an important part of Government revenue. The increase in rates has effect from 1 April this year and was announced at Budget 2015 to give the industry sufficient notice of the change in rates. The low level of inflation and the rounding of APD rates to the nearest £1 mean that short-haul rates will remain frozen for a fifth year in a row, which will be to the benefit of about 80% of passengers.
The hon. Members for Salford and Eccles and for City of Chester raised the important subject of APD devolution and the options that the Government have been considering. To be clear, APD will be under the control of the Scottish Parliament, but the Scottish Government are still consulting, so no change has yet been made. The three options in the discussion paper published at summer Budget 2015 were correctly identified by the hon. Lady: to devolve the setting of APD within England; to vary the rates within England; or to provide aid to regional airports. The issues are complex and we continue to consider the various options. I am not in a position to give a specific date, but we will of course respond in due course.
APD is a fair and efficient tax, where the amount paid corresponds to the distance and class of travel of the passenger. The changes under the clause will ensure that the aviation sector continues to play its part in contributing towards general taxation.
Question put and agreed to.
Clause 137 accordingly ordered to stand part of the Bill.
Clause 138
VED: rates for light passenger vehicles, light goods vehicles, motorcycles etc
Question proposed, That the clause stand part of the Bill.
Rebecca Long Bailey
The clause increases the rate of vehicle excise duty on certain vehicles in line with RPI for the financial year 2016-17. This is standard practice, as VED rates have increased in line with inflation since 2010. Labour has not opposed that and I have no intention of doing so today, but I have some issues to take up with the Minister.
I want to repeat on the record how opposed we were to the last raft of changes to VED made in the previous Finance Bill. These changes put a stop to the link between the level of carbon dioxide emissions and the rate of vehicle excise duty. There is now simply a flat rate after the first year, with a surcharge on cars that cost more than £40,000. We simply do not see the Government’s justification for removing incentives for lower-polluting cars. I would be grateful if the Minister clarified that. Aside from that issue, I am happy for this clause to stand part of the Bill.
Damian Hinds
Clause 138 makes changes to vehicle excise duty rates for cars, vans and motorcycles, with effect from 1 April 2016. For cars first registered prior to 1 March 2001, vehicle excise duty is based on the car’s engine size. The rates of duty for those cars and vans before 1 March 2001 increase by £5 only as a result of this clause. For cars first registered on or after 1 March 2001, vehicle excise duty is based on the car’s carbon dioxide emissions. There are currently 13 CO2 bands. One rate is payable in the first year, and a separate, standard rate is payable in all subsequent years. For about 98% of those cars, the payment will be no more than £5 extra in 2016-17. That means that a motorist already owning a popular family Ford Focus will pay only £5 more.
First-year rates influence the purchasing choices of drivers buying brand-new cars. They act as a signal at the point of purchase that people can save money by choosing a cleaner car. In response to what the hon. Lady said about the 2017 reforms, it is not true that we have removed the incentives on CO2. First-year rates have an extra effect: the so-called “sticker price” effect. There is also the zero rate for zero-emission cars.
We had a fairness and a sustainability challenge on vehicle excise duty. The sustainability challenge was due to the projected decline in revenues as more and more cars come into the lowest charging bands, and the fairness challenge was due to the fact that people who can afford only an older, second-hand car would pay more than those who can afford to change their car every couple of years.
This measure will mean that the highest-emitting new cars will pay first-year rates of £1,120—an increase of £20—and rates for the cleanest cars will remain unchanged at zero. The clause also increases the standard rate of duty for vans first registered from March 2001 onwards by £5 only. Finally, rates for motorcycles will also increase in line with inflation. Motorcyclists will see an increase of no more than £2.
Question put and agreed to.
Clause 138 accordingly ordered to stand part of the Bill.
Clause 139
VED: extension of old vehicles exemption from 1 April 2017
Question proposed, That the clause stand part of the Bill.
Rebecca Long Bailey
This clause extends the exemption from vehicle excise duty to vehicles constructed 40 or more years ago on an automatic rolling basis on 1 April each year. The VED exemption is intended to support classic vehicles, which the Government consider—and I agree—to be an important part of the nation’s heritage. It appears to be a simple legislative change to create a rolling 40-year exemption, rather than requiring separate legislation year by year. We did not oppose the equivalent measure in the Finance Act 2014 when the Budget 2014 proposal for a rolling exemption was debated, and we do not oppose this clause today.
However, the Minister is not going to get off that lightly. I would like him to address a couple of my concerns. The policy paper indicates that the clause has no Exchequer impact, but the tax information and impact note for the original measure in Budget 2014 projected an impact of £5 million in 2016-17, £10 million in 2017-18 and £15 million in 2018-19. Will the Minister clarify whether there has been a change in the Treasury’s assessment of the impact of the measure, or whether the zero impact assessment relates purely to the technical change to the legislative mechanism, rather than the underlying policy?
Furthermore, the original note stated that in 2014-15 the measure will
“have an advantageous impact for the owners of around 10,000 classic vehicles...Every year thereafter, the number of classic vehicles will increase as additional cohorts of vehicles are included in the exemption. It is estimated that an additional 10,000 classic vehicles will be affected in each year of the scorecard.”
As of 30 September 2011, 162,734 cars and 152,836 other vehicles were exempt from VED on the grounds of age. Will the Minister confirm that the figure of 10,000 vehicles in the HMRC policy paper is additional to the figures in previous years, and will he give us an update on the total number of vehicles, either today or later in writing?
Damian Hinds
I rise to speak to a fairly uncontroversial clause on the exemption of classic vehicles from VED. The Government believe that classic vehicles are an important part of the nation’s heritage. According to the Historic Vehicle Research Institute, the historical car industry employs about 28,000 people in the UK. The VED exemption is designed to support the maintenance and use of classic vehicles.
The classic vehicles VED exemption was first introduced under the Conservative Government in 1996 on a rolling 25-year basis. The Labour Government froze the exemption in 1998 so that it applied only to vehicles built after 1 January 1973. The Government announced in Budget 2013 that they would extend the exemption to vehicles built before 1 January 1974. Budget 2014 went further, announcing the introduction of a new rolling 40-year VED exemption for all vehicles, which extended the exemption to vehicles constructed before 1 January 1975 and 1 January 1976, to come into effect on 1 April 2015 and 1 April 2016 respectively.
Clause 139 places the VED exemption on a permanent basis so that, from 1 April each year, vehicles constructed more than 40 years before 1 January of that year will be automatically exempt from paying VED. In 2016-17, the exemption is worth £145 or £235 depending on the vehicle’s engine size. As the hon. Lady said, the Government estimate that about 10,000 owners of classic vehicles will benefit each year, and that is additional to previous figures.
The operational cost of the programme to the DVLA is the negligible cost of updating its IT systems, which will need to be done each year. The standard in the financial statements and in setting out projections rounds down to the nearest £5 million, which means that the cost of a single year is less than £5 million and is therefore classed as negligible. However, the tax information and impact note refers to a rolling programme, so we have to add up the less than £5 million each time.
This measure ensures administrative and legislative efficiency by automatically extending the classic car exemption on a permanent basis. I hope the clause stands part of the Bill.
Question put and agreed to.
Clause 139 accordingly ordered to stand part of the Bill.
Clause 140 ordered to stand part of the Bill.
Clause 141
Fuel duties: aqua methanol etc
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss that schedule 17 be the Seventeenth schedule to the Bill.
Rebecca Long Bailey
Clause 141 and schedule 17 provide for a reduced rate of excise duty for aqua methanol that is set aside for use or used as a fuel in any engine, motor or other machinery. That reduced rate, which is 7.9p per litre, will take effect on 1 October 2016.
The stated aim of the clause is to incentivise the uptake of aqua methanol as a greener fuel relative to petrol and diesel. In the 2014 Budget, the coalition Government announced that they would introduce a lower rate of duty on aqua methanol used in road vehicles, similar to the reduced rates that apply to other alternative fuels, to encourage the use of that cleaner alternative. That was to be legislated for in the 2015 Finance Bill, but the Bill that was introduced after the March 2015 Budget was agreed very quickly, with minimal debate, due to the timing of the Dissolution for the election. That was done with cross-party approval, but the coalition Government removed a few clauses from that Bill, with a view to introducing them at a later stage. Clause 141 is one of those.
Clause 141 and schedule 17 introduce that lower rate of duty. The schedule also prohibits mixing aqua methanol on which lower duty has been charged with biodiesel, bioethanol, bioblend, bioethanol blend or hydrocarbon oil. At the time of the measure’s initial announcement, the cost to the Exchequer was expected to be £5 million in 2015-16, £10 million in 2016-17, £20 million in 2017-18 and £40 million in 2018-19. The measure has taken a while to come to fruition, so perhaps the Minister can provide some up-to-date figures on the cost of the reduced duty rate. Further, the initial proposal, as printed in the 2014 Budget, said that the rate would be set at 9.32p per litre, so will the Minister confirm why the reduced rate will now be 7.9p?
Aside from those minor points of clarification, the Opposition are more than happy to support clause 141 and schedule 17. Indeed, I am glad that the Government are taking some action, however small, to promote cleaner, greener fuel, given the concerns about vehicle excise duty that I have outlined.
Damian Hinds
The clause will introduce a reduced duty rate for aqua methanol that is set aside for use as fuel in any engine, motor or other machinery. Aqua methanol is a new, greener fuel that is 95% methanol and 5% water. The reduced duty rate is intended to incentivise the uptake of aqua methanol, as the hon. Lady said, as a greener alternative fuel to petrol and diesel.
The Government are committed to improving air quality in the UK through the reduction of carbon dioxide and nitrogen dioxide emissions. Every year, around 50,000 people die prematurely due to poor air quality. Road vehicles account for around 92% of UK transport carbon dioxide emissions and 80% of nitrogen dioxide emissions in roadside locations.
Successive Governments will need to de-carbonise the road transport sector in the UK if we are to deliver on our commitments to reduce greenhouse gas emissions —as I know both the hon. Lady and I are committed to doing. Indeed, the fourth carbon budget requires successive Governments to reduce greenhouse gas emissions by 51% relative to their 1990 levels by 2027. Any action to meet those targets will need to include the deployment of new greener alternative fuels, and aqua methanol is one of those. Incentivising its use has the potential to contribute to the UK meeting its air quality targets through reductions in the use of diesel, which is the largest source of nitrogen dioxide emissions.
In the 2013 autumn statement, the Government announced that the differential between the lower duty rate for alternative road fuel gases and the main duty rate for petrol and diesel would be maintained until 2024. In the 2014 Budget the Government went further, announcing that we would also apply a reduced fuel duty rate to aqua methanol. The clause follows through on that commitment. It introduces a reduced duty rate of 7.9p per litre for aqua methanol to the main rate of 57.95p per litre. The decisions on aqua methanol were outlined in the autumn statement in 2014 and the costings of the policy remain consistent with our forecasts at that time, although the delay to the introduction of the new rate means costs to the Exchequer have also been delayed.
The reduced duty rate was recalculated based on fuel duty changes and the energy content. The clause legislates for the reduced rate of excise duty for aqua methanol, which will incentivise the uptake of that alternative fuel and help us to deliver on the commitment to reduce greenhouse gas emissions and improve air quality in our towns and cities.
Question put and agreed to.
Clause 141 accordingly ordered to stand part of the Bill.
Schedule 17 agreed to.
Clause 142
Tobacco products duty: rates
Question proposed, That the clause stand part of the Bill.
Rebecca Long Bailey
The Committee will be pleased to hear that I have just a few sentences to say about this clause. For the benefit of the Committee, the clause simply deals with increases in the rates of tobacco duty. I will not go into detail because I am sure the Minister will cover the specifics, but I want to illustrate some of the issues I noticed in the HMRC policy paper. The policy paper refers only to the 5% increase for hand-rolling tobacco and states that this measure alone is expected to raise £10 million each year to 2020-21. Will the Minister provide us with the expected Exchequer impact for all the measures in the clause, either now or later in writing?
Alistair Darling announced in the last Labour Government’s final Budget that tobacco duty would rise by 1% above inflation in 2010 and by 2% above inflation for the following four years thereafter. The Opposition therefore support the introduction of the escalator in the Finance Act 2014 and we will certainly support this clause today.
Damian Hinds
Clause 142 makes changes to ensure that the tobacco duty regime continues to work as part of the Government’s wider health agenda to reduce smoking prevalence. The clause implements tobacco duty increases of 2% above the RPI rate of inflation for all products and an additional 3% increase for hand-rolling tobacco, meaning a 5% increase in total for hand-rolling tobacco. The Government are committed to reducing smoking rates, especially among young people. Smoking is the single largest cause of preventable illness and premature death in this country. It accounts for around 100,000 deaths a year and kills around half of all long-term users. Reducing the affordability of tobacco products through taxation is widely acknowledged to be effective in reducing smoking prevalence.
The changes that have already come into effect have added 21p to a packet of 20 cigarettes and 44p to a 30g pouch of hand-rolling tobacco. Research shows that, as well as establishing high tobacco duty rates, maintaining those high rates is also important in reducing smoking prevalence. That is why, as was announced in the 2014 Budget, annual duty increases of 2% above inflation will continue until the end of the Parliament. I should clarify for the hon. Lady that that means they are already in the projections for the public finances and that the overall impact of the two changes is as published in the Budget scorecard. The clause implements the tobacco duty rate increase of 2% above inflation and an additional 3% for hand-rolling tobacco, which supports our wider health agenda.
Question put and agreed to.
Clause 142 accordingly ordered to stand part of the Bill.
Clause 143
Alcoholic liquor duties: rates
Question proposed, That the clause stand part of the Bill.
Rebecca Long Bailey
The clause increases the rates of alcohol duty on wine and some ciders and perries in line with inflation. The changes took effect on 21 March. In discussing the clause, I want to touch on one type of alcohol duty that is notably not being increased in line with inflation.
Damian Hinds
Clause 143 sets out changes to alcohol duty rates from 21 March this year. It was announced in the Budget that the duty on beer, spirits and most ciders would be frozen this year and that the duty on most wines and higher-strength sparkling cider would rise with inflation. With those changes, we continue to support the pub industry, which plays such an important part in British cultural life. To respond to the hon. Lady’s point about what is most advantageous to the on-trade—to pubs—beer is considered to have a greater price sensitivity effect than wine, by a number of estimates.
The British Beer and Pub Association estimates that about 30 million adults visit a pub at least once a month. As I think all hon. Members would acknowledge, pubs are important community assets that promote responsible drinking in a generally friendly atmosphere. In the Budget, the Government therefore took further action to support the sector. Given that about two thirds of alcohol sold in pubs is beer, we froze duty on a typical pint of beer, following three consecutive beer duty cuts that were widely welcomed. The Government’s support for pubs means that a typical pint of beer is now 10p cheaper than it would have been if we had not ended the beer duty escalator in 2013. I am sure that is welcome news to many, many pub goers. In the BBPA’s assessment, the three beer duty cuts have created 19,000 jobs. The duty freeze will offer further support to pubs. The duty on high and low-strength beer will also be frozen, which offers the sector a continued incentive to expand the choice of those drinks to consumers.
The Government’s key priority for this Parliament is to restore the public finances to a sustainable position. We outlined in the Budget our commitment to fiscal sustainability, and the decisions taken on duty rates must, of course, reflect that.
The clause provides for duty on most wines to increase by RPI only. Under these changes, the duty on beer and wine will remain broadly similar, and the duty rate on wine above 22% ABV will continue to be the same as that for spirits. The hon. Lady may have a particular interest in this point: the price of a bottle of wine is now 7% lower than it would have been if we had not ended the wine duty escalator in 2014.
The clause also sets out that duty on high-strength sparkling cider is increased by RPI only, which means that it continues to be the same as for sparkling wine of equivalent strength. It was also announced in the Budget that the duty on all other ciders would be frozen. That means that a typical litre of cider is now 4p cheaper than it would have been if we had not ended the cider duty escalator in 2014. The freeze in cider duty supports the industry, which has high production costs and plays an important role in many local economies, particularly in some of our rural areas.
The Budget also froze duty on spirits. As Scottish National party Members and others will acknowledge, Scotch is one of the great British success stories. Its exports are estimated to be worth nearly £4 billion, and account for about 20% of total food and drink exports. The freeze in spirits duty will provide further support to the Scotch industry. It means that a 70 cl bottle of whisky is now 87p lower in price than it would have been if we had not ended the spirits duty escalator.
The freeze will help elsewhere, too, including by supporting the global thirst for British gin. According to the Wine and Spirit Trade Association, 140 million bottles were exported in 2014, which is an impressive 37% increase in five years. Government statistics also show that between 2010 and 2015 a total of 174 new spirit distilleries opened in the UK, with 56 new licences issued in the past year alone. The announcements made in this year’s Budget and in 2014 and 2015 have increased the confidence in the sector.
The changes to alcohol duty rates in the clause ensure that responsible drinkers are not penalised. It is right to point out the Government’s continuing care and concern for the wider health agenda on alcohol consumption, but it is important not to penalise responsible drinkers. We recognise that not everyone is a responsible drinker, and we have taken a targeted approach to tackling alcohol-related harm. For example, to encourage the consumption and production of lower-strength beer, the Government place higher duties on super-strength beer and cider. Licensing rules are also in place to help to tackle irresponsible alcohol consumption. For example, local authorities can now introduce early morning restriction orders more easily.
The clause reaffirms the Government’s commitment to supporting the pubs industry and responsible drinkers.
Question put and agreed to.
Clause 143 accordingly ordered to stand part of the Bill.
Clause 155
Simple assessments
Question proposed, That the clause stand part of the Bill.
The Chair
Having considered alcoholic liquor duties, we now stagger towards clause 155, with which we will consider the following:
That schedule 23 be the Twenty-third schedule to the Bill.
Clauses 156 and 157 stand part.
Rebecca Long Bailey
The clauses and schedule relate to tax assessment—that exciting subject—and tax returns. Clause 155 grants HMRC the power to make an assessment of someone’s income and capital gains tax liabilities without their having to fill in a self-assessment form, from the 2016-17 financial year onwards. I understand that the provision will apply only to individuals on whom HMRC already has enough information to provide an assessment, so the number of individuals affected will be relatively small, but it will reduce the burden of self-assessment for them.
Providing a commentary on the clause, the Chartered Institute of Taxation said:
“We raised quite a lot of minor points in our submission about the wording of the draft legislation and the legislation that is in the Finance Bill 2016 has been made clearer on a number of these points.
Also, the length of time that the taxpayer has to query the simple assessment has been increased from 30 to 60 days which is a welcome extension.”
It goes on to say:
“HMRC need to ensure that it is made clear to taxpayers that it is their responsibility to check the simple assessment (this means checking that all their taxable income is accounted for and all expenses and allowances to which they are entitled are being correctly claimed) and that they have the right to query the assessment if they disagree with it.”
I am pleased that the Government have improved the legislation, but will the Minister tell me what measures are in place to ensure that taxpayers know that it is their responsibility to check the simple assessment, and that they know they have the right to query it?
The Chartered Institute of Taxation also highlighted the fact that the new power to issue a simple assessment comes into effect in the current tax year, but that until now there has been little publicity or guidance from HMRC about how it intends to use the power. Can the Government confirm whether HMRC will start using the power this year, and in what circumstances?
Clause 156, as set out in the explanatory notes, clarifies the amount of time allowed for making a self-assessment when HMRC has served a notice to file a return. The clause relates to an earlier legal case, R (oao of Higgs) v. HMRC [2015] UKUT, in which HMRC argued that a tax rebate did not have to be paid since the claim was lodged after the four-year time limit for tax returns to be completed had expired. The court found against HMRC on the grounds that the time limit does not apply to self-assessment returns, so the clause clarifies the existing legislation and negates the earlier legal decision. The Chartered Institute of Taxation has said that that seems like a sensible provision in light of that case, and we support the measure.
Finally, clause 157 enacts a minor change, allowing HMRC to withdraw a notice to file a self-assessment return where it is clear that an individual no longer has the need to. Again, we support that measure, and we will not oppose any of these clauses.
Mr Gauke
As we have heard, clause 155 and schedule 23 will provide a new power to allow HMRC to make an assessment of an individual’s income tax and capital gains tax liability without their first being required to complete a self-assessment return. Clause 157 will allow HMRC to withdraw a notice to file or cancel any related penalty for failure to make a return. Clause 156 will ensure that the time allowed for making a self-assessment when HMRC has served notice to file a return is clear.
I will speak first to clause 155 and schedule 23. In March 2015, HMRC published “Making tax easier: The end of the tax return”, which set out its vision to modernise the tax system by introducing digital tax accounts for individuals and businesses. That will lead to millions of HMRC customers no longer needing to fill in tax returns. At present, hundreds of thousands of people have to fill out a self-assessment tax return every year simply because they have a tax liability that cannot be collected through pay-as-you-earn. This is expensive and time-consuming for both the customer and HMRC. The measure will allow HMRC to send a tax calculation to customers along with a request for payment when HMRC already has enough information to make an accurate assessment of the tax due.
HMRC already holds a wide range of information, such as employment, pay and pension income, child benefit payments and savings income. That comes from a range of sources such as Government Departments, banks, building societies, employers, pension providers and information provided directly by taxpayers. Furthermore, HMRC already uses that information held on its systems to calculate an individual’s tax liabilities on an annual basis.
From 2016-17, this measure will allow HMRC to send customers with the simplest affairs a simple tax calculation and request for payment, meaning that they will not have to fill out a tax return. HMRC will consult on using the power to create tax bills for customers with more complicated affairs. It estimates that in time, up to 2 million individuals will benefit from the simple assessment. Individuals will have a simple customer experience, and fewer customers will incur a penalty or have to pay interest because they have not sent their return in on time.
HMRC intends the process for customers to be online and as simple as possible, and as such has aligned simple assessment with the payment dates and interest provisions that already exist for self-assessment. The current processes for hardship will continue. There will also be assistance for customers who have difficulty going online, including a paper process for customers who are unable to access digital accounts. As is the case now, customers should check that the information in their simple assessment tax calculation is correct. Customers will be able to challenge figures, and there will be a right of appeal if disputes cannot be resolved informally.
Furthermore, customers will still be able to fill out a self-assessment return if they wish or if they have to declare changes to their circumstances. Simple assessments will be used to collect the tax that is due based only on information already known about income and circumstances.
In order for the Government to facilitate the change that I have just discussed, and to enable as many people as possible to benefit from that simplification, clause 157 makes amendments to the Taxes Management Act 1970 and consequential amendments to one of its schedules to allow HMRC to withdraw a notice to file or to cancel related penalties. Under the income tax self-assessment system, anyone sent a notice to file a self-assessment tax return by HMRC is required to complete and return the assessment. HMRC does not want to unnecessarily oblige customers to complete a tax return if they do not need to be within self-assessment.
Rebecca Long Bailey
These clauses relate broadly to judgment debts, and they make the same provisions for Scotland, Northern Ireland, England and Wales. The Chartered Institute of Taxation has had no representations or comments from its members on the three clauses, apparently because they are completely uncontroversial. The legislation, however, seems complex, so I wondered whether the Minister has had any representations at all about its drafting. Otherwise, we have no issues with the clauses.
Mr Gauke
The clauses, as we have heard, deal with the rates of interest for all tax-related debts involving HMRC, ensuring that they are at the appropriate level, in accordance with tax legislation.
By way of background, section 52 of the Finance Act 2015 provided a set rate of judgment debt interest for England and Wales. Where HMRC is involved with a tax-related debt, the requirement is for the rates of interest to be those in tax legislation, and not those set out in a judgment debt or by a county court or others. Last summer, in the Finance Bill, we set out the rates of interest for England and Wales, but interest payable by or to HMRC following a court action in Scotland and Northern Ireland is set at a different rate. That is because we sought to consult with Scotland and Northern Ireland before extending the changes to them. They have since indicated that they are content for the legislation to be extended UK-wide.
To answer the hon. Lady’s question, we have not received any representations on the measure. It may be complex, but it appears to be uncontroversial, so I hope it can stand part of the Bill.
Question put and agreed to.
Clause 158 accordingly ordered to stand part of the Bill.
Clauses 159 and 160 ordered to stand part of the Bill.
Clause 161
Gift aid: power to impose penalties on charities and intermediaries
Question proposed, That the clause stand part of the Bill.
Rebecca Long Bailey
The clause relates to gift aid and will allow HMRC to impose penalties on intermediaries that fail to comply with new requirements on gift aid declarations, as set out in secondary legislation that has not yet been published. A technical consultation on those draft regulations is apparently being carried out later this year. To understand the clause, therefore, the Committee might find some background useful.
The Government want to make it easier to claim gift aid on donations given through digital channels. At the moment, a charity requires a gift aid declaration from a donor in order to be able to claim gift aid. Where donations are made by an intermediary—through a website such as justgiving.com, or by text—the situation is difficult, because the intermediary has to collect the declaration from the donor and then pass it on to the charity.
The Government therefore carried out a consultation on digital giving, which ran from July to September 2013, and published their response in April 2014. The consultation received more than 100 responses, and I understand that meetings have been held with representatives of both charities and intermediaries. The Government’s intention, as I understand it, is to allow gift aid declarations to be made by intermediaries representing individuals, and to allow charities to use such declarations to claim gift aid. The primary legislation that gave the Government the power to do that was enacted in the Finance Act 2014. Clause 161 simply amends that legislation so that the regulations, when published, may also include a penalty for intermediaries who fail to comply with the requirement, as well as a right of appeal against those penalties. Regulations for the requirements and penalties will be published later this year.
According to the policy paper, the Exchequer impact of the changes are not known, but the measure is expected to decrease net receipts, as there will be a higher level of gift aid on donations. The paper also states that the measure will affect only intermediaries who fail to comply with legislation, and that they may incur one-off costs to put systems in place to implement the changes. However, estimates of the impact will be made when details of the measure have been finalised.
We completely agree with making it easier for gift aid to be claimed on donations where it is complicated to do so, and we are happy to support the clause, but perhaps the Minister will provide more detail of what the regulations will contain and what the requirements on intermediaries will be.
Damian Hinds
I am grateful to the hon. Lady for this opportunity to put on the record a little more of the detail and some of the reasoning behind the measure. Clause 161 gives HMRC the power to impose penalties on intermediaries operating in the charity sector if they fail to comply with new requirements to be set out in regulations. These regulations are designed to make it easier for charities to claim gift aid through digital channels, and draft regulations have been made available to the Committee.
Clause 161 lays the groundwork for delivering the Government’s commitment to giving intermediaries working in the charity sector a greater role in administering gift aid, which allows charitable donations to be made tax-free. Donors can now give through multiple digital channels, including SMS text donations, online portals and, more recently, Twitter. Gift aid legislation has not always kept up with these developments, so in autumn statement 2013, the Government announced plans to explore ways in which charity intermediaries could be given a greater role in administering gift aid. We have worked closely with representatives of charities and intermediaries to develop proposals to give additional flexibility in claiming gift aid through digital channels. The clause is a necessary step in delivering those proposals. It gives HMRC the ability to charge penalties to intermediaries that do not operate within the new rules. This will help to ensure that the additional flexibility for claiming gift aid is not misused, and so help to protect the income and reputation of charities throughout the country.
It may be helpful if I briefly set out how the new proposals will work. Before a charity can claim gift aid on a donation it has received, the donor must have completed a declaration stating both that the donation is eligible for gift aid and that they want the charity to be able to reclaim the tax paid on that donation. Essentially, this allows the donor to give an intermediary permission to complete a gift aid declaration on his or her behalf in respect of donations made through that intermediary. That permission will last for the rest of the tax year, negating the need to complete a gift aid declaration every time a donation is made. Donors will, of course, have the right to cancel that permission at any time. As with any tax relief, the Government must ensure that the gift aid is claimed only when it is right to do so, and clearly rules must be in place to ensure that.
These rules are in everyone’s best interests. They protect the use of taxpayers’ money and the reputation of those charities that benefit from gift aid relief, and encourage intermediaries to act responsibly. For example, it is only right that intermediaries should let donors know the total value of gift aid claimed on their donations over the course of a tax year, as this could affect their tax liability. Consequently, there will be new obligations on intermediaries who choose to offer the new process set out in regulations. Failure to comply with those obligations could result in intermediaries facing a penalty.
If a penalty is imposed, it will be £50 per failure to comply, up to a limit of £3,000 a year. I should stress that although there must be a sanction against those who are careless or negligent, it is not anticipated that HMRC will charge these penalties routinely. There will be scope to suspend them to enable intermediaries to rectify any shortcomings in processes, and of course there will be a right of appeal against a decision to impose a penalty. I want to make it clear that the Government do not propose applying new penalties on charities; they will apply only to intermediaries.
Clause 161 amends the Income Tax Act 2007 to set out when a penalty may be imposed, and the maximum amount that can be imposed for failure to comply, and it confers appeal rights. It also provides that the clause will take effect from a date appointed in regulations. The Government recognise that intermediaries can and indeed do play an important role in assisting charities to get the benefit of gift aid. It is necessary to ensure that the processes under which they operate are robust and not misused to the detriment of charities or their generous donors.
Question put and agreed to.
Clause 161 accordingly ordered to stand part of the Bill.
Clause 162
Proceedings under customs and excise Acts: prosecuting authority
Question proposed, That the clause stand part of the Bill.
Rebecca Long Bailey
Clause 162 amends part XI of the Customs and Excise Management Act 1979 to remove reference to the commissioners from the definition of “prosecuting authority” for Scotland and Northern Ireland. It will also insert the Director of Public Prosecutions for Northern Ireland as the relevant prosecuting authority for Northern Ireland.
We see the clause as a minor amending clause that tidies up the measures in the 1979 Act relating to Scotland and Northern Ireland. We believe that it is sensible to ensure that the time limit for summary offences does not start to run before the date at which the prosecuting authority has knowledge of sufficient evidence to warrant the proceedings.
We have no concerns about the clause and are happy to support it, but I will stray slightly from the exact detail of the clause and ask the Minister what initial consideration the Treasury has given to the future of customs checks on the border between Northern Ireland and the Republic of Ireland following the EU referendum. I am sure that he is aware that the Irish border has been free of customs checks since 1993 as a result of the single market. A return to customs checks would be damaging to the British and Irish economy, and may well have implications for the Office of the Director of Public Prosecutions for Northern Ireland. Perhaps the Minister can address that concern, either today or in writing at a later date.
Damian Hinds
As the hon. Lady and all members of the Committee know, a number of issues will have to be addressed in due course. The clause does not relate to the subject of the question she asked.
Clause 162 amends the Customs and Excise Management Act 1979 to correct outdated references to the prosecuting authorities in Northern Ireland and Scotland. By doing so, it will ensure that time limits for starting proceedings will apply only to the correct authorities. The clause is purely technical and is not a change of policy.
Question put and agreed to.
Clause 162 accordingly ordered to stand part of the Bill.
Clause 163
Detention and seizure under CEMA 1979: notice requirements etc
Question proposed, That the clause stand part of the Bill.
Rebecca Long Bailey
Again, I have just got a few comments, because the clause is largely uncontroversial. It simply amends the 1979 Act to permit Border Force officers to treat the driver of a vehicle or someone comparable as if they were representatives of the goods being seized. It seems uncontroversial, but it has implications for vehicle drivers, including road haulage drivers. I am not aware of any concerns expressed by potential stakeholders, but what consultation has taken place with the Road Haulage Association in particular, the British International Freight Association and the office of the independent chief inspector of borders and immigration?
Damian Hinds
Clause 163 makes provision for an officer of HMRC to treat a person, when seizing or detaining goods, as if they are a representative of the owner of the goods, wherever that person has or appears to have possession or control over those goods.
Under current legislation, when detaining or seizing goods, there is no requirement for an officer to serve a notice of detention or notice of seizure on the person present if the officer believes that that person is a servant or agent of the owner of those goods. Whether a driver can be considered an agent or servant of the owner affects the processes that the officers seizing or detaining goods must follow. However, drivers of vehicles carrying such goods often claim distance from the owner, making it difficult for HMRC successfully to consider them to be an agent or servant of the owner. That leaves HMRC trying to find an owner in what is usually a complex, fraudulent supply chain.
The changes made by clause 163 will allow officers to treat the driver, or a person in a comparable position, as if he or she were a representative of the owner and, therefore, not legally entitled to a notice of detention or a notice of seizure. It will make the operational duties of officers of Her Majesty’s Revenue and Customs more effective. Currently, those who purport to be owners are arguing that they have not had their legal right to appeal because they were not served with a notice.
HMRC has a duty to take robust action to deal with those who smuggle illicit goods of any description into the UK. By making explicit provision for the driver to be treated the same as an agent or servant, it will reduce the resource required in trying to identify the owner of the goods in what is usually a fraudulent and potentially complex supply chain.
The measure was consulted on in December 2015 for eight weeks. One response was received, and an individual reply was sent. The main thrust of the response was a request for clarification on the rights of appeal, and on whether the legislation would affect the rights of the owner to appeal against the seizure. HMRC was able to explain that the legislation would not affect those rights; appeal rights were not compromised. It was a consolidated response from industry, including hauliers.
To conclude, the measure removes the need for an officer to serve a notice on someone who has, or appears to have, possession or control of anything that is detained or seized. By doing that, the measure clarifies procedure for officers and those from whom the goods are detained or seized. It also removes significant operational barriers for HMRC in its pursuit of reduced excise tax gaps.
Question put and agreed to.
Clause 163 accordingly ordered to stand part of the Bill.
Clause 164
Data-gathering powers: providers of payment or intermediary services
Question proposed, That the clause stand part of the Bill.
Rebecca Long Bailey
Clause 164 looks at extending HMRC’s data-gathering powers for the growing digital economy, which we are happy to support. HMRC’s existing data-gathering powers were set out in schedule 23 to the Finance Act 2011. HMRC subsequently obtained new powers in section 228 of the Finance Act 2013 to request data from merchant acquirers—businesses—that process credit and debit card transactions.
More recently, HMRC completed a consultation, “Tackling the hidden economy: extension of data-gathering powers”, between July and October 2015, which has led to the detail of this clause. The clause recognises the rapid development of the digital economy and payments made through it, and the Government wish to enhance their ability to obtain data by adding two new categories of data holders to the existing legislation on data gathering.
Those categories are identified as electronic stored-value payment services—or digital wallets—and as other business intermediaries operating offline. The Financial Times recently reported research by Worldpay that asserted that the rise of digital wallets would mean that credit cards and debit cards would fall from accounting for two thirds of all payments to just half by 2019.
The same report found that $647 billion of consumer payments to businesses will be made globally through digital or e-wallets that year. It is in that context that the Government wish to cast their data-gathering net wider to include that growing sector. I am particularly interested in the Minister’s view of the possibility of increasing tax revenue through these powers. The economic impact in the policy paper suggests an increased take of approximately £200 million per year once these powers are embedded.
Roy Maugham, tax partner at UHY Hacker Young, said:
“The new powers HMRC are seeking indicate that they believe there is large-scale tax evasion in the ‘app economy’.”
Is the expectation that these powers will reveal new instances of tax evasion or tax avoidance? Will the Minister indicate what initial scoping or research has been possible to determine the likelihood of that? In the light of the consultation response from the Low Incomes Tax Reform Group, will the Minister guarantee that the powers will not be used in a way that disadvantages those on low incomes who run owner-managed businesses and who will find them a significant new administrative burden?
A number of submissions to the consultation and responses to the draft legislation, including from the Chartered Institute of Taxation and Payments UK, expressed concern about the definition of the two new categories. I believe that the comments from Payments UK on the definition of “providers of digital wallets” have largely been taken on board, with them now being referred to as
“providers of electronic stored-value payment services”.
The Chartered Institute of Taxation would like further clarification on the definition of “business intermediaries” as it is concerned that that will catch not only websites such as eBay, Etsy and Airbnb but traditional businesses such as insurance brokers and letting agents. Can the Minister shine some light on that today?
We are also happy to support clause 165, which addresses HMRC’s power to levy daily penalties on data holders that do not comply with a data information notice request. Under existing legislation, if a person fails to comply with a data holder notice, they are liable for an initial fixed penalty of £300 and daily default penalties of up to £60 a day. If that is unsuccessful, a tribunal can decide the amount of an increased daily default penalty, which cannot be more than £1,000 a day. The clause clarifies that the tribunal will be responsible for determining the maximum amount of an increased daily penalty, but HMRC will determine the penalty that applies.
Our main concern, once again raised by the Low Incomes Tax Reform Group, is that the proposed change to the law in clause 165 might move significant numbers into the scope of data holder notices and a penalty regime intended for large companies involved in established modes of transaction, such as companies that facilitate credit card transactions. Under the current data request regime, the requirement for the parties subject to a notice to produce the information demanded within 30 days, under threat of instant penalties, may be particularly demanding for lower-resourced parties. On that basis, I hope the Minister can give such companies some reassurance.
Aside from the points that I have outlined, we are more than happy to support clauses 164 and 165.
Mr Gauke
Clause 164 will extend HMRC’s existing bulk data-gathering powers, allowing it to require data from two additional categories of data holder. The first category relates to business intermediaries that facilitate transactions, particularly online, between a supplier and a customer. The category covers providers of electronic stored-value payment services, also known as digital wallet transactions, a method of transferring payments to a retailer or trader. Comparing those new data with information that it already holds will enable HMRC to identify businesses that have failed to register with it or that are not declaring the full amount of tax they owe. HMRC will not seek data about individual transactions.
Clause 165 makes minor technical corrections to schedule 23 to the Finance Act 2011, which covers the bulk data-gathering powers mentioned in clause 164. Businesses are increasingly using intermediaries to provide custom or take payments, in some cases without registering for tax. New payment models are evolving quickly and are moving away from cash and card transactions towards other electronic payment groups, which means that some businesses can trade digitally while remaining beyond HMRC’s view.
Clause 164 updates HMRC’s data-gathering powers to keep pace with those changes and futureproofs legislation by including emerging new data sources of a similar type. Those data will help HMRC to crack down on the hidden economy, which the Government are committed to addressing. The powers that enable HMRC to collect third-party data from a range of data holders is subject to appeal. When a data holder does not comply with a notice, HMRC may levy penalties.
Clause 165 corrects provision by which increased daily penalties can be approved and assessed. As drafted, the existing provisions are not sufficiently clear and may lead to confusion for data holders and obstacles to the administration of the penalties. Clause 165 gives clarity to the legislation regarding HMRC’s application to the first-tier tribunal and adds an appeal right for the data holder over the number of days the increased penalties can be assessed.
Rebecca Long Bailey
Clause 167 introduces a raw tobacco approval scheme for users of and dealers in raw tobacco. Raw tobacco is not subject to excise duty or possession controls when it is not yet in a smokable form. The Government state that tobacco duty evasion is becoming increasingly prevalent through raw tobacco, which is freely and legally imported and either processed into smoking products in unregistered premises or sold in small quantities to consumers for home processing. To try to combat that, the Government carried out a consultation on the control of raw tobacco, and proposed an approval scheme.
The clause introduces a raw tobacco approval scheme that requires a person undertaking any activity involving raw tobacco to be approved and registered with HMRC. If a person is found to be undertaking an uncontrolled activity without registering with HMRC, the penalties that can be issued are either £250 or an amount equal to the duty that would have been charged on the relevant quantity of smoking tobacco at the lowest rate of duty. On that point, will the Minister confirm why the Government set the penalty at the lowest rate of duty? They could have gone for the hand-rolling rate, which would have doubled the penalty.
The clause allows exemptions to be granted to those who have a legitimate use of raw tobacco that does not involve the manufacturing of smoking products. HMRC expects that 20 to 24 businesses—mainly tobacco product manufacturers, importers, brokers and testing centres—will register. I understand that the Government are going to undertake a post-implementation review, which we welcome.
The aim is to address tobacco duty evasion by prohibiting the use of raw tobacco by unapproved persons to prevent the illegal manufacture of tobacco products. The clause will also make it a lot easier for border forces to seize tobacco and check whether it is destined for an approved person.
I understand that the new scheme will be largely built on existing registration processes, minimising the administrative impact on legitimate users of raw tobacco. For example, tobacco manufacturers already have duty approval, which will just be extended to include raw tobacco approval. Does the Minister feel that that addresses the Tobacco Manufacturers Association’s concerns that the measure will place additional burdens on legitimate users of raw tobacco?
The Labour party welcomes any measures to crack down on tax evasion and avoidance. We will therefore support the clause.
Damian Hinds
Clause 167 makes changes prohibiting any unapproved person from carrying out any activity involving raw tobacco. That will reduce the risk of evasion of tobacco excise duty and prevent the illegal manufacture of tobacco products. The approval scheme will be set out in regulations made under powers in this clause, and tailored to reflect a proportionate response to the risk presented. It will build on existing approval processes where appropriate to minimise the impact on legitimate users of raw tobacco.
Raw tobacco that is not yet in a smokable form is not subject to excise duty and the associated movement controls in the UK. There is a significant risk of tobacco products duty evasion through raw tobacco being freely and legally imported. It can be processed into illicit tobacco products in unregistered premises or sold in small quantities to consumers for home processing. We have identified no legitimate use for significant quantities of raw tobacco in the UK, other than for the manufacture of smoking products.
The Government are aware that raw tobacco is occasionally used in very small quantities for non-smoking purposes, such as beekeeping, pigeon bedding and fertiliser production. We have identified no significant non-smoking uses for large volumes of raw tobacco in the United Kingdom. Dialogue has been sought with the representatives of the potential niche uses, and the scheme has been designed with an understanding of those alternative uses and the extent of the risk presented.
The illicit manufacture of cigarettes and hand-rolling tobacco in the UK from raw tobacco deprives the Exchequer of the duty that should be paid, upon which we rely to fund our public services. It also makes cheaper illicit tobacco products more accessible, undermining the Government’s public health objectives.
The clause will assist in preventing the evasion of excise duty through the use of raw tobacco. It amends the Tobacco Products Duty Act 1979, prohibiting any person from carrying out any activity involving raw tobacco unless the person holds approval from HMRC. The changes will give HMRC powers to set out the details of the approval scheme in regulations, including how to apply for approval and what conditions and restrictions might apply to an approval. The clause will enable HMRC and Border Force officers to identify and seize raw tobacco if there is no evidence to show that the raw tobacco is destined for either an approved person or a premises that is specified in an approval. It also provides appropriate sanctions, including penalties and forfeiture, where any unapproved person has any involvement with raw tobacco.
From the consultation responses, it is expected that between 20 and 40 businesses will apply for approval. The one-off costs of familiarisation with the scheme and of making the application will be negligible. The raw tobacco scheme will protect £10 million of revenue per year by 2017-18, as certified by the Office for Budget Responsibility. The tobacco rate that applies to other smoking tobacco can be charged only until a tobacco product is produced, and if that happens, the correct tobacco rate will of course apply from that point. The clause will reduce the risk of evasion of excise duty by prohibiting activities involving raw tobacco by an unapproved person, to prevent the illegal manufacture of tobacco products.
Question put and agreed to.
Clause 167 accordingly ordered to stand part of the Bill.
Clause 168
Powers to obtain information about certain tax advantages
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
That schedule 24 be the Twenty-fourth schedule to the Bill.
Clauses 169 and 170 stand part.
Rebecca Long Bailey
These clauses give HMRC the power to collect and publish data relating to claimants of certain tax reliefs listed in schedule 24; I will not detail them all. The aim is essentially to make it easier for the European Commission to assess whether any such reliefs constitute state aid, in accordance with relevant EU obligations that commence on 1 July 2016. Information will be published only for beneficiaries who are in receipt of aid above €500,000, and the specific amount of tax advantage will not be published.
State aid is defined by the European Commission as
“an advantage in any form whatsoever conferred on a selective basis to undertakings by national public authorities.”
We do not have any issue with the principle behind the clauses—despite the obvious question of whether they will all need to be repealed in a few years’ time—but I have a question about clause 170(3) to (5), which allows the Treasury to amend the list of reliefs in schedule 24 by statutory instrument made under the negative procedure, meaning that it will not be debated. That raises the issue of scrutiny. Under what circumstances will the list be updated? I hope the Minister can provide some clarity on that. However, overall there does not appear to have been much reaction to the measures in these clauses, and we will not oppose them today.
Mr Gauke
Clauses 168 to 170 and schedule 24 introduce new powers to allow HMRC to collect information on certain tax reliefs and exemptions. They will allow HMRC to improve its ability to monitor and evaluate the effectiveness and value of those reliefs, which constitute state aid. The powers will also allow some of that information to be shared with the European Commission through a legal gateway and published on a public website.
Improved the monitoring and evaluation of state aid provided to UK businesses via tax reliefs and advantages is a sensible step forward. It may help if I provide hon. Members with some background. State aid is an advantage granted to an undertaking by public authorities through state resources on a selective basis. The Government support improved monitoring and evaluation of aid, to ensure that tax reliefs or advantages are well targeted and of value to the UK.
The provisions will allow HMRC to determine what information should be included in any claim for tax relief, to collect information from relevant persons in receipt of state aid and to publish and disclose relevant information about state aid received by beneficiaries. The changes will only affect UK businesses in receipt of state aid in the form of certain tax reliefs, and we will engage with those affected to ensure that they are ready.
Rebecca Long Bailey
This clause provides a power, first, to define by regulations a qualifying transformer company, and secondly, to determine by regulations the tax treatments of QTCs, investors in QTCs and transactions involving QTCs. The Committee will be aware from my comments earlier in the week that transformer vehicles are used by insurance companies to transform receivables, such as the repayments for a bundle of mortgages from a group of mortgage borrowers, into a security. It is right to express extreme caution about that procedure, given that it was the process of securitisation in the US sub-prime mortgage market that led to the financial crisis in 2007-08.
The provision appears to be broadly unobjectionable, but it provides a power for the Treasury to create regulations. If memory serves me correctly, the issue was discussed recently during the passage of the Bank of England and Financial Services Act 2016. Securitisation structures operate by transferring assets, whether sub-prime mortgages, credit card receivables or similar cash flows, into off-balance-sheet special purpose vehicles. Ordinarily, the profits or cash flows received from those assets pass through the special purpose vehicle to the investors who have acquired bonds in it. Usually, the residual amounts—the focus of clause 61, which I spoke about at length earlier in the week—that are left in the special purpose vehicle are small amounts compared with the sums that are paid to the investors.
However, as with all such artificial financial structures, it is possible to manipulate those amounts. If the residual amounts held by special purpose vehicles are to be saved from withholding tax, as clause 61 provides, and treated in a different manner for tax purposes, that makes it possible for the payment flows through a special purpose vehicle to be artificially raised so that larger sums can benefit from that different tax treatment.
What concerns me is as follows. What is stopping an unscrupulous financial institution involved in the industry of off-the-peg tax avoiding derivatives from passing large sums that would otherwise be subject to withholding tax—for example as payments of interest—through special purpose vehicles? Have the Government considered in detail how such cash flows should be treated so as to prevent artificial or abusive tax avoidance? Are the Government satisfied that they have done enough work to identify contexts in which transformer vehicles might be used for tax avoidance purposes? For example, subsection (4)(c) acknowledges that the regulations must consider attempts to obtain a tax advantage using transformer vehicles.
I understand that from 1 March to 29 April, the Treasury ran a consultation on insurance-linked securities, to which there is not yet a Government response. The website still says:
“We are analysing your feedback”.
Will the Minister say why a response to the consultation was not published before this clause came before the Committee?
Mr Gauke
To address directly the points raised by the hon. Lady, the regime does not present significant avoidance opportunities. The tax approach will be contingent on regulatory rules being met, which will ensure that the tax rules are appropriately targeted. In addition, the clause allows for a tailored avoidance rule, specific to the regime. That will be in addition to other anti-avoidance rules that are in place, such as the general anti-abuse rule.
The hon. Lady raised the familiar issue of securitisation and the risks involved. It is worth pointing out that insurance-linked securities deals are not the kind of financial asset securitisations that were a contributory factor in the financial crisis. ILS deals are essentially specialist reinsurance deals that are fully funded to meet the risks that they take on. That full funding requirement will be a crucial safeguard in the new UK framework. Insurance-linked securities were an asset class that performed very well during the financial crisis, and they continue to do so. I hope that that provides some reassurance to her.
I should say a word about the consultation on this matter. A formal consultation was launched in March 2016. The Government consulted the London Market Group’s ILS taskforce and a range of market participants on the development of a framework that will allow vehicles that issue ILS deals to locate in the UK. Respondents were supportive of the general approach outlined in the consultation, and the comments received will inform the drafting of secondary legislation made under this power. As for why those comments are unpublished, detailed rules will be included within regulations, which will be subject to further consultation over the summer, in addition to ongoing discussion with the industry taskforce.
I hope that those points are helpful to the Committee and that the clause will stand part of the Bill.
Question put and agreed to.
Clause 171 accordingly ordered to stand part of the Bill.
Clause 172
Office of Tax Simplification
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 140, in schedule 25, page 569, line 2, at end insert
“, subject to subsection (4A).
(4A) The chair of the OTS will be appointed by the Chancellor of the Exchequer with the consent of the Treasury Committee of the House of Commons.”
Amendment 141, in schedule 25, page 570, line 21, leave out from “considers” to end of line 22 and insert
“sufficient for the OTS to fulfil its duties.”
That schedule 25 be the Twenty-fifth schedule to the Bill.
Amendment 142, in clause 173, page 254, line 32, after “contributions” insert “and tax reliefs”.
Clause 173 stand part.
Amendment 137, in clause 174, page 255, line 5, after “Exchequer” insert
“or as the OTS considers appropriate”.
Amendment 138, in clause 174, page 255, line 13, leave out “Chancellor of the Exchequer” and insert “OTS”.
Clause 174 stand part.
Amendment 139, in clause 175, page 255, line 26, leave out “Chancellor of the Exchequer” and insert “OTS”.
Clauses 175 to 177 stand part.
Mr Gauke
Clause 172 and schedule 25 place the Office of Tax Simplification and its governance arrangements on a permanent statutory footing. I will also cover the other clauses in this group. The Government are making these changes to reinforce the OTS’s independence, ensure that it can play a greater role in public debate, and expand its role and capacity to advise the Government on tackling complexity in the tax system.
I would like to provide hon. Members with some background to the changes. The Government established the OTS as a temporary, non-statutory office of the Treasury in July 2010 to provide the Chancellor with independent advice on options for addressing existing complexity in the tax system. Since then, the OTS has made more than 400 recommendations to simplify the tax system, almost half of which have been implemented by the Government. To ensure that the OTS continues that important work, the Chancellor announced at summer Budget 2015 that the Government intended to put the OTS on a permanent statutory footing in this Bill.
The changes made by clause 172 and schedule 25 put the OTS on a statutory footing and strengthen its governance and operations. The OTS board must include the OTS chair and tax director and representatives from the Treasury and HMRC. In addition, the chair may nominate up to four further non-executive members to be approved by the Chancellor to provide the board with additional challenge and guidance.
Clauses 173 to 175 specify the enhanced functions and operations of the OTS. As part of the OTS’s expanded role, it will be able to provide advice on the simplification of the tax system as it considers appropriate, which is something that it has never been able to do before, as well as undertake reviews on areas of the tax system at the request of the Chancellor of the Exchequer. Where the OTS has conducted a review at the Chancellor’s request, he must publish a response.
The new OTS will also be more accountable and transparent. Clause 175 requires the OTS to publish an annual report on the performance of its functions. To ensure the OTS’s long-term effectiveness, clause 176 requires the Treasury to review its work every five years and stipulates that such reviews must be published. Clause 177 gives the Treasury power to appoint the day when the legislation establishing the OTS will take effect. That will be done by the end of 2016.
If I may, I would like to respond briefly to amendments 137 to 142, which would amend clauses 174 and 175 and schedule 25. Amendment 137 would allow the OTS to conduct reviews on aspects of the tax system as it considers appropriate. Clause 173 makes a provision for the OTS to provide advice to the Chancellor on aspects of the tax system as it considers appropriate, which is a power that the OTS has never had before. That is appropriate to its advisory role.
Amendments 138 and 139 would provide for the OTS to lay reports before Parliament. The OTS’s role is to advise the Chancellor on aspects of the tax system. It does not have a scrutiny function. It is therefore right that the Chancellor, who is accountable for the Treasury and its independent offices, should publish and lay the OTS reports in Parliament. The Chancellor also has the ability to make statements regarding OTS reports when laying them in Parliament. The OTS does not have that ability.
Amendment 140 would require the Chancellor to seek the approval of the Treasury Committee before appointing a new OTS chair. The role of the OTS is to advise on the simplification of the tax system; it does not have an Executive function. It is for the Chancellor to make the final decisions on tax policy while balancing the competing objectives of simplification, fairness and growth. The Government are nevertheless clear that the independence of the OTS is critical to its success and that is why we have strengthened the OTS’s board and introduced legislation that will put it on a statutory footing. The Bill will allow the OTS to advise the Chancellor on the simplification of the tax system as it considers appropriate, which it has not been able to do before. The Government believe that these measures, as well as the Treasury Committee’s right to hold a post-appointment hearing for the OTS’s chairman and tax director, are sufficient to achieve the independence proportionate to the function of the OTS.
Amendment 141 seeks to ensure that the OTS has the funding it needs to carry out its functions. The amendment is not necessary. The Treasury has increased the OTS’s budget by nearly 50%, expanding its capacity with up to 10 full-time employees—an increase from six in the previous Parliament. Finally, amendment 142 looks to include tax reliefs in the OTS’s remit. That is not needed as tax reliefs are already in the scope of the OTS’s remit. Clause 173 provides for the OTS to give advice on the simplification of the tax system, which encompasses tax reliefs. I therefore urge Members to reject the amendments.
May I take this opportunity to thank John Whiting for his services to the OTS as tax director and congratulate him on his recent appointment as a CBE? He has served the OTS with much distinction and he will be greatly missed when he moves on. He has put a huge amount of effort into getting the OTS not only up and running but functioning well over a number of years.
The Government are committed to a tax system that is simple to understand and easy to comply with. The OTS has a key role to play in that. By tackling the big complexities in the system, the OTS can make a genuine difference to taxpayers. Establishing the OTS on a permanent, statutory footing will reinforce its independence and ensure that it can continue to provide robust and independent recommendations to the Government on simplifying the tax system. I hope that the clauses and schedule will stand part of the Bill.
Rebecca Long Bailey
We will not press our amendments to a vote, but I want the Minister to understand our rationale for tabling them. As he has already explained, these clauses and schedule 25 make provisions for the OTS’s governance, operation and functions. We support the measures, as we believe that the OTS made some valuable contributions during the previous Parliament to informing debate about taxation and challenging the Government, but we believe strongly that it should be clearly independent. As such, we have tabled amendments to try to beef up the Bill in that regard.
Amendment 140 would amend schedule 25 to specify that the chair of the OTS should be appointed by the Chancellor of the Exchequer with the Treasury Committee’s consent, as is the case with the Office for Budget Responsibility. We think that that is a sensible approach to ensure the impartiality of the OTS. I am sure that the Minister is aware that Labour has placed on record its concerns about the OTS being used for political purposes. We therefore think that the consent of the Treasury Committee to the appointment of the OTS’s chair would be beneficial, and it would be helpful to hear the Minister’s thoughts about that idea in principle.
Amendment 141 would ensure that the Chancellor was not able to refuse to provide funding for OTS inquiries that he did not deem to be within its remit, as I understand could be the case as the Bill currently stands. The amendment would make it harder for the Chancellor to refuse to fund inquiries.
Amendment 142 would insert tax reliefs specifically into the OTS’s functions, allowing it to review the best way to simplify the ever-growing number of tax breaks and reliefs. The Opposition are concerned that there does not seem to be an effective process to review the efficacy of those tax breaks and reliefs in achieving their desired aims, and it would therefore be sensible to insert tax reliefs directly into the functions of the OTS.
Amendments 137 and 138 relate to the reports and reviews that the OTS will produce. Amendment 137 would clarify that the OTS could produce reports as it considered appropriate, not just at the request of the Chancellor, and amendment 138 would allow the OTS directly to lay reports before Parliament. As the Bill currently stands, the OTS will report to the Chancellor, who can then lay those reports before Parliament. The amendments would give the OTS greater independence and accountability to Parliament, not just to the Chancellor.
We will not press the amendments to a vote, but I hope that the Minister will take time to consider and address the Opposition’s concerns about the Bill as drafted and that the Government will be willing to move on those issues in due course.
Mr Gauke
I am grateful for the hon. Lady’s remarks in support of the OTS. I addressed many of her points in my earlier remarks, but let me briefly come back to the point about independence. The role of the OTS is fundamentally different from that of the OBR. The OBR is a scrutinising body. Rather than the OTS having an Executive function, its role is to provide advice to the Chancellor on simplification of the tax system. Ministers then make the final decisions on tax policy and are held accountable for those decisions.
The hon. Lady expressed concern that the OTS’s independence is at risk because the Chancellor could withhold funding because the Treasury do not like what the OTS is doing. I do not think that is a real risk. It is worth making the point that the OTS budget has been expanded, providing it with the funding that it needs. It is also worth highlighting the OTS’s expanded role in providing advice on the simplification of the tax system as it considers appropriate, as opposed to where it has been given a specific remit.
I touched on many of those points in my earlier remarks, but I wanted to take this opportunity to reiterate them. I am pleased that there is cross-party support for the existence and role of the OTS and welcome that this afternoon.
Question put and agreed to.
Clause 172 accordingly ordered to stand part of the Bill.
Schedule 25 agreed to.
Clauses 173 to 179 ordered to stand part of the Bill.
The Chair
We now come to new clauses. Before I start with Government new clause 7, it might be helpful to point out to the hon. Member for Aberdeen North that we will take the free-standing new clauses in the name of her hon. Friend the Member for Kirkcaldy and Cowdenbeath at the end of the Government new clauses. She has been very patient and if she hangs on a bit longer, her moment will come.
New Clause 7
Receipts from intellectual property: diverted profits tax
‘(1) Part 3 of FA 2015 (diverted profits tax) is amended as follows.
(2) In section 79 (charge to tax), at the end insert—
“(6) But banking surcharge profits and notional banking surcharge profits, to the extent that they are determined by reference to notional PE profits (or what would have been notional PE profits) for an accounting period, do not include any amount which is (or would have been) included in notional PE profits for that period by virtue of section 88(5)(b).”
(3) In section 88 (which relates to the calculation of taxable diverted profits), for subsection (5) substitute—
“(5) “Notional PE profits”, in relation to an accounting period, means an amount equal to the sum of—
(a) the amount of profits (if any) which would have been the chargeable profits of the foreign company for that period, attributable (in accordance with sections 20 to 32 of CTA 2009) to the avoided PE, had the avoided PE been a permanent establishment in the United Kingdom through which the foreign company carried on the trade mentioned in section 86(1)(b), and
(b) an amount equal to the total of royalties or other sums which are paid by the foreign company during that period in connection with that trade in circumstances where the payment avoids the application of section 906 of ITA 2007 (duty to deduct tax).
(5A) For the purposes of subsection (5)(b) a payment of a royalty or other sum avoids the application of section 906 of ITA 2007 if—
(a) that section does not apply in relation to the payment, but
(b) that section would have applied in relation to the payment had the avoided PE been a permanent establishment in the United Kingdom through which the foreign company carried on the trade mentioned in section 86(1)(b).”
(4) In section 100 (credit for UK or foreign tax on same profits), for the heading substitute “Credits for tax on the same profits”.
(5) In section 100, after subsection (2) insert—
“(2A) Subsection (2)(b) does not allow a credit against a liability to diverted profits tax if or to the extent that the liability arises by virtue of section 88(5)(b) (payments of royalties etc).”
(6) In section 100, after subsection (4) insert—
“(4A) Subsection (4B) applies where—
(a) a company’s notional PE profits for an accounting period include an amount under section 88(5)(b) determined by reference to a royalty or other sum,
(b) the company’s liability to diverted profits tax for the accounting period is determined by reference to taxable diverted profits calculated under section 91(4) or (5), and
(c) those taxable diverted profits include an amount of relevant taxable income referred to in section 91(4)(b) or (5)(b) determined by reference to the same royalty or other sum.
(4B) A credit equal to the company’s liability to diverted profits tax for that accounting period which arises by virtue of section 88(5)(b) in respect of the royalty or other sum, to the extent that it is included in relevant taxable income for the purposes of section 91(4)(b) or (5)(b), is allowed against the company’s total liability to diverted profits tax for that period.
(4C) Subsection (4D) applies where—
(a) by reason of the payment of a royalty or other sum a company’s liability to diverted profits tax for an accounting period includes liability arising by virtue of section 88(5)(b),
(b) the royalty or other sum is paid to a person who is resident in a country or territory outside the United Kingdom, and
(c) under any relevant provision relief would have been due to that person had the avoided PE been a permanent establishment in the United Kingdom through which the company carried on the trade mentioned in section 86(1)(b).
(4D) Such credit as is just and reasonable having regard to the amount of the relief referred to in subsection (4C)(c) is allowed against the company’s liability to diverted profits tax.
(4E) In subsection (4C)(c) “relevant provision” means—
(a) the provision of a double taxation arrangement (as defined by section 2(4) of TIOPA 2010), or
(b) section 758 of ITTOIA 2005 (exemption for certain interest and royalty payments).”
(7) The amendments made by this section have effect in relation to accounting periods ending on or after 28 June 2016.
(8) For the purposes of section 88(5)(b) of FA 2015 as inserted by this section, a royalty or other sum which would not otherwise be regarded as paid during an accounting period ending on or after 28 June 2016 is to be regarded as so paid if—
(a) for the purposes of section 906 of ITA 2007 it is regarded as paid on a date during that period by virtue of section (deduction of income tax at source: intellectual property)(6), or
(b) for the purposes of section 577A(1) of ITTOIA 2005 it is regarded as paid on a date during that period by virtue of section (receipts from intellectual property: territorial scope)(5).”’—(Mr Gauke.)
Brought up, read the First and Second time, and added to the Bill.
New Clause 8
Deduction of income tax at source: intellectual property
‘(1) Part 15 of ITA 2007 (deduction from other payments connected with intellectual property) is amended as specified in subsections (2) and (3).
(2) In section 906 (certain royalties etc where usual place of abode of owner is abroad), for subsections (1) to (3) substitute—
“(1) This section applies to any payment made in a tax year where condition A or condition B is met.
(2) Condition A is that—
(a) the payment is a royalty, or a payment of any other kind, for the use of, or the right to use, intellectual property (see section 907),
(b) the usual place of abode of the owner of the intellectual property is outside the United Kingdom, and
(c) the payment is charged to income tax or corporation tax.
(3) Condition B is that—
(a) the payment is a payment of sums payable periodically in respect of intellectual property,
(b) the person entitled to those sums (“the assignor”) assigned the intellectual property to another person,
(c) the usual place of abode of the assignor is outside the United Kingdom, and
(d) the payment is charged to income tax or corporation tax.”
(3) For section 907 substitute—
‘907 Meaning of “intellectual property”
(1) In section 906 “intellectual property” means—
(a) copyright of literary, artistic or scientific work,
(b) any patent, trade mark, design, model, plan, or secret formula or process,
(c) any information concerning industrial, commercial or scientific experience, or
(d) public lending right in respect of a book.
(2) In this section “copyright of literary, artistic or scientific work” does not include copyright in—
(a) a cinematographic film or video recording, or
(b) the sound-track of a cinematographic film or video recording, except so far as it is separately exploited.”’
(4) The amendments made by subsections (2) and (3) have effect in respect of payments made on or after 28 June 2016.
(5) In determining whether section 906 of ITA 2007 applies to a payment, no regard is to be had to any arrangements the main purpose of which, or one of the main purposes of which, is to avoid the effect of the amendments made by this section.
(6) Where arrangements are disregarded under subsection (5) in relation to a payment which—
(a) is made before 28 June 2016, and
(b) is due on or after that day,
the payment is to be regarded for the purposes of section 906 of ITA 2007 as made on the date on which it is due.
(7) In determining the date on which a payment is due for the purposes of subsection (6), disregard the arrangements referred to in that subsection.
(8) In this section “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable and whether entered into before, or on or after, 28 June 2016).”’—(Mr Gauke.)
Brought up, read the First and Second time, and added to the Bill.
New Clause 9
Receipts from intellectual property: territorial scope
‘(1) In section 577 of ITTOIA 2005 (territorial scope of Part 5 charges), at the end insert—
“(5) See also section 577A (territorial scope of Part 5 charges: receipts from intellectual property).”
(2) After that section insert—
‘577A Territorial scope of Part 5 charges: receipts from intellectual property
(1) References in section 577 to income which is from a source in the United Kingdom include income arising where—
(a) a royalty or other sum is paid in respect of intellectual property by a person who is non-UK resident, and
(b) the payment is made in connection with a trade carried on by that person through a permanent establishment in the United Kingdom.
(2) Subsection (3) applies where a royalty or other sum is paid in respect of intellectual property by a person who is non-UK resident in connection with a trade carried on by that person only in part through a permanent establishment in the United Kingdom.
(3) The payment referred to in subsection (2) is to be regarded for the purposes of subsection (1)(b) as made in connection with a trade carried on through a permanent establishment in the United Kingdom to such extent as is just and reasonable, having regard to all the circumstances.
(4) In determining for the purposes of section 577 whether income arising is from a source in the United Kingdom, no regard is to be had to arrangements the main purpose of which, or one of the main purposes of which, is to avoid the effect of the rule in subsection (1).
(5) In this section—
“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);
“intellectual property” has the same meaning as in section 579;
“permanent establishment”—
(a) in relation to a company, is to be read (by virtue of section 1007A of ITA 2007) in accordance with Chapter 2 of Part 24 of CTA 2010, and
(b) in relation to any other person, is to be read in accordance with that Chapter but as if references in that Chapter to a company were references to that person.”’
(3) The amendments made by subsections (1) and (2) have effect in relation to royalties or other sums paid in respect of intellectual property on or after 28 June 2016.
(4) It does not matter for the purposes of subsection (4) of section 577A of ITTOIA 2005 (as inserted by this section) whether the arrangements referred to in that subsection are entered into before, or on or after, 28 June 2016.
(5) Where arrangements are disregarded under subsection (4) of section 577A of ITTOIA 2005 (as inserted by this section) in relation to a payment of a royalty or other sum which—
(a) is made before 28 June 2016, but
(b) is due on or after that day,
the payment is to be regarded for the purposes of subsection (1) of that section as made on the date on which it is due.
(6) In determining the date on which a payment is due for the purposes of subsection (5), disregard the arrangements referred to in that subsection.
(7) Where—
(a) an intellectual property royalty payment within the meaning of section 917A of ITA 2007 is made on or after 28 June 2016,
(b) the payment is made under arrangements (within the meaning of that section) entered into before that day,
(c) the arrangements are not DTA tax avoidance arrangements for the purposes of that section,
(d) it is reasonable to conclude that the main purpose, or one of the main purposes, of the arrangements was to obtain a tax advantage by virtue of any provisions of a foreign double taxation arrangement, and
(e) obtaining that tax advantage is contrary to the object and purpose of those provisions,
the arrangements are to be regarded as DTA tax avoidance arrangements for the purposes of section 917A of ITA 2007 in relation to the payment.
(8) In subsection (7)—
“foreign double taxation arrangement” means an arrangement made by two or more territories outside the United Kingdom with a view to affording relief from double taxation in relation to tax chargeable on income (with or without other tax relief);
“tax advantage” is to be construed in accordance with section 208 of FA 2013 but as if references in that section to “tax” were references to tax chargeable on income under the law of a territory outside the United Kingdom.
(9) Where—
(a) a royalty is paid on or after 28 June 2016,
(b) the right in respect of which the royalty is paid was created or assigned before that day,
(c) section 765(2) of ITTOIA 2005 does not apply in relation to the payment, and
(d) it is reasonable to conclude that the main purpose, or one of the main purposes, of any person connected with the creation or assignment of the right was to take advantage, by means of that creation or assignment, of the law of any territory giving effect to Council Directive 2003/49/EC of 3rd June 2003 on a common system of taxation applicable to interest and royalty payments made between associated companies of different member States,
section 758 of ITTOIA 2005 does not apply in relation to the payment.”’—(Mr Gauke.)
Brought up, read the First and Second time, and added to the Bill.
New Clause 10
Stamp duty: acquisition of target company’s share capital
‘(1) Section 77 of FA 1986 (acquisition of target company’s share capital) is amended as follows.
(2) In subsection (3), omit the “and” at the end of paragraph (g) and after paragraph (h) insert “, and
(i) at the time the instrument mentioned in subsection (1) is executed there are no disqualifying arrangements, within the meaning given by section 77A, in existence.”
(3) In subsection (3A) for “(3)” substitute “(3)(b) to (h)”.
(4) In subsection (4) after “this section” insert “and section 77A”.
(5) After section 77 of FA 1986 insert—
“77A Disqualifying arrangements
(1) This section applies for the purposes of section 77(3)(i).
(2) Arrangements are “disqualifying arrangements” if it is reasonable to assume that the purpose, or one of the purposes, of the arrangements is to secure that—
(a) a particular person obtains control of the acquiring company, or
(b) particular persons together obtain control of that company.
(3) But neither of the following are disqualifying arrangements—
(a) the arrangements for the issue of shares in the acquiring company which is the consideration for the acquisition mentioned in section 77(3);
(b) any relevant merger arrangements.
(4) In subsection (3) “relevant merger arrangements” means arrangements for the issue of shares in the acquiring company to the shareholders of a company (“company B”) other than the target company (“company A”) in a case where—
(a) that issue of shares to the shareholders of company B would be the only consideration for the acquisition by the acquiring company of the whole of the issued share capital of company B,
(b) the conditions in section 77(3)(c) and (e) would be met in relation to that acquisition (if that acquisition were made in accordance with the arrangements), and
(c) the conditions in paragraphs (f) to (h) of section 77(3) would be met in relation to that acquisition if—
(i) that acquisition were made in accordance with the arrangements, and
(ii) the shares in the acquiring company issued as consideration for the acquisition of the share capital of company A were ignored for the purposes of those paragraphs;
and in section 77(3)(e) to (h) and (3A) as they apply by virtue of this subsection, references to the target company are to be read as references to company B.
(5) Where—
(a) arrangements within any paragraph of subsection (3) are part of a wider scheme or arrangement, and
(b) that scheme or arrangement includes other arrangements which—
(i) fall within subsection (2), and
(ii) do not fall within any paragraph of subsection (3),
those other arrangements are disqualifying arrangements despite anything in subsection (3).
(6) In this section—
“the acquiring company” has the meaning given by section 77(1);
“arrangements” includes any agreement, understanding or scheme (whether or not legally enforceable);
“control” is to be read in accordance with section 1124 of the Corporation Tax Act 2010;
“the target company” has the meaning given by section 77(1).”
(6) The amendments made by this section have effect in relation to any instrument executed on or after 29 June 2016 (and references to arrangements in any provision inserted by this section include arrangements entered into before that date).’—(Mr Gauke.)
Brought up, and read the First time.
Mr Gauke
I beg to move, That the clause be read a Second time.
I will speak briefly about new clause 10, unless there are questions. The new clause stops an unfair stamp duty advantage where takeovers are brought about through share-for-share exchanges with no stamp duty becoming due. It will ensure that the tax system operates fairly by preventing share-for-share relief from being claimed in situations for which it was not intended. The change made by the clause will catch the insertion of a new company above another by way of a share-for-share exchange as part of a wider transaction involving transfer of a controlling stake in the new company. The change will mean that no share-for-share relief will be available where arrangements are in place, at the time of the share-for-share exchange, for a change of control of the new company. The measure will apply to any instrument exercised on or after 29 June 2016.
New clause 10 will stop share-for-share relief being claimed inappropriately on takeovers. The Government have acted quickly to prevent an unfair tax advantage and to protect significant tax revenue.
Question put and agreed to.
New clause 10 accordingly read a Second time, and added to the Bill.
New Clause 11
Corporation tax: territorial scope etc
“(1) Section 5 of CTA 2009 (territorial scope of charge) is amended in accordance with subsections (2) to (4).
(2) For subsection (2) substitute—
‘(2) A non-UK resident company is within the charge to corporation tax only if—
(a) it carries on a trade of dealing in or developing UK land (see section 5B), or
(b) it carries on a trade in the United Kingdom (other than a trade of dealing in or developing UK land) through a permanent establishment in the United Kingdom.’
(3) After subsection (2) insert—
‘(2A) A non-UK resident company which carries on a trade of dealing in or developing UK land is chargeable to corporation tax on all its profits wherever arising that are profits of that trade.’
(4) In subsection (4), after ‘(1)’ insert ‘, (2A)’.
(5) After section 5 of CTA 2009 insert—
“5A Arrangements for avoiding tax
(1) Subsection (3) applies if a company has entered into an arrangement the main purpose or one of the main purposes of which is to obtain a relevant tax advantage for the company.
(2) In subsection (1) the reference to obtaining a relevant tax advantage includes obtaining a relevant tax advantage by virtue of any provisions of double taxation arrangements, but only in a case where the relevant tax advantage is contrary to the object and purpose of the provisions of the double taxation arrangements (and subsection (3) has effect accordingly, regardless of section 6(1) of TIOPA 2010).
(3) The relevant tax advantage is to be counteracted by means of adjustments.
(4) For this purpose adjustments may be made (whether by an officer of Revenue and Customs or by the company) by way of an assessment, the modification of an assessment, amendment or disallowance of a claim, or otherwise.
(5) In this section “relevant tax advantage” means a tax advantage in relation to corporation tax to which the company is chargeable (or would without the tax advantage be chargeable) by virtue of section 5(2A).
(6) In this section—
“arrangement” (except in the phrase “double taxation arrangements”) includes any agreement, understanding, scheme, transaction or series of transactions, whether or not legally enforceable;
“double taxation arrangements” means arrangements which have effect under section 2(1) of TIOPA 2010 (double taxation relief by agreement with territories outside the United Kingdom);
“tax advantage” has the meaning given by section 1139 of CTA 2010.
5B Trade of dealing in or developing UK land
‘(1) A non-UK resident company’s “trade of dealing in or developing UK land” consists of —
(a) any activities falling within subsection (2) which it carries on, and
(b) any activities from which profits, gains or losses arise which are treated under Part 8ZB of CTA 2010 as profits or losses of the company’s trade of dealing in or developing UK land.
(2) The activities within this subsection are—
(a) dealing in UK land;
(b) developing UK land for the purpose of disposing of it.
(3) In this section “land” includes—
(a) buildings and structures,
(b) any estate, interest or right in or over land, and
(c) land under the sea or otherwise covered by water.
(4) In this section—
“disposal” is to be interpreted in accordance with section 356OQ of CTA 2010;
“UK land” means land in the United Kingdom.”
(6) In section 3 of CTA 2009 (exclusion of charge to income tax), in subsection (1), for paragraph (b) substitute—
“(b) the company is not UK resident and—
(i) the income is profits of a trade of dealing in or developing UK land, or
(ii) the income is within its chargeable profits as defined by section 19.”
(7) In section 18A of CTA 2009 (exemption for profits or losses of foreign permanent establishments), after subsection (2) insert—
“(2A) But profits and losses are not to be left out of account as mentioned in subsection (2) so far as they are, or would if the company were non-UK resident be, profits of the company’s trade of dealing in or developing UK land (as defined in section 5B).”
(8) In section 19 of CTA 2009 (chargeable profits)—
(a) in subsection (2) for “company’s chargeable profits” substitute “company’s “chargeable profits””;
(b) after subsection (2) insert—
“(2A) But the company’s “chargeable profits” do not include profits of a trade of dealing in or developing UK land (and accordingly such profits are not attributable to any permanent establishment of the company).”
(9) In section 189 of CTA 2009 (post-cessation receipts: extent of charge to tax), in subsection (4), at the end insert “other than a company’s trade of dealing in or developing UK land”.
(10) In section 107 of CTA 2010 (restrictions on losses etc surrenderable by non-UK resident), in subsection (1), for the words from “non-UK resident” to the end substitute “non-UK resident company—
(a) carrying on a trade of dealing in or developing UK land, or
(b) carrying on a trade in the United Kingdom through a permanent establishment.”
(11) In section 1119 of CTA 2010 (definitions for purposes of Corporation Tax Acts), at the appropriate place insert—
““trade of dealing in or developing UK land”, in relation to a non-UK resident company, has the meaning given by section 5B of CTA 2009,”.”—(Mr Gauke.)
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss the following:
Government new clause 12—Corporation tax: transactions in UK land.
Government new clause 13—Income tax: territorial scope etc.
Government new clause 14—Income tax: transactions in UK land.
Government new clause 15—Pre-trading expenses.
Government new clause 16—Commencement and transitional provision: sections (Corporation tax: territorial scope etc), (Corporation tax: transactions in UK land) and (Pre-trading expenses).
Government new clause 17—Commencement and transitional provision: sections (Income tax: transactions in UK land) and (Income tax: territorial scope etc).
Mr Gauke
New clauses 11 to 17 will introduce the legislation announced in the 2016 Budget for a specific charge to income tax or corporation tax on profits from the disposal of land in the UK. The new clauses will ensure that offshore structures cannot be used to avoid UK tax on profits generated from dealing in or developing land in the UK.
New clauses 11, 12 and 15 will introduce new rules to ensure that profits generated by a company from dealing in or developing land in the UK will be chargeable to UK corporation tax. Those rules will apply regardless of the residence of the person carrying on the trade and regardless of whether the developer has a permanent establishment in the UK.
New clauses 13 and 14 will ensure that the profits generated by an individual from dealing in or developing land will always be chargeable to UK income tax. To prevent avoidance, the new charge will also apply where, instead of dealing in land, a developer sells shares in a company that carries on such developments. It will also apply where arrangements are put in place to split profits from development activity between the developer and related entities that could otherwise reduce chargeable allowance. In addition, the Government have strengthened long-standing rules on transactions in land to ensure that they can effectively counter abuse of the new rules.
To support those new rules, the Government are introducing an anti-avoidance rule to prevent manipulation between the policy announcement on Budget day 2016 and the introduction of the new clauses. The anti-avoidance rule is in new clause 16 for corporation tax and new clause 17 for income tax, along with other commencement and transitional rules. We have taken steps to amend our double taxation treaties; I am grateful to our partners in Guernsey, the Isle of Man and Jersey for agreeing to make changes to those treaties, taking effect from Budget day 2016. These measures will raise £2.2 billion over the scorecard period and take effect from 5 July 2016; they will affect developers of UK property who choose to operate from somewhere other than the UK to reduce their tax bills. There will be no effect on companies, based in the UK or elsewhere, whose profits are already fully taxed in the UK.
The changes made by new clauses 11 to 17 will continue the Government’s fight against aggressive tax planning and profit shifting. They will bring the UK in line with other major economies and ensure fair treatment between UK and overseas developers.
Rebecca Long Bailey
The measures appear to be closing a tax loophole. On that basis, we do not oppose them, especially as they are estimated to bring in £130 million in this financial year, rising to a peak of £640 million in 2019-20. I must say, however, that this important addition to the Bill was tabled rather late in the day, even if the outline of the measure itself was announced for consultation at the Budget. It could be argued that the Opposition and stakeholders have been given insufficient time to go through the detail of the legislation.
None the less, the Chartered Institute of Taxation has identified two areas of concern on which it would like some clarification. First, will the Minister confirm that the Government do not intend pure investment structures to be affected by the new measures? Secondly, will he confirm that new clause 16 is simply a timing rule dealing with the opposition of pre-trading expenditure that would not be deductible under normal principles and where reliance needs to be placed on section 61 of the Corporation Tax Act 2009? The concern is that the clause seeks to restrict normal trading expenses incurred prior to the company’s falling within the new charge. Some clarification from the Minister on those points would be appreciated.
Mr Gauke
I will of course address the questions that the hon. Lady has raised, but it might be helpful if I first provide a bit of background. Stamp duty is usually payable at 0.5% on instruments that transfer shares—no, I do not want to give that background. [Interruption.]
Kirsty Blackman
I beg to move, That the clause be read a Second time.
My apologies for causing confusion earlier. If I am ever lucky enough to be on a Finance Bill again, I promise to try hard not to cause so much confusion.
The Government will not be surprised that we have tabled this new clause, because it concerns an ongoing issue between the Scottish and UK Governments. We feel that it still requires attention. To give a little background, before the incorporation of the police and fire authorities, regional authorities were gifted VAT exemption for the fire and rescue and police services. In 2013, when the single Scottish police force and the fire service were brought in, the VAT exemption failed to be carried over to the new services.
The Government argue that the exemption should not apply because national non-departmental public bodies are outside the exemptions under the Value Added Tax Act 1994. Since the issue has arisen, however, HMRC and HM Treasury have decided that tax breaks should be given to the new transport agency Highways England, which is a national non-departmental public body, and that the exemption should be given to the UK-wide Olympic legacy organisation, London Legacy Development Corporation. Those are comparable organisations in terms of territorial extent and they are national bodies, but they have been given the exemption. The Conservative Government can no longer say that the issue is one of fairness, when it is clearly one of unfairness.
The VAT charge, which is being levied unfairly, is costing Scotland’s emergency services tens of millions every year. We would appreciate the opportunity to spend the money on front-line services instead. We have tabled the new clause in the hope that the Government will look at the issue, particularly in the light of the fact that they have permitted exemptions for Highways England and London Legacy. The Government should consider fairness and parity.
Mr Gauke
This is a familiar debate. The new clause requests that the Treasury reviews the VAT treatment of the Scottish police and fire and rescue services, reporting the cost of VAT and what the change would be if they were eligible for a refund. I am tempted to refer the Committee to the speech I have given on numerous occasions previously, as well as to the history of this. Furthermore, the Scottish Government made the decision to reform their public services knowing full well about the VAT implications.
As was explained last year, any use of Treasury resource to review and produce a report into the financial position of Police Scotland and the Scottish Fire and Rescue Service would be unjustified. Neither is eligible to receive VAT refunds under existing legislation, and the Treasury has no intention of amending principles of the VAT refund scheme to change that. I recognise that the SNP has raised the issue before, and I dare say that it will again. However, we cannot support the new clause and, if pressed to a vote, I recommend that the Committee rejects it.
Kirsty Blackman
We wish to return to the matter on Report, so I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 4
Fuel duty regulator regime
‘The Chancellor of the Exchequer shall undertake a review of fuel duty to establish the form of fuel duty regulator regime which would best ensure stability of pricing, and report to Parliament within six months of the passing of this Act.’—(Philip Boswell.)
Brought up, and read the First time.
Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)
I beg to move, That the clause be read a Second time.
I understand that we are going to be running through new clauses 1 to 6. If it is your pleasure, Mr Howarth, I will speak to new clause 4, as advised.
The Chair
New clauses 2 and 3 have already been debated. We are now dealing with new clauses 4 and 5, which are open to debate. Is that helpful?
The Chair
You could do if you wanted to. If there is a desire to have Divisions on them, the procedure allows for it.
Kirsty Blackman
Apologies. It was our intention to withdraw them but we are unsure as to the stage at which we should do that.
Philip Boswell
I apologise for any confusion, Mr Howarth. It is a pleasure to serve under your chairmanship.
I rise to ask the Minister to review the need for a fuel duty regulation regime that could mitigate the worst excesses of fuel price fluctuations and best ensure the stability of pricing. It should be obvious to even the most casual observer that fuel prices fluctuate, but it is perhaps not so obvious that the oil price typically runs through a cycle of approximately seven or eight years. As sure as oil prices go down, they inevitably go up. The fluctuation of the price between $125 per barrel in 2012 to under $30 per barrel earlier this year has had a massive impact on producers and users alike. It is good news for some that oil prices appear to be on the rise again, with oil sitting at around $50 per barrel today.
The fluctuations seriously affect road haulage companies, private road users and other transport services, as well as domestic fuel users across the country. Some of the most severely affected are those who are subject to fuel poverty. As a responsible fuel-duty regulator should, the Government could protect the most vulnerable people from the worst vagaries of the markets. In Scotland, 35% of households are affected by fuel poverty, which I am sure the Minister will agree is unacceptable. I urge him to consider a review with the objective of regulating fuel prices via a fuel duty regulator. I advise the Committee that we will press new clause 4 to a vote.
Mr Gauke
The Government oppose the inclusion of the new clause in the Bill. We recognise that, even with the recent fall in fuel prices, fuel costs remain a significant part of business and household costs, which is why it was announced at Budget 2016 that fuel duty would remain frozen for the sixth year in a row, thereby saving the average driver £75 a year and the average haulier £2,400 a year, relative to the pre-2010 fuel duty escalator. Our policy has provided greater certainty for consumers and businesses and has left pump prices much lower than they would have been.
The hon. Member for Coatbridge, Chryston and Bellshill is asking the Chancellor to undertake a review of fuel duty to establish a form of fuel duty regulatory regime that would ensure the stability of pricing. Members will remember that at Budget 2011 the Chancellor put forward a proposal for a fair fuel stabiliser that would have linked fuel duty rates more closely with oil prices. That policy would have meant that if oil prices were high, fuel duty rates would increase by RPI only, as the Government would have more revenues from the supplementary charge levied on oil and gas production. If oil prices were below the trigger price, fuel duty would have been increased by RPI plus 1p per litre, and the supplementary charge cut back to 20%. The fair fuel stabiliser was abolished in 2014 so that the Government could support the oil and gas industry without raising the tax burden on motorists. Had it been maintained, we would have had to raise fuel duty at the Budget.
A fuel duty regulator that links fuel duty to changes in oil prices would destabilise public finances by making receipts collected from the Government’s fifth-largest tax more volatile. Since 2010, oil prices have shown significant volatility, with the price per barrel ranging from between $30 to $130. By contrast, pump prices have not shown the same level of volatility.
Rebecca Long Bailey
I have just a brief comment. Labour Members agree that the fluctuations in the price of oil in recent years is concerning. A review of how best to stabilise pricing would be sensible. We will therefore support the SNP Members if they choose to press the matter to a vote.
Question put, That the clause be read a Second time.
Kirsty Blackman
I beg to move, That the clause be read a Second time.
The new clause would allow the taxation of allowances payable to Members of the House of Lords to be reviewed. Members of the House of Lords receive a tax-free allowance of £300 for every day that they pitch up and sign in. They do not all claim it, but many of them do. In 2014-15, the House of Lords sat for 126 days. That was a low number of days—normally they sit for more—but I have done some calculations on the basis of that. If one peer was there for all 126 days, they would receive £37,800 tax-free for that year. If we imagine that a lot of peers are on the 40% tax rate—many will be in the 45% bracket; not many will be on a lower tax rate—we are looking at a tax loss to the Treasury of £15,120 per peer. If 798 peers pitched up on all those days, that is a tax loss to the Treasury of £12 million.
Most peers do not turn up every day. The average attendance last year was 483 peers on any given day, which means that the loss to the Treasury is more like £7 million every year. That is quite a lot of money, and considering that the majority of those who sit in the House of Lords probably do not have a huge need for that money, I believe, as a member of a progressive party, that it would be better for some of that wealth to be redistributed. Will the Government seriously consider examining whether those people sitting in the House of Lords should, in times of austerity, receive a tax-free payment? The Treasury could easily do something on this issue; it could decide to tax the £300-a-day allowance at the appropriate level, depending on what the Member earns in other income. This is not a good use of taxpayers’ money. The money could come to the Treasury, but we are using it instead for a tax-free allowance for peers.
Mr Gauke
The Government oppose new clause 5. We are committed to ensuring a fair and more sustainable tax system for everyone, but the Finance Bill is not the appropriate vehicle to review the system of financial support for Members of the House of Lords. The new clause says that the Chancellor of the Exchequer
“shall undertake a review of the tax-free status of allowances payable to members of the House of Lords”.
The Government recognise the importance of keeping the general system of tax reliefs and allowances under review. That is done routinely by the Treasury and HMRC, who consult on changes to the tax system as part of the policy-making process, but the House of Lords introduced the present system of financial support in 2010. That system and its basis have not changed, and therefore we do not consider that the tax treatment needs to be re-examined at this time. In addition, such a review could not be carried out in isolation; the system would need to be considered as a whole, and the Finance Bill is not the vehicle to consider such constitutional reform.
Finally, this cannot be a matter solely for the Commons; we must respect the constitutional position. For the Commons to intervene on House of Lords reform without any involvement of the other House would not be the right process. It is simply not the place of the Finance Bill to legislate for such a review.
Kirsty Blackman
Given that we are asking for a review, it is quite possible that peers and the House of Lords could be consulted and have input into that review. I think the very place to discuss taxation and allowances in taxation is the Finance Bill. That is what we did with respect to workers who work through intermediaries. This is a totally sensible place to discuss this issue.
Mr Gauke
As I said, this has to be looked at in the context of the system of financial support for Members of the House of Lords in the round; we cannot look at the tax system in isolation, which is what a review under the Finance Bill would have to do. This is not the right way in which to consider the system of financial support for Members of the House of Lords. Any review of that system would need to be done in the round, and the new clause is not appropriate for the Finance Bill. I therefore urge hon. Members to oppose new clause 5, if it is pressed to a Division.
Rebecca Long Bailey
I understand that the Review Body on Senior Salaries published a review of financial support for Members of the other place in November 2009. Our position is that there needs to be a broader review of House of Lords salaries and allowances. We are happy to support the Scottish National party if the new clause is pressed to a vote; it certainly deserves consideration.
Kirsty Blackman
A number of my colleagues would love to speak on this issue on Report. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 6
Oil and gas: decommissioning contracts
“(1) The Chancellor of the Exchequer shall commission a review of the ways in which the tax regime could be changed to increase the competitiveness of UK-registered companies in bidding for supply chain contracts associated with the decommissioning of oil and gas infrastructure.
(2) In undertaking the review, the Chancellor shall consult the Department for Business, Innovation and Skills, the Oil and Gas Authority; Scottish Ministers; and any other stakeholders that the Chancellor thinks appropriate.
(3) The Chancellor shall report to Parliament on the results of his review within six months of the passing of this Act.”.—(Philip Boswell.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Mr Gauke
Before we conclude, I would like to make one or two remarks and thank a number of people. I am pleased that Finance Bills continue to receive excellent scrutiny, even if we have had dramatic changes in the Committee’s composition over the course of the past few days. The hon. Member for Salford and Eccles has continued the diligence and common sense of her predecessor. In the circumstances—I speak from experience, having held the Opposition Front Bencher role on Finance Bills—she has acted with great thoroughness and determination, and I congratulate her on providing scrutiny in slightly difficult circumstances, particularly as I understand she did not inherit any notes.
I should also thank the hon. Member for Wolverhampton South West (Rob Marris) for his work in the earlier stages of the Committee. I thank the SNP Members; rather remarkably, they had a larger Front-Bench team working on this Bill than the Labour party. I thank you, Mr Howarth, and Sir Roger for your guidance and wisdom in steering all Members through what can be a complex process. I owe you a particular debt for your chairing, with regard to chairs and your generosity in allowing me to stand and sit in accordance with the needs of my back, rather than the usual standards of procedure. Without that, this Committee might have been my last. As it is, I can highly recommend the curative effects of debating deep-in-the-money options.
I thank all Members on the Committee for their contributions and, indeed, non-contributions. I thank Members on the Government Benches for their patience and, above all, attendance. The Finance Bill has been considered against the backdrop of significant and dramatic events elsewhere in the Palace of Westminster. I would hesitate to suggest that the Finance Bill Committee is ever anything other than the very centre of the country’s public and political life, but I am not even sure it has been the centre of public life on this corridor. However, excitement and substance can be very different things.
I pay tribute to the Committee’s diligence and expertise in considering the wide range of issues before it. The hon. Member for Salford and Eccles shot straight to the first rank of Finance Bill humourists by observing that a clause does what it says on the tin. I will not attempt to compete with that, beyond observing that fellow Members of the Commons owe a debt to Committee members—the people who love the jobs you hate.
I thank the usual channels, my hon. Friend the Member for Central Devon and the hon. Member for St Helens North. I am particularly grateful for the assistance I received from the Exchequer Secretary to the Treasury, my hon. Friend the Member for East Hampshire. Finally, I thank the interested parties who submitted evidence to the Committee, as well as our Clerks, the Hansard Reporters and the Doorkeepers, who have ensured the smooth running of the Committee. I thank the HMRC and Treasury officials without whose inspiration this job would be much harder, and the Office of the Parliamentary Counsel, without which none of this would be possible. I look forward to us all meeting again at some point on Report.
The Chair
On behalf of the co-Chair, Sir Roger, and myself, I thank the Minister for his kind words. I particularly thank him for promoting me at one point in our proceedings to the lofty position of Speaker. I mentioned this to Mr Speaker, and he gave me a very frosty look.
I thank all Committee members, including those from the Scottish National party and the official Opposition, for the cordial way in which they conducted themselves, making it a pleasure for Sir Roger and me to chair the Finance Bill Committee. On behalf of both of us, I particularly thank the Clerks, Hansard and the Doorkeepers for ensuring that we conducted our proceedings efficiently, while still ensuring ample opportunity for the democracy of the Committee to function. In all those thank-yous, I am sorry if I missed anybody out.
Question put and agreed to.
Bill, as amended, accordingly to be reported.
Westminster Hall
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backbench business
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Blood Cancers
(7 years, 12 months ago)
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Jim Shannon (Strangford) (DUP)
I beg to move,
That this House has considered blood cancers and the Cancer Drugs Fund.
It is always a pleasure to come to this Chamber and have the opportunity to expound on the subjects that we bring here for consideration. I am pleased that so many hon. Members have made the effort to attend on a Thursday afternoon—often referred to as the graveyard shift. I am not sure that is entirely accurate or fair, but we thank very much those who have made the effort to be here. It is also a pleasure to see in her place the shadow Minister, the hon. Member for Hackney North and Stoke Newington (Ms Abbott), and I look forward to hearing the Minister. He and I always seem to be in these debates—if he is here I am here, and if I am here so is he—but it is always a pleasure to see him. We look forward to his response to the points that we make during the debate.
Cancer is a massive issue. It will affect one in every two people we meet, and many of us here have a personal interest in the subject. More and more people are surviving cancer because of the incredible work that has been done by the pharmaceutical industry and private enterprise, and also because of the work done in partnership with universities. Queen’s University Belfast is involved in finding new drugs and working with private enterprise, the Government and the education system to find ways of doing more.
The fact that more people are surviving and living longer is to be celebrated, but unfortunately not everyone is living well, which is what this debate is about. That is especially true for people with blood cancers, many of whom will live with the disease and the consequences of its treatment for many years. Some of them are fortunate to do so, but for many that will be time limited. About one in four people living with or beyond cancer face disability or poor health following their treatment. Evidence from Macmillan shows that by 2020 nearly one in every two people will receive a cancer diagnosis in their lifetime. Just look round this Chamber: half the people here today will receive a cancer diagnosis at some time during their life; or, if they are not affected directly, their families certainly will be.
I place on the record my thanks to the cancer charities, Marie Curie Cancer Care, Macmillan Cancer Support and the many others, which do such marvellous work with those who have cancer. Right now, routine follow-up care for people with cancer costs about £250 million a year. It is usually delivered via a one-size-fits-all medical model that is based on repeat out-patient consultations despite a lack of evidence to show that that is effective, so we must also look at that.
I was therefore pleased to see the commissioning guidance released recently to promote the roll-out of a recovery package for everyone with a cancer diagnosis. The recovery package will be especially important for patients with blood cancers, because it will mean that they get the physical, emotional and social support they need to lead as healthy and active a life as possible for as long as possible. Every one of us in this Chamber would wish that to happen. Many people with blood cancers live for a number of years with the consequences of their disease and treatment, so there needs to be a commitment from the Department of Health that everyone with a blood cancer will be offered tailored support.
Let me talk from a personal point of view. My father had cancer on three occasions. He passed away last year. He did not die because of cancer, but he was diagnosed 39 years ago—38 years before he passed away—and my mother was told to go home and prepare and get the estate sorted out. In other words, there was next to no hope, but my dad survived, and he survived for three reasons. He survived, first, because of his faith and the prayers of God’s people; secondly, because of the skill of the surgeon’s knife; and thirdly, because of the care of the nurses. Those three things are vital for all of us. That is an example of how far we have come in those 39 years.
Patients with blood cancers can face significant problems in accessing vital treatment because of the difficulties and complexities of appraising medicines in this area. I thank the charities and others who have given us background information. I will not do this of course, but I could probably speak for three hours on this subject. I am sure that people are thinking, “Well, I hope he doesn’t.” I am not going to, because clearly I want to give everyone an opportunity to participate in the debate.
The appraisal system used by the National Institute for Health and Care Excellence is not suitable for assessing medicines that treat conditions with small patient populations—in other words, cancers that affect a small number of people. Perhaps in the greater scheme of things, they are numerically small, but it is vital that the drugs are available and in place.
At this point, I pay special tribute to the hon. Member for Crawley (Henry Smith), the chair of the newly brought together all-party group. I thank him for going with me to the Backbench Business Committee to ask for this debate. We are both pleased to be able to have the debate so early after the launch of the APPG. The hon. Gentleman will speak himself, but it is a pleasure to work alongside him.
Nic Dakin (Scunthorpe) (Lab)
I congratulate the hon. Gentleman on securing this very important debate. The issue of small populations and finding the right treatments is crucial as the cancer drugs fund goes forward within the NICE context. That is an opportunity as well as a threat. I hope that the hon. Gentleman will reflect that in the rest of his speech.
Jim Shannon
It is always a pleasure to have the hon. Gentleman come along to a debate in support. He always does so, and his valuable contributions are always appreciated by us all. I wholeheartedly agree with him.
The way the system fails blood cancer patients can be illustrated via the case of ponatinib, a drug designed to treat chronic myeloid leukaemia patients who are resistant to or intolerant of other treatments. I will elaborate on this point later, for it is very important. I think that the hon. Gentleman has grasped that it is a vital issue as well. The drug is fully available to all CML patients in Scotland and Wales, but in the remainder of the United Kingdom it is provided on the NHS only to a small subset of patients who can benefit from it after NICE refused to appraise it because of the small patient population. One of the questions that we would like answered in this debate if possible—I am not sure whether the Minister is the right person to answer it, but I know that if he is not, he will certainly direct it to the right Department—is how we ensure that there is not a postcode lottery when it comes to the allocation and availability of cancer drugs.
Peter Dowd (Bootle) (Lab)
I thank the hon. Gentleman for securing the debate. Does he agree that parents—in my case, the parents of nine-year-old Charlie Fearns—are confused, distressed and dismayed that they are not provided with the medical intervention that they need to treat their child’s illness? Charlie needs chimeric antigen receptor T-cell therapy, but Mr and Mrs Fearns are having to find as much as £150,000-plus to fund the therapy themselves. Does the hon. Gentleman agree with me that that extra burden, in their circumstances, is far too onerous?
Jim Shannon
I thank the hon. Gentleman for his intervention and for that personal story. I think that that situation is a disgrace. Any of us in the House would wholeheartedly agree with him. There has to be a system that enables all the people of the United Kingdom of Great Britain and Northern Ireland to partake of, use and access these drugs. The example he gives shows just where the current system falls short. This debate gives us an opportunity to highlight that and to seek the solutions that he and his constituents want.
The situation with ponatinib has resulted in the equivalent of a postcode lottery in patient access across the UK, with some patients having to move to Scotland or Wales to undergo treatment. Why should they have to move? It is not fair that they should. It seems grossly unfair that they should have to either move or travel to the hospital. For these patients, the drug could be an alternative treatment to a stem cell transplant, and a last chance of survival.
The systems of appraisal used to assess blood cancer medicines need to be able to take into account the small patient numbers and the issues that that raises about the amount and maturity of data available, to ensure that all patients who need access to medicines do not miss out because of where they live.
Chronic lymphocytic leukaemia is the most common type of leukaemia, a cancer of the white blood cells. In leukaemia stem cells start to overproduce white blood cells that are not fully developed; in CLL, these are called lymphocytes. Figures from Macmillan and NICE estimate that some 2,700 to 3,200 people in the UK are diagnosed with CLL each year, with most cases occurring in people over 60 and very few in people under 40. Around two thirds of the diagnoses are made by chance through a routine blood test with doctors; people do not know they have it and all of a sudden they find out they do. The other third of diagnoses are made following visits to the doctor for CLL-related symptoms: enlargement of the lymph nodes, liver or spleen, anaemia, bruising or fever, drenching night sweats and/or weight loss of greater than 10%. Someone with any of those symptoms should see their doctor, and do so soon.
CLL is more prevalent in men, with recent studies showing that some of the risk of developing it is inherited from parents. One in 20 CLL patients has a relative with CLL or a very similar condition; however, CLL can and does affect anyone.
Mr Nigel Dodds (Belfast North) (DUP)
I commend my hon. Friend for raising this issue today. In Northern Ireland three people every day are diagnosed with blood cancer. I am sure he would agree with commending the work of Leukaemia & Lymphoma NI, the only charity in Northern Ireland dedicated to dealing with this, and the great support it gives to the Centre for Cancer Research and Cell Biology at Queen’s University, which he has already mentioned. Without the dedicated work of people in charities like that across the country, raising money for absolutely vital research, we would be in a much poorer place indeed.
Jim Shannon
I am indebted to my right hon. Friend and colleague for that intervention. We have done, and we continue to do, many great things in Northern Ireland in medical research, charitable giving and charitable operations. He has rightly highlighted an organisation in Northern Ireland that does just that. It is worrying that we have so many people with blood cancer. When we take that as a proportion of a nation of 1.8 million, it gives an idea of just how important it is.
CLL tends to develop very slowly with many people not requiring treatment for months or even years, although others need it straight away. For all stages of CLL, more than 40%, of men and more than 50% of women will survive for five years or more after being diagnosed. At stage A, which is the earliest, people survive on average for 10 years or more after diagnosis, those at stage B for five to eight years, and those diagnosed at stage C live for up to three years. From those figures, life expectancy is very clear: people have a diminished lifespan.
Doctors often recommend against immediate treatment for CLL if it is diagnosed at an early stage and opt to watch and wait. I am concerned that sometimes they need to be more proactive and receptive to what the issues are at the time. “Watch and wait” can be stressful for those diagnosed and their families, but early treatment can lead to exposure to the side effects of drugs without achieving significant benefits, as well as to increased life insurance premiums. Sometimes we have to look at the other things that affect us when our health declines, such as work and financial obligations, or how to feed our family. That adds to the stress.
Patients whose CLL relapses early have a more aggressive form of the disease and it is essential that clinicians have a range of treatment options available to suit individual patient need. That is due to factors such as the variable course and nature of the disease, the toxicity profile of the therapies and the comorbidities, which are more prevalent in this situation. There is a general poor understanding of the need for a variety of treatment options. Again, knowledge of the blood cancers among GPs, the NHS, consultants—those who should know—perhaps needs to be improved as well.
Stakeholders including the CLL Support Association, which has done great work collecting much of this information, have two key areas in which they have workable recommendations to make a difference. For post-diagnosis support the CLLSA believes that because CLL behaves in such a diverse way, it is important that patients and their families are provided with accurate information from trusted sources. Each hospital should have a CLL nurse who can provide patients with useful written information that contains links to websites for those who wish to know more.
Let us be honest: people who get this diagnosis want to know as much about the disease and the problems that they have right away; they want to have that knowledge and information right there. As the hon. Member for Bootle (Peter Dowd) said, citing the personal experience of his constituents, they want to know what it means, how to react, what the survival chances are and how long. All those things play upon the mind; they are very important issues.
When it comes to access to new treatments, a second preliminary decision from NICE in June 2016 has provisionally rejected ibrutinib for NICE guidance to treat relapsed refractory and 17p deletion or TP53 mutated CLL. That group of patients have a poor prognosis and very few options available to them. The manufacturer has been requested to submit a proposal for consideration of CDF listing for access to treat adults for the 17p deletion or TP53 mutation only. Again, that is something that perhaps the Minister can reply to. When people see that they can access new treatments, which really could be life-saving, they want to have them right away and want to try them. In many cases, people probably would not mind piloting those things, just to make sure that they can have life expectancy on the timescale they have been given.
The CLLSA feels that ibrutinib should be made available to both groups because both populations share a number of similarities in patient need, including a significant symptom burden, limited alternative treatment options, and subsequently poor survival prospects. As both groups have a similar symptom burden, it is unfair that they will be unable to benefit from access to this treatment. There are also the quality of life benefits. CLLSA argues that the quality of life benefits reported by patients have not been adequately considered by NICE. As such, the cost-effectiveness of ibrutinib is likely to have been underestimated. Many of us believe—in the background information—that it certainly is a drug that could do more if there was the opportunity. We need to make sure that it can be made available and accessible.
Furthermore it should be noted that CLL is a heterogeneous disease, so there is a need for multiple options in every situation. I know that each person’s individual circumstances are different and the GP and consultant who look at that will decide the way forward. Some patients may not respond to, be unable to tolerate or be otherwise unsuitable for alternative treatments such as idelalisib. As such, there is a clear need for access to ibrutinib to enable patient and clinician choice, so that treatment can be tailored to patients’ individual clinical needs. Ultimately the decision will remain a matter for NICE, but this is what the key stakeholder in CLL believes to be the way forward. That is an organisation that has been run by trustees who are all volunteers and either suffer from CLL, are clinicians or are relatives of those with CLL. They do their research, not for glory or riches, but for what is best for those affected.
Some of the background information we had relates to brentuximab—I hope my pronunciation is right. That is hailed as one of the most effective single agents for relapsed anaplastic lymphoma—or Hodgkin’s lymphoma as it is better known. It was delisted after two of its indicators were removed, making it harder for some patients to receive the medicine they need. In November 2015, the Blood Cancers Alliance met the Secretary of State for Health and in a letter to the Prime Minister expressed its concern over the delisting of life-saving drugs from the CDF. There is a drug that was delisted and that seemed to be doing the job; it is concerning that it has been removed when it quite clearly could have made a difference.
It was greatly encouraging to have so many stakeholders engage on this issue and time will not permit me to pay tribute to all of them. Another organization working in the field is Celgene, which has provided some further information that will add to the debate. Five conditions account for almost 70% of the total lives lost to blood cancer: myeloma, diffuse large B-cell lymphoma, acute myeloid leukaemia, myelodysplastic syndromes and the aforementioned chronic lymphocytic leukaemia. New treatments have transformed survival rates for multiple myeloma since the 1970s and there have been great steps forward. I know that when the Minister responds he will tell us some of the good things that have happened, but average life expectancy for a patient diagnosed with multiple myeloma is still only five years. This debate gives us the chance to discuss the issue and get some direction and focus from the Minister on how we move forward and achieve a better, longer life for those with blood cancers.
Continued progress is only possible with continued research and investment. That is critical to achieving progress in the treatment of blood cancers. We have had many debates in Westminster Hall on rare diseases because we acknowledge the need to focus on rare diseases, and today’s debate is an example of that. The numbers of people who fall into the category of having rare diseases are small, but we must not ignore the burden of their despair and what that means.
Many of the molecules in other companies’ pipelines are being studied in combination with Celgene’s treatments. Ceasing access to those treatments will seriously hinder progress in increasing survival rates and limit future innovation. I know that the Minister, like everyone in this Chamber today, is totally committed to finding new drugs that can cure these life-threatening diseases, as I am sure he will make clear in his response. The point is that a balance needs to be struck between regulation protecting people and allowing innovation.
In conclusion, I am pleased to have the opportunity to express in this Chamber my concern on behalf of those with blood cancers. I thank all hon. Members who have come to participate. Our responsibility as elected representatives is to put the case on behalf of our constituents. I believe we have the opportunity to make a difference for those who many years ago would not have a long life, but who today could have a longer life if they had access to the cancer drugs fund. What we have in the United Kingdom of Great Britain and Northern Ireland is people with fantastic brains who have the ability to come up with new medications and who can make these things happen. I look forward very much to the Minister’s response.
Maggie Throup (Erewash) (Con)
It is a pleasure to serve under your chairmanship, Mr Walker. I feel I should start by making a confession: I am probably one of the few Members of Parliament who can look down a microscope at a blood sample and identify a blood cancer, whether it is a chronic or acute leukaemia, lymphoma or a myeloma. I began my working life as a biomedical scientist in haematology. All the hon. Members present will be relieved to know that the majority of blood samples we look at in a haematology lab are normal. However, it is that rare, abnormal blood sample with odd-looking white cells that has long-lasting and life-changing consequences for patients.
As we heard from the hon. Member for Strangford (Jim Shannon), blood cancers account for one in 10 of all cancers, so they are quite prevalent. So often the patient finds it hard to grasp that they have such a serious condition. Patients diagnosed with lung cancer, breast cancer or colon cancer, for example, understand the word “cancer”. But leukaemia, whether chronic, acute, myeloid or lymphoid, does not have the word “cancer” attached to it, so the move towards calling these conditions “blood cancers” may help patients and their families to come to terms with the diagnosis and focus on the need for more research and development and funding for new drugs and treatment therapies.
Stem cell transplantation is one treatment that I want to talk more about today. Just last week I visited the Anthony Nolan research labs in north London—it seemed quite strange putting on a lab coat again after so many years. Obviously technology has changed since I was in the labs, but it was still amazing to see the world-leading equipment and ground-breaking technology and all the scientific research going on behind all the new technologies being developed. The treatment being carried out there is really cutting-edge. I make no apology for using those descriptive words: we really have a gem on our doorstep. We need to sing and dance about the Anthony Nolan research labs, and there are so many more research labs throughout the whole of the UK, as well as the charities and authorities that support them.
Stem cell transplantation is a curative therapy for blood cancer. Despite the great progress that has been made in recent years, sadly one in three patients do not survive their first year after a stem cell transplant. Only half survive to five years post-transplantation, despite all the advances that are being made. Stem cell transplantation is a complex and high-risk treatment and there is an urgent need for significant improvements in transplant outcomes.
There is definitely a need for further research into stem cell transplantation to reduce the side effects of treatment and to improve the long-term survival that we really need. I believe that doing more research will lead to cost savings for the NHS, as patients will be less likely to require specialist care following transplant, but there are a number of barriers to this type of research taking place, such as inadequate research infrastructure and inadequate data collection.
Patient outcomes can be significantly improved through more research into this type of technology. I am sure that some of the current barriers to research can be overcome with Government support for improving research infrastructure. As part of that, we need to establish and really put on the map a national stem cells transplantation trials network to bring together all the data from across the country as well as the data coming to Anthony Nolan. Hopefully, that should accelerate the adoption of new treatments in clinical practice and ultimately improve patient outcomes.
Just a couple of years ago, the Anthony Nolan research labs invested in a new technology for advanced tissue typing, known as third generation sequencing—that is where it really went beyond me on my visit there. The technology allows entire genes to be sequenced in one go, and it is faster and more accurate than was previously possible. In turn, it allows for the best possible donor for patients with blood cancer, leading to better outcomes and reducing post-transplant complications such as graft-versus-host disease.
Sadly, not every patient with blood cancer is suitable for a stem cell transplant, and even if they are, a match may not be available. For some patients, a stem cell transplant is the only suitable option, one example being patients with chronic myeloid leukaemia, a condition the hon. Gentleman touched on. Some of these patients are resistant, or develop resistance during treatment, to targeted drugs called tyrosine kinase inhibitors. Resistance to those targeted drugs is a significant problem in up to a third of patients with chronic myeloid leukaemia.
These complexities only add to the need to improve access for patients to the cancer drugs fund. Chronic myeloid leukaemia patients who are resistant to tyrosine kinase inhibitors and are not suitable for stem cell transplant need a number of medicines to be available to them. Those targeted therapies treat small patient groups and as such have been difficult for NICE to evaluate because, again, we do not have the numbers to get the evidence to prove that a drug works.
The therapies have been passed to the cancer drugs fund panel for consideration, but even now access is restricted and they have only been allowed for some patients with specific mutations. As we have heard, that is contrary to decisions in Scotland and Wales. In fact, like the hon. Gentleman, I have heard of a chronic myeloid leukaemia sufferer moving to Wales to be able to access the treatment that provides his only hope of survival for a few more months and years to spend with his family.
By the nature of the condition, blood cancers are diverse, and just a small range of approved cancer drugs or treatments does not provide a solution. It therefore follows that data on the effectiveness of the drug regime on offer are limited. This situation should not prejudice those blood cancer patients whose cancer epidemiology does not permit treatment with NICE-approved drugs.
I want to finish with three asks of the Minister. First, will he support clinical research that will improve outcomes for blood cancer patients and specifically the aim of establishing a clinical trials network for stem cell transplantation? Secondly, will he ensure that the way the cancer drugs fund is administered does not put up even more barriers to blood cancer patients? Thirdly, will he ensure that the final outcomes of the accelerated access review provide a genuine speeding up of access to transformative and innovative drugs, devices and diagnostics, not just for blood cancer patients but for patients with other hard-to-treat conditions?
Colleen Fletcher (Coventry North East) (Lab)
It is a pleasure as always to serve under your chairmanship, Mr Walker. I should start by saying that I am a joint vice-chair of the new all-party group on blood cancer and a member of the all-party group on stem cell transplantation. I am pleased to have the opportunity to speak in this important debate on blood cancer and the cancer drugs fund. I thank the hon. Members for Strangford (Jim Shannon) and for Crawley (Henry Smith) for affording me this opportunity by securing the debate. I also thank the previous speaker, the hon. Member for Erewash (Maggie Throup). I agree with much of what she said, including about the need for more clinical research.
It is true that since its introduction in 2010, the cancer drugs fund has enabled many blood cancer patients in England to access treatments that are unavailable in the mainstream NHS. That has undoubtedly benefited and saved the lives of thousands of patients. However, it is equally true that, latterly, the CDF has also fostered a great deal of uncertainty for many blood cancer patients and their families.
Some have experienced a rollercoaster of emotions as the life-saving treatments they rely on have been made unavailable, then available and then unavailable again in a matter of a few months. That was most acute during the 2015 delisting process, which resulted in 16 indications for seven blood cancer drugs being removed from the CDF. There is considerable concern that under the new system more and more blood cancer drugs will become unavailable as the CDF moves away from being the safety net for patients that it was designed to be. That concern is reinforced by the retention of the flawed process used by NICE for assessing drugs, which has resulted in many blood cancer drugs becoming unavailable. I hope the Minister will offer assurances that blood cancer patients will be able to access the drugs they need under the new process for reviewing and appraising medicines.
We must not forget that the drugs offered through the CDF are just one of many treatment options available for patients with blood cancer. I want to turn briefly to one of those: stem cell transplantation. I intend to make a few points about the inconsistencies in care for blood cancer patients post-transplant. I declare an interest, as my husband Ian was diagnosed with acute myeloid leukaemia in 2014 and received a stem cell transplant soon after in the same year through Anthony Nolan. I have been to its research labs, where his DNA is stored—he got a 10:10 match, so we were hugely excited about that. I was with Ian when he was told he had a life-threatening disease and also when he was told that he had been cured. I therefore know a bit about despair and hope and inconsistency. I travelled with him throughout the journey. Although he is cured, it is a journey that is not entirely over, but the light of hope now outshines the darkness of despair in his case.
If we are to make use of the cutting-edge research that allowed his cure, we surely need to look at the inconsistencies of post-transplant care. It is vital that blood cancer patients who undergo stem cell transplants have access to the care and support they need after their transplants, as well as before and during. Currently, however, there is no long-term patient pathway and as such the provision of services varies greatly across the country, leaving vulnerable patients at the mercy of the postcode lottery, where some get very good support but others get very little.
The problem arises because the transplant period is defined as 30 days before transplant until just 100 days post-transplant. Variations in care and support occur after that period when commissioning responsibility transfers from NHS England to clinical commissioning groups. After that point there are no guidelines on what constitutes a suitable late effects service for patients and no guarantees of appropriate funding for transplant centres to deliver the care that stem cell recipients will continue to require. As such, the result is geographical variations.
Delivering the long-term care that patients need at a consistent standard across the country requires a clear and fully funded patient pathway. It is my belief, and that of Anthony Nolan, the blood cancer charity, that that pathway should cater for each patient for at least five years after transplant and look much further beyond the arbitrary 100-day figure. I hope the Minister will touch on what can be done to ensure that every patient has access to the same standard of care and support. Will he agree to meet with representatives of Anthony Nolan to discuss how best to deliver a comprehensive post-transplant pathway?
Just as consistency around post-transplant care is essential, so too is the need for consistency in the NHS’s policy on second transplants for blood cancer patients. This is not a plea—I hope my husband will not need a second transplant: he is currently well, but living with the after-effects of the drugs needed to see him through this period—but unfortunately NHS England currently has no clear or consistent policy on whether it will fund second stem cell transplants for the small number of patients each year who relapse, even though there are many people alive today because of a second transplant.
Will the Minister offer his assurances that if a patient’s doctor recommends a second transplant, NHS funding will be allocated to ensure that that patient has a second chance of a cure? After all, is that not why we are here today: to ensure that all blood cancer patients have access to the best treatments available for their condition—treatments that offer the best chance of a cure—whether it be a stem cell transplant, a course of radiotherapy or chemotherapy or access to medicines approved by NICE or those available through the CDF?
Henry Smith (Crawley) (Con)
It is a great pleasure to serve under your chairmanship once again, Mr Walker. I pay tribute to hon. Members who have joined me on the new all-party group on blood cancer and particularly the hon. Member for Strangford (Jim Shannon) for going to the Backbench Business Committee and asking for this debate—my appreciation therefore also goes to the Backbench Business Committee for allocating time today to discuss this important issue. The hon. Gentleman is an assiduous parliamentarian and we are grateful to have his wise words and commitment behind this important issue.
Many of my constituents have seen first hand, through family and friends, the real-life effects of blood cancer. We heard a powerful and personal presentation from the hon. Member for Coventry North East (Colleen Fletcher) just a few moments ago. For my part, almost exactly four years ago this month my mother passed away from acute myeloid leukaemia. There will also be personal stories in the Public Gallery and beyond, so it is important to ensure that this issue is highlighted.
This morning I was pleased to see that the National Institute for Health and Care Excellence approved the chronic myeloid leukaemia drug bosutinib. That is great news for patients. I hope that will not be the last such approval in the weeks and months to come. The importance of early diagnosis cannot be overestimated, not least because, by 2020, almost half the UK population will receive a cancer diagnosis during their lifetime. Although I am sure that everyone in this place is aware, it may come as a surprise to those who are not so familiar with the issue that blood cancer is the third biggest cancer killer and is made up of more than 130 different diseases, including leukaemia, lymphoma and myeloma.
It is important not to lose sight of the importance of ensuring emotional support. The management of the cancer drugs fund’s list of medicines in 2015 caused additional emotional strain to some patients, their families and their support networks. Several treatments were not approved by NICE and so were unavailable to patients, and some treatments were made available through the cancer drugs fund. However, 16 of the drugs that received indications were then delisted during 2015, and two delisted medicines were reinstated on to the CDF in October 2015 after NHS England and the drug manufacturers agreed a new price.
All treatments currently on the CDF, and those that have been delisted, will be reviewed by NICE in the coming months as part of the new system for appraising cancer drugs, which could mean that the status of those drugs changes once again, causing additional uncertainty. Such change is of course welcome if the drugs end up becoming available, but the lack of permanency in such decisions is distressing for patients and those who care for them.
For those on a first-line treatment, not knowing whether the second or third-line options will be available—or, worse, knowing that they will not be available—places them and their family members in an almost unthinkable and unbearable situation. Although the revised cancer drugs fund provides up to two years of interim funding for a drug, the concern is whether that is enough time to secure the necessary data needed to make a final decision.
In helping to form the new APPG, I have been made aware of a number of concerns about the new cancer drugs fund system. First, the changes in the new incarnation of the CDF have led to confusion among patients. The old system provided a safety net for patients if a drug was delisted by NICE, but under the new system a negative verdict from NICE means that there is no remaining safety net and the drug will be unavailable to patients, which is a significant cause of concern. Secondly, the fund previously allowed a number of drugs to be provided to NHS patients that otherwise would not have been provided. Many of the CDF drugs had previously been turned down by NICE for being too expensive, because of insufficient data due to the smallness of the patient populations they targeted or because low patient numbers made it impossible for cost-effectiveness to be assessed using NICE’s standard methodology.
Thirdly, treatments currently on the CDF, and those that were previously included but subsequently delisted, will all be reviewed by NICE under the new system. As I have mentioned, such instability also causes suffering. Where patient populations are small, it can be difficult to secure the necessary data to make a successful application to NICE. Fourthly, the success or failure of the new process will depend on how NICE interacts with the pharmaceutical industry. Both sides have a crucial part to play, and flexibility is required on issues such as pricing, access schemes, the application of methodology and how clinical data are used.
Finally, the revised CDF will provide a maximum of two years’ interim funding for a drug if NICE deems that further clinical data are required before a final appraisal decision can be made. The new CDF will therefore provide temporary funds while data are collected, whereupon the drug will be approved or declined by NICE. The fund is welcome in principle, but I fear that an additional two years will be insufficient to secure the necessary data to make a final decision, particularly for some of the blood cancer drugs due to be reviewed by NICE.
The UK is a world leader in blood cancer research, which is welcome. As a country, we can be proud of that work, while recognising that there is still much more to do. Work undertaken in this country has improved our understanding of blood cancer and helped to make available a number of life-saving and life-changing treatments, with many more in progress. Blood cancer research in the UK has been at the forefront of advancing precision medicine for patients, from molecular diagnostics to targeted therapies. In launching the APPG, it has been a pleasure to work alongside charities such as Bloodwise. Since its launch in 1960, Bloodwise has spent more than £500 million on blood cancer research. I pay tribute to the work it has done and continues to do.
The UK’s world-leading blood cancer research not only helps those affected by blood cancer but allows a greater understanding of other cancers and has helped to develop new treatments for other diseases. It is vital that patients are able to benefit from that research. What are the Minister’s views on providing a new model for appraising cancer drugs? Along with the work of the Government’s accelerated access review, a long-term and sustainable system will enable patients to benefit from the innovative, life-saving drugs that are being developed.
Last month I received a written answer from the Under-Secretary of State for Health, my hon. Friend the Member for Battersea (Jane Ellison), who has responsibility for public health, in which she referred to the Government’s September 2015 announcement that, by 2020, the approximately 280,000 people diagnosed with cancer each year will benefit from a tailored recovery package. Will the Under-Secretary of State for Life Sciences provide an update on that goal today?
I would be grateful for some reassurance on the following issues. Will the new process for reviewing medicines enable blood cancer patients to access the drugs they need? Will NICE give consideration to rare diseases and to drugs targeted at small patient populations, with clear guidance on how NICE will provide a fair assessment of such drugs? Will NICE, NHS England and the manufacturers be encouraged to work together effectively to ensure that drugs are made available? Will the Government consider the drugs budget in the light of the huge advances in technology and innovation that are leading to the development of many new life-saving drugs?
I am sincerely grateful to hon. and right hon. Friends for their attendance and attention today. With my friends on both sides of the House, I look forward to ensuring that the issue of blood cancers is further advanced and that awareness is increased.
Martyn Day (Linlithgow and East Falkirk) (SNP)
It is a pleasure to serve under your chairmanship, Mr Walker. I thank the hon. Members for Strangford (Jim Shannon) and for Crawley (Henry Smith) for securing this informative and timely debate. Although I might have sleepless nights at the thought that one in two people will receive a cancer diagnosis, I thank them both for driving home that point to the wider populace.
There can be little doubt that a cancer diagnosis is a daunting prospect for those affected and their families, which is why it is vital that we support them throughout their journey from detection through to aftercare. Many heartfelt examples and experiences have been detailed in today’s debate, and it is clear that the support that individuals require can vary greatly. One size does not fit all, so we need a system that considers the problems from all angles. I agree wholeheartedly with the hon. Member for Strangford that everyone should be offered tailored support.
I am grateful to the hon. Member for Erewash (Maggie Throup)—I hope I have pronounced it correctly—for her explanation that we should refer to all the diseases as blood cancers. As a layman, I found it helpful. There are 130 of them, all with complex names, and having done some research for this debate, I found the names confusing. It is a good approach. Her argument about the strong need for more clinical research should be taken on board.
I was grateful to hear from the hon. Member for Coventry North East (Colleen Fletcher) about her personal circumstances. I am glad that her husband has had a positive outcome. The regional variations are somewhat disappointing; a lot more can be done. I thank the hon. Member for Crawley for his submission and for securing this debate. He drove home the fact that blood cancers are the third biggest cancer killer, and spoke about the difficulties caused by small sample sizes in providing adequate data for drug assessments. That is an important point.
In Scotland, of course, health issues are devolved, so unlike many hon. Members here today, I see only a tiny number of such cases in my casework, as they go to MSPs instead. Our experience in Scotland is also a little different. The Scottish Government are implementing a £100 million new cancer plan to improve prevention, early diagnosis and treatment, and have reformed how the Scottish Medicines Consortium assesses drugs in order to give patients better access to treatments that can give them longer and better quality lives.
Basically, we have combined our cancer drugs fund with our rare diseases drugs fund and simply called it the new drugs fund. The amount in the fund has been quadrupled, which is a significant factor. That approach will serve as a blueprint for all cancer services in Scotland, improving the prevention, detection, diagnosis, treatment and aftercare of those affected by the disease.
Other initiatives include a £50 million fund over the next five years to improve radiotherapy equipment and support radiotherapy training, ensuring that everyone who would benefit from it has access to advanced radiotherapy, and £9 million over five years to support access to health and social care services during and after treatment, such as link workers to provide support in the most deprived communities. We will also invest £5 million over the next five years in reducing inequalities in screening. There are many such examples, and we can learn from one another’s good practices in the different parts of the United Kingdom.
In Scotland, the Scottish Medicines Consortium considers drugs as NICE does, including worldwide evidence, and works up each drug in detail. The balance for us seems to be slightly more on effectiveness than on cost, although cost obviously remains a factor in all matters. Our impression is that, for NICE, cost would sometimes be a bigger component. Both organisations consider cost-effectiveness; as we all know, there is not an infinite pot of money.
In conclusion, although no system will ever produce a favourable result for every individual, more can always be done and we can always learn lessons from each other’s systems. In that light, I suggest that Ministers consider giving NICE the power to change its decision-making process and consider new medicines more flexibly.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
This debate illuminates an extraordinarily difficult subject: the clash between the fact that ultimately there must be constraints on NHS spending, whatever party is in power, and the desperation of cancer patients and their friends and family to obtain any drugs and treatments that will give them a few extra months of life.
The cancer drugs fund was a manifesto commitment by the Conservative party. As such, I venture to suggest, it was partly a political response to a series of terrible stories in the media about NICE—the rationing body—not allowing people access to drugs. However, it was always intended to be time-limited; the Government were clear from the beginning. Sadly, it has been overspent. In 2013-14, NHS England overspent the allocated budget for the fund by 15%, or £31 million, and in 2014-15, it was overspent by 48%, or £136 million. The overspend was partly offset by NHS England underspending against other budgets, but it also meant the deferral of some planned spending on primary care services.
The Government’s response to the fact that the cancer drugs fund was always going to be transitional is to introduce a new model. The cancer drugs fund will become a transitional fund that will only pay for new drugs until NICE carries out a full assessment of whether the drugs should be recommended for routine commissioning. After the assessment, the drug will either be approved by NICE for routine commissioning or removed altogether from the cancer drugs fund. That is clearly a horrifying and shocking reality for cancer patients and their families to face. Labour Members believe that the Government could have done more in setting up a new system.
This situation is serious. At the last count, 5,500 cancer patients and 1,750 blood cancer patients were dependent on some of the drugs that might be struck off. Although they personally will be unaffected, their successors as patients and the health professionals who care for them will be left in limbo. The Government have delisted seven of 14 drugs to treat symptoms of blood cancer, even before the CDF has published its report. The independent accelerated access review is also not complete, and the pharmaceutical price regulation scheme has come in for widespread criticism.
It is not clear—the Minister might be able to shed some light on this—whether there has been any proper evaluation of the efficacy of the existing programmes. Prolonging life and the palliative effects of such drugs are key issues, as well as—this is where I started—the relative costs of the drugs themselves. Any decisions made on the availability of drugs should be rational and transparent, taking those factors into account. Although I await the Minister’s response with interest, the decisions of the CDF under this Government do not appear to meet the criteria of either rationality or transparency.
We must be honest: cancer treatment in this country is poor by international standards. We have some of the worst cancer survival rates of the advanced industrialised countries. Some of our nearest comparators are much poorer countries such as Lithuania and Estonia, which have similar if not better cancer survival rates. NICE comes in for extensive criticism, particularly from pharmaceutical companies, but the truth is that NICE, as an independent regulator that takes decisions on the efficacy and cost-effectiveness of drugs, is a model admired around the world. It is a difficult situation.
We in the Labour party want an investigation of the causes of our low cancer survival rates and a plan for Government. At this time, the whole House is waiting for the Minister to say how the Government balance issues of cost-effectiveness and the need for life-extending and palliative care. Are they satisfied that their model for phasing out the cancer drugs fund and turning it into a transitional arrangement is really the best model? What have they done to alleviate the concerns of cancer patients, their friends and family, and people who speak for the sector?
The Parliamentary Under-Secretary of State for Life Sciences (George Freeman)
It is a great pleasure to serve under your chairmanship, Mr Walker. I thank and congratulate the hon. Member for Strangford (Jim Shannon) and my hon. Friend the Member for Crawley (Henry Smith) on setting up the all-party parliamentary group and initiating this debate. It is another example of Westminster Hall providing an important forum as an adjunct to the main Chamber for hon. Members to raise specialist issues, and I welcome it hugely. I thank Members from all parties who have spoken. Again, it is an example of the House at its best, working together in a non-partisan way on an issue that our constituents want us to see is important.
While I am here, I take the opportunity to welcome the hon. Member for Hackney North and Stoke Newington (Ms Abbott) to her role as shadow Health Secretary. I look forward to working with her here and in the main Chamber.
I pay tribute to Bloodwise and other charities that work in the blood cancer space. Charities are playing an increasingly important role in the sector; the Association of Medical Research Charities recently released figures that show that our charities now invest more than £1.4 billion a year in medical research. That puts them above any of our UK pharma companies. Charities make a major sectoral contribution, not only with their research but by advocating on behalf of their patients, driving care pathway reform and leading and supporting integrated care pathway initiatives with NHS England. I put on record our gratitude to them for that work.
I congratulate Members on setting up the new APPG, which has a really important role to play, working with parliamentarians, Government and everybody involved in the blood cancer community, in ensuring that the voice of blood cancer patients is heard here in Westminster and that policies affecting blood cancer patients, their families and carers are patient-centred and evidence-based.
The word “cancer”, as you know Mr Walker, still strikes fear into people’s hearts up and down the land. The truth is that, through extraordinary biomedical advances and treatment improvements, more than 850,000 people are now living and working with cancer. It has become a treatable condition. Some cancers are now preventable with early screening and intervention—for example, there have been stunning breakthroughs in breast cancer, which now has a full survival rate of more than 95%. But other cancers, particularly some of the rarer cancers, still strike fear into people’s hearts, which is partly why I welcome this debate and the increasing number of debates in Westminster Hall on specialist and rare diseases.
Most Members present will have experienced the diagnosis of a family member or a loved one. We have heard powerful contributions from colleagues about that; I too experienced it when my sadly late mother-in-law was diagnosed with chronic myeloid leukaemia. My wife and our family had to watch the tragedy of a young, wonderful, healthy grandmother leaving us. Members have spoken with great passion about the need for us to do everything we can to speed up research and ensure that those people have not died in vain—that their experience helps others to avoid similar suffering. That is why the availability of effective drugs and other cancer treatments is so important to us all and why it drives me in my work as Minister for Life Sciences.
Let me set out how the Department views blood cancers and how they are grouped together, because that shapes our policy on research and treatment. Haematological or blood cancer is a term used to describe a range of cancers that affect the blood, bone marrow, lymph or lymphatic system. The symptoms can be quite vague and many of them, such as tiredness, fever, lumps or an infection, are similar to those for colds or other much less serious illnesses. I repeat the exhortations of other hon. Members: if in doubt, go and see a doctor early for a check-up.
The charity Bloodwise estimates that around 230,000 people are now living with blood cancer in the UK. It is the fifth most common cancer in UK adults and the most common in children and young adults. It is the third biggest killer.
There are three main kinds of blood cancer. The first is leukaemias, which affect the white blood cells that are so vital to our immune system—the police of our blood system, if you like. Leukaemias include four main types: acute myeloid leukaemia, acute lymphoblastic leukaemia, chronic myeloid leukaemia and chronic lymphocytic leukaemia. The second kind of blood cancer is lymphomas, which affect the lymphatic system—another crucial part of our immune system that helps to protect the body from infection and disease. The two main types are non-Hodgkin lymphoma and Hodgkin lymphoma. The third kind of blood cancer is myelomas, which affect the plasma cells that produce antibodies, which help fight infections.
Across those three core groups, there are more than 130 different blood cancer conditions. Most start in the bone marrow, where blood is made; many different types of blood cells are made in the bone marrow, with the type of blood cancer depending on the type of blood cell that is affected. In most blood cancers, the affected blood cells stop developing in the normal way and become cancerous. The cancerous cells stop the blood doing what it normally does, such as fighting off infections. I am conscious that Members present are probably familiar with this, but many watching may not be, and it is important that people understand what the underlying symptoms and causes of the condition are. Common treatments are chemotherapy, radiotherapy and, in some cases, a stem cell or bone marrow transplant.
Many people throughout the country are working hard to improve cancer diagnosis, treatment and care. In particular, I draw attention to the work of some of the pioneers— Bloodwise, Anthony Nolan and Myeloma UK should all be applauded. The work of those charities is also supported by the UK’s world-class scientific and academic life sciences research community, which is driving forward patient-centred research into blood cancers. Let me highlight a few groundbreaking centres that can give us all a lot of hope.
The Francis Crick Institute here in London—the flagship biomedical centre next to King’s Cross—hosts Dominique Bonnet’s programme. Dominique’s team is studying both normal and leukaemic blood stem cell biology and has published work in developing immunotherapeutic approaches to targeting leukaemia. A number of other groups are studying the development of cancers and identifying opportunities to develop novel therapeutic approaches more broadly.
Blood cancer is a key theme behind the Medical Research Council’s £30 million funding over five years for the molecular haematology unit at the University of Oxford, which I am visiting tomorrow. The unit is building on its programmes to understand the development of the blood system from the embryo through to adulthood and how that can go awry, leading to a variety of haematological malignancies, as well as a number of other disorders.
Similar programmes in understanding the development of the blood system and the pathogenesis of blood cancers are supported by the Wellcome Trust-Medical Research Council Cambridge Stem Cell Institute, now under review at the end of its first five-year review period. The institute originally received an £8 million award over five years from the funders, with a strong push to translate those discoveries into clinical application.
The MRC centre for regenerative medicine hosts a number of programmes to improve understanding of the developmental biology of the haematological system and of stem cell compartments, how stem cells go on to make adult blood components and how that can go wrong and lead to leukaemias.
I make particular mention of the work of Professor Charlie Craddock, director of the blood and marrow transplant unit at University Hospitals Birmingham NHS Foundation Trust, who leads the trials acceleration programme, funded by Bloodwise and supported through the National Institute for Health Research experimental cancer medicine centre funding and its clinical research network.
In the last decade, a wave of new drug and transplant therapies have been developed that offer the prospect of dramatically improving the outcomes for patients with blood cancers. It is important that we get those therapies to patients quickly, not only for the patients’ own benefit but because patients’ response, feedback and data drive intelligent research.
The trials acceleration programme was opened in 2011 specifically to address the vital importance of accelerating patient access to novel therapies in blood cancer. By funding a regulatory hub with the capacity to rapidly work up clinical trials of novel agents, coupled with an integrated network of research nurses at major leukaemia units throughout the UK, it has been possible to develop an internationally competitive portfolio of 17 clinical trials. Experience to date has shown that the trials acceleration programme is able to dramatically shorten the time to trial set-up: it is now routinely less than 12 months, which is a substantial breakthrough from where we were just a few years ago.
Professor Craddock tells me that, in the process, patients have accessed more than £150 million of new, potentially life-saving drugs that they would not otherwise have had access to, and vital new data concerning drug activity have been generated. The trials acceleration programme has proved itself a highly effective model for acceleration of new drug therapies, and it is partly those pioneering projects that have informed my thinking on the accelerated access review, which I will say more about in a moment.
The National Institute for Health Research, which we fund to the tune of £1 billion a year, is investing more than £4 million over five years in blood disorder research at the Oxford Biomedical Research Centre, including research into lymphoma, leukaemia and myeloma. In addition, the Department has allocated £200,000 to NHS Blood and Transplant to explore issues on the establishment of UPTAKE, a new research collaboration platform designed to work closely with the NIHR clinical research network to develop and deliver prospective clinical trials in transplant and cellular immunotherapy.
We are leading in the development of genomics to drive insights into new diagnostic and treatment methodologies. The 100,000 genomes project is assembling one of the world’s largest datasets of genomic and phenotypic data, linking hospital outcome data with genotypic data from patient volunteers to provide what I have referred to elsewhere as the NASA of 21st century personalised biomedicine. The focus is on cancer and rare diseases.
This is a good day to be having this debate because just yesterday Dame Fiona Caldicott reported back to the Secretary of State and me. We had asked for her thoughts on how we get the balance right on data security consent and opt-outs so that we can harness patient and public trust in the use of data in our health service for research.
Ms Abbott
I listened with interest to the Minister, citing several organisations that speak up on the issue of blood cancer. I draw his attention to the African-Caribbean Leukaemia Trust, which had done a lot of good work encouraging people from the African-Caribbean community to donate blood—their chances of getting a properly matching blood donor are extremely low. The trust was founded by Beverley De-Gale and Orin Lewis, whose six-year-old son was diagnosed with leukaemia. I would not want the debate to finish without their work being mentioned.
George Freeman
The hon. Lady makes an excellent point. I thank her for it and endorse her sentiments. In several research areas important initiatives have been taken by black and minority ethnic and other communities with particular genetic predispositions. It is important that we support those initiatives, which I very much welcome.
The Genomics England programme operates on an explicit volunteer consent model. I want to take this opportunity to reassure the House that our announcement that we are dropping the care.data programme, which most colleagues would admit was not exactly an award-winning exercise in carrying public trust and confidence in data, is by no means, and should not be mistaken for, an abandonment of our commitment to a digital NHS. We are completely committed to making sure that our NHS is fit for purpose in the 21st century, which means that, in order to fulfil the most basic contract with our users, we need to have information for individual care, for system safety and performance and for research.
Raising awareness is the central issue of the motion. I assure Members that raising awareness and improving the early diagnosis of cancer, particularly blood cancers, is a priority for the Government. We absolutely recognise that earlier diagnosis makes it more likely that patients will receive effective treatments. On average, GPs in England see fewer than eight new cancer cases per year, but many more patients present with symptoms that could be cancer. In truth, we are missing huge opportunities to harness our daily diagnostic footprint for better cancer diagnosis.
In order to continue to support GPs to identify patients whose symptoms may indicate cancer and urgently refer them as appropriate, the National Institute for Health and Care Excellence published an updated suspected cancer referral guideline in June 2015, which includes new recommendations for haematological cancers in adults and children and young people. NICE noted that more lives could be saved each year in England if GPs simply followed the new guideline, which encourages GPs to think about cancer sooner and lowers the referral threshold.
Following the publication of the updated guideline, the Royal College of General Practitioners has worked in collaboration with Cancer Research UK on a programme of regional update events for GPs, to promote the new guideline. They have also worked to develop summary referral guidelines for GPs, including by introducing an interactive desk easel for them, to enable them to adopt the guideline. The British Medical Journal has also published summaries. In addition, NHS England’s Accelerate, Co-ordinate, Evaluate—ACE—pilots are exploring new models for delivering a diagnosis more quickly and effectively, including by piloting a multi-disciplinary diagnostic centre, which we hope will be particularly effective for patients with vague or unclear symptoms.
In conjunction with the Department, NHS England and other stakeholders, Public Health England currently runs the Be Clear on Cancer campaigns, which are designed to raise the public’s awareness of specific cancer symptoms and encourage people with those symptoms to go to the doctor at an earlier stage, when cancer is more treatable. Mr Walker, I know that you are a great champion of male health issues and have worked against stigma in health, and it is very often men who are slow to present and who tend to feel the stigma and take the traditional view, saying, “I’ll only go when I have a real problem.” The enlightened fairer sex tends to go to the doctor quicker. It is important that we remind men to be quick to go to the doctor.
Maggie Throup
The Minister is right to say that there are some really good promotional campaigns that raise the profile of different healthcare issues. The campaign to detect strokes early on, Act F.A.S.T., was a good one. Some of the other campaigns, such as those to raise awareness about lung and colon cancer, are also really good, but the hidden nature of blood cancers makes things harder. Does the Minister agree that we should try to raise the profile of the symptoms?
George Freeman
I completely agree with my hon. Friend. As she has made clear, and as I repeated earlier, it is tricky because the symptoms are not always straightforward or simple. It is often not a lump or something that is easily detectable, and the symptoms can easily be confused with those of other conditions that many of us might all too easily brush off and dismiss as the result of tiredness, fatigue and the general pressures of modern life. It is important that people recognise the symptoms. The all-party group and this debate will help to underline the importance of being aware of the early symptoms.
So far there have been 11 national Be Clear on Cancer campaigns covering seven types of cancer, and a national respiratory symptoms campaign will run from July to October this year to raise awareness of lung disease. I shall obviously ensure that the Under-Secretary of State for Health, my hon. Friend the Member for Battersea (Jane Ellison) is aware of this debate and will make clear to her the cross-party support for greater awareness of blood cancers.
Jim Shannon
I am not sure whether this is the Minister’s responsibility, but those of us who have participated in the debate are very aware of the issues relating to the accelerated access review. We are keen to know whether there could be a review of the scheme and of access to drugs. Even if the review were to resolve the many issues surrounding the speed with which new medicines are evaluated by NICE, unless there is meaningful change to the final decision-making process, new medicines will fail to reach patients. I suspect that is the Minister’s responsibility, but he can confirm that. How can we improve the accelerated access review? I know the Minister will have a good answer and I want to give him an opportunity to share it.
George Freeman
I am grateful to the hon. Gentleman for reading my mind—not for the first time—because the next paragraph in my speech is about the cancer drugs fund and the accelerated access review. His intervention gives me a moment to highlight some of the important points that colleagues have made. The hon. Gentleman, who is something of a biomedical stalker of mine on these occasions, as he acknowledged—we rarely appear in this House other than together—was right to highlight the great work that Queen’s University Belfast does on blood cancers. He spoke with great passion about his father’s experience.
My hon. Friend the Member for Erewash (Maggie Throup) spoke about her experience as a haematologist in this field and about being involved on the frontline of research. That is another example of the power of having Members with a range of career backgrounds in the House. She brings great expertise to these matters.
The hon. Member for Coventry North East (Colleen Fletcher), who is vice-chair of the all-party group, made some important points about the CDF, to which I will return, and described the experience of her husband Ian. She asked whether I would meet the Anthony Nolan Trust; I will. I have already had several meetings with the trust and will continue to meet it, and when I do, I will pick up on the issues she mentioned relating to post-transplantation care in particular.
My hon. Friend the Member for Crawley spoke powerfully about his mother’s experience and made some really important points, not least about data and the importance of our harnessing it and generating a new model of appraisal. I will pick up on the latter point when I discuss the accelerated access review.
The hon. Member for Linlithgow and East Falkirk (Martyn Day) discussed NICE and how important it is that we tackle the new landscape and make sure we are quicker and better at assessing new medicines. The hon. Member for Hackney North and Stoke Newington raised several important issues in a spirit of cross-party non-partisanship that I hugely welcome and appreciate.
I return to the cancer drugs fund. At the beginning of the previous Parliament, the Government, led by the Prime Minister, made the important commitment that we would put in place a cancer drugs fund to ensure that UK patients got access to the very latest cancer drug treatments. We did that in response to a number of high-profile cases in which NICE, applying its standard, one-size-fits-all quality-adjusted life year, had turned down cancer drugs, and patients were desperate for some hope, wanting the system to be responsive to their needs.
I am proud that we have made a total commitment of more than £1 billion to the cancer drugs fund and that we are continuing to invest each year, with more than £300 million put in this year. However, the system as it was originally set up has not proved to be sustainable, because of the pressure—inevitable pressure, in some ways, given the extraordinary explosion of our medical advances—put on it. If drug companies are turned down by NICE and there is a fund available for a post-NICE approval, the companies simply go to it and it has become over-subscribed.
NHS England has moved in the right direction by taking our funding commitment and repositioning the CDF as an early access and managed-access fund that examines more innovative drugs, ensures that they are provided to patients more quickly and makes sure that the data from that early access is allowed to inform the selection of the drugs that are adopted.
The truth is that breakthroughs in 21st century drug discovery and the rise of better targeted medicines are bringing huge benefits for patients but they also place huge pressure on our traditional models of assessment, adoption and reimbursement. With a rapidly ageing society and an explosion of new treatments, we cannot continue with the old model of one size fits all, with the NHS acting as a late procurer at a retail price of every drug. At the heart of my portfolio is a mission to unleash the power of the NHS as a research partner in bringing new drugs to market and getting a dividend—a discount—in return for that work.
We spend around £14 billion on medicines in the NHS every year and over £5.5 billion of that is spent on cancer drugs. The new generation of cancer therapies are incredibly exciting. The immunotherapies that we are seeing do not just delay death or grant patients a few extra months or years; they are cures for cancer. Those Daily Mail headlines that have been promising cures for cancers for more than 20 years are finally true. We now have cancer cures coming through, which profoundly changes the way that we will have to price drugs.
Let me say something about the accelerated access review, NICE and the CDF. At the heart of the accelerated access review is a commitment from the Government to consider whether and how we can better harness our extraordinary NHS assets as an integrated healthcare system to become a partner in the development of new therapies, so that instead of the industry treating the NHS as an increasingly pressurised retail-based consumer that struggles with this explosion of ever more expensive technology, we become a partner. Then, in return for sharing our clinical assets, for working with charities and the industry around our £1 billion-a-year National Institute for Health Research network, and for our leadership in genomics and informatics, we can pull innovation through more quickly for patients, share a data package and be the first place on Earth that companies want to come to in order to have their innovations assessed.
The accelerated access review has been examining a whole range of complex issues in this field and its report is waiting for a post-referendum slot to be published. I can assure Members that in the time that the review team has been preparing that report for publication, I have not been sitting around waiting for it; along with NHS England, I have been doing the preparatory work to be ready for it. Without in any way wanting to pre-empt the report, let me just share with colleagues some thoughts about where I think there is a huge degree of consensus between the Department of Health and NHS England on how we might be able to make some moves.
There are three key areas. First, in specialist commissioning, which deals with many rare diseases and rare cancers, the drugs are commissioned nationally through the Department of Health and NHS England. We want to see whether we can pull together that commissioning function into a more innovative procurement unit, to pull through and do some more innovative deals with industry in return for discounts—acceleration for discounts.
Secondly, we want to consider the NICE pathways through to NHS England and ask whether we can make it easier for innovators either to go through a series of much clearer NICE pathways or to go straight to NHS England and do pricing, discounting, acceleration and volume deals, as well making sure that we have an transparency and accountability framework so that people can see which parties in the ecosystem are fulfilling their mandate.
[Mr Clive Betts in the Chair]
The evidence from recent NICE approvals is encouraging. Many thousands of people have benefited from blood cancer drugs that NICE has recommended, such as bortezomib, ofatumumab and rituximab, and the evidence is that if we gather the data properly from the drugs that we approve, then we can use that as an intelligent health service to inform which drugs we adopt and pull through more quickly. If we get that right, the CDF in its reformatted position as a managed-access fund operating earlier in the system could become a powerful vehicle for an accelerated-access model of cancer drugs assessment. That will require some careful work on the NICE/NHS England framework, but we are doing that work right now, as we speak.
I will close, Mr Walker, by saying that—ah, Mr Walker has been replaced by you, Mr Betts.
George Freeman
That was achieved in an extraordinary manoeuvre, which was so seamless I did not even notice it happening over my left shoulder.
This summer, officials in the Department will work with the accelerated access review team and NHS England to try to strike a blow for an integrated healthcare innovation economy that makes best use of our budgets. Let me put it on the record that these are substantial budgets: we have committed an extra £10 billion a year to the NHS in 2020 and at the heart of that package is an extra commitment to new drugs worth £4 billion. Those are substantial sums, but we want to make sure that those funds are spent on getting the right drugs through to the right people quickly, and in return for that acceleration we will be able to get better discounts from the industry. I am confident that by bringing the CDF together with the accelerated access review, we will be able to deal with many of the issues that colleagues have raised this afternoon.
That brings me to the end of my comments. It only remains for me to thank hon. Members for raising these issues. I hope they can rest assured that I am committed to seeing these issues through and working with them in the days, weeks, months and—who knows?—years ahead.
Mr Clive Betts (in the Chair)
I call Jim Shannon. You have two minutes to wind up.
Jim Shannon
It is a privilege to sum up. First, I thank all the right hon. and hon. Members who have made valuable contributions today. In particular, I thank the Minister for his concluding remarks, which gave us lots of hope and comfort for the way forward. I genuinely mean it when I say that we very much appreciate his energy and his commitment to the issues that he is involved with. We know that when he says he will do things he will actually do them, and we very much appreciate that.
I thank all those Members who have made a contribution today. The hon. Members for Scunthorpe (Nic Dakin) and for Bootle (Peter Dowd) and my right hon. Friend the Member for Belfast North (Mr Dodds) told some personal stories to illustrate the issues. In particular, my right hon. Friend referred to the charitable work that is done in England. I think that theme came through in all the contributions that were made today.
The hon. Member for Erewash (Maggie Throup) referred to the stem cell infrastructure that needs to be improved and I thank her for her very helpful contribution. She referred to the suitability of patients for stem cells and drugs, and she also referred—as we all did—to the improvement of NICE, which is very much needed. In addition, she referred to the clinical research that is also needed.
There was a very valuable, detailed and comprehensive contribution from the hon. Member for Coventry North East (Colleen Fletcher). I am so pleased to have listened to the very personal story that she told us, and what a joy it is to know that she can point to the stem cells and to how her husband’s own health has improved, which in turn helps their entire family. I think that each and every one of us here today was particularly touched by that contribution. On behalf of us all, I wish her husband well. It is good to know that the Anthony Nolan trust was very much involved in his treatment, as it is in the treatment of many other people. We thank the trust for its work.
The one key comment by the hon. Lady that I wrote down during the debate was this: “Hope shines out from the darkness”. She also referred to the geographical variations in treatment that exist across the United Kingdom, and to giving a second chance. How true that is.
The hon. Member for Crawley (Henry Smith), who is the chair of the all-party group on blood cancer, also contributed today. First of all, we thank him for his initiative for starting that group. We are very happy to be behind him. He is the general and we are the soldiers; he leads in the direction that we wish to go in. He referred to 130 blood diseases, to the emotional support that is necessary for sufferers, to his concerns over delisting, to the need to improve performance and to how NICE and the pharmaceutical industry can work together, which I mentioned in my introduction, but it is so important it deserves repeating. He also referred to Bloodwise and said that everyone needs access to the drugs that they require now.
The hon. Member for Linlithgow and East Falkirk (Martyn Day) spoke, as he always does; he never misses these debates. He always comes along and makes a very determined and considerable contribution. In many ways Scotland leads the way in what we could do in the rest of the United Kingdom. His contribution outlined what Scotland has done and the regional variations. He made many important points, but one of the ones that I thought was good—the Minister will have noticed this—was on how we can exchange our viewpoints regionally and then use the regional variations to the advantage of us all. In Northern Ireland, we can learn from what they do in Scotland and in England and Wales, and vice versa. That is important.
It is nice to see the shadow Minister in her place. She has certainly grasped her portfolio quickly. She has lots of experience, of course. We thank her for the comments she made. She referred to the evaluation of drug availability, relative costs, the rationale, transparency, the palliative effect and the absolute cost—
Mr Clive Betts (in the Chair)
Order. The format is for the mover of the debate to have literally two minutes to finish. I know we have got time, but there is normal procedure with this. Will the hon. Gentleman bear that in mind and come to a conclusion?
Jim Shannon
My apologies, Mr Betts. I did not realise that. I thought I had five minutes, and I presumed that was the case. I will bring my comments to an end.
I thank all those who have taken part. I thank the Minister for his concrete proposals and his response. My concluding point is that a single medicine for a cure takes 12 years, 1,600 scientists and 500,000 lab tests to develop. That is the importance of the work that is done. To put it into perspective, that is what we want to work towards: a cure for cancer. If we can get a cure for cancer, we will make lives better. Let us ensure that everyone in the United Kingdom of Great Britain and Northern Ireland can benefit from that.
Question put and agreed to.
Resolved,
That this House has considered blood cancers and the Cancer Drugs Fund.
Written Statements
(7 years, 12 months ago)
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Infrastructure (Financial Assistance) Act 2012: Annual Report
(7 years, 12 months ago)
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The Chief Secretary to the Treasury (Greg Hands)
The Annual Report to Parliament under the Infrastructure (Financial Assistance) Act 2012 for the period 1 April 2015 to 31 March 2016 has today been laid before Parliament.
The report is prepared in line with the requirements set out in the Infrastructure (Financial Assistance) Act 2012 that the Government report annually to Parliament on the financial assistance given under the act.
[HCWS73]
UK Debt Management Office: Business Plan
(7 years, 12 months ago)
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Harriett Baldwin
The United Kingdom Debt Management Office (DMO) has today published its business plan for the year 2016-17. Copies have been deposited in the Libraries of both Houses and are available on the DMO’s website: www.dmo.gov.uk.
[HCWS71]
UK-Turkmenistan Double Taxation Conventions
(7 years, 12 months ago)
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The Financial Secretary to the Treasury (Mr David Gauke)
A Double Taxation Convention with Turkmenistan was signed on 10 June 2016. The text of the Convention has been deposited in the Libraries of both Houses and made available on HM Revenue and Customs’ pages of the gov.uk website. The texts will be scheduled to draft Orders in Council and laid before the House of Commons in due course.
[HCWS70]
Neighbourhood Planning
(7 years, 12 months ago)
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The Minister for Housing and Planning (Brandon Lewis)
On 11 January 2016, I extended for a period of six months the criteria for consideration of the recovery of planning appeals to include proposals for residential development over 10 units in areas where a qualifying body has submitted a neighbourhood plan proposal to the local planning authority or where a neighbourhood plan has been made (Hansard HCWS457).
I am now extending that period for a further six months from today but, in the light of the experience which has now accrued on neighbourhood planning, I intend to limit the criteria to include proposals for residential development of more than 25 units in areas where a qualifying body has submitted a neighbourhood plan to the local authority but the relevant plan has not yet been made. This change to the criteria would not however preclude Ministers from exercising their discretion to recover any other appeal which fell outside these parameters if they considered, it appropriate under any of the criteria set out in the written ministerial statement made by Mr. Parmjit Dhanda on Monday 30 June 2008, Official Report, column 41WS.
[HCWS74]
Submarine Dismantling Project
(7 years, 12 months ago)
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The Minister for Defence Procurement (Mr Philip Dunne)
Today I am announcing that Capenhurst Nuclear Services (CNS), at Capenhurst in Cheshire, has been selected as the MOD’s site for interim storage of the intermediate-level radioactive waste (ILW) from decommissioned nuclear-powered submarines prior to disposal. AWE Aldermaston in Berkshire has been identified as a contingency site.
CNS will have the capability to store this ILW until it can be disposed of in a geological disposal facility, some time after 2040.
Like all the sites shortlisted, the operator CNS already manage radioactive materials, and were found to meet the submarine dismantling project’s requirements best, including value for money.
There are two options at CNS to store ILW. The option that MOD will be taking forward is to use an existing facility, with a second on-site contingency option of constructing a new store.
As put forward during the public consultation, we have also selected a contingency site. Should both Capenhurst options prove unsuitable, AWE Aldermaston will then be taken forward as the MOD’s preferred contingency site.
As a responsible nuclear operator the MOD takes seriously its duty to manage the submarine fleet throughout their operational service and during the disposal process. Today’s announcement reiterates my commitment that this activity will be undertaken in a safe, secure, cost-effective and environmentally sound manner.
[HCWS78]
United States Visiting Forces: Contingent Liability
(7 years, 12 months ago)
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The Parliamentary Under-Secretary of State for Defence (Mark Lancaster)
I have today laid before Parliament a departmental minute to advise that the Ministry of Defence has received approval from Her Majesty’s Treasury to recognise a new contingent liability associated with potential redundancy payments to civil servants currently located at RAF Mildenhall, RAF Alconbury and RAF Molesworth, which are scheduled for closure under the United States Visiting Forces European Infrastructure Consolidation review.
In January 2015 the United States Department of Defence communicated their decision to withdraw from RAF Molesworth and RAF Alconbury with the activities undertaken there being consolidated at RAF Croughton. Additionally, they also announced their withdrawal from RAF Mildenhall. Currently, US plans are not yet sufficiently mature to say definitively when these stations will close.
There are approximately 470 MOD civil servants employed at these three stations. While staff will be supported in seeking to secure alternative employment in the Civil Service it is likely that some civil servants will be made redundant. The responsibility for the provision of redundancy payments is split between the UK and the US. I can advise you that Her Majesty’s Treasury have agreed a contingent liability of up to £6 million.
I can assure you that all MOD civil servants who are affected by these base closures will be managed in accordance with the MOD Civil Service terms and conditions and will be provided with advice and support to make decisions about their future.
[HCWS72]
Office for Nuclear Regulation: Annual Report
(7 years, 12 months ago)
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The Secretary of State for Energy and Climate Change (Amber Rudd)
Later today the annual report to Parliament setting out the use of the Secretary of State’s powers exercised to the Office for Nuclear Regulation during the year, will be published. This is in accordance with Section 108(1) of the Energy Act 2013.
[HCWS65]
Committee on Climate Change: UK's Carbon Budgets
(7 years, 12 months ago)
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The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
I wish to inform the House that the Government are today laying the Committee on Climate Change’s (CCC) advice on the compatibility of UK onshore petroleum with meeting the UK’s carbon budgets, as well as the Government’s response to that advice[i]. These are being laid before Parliament in line with Section 49 of the Infrastructure Act 2015.
The CCC’s report mainly focuses on shale gas extraction. The Government welcome the CCC’s conclusion that shale gas is compatible with carbon budgets if certain conditions are met. We believe that our strong regulatory regime and determination to meet our carbon budgets mean those conditions can and will be met.
The Government are committed to exploring the UK’s shale gas potential while maintaining the very highest safety and environmental standards. We are confident that the existing regulators have the right powers and flexibility to ensure that emissions are minimised. We will of course continue to work with the Environment Agency, the Health and Safety Executive and the Oil and Gas Authority to ensure this continues to be the case as the new shale industry grows.
Exploring and developing our shale gas and oil resources could potentially bring substantial benefits and help meet our objectives for secure energy supplies, economic growth and lower carbon emissions. We therefore welcome that the CCC shares the Government’s view that shale gas could make a useful contribution to UK energy supplies.
We do not yet know the full scale of the UK’s shale resources nor how much can be extracted technically or economically. There is therefore a clear need to seize the opportunity now to determine the full potential for shale development in the UK and we support the industry’s work to bring forward exploratory wells.
Having access to clean, safe and secure supplies of natural gas for years to come is a key requirement if the UK is to successfully transition to a low-carbon economy. The UK was the first country to set legally binding carbon budgets, and this Government are fully committed to them, as shown by the announcement of the fifth carbon budget level last week. We need gas—the cleanest fossil fuel—to support our climate change efforts by providing flexibility and helping us to reduce the use of high-carbon coal.
Section 49 of the Infrastructure Act requires the Secretary of State, when laying the CCC report before Parliament, to lay either regulations providing for the right to use deep-level land to cease to have effect, or a report explaining the reasoning for not doing so. The Government response explains why the Government believe that our strong regulatory regime will meet the conditions set out by the CCC, and therefore further regulations are not required. This meets the Government’s obligations under the Infrastructure Act. The Act requires a further report to be provided by the CCC in April 2021.
[i] These are available at: https://www.gov.uk/government/news/committee-on-climate-chanqe-report-and-government-response-on-the-compatibility-of-uk-onshore-petroleum-with-meeting-the-uks-carbon-budgets.
[HCWS66]
June Environment Council
(7 years, 12 months ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rory Stewart)
I attended the EU Environment Council in Luxembourg on 20 June along with my noble friend the Parliamentary Under-Secretary of State for Energy and Climate Change (Lord Bourne). Roseanna Cunningham MSP also attended.
I wish to update the House on the matters discussed.
EU emissions trading system (ETS)
The presidency introduced its progress report on negotiations to reform the EU ETS, framed in the context of the Paris climate agreement. The Commission saw carbon leakage rules as a priority and cautioned against over-burdening national authorities and industry. The Commission called for more ideas from industry on how best to use the innovation and modernisation funds, and supported a focus on addressing the surplus of allowances in the system rather than direct price regulation.
In the ensuing policy debate, all Ministers supported the presidency’s progress report and proposals for next steps. The UK focused on the need to balance the reducing number of free allowances with appropriate carbon leakage support, protection of the market stability reserve, strengthening of the carbon price, and reaching agreement on ETS alongside the effort share decision.
Paris ratification: presentation from the Commission and Council statement
The Commission briefly presented its proposal for a Council decision on EU ratification of the Paris agreement, published on 10 June. The presidency then invited Ministers to endorse a Council statement calling for ratification of the Paris agreement by the EU and its member states as soon as possible.
Following proposals from other member states, the presidency presented a compromise statement which included references to climate finance, and which the Council agreed by consensus.
National emissions ceilings directive: state of play
The presidency set out the state of play of the negotiations. The presidency was disappointed agreement had not yet been reached, but noted good progress was made in the four trilogue meetings which had taken place. On the key issues of 2030 limits, flexibilities and the nature of 2025 ceilings, the institutions were still some way apart. Despite this, the presidency believed a deal was close and had been in contact with the European Parliament with a view to arranging a fifth trilogue meeting. The Commission fully supported the presidency’s efforts.
The UK along with other member states encouraged the presidency to make another attempt at a first reading agreement by the end of June. However there was some difference in focus between member states in terms of ambition and the need for realistic and attainable targets. A significant number of member states expressed a clear preference for an agreement built on the most recent presidency mandate.
AOB: NOx emissions by diesel
The presidency reported on recent discussion at Transport Council. The Commission reiterated its view that the main issue was member state implementation of the Euro 5/6 regulations. It noted the progress made on the adoption of the real driving emissions (RDE) and worldwide harmonised light vehicles test procedure (WLTP) proposals. The Commission called on member states to accelerate negotiations on the type approval regulations. The Commission said it intended to provide further guidance on the implementation of the Euro 5/6 regulations by the end of the year, but added this had to be based on a transparent exchange of information gathered during national studies.
The UK underlined the urgent need to resolve the issue to ensure health benefits and for member states to fulfil their legal obligations.
AOB: endocrine disruptors
The Commission presented its recently adopted package on endocrine disruptors consisting of a communication and draft Commission acts setting out scientific criteria in the context of EU legislation on plant protection products and biocidal products.
Council conclusions on Closing the Loop: Circular Economy
The Council adopted by consensus conclusions which responded to the Commission communication on an EU action plan for the circular economy. The UK welcomed the conclusions and, in particular, the call for EU action on microbeads which was supported by several other member states.
Council conclusions on illegal wildlife trafficking
Council adopted by consensus conclusions which responded to the Commission communication on an EU action plan against wildlife trafficking. The UK intervened in support of the conclusions and called for a robust EU commitment on trophy hunting at the convention on international trade in endangered species conference of the parties in September. The UK also called for action in working towards the closure of the Chinese domestic market for ivory.
AOBs
The Council noted updates from the Commission on: negotiations on aviation emissions in the International Civil Aviation Organisation (ICAO), the outcome of which would have implications for the EU’s aviation emission trading system; the outcomes of the eighth Environment for Europe ministerial conference; and the UN Environment Assembly.
The Council noted presidency updates on: April’s “Make It Work” conference, an initiative which aims to improve EU regulation; April’s informal Council of Environment and Transport Ministers; and the recent “REACH Forward” conference on chemicals legislation.
The Council noted information provided by: the Commission regarding environmental implementation review; the German and Belgian delegations regarding the Batrachochytrium salamandrivorans (BSal) virus affecting salamander and newt populations; and the incoming Slovakian presidency, who informed member states of the key environment priorities for its presidency—climate change, biodiversity, waste and water.
[HCWS68]
St Helena and Ascension Island: Child Safeguarding
(7 years, 12 months ago)
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The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (James Duddridge)
On 10 December 2015, Official Report, column 56WS, I informed the House that the UK Government had published a report by Sasha Wass QC on allegations surrounding child safeguarding issues on St Helena and Ascension Island. The report was independent and comprehensive, and I welcomed its conclusion that no evidence had been found of corruption or cover up in the St Helena police service, the St Helena and Ascension Island Governments, the FCO or DFID.
However, the report did find evidence of systemic failings by social services and police in the past. The report made a number of recommendations in relation to child safeguarding. The Government accepted all of its recommendations, and on 29 January 2016 the FCO appointed Ms Ginny Ferson to St Helena as UK Government special representative: Wass inquiry implementation. Ms Ferson went immediately to St Helena, visiting Ascension Island en route. She established good relationships with local Government officials, police and other stakeholders and worked alongside them on implementing the Wass inquiry recommendations. This included an analysis of previous reports commissioned by the FCO and DFID to determine which previous recommendations remained outstanding but valid. Those recommendations that remained valid but outstanding have now been implemented.
To ensure full transparency, the St Helena and Ascension Island Governments collated the recommendations of the inquiry report into a risk-rated action plan which has been published on their respective Government websites. Ms Ferson’s report will be available on gov.uk.
Good progress has been made in implementing the recommendations of the inquiry report. The UK Government have increased the funding they provide to the St Helena Government for child safeguarding and for health and social care more generally, and improved co-ordinated efforts are bringing about real change. For example, Jamestown hospital is undergoing a £2.8 million refurbishment of its medical wing, due for completion by the end of July 2016. In addition, a funding uplift has enabled the rebuilding of a dedicated community nursing team and re-opening of three local health clinics. The safeguarding directorate and police service have rolled out a locally adapted version of “Working Together 2015” based on the UK model. The Ascension Island Government have done likewise. All schools now have a designated child safeguarding lead. Most recommendations have been fully implemented, others are on course to being completed. One relating to secondments to a UK police investigations team will be implemented as soon as staffing levels allow.
It is important that the improvements are sustainable and Ms Ferson includes advice on future-proofing in her report which we, alongside the St Helena and Ascension Island Governments, have taken on board.
We are determined to build on this work on child safeguarding across our territories. The FCO’s child safeguarding unit has promoted the recommendations of the inquiry report throughout the overseas territories to maintain focus on continuing to strengthen child safeguarding measures. We have intensified our work with key UK departments and bodies such as the National Crime Agency, Crown Prosecution Service and social work experts, to provide additional expertise to territory Governments on improving safeguarding measures across the board.
[HCWS77]
Cremations
(7 years, 12 months ago)
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The Parliamentary Under-Secretary of State for Women and Equalities and Family Justice (Caroline Dinenage)
Today the Government are publishing their response to the recent consultation on infant cremations, which sought views on proposals for a number of changes to the Cremation (England and Wales) Regulations 2008, and for improving other aspects of cremation practice.
Improving infant cremation legislation and practice has been a priority for me since I joined the Ministry of Justice last year. I am therefore very pleased to publish this document which sets out the changes we plan to make.
We consulted between December 2015 and March 2016 following consideration of David Jenkins’ report of June 2015 into infant cremations at Emstrey crematorium in Shropshire, and Lord Bonomy’s Scottish Infant Cremation Commission report of June 2014. These reports found that ashes were either not recovered following infant cremations, or were recovered but parents were neither consulted over what should happen to their babies’ ashes nor advised of the ashes’ final resting place.
Such practices caused parents already grieving the loss of their baby immense additional distress. Some parents will never know what happened to their babies’ ashes.
I have always made it clear that such practices should never happen again. It is my aim that the changes I am announcing today will ensure that no bereaved parent suffers in future as many have suffered in the past.
Following consideration of the responses to our consultation, we plan to make the following changes:
Introduce a statutory definition of ashes.
Amend statutory cremation forms to make sure that applicants’ wishes in relation to recovered ashes are explicit and clearly recorded before a cremation takes place.
Where parents choose a cremation following a pregnancy loss of a foetus of less than 24 weeks’ gestation, we will bring such cremations into the scope of our regulations, like all other cremations. I must stress that we have no plans to alter parents’ current choices following a pre-24 week pregnancy loss, so parents will continue to be able to choose between cremation, burial and sensitive incineration or they can ask the hospital to make all arrangements on their behalf.
Establish a national cremation working group of experts to advise us on a number of technical matters related to our proposed reforms, such as the detail of new regulations and forms, codes of practice and training for cremation authority staff, information for bereaved parents, and whether there should be an inspector of crematoria.
Copies of the consultation response document will be placed in the Libraries of both Houses. The response is also available at https://consult.justice.gov.uk/digital-communications/consultation-on-cremation.
[HCWS67]
Judicial Conduct Investigations Office: Annual Report
(7 years, 12 months ago)
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The Lord Chancellor and Secretary of State for Justice (Michael Gove)
With the concurrence of the Lord Chief Justice, I will today publish the 10th annual report of the Judicial Conduct Investigations Office (JCIO), formerly known as the Office for Judicial Complaints. The JCIO provides support to the Lord Chief Justice and myself in our joint responsibility for the system of judicial complaints and discipline.
Over the past year the JCIO received 2,609 complaints and 662 written enquiries, with 43 complaints resulting in disciplinary action. A first substantive response was provided within 15 working days in 99% of all cases and regular monthly updates given to all parties in 98% of cases.
I have placed copies of the report into the Libraries of both Houses, the Vote Office and the Printed Paper Office. Copies of the report are also available on the internet at: http://judicialconduct.judiciary.gov.uk/ publications.htm
[HCWS75]
Legal Services Regulation
(7 years, 12 months ago)
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The Parliamentary Under-Secretary of State for Women and Equalities and Family Justice (Caroline Dinenage)
My noble friend the Minister of State for Civil Justice (Lord Faulks QC) has made the following written statement.
The Government are committed to encouraging open and competitive markets. Well-functioning markets are key to the health of the economy and promote growth, innovation and efficiency. Competitive markets are also in the best interest of consumers, enabling consumer choice resulting in better and more affordable products and services.
The legal services market is not only an important contributor to the UK economy, but also to access to justice. The Government are committed to a strong, independent and competitive legal services market, which will promote consumer choice and quality services at lower prices, ensuring greater access to justice for all.
On 30 November the Government published, “A Better Deal: boosting competition to bring down bills for families and firms” which set out the Government’s approach to encouraging open and competitive markets, for the benefit of the UK economy and UK consumers. A key part of the Government’s approach is to ensure that the statutory frameworks underpinning regulatory regimes allow regulators to regulate in a way that is proportionate and promotes competition and innovation.
The “Better Deal” document included a pledge to consult on making changes to the regulatory framework for legal services to remove barriers to market entry, and regulatory burdens on, alternative business structures in legal services, and on making legal services regulators independent from professional representative bodies.
Today, I am publishing a consultation that seeks views on the first of these proposals. The Government intend to consider the detail and timing of a further consultation on regulatory independence, in the context of the preliminary findings of the Competition and Markets Authority study into the legal services market, which are due to be published shortly.
Since 2010, when alternative business structures were first licensed to provide legal services, over 600 ABS firms have entered the market. The introduction of ABS businesses, particularly those that have access to external investment and business and commercial expertise, has benefited the market more widely. Recent research has indicated that ABS firms are more likely to be innovative than other regulated legal services firms: https://research.legalservicesboard.org.uk/wp-content/media/Innovation-Report.pdf. These new, innovative providers have increased competition in the market, which we believe encourages a wider variety of legal services in the market that are more accessible and affordable to consumers.
As a result of concerns raised at the time about the potential risks of these new and unknown business models, the legislative framework for the regulation of ABS businesses, set out in the Legal Services Act 2007, is more onerous and prescriptive than that for traditional law firms.
In practice, ABS businesses have not been shown to attract any greater regulatory risk than traditional law firms and the Legal Services Board and front-line regulators suggest that the current statutory requirements act as a deterrent and an unnecessary barrier to firms wanting to change their current business model to a more innovative one, as well as to new businesses considering entering the market.
The proposals set out in this consultation aim to enable legal services regulators to reduce regulatory burdens on ABS, while taking a more effective risk-based approach to regulation.
[HCWS69]
Surveillance and Interception of Communications
(7 years, 12 months ago)
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The Prime Minister (Mr David Cameron)
I have today laid before both Houses a copy of the latest annual report from the Chief Surveillance Commissioner and a copy of a report by the Interception of Communications Commissioner on his oversight of directions issued under section 94 of the Telecommunications Act 1984. Both reports provide rigorous and independent oversight and scrutiny of the use of covert investigatory powers.
The Chief Surveillance Commissioner, the right hon. the Lord Judge, was appointed in July 2015 to keep under review public authority use of covert surveillance, covert human intelligence sources and property interference powers. The Chief Surveillance Commissioner provides statutory oversight to ensure that public authorities use correctly and lawfully the relevant provisions of the Regulation of Investigatory Powers Act 2000, the Regulation of Investigatory Powers (Scotland) Act 2000 and the Police Act 1997. He heads the Office of Surveillance Commissioners (OSC) which supports him in the discharge of these statutory duties.
His annual report provides a detailed account of the way in which the OSC has provided this scrutiny, both through authorisation of deployments where prior approval of a Surveillance Commissioner is required by statute, and through a rigorous and comprehensive programme of inspections. The report also sets out the findings and conclusions that Lord Judge and his team have drawn from this process.
Covert surveillance powers are a critical tool for investigators dealing with terrorist and serious criminal activity, and the work of the OSC is essential to ensuring that there is public confidence in the way that such covert powers are used. I am pleased to note that the report finds the vast majority of public authorities are complying fully and conscientiously with the statutory requirements, and that the OSC are working actively to identify and address any issues that arise, and any cases that fall short of desired standards.
In February 2015 I directed the Interception of Communications Commissioner, the right hon. Sir Stanley Burnton, to oversee the use of directions given under section 94 of the Telecommunications Act 1984. The Commissioner has since carried out a comprehensive review of the use of section 94 directions, the extent of their use and the processes and policies that govern their use. I welcome the Commissioner’s support for the changes that we are seeking to make through the Investigatory Powers Bill which will replace the use of section 94 directions with a more comprehensive statutory regime for the acquisition of communications data in bulk or the issuing of a national security notice. Accompanying this new statutory regime will be codes of practice that will contain far greater detail and clarity around the policies, procedures and safeguards associated with the use of these powers.
I would like to thank both Commissioners, and the staff that work for them, for the continued diligence and rigour with which they undertake their oversight roles and commend these reports to the House.
[HCWS76]
HS2: South Yorkshire Update
(7 years, 12 months ago)
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The Secretary of State for Transport (Mr Patrick McLoughlin)
Since the Government proposed that South Yorkshire should be served by a high speed station at Meadowhall in 2013, opinion among local stakeholders has remained divided. This has made the decision about where to best to locate an HS2 station in South Yorkshire very challenging. I would therefore like to thank Sir David Higgins, Chairman of HS2 Ltd, for the work he and HS2 Ltd have undertaken in re-appraising the options and welcome the report he has published today on this issue.
The report re-examines both the HS2 station location and route in South Yorkshire as well as alternative high speed city centre proposals at both Sheffield Midland station and the former Sheffield Victoria station.
There are two key recommendations:
That HS2 services should serve Sheffield Midland station in Sheffield city centre by running high speed ‘classic compatible’ trains into Sheffield via a dedicated link off the main high speed line. Under this proposition Sir David believes it would be possible to provide two trains per hour into Sheffield city centre and a new high speed service to Chesterfield.
That the high speed main line be moved further east, initially running parallel to the M18. Sir David suggests that this alignment not only avoids the complexities and risks associated with the Meadowhall route but also provides journey time savings to services heading to Leeds, York and Newcastle.
The report also notes that using the existing Sheffield Midland station for HS2 services opens up the possibility of running high speed trains from Sheffield to Leeds by building a link back onto the main HS2 line north of Sheffield. This link could deliver Transport for the North’s (TfN) ambition for a frequent 30-minute journey time between Leeds and Sheffield, and might also be used by Birmingham-Leeds HS2 services, allowing them to route through Sheffield. TfN are considering the Sheffield-Leeds corridor alongside other Northern Powerhouse rail schemes and I look forward to their advice on how the HS2 mainline can be utilised to help deliver their aspirations for fast and frequent city centre services across the north.
I appreciate that the recommendations set out by Sir David Higgins today will cause concern for those living along this newly proposed route and will also be unsettling for those living alongside the consulted route via Meadowhall. HS2 Ltd will now engage closely with these affected communities to provide them with the necessary support and information as quickly as possible. I would also like to reassure homeowners along both routes that they are eligible to apply to the Government’s exceptional hardship scheme from today.
Before I reach a decision about HS2 in South Yorkshire I will want to consider today’s report in detail. It is my intention to make an announcement on the HS2 Phase Two route, of which South Yorkshire is a part, later this year. Should I decide to adopt the report’s recommendations as my preferred option in South Yorkshire I will then hold a public consultation in order to allow local stakeholders and affected communities the opportunity to comment on the proposal, alongside a consultation on the property compensation and assistance schemes for the entire route.
[HCWS63]
Office for Nuclear Regulation: Annual Report
(7 years, 12 months ago)
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The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)
Later today the Office for Nuclear Regulation’s Annual Report and Accounts for 2015-2016 (HC 112) will be published. Having consulted the Secretary of State for Energy and Climate Change who is accountable for nuclear security and the Office for Nuclear Regulation, I can confirm, in accordance with Schedule 7, Section 25(3) of the Energy Act 2013, that there have been no exclusions to the published document on the grounds of national security.
[HCWS64]
House of Lords
Motoring Offences Review
(7 years, 12 months ago)
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Lord Berkeley
To ask Her Majesty’s Government why their review of motoring offences and penalties announced two years ago has not started.
The Minister of State, Ministry of Justice (Lord Faulks) (Con)
My Lords, the review of offences and penalties relating to driving is taking place within consideration of a wider sentencing framework. We intend to commence a public consultation before the end of the year.
Lord Berkeley (Lab)
I am grateful to the Minister for that Answer. I remind him, if he does not know already, that in May 2014—that is over two years ago—the then Secretary of State, Chris Grayling, announced,
“a full review of all driving offences and penalties … over the next few months … expected to be implemented in early 2015”.
Twenty-five months later—stretching the definition of a “few months” a little bit—the Minister says that the review has started, but when will there be public consultation, for how long and when will the Government publish something that we can read? I know that we have a caretaker Government at the moment but, unless they were going to use European legislation, this kind of thing could go on.
Lord Faulks
The noble Lord makes a fair point about the delay. We do, however, intend to move to a public consultation before the end of the year, with a view to bringing forward any legislative changes that are necessary later in this Session.
Baroness Barker (LD)
My Lords, two years ago the Justice Secretary said that this review was necessary in order to make our roads safer. Is that still the purpose of the review, and will it apply to careless drivers as much as to other road users?
Lord Faulks
This is a difficult area. The distinction between careless driving and dangerous driving, although long established, does not please everybody. There are always difficult balances between assessing the culpability of driving and the effect of driving. Relatively minor episodes of careless driving can cause serious injury; very dangerous driving can sometimes not cause much in the way of harm. It is a difficult matter. It is also important to establish some proper correlation between the sentencing for driving offences and sentences, say, for dishonesty or assault cases and that sort of thing. It is a difficult matter, but we are proceeding.
Lord Beecham
My Lords, has the abolition of the requirement to display a tax disc made enforcement of motoring offences more difficult? Have the Government made any assessment of the loss of revenue as a result of that change?
Lord Faulks
I am not aware of any assessment of the loss of revenue. I will certainly write to the noble Lord if such information is available. But it is of course perfectly possible to trace by the individual registration number, through computers, exactly who has the car and who should have the car.
Baroness Jones of Moulsecoomb (GP)
My Lords, will the Minister tell us whether the concept of the driver’s duty of care towards vulnerable road users will also be included in the consultation?
Lord Faulks
The question of vulnerable road users—cyclists, pedestrians and the like—is something that courts should and do take into consideration when sentencing anyway, but it is a matter on which consultation will evoke appropriate responses. The noble Baroness makes an important point.
Lord Robathan (Con)
My Lords, will my noble friend the Minister look particularly in this review at the prosecution of those who park in the so-called boxes for advance stop lines for cyclists? As a cyclist, I find that the lines are ignored extremely often and I do not think that there have been any prosecutions at all.
Lord Faulks
I am not aware of any prosecutions. My noble friend makes an important point. Safety for cyclists is a priority for the Government, and we have been investing a considerable amount in this. The plan is to invest £300 million in cycling and walking over the next five years, including £100 million from the Highways Agency to improve the existing infrastructure for cyclists on the strategic roads network.
Baroness McIntosh of Pickering (Con)
My Lords, will my noble friend agree to include cycling offences among motoring offences? Will he review the penalties for cyclists using pavements? Why are they not being apprehended and brought to justice?
Lord Faulks
I am sure that a number of noble Lords will be sympathetic with that observation, and I agree with my noble friend. The answer is that the consultation will provide the basis of the review that we have carried out and it will invite all sorts of observations which will be most valuable.
Baroness Randerson (LD)
My Lords, Part 6 of the Traffic Management Act 2004 covers the civil enforcement of moving traffic offences, but the Government have never introduced the necessary secondary legislation. London and Welsh local authorities already have these powers, and they find them very effective at reducing congestion and enabling buses to run smoothly. Can the Minister explain why the Government are so unwilling to give local authorities the powers they need to do the job and whether they have any plans to do so in the future?
Lord Faulks
I am afraid that I do not have an instant answer to the question put by the noble Baroness, but I will look into the matter and write to her about it.
Lord Whitty (Lab)
My Lords, I declare an interest as chair of the Road Safety Foundation. It is all very well having clearly defined offences and sentences, but all of them have to be enforced. In that context, will the noble Lord dissociate the Government from the populist demand for switching off and removing speed cameras, which have actually contributed substantially to improved driver behaviour and to saving lives?
Lord Faulks
The noble Lord makes an important point, because enforcement is critical; simply having an offence and a penalty is not enough. Of course, these issues are for local authorities with budget restraints, but nevertheless the point is an important one.
The Countess of Mar (CB)
My Lords, what is the position of two cyclists who crash into each other head-on in a cycle lane, as happened in London on Monday?
Lord Faulks
Not a happy position is probably the case, I think. Of course there are all sorts of potential offences that they may or may not have committed, depending on the facts of the case, and no doubt they might even consider some kind of civil action, depending on the conduct of the respective cyclists.
Lord Hamilton of Epsom (Con)
My Lords, am I right that road deaths have been falling pretty steadily over the past few years, and will this be taken into account in the review?
Lord Faulks
My noble friend is quite right that road deaths have been falling very considerably, although interestingly whiplash injuries are increasing, notwithstanding not only the decline in road deaths but the decline in all forms of accidents in cars. I am glad to say also that the number of cyclists who have been killed or injured has also decreased. However, we are always conscious of the importance of preserving safety, and of course we will take the statistics into account.
Paralympic Games 2016: Terrestrial Television
Lord Addington
To ask Her Majesty’s Government what steps they are taking to ensure that all sports with British representation in the 2016 Paralympic Games will be available for viewing on terrestrial television.
The Earl of Courtown (Con)
My Lords, coverage of the 2016 Paralympic Games will be the most comprehensive and ambitious coverage of the Games to date. Channel 4 will be showing all sports with British representation on free-to-air channels when covered live by the host broadcaster. Where sports are not covered, Channel 4 will deploy additional camera teams to capture British medal wins wherever possible.
Lord Addington (LD)
I thank the noble Earl for that reply. Can the Government give an undertaking that they will encourage all those who are in the process of granting cities the right to host future Games to insist that those cities guarantee in the planning process that the Paralympic Games will have full coverage? That will ensure that we do not have the situation we are in now, where certain sports will happen to be missed out, many of which have good British medal prospects.
The Earl of Courtown
My Lords, the noble Lord makes a good point. Channel 4 would like to see comprehensive live coverage of all sports of the Paralympic Games and has been working with the International Paralympic Committee, OBS and the Rio Organising Committee to extend live coverage. As for pressure to put on further Olympiads in the future and television coverage of the Paralympics, this is carried out through UK Sport.
Lord Holmes of Richmond (Con)
My Lords, when I was at LOCOG I was fortunate enough to do the deal with Channel 4 for the 2012 coverage—the largest broadcast deal ever done for the Paralympic Games. Does my noble friend the Minister agree that the more than 600 hours of Channel 4 coverage this summer will not only bring into people’s homes a sensational summer of sport but have a transformational effect and positive impact on attitudes towards, and opportunities for, disabled people right across the United Kingdom?
The Earl of Courtown
My Lords, I could not agree more with my noble friend. We had 500 hours of coverage in 2012 and in 2016, this year, we will have 600 hours of coverage. My noble friend also mentioned the effect that this had on the population. I can add that 74% of 12 to 16 year-olds said that they felt more comfortable discussing disability after those Games. My daughter was one of those—at the age of 12, she visited the 2012 Paralympics in London.
Lord Grocott (Lab)
Does the Minister agree that terrestrial television was one of the reasons for the phenomenal national interest and excitement that was engendered by the successes of the Welsh football team—I am speaking as an Englishman—which was absolutely terrific? One of the key reasons was the fact that it was available free to air on terrestrial television and it was a great coming together of people’s interest and excitement. Does the Minister deeply regret, as I do, that so many of our national sporting events that were previously available on terrestrial television are now no longer available, and the country as a whole suffers in its enjoyment levels and even its sense of cohesion as a result of that loss?
The Earl of Courtown
My Lords, the noble Lord, Lord Grocott, mentions the listing of different sports and their availability on free to air. He makes a good point. The ability of people to watch sport is very important because it helps to encourage the legacy of these great events, apart from anything else, and encourages more people to turn out. I shall read out something on the Government’s position:
“Government does not propose to reopen discussion on the Ofcom Code on Listed Events. Rather than being told by government what to show and what not to show on free-to-air television, it is for NGBs and other rights holders to strike the right balance between reaching a wide audience and using their rights to generate as much revenue as possible”,
which they will need to carry out these rights.
Lord Clement-Jones (LD)
My Lords, the Minister mentioned the superb coverage of Channel 4, as indeed did the noble Lord, Lord Holmes. Is it not time to end the uncertainty over the future of Channel 4, or is this another question for the next Prime Minister?
The Earl of Courtown
My Lords, as I think the noble Lord, Lord Clement-Jones, is aware, no decision has yet been made on the future of Channel 4. Her Majesty’s Government are looking at a broad range of options, including those proposed by the Channel 4 leadership. We want to ensure a strong and secure future for Channel 4.
Baroness Masham of Ilton (CB)
My Lords, the Minister will not be aware that I took part in the very first Paralympics in 1960 in Rome. We have come a long way, and Channel 4 should be congratulated on the lead that it is taking.
The Earl of Courtown
The noble Baroness is quite right that it should be congratulated on the amount of coverage and the enjoyment that people got from that coverage. I also did a bit of homework, and I gather that she did table tennis and competed in 1960, 1964 and 1968.
Baroness Jowell (Lab)
My Lords, I draw attention to my entry in the register as a trustee of the Tennis Foundation, which promotes tennis for disabled people. Will the Minister accept that Channel 4’s establishment of parity between able-bodied and disabled sports in the Olympics is a remarkable achievement? Will he also accept that it is how that participation in sport by disabled people is carried on after events such as the Olympics that is the real test of legacy?
The Earl of Courtown
The noble Baroness is quite right, and that is why I drew attention earlier to the effect on young people—the 12 year-olds and that age group—and how many of them felt what a great experience it was going to the Paralympics and just seeing what great work and endeavour were carried out. I thank the noble Baroness for that.
Lord Patel of Bradford (Lab)
Can the Minister join me in congratulating the ECB—the England and Wales Cricket Board—on undertaking fantastic work in local communities with young people with disabilities, especially people who are short-sighted or blind, so that they can play cricket? What are the Government doing further to support national organisations such as this to take up local cricket games where facilities are simply not available?
The Earl of Courtown
The noble Lord is quite right. Cricket at a local level very often relies on the good will of local people. A lot of free time is given as well, such as in the maintenance of pitches. If I have any more information on this issue, I will write to the noble Lord.
Magistrates
(7 years, 12 months ago)
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Baroness Seccombe
To ask Her Majesty’s Government what assessment they have made of the Magistrates’ Association’s request for an increase in the maximum penalty magistrates can impose from six to 12 months.
The Minister of State, Ministry of Justice (Lord Faulks) (Con)
My Lords, we are committed to ensuring that the magistracy remains at the centre of our justice system. We are actively considering the possibility of increasing the sentencing powers for magistrates as one way in which we can make sure that this is the case.
Baroness Seccombe (Con)
My Lords, that is indeed good news because in the Magistrates’ Association there is a well-trained workforce ready and able to take on that extra responsibility. That would certainly help with delays in the senior courts. Delays are the bugbear of any court, so how should courts assess a situation in which a defendant pleads not guilty in the magistrates’ court, the case is prepared on that basis and yet on the first day of the Crown Court appearance, as soon he can, he changes his plea to guilty? This is extremely expensive for the public purse and, more importantly, causes great distress to victims and other people involved in those cases.
Lord Faulks
My noble friend makes an important point and, with her experience of the magistracy, a pertinent one. We very much respect the contribution that magistrates make to our criminal justice system. Some 90% of criminal cases in the justice system are dealt with by magistrates. As to her specific point, defendants are always encouraged to plead guilty— where appropriate, of course—at the earliest possible opportunity, and judges and magistrates very much bear in mind that, although there is a temptation for brinkmanship, the best way to show mitigation and reduce your sentence is to plead guilty at an early stage and save all the costs that my noble friend referred to.
Lord Beecham (Lab)
My Lords, on 23 December, the Ministry of Justice declined a freedom of information request on the modelling of proposals to increase the sentencing powers of magistrates, but admitted that it had carried out such modelling. On 7 June, the Minister, Mr Vara, told the Justice Select Committee that he was not aware of any such modelling. Will the Government now disclose what assessment has been made of the impact on prison numbers of the proposed changes? If they proceed with the proposal, when will they review the effect of that change?
Lord Faulks
The question of appropriate sentencing powers is a difficult one. It goes back to 1952, when the magistrates were first given their powers. There are different views on whether it is appropriate to increase the sentencing powers. For example, the Prison Reform Trust and the Howard League think there ought to be a decrease in sentencing powers. There is a great deal of thought being carried out on this. I am not currently aware of any modelling and I cannot go beyond the answer given, but I will take that back to the department and bear in mind the question posed by the noble Lord.
Lord Marks of Henley-on-Thames (LD)
My Lords, this change has been on the statute book since 2003. The Magistrates’ Association argues strongly that retaining more cases in the magistrates’ court and reducing the number of cases committed to the Crown Court for sentence would cut delays, as the noble Baroness, Lady Seccombe, said, save some £40 million and, importantly, make justice more local. Do the Government see any persuasive arguments against now implementing the change?
Lord Faulks
The noble Lord is right; it was as long ago as 2003 that this potential increase in sentence was statutorily allowed. A number of factors have been taken into account by successive Governments. He makes an important point about cost savings. He is quite right; it is, of course, much cheaper to use magistrates than go to the Crown Court and, if they have appropriate powers, it is more likely that magistrates will deal with the matter. We have to bear in mind—I think the noble Lord, Lord Beecham, directed his question towards this matter—the possible effect on the prison population and how magistrates will feel able, or want, to use any increase in powers. It is a difficult question.
Baroness Berridge (Con)
My Lords, my noble friend mentioned the incredibly high level of training and expertise that magistrates have. When looking at this Question in relation to today’s first Question, of course the overwhelming majority of motoring offences are also dealt with in the magistrates’ court. On training, will my noble friend the Minister please outline what plans the Government have to ensure that when driverless cars become a reality on our roads, with the potentially complex issues to do with the programming of those cars in the eventuality of an accident, we will still have the expertise in the magistrates’ courts to ensure that the overwhelming majority of such cases are tried in those courts?
Lord Faulks
My noble friend makes a good point. The senior presiding judge and HMCTS review the needs of the magistrates’ courts annually, including training for district judges and magistrates. All interested parties are consulted such as local Bench chairmen and local branches of the Magistrates’ Association. The training would include any new potential offences or situations identified through various routes. Clearly, they should include a new concept such as that to which my noble friend refers.
Baroness McIntosh of Hudnall (Lab)
Can the Minister confirm that people who receive short custodial sentences of, say, up to 12 months are on the whole least likely to benefit from any of the educational or other potentially rehabilitative resources that are available in the prison system in a very limited way? Therefore, going back to the question from my noble friend Lord Beecham, is it at all useful to run the risk that the number of such sentences will increase?
Lord Faulks
The noble Baroness puts her finger on one of the factors which makes it very difficult to decide this quite long-standing issue. Of course, she is right that short sentences are difficult in terms of management for the purposes of rehabilitation, giving training, purposeful activity and the like. Prison governors, who will be given more autonomy, will find it difficult to get any meaningful interaction with a prisoner if the latter is there for a short time. However, it is a matter for magistrates what they think the appropriate sentence for a particular offence is.
Lord Smith of Hindhead (Con)
My Lords, I am sure many noble Lords will share my concern about the prevalence of some magistrates permitting criminals to take a break from their tags to go on pre-booked holidays, stag weekends or other social occasions outside the limitations of their curfews. On 25 November last year in the other place, when addressing a Question on this matter, the Prime Minister said:
“A punishment is a punishment, a tag is a tag”.—[Official Report, Commons, 25/11/15; col. 1355.]
Can the Minister update the House on recent talks with the Magistrates’ Association to help close this loophole?
Lord Faulks
I am aware of some of the cases to which my noble friend refers. Of course, we as government cannot interfere with the discretion of judges and magistrates in how they sentence and implement sentences. Every single case must be considered individually. Some of those decisions seem somewhat surprising on the face of it. The Magistrates’ Association and all interested bodies will no doubt have that very much in mind in looking forward.
Brexit: Horizon 2020 and Erasmus
(7 years, 12 months ago)
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Baroness Sharp of Guildford
To ask Her Majesty’s Government what assessment they have made of the impact of the outcome of the referendum on the United Kingdom’s membership of the European Union on the short-term and long-term participation of UK universities in Horizon 2020 research collaborations and the Erasmus Programme.
Baroness Evans of Bowes Park (Con)
My Lords, the referendum result has no immediate effect on the right of researchers to apply for or participate in Horizon 2020, nor on those currently participating in or about to embark on Erasmus exchanges. The future of UK access to European research and innovation funding and to the Erasmus programme will be determined as part of wider discussions with the EU.
Baroness Sharp of Guildford (LD)
I am grateful to the Minister for that reply, but is she aware that, in spite of similar reassurances given by the Minister of State for Universities and Science in the other place, there is already anecdotal evidence of researchers being asked to stand down from European programmes, particularly when they are the lead researcher? This is hard for all researchers in all areas, but particularly so for those in some of the more niche areas, such as—one that I know quite well—the science associated with cultural heritage, where we have global influence but depend very much indeed on European money to fund these programmes. They bring many talented young people over to this country on exchanges of one sort or another, partly under the Erasmus programme, partly under the Marie Curie programme. If we are not able to pursue this research, it will hit the UK’s soft power influence very substantially. Is the Minister aware of these difficulties that are likely to arise and how the Swiss example means that, unless we keep freedom of movement, associated status will be of no value?
Baroness Evans of Bowes Park
I can certainly reassure the noble Baroness that Ministers are in close contact with Commissioner Moedas on the issue, particularly around Horizon 2020, and we are being vigilant about any problems that may start to emerge in the area. But, as I have said, UK organisations can continue to participate in Horizon 2020 under the same terms and conditions as currently, and should not be discriminated against; we will of course maintain a watch on this. We are in very close contact with the university sector and, as I have said, with the Commissioners.
Lord Stevenson of Balmacara (Lab)
According to a recent THE review, more than 18 universities will lose more than 50% of their grant funding from EU sources. This affects not just the major universities, such as Cambridge and Oxford, but the whole range. In addition, substantial reductions in taught postgraduate courses will happen. Does it make sense, given the tsunami that is approaching us, for the Government to continue with their radical proposals to reorganise research structures in the new HE Bill?
Baroness Evans of Bowes Park
We believe that the current uncertainty makes it even more vital that we have a stable and robust regulatory framework to ensure that our world-class research base can maintain its position internationally. The Bill will put in place a framework to maintain our status; UKRI—the new body—will facilitate more multidisciplinary and interdisciplinary research and enable us to keep up with emerging economies. It is critical at this time that we provide the stability that the university sector is looking for.
The Lord Bishop of Ely
My Lords, I declare an interest as a visitor to a number of colleges in Cambridge. In my conversations with the vice-chancellors of both Cambridge University and Anglia Ruskin University, which is in Cambridge, not only were they very concerned that there was a risk of losing £500 million of research funding for Cambridge and for the Russell group universities but—rather than the money—they were much more concerned about soft diplomacy and the free movement of scholars, which may be affected in the future. The vice-chancellor of Anglia Ruskin tells me that it is doing some very important research with a university in Portugal on earthquake studies—perhaps, by analogy, useful to us at the moment—and that this research could be in jeopardy. Can the Minister give us some assurance that there will be attention both to the soft power and soft diplomacy that needs to be assured and to how such research, with its real importance to vulnerable communities, will be sustained into the future?
Baroness Evans of Bowes Park
Of course the Government and I entirely understand the concerns of the sector. We have a world-class higher education sector and we want to support it and make sure that it is able to maintain its footing as the best in the world. That is why we will work extremely closely with the sector throughout the coming months and years to make sure that we provide the support, its voice is heard, and we do all we can to maintain it.
The Lord Privy Seal (Baroness Stowell of Beeston) (Con)
My Lords, it is the turn of either the Cross Benches or the Conservative Benches. We will go to the noble Baroness, Lady Coussins, and I hope we can get in a Conservative next.
Baroness Coussins
Thank you. Will the Minister acknowledge the vital importance of the Erasmus programme for the funding of the third-year abroad element of modern language degrees, especially when the shortage of MFL teachers will be even more acute because of the Government’s EBacc target? How will the Government plug the Erasmus gap both for outgoing UK students and for the incoming Erasmus students from the EU who supply our schools with foreign language assistants?
Baroness Evans of Bowes Park
The referendum result does not affect students studying in the EU, those currently on Erasmus, or those considering applying in 2017, and payments will be made in the usual way. Our future access will of course be a matter for negotiations.
Business of the House
(7 years, 12 months ago)
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Baroness Stowell of Beeston
That Standing Order 46 (No two stages of a Bill to be taken on one day) be dispensed with on Tuesday 12 July to allow the Supply and Appropriation (Main Estimates) Bill to be taken through its remaining stages that day.
Business of the House
(7 years, 12 months ago)
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Baroness Stowell of Beeston
That the debate on the motion in the name of Baroness Mobarik set down for today shall be limited to 2 hours and that in the name of Lord De Mauley to 3 hours.
Investigatory Powers Bill
(7 years, 12 months ago)
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Earl Howe
That it be an instruction to the Committee of the Whole House to which the Investigatory Powers Bill has been committed that they consider the bill in the following order:
Clauses 1 to 7, Schedule 1, Clauses 8 to 12, Schedule 2, Clauses 13 to 53, Schedule 3, Clauses 54 to 57, Clause 221, Schedule 8, Clauses 222 to 231, Clauses 58 to 66, Schedule 4, Clauses 67 to 79, Schedule 5, Clauses 80 to 100, Schedule 6, Clauses 101 to 126, Clauses 203 to 216, Schedule 7, Clauses 217 to 220, Clauses 127 to 202, Clauses 232 to 241, Schedule 9, Clause 242, Schedule 10, Clause 243, Title.
International Trade Opportunities
(7 years, 12 months ago)
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Baroness Mobarik
That this House takes note of the global opportunities for trade and of the case for Her Majesty’s Government having a comprehensive strategy to further encourage and support Britain’s businesses to engage internationally.
The Lord Privy Seal (Baroness Stowell of Beeston) (Con)
My Lords, by all means leave the Chamber if you are on the way out, but may I ask those exiting to do so quietly? My noble friend is trying to introduce this debate, but if anyone wants to leave now and go that way—do they want to go now?—they can do so while I am talking. I encourage my noble friend to start again.
Baroness Mobarik
My Lords, during the past few weeks, our focus has been on the EU referendum of 23 June and the result to leave after 42 years of membership. We are clearly entering a period of very significant change in the UK economy and in commercial relations between us and the EU. There is rightly a great deal of concern, as there is such a substantial degree of integration between the UK and EU economies. These cannot be disentangled overnight, and nor should they be. It is imperative that we maintain our access to the single market and that we negotiate the best trade relationships with the EU. I have every confidence that my colleagues will lead Brexit discussions to protect and enhance our trading position with the EU.
What we must not allow is a state of paralysis as we try to extricate ourselves from the EU and its institutions, and we must not ignore the absolutely crucial need to develop business opportunities with the rest of the world. If we accept that the degree of access to the single market may affect the types of agreements that can be negotiated elsewhere, the task has to start now—and simultaneously with the Brexit negotiations. While many of us may have serious misgivings and concerns about the impact of the referendum result, there is a general consensus that going it alone has one obvious plus: it allows us to be nimble and flexible. After all, it is one of the reasons that so many voted for an exit from the European Union. We now need proactive engagement with the rest of the world. It will by no means be from a standing start but we have to work to make it greater.
It may be useful to remember that the highly developed markets of the US and the EU have relatively slower growth than the emerging markets. We have of course been aware for some time that the world’s centre of gravity has been shifting eastwards and that building trade links with emerging markets is essential. In recent years, we have witnessed closer economic ties between Britain and China; the Chancellor’s support for the Asian Infrastructure Investment Bank illustrates this well. China has a maturing economy that is ripe for the services and luxury goods that are Britain’s strengths, but certain markets have been ignored to a large extent in the past. We must now take the opportunities wherever they are to enhance our relationships, and in particular to re-engage with the Commonwealth, where we already have such strong historical ties and a special relationship, which we have not taken advantage of fully.
The Commonwealth accounts for around 10% of UK trade; that has remained stable over the last decade. Among the Commonwealth countries, Australia, India, Canada, Singapore and South Africa are the largest of the trading partners. However, with the Commonwealth we are provided with a spectrum of economies at various stages of growth, from the developed and advanced economies of Australia and Canada all the way to some of the fledgling economies in Africa that really need support. In between, there is the exciting frontier of fast-emerging and fast-growing economies, such as those of India, Pakistan and Bangladesh.
IMF reports show that the developing and emerging economies’ share of global GDP has increased to 55.1%. I suggest that we require much more additional resource to establish proactive and dedicated campaign teams for particular regions—essentially, a task force working with existing departments and institutions to strengthen our commercial trade and business links with countries outside the EU. These campaign teams should be results-driven and run like a business. Unusual times and circumstances mean that we have to think out of the box—so we should have fewer reports and more action.
This is not to say that business organisations have not already been working hard in seeking global markets, but, by being liberated from the constraints that the EU inevitably presents as it seeks to balance the needs of its many members, the UK should be able to be more targeted in developing these commercial relationships through a highly tailored approach by country, region and sector.
I must acknowledge the work of the Foreign and Commonwealth Office through its embassies, high commissions and consulates that do such a fine job in building trade relations—but they have to be strengthened, as does UKTI. For example, one Commonwealth country in which I have an interest, as the Prime Minister’s trade champion in Pakistan, has huge potential yet there is not even one person at UKTI dedicated to developing business with it. I had the honour of representing the UK Government in Karachi last October when, for the first time, it held one of the Great British Festival events that promotes the Great Britain brand. The very small and dedicated team at the consulate had done a great job but we need to do so much more for a market which has been given emerging status and has a population of 200 million people, the vast majority under the age of 30. Although I am keenly aware that issues such as security have been an impediment to this potential trade, the arguments for engaging with this market are now too many to ignore. Apart from its significant population, its vast natural resources and a growing middle class with purchasing power are key attributes.
I hope that noble Lords will bear with me if they have heard this before, as I have previously highlighted these points and opportunities in another debate, but it is important to remind noble Lords that the Chinese investment of $42 billion in an economic corridor—a network of roads, railways and pipelines to transport oil and gas—enables China to develop a cheaper and shorter route to trade and investment with the Middle East, Africa and Europe. It links China, all the way through Pakistan, to the port of Gwadar on the Arabian Sea. According to analysts, it will place Pakistan at the heart of four out of the five fastest trade flows in the world. The UK has the potential to engage there in a number of areas: in energy, infrastructure, agriculture, dairy and of course education, which is key to building a skilled workforce for this emerging economy.
Pakistan is a good example of somewhere with which we already have some business links but where there is lots of room for growth. Preconceptions about security, corruption and the difficulty of doing business —in Pakistan in particular but non-western countries in general—need to be challenged, with a more realistic appraisal provided by trade organisations and the FCO. One thing that can help, and where we are well placed to deliver effectively, is our capacity-building skills and consultancy generally. These emerging economies are crying out for this. Education, which I have mentioned, is another area of expertise where we could be doing so much more across the emerging economies of the Commonwealth. High-value engineering, fashion retail—where we are possible world leaders—and of course financial services, which probably deserves a whole debate in itself, are all areas within our capacity.
But while we scope out our strategy for the future and where we want to be 10 years hence, we must also ensure that our teams pursue policies that will provide a future for those left behind in society, in particular by developing our manufacturing base. It is about being outward-looking, and engaging globally—but that means looking to home, and building and supporting businesses here. The last two days of debate on the outcome of the EU referendum have highlighted the concerns of many noble Lords that we have real issues of inequality and disparity in our society. So this must be a time for collective thinking—for creative thinking.
It is the small and new businesses which continue to revolutionise the economy of this country. The talents of people from all regions of the United Kingdom—from the north of Scotland all the way to the most southern regions of England and Wales and Northern Ireland—will take us forward. If we want to export, we have to make things. We must increase and expand our manufacturing base and output. The very substantial regional and generational inequalities have to be tackled, and having a goal to promote Britain abroad is a great way to take everyone forward together. It is time to invest in entrepreneurship and to teach and provide the young with certain skills. This is already being done in many schools but needs ever-greater attention. It is crucial that we persuade potential investors that the UK’s infrastructure and policies are among the most attractive in the world for manufacturing. I will make one important point here today: the UK has underinvested in infrastructure and we are hesitating once again in our commitment to airport expansion. This cannot be right at such a crucial time for our country and our economy.
As a student of history, I spent many hours trawling through the dusty archives of the Mitchell Library in Glasgow when I was carrying out some postgraduate research—which, I hasten to add, never saw completion. I recall the sense of awe when uncovering old company documents and reading of the great trading nation that Britain was. As a small island with a small population, Britain was the most advanced economy of the 19th century. Of course, the circumstances were quite different—we had the advantage of leading the industrial revolution—but there was something else there: determination and a strong work ethic. The degree of entrepreneurship and the fearlessness in exploring new geographies around the world was really quite remarkable.
With globalisation, we are so much more inter- connected, and in some ways that should make it easier. But we require leadership and the right conditions for business to flourish—venture capital investment and finance for small and medium-sized enterprises, and proper connectivity. There is one great plus that I can see from leaving the EU; with any luck, there will be a reduction in red tape and bureaucracy, which has for so long stifled SMEs. Perhaps now we can develop conditions whereby public procurement can benefit small companies.
I can say from my own experience of business just how dismal a scenario it has been. OJEC has required the kind of resource that small businesses just do not have. OJEC, or the Official Journal of the European Community—or now OJEU, the Official Journal of the European Union—is the publication in which all tenders from the public sector which are valued above a certain financial threshold according to EU legislation must be published. It is one rule that it will be a relief for companies such as mine to flush away—and let us refrain from putting other red tape in its place. We now need more doing and less paper-pushing.
Finally, we ought to develop a “Built in Britain” brand: something that stands for quality and longevity. It requires collective thinking from industry and government and requires an aggressive mix of bureaucrats and business people to make it happen. We need a Built in Britain brand which carries everyone with it and is part of the nation building that is so badly required—a banner under which we can export to the rest of the world.
In closing, I ask my noble friend the Minister to perhaps give us some indication of the current thinking of Her Majesty’s Government on the global opportunities for trade post Brexit.
Lord Bhattacharyya (Lab)
My Lords, I am grateful to the noble Baroness, Lady Mobarik, for the opportunity to focus on the future of British business. Trade is the lifeblood of the British economy, but the significance of trades goes far beyond the boardroom or the factory floor. As they choose their next leader, noble Lords opposite might remember that from the corn laws to imperial preference and the EU, trade policy has put them on these Benches much more effectively than my own party.
Why is trade so central to our national psyche? Britain has always been a trading nation, from the plantations of the West Indies to the tea clippers of the east. For many of us, trade is the fountainhead of our Britishness. I came to the UK as a graduate apprentice because of Britain’s manufacturing base. When I came to Birmingham, British products represented one-sixth of the world’s manufacturing exports. Manufacturing represented one-third of our economy and one-third of all jobs. With the rest of the world expanding their capabilities and technical skills, it was obvious that manufacturing exports would play a smaller role in the UK economy. Yet the contrasting performance of Germany and the UK during the financial crisis shows that it is essential to have a strong, stable manufacturing base.
Clearly, leaving Europe will cause major issues for manufacturers. Losing our voice on regulation, increased barriers, limits on recruitment and sheer uncertainty will have a depressing effect. These may be dealt with in the Article 50 negotiations. I hope that they are, although I fear they will not be. But I do not wish to focus on potential negatives today. The choice is made. To be positive, we can still increase trade while outside the EU, but it will require us to reform not merely Brussels, but ourselves. In many ways, that is a far harder challenge. It demands that we not only stay competitive in Europe, despite being on the outside, but become competitive far beyond the EU. The challenge is to improve what we offer the world’s consumers. That requires investment in innovation. We do not do nearly enough. R&D spending in Germany is 2.9% of GDP. Across the whole of Europe, R&D spending is more than 2% of GDP, but in the UK it is stuck at 1.7%. Outside Europe, the comparison is even less flattering. Compared to America, we spend a third less on innovation as a share of GDP, only half of what the Japanese spend and just a third of what the South Koreans spend. We need to match their innovation if we want to sell to the rest of the world. To achieve this, the CBI says we need to spend 3% of GDP on R&D. I believe it is the right target, but it is not enough.
That innovation also has to be outward looking and collaborative. We cannot research new technologies in a little bubble and expect to impress the world. For example, at the start of the millennium, most experts thought that our automotive manufacturing capability would more or less vanish, and we gave up. They thought that all that would survive was the assembly of foreign-designed vehicles as a stepping stone to Europe. That itself is now in trouble. The huge talent, skills and flexibility of British designers and engineers were ignored. We have outstanding technical innovation, product designers, digital technology and a science base that is the envy of researchers around the world, but decades of poor management had created a short-term mindset while failure to invest in innovation and R&D meant that that talent was wasted. Saving the neglected capability of the British car industry was the reason I asked my friend Ratan Tata to consider buying Jaguar Land Rover. We did that on a Sunday morning from my breakfast table because I knew the talent was there and we could make it a success. I had seen weak leadership and short-termism almost destroy the sector, but I believed that strong, stable leadership and a long-term approach could restore it. Even I was nervous at the beginning, but 10 years later we have one of the most profitable manufacturing industries in the country, exporting 80% of production.
We can make it in this country. How has this been achieved? It has been achieved by adopting the sort of long-term, innovation-led, collaborative industrial strategy we have lacked for more than 30 years. I stress “collaborative” because we must work with the rest of the world as equals. The arrogant language of “moving up the value chain of digital technologies” undervalues the advances made by others, fails to appreciate their consumers’ needs and underestimates what their innovations offer us. Instead, we must build partnerships with firms and universities around the world. We must invest in understanding the Indian, Chinese and Indonesian consumer, as well as our own, because we know what happens if we do not. British Steel faced the fall in global steel prices carrying a legacy of underinvestment and low innovation. I know this because it is another company I made my friend buy. I am hopeful that we can still find a solution that will secure the future of the steel industry. It was all because of underinvestment and poor management. Yet the truth is that the root causes of the steel crisis should have been dealt with well before the glut. We need a level playing field for domestic steelmakers against overseas competition, including competitive energy, labour and tax policies—mainly infrastructure. However, to grow trade we cannot merely subtract cost; we must add value. A strong trade policy, especially in manufacturing, will require an effective industrial strategy. That means not picking winners but ensuring that where an industry or technology has the potential for growth, we maximise the chances to succeed.
A strategy on its own is not enough. Attention to detail and sustained commitment are the keys to success. We must continue to push business and academia to look outward. We have to reach out to create new global partners and stand beside them in the tough times as well as the good. This matters because trade is not simply the purchase of goods but the building of relationships. So all industrial policies need to be built on a dialogue between British industry and the world. Most of all, we need to develop a mindset of competitiveness, to which the Government should always respond.
That is especially true of immigration policy. An outward-looking industrial strategy is essential for improving British trade and should be at the centre of our post-EU trade strategy. Investment from firms such as JLR and the UK motorsport industry has massively grown exports. Considering the key people who work in those companies, I would suggest that a lot of them are top-quality immigrants. The results are clear: record levels of production and thousands of new jobs.
So why is that the exception, not the rule? Because the US, Korea and Japan invest two to three times more than the UK on public sector applied science. As a result they have a private sector that invests in commercial research, whether in nanomaterials or in microprocessors. This is the engine of innovation that pushes forward their trade. By backing bodies such as Innovate UK and listening to groups such as the CBI and the Automotive Council, the Government can use our strength in science to get the private sector to invest in innovation, and that will drive trade. That is how we drove trade in the past.
So I ask the Minister to assure the House that innovation will be a key priority in our planning for a post-EU Britain. To succeed, we have to be competitive, we need the mindset to collaborate with the best, we need the resources to innovate with the smartest and we need the partners to invest for the long term. Investing here will increase our national wealth, spread prosperity more widely and build a broad-based, growing economy, instead of what happens now. If anyone goes to the Government for anything they are told, “It’s against EU rules” or, “It’s against state aid”. They will use every excuse under the sun, and then no one will be welcome in this country because of all these problems.
The secret to a strong trade policy is simple. Ultimately, it is simply making products that people in the rest of the world do not have and find that they want. That is how Britain led the first Industrial Revolution, even outside Europe, and it is still the key to success today.
Lord Patten (Con)
My Lords, in times of economic change and challenge there are always new opportunities for business. That is why my noble friend’s debate is so timely, and I listened with great care to what she had to say.
Change is all around us but we must not be seen as mere supplicants at the gates of the stronger in the economic world. For sure the pound is down, but then the stock market at FTSE level is higher than before 23 June, unemployment in the UK is low and the envy of the western world and investment is quite good into UK business and industry, even if productivity is a bit ho-hum and strongly in the “Must do better” box. The recent fall in the pound/euro cross rate or the 10% devaluation of the pound against the dollar should be seen as radically reducing the cost base of UK manufacturing, already with a strong underpinning economic base, as it exports into Europe or the US—if these changes in the exchange rates are taken advantage of, together with the excellent proposals from the Chancellor of the Exchequer to cut UK corporation tax in short order, which is a pledge that I hope to see kept to in future months.
Equally, on trade itself, President Obama said that in his view Britain would be at the back of the trade treaty queue. We will see about that. Australia, India, Mexico, South Korea, New Zealand and others have all expressed interest in new deals. I hope the United Kingdom will pursue those with vigour while at the same time we continue to trade with Europe, a much-valued customer for what we do but also a major market in both directions, because it wishes to sell to us. Therefore we must respect our close neighbours, allies and friends. However, in the coming months both sides will, post that decision-night shock, realise that getting bogged down into difficult discussions of a never-ending sort about access to the single market for goods will turn out to be a bad for world trade and European trade. This process cannot drag on forever, so we should simply apply World Trade Organization rules after, say, a 24-month period after the exercise of EU Article 50 unless we agree otherwise in specific areas, if agreement does not happen during that period.
The proposal for applying World Trade Organization rules would do a number of good things for the UK, its economy, and for exporters. First, it would provide business with new certainties, which it wants—understandably, businesses like certainties—to parallel other measures such as that corporation tax reduction proposal, which would create a most attractive location for inward investment into offshore Europe. Secondly, it would encourage UK business to raise sector-specific concerns early with the Government. Thirdly, faced with World Trade Organization tariffs, other countries would be encouraged to negotiate, which would allow the United Kingdom to seek freer access to the EU for some of our priority industries. Lastly, and most importantly, with our new albeit surprising freedoms to do this kind of stuff we can unilaterally decide to do all this in short order after 24 months or whatever period, and it can be delivered without trade wars.
I will exemplify how this works or might work with a worked example; I do so with some temerity, seeing down the Bench from me my noble friend Lord Green of Hurstpierpoint, that strikingly successful former Trade Minister who knows what he is talking about. None the less, I will risk it, and will take our trading goods with Europe—trading goods alone—as an example of how this might work.
The context of all this is that the European Union in the last full year, 2015, exported £219.8 billion of goods to the UK. On the other hand, the UK exported £134 billion of goods to the EU in return. Therefore the average tariff on imports into the UK would be 4.1%, by my calculation, raising about £8.9 billion per annum under World Trade Organization rules. The average tariff rate in the other direction, on exports from the UK, would be 3.5%, costing about £4.6 billion per annum.
However, all this detail—and let no one accuse me of not getting into the detail this afternoon—should be set against the context that the UK is the EU’s single largest export market: some 17% of all EU exports come to the UK. That is bigger than the amount that goes to the US, which is 16%, or, for example, to China, which my noble friend mentioned in her introductory speech, which is a mere 8%. Therefore we all have to recognise on both sides that the EU needs the UK market very badly indeed in any future trade negotiations.
UK exporters have benefited from the reduction in the value of sterling and are therefore now very competitive, even with tariffs. The only significant sectors where we are a net exporter to the European Union are fish, mineral fuels and bitumens, and aircraft, spacecraft and parts thereof. These sectors would need to be helped in various ways and would doubtless be the focus of government incentives to relieve any pain of tariffs, even beyond the currency tail-winds, to be realistic—I recognise that.
At the same time, some UK importers would suffer substantial additional costs, and these are focused on a few industries: my little list is vehicles, electrical machinery, plastics, nuclear reactors, boilers and so on, and meat and fish preparations. There are also a few relatively small sectors where the UK relies heavily on EU imports that would attract high tariffs. These are flowers, vegetables, citrus fruit and nuts, preparations of meat and fish, preparations of vegetables and fruit, and fertilisers. There will also be—I have taken expert advice on this—some even smaller sub-sectors that will be affected. One, I am told, is pastry cooks’ products. Let no one suggest that I do not get into the detail of these future trade negotiations.
In those areas, the UK could do one of two very important things: first, unilaterally reduce tariffs on imports for smaller sectors where leverage over any one member state is low; and, secondly and absolutely vitally in these negotiations with Europe, use the tariff imbalance to negotiate other access rights—for example, trade tariff-free access for cars coming from Europe into the United Kingdom in exchange for the continuation of passporting for financial services. To take one country as an example, the Netherlands relies very heavily on the UK for its cut flower industry. It would doubtless apply pressure on other EU countries to act in a realistic way and in the spirit of give and take that all global trade agreements demand in return for tariff-free access for its own goods and markets here. Without a doubt that is what the Dutch would do. That is enough detail. That approach with our European friends would underpin the broad strategic approach to other worldwide business opportunities which my noble friend so rightly wishes to see and which she eloquently set out in her introductory speech.
I should like to ask just one question of the Minister, and I apologise for not having given her advance written notice of it. Working, as I do, outside the House for my living, some of these niceties escape me. I apologise and would be very happy to have a written answer placed in the Library of the House in due course if she cannot give it now. What is our vision for utilising more systematically our trading links with the 53 member countries of the Commonwealth, which should be our natural trading friends and allies? After all, the Commonwealth Secretariat says:
“Through our expertise and assistance … countries secure better trade deals”.
We are indeed one of the countries seeking those better trade deals and we should trade vigorously with our Commonwealth neighbours.
Lord Stoneham of Droxford (LD)
My Lords, I congratulate the noble Baroness, Lady Mobarik, on initiating this debate, but I suspect that it was planned in an environment very different from the one in which we have found ourselves since 23 June, and I think that her speech reflected that.
With the growing deficit in our current balance of payments, we should concentrate on an offensive strategy to open up new markets and initiate import substitution, but I am afraid that, with the reality of Brexit, we are in a defensive strategy to protect what we have—that must be our first priority—and to negotiate completely new trade agreements. I remind the House that 44% of our exports go to the EU. If you count all the preferential trade agreements that we have, 57% of our exports are covered by the EU as well, and if we include the agreement that we hope to see with America and Europe by the time we reach exit from the EU, something like 73% of our exports will be covered by agreements and arrangements with the EU.
There are three principal problems with this. Of course, business will adapt to the problems we have created as a country by voting for Brexit. Change and crises galvanise change in business. In companies that I have run, I have always quite liked crisis because it enables you to achieve change more quickly, but I remind the House that many fewer companies than was the case 40 years ago are controlled and owned in the UK. Multinational companies will follow not the national interest of the UK but their own interest. All our motor industry jobs will depend on such companies and the decisions they make. One of the saddest things about the referendum result was the vote in Sunderland, where Nissan is based—a company which is owned not just by the Japanese; a 44% shareholding is owned by Renault. What will happen the next time a new line or new investment is planned for that plant and where will it go?
We need as a country to bring in new skills, because we do not have the skills to negotiate trade deals in great numbers. I am told that we have 40 experienced trade negotiators, most of them already working in the EU. The public comment is that some 500 are now needed. The EU will have a great competitive advantage in these negotiations, because it has the knowledge, the skill and the expertise.
The Government will try to reassure us. They have already said, “Oh, look, the economy now is fundamentally strong enough to deal with this crisis”, but the country is facing a vulnerable situation. We have made some progress on the deficit, but we will now be blown off course by lower growth and greater uncertainty. We are an economy still recovering from its heart attack in 2007-08 and dependent on the life support of artificially cheap money. We are still very unbalanced as an economy. We may now have the competitive advantage of a lower pound, but household debt is still too high and we have not created the export growth that we wanted even with quite a competitive pound during the past four or five years. Business investment is very disappointing. We are bailed out only by flows on the capital account to keep us in a liquid situation on our foreign accounts. Uncertainty will kill business confidence and investment.
As a country that is so dependent on trade, we are woefully unprepared for the decision that Brexit has given us, and I have to question the sheer incompetence of a Government leading us into a referendum to solve their own problem and emerging from it completely unprepared for what we now have to face. If Chilcot thinks that we were unprepared going into Iraq, I hate to think what future historians will say about where the Government now find themselves in dealing with these problems.
There are two issues that we should address in this debate. First, whether we should remain in the single market is completely unresolved. We have had the noble Lords, Lord Lawson and Lord Patten, telling us effectively that we should ignore the single market and just get on with our own arrangements, because they say that the single market would be unachievable without free movement of labour. But it is much more complex than we realise. We have had 40 years of free trade and integrated our supply chains as a consequence. The reason for our not seeing improvements in our balance of trade when the pound goes down is that it simply increases the level of imports of vital parts for our manufacturing and other services, which we then have to sell as exports, so it does not necessarily help our competitive position. I know that they will say, as the noble Lord, Lord Patten, said, that we will simply go to the World Trade Organization and negotiate away the 10% tariff on cars. I fancy the negotiations on agriculture because we now have significant exports of agricultural goods and I imagine that we will have such a strong position against the French and German farmers, negotiating away the 20% or 30% tariffs that those exporters will now face. There will be a complete disruption of supply chains.
The other aspect is all the preferential deals that the EU has negotiated with other countries. What will our position be in those? Do we retain our rights or will we have to renegotiate them? I challenge the Government: what is your preparation and what are your contingency plans on these matters? Most experts think that it will take five to 10 years to extricate ourselves from these sorts of arrangements. Then of course we are saying that we want to do new deals with the USA, China, Brazil and India using the flexibility that we now have to negotiate. But how will we possibly have the time, expertise and experience to do that?
I have a couple of other points. Our competitive advantage as a country depends on a number of factors. I have mentioned supply chains. Last year, I went to Airbus to see how it assembles aeroplanes. We will now have all the complications as parts of the aerospace industry have to go in and out of the single market and out of this economy. We will need to negotiate very carefully in these areas to protect our aerospace industry and our car manufacturing.
Our universities should be the source of all our future hope and prosperity in terms of research and development. It is a big competitive advantage. All that will be completely disrupted by the change in funding. Finally, there are services. Manufacturing is important—my goodness me, it is important to our economy—but services are our future. If we look at the way that people voted in the referendum, those areas of the country that had a big commitment to the service industries—whether London or the motorway links going down to Hampshire and Sussex and up to Cambridge, across to Bristol, Oxford, Manchester and our university bases—were where people saw the threat of coming out of the EU. Services are all-important so, looking forward, are the Government launching an immediate consultation on the single market and the detailed impact, industry sector by sector, service by sector, on the consequences of withdrawal? It is a question of talking not just to other countries, but to sectors and industries in this country. What are our priorities for renegotiating all the other trade deals that the EU has? Are we gearing up not only the diplomatic service but all our trade organisations to deal with this huge task?
I leave noble Lords with one final thought. There is already talk of us becoming the Singapore of Europe. We have already had these initiatives of lower taxes for business. Lower taxes do not actually help investment. They create cash but it does not mean necessarily that that cash is invested back into the UK. It may just simply stay idle if there are no investment opportunities. But believe me, if we are relieving taxes on business, we are putting higher burdens on everybody else. We should be very cautious of anything going forward that undermines our competitiveness. The living wage, training levies and pension contributions are all coming along the pipeline. Going alone is a very dangerous place. We were told that we would be more flexible and more responsive, but I recall the words about going abroad: “Speak softly, and carry a big stick”. Without the single market, our leverage in negotiations will be much reduced and this is a very dangerous, uncertain step into the unknown.
Lord Green of Hurstpierpoint (Con)
My Lords, I congratulate my noble friend Lady Mobarik on introducing a debate on a matter that is topical, critical and urgent. In fact, well before the referendum decision this was an urgent and chronic topic for us. It is the clear Achilles heel of the British economy and has been for several decades. Last year the external position of the country deteriorated to the point where the current account deficit was just shy of £100 billion and something above 5% of GNP. That is the largest since the war. The trade deficit is over 2%, which is not a record but nonetheless serious and chronic. It is worth reminding ourselves that no other developed country is in this position. The Australians have a significant deficit, but it is about 3%. The US and Canada both have deficits, but they are less than half of ours in proportion to GDP. No other major EU state faces the same challenge. Finland, Poland and France all have trade and current account deficits, but they are less than a quarter of ours as a percentage of GDP.
The trade deficit has been there almost all the time since the 1960s. Hitherto we have had no trouble financing it, but it would be folly to assume that the markets are always going to be that kind to us. As the noble Lord, Lord Stoneham, indicated in his remarks just now, the deficit is becoming more deeply rooted. Traditionally, sterling devaluation every now and then helped us out of the crisis of the time, but each sterling devaluation has had less effect than the last one. Why is that? It is partly because of short-term responses. There seems to be a tendency for export prices to be held up in the foreign currency rather than to cut them on the back of a devaluation in order to gain share. On the import side, it seems to have resulted in a short-term depression of import demand rather than real domestic import substitution. In any event, over time the growth of supply chains has reduced the impact of a sterling devaluation because our major engineering names—household brands for all of us—which export world-class products from this country find that the import component has gone up over the past 20 to 30 years from around 30% to about 70% of their output.
The point is that this is a serious challenge and has been so for a long time, and there is good reason to believe that part of our challenge is to get more British firms involved in the export markets. Compared with some of our obvious competitors across the Channel, we have a smaller proportion of businesses engaged in the export trade.
Of course, we have recently increased dramatically the scale, complexity and risk of the challenge. We have put into question our ready access to the market that takes more than 40% of our exports. As my noble friend Lord Patten said, the EU does indeed have every rational interest in a reasonable deal with the UK going forward, but it will be complex to negotiate it. We have told ourselves that other markets will be ready and eager to negotiate trade agreements with us to replace the existing 50 or so EU agreements around the world under which we currently trade. We have told ourselves, too, that in the case of the big ones currently under negotiation—the United States, Japan and India—the counterparty is not only ready and eager, but will find it easier to negotiate with us because we do not have to balance the demands of 27 other member states against our priorities.
“O brave new world
That has such people in’t”,
I am tempted to observe, because now we are on our own. We have taken the challenge, we have made the decision, and now we need to deliver on the promises.
We have given ourselves some extra degrees of freedom—that is clear—but we have undertaken grave risks. We have seen sterling fall. As of yesterday it was at its lowest level against the dollar since 1985 and against the euro since 2013. On the face of it that is good news for British exports, but on the other side we have started to see anecdotal evidence of an investment slowdown, various announcements of decisions, particularly strategic decisions, being put on hold, IPOs being pulled, and evidence that we are moving into a period of uncertainty that will affect investment. We need to keep that period of uncertainty as short as possible.
It is too early to tell, as Zhou Enlai famously said about the French Revolution, how this will all play out—but it is not too early to reflect on the policy challenges and the trade promotion imperative that we now face. I will talk briefly about three things. The first is the policy challenge vis-à-vis the EU. Participation in the single market now becomes a trade policy and negotiation question. Essentially there is a spectrum of possibilities that will have to be looked at in the coming couple of years or so. At one end we have an arrangement that looks like the EEA—essentially for access to the single market but taking the four freedoms as well and the costs of contributions to the Brussels budget. It is worth noting under that heading that being a member of the EEA does not get you inside the common external tariff of the EU and that we will face, even under that regime, new customs procedures, proof of origin rules, and so forth.
At the other end of the scale we have the WTO rules which, however, cover only goods. If we set our tariffs with the EU at zero we have to generalise those around all the other markets—and that removes bargaining chips as we go into negotiation with them. I make these points simply to indicate that life will not be easy or straightforward in these negotiations.
We can look at in-between arrangements. Switzerland has attracted a certain amount of attention in recent days. That country has dozens of agreements with the EU. Its relationship is fractious and changing. It is worth noting that it does not yet have passporting arrangements for Swiss banks in the EU, and that the Swiss have put all of that in balance by their referendum in 2014 which voted to restrict migration from the EU. The standstill arrangement on that runs out next February, so we will see how the Swiss get on.
There are other models. People talk about the Canadian arrangement: the Comprehensive Economic and Trade Agreement. That covers goods and agriculture and deals with tariffs, quotas and subsidies but does not cover services which are, as a number of speakers have already pointed out, important to us. It is also outside the customs union and would have the same effect, therefore, as being in the EEA.
Not talked about enough is the Turkish option. It is inside the customs union and can still negotiate independently with third parties. The arrangements cover only part of its economy—notably its manufacturing and processing industries—and Turkey notoriously does not have free movement of people. That is a disadvantage in their minds which, I suspect, would not be a disadvantage in the mind of the British Government. I do not know what the way forward is; I merely stress the importance of sorting out this problem as soon as we reasonably can.
As for the rest of the world, we have to negotiate with those countries that are currently covered by the EU agreement. It is probably too easy to assume that they will be happy to sign the same thing with us independently. In the case of the Canadians, for example, that was a painfully negotiated deal, involving the provinces as well as the federal Government of Canada, which makes it complex on their side as well as on ours. We will see as we get into it how well we get on with these various renegotiations.
What about those countries where no agreement exists yet—notoriously, the United States, Japan, and China, the first, second and third largest economies in the world, by the way? Negotiating TTIP at the moment feels to all concerned rather like walking through treacle and we do not know how and when we will get out the other side. We have told ourselves that they will find it much easier to negotiate with us because they do not have to deal with the requirements of 28 member states—only with us. That is true, but we need to stare one uncomfortable fact in the face: that negotiation is all about services and regulatory convergence or harmonisation. Tariffs on goods are 3% both ways, and for the most part are relatively trivial. The services that we care about, in particular in pharmaceuticals and financial services, are ones where it is a particularly difficult negotiation on their side. We would be unwise to assume that the Americans will find an agreement with the UK easy to negotiate.
We are where we are, and the question, to quote one famous Russian politician, is: what is to be done? The most obvious point is that we need a huge increase in official resources devoted to this challenge. We should see this as almost putting the country on a war footing. I am told that there are about 20 people in the trade policy division in the Department for Business, which roughly coheres with my memory of it from a couple of years back. My suggestion is that we probably need to grow that at least fivefold or maybe tenfold as quickly as possible with people who are able, and who, as rapidly as possible, will be trained in the minutiae of trade negotiations.
On the trade promotion front, we should re-look at the question of the UKTI budget. It was slightly reduced in the spending round. It would seem rational to ask ourselves whether we should not reinstate an investment in UKTI and encourage an expansion of the partnership that has been developed between UKTI and business groups around the world—in some cases it is chambers and in others British business groups in what I think is now 37 countries. I suggest that we need to enhance those, be prepared to invest in them as strategic partnerships and not see them just as contractual arrangements. In short—I am conscious that I am overrunning my time—there is a lot to be done. I look forward to hearing any comments from my noble friend the Minister on the way that we will resource this.
Viscount Waverley (CB)
My Lords, I remember well sitting on the peripheries of a highly successful trade mission to Kazakhstan led by the noble Lord, Lord Green, and it is a pleasure to follow him today. The noble Baroness, Lady Mobarik, should be thanked for moving your Lordships’ House on to arguably the single most important subject beyond that of the referendum.
Much was made during the referendum debate of what would, and needs to, accrue from exporting globally. On the United Kingdom’s standing in the world, the Prime Minster informed us that we are the fifth-largest economy—although, expressed in dollar terms, we have already, I believe, slipped to sixth or seventh. We are members of the Commonwealth, but even many of our friends there have entered into their own regional arrangements. These were all cited as illustrations as to why we need not be concerned for the future. Comments ranged from those of some, who took the view that we do not need to be a member of the single market, to those of others advocating that the European Union needs our market as much as we need it, which then comes back to that all-important question of access—or not—to the single market and on what terms.
While I have listened with great care to all the positive messages today, I believe that we are afforded a few moments for a reality check, all put forward in the spirit of helpfulness. On 1 July—I am following the example of the noble Lord, Lord Patten—there were 180,734 public procurement opportunities in the 27 member states where United Kingdom commercial interests could tender freely and equally due to our membership of the European Union. In the UK, there were 12,271 public procurement opportunities where entities from member states could tender freely and equally. While it can be generally expected that all is well for those tenders that have been approved, what of those upcoming tenders for which UK interests wish to be considered? For how long will it be the case that unfettered access remains? Will it be for the two-year negotiation period, or will we be disadvantaged from the time Article 50 is triggered?
Global opportunities and the environment in which UK commercial interests can thrive become imperative. In years gone by, it was often said that the world is our oyster. Certainly, the UK has many comparative advantages, but that environment is fast-changing. Increased competition comes from countries such as India, China and South Korea, with France wishing to protect its interests in the francophone area, and the multivector policies adopted by many countries, particularly those that are strategically placed. However, what gives me equal cause for concern is that the new world countries, where many of the opportunities previously existed for the United Kingdom, are starting to play the game by their own rules.
As an example, some time back I was requested by the national oil and gas state entity in Kazakhstan, KazMunaiGas, to negotiate with the three largest foreign oil and gas operators to recognise that procurement policy was not expected to pay scant regard to national goods, works and services capabilities. From these aspirations, I was able to create a memorandum that is known as the Aktau Declaration on Joint Actions, which was signed up to by all the operators concerned. This was in line with the desire to ensure,
“opportunities for the companies and citizens of Kazakhstan to benefit directly from oil and gas projects as part of a strategy to develop an indigenous capability in the sector … creating an appropriate environment and attracting joint ventures with technology transfer by companies in the global oil and gas supply”—
in other words, a stringent local-content programme. These activities become more dire with the low oil price and the little-known consequences of a low oil price that is holding back investment in capital projects.
The point of all this is that the rules of the game have changed and are changing. Partnerships and joint ventures with local employment will become increasingly mandatory. I cannot underline enough that what these countries expect is genuine partnership. The illustration I am offering noble Lords is being increasingly adopted by many around the world. I think particularly of Tanzania, where the president, or his Government, has signed up with the appropriate foreign entities.
Yesterday afternoon, I sent an email to 50 or so chambers of commerce around the UK and a trade mission organiser to inform them of today’s debate, requesting that if they had any points of specific concern that required being flagged to kindly let me know. I am most grateful to the large number who responded by return. A range of important issues emerged. The difficulty I now find myself in, with regret, is that those issues were far-ranging and far too numerous to do them justice—even a snapshot, with calls to action—and to be able to place on record today all the many concerns and challenges expressed. To be exact, I received 15 pages of condensed type of useful suggestions. There is no possibility of my doing justice to all that I have received.
However, the examples include the need to accommodate business visas with easier-to-obtain visas. For example, Dubai is now taking over as the meeting place of choice for not only nearby states but also west Africa. Our friends in west Africa prefer to go to Dubai instead of coming to London Heathrow or Gatwick, as they have done historically. The fast-track trade agreement with India was noted by a number of people, and clarity on a timetable for exit from the EU is considered essential. Lastly, to pick up one of many of the points made, stability should be sought from the Government similar to that being expressed in a clear and resolute fashion by the Bank of England. Would the Minister kindly allow me to package these up and send them over to her for her officials to review? By the way, it is a pleasure to see the noble Baroness at the Dispatch Box. The noble Lord, Lord Price, is, I understand, in the marketplace today, where the UK needs him to be—in China.
Nevertheless, over the years I have felt that there is not sufficient partnership between the public and the private sectors in the UK. That gap needs to be plugged. After all, while often too much can be expected from government, the support of—and, in many circumstances, assistance by—government is paramount. Conversely, the private sector is at the sharp end and its views need to be taken on board as an equal partner.
With regret, I now conclude my remarks with an unpalatable tale but one that illustrates the importance of the work that needs to be urgently carried out by the Minister’s department. At this point, conforming with protocol, it is appropriate that I declare that I am the founder and chairman of SupplyFinder.com, a free-to-use global business portal created to stimulate global trade and investment, presenting national and international opportunities covering 195 countries and 25 sectors in eight languages—a large undertaking. I have been keeping the Minister’s department, including the head of digital, informed of progress and will of course continue to do so to the extent that they are minded. To go back to the tale, some short months ago I had occasion to speak with our consul-general in Casablanca, who informed me that the OBN—the Overseas Business Network—in Morocco, which is UKTI’s partner on the ground, was frantically arranging itself in Meknes for what was apparently the largest agricultural conference and exhibition in Africa. Making an immediate decision, I jumped into my car, albeit in Faro, and drove to Meknes, arriving in time for the last day—all well and good. I went immediately to the overseas pavilion, calling at the European Union stand, followed by those of Spain, France and others, including various African representatives. But then—guess what?—the UK stand had packed up shop the day before and left. There was no note, no catalogue, no point of contact—nothing.
We can only scratch the surface of what needs to be debated in this opportunity today, but there is so much more that could and needs to be added if the UK is going to excel in this highly competitive global market. I end with just one thought for the Government, which I believe has been expressed elsewhere. While there is an undeniable need for UKTI to settle down and become supercharged—a new word I learned yesterday, by the way—and properly resourced, there is an urgent need for a review in parallel that addresses this self-created, changed world that had its big bang on 23 June. But, all that said, we soldier on.
Lord Selsdon (Con)
My Lords, it is with a certain nervousness that I stand here before your Lordships, recognising that I have been in this House for 52 years, but I stand with pride knowing that my noble friend Lord Lyell has been here a year longer. During this time, I have been drip-fed by numerous political parties and others and, often out of my depth, talking and failing to understand how you spell things, but liking the object of trade.
I came here only after my father suddenly died accidentally and, before I knew it, I was told that I should go to see Lord Jellicoe, for whom I had a lot of time. He asked if I could give up part of my job to come to the House of Lords. I said that I would ask my boss, who immediately said no, but that he could put me on part-time work as a consultant. Then I was introduced to Lord Shackleton, and it was these two Lords who gave me my interest in trade. Before, a lot of the work that I did was trade research, but these two wonderful men, who were themselves great friends—and competitors—opened up the world for me.
I was told to do some research and to decide what I thought I could do in the House of Lords, so I went off and researched the history of trade. I read most of the volumes—with the help of the Library—of the original council of trade of Queen Elizabeth I. I suggest that your Lordships read the rules and regulations there, because I think that they are slightly better than those that we are trying to introduce today. They were very patriotic indeed, because they were looking at inward investment as well.
In that period of time with my two noble friends, I wondered what I could do. They said, “Why don’t you get involved in trade, as you are doing trade research?”. Lord Shackleton said, “You’d better come to Moscow with me. You’ll find that it is going to have a different future—there are going to be all sorts of changes with the Russians”. We went to the embassy in Moscow and had to go down into the basement. We then found that some strange mouse, or some strange human, had put a microphone into the wall in order to learn what I might be prepared to say. I thought it very complimentary.
It was suggested that I should look at the socialist world because it would change and we, the British, could probably be their best friends and help to put them in order. It was also suggested that I should get involved in trade, not just the Board of Trade; I found myself on the East European Trade Council, under Lord Shackleton, and was quite a lot younger than the others. With Lord Jellicoe, I suddenly found myself almost on the Board of Trade. I went off to Cuba; I was told to deal with the more difficult countries because, when things changed, I would probably the only one alive who had had certain experience.
With Lord Walston, I went to Havana. When we got there on a British plane, we wondered how we could get to where we needed to go. In fact, we had gone to Miami, but I thought we had arrived in Havana. When we did arrive at that end, we were greeted by Raúl Castro, Castro’s brother, and shown around, but Lord Walston seemed to know everybody. A party was given at the embassy, which was quite nice. A rather strange incident had taken place the week before, when the wife of the Foreign Minister, dressed up to the nines, had walked in—head held high with pride—and, not noticing the swimming pool, which looked like the marble surrounding it, walked straight into it. I gather that her husband asked whether anyone had a walking stick or a golf club because her extra hairpiece had come off and had to be picked out.
We were shown all around Havana. I said, “I hope to be alive when relations get better. Is there anything you could sell us?” Someone said, “Well, we’ve got pretty good fruit, particularly pink grapefruit”. I have to say that I did not know what a pink grapefruit was. He asked, “Have you got anyone who could buy them?” I asked whether they had a telephone, and they said yes. I asked whether it worked internationally. They said, “Oh, of course. Our telephones can get anywhere in the world”. I rang Marks & Spencer, which said down the telephone, “Tell him to fill up his biggest ship and we’ll take the lot”. That was my first trade deal with Havana. I have learned that some of our old relationships with other nations are quite important.
Having been involved in such things, I rapidly found myself president of the British Exporters Association and dealing with all sorts of activities. My real wish, however, was to see whether we could get foreign investment into the United Kingdom, because our manufacturing industry had been declining for quite a long period. I then went out as a banker to ask people to come in. One of the first was the Italian white goods group called Merloni Ariston; “ariston” is the Greek for best. It was a family business that used to make weighing machines. Before we knew it—we had been sitting down with Arnold Weinstock—everyone in England wanted to get out of white goods. I said to Merloni, “If they want to get out and you’re so good, why don’t we buy them out?” They said, “We don’t have that sort of money.” Before I knew it, however, they had managed to buy a large section of the white goods industry. The Italians were playing everything off the front foot.
In fact, that led to my being asked to go on the British Overseas Trade Board—I was already on the East European Trade Council—and I was then made chairman of the Committee for Middle East Trade, dealing with the Arab world and others. They wanted someone who would be alive when important things happened. From my own background, I knew that in the Middle East and the Arab world, the guest is always the most important person and is always protected, so I had no fear.
I went to Jordan first, and then moved to Iraq for the first time on my own. I waited for someone to arrive, and when people asked what I wanted, I said, “I want to reopen trade relationships. Have you got any oil you could sell?” Before I knew it, I was seeing the Oil Minister. He was sitting in his office, with a mirror showing a whole lot of people negotiating transactions. This all led to my believing that it would be a good idea to have a close relationship with Iraq. I was chairman of the Committee for Middle East Trade, so it seemed to come under me, and I asked the Foreign Office and the Department of Trade and Industry so that I did not put my foot in it.
Having looked at the history of our trade relationships with Iraq, I got to know Tariq Aziz who was a very nice man indeed. I had been a wicket-keeper, which is why I had to have new knees to walk, and found that Tariq Aziz had also been a wicket-keeper in Wales, so we had a quite intriguing relationship. After my Iraq trips, which were many, I went to see the key man who was doing the evaluation and it was deemed that what I knew was irrelevant at that time.
If we look at the world, in a way the British are best at dealing with the more difficult countries, where the competition is least. We know too, if we look at inward investment, that a lot of British businesses which would like more business may be in a position to be acquired by foreign or international interests. Our own balance of payments is not particularly strong but the quality of the people we have here and the desire for others to come into the United Kingdom makes it very interesting. Instead of trading, maybe we should look at which companies and institutions within the EU we might join in partnership investments, as we look at different parts of the world.
Into all this work that I got involved in would come the nice, exciting bits which you could not understand. I was asked to deal with exclusion zones. I then raised in your Lordships’ House the issue that British influence includes the 200-mile limit, which gives us an economic exclusion zone that makes up 20% of the world. If that is put together with the French zone, it comes to nearly 30%. Into the blue, when I asked about this it was brought to my attention that the largest ever sea chase after a fishery, for the Patagonian toothfish, took place in the South Atlantic. The Patagonian toothfish’s importance is that it was apparently much loved for eating among the American mafia. Out of that came a new world of calamari—the squid. I was given some aerial photographs to show the importance of squid fishing. It was done by North Korean fishing boats, effectively using sticks to catch the calamari or squid that now adorn the tables of much of England.
It is nice to know about the EU—in the bank, they made me an EU adviser for a time, when my job was not to get anything done but to go and get the money back. I have a great hope that we have to be global and I regard the EU as just a small part of the global initiative.
Viscount Bridgeman (Con)
My Lords, I am grateful to your Lordships for permitting me to speak in the gap and I thank my noble friend Lady Mobarik for securing this debate.
I returned two days ago from the meeting of the British-Irish Parliamentary Assembly in Malahide, near Dublin. As your Lordships will know, the assembly was created in the bad days of the 1990s to enable Back-Benchers from both sides to talk to each other. On the British side, it owed much in its early days to the imagination and vision of the then Peter Temple-Morris MP, before he entered this House. I am very happy to see the noble Lord, Lord Temple-Morris, in his place.
It will come as no surprise to your Lordships that there is considerable anxiety in the whole of the island of Ireland at the outcome of the referendum but particularly in the Republic, which, among the 27 members of the EU involved, probably has the most to lose from Brexit. In the context of this debate, Great Britain is Ireland’s largest trading partner. The Irish are especially worried about the effect of the weakness of the pound against the euro on their tourism, which depends on visitors from the United Kingdom. The retail trade in the south could be affected by the stream of shoppers from the Republic who will once again take the high road to Belfast and make shopping expeditions to take advantage of the weakness of the pound there.
I cannot say too strongly that a reversion to a closed border, which would become an EU border when Brexit takes place, would have a disastrous psychological impact, particularly on north-south relations within Ireland but also on wider British-Irish relations. It could have the effect of putting back Anglo-Irish relations 30 years or more, a theme that ran through the whole of the BIPA meeting from speakers from both sides. I am happy to say that at our meeting we had an assurance from the Minister for the Diaspora and Overseas Development Aid that it was the policy of the Irish Government to maintain the open border. I understand that following the referendum result, my right honourable friend the Prime Minister had an early conversation with the Taoiseach on this sensitive matter. I hope that as part of the Brexit settlement, the Irish border will be maintained in something like its current open state, whether by derogation or other means.
I finish by saying that the Anglo-Irish relationship is unique within the European Union as it is now constituted, and I urge Her Majesty’s Government, through the Minister, to do all in their power to ensure that in the coming Brexit negotiations this very special, close and mutually beneficial relationship will suffer the minimum disruption.
Baroness Burt of Solihull (LD)
My Lords, I congratulate the noble Baroness, Lady Mobarik, on securing this debate today and all noble Lords, who have made very thoughtful and perceptive contributions, including the noble Lord, Lord Selsdon, who I will henceforth think of as our man in Havana on account of his exploits in our now mostly gone world of international trade. I now know more than I ever wanted about the Patagonian toothfish. We have heard a lot about the difficulties of renegotiation and about the gloom and doom, including how the pound is down to a 31-year low from the noble Lord, Lord Green, in his excellent and thoughtful contribution.
This is very unhelpful when our balance of payments deficit is so large that we are spending more to buy imports than we are reaping in improved attractiveness of our exported goods. We have moved from being the fifth to the sixth-largest economy in the world— displaced by the French, which is galling in more ways than one.
We have to look at our place in the world from a new perspective, as many contributors to the debate have done this morning. We no longer have the might of the largest market in the world on our side when it comes to negotiating power, as my noble friend Lord Stoneham mentioned. Like it or not, we have to strike out at new or at least underdeveloped markets and, to get those markets to take us seriously, we have to have a plan. Indeed, it would have given more comfort to Britain’s industry if we had had an industrial strategy in the first place, but Mr Javid, the Business Secretary, apparently does not like the words “industrial” and “strategy” in the same sentence. The noble Lord, Lord Bhattacharyya, echoed this in his excellent contribution and talked about the importance of manufacturing and innovation, both of which are very endangered amid the possible outcomes ahead.
It is time to stop reacting and to start planning to help industry to cope with the changed economic landscape that it finds itself in. The option suggested by the noble Lord, Lord Patten, of going straight to the World Trade Organization in two years if we have not got a deal, would be disastrous for British manufacturing. A 10% tariff on cars and 12% tariff on clothing and food do not bear thinking about.
I am sure I was not the only Member of your Lordships’ House to experience dismay to discover that, as far as trade was concerned, there was no post-Brexit plan in place from the Brexiteers. Bold statements like, “We’ll soon have our own, better deals with the rest of the world” were not, it seems, backed up by anything other than rhetoric. The world we face, and the opportunities that exist within it, may not be quite as enticing as they might have appeared from the other side of the pre-Brexit fence.
Our Chancellor has laid great store by doing trade with China. Trade with China is rapidly expanding, but still constitutes only 3.7% of our exports, and growth in China is slowing, as we know. India, another great focus of government optimism, constitutes only 1.7% of our exports. Several Members mentioned trade with Commonwealth countries and the importance of reinforcing the links that we have with our friends in the Commonwealth. To look on the positive side, at least there is lots of room for improvement.
Let us look at countries where our balance of trade is positive: Australia, South Korea, Singapore, Japan, Switzerland—in EFTA—and of course our good old pals, the US of A, our largest single trading partner. I for one would be very willing to put my best suit on and go to any country to proudly sell the British brand. In the coalition, we boasted that no Minister was allowed out of this country without a business brief in their little red box. We need the same get-go focus today, right now more than ever. The noble Lord, Lord Stoneham, in his excellent contribution, said he likes a crisis and that it galvanises business to make changes. I hope it galvanises the Government as well, because otherwise we could be in a great deal of difficulty.
We must have a plan, but the plan needs to take account of what kind of deal we will be doing with our erstwhile European partners. Some of the other trading models which give a degree of access to the single market impose restrictions on trade deals with other non-EU countries. The noble Lord, Lord Green, gave an excellent explanation of the models and analysis of the situation, and I conclude from his comments that none of them is as good as what we have at the moment. The noble Viscount, Lord Waverley, included in his contribution the lost opportunities in public procurement, alongside a number of other very thoughtful and perceptive comments.
As we will become the EU’s largest trading partner—a bigger trader even than America—I am sure we will have a lot of negotiating power. The deal that we will be able to obtain should be unique, not least because we buy more from the rest of Europe than we sell to it. Several noble Lords have made the point that it is very much in its interests to trade with us too. In my view, and in the view of my party, access to the single market is the most important thing we should be striving for. But here is the quandary: we need a plan—fast—to restore confidence and our attractiveness in the eyes of investors, but equally we need access to the single market, otherwise our attractiveness to non-EU countries aiming to invest here, at least in part to gain access to the single market, is lost. It is the old chicken-and-egg question.
Business thrives on certainty, and right now that is in very short supply. The two major political parties are so busy tearing themselves apart that their focus on the needs of their country has been lost. Who would have imagined, six months ago, two months ago or even two weeks ago, that things would have ever come to such a state? However, there is one political party whose focus has not been lost; one party that is undivided in our appreciation of the need of our country for stability and certainty. We know what we stand for: a Britain strong in Europe and strong in the world. We say that our priority must be to remain within the single market, so companies can have confidence to stay here, invest here and trade from here. We say to the Government: do not pour what money we have into tax breaks for the rich by reducing corporation tax, when it could be put to better use supporting British business by bolstering the British Business Bank and supporting innovation, business growth, and those businesses that may not any longer attract funding from even more risk-averse banks. As long as we retain access to the single market, Britain is the best place in the world to trade with and from. We have the flexible, skilled workforce, we have a “can do” attitude towards supporting business and we are still the best place in the world to do business.
Lord Mendelsohn (Lab)
My Lords, I draw attention to my entry in the register of interests, which currently holds a balance of winners and losers from the post-Brexit crunch. I congratulate the noble Baroness, Lady Mobarik, on her accomplished and comprehensive speech, in which there was much to agree with. It was very valuable to have the debate introduced and such an effective case made. I shall try to be helpful. I am hoping, in this moment when we have suspended animation, to try to make a case—and to convince the Government that it is necessary—for being bold and expansive. We are in a very different place, but we are where we are, and we have to think about our challenges and the right prescriptions. In that regard, I thought the speeches of the noble Lords, Lord Stoneham and Lord Green of Hurstpierpoint, were outstanding. Both identified that we need to be bold and that our plans need to be based on a correct estimate of our challenges. It has been clear for a long time that our trade has underperformed. One simple measure is how Germany’s trade with countries such as China has rapidly grown, way outside our own capability. Those sorts of things are great illustrations of some of the challenges that we face.
I shall touch briefly on three areas. First, there is the Government’s performance on promoting exports. Secondly, there are some of the challenges for exports, which we must address, as a consequence of the decision to leave the EU. Then I shall make some final observations on the risks ahead for our country.
We on this side of the Chamber had high hopes that, when the noble Lord, Lord Maude of Horsham, became Trade Minister, we might at last see some serious progress in addressing clear structural weaknesses in government that were holding back our capacity to perform effectively compared to our peers. I am not suggesting that it made us believe that we would hit £1 trillion, with a doubling of trade, but it certainly gave us some expectation that the whole of government could be galvanised. Traditionally, we have expected UKTI and UK Export Finance, admirable though those organisations are, to carry the sole burden of supporting exports. A consensus had formed that the whole of government needed to be mobilised, and the increasing engagement of the Foreign Office illustrated only how our performance lagged and how much more we could do. We can do better and we need all our overseas posts to show the laser-like pursuit of Britain’s commercial and economic interests—and, across government, all the departments that deal or engage with business sectors can encourage, support and help businesses to explore overseas opportunities. We were pleased that someone who had the ability to galvanise Whitehall was chosen to make this happen, and we are disappointed that there seems to be a gap. This is not to criticise the current Trade Minister, who, as I read in my Bloomberg stream, is doing a very fine job of flying the flag in his role. But we need an expanded group of Ministers to take on all these challenges. The noble Lord, Lord Green of Hurstpierpoint, made the right point about how we have to expand, and on the level of expansion that is required. We need to make the most of all those willing to fly the flag for British business abroad, and I thank all those Members of both Houses who act as unpaid trade envoys. Our business ambassadors also play an important role. But the case is clear that we have to scale up, and scale up massively.
We must look at what is on the agenda. It is not just a small amount of trade promotion; in the round, we have to look at how we will approach the WTO framework and the multilateral negotiations, the 100 or so renegotiations of trade agreements, as well as how long they take and how they are covered. The EU is in the midst of arrangements, for both implementing and discussion, with Canada, Singapore, the United States, Japan and Vietnam, India, Mercosur, Australia and New Zealand, Mexico and Chile. That is as far as I could work it out—I suspect that it is a whole lot more. So what are we going to do bilaterally? That is a huge challenge, and we will have to make sure that we are prepared to address it with the right resource.
On the second series of issues, we are concerned about the size of challenges ahead in dealing with the consequences of Brexit. There are myths about our current circumstances. First, on the argument that a decline in the pound’s value could stimulate exports, offsetting any downsides from leaving the EU free trade area, the evidence suggests that, at best, the answer is “not enough”, and by some distance. The stimulating effects of currency depreciation have been gravely overstated. A fall in sterling merely compounds the problem. It is no solution. We are import-dependent for food, drink, raw materials, semi-manufactures and finished consumer goods. Imports are relatively inelastic with respect to price. A depreciation merely generates domestic inflation or damages margins in manufacturing, wholesale and retail. Although weak currencies typically present an opportunity for increased output, this luxury is not available to the UK. Our exports concentrate on highly sophisticated services and goods, such as financial, legal and IT services, as well as pharmaceuticals. The economy’s core exports naturally suffer from low price elasticity. In volume terms, therefore, a 1% depreciation of the pound increases the UK’s exports by a mere 0.12 %. Meanwhile, a widening trade deficit, caused by a falling pound pushing up import prices, casts uncertainty on the UK’s capacity to substitute its large import values with domestic production. The result is rising consumer prices with little or no improvement in exports in return.
What is more, as the UK manufacturing sector continues to decline—we had an outstanding speech from my noble friend Lord Bhattacharyya on manufacturing issues—any further depreciation of the pound will lead to price increases. Currently, the UK’s trade deficit is experiencing its highest levels in eight years. With a lightweight manufacturing sector, the UK is unable to plug the widening trade gap domestically, causing price elasticity of supply to remain at zero. We have been far too relaxed over the decline in manufacturing and we are suffering the consequences.
There is also a fallacy that there will be some deregulatory boost from all this. I shall not go into that in too much detail, but those things are specious and we have to understand that we need some regulatory push to ensure that we have effective markets. I look forward to later in the year when the Minister introduces the better markets Bill. I think we may be able to accomplish some things there.
We also need to address the fact that, as a result of the shocks and challenges in our position, we need to institute some form of industrial policy, using our advantages to support industries while we have a competitive advantage, with a strategy to ensure that nothing makes it less attractive for large multinational companies to favour the UK over other countries, support for domestic clusters of industries, and connected ecosystems to drive innovation. Where we have capabilities in industry and science and technology, we need a larger global presence, and we must focus policy—on skills, infrastructure and other areas of capital and financial support—to make sure they can prosper. These things are essential.
We have two critical sectors on which we must keep a close eye. Before the referendum, the motor industry was the UK’s second largest export industry, worth £3.2 billion, an increase on 2015. Our automotive industry produces an average of 1.6 million cars each year, of which 77% are exported abroad, of which 58% are sent to EU countries. That is absolutely critical. In addition, the pharmaceutical industry is of major concern. I hope the Minister can give assurances that the EU regulatory approval system that aids the faster dissemination of drugs between the EU and UK will be a priority discussion in future negotiations. I would be grateful if the Minister could also address the question of the EU Medicines Agency, and our role in and view of it, and whether it is likely, given that it is based in London, that it will have to relocate in the circumstances of our exit.
There are some major issues that confront us. The noble Lord, Lord Green of Hurstpierpoint, made the speech that I wish I could make, but he set the context for the issues around the current trade deficit. Can we pay our way? Can we make enough from exporting to pay for our imports? Can our invisible exports, whether they are services, tourism, or things such as insurance—or even income generated from our overseas investment—help us to deal with this? We are now in the worst position in our history. Never has the Government’s inability to meet their objective and balance trade been starker. There are two serious crises. Our weak export performance, no matter what we have done, no matter what gloss we put on it, does not address where we need to be. Foreign direct investment is hugely underperforming.
There is one matter to which we must turn our attention. The money that we earn from British-owned overseas businesses minus the outflows to overseas owners of foreign-owned businesses located here is now negative. There is now a £250 billion deficit in the value of UK assets owned by foreign companies compared to foreign ownership. This number is only going up. FDI is now likely to sharpen the current account deficit. When I read the Government’s April press release headed:
“UKTI reveals record number of UK businesses looking to export”,
I raised a glass. Notwithstanding my scepticism when I read such things about when the records began, what they are and the nature of the data that were collected, I raised a glass, but it is nowhere near enough. Even before the decision to Brexit, trade, our current account deficit and FDI meant we were facing huge underperformance and there were conditions for major problems to our GDP, so we need the Government to rise to this new level of threat as well as to the opportunities. I appreciate that the Minister cannot provide the answers required in our current political circumstances but, most importantly, are she and the Government prepared to accept the level of the crisis we face? At a time when we can do something about it, I hope she is.
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, I am very grateful to my noble friend Lady Mobarik for calling this debate and for her wide-ranging, interesting and perceptive speech. I associate myself with the words of the noble Lord, Lord Mendelsohn, in relation to all that has been said about other speakers.
Our economic position in the world is at a point of inflection. As we turn to the future, the overwhelming need is to rise to the occasion, seize the initiative and make the most of the new opportunities. In my noble friend’s words, we must not allow a state of paralysis. We must engage with the rest of the world, building on existing relationships and, I would say, creating new ones.
While I wanted the UK to remain a member of the EU, the British people have spoken, and it is the Government’s job to implement their decision. In contrast to some noble Lords who have spoken, my vision for the future is positive, because there are opportunities as well as threats in Brexit. We must capitalise on new export opportunities, attract inward investment and build UK dynamism by making the UK the best place in the world to do business. As the noble Lord, Lord Mendelsohn, said, we will no doubt be returning to that later in the year.
I sense that those who have spoken in today’s debate are already looking forward and thinking about how to turn opportunities into action. As my noble friend Lord Patten said, the Chancellor has announced that he is looking into cutting corporation tax to encourage investors. I was very interested by my noble friend’s analysis, which underlined the strength of mutual trade between the UK and the EU and the tariff opportunities if we go that way. We also need to factor in the depreciation of sterling as a positive, which we have seen reflected in the relative share prices of, for example, Rolls-Royce and GSK and some of the best British companies. However, I take the point made by my noble friend Lord Green that, because of changes in supply chains, this is slightly less significant in its impact than what we saw, for example, after Black Wednesday.
As someone who has worked in business, I have some sympathy with my noble friend Lady Mobarik’s point about the need for a robust, results-focused plan on international trade, and I agree with my noble friend Lord Green that this needs to be properly resourced. The noble Lord, Lord Mendelsohn, said that we need to scale up, and I can see the case for that. As a start, the Government have established a new EU unit in Whitehall, drawing in the best and brightest from inside the Civil Service. To respond to the noble Lord, Lord Stoneham, we are also looking outside the Civil Service for talent—as we did in the Second World War. I remember my mother, who worked at the Board of Trade as part of the war effort, talking about the brilliance of the academics who came in and what a difference they made. I have already had approaches from colleagues I knew doing deals around the world, in Asia and elsewhere, asking whether there is an opportunity for their talent to be offered to government. We need to look at all these kinds of angles in the stepping up of resourcing.
There will be no immediate changes to our relationship with the EU. While the UK is still a member, all rights and obligations will apply. We continue to support the EU’s trade agenda, and the UK will participate constructively in EU decision-making on trade issues. Indeed, I am off to the Council, in Slovakia, next week. As the current Single Market Minister, I know how hard we need to work on the issues involved. I assure the noble Baroness, Lady Burt of Solihull, that we are doing just that. We are engaging in a series of sector roundtables to make sure that we are identifying the challenges as well as the opportunities. My door is always open, as she knows.
One of the most important tasks for the Government going forward is forging deeper trade relationships with the US, China and Japan, for example, and rekindling long-standing ones, such as those with Australia, New Zealand and Canada. To respond to my noble friends Lady Mobarik and Lord Patten, I agree that a strong Commonwealth, with enhanced economic prospects for all members, is good for UK business. The United Kingdom Government are represented across the Commonwealth, and UKTI has offices in around half of the Commonwealth countries, including in Pakistan, where there is the fast-growing market which my noble friend Lady Mobarik talked about—I know well the opportunities there and, indeed, Pakistan is an important source of textiles in this country. There are shared systems in the Commonwealth and a shared language, which means that the cost of trade between Commonwealth countries is some 19% lower than with non-Commonwealth countries. We are committed to helping the Commonwealth unlock its vast potential in the area of trade. I am very glad to say that Commonwealth Trade Ministers will meet in London in March 2017. That has now become a much more important meeting.
Getting these trade relationships right is at the heart of the Government’s vision for the UK after we leave the EU, but it will be equally important to maintain existing trade relationships, for instance with Korea, to provide stability for UK businesses. We are not starting from scratch. We already have strong international relationships, which are underpinned by our network of more than 270 posts in 160 countries around the world. As has been said, many countries have already been in touch to express their desire to maintain and build on existing trading relationships with the United Kingdom. We have laid good foundations with China and India, exemplified by the visits of President Xi Jinping and Prime Minister Modi last year. As has been said, my noble friend Lord Price is not in his place today because he is in China. I will be visiting China next month and will be focusing on resolving intellectual property matters, which are a key issue for UK investors.
Of course, we can build on the relationship we already have with one of our most important trading partners, the United States, where I was in January—I followed that up recently when I was at the OECD in Cancun last month. The US is the largest export market for British goods and services outside the EU, including in key sectors such as machinery and transport equipment, especially aero-engines, chemicals, food, live animals and, of course, financial services.
I agree with my noble friend Lady Mobarik that infrastructure investment is very important to a successful economy. As the Transport Secretary has said recently, it is right that the vital matter of airport expansion is resolved in a decision to be made by our incoming Prime Minister.
Britain’s economy is fundamentally strong, and we are a great trading nation. The UK is the seventh-largest trader in goods and fourth-largest trader in services globally. We have strong sectors to drive our trade forward. In 2015, Britain exported £4.56 billion in medical technology, £25 billion in pharmaceuticals and £19 billion in food and drink. As an aside, pharmaceuticals, which was raised by the noble Lord, Lord Mendelsohn, is always a priority area for the UK, and he is right that we need to respond to that. The European Medicines Agency is an issue, although not an immediate issue for the reasons that I have said.
I agree with the noble Lord, Lord Bhattacharyya, that manufacturing is vital to our country. It has been a great strength and must continue to be one. We also have established strengths in aerospace and vehicles, and in 2014 exports of finished manufacturing goods rose to a record level of £148 billion. I commend the noble Lord’s work in bringing Tata to the UK and in helping Jaguar Land Rover, which has helped to revitalise our car industry in this country.
The noble Lord is also right that innovation is key to growth. We are a nation of great inventors, we have great universities and a world-respected IP regime and we will be setting forward our ideas in an innovation plan in the coming months.
The UK is the world’s largest exporter of financial services, exporting more than the US, Switzerland and Luxembourg. In 2014, our total financial services, pensions and insurance exports were worth £69 billion. They have grown 7.9% compound over the past decade. We will need to ensure that all those industries are capable of thriving and prospering on the world stage.
It is important to remember that we are a member of the UN Security Council, NATO, the G7, the G20, the OECD, the WTO and our Commonwealth, and our voice will always be prominent in those fora.
Trade of course goes two ways, and the UK has many strengths which make us an attractive place in which to invest and do business. As Minister at the Department for Culture, Media and Sport, I am particularly proud of the global reach of our tourism sector, our creative industries, which are growing at 9%, and the strength and innovation of our digital economy.
My noble friend Lord Selsdon talked about the importance of foreign investment and some past successes. He will be glad to know that investment continues. Even after the referendum result, Singapore’s Centurion this week committed £20 million to fund new student accommodation in Newcastle, Manchester and Bristol, citing the UK’s education sector as strong and resilient.
I remind noble Lords of the benefits of free trade—I speak as an economist. The WTO remains the bedrock of international trading, and I must mention that recent successes have included the Bali ministerial conference in 2013, where the trade facilitation agreement was reached, which will be implemented next year. I record my thanks to my noble friend Lord Green, whose expertise, diplomacy and brilliance was at the heart of that success when he was Trade Minister. The 10th WTO ministerial conference in Nairobi in December last year agreed a good outcome on agriculture—a very difficult area—with WTO members agreeing to remove trade-distorting forms of agriculture export subsidy. Successful free-trade agreements are concluded outside the EU. The Canada-Korea FTA came into effect in January 2015. This will eventually make virtually all their bilateral trade duty-free.
As was said, our new whole-of-government approach to boosting exports was announced by my noble friend Lord Maude of Horsham in January. UKTI is at the heart of this new approach, bringing together all government players and overseeing export performance on behalf of the cross-government exports implementation taskforce, which is led by Sajid Javid, the Business Secretary. This will be doubly important in the circumstances in which we find ourselves, looking strategically but also at the nitty-gritty—sector by sector—both in trade and in discussion with the EU, because both will be so important in where we get to.
UKTI has recently completed a business forecasting exercise to determine priorities for the next five years, pulling together data from teams across different sectors and markets around the world. That identified 191 new export campaigns which we believe can increase exports by up to £70 billion by 2020. UKTI is also working with partners in the UK, such as the chambers of commerce, which my noble friend Lord Green mentioned, and overseas. We are also bringing in business—a point made by the noble Viscount, Lord Waverley—so we have new partnerships. We are working with Barclays and Lloyds banks, for example, who have pledged to help 40,000 businesses to export by 2020, which will help us to reach our target of 100,000 exporting businesses, which now becomes even more important. We are working closely with businesses of all sizes and other stakeholders to ensure that the UK’s trade strategy works for them and that we continue to be a leader in free trade around the world. We recently announced that John Alty, CEO of the IPO, has been appointed to lead a team for stakeholders to liaise with to discuss their immediate priorities.
To conclude, these are challenging times but also rich in opportunity. Our priorities in the months ahead will be to limit uncertainty during the transition, ensure that our new relationship with the EU works for business and keep Britain open to international trade and to the world. International trade and investment have been integral to the history of this country and will be central to our future. Britain is open for business. Our ambition remains to be the best and easiest place to do business and to be an excellent global trading partner.
Baroness Mobarik
My Lords, I thank my noble friend for her comprehensive reply. I also thank all noble Lords who took part in the debate.
I know that there is no time to say much more than that, but I will address one point to the noble Lord, Lord Stoneham. I assure him that this debate was not scheduled in different political times; it was most definitely scheduled after the result of the EU referendum. After the initial shock and dismay at that result, in the words of my noble friend Lord Green we are where we are and we have to move forward. I always like to see the glass as half-full, so this debate was about how we energise ourselves to move forward and take urgent action to scale up our efforts. I thank the House again for allowing this debate.
Brexit: Case for a Second Referendum
(7 years, 12 months ago)
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Baroness King of Bow
To ask Her Majesty’s Government whether they have made an assessment of the case for holding a second referendum on the United Kingdom’s membership of the European Union.
Baroness King of Bow (Lab)
My Lords, let me begin by making one thing very plain. At this point in time, it is the will of the British people to leave the European Union. Therefore, negotiations on Brexit must take place. Once they conclude and the shape and meaning of Brexit become clear, at that point it is only fair and democratic that the British people accept or reject the final deal. The problem is that at the moment we have no idea when the deal will be made—even if it will be made—or what it will include. To borrow a phrase, we know nothing.
David Cameron repeatedly said that if he lost the referendum vote he would trigger Article 50 for Britain to leave the EU. Well, he did not trigger Article 50 but he did trigger a series of events that may well lead to the break-up of the United Kingdom and the impoverishment of its people.
Let us turn to the British people. They voted by a narrow margin to leave the EU, but many British people—possibly the majority; possibly even the majority in this House—were unaware of the far-reaching consequences of the EU referendum. After all, they were asked, “Do you want to leave the EU?”, not, “Do you want to break up the UK?”. This likely outcome was not articulated clearly by either side during the referendum campaign. This brings us back to the central problem. After the dust has settled, in the immediate aftermath of the referendum vote, we do not know what we voted for. We have no idea.
Did we vote to leave the EU but stay in the single market? A lot of people who campaigned and voted for Brexit, including Boris Johnson and Michael Gove, say that was what they were fighting for. Really? Well, we are not going to get that unless we accept free movement of people. That has been made very plain by EU leaders. Although the remain camp accepts free movement of people, many in the leave camp do not; in fact, that was why many of them voted to leave. In many of those forgotten British towns that have been left to struggle on their own—like Don Valley in the north, Ebbsfleet and Thurrock in the south and Ebbw Vale and Gwent in Wales—a lot of people who voted to leave said that they did so because they wanted to restrict free movement of people. They voted for something that will probably never happen, so they have already been deceived. At least let them have the final say when they know what the cost is.
Lord Robathan (Con)
I am very grateful to my noble friend for giving way. Does she not think it may be perceived as being somewhat patronising to suggest that people did not know what they were voting for when they voted in the referendum? Would it not be better for this unelected House to say, “The people have spoken, whether we like it or not”?
Baroness King of Bow
I thank my noble friend for that intervention. He called me his noble friend and I regard him as mine. I will come on specifically to what I think the role of this unelected House is. It is absolutely fair to say that most people did not realise that the EU referendum and the Brexit vote would trigger the chain of events that have happened so far. Our economy is in crisis, major companies are lining up at this moment to leave and jobs are flooding out. People did not realise that there would be those consequences, and the main reason why they did not know is that the architects of the campaign themselves did not know what the final deal would be that they were voting on. It is that point that I am bringing before the House today.
As I was saying, after only two weeks a new opinion poll released yesterday showed massive voter remorse in Wales, precisely because they did not realise what they were voting for. According to this opinion poll—although I agree that we cannot always trust polls— Wales has changed its mind. If there were a second referendum, Wales would now opt to stay in the EU by a margin of 52% to 47%. Notwithstanding that apparent change of heart, it would be entirely illegitimate for Parliament to thwart the will of the British people by voting down Brexit—something that the noble Lord will know has been raised in the other place. It would be entirely illegitimate to do that even if leave’s key claims were untrue—and it transpires now that many of them are.
It is, however, entirely legitimate for Parliament to ask the British people to review their vote, as it has monumental consequences for our country’s future that were not discussed during the referendum campaign itself. Governments are constantly asked to reconsider their legislation, whether by judicial review or legislative amendments in the Commons or the Lords. In the same way that Governments must often vote on their legislation a second time, I do not see why citizens should not do the same. Like Governments, they are quite entitled to vote the same way if they choose, but it should be their choice.
In these extraordinary circumstances, the House of Lords should fulfil its constitutional role, which is to require legislators to pause, reflect and vote again. As the noble Lord pointed out, we have no elected authority; our only role is to scrutinise the decisions of those with democratic authority—in this case, the British people—to bring more facts to their attention and to ask them to review their decision. Do they still believe that it is the right thing to do?
But if there is a second referendum, here is a note of warning to all in the remain camp: it will lose again unless we have a very clear plan to spread economic opportunity beyond affluent groups and affluent areas. We should reflect on one point above all: our current constitutional crisis is built on Britain’s inequality. Losing Britain’s position as the world’s fifth largest economy—incidentally, something that took place within 24 hours of the Brexit vote; we slipped from fifth to sixth—is meaningless to those who do not even have a toehold in our economy. Why should they care? They voted for change. The problem is that the change they voted for can only make the situation worse for those cities and communities that have been abandoned. Making Britain poorer cannot help Britain’s poorest communities. Shamefully, making Britain richer did not help them, either—or not enough. That is why we should thank the leave campaign for illuminating an inescapable truth: if we do not radically change our economy to provide opportunity for all of Britain, not just metropolitan Britain, our country as we know it will cease to exist and our identity as a tolerant, influential, outward-facing people will vanish.
In summary, in terms of what I am asking parliamentarians to do, if they believe that citizens have voted for something that threatens the future prosperity and fundamental integrity of the UK, they must tell them what they routinely tell the British Government: pause, reflect and vote again, once we know what they are being asked to vote on. Today parliamentarians will not play that role, but it does not really matter what they say today—it is what they say once Brexit is negotiated. This is the most important peacetime challenge that Britain has ever faced—certainly the most important in my lifetime—and, incredibly, we do not have a plan. Basically, the remain camp had no plan B and the leave camp had no plan A. Instead, what have we got? Oliver Letwin, the new Brexit Minister—or, as one journalist described him today, “the Wizard of Brexit”. The curtain has been pulled back to reveal—a disappointment. He can say whatever he wants but that will not make it any more believable.
Our economic prospects are fading. Since Brexit, as we know, the pound has crashed to a 30-year low and innumerable large companies are moving their workforces out. The political prospects of sorting this out are ebbing away almost as quickly as the strength of the pound—and in the meantime, hate crime is on the rise. We are turning into a country that we do not recognise. Last week a Member of this House told me that a friend of hers, a white man, was stopped in his car by a group of men. They asked him threateningly, “What language do you speak?”. “English,” he said, “I’m English”. “Well, that’s all right then,” they said, and drove away. As someone who has campaigned around issues of xenophobia for years, I have to ask what this country is coming to when white Englishmen have to put up with racism. Of course we expect black British people to put up with it—it has been like that for ever and a day—but not white Englishmen. Whatever next? The genie is out of the bottle. We need to protect our tolerant society in every way we can.
That is why I brought this debate: to ask if the Government had made an assessment of the case for a second referendum. I know that the Minister will stand up and say, “Yes, we have made an assessment and no, there will be no second referendum”. I simply say that politicians often eat their words: look at David Cameron and Article 50, Nigel Farage saying that migration would be brought down, and Boris Johnson claiming that £350 million more a week would be available for the NHS. Then let us look at ourselves and think about what we say today. I say this: in the interests of democracy, the British people must be given the chance to vote on the deal to leave the EU once we finally know what the deal is and what it costs in terms of our economy, our jobs, our pensions, our future, our global influence, our geographical borders and—last but certainly not least—our precious identity as a tolerant, open, outward-facing nation. I say let the people decide.
The Earl of Caithness (Con)
My Lords, I totally respect the right of the noble Baroness to table this debate. That said, it was a topical question when she tabled it but it is no longer topical. We have just spent two long days debating the subject that she has raised, and I do not think it does the House any good if we repeat much of what was said then. The noble Baroness never mentioned the fact that we had had that two-day debate. My noble friend Lady Anelay made the Government’s position totally clear at about 10 pm last night, and it is at col. 2109 of Hansard. There is nothing that she could add to or subtract from that statement; it is perfectly clear.
Say what one will about the campaign—we can howl about the lack of information, protest at the lies told and bemoan the unprincipled behaviour of some politicians—but there will be no second referendum under this Government. I have been active in both recent referendums. They have both been divisive, destructive and distracting. I do not want to go through a third.
When would it be held? Not now; the noble Baroness has said it would be once we had negotiated our position. We might have a position but the negotiations will take many years. In any case, we have only two years from the service of the Article 50 notice to when we could be unilaterally thrown out of the EU on our ear without any further debate.
I have no doubt that the happy alliance of those in this country who feel most isolated and resentful, together with some of those in the Conservative Party, will not last very long. They have totally different objectives; indeed, the noble Baroness has already told us that that is happening. The only way we can have a second bite at this cherry is to have a political party whose main aim in its manifesto commitment is not to break with the EU, and to test that at a general election.
Lord Lipsey (Lab)
My Lords, on this day in two years’ time, EU exit negotiations are going badly. Growth has stalled; unemployment is soaring. The new “Real Labour Party”, which has an electoral pact with the Lib Dems, leads by 25% in the polls on its sole platform, “Second referendum now”. In that circumstance, what is Parliament to do? I emphasise the word “Parliament” because it barely escapes Ministers’ lips when this subject is under consideration. The Government produced a document in February called The Process of Withdrawing from the European Union, which barely mentions Parliament. Yet at some stage—whether before triggering Article 50, as some people think, or after—Parliament will have to get involved, and surely at some stage, if we wish to exit, we will have to repeal the European Communities Act, and both Houses will vote.
I am not very keen on the European Union. It is a minority view, but I voted no in 1975, rather to the shock of my then boss Tony Crosland, who was a great European, and I reluctantly voted to remain this time, partly because of the economic risks but mainly because the tone of the leave campaign was shocking. However, I am concerned about process and that at a time when we should all be worrying, day and night, about the gap that has emerged between people and politics, we do not act in a way that deepens that gap and makes it more salient. To proceed, irrespective of circumstances, and put into effect a referendum held in 2016 if the circumstances in 2018 are completely different, would be a mistake. If it is clear that the people have changed their mind—and there is nothing wrong with changing your mind—it would strike a deep blow to our remaining democratic legitimacy.
This referendum was partly about sovereignty, which in our country means the sovereignty of Parliament; that is what the leave campaigners said they were trying to restore. That sovereignty still exists, although we have to give great weight to what the people say in any referendum. If opinion in two years’ time remains in favour of leaving, that is fine—we must accept that. But if it shifts, as on balance I expect it to, so that the people are clearly for remain, it is my contention that Parliament would have not merely a right but a duty to put leaving to the test of a second referendum. We should then see whether we are mice or men and women.
Baroness Bowles of Berkhamsted (LD)
My Lords, the way in which the referendum campaign was conducted and covered was shocking. Even the BBC news, which neutralised expertise in the name of balance, was about as useful as an exam where everyone gets 50% because those getting the answer wrong thought it was right and vice versa. It is not the first time this has happened—last time it was about autism and the MMR vaccine.
Nevertheless, a rerun of a close referendum is unlikely to be broadly acceptable to the public without compelling evidence for it. Nor is a rerun for a supermajority; measures such as that need to be contemplated well away from heat or likely use. However, another referendum, later on, about a more focused question is another matter. It might be appropriate after a significant change in circumstances or on the outcome of negotiations with the EU, especially bearing in mind that negotiation strategy cannot all be public.
The last few days of debate have yielded a wealth of reasoning, including that the remain or leave question was broad in scope about a complex matter and was the start of a process that needs parliamentary sovereignty and public assent. Above all, the national interest must come first and cannot be ruled out. However, the fact that there could be a referendum on the outcome should not undermine sincere efforts to identify a genuine mandate and negotiate with the EU. As was also mentioned on previous days of debate, the referendum lock in the 2011 Act is drafted very widely. It covers where an EU treaty confers on an EU institution or body,
“power to impose a requirement or obligation on the United Kingdom”,
and also covers replacing treaties. Such things may well be needed to achieve Brexit, and the logic still applies—a say on being bound.
Finally, it is important that there is the time for a possible referendum or some other ratification. A hard deadline must not rob us of that opportunity. I have seen it all before with the Greek bailouts. Therefore I note that nothing in Article 50 says that extensions are negotiated only at the end—and a ratification extension, or other circumstantial extension, could be pre-agreed as part of the triggering process.
Lord Livermore (Lab)
My Lords, I believe passionately in Britain’s membership of the European Union and that leaving would have disastrous consequences for our country—for the union with Scotland, our economy, and our place in the world. Great Britain now faces the very real prospect of becoming little England: poorer and inward-looking, divided and diminished.
However, we cannot pretend that a verdict has not been delivered by the British people in the referendum, and Parliament—particularly this House—must acknowledge a mandate, based on the promises of the leave campaign, for an end to free movement of labour and an end to our financial contribution. But neither can we pretend that this mandate is in any way compatible with the economic well-being of the nation, and Parliament would be failing in its democratic duty if we failed to acknowledge that fact.
The uncertainty created simply by the result of the referendum is already feeding through to the real economy. The Economist Intelligence Unit estimates that investment will decline by 8% by 2017, our debt burden will reach 100% of GDP by 2018, and our GDP will be 6% lower by 2020. Both the politics and the economics are clear but irreconcilable, and we are heading for a moment of decision when a choice has to be made between them.
Rather than confront that choice, a delusion has taken hold in both main parties—and, most importantly, among the candidates vying to become Prime Minister—that our economy can be protected within the single market while at the same time ending free movement and budget contributions. The presidents of the European Parliament, the Commission, the Council, as well as the leaders of Germany, France, and all member states, have said unanimously that there can be no access for the UK to the single market on these terms. After all, why would they give the UK a better deal than they themselves enjoy?
Therefore we face a terrible choice, but one for which the British public have in no way been prepared. Do we honour the political mandate and create an economic crisis, or do we honour our duty to protect the economic well-being of our country and create a political crisis? If the promises made on immigration turn out to be undeliverable, the backlash will be catastrophic for our democracy. Yet how can a democratic Government knowingly and deliberately pursue a policy of leaving the single market when it would cause such economic self-harm to our nation?
Ideological zealots on both the extreme left and right in British politics will make the decision more difficult still for anyone who genuinely seeks to wrestle with this choice. However, decisions of this magnitude cannot be taken by Parliament alone. They require greater democratic legitimacy. The British people must be involved in helping to resolve this choice.
Lord Norton of Louth (Con)
My Lords, I follow the noble Baroness, Lady Bowles, in essentially making a distinction between an argument for a later referendum based on whatever is negotiated under Article 50 and an argument for a rerun of what happened on 23 June. The noble Baroness, Lady King of Bow, said that she was making the case for a later referendum based on the negotiations that took place, but all the arguments that she advanced were for a rerun of the referendum on 23 June. They were based on why the electors got it wrong. That is an extremely dangerous path to pursue. It would convey the impression that the political class was not prepared to accept what the electors had decided. That would undermine trust in the political process when that trust is already fragile.
We cannot second-guess the electors. They voted. We might not like how they voted but there was a result. We asked the electors to make a decision on whether we should remain in or leave the European Union. They made the decision—perhaps by a small majority but it was a decision. In the past two days we have heard various people arguing, “But it was only advisory and there was a small majority. We should have had some sort of threshold or there should have been a much larger majority”.
To say that the referendum was advisory is misleading. We did not say to the electors, “Please tell us what you think and then we’ll decide whether to accept what you’ve said”. It was non-binding but that is a very different matter. There is no statutory obligation on Ministers to trigger Article 50 but there most certainly is a compelling political argument for doing so. The Government are bound by that political dimension. Yesterday I quoted Dicey, who distinguished between parliamentary and political sovereignty. The latter matters.
As for whether we should have applied some rules, we did not. At Second Reading of the European Union Referendum Bill, I raised the question of a threshold but there was clearly no desire to pursue it, so we put it to the people. It was a simple choice based on a majority. We cannot rerun it; we cannot apply rules that were not in place at the time. Therefore, I think that for the moment we have to accept the decision of the people and proceed on that basis. There may be a case for a later referendum based on negotiations—
Baroness King of Bow
I agree with the noble Lord. We accept the rule of the people, we see where it takes us and then we give them the democratic right to decide whether they want that or not.
Lord Norton of Louth
That is the line I am pursuing. My point is that we go forward on the basis of what has been decided. There may be a later case for putting the negotiations to the people, but we do so on the basis of that case, not on the basis that they got the decision wrong on 23 June—on which the noble Baroness’s argument was essentially based. We have to accept the decision and move on. There may be a later argument about referendums but it is not one to have now.
Lord Hoyle (Lab)
I have to say to my noble friend—and we are very good friends—that I wonder where she was when the referendum was being discussed. The dangers were outlined; it was doom and gloom all the time. People were warned about the dire consequences of voting to leave, so that was certainly put to the people. We must never underestimate the people once they have spoken, even though we may not like it. I have not liked many of the decisions that they have made. The noble Lord, Lord Robathan, is laughing but he knows that from our exchanges in the past. We must accept and go along with what the people say. There may be a case for a later discussion, but we cannot now say that we must have another referendum.
It is argued that the decision was made by only a small majority, but if the decision had gone the other way, would that have been accepted? As has been said, all the arguments put forward were about the present position. If you had another referendum now and did not get the result you wanted, would you want another one?
We have just had a very lengthy debate on Europe and our position in it. I do not want to go over what was said but we are certainly a very important market for the EU. It has a £58.8 billion trade surplus with us. The German car industry exports 20% of its cars here. I will not mention the French wine industry, although I enjoy a glass of its wine. I repeat: our market is very important to the EU.
We have to recognise that the people have spoken. We are in a democracy, so let us get on with it. I agree with those who have said that the negotiations should begin immediately. We cannot wait for two years and the EU does not want that either. It is saying, “You have spoken. Let’s start the discussions and the sooner the better”. Certainly, we must not underestimate the British people or democracy. I want to say here and now that they made their views very clear.
Lord Brown of Eaton-under-Heywood (CB)
My Lords, I agree with much that was said by the noble Baroness, Lady King, in opening the debate and, more particularly, with everything that was said by the noble Lord, Lord Norton. I of course recognise that the majority vote must be given immediate effect, although I, too, hope that further down the line there may be an opportunity to reverse the process if we find that the price at which we can leave is simply appalling.
I want to use my three minutes to express the fervent hope that we never again get ourselves into the position that we are in now. We have held a referendum requiring a decision by a simple majority on a question of the most profound importance, supposedly offering a simple binary choice. Parliament having, by a large majority in both Houses, commissioned the referendum, realistically it is now bound, in the interests of the public continuing to trust us at all, to accept the result and embark on the process of leaving.
I ask noble Lords to contrast the position under the European Union Act 2011, which essentially provides that, in the event of any proposed significant change in EU competencies or treaty law, no such change is permissible without both majority approval in a referendum vote and—this I stress—approval by Act of Parliament. How much better if that had been the basis of this particular sounding of public opinion?
Referendums generally, I suggest, are to be discouraged. In a compelling article, which is imminently to be published in Prospect magazine, Anatole Kaletsky explains why that is so. Margaret Thatcher, he records, called them,
“a device for dictators and demagogues”.
Their very character, said one of the draftsmen of the original United States constitution, was tyrannous. The so-called “will of the people” is often, the author suggests,
“inconsistent or ill-informed and sometimes dangerously repressive”.
Minority interests are simply ignored or overridden. Small wonder that, for example, in Germany’s post-war constitution referendums were deliberately excluded. Representative democracy should not be compromised. In short, we must never again allow ourselves to get into this intolerable position.
Lord Balfe (Con)
My Lords, perhaps I may take up a point made by the noble and learned Lord, Lord Brown. The reason it was put into the German constitution was that Prime Minister Attlee pointed out that referenda were the tools of Hitler and Mussolini. That constitution was drawn up during the Labour Government of 1945.
Before the referendum, the question was quite simple. It was: what might happen? The people decided that they would find out. That is what they voted for—to find out what might happen if we left the European Union: if we triggered Article 50 and negotiated. For well over 30 years, I have had an Irish passport. One tradition of Ireland is that if people give you the wrong result, you go back and ask them again. On this occasion, I do not think that we can quite do that, but when the negotiations are over, probably in 2019—we have not even started them yet—the question will change. Then, it will be: what will happen if we accept these terms and withdraw? There will be a number of different scenarios.
First, immigration and our membership of the EU are not quite as closely linked as we think. More than half the people who come into Britain do so on visas issued by British embassies around the world. We will find it increasingly difficult in a shrinking world to control migration—that is a prediction—and it will not be seen as an EU matter. As discussions continue, we will find a whole range of problems. I do not think that we will be united in this House or in the political fora on how we face them or on what is acceptable. It is also possible that at the end of the negotiations the Government will say, “Well, we’re sorry, we can’t recommend this package to you. We have not been able to get a package that is acceptable for us to say that it is sensible to leave”. So we should not deny that all sorts of scenarios are possible.
I say to my friends sitting opposite—and a number of them are friends—that if they could manage to find themselves a decent leader, I could well see the Labour Party campaigning at the next election to scrap the renegotiation on the grounds that it is just driving into the sand. The Liberal party, which has a long and historic record of support for Europe, might well go to the public at the next election and say, “Actually, we think you got it wrong”. So we may have another referendum, but it may be called a general election and the parties may be on different sides.
Lord Grocott (Lab)
My Lords, it may have been some time since the noble Lord, Lord Balfe, was canvassing and campaigning among Labour voters in the Midlands and the north if he thinks that, in 18 months or so, where they voted widely 2:1 to leave, they will want to go along with such a manifesto as he has described. But I do not want to spend time referring to what has been said before.
It should be the simplest of propositions; it should be the simplest of speeches. Parliament decided that the public should make the decision in a referendum. The public have given us that response. Our duty is to respect that and to implement it—end of discussion from where I am standing.
I know that that causes pain and distress to a lot of people who are on the other side of the argument—it would have done whatever had happened. Perhaps I can offer one piece of expertise to the House, which is that I am something of an expert on losing elections. I know what noble Lords are feeling. Having fought eight general elections—won four and lost four—I know that the feelings that you go through are almost exactly the same. When you lose, your opponent lied; your opponent made promises that he could not possibly keep; probably your opponent had more money than you did; and certainly the press were on your opponent’s side. On the four occasions when I won, I am happy to say that it was a triumph of British democracy.
These responses to losing and winning are unfortunately the case with referendums as well. We have had three in the past five years, all of which were said at the time to be defining referendums. The first was on AV versus first past the post, where the latter was supported by a two-thirds majority. Within a year, a substantial number of people, including many in my own party, said, “Oh well, forget about that referendum result. We’ve got to get on with PR as quickly as possible”. On the Scottish referendum, within weeks of Scottish National Party leaders saying, “This is a once-in-a-generation opportunity”, they were saying, “Oh, perhaps we ought to have another referendum soon”. However, I must say to my noble friend Lady King, whom I am very fond of and have known for a long time, that she really has beaten the world record. It is 10 days since we made a decision and now we’re saying, “Well, no, we ought to look at this one again”. We know what she is saying and I respect it: she wants a second referendum to reverse the decision of the first. That is what it is about. If I am misrepresenting anyone, please could they explain that to me now.
Lord Grocott
Honestly, I have only three minutes; it is ever so difficult.
I sat through the whole Committee stage of the referendum Bill. The referendum was supported by the Conservative Front Bench, by the Liberal Democrat Front Bench, by my Front Bench, by the Green Party, by the Scottish National Party and by the Welsh national party—all parties supported the referendum. I never heard anyone say, “This is only the first of two referendums”; I never heard anyone say, “Oh, this is just an advisory referendum. You don’t have to take much notice of it. It’s useful advice, but let’s leave it at that”. The unanimous view of this House—no one voted against—was that the public should decide in a referendum.
I simply say to this House, of which I am very fond, that this is essentially an advisory House; the public are not an advisory public. The public have made their decision. I say to my friends in this House—I would say it to my friends at the other end, among whom I see no appetite whatever for another referendum—that it really is not our job to thwart the will of the British people.
Lord Low of Dalston (CB)
My Lords, I am sorry that I failed to get my name down on the list, but I am grateful for the opportunity to speak briefly in the gap. The noble Earl, Lord Caithness, pointed out that the noble Baroness, Lady Anelay, had made it crystal clear in the debate last night that the Government were against a second referendum and that the matter was closed. I want to drive home the point made most forcefully by the noble Lord, Lord Norton of Louth: that the second referendum being spoken about now would not be a re-run of the referendum on 23 June—in fact, it should not really be called a second referendum at all—but that we are talking about an opportunity for the people to have their say on the terms of withdrawal once they have been negotiated. I do not say that there should be a commitment to holding such a consultation here and now; I just say, as I did in the debate last night, that we should remain open to the possibility of holding such a consultation once the terms have been negotiated.
Lord Robathan
My Lords, I apologise for not having put down my name; I did not realise that the debate was taking place. I am not a fan of referendums—I really am not; I believe in parliamentary democracy—but we had one, as has just been pointed out. Dear God, was one not enough? Do we really want another one? I cannot believe that people would want another one. I am distressed that we are losing as a consequence the very rare talents of our Prime Minister, but that was his decision, not mine.
Let me focus on this House. This House revealed during the referendum campaign that, frankly, it was quite out of touch with public opinion, with the people whom we are here to serve—our people. I always thought that we would leave, because I talked to people and listened to them. We as a House should perhaps have listened rather more to what the people were saying. We have become out of touch and it is important for our legitimacy that we become a little more in touch with the people, because this is a unique, unelected and—dare I say?—somewhat strange legislative assembly.
The British people were not deluded; they knew what they were doing; they voted to leave. We may disagree with it—many people do; I do not—but they voted to leave. We should not scorn their decision; we should not deride the reasons they did it for; we should accept what they said and get on with being a democracy in this county. When one disagrees, it is of course a bit painful—I thought that the noble Lord, Lord Grocott, was absolutely right; luckily, I won all the general elections that I stood in—but, nevertheless, please let us just accept the result.
Baroness Smith of Newnham (LD)
My Lords, as the noble Lord, Lord Norton, suggested, there is a distinction between a second referendum, which, as I made clear last night, the Liberal Democrats do not support, and a referendum on the results of a renegotiation or whatever the withdrawal agreement would be. While I made it clear last night that we absolutely respect the outcome of this referendum and are not patronising anybody, I was perhaps not sufficiently clear that if we trigger Article 50 and there is a package, the Liberal Democrats would support a referendum on the outcome of those negotiations. There is a distinction between those two things—no support for a second referendum to unpick the democratic decision, but an acceptance that there is a real question about what people voted for. It is all very well to say that they voted to leave. That was clear. But there was no agreement before 23 June and there is still no agreement among those who advocated leave about what sort of relationship the United Kingdom should have with the European Union once we have left. There is a real gap.
We had no plan B from the Government. The Government have not said, “This is what we propose to negotiate” and I note that the noble Baroness, Lady Anelay, will not be able to say, “This will be the package”, because clearly we are waiting for a new Prime Minister and a new Government. There is no clear sense of where we go or what we negotiate. No one standing for the Conservative Party leadership was leading the avant-garde for leaving the single market. There are real questions about what leave means and who has a mandate.
A general election would be the way to give a fresh mandate and the Liberal Democrats will campaign to say that the United Kingdom is better off in the European Union. That is not to say that the voters got it wrong but, if there is another general election in the near term, we would absolutely say that we are better off not leaving the European Union. We would also say that it is vital that we enfranchise those who have most to lose—namely, 16 and 17 year-olds. That carried weight in your Lordships’ House during the passage of the then EU referendum Bill and we would push for it again.
Finally, the noble Baroness, Lady Anelay, reminded us yesterday that the Prime Minister had said that this was a once-in-a-generation decision and that there would be no further referendum. But what happened to the European Union Act 2011? Will the Minister tell us whether that would be invoked at the end of the Article 50 negotiations?
Lord Collins of Highbury (Lab)
My Lords, I must say to my noble friend Lord Grocott that, every time I have had the opportunity to vote in a referendum, I have been on the losing side, so there we go. That is how effective they are.
We have spent the past two days in this House debating the referendum outcome and we have sought to better understand what happens next. There is no doubt, as I said last night, that the referendum process has polarised politics in our country, with complex issues appearing to be resolved by one simple answer. Whatever our thoughts on people’s reasons for deciding the way they did, what is not in doubt is the final outcome, which must be honoured—although, as I said last night, if many people had heard the reasons for Brexit given by the noble Lord, Lord Lawson, they might have changed their minds, because they would have understood that it meant a return to the 1980s to finish the work of Margaret Thatcher.
My trade union upbringing taught me never to ask a question unless you know the answer. I suspect that, for most of us, today’s question falls into that category. Even my noble friends suggest that perhaps today is not the time for this debate. But as the noble Lord, Lord Butler, said yesterday, the answer given by the people is not straightforward. Of the two options on the ballot paper, one set out clear terms for remain—the agreement negotiated by the Prime Minister—but the leave alternative offered a whole range of different futures, depending on the outcome of uncertain negotiations. I agree with him that we must go into the negotiations in absolute good faith, determined to get the best result for the British people. To do anything else or suggest anything else would totally undermine the political process.
However, I also want to repeat what the noble Lord, Lord Lisvane, said at the end of his contribution. At the end of the formal negotiations, there will be an exit package. It may be good, it may be acceptable, it may even be disastrous, but it will surely require further authorisation—whether popular, parliamentary or more probably both. But today is not the day for that debate.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, after what the Prime Minister described as one of the biggest democratic exercises in history, it is fitting that we have the opportunity to discuss questions arising out of the decision by the voters that the UK should leave the European Union. This is one of multiple opportunities. We have had two full days of debate, starting on Tuesday morning at 11.30, and there are some hardy individuals around the House today who took part not only in that but in today’s debate and sounded as fresh today as—if not fresher than—they did in the first debate. I have enjoyed every single word they said; even if I did not agree with half of it, I have certainly enjoyed it. It is the kind of debate that does this House proud. It is a good one.
Of course, I know that the result was not what many of us wanted or hoped and campaigned for. I am reminded by the noble Lord, Lord Grocott, about how one can be on the losing side. This is not the first referendum that I have had the opportunity to vote in, and I was on the losing side, but I am not using that as an argument to have another referendum and keep on trying. I will argue just the reverse.
The result was clear. By a margin of more than 1 million votes, 52% of those who cast their votes voted for the UK to leave the European Union. We can quote all the opinion polls we like, but the only one that counts is the ballot box, and it does count. It is an advisory matter—in law it is advisory—and the Prime Minister made that clear. But he also made clear his word that, if the British public, the Gibraltarians and all those who were qualified to vote said out, it would be out. Therefore, on the substantive text of the noble Baroness’s Motion, I would say that there will be no second referendum. However, I realise that what she has done is to extrapolate from that and say: “What I really want to do is to say: let us look at what happens next. What is the role of Parliament and what happens when we have a negotiated agreement? Should there be a referendum on that outcome?”. I will look at that relatively briefly, as this is a time-limited debate.
I was astonished to hear the noble Lord, Lord Lipsey, say that he hardly heard Parliament mentioned. “Gosh! Brass neck”, my mother-in-law might have said. If he had been here throughout the debates, he would have heard me and others mention the role of Parliament. It is crucial in this matter—utterly crucial, as I made clear last night. The Prime Minister said that Parliament will have a role, but it is also important that this House fleshes out what we see that role to be. Already, the Leader of the House has spoken to the chair of the European Select Committee to work out how we can best engage with this House. The chair of the European Select Committee has already had meetings with Oliver Letwin, who heads up the unit in Whitehall to provide information to the next Government about how we might go forward, and the noble Lord, Lord Boswell, has also spoken to David Lidington, the Minister for Europe. It is all in train, because Parliament is key to what happens next.
It is the case that there are different views about how Article 50 can be triggered. As I made clear last night, in law the Government alone can trigger the Article 50 process under their inherent prerogative power to conduct foreign affairs, which includes the power to withdraw from a treaty or international organisations. But there is a political decision to make and the Prime Minister said that we now have to look at all the detailed arrangements, and Parliament will clearly have a role in making sure that we find the best way forward. I realise that Parliament will have a variety of views, but I undertake to listen to the views of Parliament. That is provided that I am in this job, given that—who knows?—lots of things change over the summer, but I imagine that whoever is in my position will continue with that undertaking. We have already had debates responded to not just by Foreign Office Ministers but others who have given that same undertaking.
Lord Lipsey
My Lords, I am most grateful to the Minister. Will she now give a commitment that there will be no withdrawal from Europe without both Houses voting for the repeal of the European Communities Act?
Baroness Anelay of St Johns
My Lords, the noble Lord is taking me neatly into the next part of my remarks.
Perhaps I may first dispose of this issue. There is an argument that leaving could be achieved by an Order in Council, whereas others say that we need to repeal the European Communities Act. Last night, I pointed out that repealing the European Communities Act is the end of the process—it is not the beginning—because the only lawful route to leaving the European Union is through the procedures laid down in Article 50. That is absolutely clear. The report published in May by the European Union Select Committee of this House made it clear that that is the only lawful route; otherwise, if we were to go straight ahead and repeal the European Communities Act, we would be in breach not only of EU law but of international law. This proud country does not breach international law; that is not our plan. There is a process that one needs to go through, but it naturally will involve seeking advice from Parliament. What that will be is now a matter for Parliament to advise on, and getting that advice has been part of the process over the past two days.
We had some tremendous contributions to the debates. For example, my noble friend Lord Lawson suggested with regard to the European Communities Act that there could be an early introduction of its repeal but with the equivalent of a sunrise clause within it so that implementation of the repeal could be delayed. There are lots of ideas that can be brought forward on these matters.
I turn to a matter raised by the noble Baroness which is different from the text of her Question on the Order Paper. She feels passionately that, after a negotiation and once we have reached a position where the Government feel that they have achieved an outcome that is in Britain’s interest, at that stage we should put that decision before the public. Other noble Lords have pointed out some of the holes in that argument. This last referendum put before the public, for the remain side, the negotiated outcome, and yet we are now being told by the noble Baroness, or certainly by others, that people did not know what they were voting for. We are now being told, “Let us bring forward a full negotiated package and we will then put that package before the public”. My concern is that, if the public say that they do not agree with that, there would be an attempt to rerun and rerun. There is a core issue here that we have to be really worried about, which is that as politicians we must re-engage with the public. They have shown that they distrust the political elite. We will increase that disgust if we keep saying to people, “Keep on voting until you do what we want”. That is not the way we operate. I know that it is not what the noble Baroness wants, but I think that that is the implication behind her argument.
Baroness Anelay of St Johns
Perhaps I may continue, because the debate is time limited. Some of the previous speeches overran, although not by much—noble Lords have been terrific in how they coped with that.
Perhaps I may put another point. Let us say that we reached a position where, at the conclusion of a negotiation, the Government of the day decided that they did want to put the agreed package before the public in a referendum. Let us say that, at that stage, Parliament agreed to such a referendum—there has to be an Act of Parliament for that, with all the conditions that apply, and we know of the resistance to referendums and whether they should be used for the precise purposes that the noble Baroness has outlined. However, let us say that there is then a referendum. Would it be a binary choice? We need to think about that further after this Question for Short Debate, because the noble Baroness has raised some interesting issues. Is it really binary? What if the public say, “No, we don’t want that, but we don’t want to stay in”, because at the time when the choice was put to the public we would still be a full operating member of the European Union, which we are this minute, this day and this year. Or is there a third option, which is, “Go back and try again”?
Baroness Anelay of St Johns
Perhaps I may finish what I am saying. We must remember that we are reliant on the fact that it is the 27 other members of the European Union who will decide, first, whether the agreement is one that they can agree to, and secondly, how long it may take. Asking to negotiate first for an extended period beyond two years is an interesting idea. It is novel and I am not against the novel, but I like my novels to have some element of reality in them as well. We cannot predict what the result would be.
I have two minutes left, so I shall give way to the noble Baroness.
Baroness King of Bow
I completely agree with the noble Baroness and others who have said that we must not treat the British people in a condescending way. They can make up their own minds—absolutely they can. But you cannot say that on the one hand and then say, “Ah, but what happens in two years’ time? It might be too complicated for them”. I am saying this: do not curtail democracy; enhance democracy; let the British people decide when they know the decision that they are actually taking.
Baroness Anelay of St Johns
My Lords, when the British public know what the deal is, the question will be this: what will be on the paper offering the options? I am trying to point out the unreality of the proposal being put forward by the noble Baroness, given that the other 27 member states would look on in astonishment at this pick ’n’ mix option that she is proposing.
But overall what I would say is that, while democracy can give us a kick in the teeth, my goodness it is better than any alternative of governance that I know, and I am proud of the role that this House plays in it.
Agriculture and Horticulture
Lord De Mauley
That this House takes note of the current and future roles agriculture and horticulture play in Britain’s rural economy and the role that advances in agricultural science can play in the further development of that sector.
Lord De Mauley (Con)
My Lords, before I start I should refer to my interests as set out in the register, including that I am a farmer and a beneficiary of the CAP schemes.
The track record of British farming is one of resilience. During the five years following the recession of 2008, while the UK economy as a whole recovered to a size similar to that before the global banking crisis, the contribution of farmers to the economy grew by around 45% to almost £10 billion. Our farmers grow the raw ingredients for the food sector, which collectively is worth more than £100 billion. The farming and food sectors together provide nearly 4 million jobs. Food and drink is now our country’s fourth-largest exporting sector and is worth more than £12 billion. Farming offers huge potential to the rural economy as a whole.
Today, British farmers produce around 62% of our food, which is good but—some would say—not enough. Many increasingly employ innovative technology to produce food for today and to prepare for the future. Our farmers work to enhance the countryside and protect the environment, to maintain habitats for native plants and animals, to maintain footpaths, to protect watercourses and to support wildlife. Productive farming depends on healthy soils and clean water, so it is in farmers’ interests to prioritise their protection. Through the voluntary Campaign for the Farmed Environment farmers have created thousands of hectares of wildflower habitat and are continuing to plant more. As energy prices rise and climate concerns increase, farmers are finding innovative ways to produce renewable energy on farms.
But all of this has to be seen against a background of volatility in farm business incomes, which sometimes vary by up to 30% between years because of factors such as commodity prices, currencies and weather conditions—and the structures of some of our markets do not help, either. So it was welcome when the Chancellor announced in last year’s Budget that farming incomes could be averaged over five years for tax purposes. High on the list of those bearing the brunt of the problem are dairy and other stock farmers, many of whom continue to suffer devastating losses. I would be interested in an update from my noble friend the Minister on the initiatives that are in place to assist them.
I turn to horticulture, which for food represents around 12% of total agricultural output, so it is an important component. In addition, there is a sizeable and important market in ornamentals. Field vegetables and non-edibles in particular have shown recent growth, although vegetables have declined over the longer term so that until recently—my figures may be slightly out of date—we are in value terms around 38% self-sufficient in vegetables, while the figure is only 16% for fruit because of our appetite for tropical fruits, and around 49% in ornamentals.
It is important that we now see growth in that area, and my noble friend might care to comment on new ways to encourage that. While global demand for food is forecast to increase steadily over the next 20 to 30 years, it will not be all plain sailing, especially as prices are likely to continue to be volatile. If farming is to be profitable in future, whatever else contributes to that profitability, yields will need to increase.
The United Kingdom is home to some of the world’s finest agricultural research, and this must hold one of the keys to improving the position of our farmers. I have been fortunate to visit many of our wonderful institutions: from Rothamsted to John Innes, Fera to Roslin, East Malling to NIAB, the RAU to Harper Adams, to name but a few. Drawing on exciting breakthroughs in plant and animal breeding, remote sensing, meteorological prediction and the exploitation of data, Britain’s most progressive farmers are leading the way. Our world-class food and drink manufacturing and retail sectors are highly competitive, supplying consumers both here and abroad.
In the agritech strategy, in which I was fortunate to play a role, we considered how we could meet the challenge of feeding a growing population without damaging our natural environment. Our vision was of a United Kingdom with once again a world-leading role in the race for better, more efficient and more sustainable agricultural production. Central to this was rebuilding the connection between basic research and applied science. We secured £160 million from the Treasury through the agritech strategy to accelerate innovation by UK food and farming businesses and to boost UK growth through the emerging global markets. This, importantly, included addressing skills, essential to help us to develop ideas from the laboratory to the farm, as well as to develop our capabilities on-farm.
We also identified that British science and technology has a vital role to play in efforts to improve food security in developing countries. Part of the £160 million was to go towards the establishment of a small number of centres of scientific excellence. I understand that these now include an agrimetrics centre, based at the Harpenden site of Rothamsted Research, a centre for crop health and protection and a centre for innovation excellence in livestock, both to be headquartered just outside York at the National Agri-Food Innovation Campus in Sand Hutton, and an Agricultural Engineering Precision Innovation Centre that will have hubs at Edinburgh at Harper Adams University and at Cranfield University.
The other substantial proportion of the £160 million agritech money was to be invested through a catalyst in projects dealing with subjects ranging widely from, for example, resistance to rhynchosporium, to improving apple storage, to localised delivery of environmentally benign pesticides, to feed conversion efficiency in beef cattle, to chicken welfare, to the sustainable intensification of agriculture in the Horn of Africa, and much more. Perhaps my noble friend could update us on the agritech strategy.
There is more, of course, to the rural economy than farming, but farming is integral to it. Of all the technologies that will benefit rural industries, superfast broadband is one of the most tangible, so I am pleased to see the prospect of some real progress in my home area, despite some well-publicised disappointments. I would welcome an assessment of progress nationwide.
Before I finish, I cannot avoid the elephant in the room: the effect on all of this that Brexit will have. I do not know whether others noticed, as I did with some surprise, the high proportion of farmers during the campaign who, despite their, in many cases, heavy reliance on subsidies through the CAP, said that they planned to vote leave. The reasons given ranged from arbitrary and disproportionate fines being levied for relatively minor administrative errors in cross- compliance and grant claims, to confusing and sometimes contradictory regulations, for example on nitrates, to the categorical refusal of the European Union to accept imports of British beef without any scientific basis, to frustration at political decisions by the Commission which, for example, led to the sacking of the excellent chief scientific adviser because she gave advice that the commissioner did not like.
Others cited the position that the Commission took over the negotiation of a new CAP, for example insisting on a flawed three-crop rule and making mapping unnecessarily complicated. These are the reasons a surprising number of farmers gave me for voting leave. Brexit will have far-reaching consequences and I worry that, despite what many told me, it will not make farming, or indeed horticulture, which relies on labour from overseas, a great deal easier. I will finish by tempting my noble friend to gaze into his crystal ball and give us his thoughts on how the future might pan out for British farmers and horticulturists, and indeed for agricultural science. I beg to move.
Lord Clark of Windermere (Lab)
My Lords, I thank the noble Lord, Lord De Mauley, and congratulate him on initiating this debate, which is particularly timely in view of the Brexit decision 10 days ago, to which he alluded.
When I speak in the Chamber on rural issues, I am always conscious that I see things from a slightly different perspective from many colleagues on either side of the House. I am not a landowner but I was born in the countryside, grew up there and live in the countryside today. I will defend with them the critical role of the agricultural community, in particular, to survive and prosper in this country. I am grateful for this debate.
I am also conscious, however, that the previous census, in 2011, showed that more than one in five still live in rural areas. Having said that, we are a heavily urban-based society. Clearly, because of that, most of our citizens are influenced by the environment in which they live. It is incumbent on those of us who think we understand the countryside to try to explain to them the difficulties, the potential and the opportunities for those of us who live in the countryside, so I am doubly grateful for the opportunity to take part in this debate.
Having said that, things are changing in agriculture, and have changed in my lifetime beyond what I could comprehend. Science and technology will have to be harnessed even more in the years ahead if we are to sustain a role for agriculture, and we do need to sustain it in our rural areas. Broadband, as the noble Lord indicated, has not been universally successful in many rural areas. In some it works; in others it does not. It causes a problem for modern businesses operating in rural areas.
Perhaps I can emphasise that by giving one example of the impact of technology. I shall talk about forestry because I started my working life as a forestry worker and then had the dream job to which I aspired, as chair of the Forestry Commission. When I retired in 2009 after eight years, it was decided that I would cut down one of the trees that I had planted 50-odd years previously. That was significant in many ways for showing forestry as providing a living crop that had its life and had then to be harvested. I did it in a way that I would never have dreamed of doing it. I was sitting in a state-of-the-art machine which cost hundreds of thousands of pounds, and which was guided by a computer. Within five minutes, I had chopped down the tree, stripped it of its branches and we had cut it up into lengths to be sent off to the factory.
I contrasted that with the position 50 years previously when I planted the tree. Then, it would have taken two of us a whole day to do that job. We would have had to cut down the tree with a crosscut saw—this was in the days before even the chainsaw, which was a remarkable piece of technology that has had such an effect on the lives of everyone in the countryside: farmers, foresters, horticulturists and everyone. Then we would have to strip the branches, then cut it up and then get it ready for loading on to the tractor to go. That just showed how productivity can be so enhanced beyond our wildest dreams by modern technology. I use that as an example.
What is true in forestry is true in agriculture. It is laughable now to think of people milking cows by hand. Cows virtually milk themselves these days. Having said that, as the noble Lord indicated, life is still hard for those of us who work in agriculture and rural areas. He mentioned farmers with livestock. That is doubly difficult. I think of the upland farmers with sheep. Of course, technology has revolutionised that in a very basic way in that the farmers now have quad bikes to go up into the hills. Nevertheless, they still need the old and trusted Border collies—the cleverest of all dogs. Without those dogs, they could not do the job. I do not foresee it, but perhaps one day we may have a machine that does that. It will have to be pretty good to run 100 miles a day to bring in the sheep from the hills. That emphasises how hard life is for farmers, particularly with livestock.
We face a big challenge at the moment. The noble Lord mentioned Brexit. I remember the referendum of 40 years ago. The issue then was so much to do with agriculture: the sugar from Australia and the West Indies, and the lamb from New Zealand and the Commonwealth countries. Agriculture and farming dominated that debate in many ways. I know that the NFU took a position officially to endorse remain but, according to the opinion polls, about 50% of farmers voted to leave. The CAP, with all its shortcomings, had pluses. We are now going back to the annual agricultural review. I recall all the hardship and anguish that the annual review caused, not only to we politicians but especially to the farmers. There were those months of uncertainty and bargaining. It was not a very successful means. We will have to reinvent our own agricultural support system. Each of the constituent Governments in the UK will need their own system.
I also agree very much with what the noble Lord said about food production. I am a great environmentalist but I have always accepted that at the end of the day we need to produce as much food as we possibly can. It is silly to try and produce food that we cannot grow efficiently, but with science and technology there are things we can grow now that possibly would have been very difficult 40 or 50 years ago. I was interested to see this week that our own Select Committee on Science and Technology was looking at driverless vehicles. One aspect it looked at was how that could revolutionise agriculture and farming. I am moving away from the stock farmer to the arable farmer. Clearly, with modern technology and driverless vehicles you can spray crops—and the machine will pick out which is a weed to spray and which is the crop. With investment and experiment, that could revolutionise the way we do our arable production.
We then have the challenges of climate change. I looked at the Veterinary Record this week, which discussed how even in a cold climate between January and April there were 14 investigations into exotic diseases, many of them—such as blue tooth—affected by and coming into our country because of changes in climate. Those are other challenges we must take on board when trying to get the right balance of support. There needs to be support for the agricultural industry.
While agriculture is critical and provides the backbone of many of our rural communities, in terms of jobs so much depends on the tourist industry. I speak here as chair of the Lake District National Park Partnership, which oversees the work of the national park. We have in it all the major players from the community—obviously, the tourist industry and the environmental groups but also the NFU and representatives of the Country Land and Business Association—so that we can get a balanced view of how we move forward and make sure that we get the right discussions. Currently, we have a bid for a World Heritage Site with UNESCO which could be decided next year. I make this very last point: people come to the Lake District National Park, and visit England, in such numbers because of the landscape there. That landscape—the hills, fields, fences and stone walls—is built and maintained by farmers. That is why we must support our farming industry.
Lord Jopling (Con)
My Lords, it is a real pleasure to follow my old friend the noble Lord, Lord Clark. He may not be a friend in the political sense but he was born, bred and lives in the depths of my old constituency. Indeed, he once wrote a book about the Labour Party in that constituency in which he referred to me as “wily”. I am sure he did that as a friend but I was really rather flattered to be described in those terms.
Like him, I must begin by congratulating my noble friend Lord De Mauley on instigating this debate, which is extremely timely. I have seldom participated in debates in this building on agriculture. I think I am right that this is only about the third time I have participated since, 29 years ago, I ceased to be Minister for Agriculture. However, this is a good time to come back to the topic. Of course, I must begin—like my noble friend—by declaring an interest as a farmer and being in receipt of funds from the common agricultural policy.
Like others, I must concentrate my remarks this afternoon on Brexit. I was very surprised that so many farmers supported Brexit. My noble friend Lord De Mauley referred to a whole lot of the nonsenses that have emanated from Brussels. Nobody is more aware of those than I because I had to put up with some of them in my time. However, I am old enough to remember the days of the annual price review—to which the noble Lord, Lord Clark, referred—and of guaranteed prices and deficiency payments. It was a horror squeezing money for the agricultural industry out of the British Treasury. It was annual horse work, if I can put it that way. I can remember very well—perhaps not many noble Lords remember this—that in the 1966 general election, and again in the 1970 general election, before we joined the Common Market, as it was then, the manifesto policy of the Conservative Party was to break away from guaranteed prices and deficiency payments and to move to a system of protection based on tariffs on imported foodstuffs. I think that a lot of people have forgotten that. In the 1960s, I happened to be a member of a study group chaired by Lord Prior, who subsequently became a Minister, which led to that policy in those two elections. It is unfortunate that so many farmers seem to have thought that they would obtain a similar level of generosity from the British Treasury as they have had over all these years from the mandarins of Brussels and the Council of Ministers. The Council of Ministers, on which I had the privilege and pleasure of serving for four years, was much more sympathetic to the position of farmers and agriculture than one ever sees in the British Treasury.
However, today I want to refer to the problems of the dairy industry. My noble friend Lord De Mauley quite rightly referred in passing to the current crisis in the dairy industry. I have never been involved in that industry. The closest I ever got to it was when I was the Minister who introduced milk quotas in 1984, which led to me being widely and nationally vilified. Unlike the German Minister, I was never burnt in effigy as a result of that—I think he was five times. That measure made me extremely unpopular, until farmers discovered that quotas were worth a great deal of money and it was much easier to talk to their bank managers on the back of the value of their quotas. Then they started to ask me, “You won’t scrap milk quotas, will you?” I always said, “I wish you had told me that at the time”.
Going back to the UK’s dairy industry today, it is really in a fearful state. Receipts in many cases are well below the cost of production, and many small and medium-sized milk producers are going out of business. Of course, one of the underlying reasons that the dairy industry is in such crisis in the UK leads, I believe, directly from the scrapping of the Milk Marketing Board, which happened after I left the department. I think it is no secret that the Commission in Brussels pressed me very hard indeed to abolish the Milk Marketing Board, as did some people here at home. I absolutely refused to do that, to the extent that I threatened to resign if I had to do so. However, it was scrapped because of the intense pressure from Brussels.
It is as well to recall that the Milk Marketing Board was set up between the wars because of the fate of small and medium-sized milk producers who were situated away from the big conurbations and being driven to bankruptcy by the attitude and behaviour of the large dairy manufacturers at that time. There are many parallels between what happened back in the 1920s and 1930s with what is happening today in the milk industry. The situation today is not helped by the actions of some of our supermarkets, which have caused the dairy industry to be in such difficulty through the use of their buying power. Therefore, if we are to leave the European Union and the common agricultural policy, I ask the Government to ensure that in future there will be nothing to prevent us trying to find new devices to support not only small and medium-sized dairy farmers but also small and medium-sized farmers right across the spectrum.
The noble Lord, Lord Clark, and my noble friend referred to the importance of the rural economy. It would be tragic if we were to move to a situation where we drove medium and small-sized farming interests out of business altogether. I am not necessarily saying that we should create a new Milk Marketing Board; I do not think we could face that at this moment. However, there are other ways, and other organisations, which could be created to help the whole agricultural industry, although I am thinking of milk in particular.
In the old days, there were other organisations which had far fewer powers than the milk board. The milk board had the almost monopolistic power of being the sole first buyer of milk from producers. Other organisations were set up such as the Cereals Marketing Board, which had a reserve buying power. I made my maiden speech down the Corridor on that. There was also the meat and livestock authority and the potato marketing boards. There were other organisations of this sort which we ought to give some thought to reviving in some form to protect and support our industry because, as I said earlier, our agricultural industry will not be able to rely for very long on the generosity of the British Treasury. If we are to leave the European Union, and now that we are likely to be free of CAP regulations, I hope that the Minister will be able to tell us that thought will be given to determining whether plans can be prepared to establish new organisations to provide backing for the agricultural industry in the years ahead.
The Duke of Somerset (CB)
My Lords, it is a pleasure to follow the noble Lord, Lord Jopling, with his great experience of farming.
I declare an interest as a landowner who receives income from agricultural activities. The main question that we all want to ask the Minister is one that he will be unable to answer—that is, on the future support system for our farmers and horticulturalists outside the CAP. I think that I am the third speaker to express surprise that so many farmers opted to leave the EU. For many, the single farm payment is the difference between loss and being able to pay the rent or the bank.
The Defra Minister in another place has argued that subsidies will carry on indefinitely. I find that hard to believe when both the main political parties in the last decade have said that they would be reluctant on that, certainly at the current levels. At the very least, I hope that future support will be found for marginal and upland farms which would not be able to survive on the unprotected world stage and which provide public goods.
We should remember that, currently, the CAP provides 55% of the total UK farm income—that is a considerable amount. Even with the present payments, farming is in a dire situation. I believe that all sectors are suffering, from cereals, through milk, to the meat trade. It is both low prices and volatility, but it is the former that is the most severe. Cereals in particular are projected to make a loss in this coming harvest, even after direct payments. The rotten weather has not helped, with increased disease and a difficult spraying season.
So, as the timely Motion moved by the noble Lord, Lord De Mauley, indicates, we need to look to science to help. We need difficult decisions to be made on a scientific basis. There are two topical questions that are currently causing problems: glyphosate and neonicotinoids. In the case of the former, a last-minute reprieve for a further 18 months was achieved after the EU member states delayed a decision on unproved grounds about the threats to human health. Further assessment is urgently needed. We obviously do not wish to carry on using a carcinogenic product but, if it is not one, this vital agricultural tool must be allowed to continue to be used. The controversy over neonicotinoids is similar in that science is still uncertain as to the effect that they have on pollinating bees. Such a ban would seriously affect rapeseed growers. Again, we need the scientists to finish their evidence-based work so that regulators can make an informed decision. Science can help in all sorts of agricultural areas, from —as we have heard—automated tractors and combines through to forecasting the weather and developing crops that can cope with the changing climate and can survive floods and drought. There are plenty of other arable diseases and weeds that the industry is looking to control chemically. Black grass is spreading north and mildew, rusts and blight are rampant.
I think, however, that there is a question mark over the tolerance of consumers in the future as they start to understand how many chemicals are applied to their food. This is something that the industry will have to manage very carefully, as people become more questioning and savvy about what they eat—as they are doing. It is a surprise to me that the organic premiums are not greater in order to reflect this but, perhaps with the inevitable rise in prices post-Brexit, price will outweigh these concerns in consumers’ minds.
GM is another PR issue for the industry to confront. Biotechnology policy is changing and the Government have recently increased their support, certainly since 2010, for both GM crops and further research. That is especially true in the activity of the Department for Business, Innovation and Skills. We are fortunate to have a good number of diverse agricultural research stations, as we have heard, and these will be increasingly under pressure to come up with solutions. The world population is set to rise from about 7 billion at present to 9 billion by 2050 and all these new people will need feeding, but with less labour, less water, less energy and less land—all commodities that will be needed for other, competing uses.
GM is a part of biotechnology and its benefits could cover the whole spectrum of agricultural output but many consumers and growers remain wary. Despite 2 trillion GM meals having been consumed since 1997, with no apparent health risks, suspicion remains. We have seen the activities of large companies such as Monsanto, which exploits its dominating position in the seed market and contracts its producing clients into poor positions of dependence and debt. That they have a Roundup Ready soybean available causes huge anxiety to many. A cursory internet search reveals the horror stories of many US farmers who are locked into these methods. Great care is thus needed in advocating these progressions. Barriers between GM and non-GM farms must be enforced through a strong code of conduct, as has indeed been in place in the UK since 1999. Likewise, a redress charter is being developed to compensate for accidental contamination of neighbouring land.
Another industry interface with the general public is TB and badger control. It is encouraging that the ministry is more determined than ever to tackle this curse, but frustrating that the vaccination programme has been interrupted by the scarcity of the BCG vaccine. However, the Government and the industry have failed to win the argument about culls and they need to work harder to point out the dangers of TB and the sad and wasteful costs of slaughtering affected cattle. Why are badgers considered by many to be more valuable in the animal kingdom than cows? They are equal; each has a life, but one carries disease and so needs to be controlled like all other wild animals that impinge on human health and well-being.
There is much to celebrate in British food production, from our huge range of cheeses, to artisan breads, small-scale cereal and muesli makers, yoghurts, asparagus, game, and craft beers, not to mention fruit and berry products—surely we all agree that our strawberries are the best in the world. All these niche products are funding an increasing market of keen purchasers. British food quality is, I believe, overtaking the French in critical perception, as their labour laws are decimating restaurants in that country. We must encourage these products and their dissemination in farm shops and farmers’ markets. The margins are narrow and many retailers, small and large, are struggling. Science has a huge role to play, but so will a new Government—free, perhaps, of Brussels red tape, bureaucracy and conformity. Defra will need to make friends with a new Treasury, inevitably short of funds, and make the case for targeted support to keep our industry one of the biggest in the UK, vibrant, healthy and innovative and which, at the same time, also respects the environment, biodiversity and public opinion.
I have one minute left so I will repeat a plea that has already been made that the Government redouble their efforts and determination to provide fast broadband and mobile phone signal to rural areas. The absence of these services seriously hinders and disadvantages all those working and living in rural England. I ask that the Government do all that they can to improve that situation.
Baroness Byford (Con)
My Lords, I thank my noble friend for securing this debate this afternoon; it is always good to have a debate on agriculture but, at this moment, after the Brexit decision, it is so important that we have it. I should declare my interests, which are in the register, that we have farming family interests and that we are in receipt of common agricultural payments, and that I am a member of the NFU and CLA and I am the current president of the Royal Agricultural Society of England.
Today, we have been set the target, if you like, of considering agriculture and its role in society, the economic factor that goes with that, and the role of science in agriculture as we look to the future. I have divided my thoughts into those three areas.
I believe that serious consideration of the place of agriculture starts with food. It covers the growing of cereals; animal husbandry, from which come milk and meat; and poultry, which signifies meat, eggs and special lines, such as Christmas turkeys, geese and ducks. Agriculture and forestry encompasses production, packing fruit from horticulture and growing fruit and vegetables. At farmers’ markets throughout the country and in countless stalls at shows, fairs and fetes, we find cheese, butter, pies, cakes and ice cream, all produced locally on our farms. Most farms are situated in rural areas, though there is a significant growth in city farms and, of course, in the use of allotments.
Agriculture supplies employment in rural areas for many people, and has the merit of being a long-term business. As has been said, food manufacturing is our greatest manufacturing industry in the country. It employs one in eight people, and is bigger than the aerospace and automotive industries. It is worth about £100 billion and, as I say, it is a long-term commitment. The sheer range of possible products that may be obtained from the land leads to a stability that is not always available for the urban environment.
Following the referendum on withdrawal from Europe, the supply of labour, particularly on fruit and vegetable farms, is of concern. Will the Minister clarify whether existing arrangements will continue, and if not, what plans will be put in place to address this change? I am referring to the former SAWS and other such schemes.
Agriculture also supplies housing in the form of tenancies for farm workers. It is increasingly coming forward with land for shared ownership schemes and with barn conversions for dwellings. Outside food or renewable energy production, agriculture’s biggest contribution is surely to tourism, which has already been mentioned. We are very lucky to live in a very attractive island, but much of the maintenance of that attraction is down to the work done by our farmers. They also contribute to the entertainment and well-being of tourists through the supply of farm-based holidays, cafés, cream teas, bed and breakfast facilities, and many self-catering venues. Rights of way, bridle-paths and footpaths criss-cross the rural landscape, and many farmers maintain them as a matter of course.
Farmers also use external professional services. Livestock husbandry requires vets, and we have people to deal with subsidies and water extraction licences. Employee payments and pensions involve computer experts, and machinery needs highly skilled engineers. Farmers, their employees and all families need doctors, nurses, carers and teachers. There is a call for cleaners, motor mechanics and those skilled in home maintenance trades. My goodness, we need a lot of people.
Agriculture is the foundation of the rural economy. If I may say so, it is often the focus of the local community, bringing it together in a way that some of our urban colleagues really envy. Its economic stability and prosperity is vital to the well-being and way of life of a quarter of our population. Its continued development and progress is essential to the remaining three-quarters of our population. As our population is expanding rapidly, food resources must at least keep pace, if not grow.
As others have suggested, agriculture experienced a loss of some £15 billion in 2015. Commodity prices have continued to fall, and the dairy industry is experiencing particularly hard times. Looking to the future, I am confident that our agriculture will succeed in the coming years. The pending changes will give us access to all markets on terms negotiated by our Government. I believe that imports can be controlled to ensure, for example, that pork and pork produce come from herds that are raised to the same welfare standards as our own. If that is not the case, it is surely not right for UK farmers to be expected to compete at a financial disadvantage to other producers around the world.
Lastly and most importantly, I turn to research and development. I am sure that my noble friend Lord Plumb, had he been here today, would have referred to his early years, when technology was fairly minimal, and to the fact that the enormous changes seen in agriculture have been because of the development of technology, with GPS making such a difference to those of us working on the land.
Further collaboration is very important. At the moment, quite a bit of our research is twinned with Europe, but I believe that we will look further afield in the world to gain suitable arrangements. Our Government must be prepared, especially in the early days, to subsidise research programmes if they are discontinued before new ones can be established. It is very important to find out soon whether existing contracts will be kept going at the time of our exit from the EU, and whether they will be honoured until their completion. I seek clarification from the Minister on that point.
I am grateful to the NFU for its detailed briefing on biotechnology. It acknowledges that some of its members are keen to see GM technology developed in the UK, while others have concerns about such crops. In fact, in my family, my husband would have taken a different view, which will I think be reflected in other contributions. GM modification is not a stand-alone saviour, but it offers new techniques of plant breeding. Other farm management practices to improve efficiency and long-term sustainability are equally important, and soil and water are crucial. As president of LEAF, I am well aware of the impact that that can have, and of the importance of caring for the environment and wildlife.
GM technology would increase yields, use resources more efficiently and be more robust in the face of increasing pests and diseases caused by changes in climate. I urge the Government to support this new technology in the future so that we can develop more for our own home market, but, equally importantly, so that we can supply the export trade to countries that will not be in the same position as us.
Finally, I cannot sit down without urging the Government to consider how best to support our apprenticeship schemes in rural areas. My noble friend Lord Gardiner of Kimble said on 27 April that the Government are seeking to improve skills in rural areas through the tripling of apprenticeships in food and farming. I hope recent events have not caused him to change his mind. I draw his attention to the crucial role of land-based colleges in supporting these endeavours. Through their courses, a career in agriculture should be seen as an exciting choice. It offers endless career possibilities through science, biology, plant breeding, engineering, technology, GPS and working with livestock—to name but a few. This industry needs a skilled workforce, and if agriculture is to thrive in future years, we must push ahead. Again, I am grateful to my noble friend Lord De Mauley for giving me the opportunity to make this speech.
The Earl of Caithness (Con)
It is a great pleasure to follow my noble friend—and bridge partner—Lady Byford, with her great expertise. It is right to say just how much we miss our noble friend Lord Plumb. He is not taking part today but would have been a useful contributor. I was one of those who called for a full debate on farming and the countryside during our short debate on 27 April, so I am particularly grateful to my noble friend Lord De Mauley for securing this debate for us. I declare my interests as in the register and confirm that I am not a landowner and I do not farm.
The speech I planned to make when I raised this matter on 27 April was very different from the one I will make today. Today I have to refer to my maiden speech, which I made in 1971 on the future of Scottish farming when we joined the EEC. There was a lot of enthusiasm from farmers then for the bright lights that were ahead of us—but I was sceptical. In 1971, the UK was 55% self-sufficient in food; it is about 60% self-sufficient today. In 1971, the EEC was 90% self-sufficient in food; today, the EU is about the same, and 100% self-sufficient in many products. I went on to say then that a prosperous agricultural industry and our diverse countryside were essential to our nation’s well-being; I would say the same today. As the noble Lord, Lord Clark, reminded us, much has changed in 45 years, but I am also reminded how much has stayed the same. When I made that speech, I certainly did not envisage that I would be standing here making a speech on what is going to happen when we come out of the EU.
So whither now? We cannot go back to the post-war system of guaranteed prices and assured markets. My noble friend the Minister has a fairly blank slate on which to come forward with proposals. What has Defra cobbled together so far in the past two weeks? We cannot look at agriculture and horticulture in isolation when they are part of a wider discussion on how our countryside is managed—by whom and for whom, and how it should be accessed for public good. We live in a heavily urbanised society in which some people are very vocal and some, sadly, have little idea of the real world of farming. It is therefore important that we have easy-to-understand information readily available for those people. What is the relevance of climate and soil, for example? Does it matter that 85% in Scotland is in a less-favoured area?
Farming is unpredictable, as the noble Lord, Lord Jopling, reminded us. In 2014-15, farm businesses’ income in Scotland fell by more than 20% from the year before. Business really cannot exist on that basis. But farming is a commitment. Stock farming is a 365-day a year business—yes, even on Christmas Day, while most are holidaying, farmers are feeding, watering and tending their stock. We want cheap food but we want it of high quality. We are schizophrenic between a romanticised view of the country and farming and an industrialised view of an efficient, capital-intensive and mechanised industry. Sadly, the voice of farming has diminished hugely over my lifetime. An added difficulty for my noble friend Lord Gardiner is how to make the voice of farming heard in what will be a bitter political struggle on how we go forward now. Farming will be well down the list of priorities. In that respect, I venture to suggest that the CAP was an irritating but useful friend of the farmer, since it at least gave farming a high profile.
In winding up the debate last night, my noble friend Lady Anelay said that the Government would consult the devolved Governments—but that is not enough. I hope that my noble friend Lord Gardiner will reassure the House that the Government will consult the devolved institutions as well. These organisations, which represent the interests of those who live and work in the country, must be actively consulted and listened to as we go forward. Can he say whether we are to have a UK policy for farming or different English, Scottish, Welsh and Northern Irish policies?
I turn to the crucial question, as I see it. What is the value and public good of the taxpayers’ money that is given to farmers and landowners? Is it good value? A great many farms are unprofitable and would go out of business without taxpayer support. Most farmers have diversified just to exist; some farming is no more than glorified crofting. Farming is a small proportion of total farm income to many. Many of us want the stone walls and hedges, and the small mosaic of fields that is much better for wildlife, rather than prairies and wire fences. But that is costly to maintain and needs skill and dedication, which is provided by the farmers—often freely, as my noble friend Lady Byford told us. We need a countryside that is of huge benefit to us all and to the much underrated and misunderstood industry we call tourism, which is such a help to our rural economy.
On access, I speak from personal experience. I did not know how much of getting better after an operation was in the mind. I have been pushed through woods on my wheelchair and I have tottered on crutches, painfully and slowly, along farmers’ footpaths. Recently, I walked again on a hill. I was fortunate to be able to do this—to hear the birds and see our lovely countryside, and to get fresher air than we have in the city. It has speeded up my rehabilitation. I have had it all for free and done it on someone else’s land, but I am not alone. Millions of people, a minority of them perhaps mentally or physically ill but most fully fit, derive huge benefit and improve their well-being by accessing the country. In doing so, they are saving the NHS and the taxpayer a massive sum of money. Is there a cost-benefit analysis of this calculation? What assessment has there been—and, if there has not been one, will my noble friend have one done?
Has the benefit of well-being been taken into account in the cost of agri-environmental programmes in the UK, which is equivalent to £20 per hectare? The average in the EU is £100 per hectare. We have the lowest level of support of any member state. Many argue that support for farming, especially livestock farming in the hills and uplands where there is little opportunity for diversification, is the best means of keeping a balance between food production and care of the countryside. The noble Duke, the Duke of Somerset, reminded us that some politicians are arguing that that support should be reduced. Has the Minister assessed what the implications of that might be?
I hope to be fit enough to fish again later this year and I make no apology for wanting to do that. Country sports play a vital role in preserving our countryside. Not only do they help keep the rural economy good and create jobs, but they require our woodlands, heather, rivers, lochs and lakes to be in good condition. Everyone benefits from that; wildlife benefits from that. Country sports really do help farmers and fragile communities exist.
I will not talk about scientific research, which has been well covered. I recall only that I served on our EU Sub-Committee which looked at this. It found that we could and should do an awful lot more. Perhaps now is the opportunity.
As my noble friend the Minister plans for the future, will he consider looking at farming more holistically, as it is part of how our countryside is shaped? Rather than payments on a field-pattern structure, there should be a whole-farm approach to include woodland, so that the farmer can receive the right benefits for managing all his land in a way that we would like him to.
When my noble friend Lord De Mauley opened this good debate, he reminded us of the resilience of farmers—but that is also their own worst enemy. By showing such huge resilience and ability to adapt to what successive Governments have thrown at them, they deserve our gratitude and respect. But it has also allowed politicians to consider them as easy meat—that farmers will just carry on doing whatever politicians ask them to do. That should not be taken for granted in the future. Doubt has been expressed, at least on the “Farming Today” programme at the weekend, that after all the changes Defra has gone through it no longer has the capacity to think through the myriad uncertainties and opportunities that now confront us. Can my noble friend tell us what use Defra will make of those in the farming community and others in the private sector with the relevant experience to help him find the right path forward?
The Lord Bishop of St Albans
My Lords, I add my thanks to those from other noble Lords to the noble Lord, Lord De Mauley, for securing this important debate at this time of significant uncertainty for the agricultural and horticultural sectors. I also declare my interest in the register as president of the Rural Coalition.
As noble Lords have already stated, the agricultural and horticultural industry is an essential feature not only of the rural economy but of the wider national economy. It is often said in this Chamber that the defence of the people is the first duty of government, but I wonder whether feeding the people should be an equally primary duty. Establishing food security is an essential role of all Governments, never more so than in the current climate of global uncertainty.
The process of maintaining a thriving agricultural and horticultural industry is not simply about protecting commercial and economic interests. A thriving domestic food industry is a common public good and provides the bedrock from which we can secure affordable and nutritious food for everyone in our society. Farming of course plays a central role in the rural economy, providing jobs and bringing money and services into rural areas. It provides the backbone of the wider food manufacturing industry, and its important role in domestic supply chains will only increase if sterling remains weak.
Figures released last week by the Government show that nearly a third of UK children are now classed as living in poverty, unable to afford basic supplies. Food banks are being increasingly relied on by some of the poorest families in society. Of course, things could get worse if barriers to global trade rise and we do not have the capacity to rely on domestic produce. We can create all the life chances we like, but that is futile if families cannot afford to put food on the table.
It is for that reason that the Government must take steps to secure the future of Britain’s agricultural and horticultural sectors, particularly in the light of our impending withdrawal from the EU. If we are going to become more reliant in the future on domestic food supplies, we need to start the hard yards now. There are three things in particular that I hope Her Majesty’s Government will start planning for immediately, besides the inevitably protracted negotiations.
First, the Government must do everything they can to secure funding for the ground-breaking agricultural research which is already taking place across UK universities and research centres such as at Rothamsted Research, which I think two noble Lords have already referred to and which is just up the road from where I live in my diocese. Rothamsted has made significant contributions to research over the years and has the longest-running continuous scientific experiment, which began back in 1856. It is also at the forefront of cutting-edge agricultural research. Yet without EU support, Rothamsted Research faces serious challenges in securing funding for future long-term projects. In the last five years, Rothamsted scientists have received nearly £5 million in funding support from the EU. The loss of this research capacity would ultimately be to the detriment of the UK, not only to our status as a world leader in agricultural research but to our ability to increase food production to match demand in an environmentally sustainable and ecologically sensitive manner. What research centres such as Rothamsted urgently need is the security of government investment for long-term projects that will boost productivity in a sustainable manner. We cannot allow research funding to be controlled by commercial interests, whose priorities may just be short-term and perhaps ill-aligned with the wider common good.
On that note, I might add that any research funding must be directed towards agricultural practices that promote environmental sustainability. We need the agricultural technologies of the future to reduce farmers’ reliance on herbicides, pesticides and artificial fertilisers, not increase it.
Secondly, there is access to labour, to which the noble Baroness, Lady Byford, has already referred. As noble Lords will know, the horticultural industry is particularly dependent on seasonal labour, which is invariably, for one reason or another, provided by EU migrants. The seasonal agriculture workers scheme was scrapped back in 2014, and I know many farmers are fearful about how they are going to find the workers to pick fruit and vegetables. Obviously, we do not know what form the eventual EU agreement might take when it comes to migration, but I hope that the Government would not be caught out and that appropriate schemes would be ready for implementation when required.
We need similar assurances for the agricultural research sector, which has consistently looked to the European Union to attract the very best research talent, as well as working in collaboration with research bodies across the EU. One-quarter of Rothamsted’s research staff are from the EU, and it is a similar story across other research bodies and universities. Again, I hope Her Majesty’s Government will be working on plans to ensure that Britain remains at the forefront of international agricultural and environmental research, regardless of eventual EU agreements. It is absolutely vital that our research institutions have access to the EU knowledge base, through the sharing of both information and personnel.
Thirdly, away from the EU negotiations, I hope that we can begin to see fresh blood injected into an agricultural industry that is ageing at an alarming rate. Unless a new generation becomes integrated into the farming industry, I fear the long-term sustainability of British agriculture and horticulture is in serious trouble, no matter how many new technologies or scientific advances we might develop. Research depends on a thriving industry, just as the industry depends on innovative research.
There is good news of course: we have record numbers of students graduating from agricultural colleges across the UK, which are some of the finest educational institutions in Europe. But these aspiring farmers struggle to get a foot on the first rung of the farming ladder, so prohibitive are the risks and costs involved. Apprenticeships will help, but I would like to see new entrants schemes established—but we also need to take steps to give an older generation of farmers the confidence and stability to retire with dignity and pass the farms on to new hands. That means direct retirement support, but it also means investment to create the sustainable rural communities that will be required in terms of housing, education and social care.
The Earl of Shrewsbury (Con)
My Lords, I congratulate my noble friend Lord De Mauley on securing this debate, especially as during a recent similar debate in the Moses Room it was stressed by those taking part, including my noble friend Lord Caithness, that a larger window for debate was required, reflecting the importance of the subject. Today’s debate is excellent news, therefore, and I welcome the opportunity to consider the situation facing our agricultural industry.
Both my noble friend and the Minister bring with them wide experience, not only in Defra but as participants in the industry. I declare an interest, as a member of the National Farmers’ Union, and as a former president of the Staffordshire & Birmingham Agricultural Society, where I had the pleasure of inviting my noble friend Lord Plumb one day. I am very sorry that he is not here today. We miss him—I have never actually taken part in an agricultural debate without the old boy in here, and we wish him well. Henry Plumb walked around with me; what I wanted him to do was to come to lunch, but I could not keep him away from the farmers, who regarded him as somewhat of a god.
With the result of the recent referendum still ringing in our ears, what better time could there be to explore the needs of the agricultural and horticultural sectors going forward? I voted to leave, as did many farmers and landowners. The road from Ashbourne to Derby was lined with leave posters on agricultural land. That I did not expect to see—nor did I expect the leave supporters to prevail. But we have what we have, and we must get on with it, and grasp wholeheartedly the opportunities and challenges which Brexit inevitably will bring.
We ignore the economic importance of the agricultural sector at our peril. It is the bedrock of the UK’s largest manufacturing industry—food and drink—employing 3.9 million people and being worth an annual £108 billion to the economy.
Currently, agriculture is not an easy business to be in. It seldom is but, particularly at the moment, times are very poor. Milk and meat prices are atrocious, cereal prices are not much better, and one of the few sectors to be fairly buoyant is poultry. My youngest son is a free range egg farmer in Lincolnshire. His business is profitable, but it is subject to vagaries and even small fluctuations in the cost of inputs and in the price of the product, which in turn is almost entirely driven by the decisions of the supermarket chains. He told me yesterday that 1 penny less per dozen makes a very considerable difference to his profitability.
Love them or loathe them, we badly need to grow GM crops on a commercial basis. I believe that they would revolutionise homegrown food production, reducing the costs of livestock, poultry and egg production dramatically, and thus assist those sectors to become profitable. What we now have to do—and I mean immediately—is to plan for life in the horticultural and agricultural industries and indeed in the rural community as a whole, after the cessation of the single farm payment when we leave the EU. A number of politicians have said openly that these sectors will not be allowed to suffer, but, to be quite frank, we have seen so many promises broken by our political classes, so can we really believe their assurances on this issue? Do they really know yet which direction they intend to take us in? Will they have the funding available to continue a basic payment and support through the Rural Development Programme or some such scheme? Will they continue to support the stewardship of our less favoured upland areas, where much of our sheepmeat production comes from? What will happen to our export market for sheepmeat to Europe, which is currently a substantial market for our sheep farmers?
I suggest that we need, like never before since the last war, a new and vibrant domestic agricultural policy, one that is both achievable and sustainable and, yes, profitable to the farmer and producer, giving them a fair return for a very high-quality product. Without adequate profitability, they cannot invest in the future. We have a growing population and declining food self-sufficiency, and these facts must be addressed and action taken. We need to promote British food products through better, clearer labelling. Our customers really care about traceability; they care about high welfare standards—and we have some of the best welfare standards for animals in the world, in this country. They care about quality and, alongside our agriculturalists, they care about our countryside.
The post-war Labour Attlee Government stated their aims for the Agriculture Act 1947 as,
“to promote a healthy and efficient agriculture, capable of producing that part of the nation’s food which is required from home sources at the lowest price consistent with the provision of adequate remuneration and decent living conditions for farmers and workers, with a reasonable return on capital invested”.—[Official Report, Commons, 15/11/1945; col. 2334.]
That is an admirable statement, and one upon which we now have the opportunity to modernise and build, but it should also include the word “export”.
The Earl of Arran (Con)
My Lords, in our family my wife is the farmer and we farm in the beautiful dairy fields of north Devon. As other noble Lords have said, it is hard to exaggerate the magnitude of change that the referendum result will enforce on the rural economy. This will require not only a review of British farming policy but also a greater understanding of the critical importance of sustainable agriculture to our rural communities. The facts help to spell out the scale of the challenge. As noble Lords have said, food and drink is the UK’s largest manufacturing business with 7% of GDP. Farming received £2.4 billion in 2015 from CAP with an additional £4 billion allocated to the UK for rural development programmes between 2014 and 2020. On average, therefore, every farm receives an average of £13,000 per annum.
In the south-west, there are around 25,000 farm businesses—24% of all English farms—with 60,000 employees and, crucially, 200,000 indirect employees. We calculate that every farm supports around 25 other businesses. The referendum result is a huge opportunity for the Government to unlock the vast potential of a revitalised agricultural industry, to the benefit of not only the rural economy but national wealth. It is a real chance to ensure that agriculture is a sustainable and profitable long-term business rather than one that continues to require subsidy.
Opportunities are there in abundance. Take, for example, food production. Currently the UK produces only 60% of its capacity. With population growth and rising cheaper imports, this is predicted to drop below self-sufficiency by 2030. By supporting the great British food initiative and the long-awaited 25-year food and farming plan, production could achieve 75% of our requirements and, at the same time, increase food and drink exports around the world, which are currently this country’s fourth-largest export sector. This could create double the number of direct and indirect jobs, with obvious benefits to the whole rural economy. Importantly, many of the jobs would be attractive to our next generation.
In the south-west, we have seen too many young people leave the industry. We have, however, been market leaders in encouraging women to develop farm diversification enterprises. Here again, a rich prize can be achieved. Greater links between agriculture and tourism would also transform the prosperity of the south-west: amazing food equals amazing gastronomy plus beautiful landscapes equals happy visitors all year round.
To concentrate just on the importance of food production tells only half the story. Farms, through their land stewardship programmes, also provide a wide range of eco-system services. These include helping to improve water quality, being at the front line in helping to reduce flood risk and making a vital contribution to renewable energy supplies. Here again, this extends the influence of agriculture right across the rural economy and helps to ensure that rural services can be maintained.
So what must the Government do to ensure that agriculture and the rural economy can now reach their full potential? First, they can ensure that Defra is adequately resourced to meet the challenge of unpicking the European project while driving new front-line business. Secondly, they can ensure that, as a minimum, current funding for the agricultural industry is maintained with a guarantee that this will be ring-fenced for at least five years to allow confidence to be rebuilt and investment decisions to be made. Thirdly, they can ensure that there is not a shift of capital investment priorities from shires to metropolitan areas. Fourthly, they can rural-proof council tax, which is already significantly higher per head of population in rural areas compared with urban areas due to historic underfunding of rural services by successive Governments. In short, the challenge is for the British public to support the rural economy and our farmers, but will the Government respect the voice of the people? Again, in short, they must.
The Countess of Mar (CB)
My Lords, I, too, am grateful to the noble Lord, Lord De Mauley, for bringing this very important subject to our attention today. I declare my interests as recorded in the register. My husband owns a small farm in Worcestershire, for which we receive about one-thirteenth of the £13,000 average CAP payment. I am also co-chair of the All-Party Parliamentary Group on Agroecology for Sustainable Food and Farming.
While I was thinking about writing this speech, my mind went back to my first jobs on farms in the mid to late 1950s—I cannot believe it was 60 years ago. I recall long hours of back-breaking work hand-weeding acres of kale in the pouring rain, spreading lime, slag and farmyard manure on the fields for fertiliser and milking cows in their stalls, initially by hand, but later by machine, at 6 am each morning and again 12 hours later. After I married, I would go strawberry picking in the summer and apple picking in the autumn. Those jobs are now taken almost entirely by our eastern European friends, and I wonder what has happened to the British workforce in this field.
Scientific and technological developments and, at times, sheer necessity have changed the world of British agriculture and horticulture from small, mainly family units, which were labour-intensive and marginally productive, to, with some exceptions, large, low-labour, high-capital industrialised units with some of the highest productivity levels in the world. We have looked west to Canada and the USA, where farmers have vast tracts of uniform land, and have tried to emulate their monocropping practices, albeit on a smaller scale, particularly in eastern England. However, Britain is a small country with hugely varying geographical features, climate and soil conditions, not necessarily suited to US methods.
A section of the scientific and farming community is asking us to emulate the States further by allowing genetically modified crops to be grown in the UK. Our farmers and horticulturalists have, with EU encouragement and education, made steady advances in reducing pesticide and fertiliser inputs to those deemed essential, and they have steadily improved yields. Here, I pay tribute to the noble Baroness, Lady Byford—whom I call my friend; we have worked together for so many years—for her work with LEAF, which has certainly made huge advances.
There is a risk that if we introduce GM pest and herbicide-resistant crops, those advances will be reversed. This reversal is a feature of so-called Roundup-ready GM soya. Since an initial increase in productivity when GM crops were first introduced, crop yields have become highly variable and have in some cases declined, sometimes below pre-GM levels. More than 20 weed species have become resistant to Roundup, despite application rates that have risen nearly 15-fold since GM soya was introduced in 1996 to 122.5 million pounds in 2014, the latest date for which EPA figures are available.
To accommodate this, maximum residue levels for glyphosate, the active ingredient in Roundup, in animal and human foods have been steadily increased, despite safety concerns. Major seed companies have now developed stacked varieties of soya that are tolerant to at least two herbicides, but I have very little doubt that Mother Nature will find her way around these, too.
Those scientists who develop GM seeds and plants seem to have totally ignored their effect on the environment, or on the health of humans and animals who consume the crops produced. They emphasise the accuracy and simplicity of their procedures while ignoring the complexity and interdependence that exists within the genome. We still do not understand fully the relationship between genes and the environment. To quote Jonathan Latham,
“a defined, discrete or simple pathway from gene to trait probably never exists. Most gene function is mediated murkily through highly complex biochemical and other networks that depend on many conditional factors, such as the presence of other genes and their variants, on the environment, on the age of the organism, on chance, and so forth”.
US regulators have taken the word of the corporations that their GM products are substantially equivalent to their non-GM counterparts without testing the veracity of their assertions. There have been very few truly independent studies of the safety of GM foods. We frequently hear, as my noble friend the Duke of Somerset said, that millions of Americans have been eating these foods for 20 years with no ill effects, but there have been no post-marketing surveillance or epidemiological surveys to prove this assertion one way or the other. American consumers have no way of knowing whether the food they are eating is GM unless they deliberately buy organic food.
We know that many studies have shown that glyphosate is strongly associated—I repeat, strongly associated—with increased birth defects, neurological developmental problems in children, kidney failure and cancer. It is genotoxic. It is believed to attack the beneficial organisms in the human digestive system, causing serious health problems, although much more research is necessary to prove this and other hypotheses. It is also a powerful biocide which encourages microbial plant pathogens and mycotoxins to develop.
There is a major concern about the threat of major widespread contamination of the countryside. It is clear that some GM crops pose a threat, but not all. The lesson of the Government’s own farm-scale evaluation trials should be heeded. The key one was that contamination was inevitable with some crops. Currently there is no effective system in place for post-marketing surveillance to measure the effects of GM releases, though both the UK Government and the EU have acknowledged the need for such monitoring. It could be said that there is no need for monitoring because there has been no commercial cropping, but if GM varieties of, say, oilseed rape, cereals or grasses are to be introduced, a robust monitoring system is essential.
There is a tendency to the simplistic view that agricultural science is the equivalent of genetic modification and intensive chemical farming. Far from men and women in white coats working in laboratories on trial plots, there are many agriecological, agriforestry and organic farmers who have an intimate scientific knowledge of the farming, ecological and environmental systems in which they operate. Far from the objectors to the currently available GM seeds being anti-science, I believe they have very valid scientific reasons for voicing their concern.
These advances are proving economically important to many family and small farms, as well as to many large-scale producers that serve local markets, UK markets such as supermarkets and, especially in the case of dairy products, the export market. The UK organic market, according to the Soil Association’s 2016 report, showed growth of 4.9% and a value of £1.95 billion. We are now on the threshold of major change in the way we are being encouraged to farm as members of the EU, changes that I hope we will embrace with enthusiasm and courage as well as a modicum of caution. I suggest to the Minister that he reads The Precautionary Principle (With Application to Genetic Modification of Organisms) by Nassim Nicholas Taleb. It provides a very balanced method for the application of the principle, though I must confess that the mathematics got the better of me. We are constantly reminded that we will need to feed 9.5 billion people by 2050. That reminder is coupled with the statement that the only way we will succeed is by embracing genetic modification. I am neither anti-GM nor anti-science. If it could be shown that, instead of being beneficial solely to the great corporations that promote it, GM was both beneficial and safe for humans, animals and the environment, I would happily embrace it.
Currently, agritech strategy totally, and government funding largely, ignores the research and development needs of the sector. In what is undoubtedly our most important industry, the many years of neglect have resulted in the closure of land-based university departments and colleges with a loss of soil and plant scientists—those young people who, as we have heard today, the research establishments need to replace others as they retire.
British expertise in this field was once regarded as the best in the world. Just after the Second World War, we were 80% self-sufficient in food. That is now down to 62%. Unless we recognise the importance of agriculture, not just to the rural community but to the whole of our nation, we will be in danger of becoming the equivalent of a third world country. Commercialisation or development pathways for direct rural development are not particularly considered in funding allocations, or, if they are, they are not transparent. Alternative approaches that rural communities might consider more beneficial to the development of the rural economy are not set against any proposal and considered. It is not just a matter of deficit in transparency; it is a deficiency in thinking about how science can engage communities and, through that engagement, be more effective.
Our farmers have the skills, energy, ingenuity and motivation to be the best. Far from wallowing in doom and gloom, let us harness those assets and show the world what we can do. However, we need a supportive Government.
Baroness Redfern (Con)
My Lords, I am grateful to my noble friend Lord De Mauley for tabling this timely debate. I am following very experienced and knowledgeable speakers and farmers. I am not a farmer but I own a pair of wellies and some well-worn walking boots. This morning I was out in the countryside very early, walking my dogs and enjoying the freedom of that countryside. I thank farmers for being good stewards and opening up the countryside to enable people to come and walk their way back to health. I wish also to highlight the contribution that our rural economy plays in economic terms now and in the future.
As we know, agriculture and horticulture play a significant part in our rural economy by contributing an estimated £229 billion to England’s total economy in terms of GVA. The agritech strategy will play a significant role in meeting the challenge of feeding a growing population and, importantly, will do so without damaging our natural environment. All partners, whether from the public sector, the third sector or industry, will initiate support for long-term investment by businesses and private investors, who will look at opportunities for working together, with potential for real growth in investment.
Getting more land back into production was a necessity many years ago, with land conversion, drainage and reclamation. The people who lived where I live, in the Isle of Axholme, learned from the Dutch experts such as Vermuyden, who brought some of this technology to Britain all those years ago, and we still see strip-farming being used today in my part of the world. This Dutch engineering expertise created a landscape and enabled farmland to be established and expanded, and we can still see that uniqueness today. Therefore we need more land to grow more food, and that continues with even more pace so that we will be able to feed more people. As we have already heard from previous speakers, we are at just 62% self-sufficiency.
Fast-forward from the then British agricultural revolution to the science and technology of today, which is helping our modern farming and food production raise its game and our position to become, I hope, a global leader once again. Lincolnshire is a major contributor in cereals, including the area known as the bread-basket of the UK, but we also major in food processing, food and drink manufacture and packing, retail, tourism and catering. To the south of the county we have horticulture, which is certainly not to be underestimated as an important player in Lincolnshire’s rural economy and the landscape. Even our sporting fixtures receive quality turf from Lincolnshire for major sporting venues, and I hope that everybody has heard about Lincolnshire Poacher cheese, which is one to be sampled.
Our colleges must re-energise and begin to reform, encourage and stimulate interest to make a serious case for a place in further and higher education courses, to reduce our green skills gap and make a case for new opportunities in this sector. It is about changing mindsets, because there is much more to agriculture and horticulture than many people think. Having worked in the agri industry, I have seen many changes in agriculture innovation and how it plays into achieving bigger quality yields, coupled with resource efficiency.
Unfortunately, there is a downside to our food production, because we have seen that, over the past 30 years relative to our major competitors, our skills gap is holding back on developing and using innovation and new technologies. All too often we see professionals retiring and experienced workers leaving. Therefore it is so important to fill, skill and reskill our new workforce now and for the next generation.
I am pleased that the Government have recognised and support—with funding—putting research into practice, with agricultural science and technology becoming rapidly one of the world’s fastest-growing and exciting markets. We are already seeing progress in nutrition, genetics, informatics and satellite imaging, which help drive major global investment in agritech. We want the UK to be leaders in this technology, with a vision to be part of not only increasing productivity but working internationally.
I have spoken to many farmers recently; in Lincolnshire we had the large Lincolnshire agricultural show and have other small and medium-sized shows. I have to say that the majority of farmers were for leaving the EU, for many reasons. I will touch on Europe for a moment. Previous reforms of the CAP on subsidies distorted the market, having the reverse effect from that intended, discouraging competitiveness among farmers. EU regulations have acted at times as barriers to innovation, merely acting as a safety net not available to other small businesses. Again, it is recognised by economists that this can inhibit innovation and change.
Leaving the EU allows the UK to build a new agricultural policy specifically adapted to our needs—one that is easy to understand and simple to administer, whereas for many people the CAP is very complicated, with late farm payments having an impact.
Our rural economy comes with many challenges, as well as opportunities. In Lincolnshire, small and medium-sized companies need connectivity. Previous speakers have mentioned superfast broadband. Luckily, North Lincolnshire was a pilot area for this and connectivity there is almost at 100%, which is really good. Other rural parts of Lincolnshire and the UK as a whole need that fix as quickly as possible.
The Government have set about their vision for the UK to become a world leader in agricultural technology, innovation and sustainability, exploiting opportunities to develop and adopt new and existing technologies, products and services to increase productivity, thereby contributing to global food security and international development. I certainly agree about “getting smarter with science”.
However, this industry has another barrier—dealing with the diverse weather conditions, which, for example, have led to the flash flooding that we have witnessed all too often. It is imperative that the agricultural and horticultural sectors are given real support to increase flood defences, ultimately giving businesses the confidence to grow.
I am pleased to have had the opportunity to take part in today’s debate to highlight the importance of agriculture and horticulture to our rural economy. Agricultural science plays an important role not only in production but in encouraging the closure of the green skills gap. Finally, I would like there to be a firm dialogue with Ministers to identify how we can action these objectives in support of our agricultural sector. I very much welcome this debate.
Lord Swinfen (Con)
My Lords, I am not a farmer. However, I like to think that I am a countryman. I live in an old farmhouse surrounded by someone else’s farm. It is farmed not by him but by a contractor. What I am about to say may be specific for that reason rather than applying generally throughout the country.
I understand that there are now far fewer mixed farms than there were 30, 40 or 50 years ago. A number of them have much less in the way of livestock or no livestock at all where they had it before, and there are now a number of very much larger arable farms—farmed, of course, with modern machinery and much less labour.
Some 70 years ago, from my observations there were far more butterflies and insects. In fact, back then, as a small boy among many others, it was great fun to catch butterflies in a butterfly net. I understand that that is now illegal and I suspect that that is because of the reduction in the number of butterflies in the country.
I have also noticed that there are far fewer starlings around. Noble Lords will recall that in the past when going to Trafalgar Square there were thousands and thousands of starlings every evening and in the mornings. Their number probably declined there as a result of the reduction in the number of horses in central London. However, their number has dropped in the country as well. I have not seen a large flock of starlings flying round at dusk for many years, and it used to be a very common sight. I suspect that it is partly because of the arable farming that goes on today.
When the crops were off, farms used to lie with spilled seed on the ground for weeks if not months. Today, around me, they are very often ploughed in within a matter of days of the harvest being taken off. There is no food left for birds or other wildlife.
We used to have swallows at home. The last time I saw a swallow at home it was some three years ago and it was lying on its back on the ground, because there are no flies around. The farmer around us regularly sprays his crops with insecticide. There are no flies for the swallows, for the swifts, for the martens or for the flycatchers, and others that live on flies. Consequently, there will not be the grubs in the ground for those that eat the grubs there. One of the only benefits as far as I can see is that we are no longer, as humans, pestered by flies in the summer, which must be a great advantage for horses and ponies as well. Farmers provide game strips because they want to increase the number of grey partridges, but where are the insects for the chicks to eat? They have all been sprayed out. The partridges will not stay in the partridge strips. They are adventurous; they go among the other crops and they die.
Hedges were taken out—those who did it probably got a grant. Other hedges have now been put back in, some in the same place and some in different places, probably with another grant. But they are cut mechanically and no longer cut and laid as they were in the old-fashioned way. It means that the bottoms of hedges are thin. There is no cover there; there is less cover for the birds to build their nests, and nothing for small mammals on the ground.
We used to have hedgehogs around us, lots of them, brought in every night in the summer by my dogs. They had to be rescued and freed again. Some three or four years ago, a crop of rape all around us was smothered in slug pellets, making the slugs poisonous to the hedgehogs. Since then, I have seen one hedgehog only.
We get a lot of moles in the lawns in our garden—an awful nuisance—but it is the only area around where there are sufficient worms for the moles to feed on, because, with no muck being put on the fields, there is nothing for the worms to eat. While we have been in the house—we moved there in 1974—there was one field of navy beans ploughed in because it was so wet that it could not be harvested and one field on which sheep were folded one year, but no organic compost has been put on to that land in all the time that we have been there. It means that when it rains heavily and there are no crops on the ground to hold the soil in place, it is washed off. That is the topsoil. What is left is the organic soil.
I know that we need to produce food and need modern farming methods, but they must be combined with keeping the standard and structure of the soil healthy for the future. If we lose the structure of the soil, I understand that it takes at least 100 years to produce an inch of good soil on top. What are we doing to this green and pleasant land? Many of your Lordships will have read Rachel Carson’s Silent Spring, which was published in 1962. It should be compulsory reading for every agricultural student. I am not against modern farming practices, but I wish that the farming community could manage to keep the soil in good condition to maintain our wildlife and our birds, which we need. We cannot afford to lose them.
Baroness Parminter (LD)
My Lords, I add the thanks of those on these Benches to the noble Lord, Lord De Mauley, for initiating this debate today. Post the referendum result, it is critical that the role of UK agriculture is championed. This debate has allowed Members on all sides today to do just that. As we have heard, our farmers provide over 60% of the food that we eat and it is vital that we have farmers keeping our food prices affordable, and a sustainable farming industry providing well-husbanded landscapes, which, as the noble Lord, Lord Clark, and the noble Earl, Lord Arran, memorably articulated, are the bedrock of tourism in many rural economies. They also deliver protection to wildlife and biodiversity and can help climate mitigation.
Now there are serious questions about how our farmers will trade in the EU and further afield, the levels of agricultural support they will receive, how they will access labour, what standards they will follow and the levels of investment in research and development. While the majority of farmers voted to leave the EU—and, like other noble Lords, I am equally surprised at the large number who did—few of them would deny that there are many challenges ahead. The most vulnerable are the livestock farmers, particularly in upland areas, and those on low incomes. They must be uppermost in our mind at this time.
Farmers now face a lengthy period of uncertainty about what the future trade arrangements will be. At the Norfolk show, the Secretary of State said that there was no plan B, so I am keen to hear what Defra has—as the noble Earl, Lord Caithness, notably said—“cobbled together” in its plans to work with the team in the Cabinet Office that is being drawn together to co-ordinate negotiations. I ask the Minister specifically what economic advice Defra is getting to inform its position and from whom. The NFU is urging the Government to ensure access to the single market when negotiating withdrawal agreement. It is right to do so given that the rest of the EU countries presently take 60% of our farm exports.
As significant are worries about the level of support that British farming will attract outside the CAP. With UK agriculture receiving £3 billion per annum under the CAP, upcoming discussions about the future of direct support to British farmers will have far-reaching consequences. There is no doubt that there will be those in government arguing that farming is a marginal economic force, with core agriculture contributing less than 1% to GDP. Some prominent leave campaigners will still be arguing for the abolition of direct payments and that farmers should be left to float free on the volatility of the world food markets.
While we can and have today pointed to the contribution that UK farming makes to the economy by underpinning our food industry, there is no denying that when discussions about future support go ahead, Defra will need all its tenacity to fend off calls for more money for education or the NHS. My party believes that farmers deserve public support and subsidy for delivering a public good: both feeding us healthy food at a time of growing food insecurity and delivering environmental benefits. We will argue hard for continued support on those joint grounds.
There are real worries, too, about how we will access the non-UK labour vital to harvesting our crops, given the increasingly difficult ways that we will have to recruit a domestic workforce—something that the noble Baroness, Lady Byford, and the right reverend Prelate the Bishop of St Albans remarked on. I would echo their comments and ask the Minister how the department believes that farming in places such as Lincolnshire—or closer to my home in Surrey, where we have a number of soft-fruit farms—will survive without the free movement of people that we have benefited from in the EU.
There is all this uncertainty and a risk of a bonfire of the directives, as the hard-won gains in animal welfare and environmental protection built up over 40 years, which Britain has often been at the heart of championing, are threatened by those in the industry who see leaving the EU as a chance to cut back on all that burdensome red tape and to ditch all that gold-plating, when in reality that red tape has created a level playing field for our farmers to trade fairly while raising standards of animal welfare and tackling the threat of catastrophic climate change and environmental degradation.
We on these Benches will speak out loudly on the continuing need for legislation to control nitrates and pesticides, to improve our water quality, to ban the use of nicotinoids—unlike the comments of the noble Duke, the Duke of Somerset—and all the hundreds of other pieces of legislation and regulation built up to ensure that farming delivers wider public goods.
The noble Lord, Lord De Mauley, highlighted the role of agriscience in the future development of the sector, and I will turn to that in a moment. Before I do, I will make one point about the need for a clear strategy from the department at this time. We on these Benches have resisted calls made by the Government, who decided that they would divide the strategy into two: one for food and farming and one for the 25-year plan for the restoration of biodiversity. We would argue that after the referendum, when there is an absolute need to remind the general public of the benefits that farming produces so that we can ensure that they will support calls for public subsidy for farmers, it is no longer appropriate for the two strategies to be kept in isolation. Now that a pause has been put on the 25-year plan for biodiversity, will the Government reconsider and bring the two strategies together so that we have one strategy for farming which recognises its vital role in both producing the food we need and protecting the environment we rely upon?
I turn now to agriscience. The noble Lord, Lord De Mauley, was right to flag up this issue, but the referendum poses major challenges to agricultural research and development. Key figures in the industry say that it is of enormous concern both in terms of the level of funding and the loss of links and networks that have been built up over the past 40 years. The right reverend Prelate the Bishop of St Albans highlighted the work of Rothamsted Research. I have been speaking to emeritus Professor Peter Gregory at the School of Agriculture, Policy and Development at Reading University. He reflected on how, back in the 1980s when the first framework grant was introduced, everyone thought that it was just a lot of bureaucratic nonsense. Some 30 years on it is fundamentally different, with everyone who is active in agricultural research linked deeply into EU networks. Under the current EU research programme, framework programme 7, the UK ranks second behind Germany both in the number of participants and budget share. How will we access those funds, consortiums and networks outside the EU? How will we continue to make progress in, innovate and develop our agribusinesses?
It is not just about replacing funds, which leave campaigners cavalierly suggested was possible when clearly that is even less likely now, given that the risks of exit warned of in the run-up to the referendum have begun to crystallise, as the Governor of the Bank of England said this week? It is about how we can replace the important collaborations that British science needs if it is to remain at the forefront of research. There are desperately pressing global challenges such as food security—an issue outlined by the noble Duke, the Duke of Somerset. With our European partners, the UK has been pivotal in addressing those issues. We need to find ways to advance agricultural science with our partners in Europe and further afield in the years ahead.
Let us be clear what we mean by agriscience. It is not just about GM, although there are outstanding concerns which were eloquently outlined by the noble Countess, Lady Mar. GM is not a silver bullet and it is only one of a number of options in the toolbox. We have seen big advances in precision farming over the past four years. Highly specialised sensor companies have begun applying their technology to horticulture with image analysis and biological interpretation of what is coming out of the sensors. In due course this technology will roll out into mainstream agriculture if the funds for research can continue. A new suite of applications is coming along to take us beyond some of the pesticide controls that we have had to date.
We must not think about agriscience as just about doing things to nature, it is about working with natural resources, including the soil, the importance of which was eloquently alluded to by the noble Lord, Lord Swinfen. In recent years, universities and research institutes have begun to focus more on soil, including increasing research efforts and working with farmers to trial different solutions and provide evidence of what can work on our farms. These are vital programmes, one of which is the soil security programme led by the Natural Environment Research Council in partnership with the Biotechnology and Biological Sciences Research Council, Defra and the Scottish Government. Future agriscience must support agro-ecological research, as we can achieve truly sustainable agriculture only if we respect and value the constraints of the natural environment. So, like others, I ask the Minister what assurances he can give about maintaining the funding for agriscience R&D and the vital collaboration to maintain our leading status once we are outside the EU.
There is no denying that there are challenging times ahead for farming. For those of us who argued that British farming’s future was best secured within the EU, our job now is to champion British farming and the huge benefits it can contribute to our country, our communities and our precious environment if it is properly directed and supported.
Baroness Jones of Whitchurch (Lab)
My Lords, I am very grateful to the noble Lord, Lord De Mauley, for initiating this debate today and for the insight and knowledge he and other noble Lords have brought to the discussion. As everybody else has been declaring interests, I feel that I ought to find one to declare. The best I can come up with is that I am the daughter of an official of what was then known as the Ministry of Agriculture, Fisheries and Food and I spent my years growing up in the rather beautiful Vale of Glamorgan. I could not have had a nicer place as my playground in my formative years.
I feel rather sorry for the Minister in having to reply to this debate. There are such huge challenges to be answered in the light of the EU Brexit vote, and I doubt whether he can say very much with certainty at this stage. However, things need to be said and clarified soon, to provide some reassurance for the 9 million people who live in rural areas, and specifically to those contributing to the food and farming sector, which is worth some £108 billion to the UK economy.
As a fervent remain supporter, I could use my time to score lots of political points about the hollow Brexit promises made to farmers during the campaign about protecting their interests and their lifestyles. To be honest, I am not sure that the farming community put too much weight on those promises. Whatever their motives—we have heard a number of different interpretations around the Chamber today—they, like me and other noble Lords, are left with a whole pile of questions about the practicalities of leaving the EU and what the future holds.
For example, what will happen to the 10,000 or so pieces of EU legislation which impact on farming life? Will the EU-funded rural payment scheme be protected? Will a future UK farming strategy have the same commitment to environmental protection, or will those commitments be discarded as being perceived somehow as unnecessary red tape? Will we still be in the single market, or will farmers have to find new markets elsewhere in the world—a real problem for us when we look at how much we rely on the EU currently?
Will we be able to impose higher tariffs on food imports that do not meet our welfare and public health standards? What will be the impact on the availability of seasonal labour if freedom of movement to the UK is restricted? What will happen to the unprofitable upland farms whose very existence is kept alive by the EU subsidies? As my noble friend Lord Clark and others have said, they also add so much to the landscape that attracts and builds a vibrant tourist industry.
Like a number of other industries, the farming sector relies on long-term planning and investment, so we cannot afford to have an investment freeze while we await the outcome of potentially two years of negotiation. Perhaps the Minister could clarify what work is taking place in the department to give some urgent guidance to farmers on these issues. Could he also clarify the status of the 25-year food and farming strategy, which we understood was to be published shortly? Is it now being revised in the light of the referendum decision?
Even without the complications of Brexit the farming community, as we have heard this afternoon, has been faced with some difficult challenges. Falling global prices and overproduction of milk have seen profits fall and many producers exiting the market. At the same time UK food self-sufficiency has dropped from 80% to 62% and continues to fall. If, as a result of Brexit, we are to be more isolated in the world, it is even more imperative that the Government give priority to ensuring that the UK has enough safe, affordable and nutritious food to feed its population.
Clearly, as noble Lords said, one part of that solution is to harness the outcome of research and technology to increase yields. We welcome the Government’s investment in agricultural innovation—the noble Lord, Lord De Mauley, referred to a number of schemes. For example, there is the funding of three centres looking at crop health and protection, livestock technology and precision agriculture. Of course, these centres will help to build on our global reputation for agricultural innovation. Apart from helping to increase crop yields and improve pest control, they should also lead to better lives for our livestock and healthier animals. These developments will build on our scientific breakthroughs in such areas as nutrition, genetics, satellite imagery, meteorology and vaccination, which are already having an impact on farming efficiency. However, these initiatives must be set against the potential loss of EU-funded research projects such as Horizon 2020 and other EU innovation partnerships.
A number of noble Lords mentioned GM crops. We had a useful debate a few weeks ago about the opportunities and concerns arising from GM insects and GM crops. As I made clear at the time, it is important that all these developments are rooted in science and evidence, but are also combined with robust safety controls and underpinned by a fully informed public debate. That is why we are also supportive of the work of the Nuffield Council on Bioethics and others who have sought to increase public understanding and raise public awareness of the ethical issues arising from techniques such as gene editing. Could the Minister confirm that the Government will work closely with Nuffield and others to ensure that our scientific advances are firmly rooted in public awareness and ethical scrutiny?
We also urge policymakers and innovators to focus their efforts on the concept of sustainable farming. There is increasing evidence of the damage that intensive farming can do to the longer-term viability of the land. The overuse of pesticides and the destruction of local habitats will have an adverse impact on yields. We need to value pollinators and bird life more, which spread natural reseeding. The hedges and woodland that make rural areas attractive places to visit and work also provide a healthy, balanced ecology which is resilient and abundant. We need to value that more. Our scientific progress must be centred on the essence of long-term, sustainable farming practice rather than short-term profits.
If we are serious about sustainable farming, we also need a bigger rethink about the behaviours we encourage as both producers and consumers. We have a generation who have no understanding of food production systems. Cheap food and obesity go hand in hand. We currently spend £6 billion a year on health issues caused by bad diets, with the cost to the economy as a whole set to rise to about £50 billion annually by 2050. While the introduction of a sugar tax on sugary drinks is welcome, we need a much bigger eating revolution. We need to make healthy food choices more appealing. Seasonality and provenance need to be valued more and consumers need confidence in robust labelling controls—with no more invented Tesco farms.
We must also bite the bullet that no Government have been prepared to face up to until now: large-scale consumption of animal protein is incompatible with sustainable farming and food security. Put simply, people must be encouraged to eat less meat. It is not the best use of our limited land resources, and livestock contributes 15% to global greenhouse gases, making our Paris commitments even more unattainable. At the same time, we must address the inefficiencies throughout the food chain that lead to an estimated 16 million tonnes of food waste being generated each year—a waste of energy and precious resources. Could the noble Lord confirm the Government’s commitment to sustainable farming combined with a focus on healthier eating and less food waste?
Finally, our strategy for innovation in the rural economy needs to be focused on the impact of climate change. We saw last winter how ill prepared we were for changing weather patterns, which resulted in the large-scale floods. We need a more profound rethink which goes further than building higher flood defences. On the one hand, we need an urgent plan to implement our Paris commitments to cut CO2 emissions. Sadly, I have to say that DECC has been noticeably slow in coming forward with any concrete proposals in this regard. On the other hand, we need to adapt to the effects of a changing climate on our landscape. Despite our growing frustration that we will never see a summer this year, we have to recognise that overall the trend to higher temperatures and reduced summer rainfall will increase the need for irrigation of crops and water for livestock. Some crops will be become less viable; other new species might thrive. At the same time, flooding of farmland could become more frequent and new pests and diseases could pose additional risks to trees, crops and livestock. Yet the Committee on Climate Change’s latest report in 2015 highlights that there has actually been a decline in investment in research and development on new approaches and technologies that would boost the resilience of agriculture and forestry to climate change. This seems particularly short-sighted, so could the Minister explain what steps are being taken to invest in solutions to this challenge?
I have been able to focus on only a few of the key challenges identified by noble Lords, but I think we have had an excellent debate and I look forward to the Minister’s response.
Lord Gardiner of Kimble (Con)
My Lords, my noble friend has long been a great champion of agriculture and horticulture and I join other noble Lords in congratulating him on securing this debate. As his successor at Defra, I am very conscious of the positive legacy he has left us.
This has surely been an exceptional debate and the experience that your Lordships bring to it is invaluable. I am delighted and honoured to reply to it. My noble friend Lord Plumb was rightly mentioned a number of times. I am very much reminded that he has been a constant in so many people’s lives. In fact, I remind him now and again that he knew my grandfather very well.
I declare my farming interests as a recipient of CAP funds, a member of the National Farmers’ Union and as vice-president of the Buckinghamshire Agricultural Association and the Suffolk Agricultural Association. I assure the noble Baroness, Lady Parminter, that I am tenacious. I am very grateful to the noble Baroness, Lady Jones of Whitchurch, for her remarks but I shall be robust on matters in the department and more generally because I passionately believe that agriculture and horticulture have a crucial role to play in our rural and, indeed, our national economy.
Farming directly added almost £10 billion to our economy in 2014. The right reverend Prelate the Bishop of St Albans described it as the backbone of the food industry. I decided that I would call it the seedcorn. Farming contributes to the UK’s £108 billion agrifood chain, which provides employment for one in eight workers. It is an industry renowned the world over for the quality of its produce and its high standards of animal welfare. Farming also dominates our landscape: 70% of UK land is classed as agricultural.
I am pleased that my noble friends Lord De Mauley and Lord Shrewsbury raised the issue of exports. The UK boasts some of the most diverse food and drink, ranging from Scottish beef to Yorkshire forced rhubarb, Kentish ale and Suffolk cheese. As my noble friend Lady Redfern is present, I had better include Lincolnshire Poacher cheese as well. Food and drink is the UK’s largest manufacturing sector, with exports worth £18 billion. I assure noble Lords that very much uppermost in the Secretary of State’s and all the ministerial team’s minds is how we enhance exports to China and America. If I had longer, I would advise your Lordships on the many areas that we are working on.
This Government are absolutely clear about the importance of vibrant and sustainable rural communities that are built on a strong economy, making them great places to live, work and visit. We also champion the way of life and traditions that make our rural areas so special. Sustainable rural communities need to be dynamic, resilient and ready to adapt for future generations. We should not look to preserve them in aspic, but instead provide them with a framework of support within which they can flourish. Last August the Secretary of State published a 10-point rural productivity plan. It will help us to create thriving towns and villages where generations of families can open and expand their businesses, buy homes and educate their children at first-class schools.
One of our plans—mentioned by a number of your Lordships—is to improve broadband, mobile and transport connections. The public investment in improving broadband is nearly £1.7 billion. My department is working closely with DCMS and its delivery body, Broadband Delivery UK, to press for improvements in coverage. It may be good in Lincolnshire, but there are still counties that are not where they should be and we need to work consistently to improve it across the country. We should also be improving planning and regulatory conditions for rural businesses, creating a highly skilled rural workforce, creating strong conditions for rural business growth, and making it easier to live and work in rural areas, particularly by overcoming housing constraints and improving access to affordable childcare for working parents.
As a number of your Lordships—my noble friend Lady Byford, in particular—mentioned, tourism plays an important role in the English economy as a whole and a vital one in many rural economies. Many of our most iconic landscapes, which attract millions of visitors from around the world, are landscapes that have been, and continue to be, shaped by farming. I am so pleased to endorse what the noble Lord, Lord Clark of Windermere, said: the Lake District would not look the way it does today without the presence of sheep and the careful management by hill farmers.
I also entirely agree with my noble friend Lord De Mauley about the importance of growth in the horticultural sector. The UK’s horticultural growers are embracing new technology to allow them to grow more while using less land. New growing techniques are being used for new varieties of apples, producing not 20 tonnes per hectare, but up to 100 tonnes per hectare. Meanwhile, growers use fewer pesticides because they use weather monitoring technology to determine when they need to spray. Our apples are the tastiest in the world and we are now selling this crisp, beautiful fruit into the middle of June. This is due to improved storage technology. The noble Duke, the Duke of Somerset, mentioned strawberries—another success story. In the 1980s, English strawberries were a treat for a few weeks of the year; the rest were imported. We are now nearly self-sufficient in strawberries and they are available from March through to November and, whatever the weather, for the whole of the Wimbledon fortnight. UK growers use various types of modern, innovative, hydroponic growing systems to produce fresh herbs and salad vegetables year-round. In addition to UK research and development, UK growers regularly visit other countries to learn from the technology used elsewhere and incorporate the best ideas into their own regimes.
British cut flower growers are just starting to see a renaissance in interest in local seasonal blooms. With continuing support from consumers, they can continue to invest in the best production techniques and produce even more. Our garden designers are the best in the world and the impact on our economy is enormous; it is worth more than £10 billion. We attract visitors from everywhere to our world-renowned gardens and centres of horticultural excellence. I must mention Kew and Wakehurst, for which I am responsible, as well as Wisley, Sissinghurst and Alnwick, to name a few. In addition, we lead the world in flower shows. Many of us will have wondered at the displays at Chelsea, not least the gold-medal winning tribute to Her Majesty by New Covent Garden Market.
As my noble friend Lord Shrewsbury has observed, farmers quite clearly operate in a global market. The future promises further change; yes, some opportunities, but some current uncertainty, following the decision of the British people to leave the European Union, to which all your Lordships—I think it is fair to say—have referred. I am fully aware of the overwhelming importance of this decision to our farming and horticultural industries. The Prime Minister has been clear that the negotiation for Britain’s future relationship with Europe will need to begin under a new Prime Minister, who should also take the decision about when to trigger Article 50 and start the formal process of leaving the EU.
To address the points made by the noble Baronesses, Lady Jones of Whitchurch and Lady Parminter, and my noble friend Lord Caithness, Defra’s priority, as my colleague the Secretary of State has made clear, is to put our shoulder to the wheel to ensure we leave the European Union in the best way for Britain, which includes ensuring that Britain’s agriculture and horticulture sectors have a vibrant future. I assure noble Lords that Defra will play a very important role in these discussions. As we prepare to negotiate our exit, Defra will work closely with a new dedicated EU unit set up in the Cabinet Office to look at future support for farmers, future trade arrangements and the regulation of the food industry.
The Government will work with industry and the public to develop these new arrangements. As my noble friend Lord Caithness said, agriculture in the UK is a devolved issue, but we will continue to work closely with colleagues in the devolved Administrations. When I attended the Agriculture and Fisheries Council in Luxembourg last week, I had some very cordial discussions with the Scottish Government Minister. The noble Baroness, Lady Parminter, asked about the economic analysis on Brexit that Defra will receive. The Government will work with industry experts and the public to take into account all the important issues, particularly the advice on economics, as she highlighted.
My noble friend Lord Caithness, the noble Baroness, Lady Jones of Whitchurch, and my noble friend the Duke of Somerset asked about the future of CAP schemes. As the Prime Minister has made clear, while the UK remains a member of the EU, current arrangements for food and farming, trade and the environment remain in place. EU funding arrangements continue unchanged. We are considering the implications for multiannual schemes under the Rural Development Programme for England, including countryside stewardship, as a priority. We will advise stakeholders as soon as we have any further information.
In answer to the question asked by the noble Baroness, Lady Jones of Whitchurch, the existing rules of the CAP will continue to apply and inspections will be conducted as normal during this period. Looking to the future, the Prime Minister was absolutely clear that a system of agricultural support would be needed in the event of a decision to leave the EU. This will all have to be negotiated under the direction of a new Prime Minister, but it is vital that British farming is profitable and remains competitive. It is at the heart of the countryside, and it is the bedrock of the food and drink industry, which is Britain’s largest manufacturing sector.
My noble friends Lord De Mauley and Lord Jopling spoke about the dairy sector. It has been and still is a grave time, but there are some positive signs for the sector. The global dairy price has risen by 3.4% over the past year and dairy consumption globally continues to rise. To support dairy farmers through this volatility, we have extended tax averaging to five years, invested in technological advances to help farmers improve their productivity, and fought hard—I was at the Agriculture Council when this happened—to secure support from Europe for a £26.2 million aid package for our dairy sector. We paid this money promptly to provide some immediate relief. I should say that I am very conscious of all that has been said about the dairy sector, as my family has been steeped in the industry for so many generations.
The world’s population is expected to rise from 7 billion to 9 billion by 2050. Our world-class research and development has a role to play in contributing to global food security and international development. As has been acknowledged, the UK has enormous strengths in this area. A recent international survey placed us top in innovation in biosciences and environmental science. In the UK, as of 2012-13, the private sector is spending more than £500 million on research and development in agricultural technologies, while the public sector is spending around £300 million.
My noble friend Lord De Mauley launched the agritech strategy in 2013. Through that strategy, this Government are taking action to ensure that the products of our world-class science and research base are making it to our food and farming businesses. As my noble friend said, the Government have committed £160 million under the strategy to rebuild the pipeline of innovation from the research laboratory to the farm. To date, £77 million of government funding has been committed to almost 100 projects under the agritech catalyst. The projects cover every aspect of farming, from cereals production to horticulture and livestock. Examples of these research projects include the precision application of fertilisers using radar technology, and protecting crops without spraying insecticides by luring insects to traps coated in insect fungal spores.
Many of your Lordships raised the importance of the environment. I was struck by what my noble friend Lord Swinfen said about soil health. I spent last Friday on a farm looking at pollinator schemes because the national pollinator strategy group, for which I am responsible, is a key part of what we want to do in ensuring that we have the best environment. I assure the noble Duke, the Duke of Somerset, that black grass is prevalent in Buckinghamshire and is a very serious problem for us all.
This Government have also invested £80 million in four new centres for agricultural innovation, which will be enormously important. These centres are now open for business and I hope that we will soon see a positive impact.
The noble Baroness, Lady Jones of Whitchurch, asked whether a future farming strategy will have the same commitment to environmental protection and about the status of the food and farming plan. The outcome of the referendum clearly provides an opportunity to consider a long-term vision for the type of environment, and food and farming sectors we want in Britain. I also noted the comments made by the noble Baroness, Lady Parminter, on this. It remains essential that we have a thriving food and farming sector, with high environmental standards. We will continue to develop both our plans in partnership with the sector within this new context.
My noble friend Lady Byford and the right reverend Prelate the Bishop of St Albans mentioned employment. The land-based colleges and universities provide vital training for those joining the industry. I welcome the recent creation of the National Land Based College, through which many land-based colleges are working together to enhance their offer to the industry. For our part, we are working with the industry to treble the number of apprenticeships in food and farming. My noble friend Lord Arran spoke of the enormous opportunities. I endorse his words and very much hope that it will be a huge success in his part of the world, the south-west. We also need to join up innovation across the farm gate. To bridge that divide, last summer the Prime Minister announced that we are setting up a new industry-led food innovation network, which I believe will be of great assistance.
The Government recognise that GM technology is one option that could help to make agriculture more efficient and sustainable. We want our farmers to have access to the best technology available, so that they can remain competitive and contribute to the growth of the rural economy. The Government believe that policy on GM technology must be science-based and proportionate, taking full account of the available evidence. We also recognise the importance of the points raised by the noble Baroness, Lady Jones of Whitchurch, and the noble Countess, Lady Mar, about the need for a debate on new technologies to be informed by and to take account of any ethical considerations.
A number of your Lordships raised climate change, which is one of the biggest challenges we face in our future. We are committed to meeting our target for reducing the UK’s greenhouse gas emissions and supporting the agriculture sector in reducing those emissions through investment.
The noble Duke, the Duke of Somerset, raised the matter of TB. We are taking strong action to deliver a long-term plan to eradicate the disease and protect the future of the UK’s dairy and beef industries. Our comprehensive strategy includes strengthening cattle testing and movement controls, improving biosecurity on farms and when trading, and badger control in areas where TB is rife.
Food security is another key point. Meeting the challenges of global food security will require a multipronged approach to improving production systems. This has been highlighted in the Royal Society report, and endorsed by the Foresight report. We are investing in food security. The Government invest £450 million a year in food and farming research and, as I mentioned, a further £360 million to support agricultural technologies. We are working with farmers, manufacturers and retailers to enable UK producers to grow and compete.
I re-emphasise the vital economic importance of British agriculture and horticulture, and this Government’s commitment to supporting its continued growth, especially through the use of science, in the future. Our country has a proud history of leading bioscience research and farming innovation, alongside a strong history of environmental land management. Farming and horticulture will continue to be the heartbeat of our countryside. For many of us, the British countryside goes to the very core of our identity and culture—the challenges of the seasons and the custodianship of the land. We owe much to the rural communities up and down the kingdom: our food, water, energy, landscape, recreation and indeed tranquillity. We ask much of them.
My noble friend Lord Caithness spoke personally of the countryside’s place in terms of both physical and mental health. Whatever the analysis, which I do not have to hand, I suggest to my noble friend that all these benefits are without price. The vibrancy of those communities is essential, and not only to the rural economy. I sense what all your Lordships have felt in this really striking debate—which has brought so much experience to bear—which is that what we owe to these communities and to our country is absolutely essential to our national well-being. I assure your Lordships that my energies, and the energies of Defra, are devoted to that purpose.
Lord De Mauley
My Lords, I thank all noble Lords for taking part in this debate so enthusiastically. I was struck by the high level of agreement between most of us, perhaps with the exception of the subsidiary debate on GM crops, which noble Lords will be relieved to hear I will not embark on now. Although the noble Lord, Lord Clark of Windermere, was a lonely Labour Back-Bencher, he and most of us on this side seemed to have a strong meeting of minds.
I did feel sorry for my noble friend Lord Swinfen. I do not know where he lives, but it sounds like the most terrible place and I feel very lucky to be able to say that it is not like that where I live. None the less, he makes an important point, which is why our agritech strategy emphasises the importance of meeting the challenges of a growing population without damaging our environment.
There is not time for me to thank each and every noble Lord by name, but my noble friend the Minister has summarised the debate in his usual competent way, saving me the trouble.
Refugees and Migrants: International Summits
Lord Roberts of Llandudno
To ask Her Majesty’s Government, ahead of (1) the high-level United Nations plenary meeting on 19 September, and (2) the summit hosted by President Obama on 20 September, what plans they have to work with other nations in addressing large movements of refugees and migrants.
Lord Roberts of Llandudno (LD)
My Lords, I had thought we might sing the Welsh national anthem at the start of my speech to congratulate the Welsh football team for doing so magnificently. But I am going to refer to another song which we could sing:
“All things bright and beautiful,
All creatures great and small”.
However, one verse has been omitted in recent hymn books:
“The rich man in his castle,
The poor man at his gate,
God made them high and lowly,
And ordered their estate”.
No wonder that verse has been omitted. That is not how life goes. People are victims of circumstances. They often do not choose the paths laid before them; they have to accept the circumstances in which they find themselves. Today we are in the middle of the greatest humanitarian crisis since World War II. I was surprised when I saw the figure—it is estimated that 34,000 people a day become displaced, including asylum seekers and refugees, and people internally displaced. There are incredible numbers of people, displaced for many different reasons, including political oppression, civil war, food shortages and climate change. How do we handle these causes of migration, and what do we need to do to help people who have been forcibly displaced, both internally and beyond? What guidance can be given to countries?
Migration is not new. People fled, for instance, in the 19th century, because the Irish potato famine caused a mass emigration of 1 million people to the United States. Some came to south Wales and worked in our industries there—but another 1 million Irish people starved to death as their main crop failed. In the 20th century, political violence and hatred led to the Holocaust, when 6 million Jews died, and the papers here reported, “German Jews pouring into this country”. That was a sort of migration—a devastating migration for so many millions of people. The war itself saw millions trudging in search of somewhere they could be accepted and helped to survive. Then we saw the partition of the Indian continent with all the migration there, and in the Middle East the lines drawn on maps had terrible repercussions. We still seek to find a lasting solution to the Israel-Palestine question. The Syrian crisis has devastated a once peaceful country.
I read a report from the British Red Cross, which has studied the situation in Africa. It says that the journey from east and west Africa through north Africa is long, dangerous and traumatic, and takes one to two years. Every person interviewed in the course of Red Cross research had been exposed to violence and witnessed the death of someone else on the route. The upcoming summits on migration at the UN General Assembly in September will provide an opportunity for countries to reaffirm their commitment to a humane response to migration. The British Red Cross study highlights how far the international community has yet to go in ensuring that all migrants, regardless of their legal status, receive the protection and support they need.
It is a vast issue, with 65 million refugees and 65 million individual stories. It is 65 million boys, girls, grandparents, mothers and fathers; each of these people is an individual. There are 65 million migrations, each individual with their own character, strengths, weaknesses and potential. What has caused each of these people to flee their homes, to take risks and face the unknown? Was it bombing or hunger? What pressures led them to risk crossing devouring seas in very fragile boats? This past year, more than 3,000 have drowned as they tried to cross from north Africa to the European continent.
One Syrian refugee who fled civil war and left all that he knew and loved behind had studied English and history at his university in Syria. As his studies concluded, the war commenced, and as a young, able-bodied man, he was left with three options: fight for the Government, fight for the rebels, or flee the violence. His reluctance to kill his own countrymen led to choosing the third option. First, he travelled to Iraq; he was a very competent person and worked as an aid worker with the United Nations. When he realised that that area in Iraq was no longer safe, he made the decision to put his life in the hands of traffickers and flee to Europe. He travelled by rubber dinghy and in the back of lorries, in constant fear for his life because he was in the hands of traffickers.
The family of another young man from Syria sold everything they owned to help pay traffickers and get him to safety. He, and 45 other people, were put in an inflatable boat that was intended for a maximum of 20 people, he walked 12 hours in the dead of night once he reached Greece and spent the month after that walking through Macedonia and Serbia.
Those who have fled Syria are the victims of circumstances. It was not their wish to leave their homes, families, livelihoods and country. In no way can they be regarded as economic migrants. Rather, they were forced out by the violence and insecurity that political upheaval had wrought in their homeland. We have a responsibility to help these people and others as they face an uncertain future. Some will, by one means or another, reach the United Kingdom. We hear of government attempts to reduce the number of asylum seekers to tens of thousands. What prospect is there of this? It can become a reality only when bombing stops and when the famine-stricken are fed. Climate change will always be with us, as we heard in the previous debate. Its consequences will be increasingly notable.
Here in Britain, initial Home Office decision-making is inadequate. How do we receive these people? In 2015, the courts overturned Home Office decisions in 38% of asylum appeals. In 2015 alone, nearly 15,000 asylum seekers were locked up in detention centres. In fact, nearly half of all asylum seekers will be detained during their asylum process here in Britain. What led me to support the coalition Government in the previous Parliament was the pledge to end child detention in immigration cases. We have gone a long way towards that, but much more needs to be done. Britain is not fit for purpose in its processing of asylum applications. The United Kingdom currently welcomes less than 1% of the world’s refugees. It is a challenge, remembering our Christian heritage, to welcome people who have faced incredible difficulties and to incorporate their contributions to our society. So often we seem to be banging our heads against a brick wall trying to get the Government to move. Canada welcomes 25,000 Syrian refugees a month. The UK wants to accept 20,000 over the term of a Parliament. The obligation in the latest Immigration Act to accept unaccompanied child refugees is not making a great of deal of headway.
In 2016, the United Nations made its strongest appeal for humanitarian aid, calling for $20.1 billion. This September, President Obama will host a leaders’ summit on refugees to increase financing for international humanitarian organisations by 30%, double the number of legally resettled refugees, increase access to legal channels of admission and increase the number of refugee children in schools and refugee adults in work. Global migration is an issue our children and our children’s children will have to reckon with. We have to accept our fair share of refugees here in the UK. At that time, we hope that some of the problems that drive them from their homes are mitigated. There is no one-size-fits-all approach, but one thing that could happen at the UN could be a requirement for each country to plan the way that it is prepared to respond to future emergencies. In the UK, with 20,000 refugees to accept before the next general election takes place, according to the Prime Minister’s pledge—there is no use passing this on to the next Prime Minister as the pledge has already been made—unaccompanied refugee children must be accepted here. We agreed and I want to know exactly what is happening and how far down the road we are.
In conclusion, we wish the conferences in New York well. Is Britain going to take a lead or will we pass by? We could be the humanitarian force in the world in the coming decade. Will we do that or will we sit back and let other people do what they can?
Lord Judd (Lab)
My Lords, I am glad to follow the noble Lord, Lord Roberts. He has a lot of political courage. I sometimes feel that the House is not comfortable with his contributions because it would rather not face the issues he sees so clearly with a sense of vision and international responsibility.
We are preoccupied at the moment with immediate European affairs and their implications for people. I am one of those who believes that it is intolerable that we should have thrown people who are working here, living with us, contributing to our society and enjoying being in our midst into a sense of desperate agony and uncertainty about their future. Of course we should give them an unqualified pledge that they can stay whatever happens. But all this is child’s play when considered against the international, global reality that faces us. Pressures are immense.
Where do refugees come from? In the world, 4.2 million come from Syria, 2.6 million from Afghanistan, 1.1 million from Somalia, 744,100 from South Sudan, 640,900 from Sudan, 535,000 from the Democratic Republic of the Congo, 470,600 from the Central African Republic, 458,500 from Myanmar, 383,900 from Eritrea, 377,700 from Iraq. All those people are desperate, agonised, yearning for some hope for their future and that of their children. It is a terrible plight to consider. Who takes them in? Turkey takes 1.8 million, Pakistan 1.5 million, Lebanon 1.2 million, Iran 982,000, Ethiopia 702,500, Jordan 664,100, Kenya 552,300, Uganda 420,400, Chad 420,800 and Sudan 356,200. Those figures should be imprinted on all our minds as we look at our neurotic supposed concerns about the numbers with which we are dealing. I speak specifically and legally about refugees. The truth is that we host 117,234, which amounts to 0.18% of our population. When will we look at these issues with a real sense of honest perspective?
It will not get better because, as the noble Lord, Lord Roberts, argued, climate change will mean that these numbers accelerate all the time. That is why I deeply regret our withdrawal from the European Union, where we could collaborate in finding strategic solutions. If we are really serious about being positive members of the international community, we had better demonstrate very quickly that we will take specific and identifiable action to meet these challenges and the human suffering that they represent.
With regard to the refugees who are the specific responsibility of the UN High Commissioner for Refugees, to whom we have given that responsibility, 50% of the countries that receive them are in sub-Saharan Africa. Four of those are the least developed countries. The EU receives none of those refugees who are the specific responsibility of UNHCR. That is a disgrace. History will see that and wonder how we could be so mesmerised by the immediate problems on our own doorstep.
The political consequences of what I have been talking about are incalculable. Hosting this number of refugees will lead inevitably to tremendous tensions. It will matter tremendously that such a high proportion of the population in Jordan or Lebanon are now refugees. The people of those countries have been amazingly tolerant and accepting, but what will happen as they begin to see the world’s attention, such as it is, concentrated on the refugees and not on the implications for them socially and economically? It is bound to undermine political stability still further in the region. We must give priority to quickly finding strategies that matter.
In the three minutes left to me, I have a few points to make. Our response should focus on prevention, doing more to ensure that people do not need to flee war, disasters, persecution and poverty. It means the co-ordination of development, human rights, conflict resolution, security sector reform and early warning as much as it does managing the movements when they arise. It means we need to recognise that many countries and regions have been dealing with large refugee problems for a long time. Our approach needs to acknowledge that we need to provide a better package of support to those countries, and predictable funding for UNHCR would be a good start, as would preventative funding for agencies such as the World Food Programme, which often appeals for funds to stave off disasters but is often ignored until the situation escalates.
There is clearly a need to close the gaps in protections. For example, those displaced by disasters and poverty do not fit neatly into the 1951 convention definition, which is predicated on individual persecution. The same has been true of so-called climate refugees. Given the present environment, it is difficult to imagine that trying to amend the convention would be productive. We need to look at other mechanisms—for example, building this into our climate change and development frameworks. Obviously it is vital for us to lead by example. That does not just mean giving money; it demands working on the politics, which means taking people into our own society and being part of United Nations schemes to do so. All the more so post-referendum, when, if we are not to confirm our position as a neurotic, introspective island off the mainland of Europe, we have to show that we are a responsible global player. There is nowhere better to start than by demonstrating our seriousness of intent on the refugee issues. Above all, I thank the noble Lord, Lord Roberts, for having raised this important subject.
Baroness Sheehan (LD)
My Lords, I too thank my noble friend Lord Roberts for securing this important and timely debate.
We are witnessing the forced displacement of people on a colossal scale. This is a global emergency which is projected to grow, devastating lives, stunting economic growth and endangering world peace. There is no one single cause of this mass movement of people. Separating desperate people into refugees and economic migrants is counterproductive if we want to come to grips with useful ways in which we can move forward. We need now to broaden our definitions—by that I mean the 1951 Refugee Convention—of those who need our help to include those displaced by crippling inequality and devastation of livelihoods by climate change, because they too are fleeing to save their lives.
Our global institutions continue to address the issue, with a multitude of initiatives under way, all incorporated in the high-level United Nations plenary meeting on 19 September, complemented by the summit hosted by President Obama on 20 September. It is imperative that Britain plays its full part. It is a shame that at a time when Britain should be playing its historic role in leading global thinking and moulding forward processes, we are instead looking inward and our focus is becoming increasingly insular as we divert resources to extricating ourselves from EU agreements. It is doubly frustrating, as this will entail dismantling some of the very mechanisms which help us to work collaboratively with our European partners—and then reconstruct them to meet the same international requirements. What a waste of time, effort and money.
Another major concern thrown up by the EU referendum result is the toxic, xenophobic language unleashed by the leave campaign, which has fuelled racist, anti-immigration violence against peaceable residents. History has taught us many lessons about the destructive legacies of hatred. This climate incites discrimination against refugees and migrants in various spheres of life such as education, employment, healthcare and housing, violating their human dignity.
I will quote the UN Secretary-General’s report of 21 April 2016 to the UN General Assembly, entitled In Safety and Dignity: Addressing Large Movements of Refugees and Migrants:
“To address this, I have decided to initiate a global campaign led by the United Nations to counter xenophobia, emphasizing direct personal contact between host communities and refugees and migrants. I hope that the campaign will highlight our common humanity and stress the positive contributions made by refugees and migrants”.
I hope the Minister will be able to assure us that the Government will embrace the sentiments behind this initiative on the part of the Secretary-General and will enthusiastically make the positive case for the benefits that migrants bring to Britain—not just economically but socially, culturally and, dare I say it, gastronomically. Chicken tikka masala is, after all, the nation’s favourite dish.
The inclusion of refugees and migrants in all spheres of economic, social and cultural life will promote social cohesion, to the benefit not only of refugees and migrants but the host community. I shall give your Lordships an example—that of Nagu, a remote island in Finland, which was called upon to host refugees. It is worth looking at the report in the Guardian on the way in which the islanders took a decision not to be fearful of the arrival of strangers but, rather, to welcome the Afghans and Iraqis into their community and include them in their activities. Those included social gatherings, a friendship cafe, baking classes, piano lessons, animation and drawing for the children, music events, football, ice-skating and daily walks—all with the facilitation of the Finnish Red Cross. For many local people, the arrival of the refugees has helped the community to find a greater togetherness. Despite their initial reservations, the islanders now feel that it is the refugees who have brought them something.
That example shows that with good leadership it is possible to change the mood of the host community from one of fear of the other to one that is open-minded and welcoming—to the benefit of all. It is my fervent hope that, in developing plans to work with other nations to address large movements of refugees and migrants, our Government will, in particular, look closely at the damage done to community cohesion in host nations by inflammatory anti-immigration rhetoric and that they will do what is necessary to encourage a welcoming environment. Without that, I see no easy way of securing a decent, moral and humanitarian solution to the crisis that we face. I suggest that the tone of candidates’ campaigns as they vie for the position of Conservative Party leader should reflect that, given that the country’s ears will be acutely tuned in, as the campaign will also involve the selection of a Prime Minister to govern us all.
To end, I should like to focus on the manifestation of this global issue on our own doorstep—in the camps in northern France at Calais and Dunkirk, and in other, smaller camps. The title of this debate includes the words “work with other nations”. What collaborative work are the Government undertaking with the French Government to put in place systems and processes to assess the claims of the people who have been living there in the most appalling conditions? The camps continue to grow, although that has not received much media coverage recently. I assure the Minister that, despite protestations by the Government that systems are in place, I have seen no sign of them on my recent visits to the camps.
The then Immigration Bill saw the inclusion of an amendment from the noble Lord, Lord Dubs, supported by these Benches, to allow an unspecified number of unaccompanied asylum-seeking children already in Europe to come to the UK. I would like to see the Government take a proactive role in making that happen. Attending high-level UN meetings with President Obama is all well and good, but what is the point of fine words when we ignore the plight of very vulnerable women and children here and now on our doorstep?
Lord Collins of Highbury (Lab)
My Lords, I, too, thank the noble Lord for initiating this debate. Images of refugees making treacherous journeys in search of safety have dominated the news in recent times. I sometimes fear that we have become a bit immune to those images, but I hope that no one will ever forget the picture of that lone child being swept up on a tourist beach. That image resulted in an outcry from the public and a call for action—action that I hope everyone on all sides of the House firmly believes needs to be taken.
As we have heard, behind that one image is the story of tens of millions of families forced out of their homes. As the noble Lord, Lord Roberts, highlighted, UNHCR figures show that more than 65 million people were affected in 2015—the highest level ever recorded and greater than the entire population of this country. Although the total includes some 21.3 million refugees and 3.2 million people awaiting asylum decisions, the overwhelming majority of the displaced— 40.8 million—are exiled from their home within the borders of their own countries.
The figures have increased by more than 50% during the past five years as levels of displacement reached their highest with violence, conflict and wars. The violence in Yemen, for example, brought about more new internal displacement than any other conflict in 2015, with almost 10% of its population forced into internal exile.
More than 800,000 refugees and migrants came from Turkey into Greece in 2015, accounting for 80% of sea arrivals, while the number of people crossing from north Africa into Italy dropped slightly from 170,000 in 2014 to around 150,000 in 2015. The number of people crossing the Mediterranean increased from 5,500 in January 2015 to a monthly peak of more than 221,000 in October.
Filippo Grandi, the UN High Commissioner for Refugees, said that the world was not doing enough to tackle a crisis with no end in sight. He said:
“More people are being displaced by war and persecution and that’s worrying in itself, but the factors that endanger refugees are multiplying too … At sea, a frightening number of refugees and migrants are dying each year; on land, people fleeing war are finding their way blocked by closed borders”.
And yet, he went on to say—this is perhaps the most worrying thing—politics in some countries is gravitating against asylum. I repeat the question asked by the noble Lord, Lord Roberts, bearing in mind the commitment that this Government gave to ensuring that asylum seekers could enter the UK from the conflict in Syria. What are the latest figures on reaching the 20,000 target? What are the figures for the first six months of this year? We knew what the commitment was over the Christmas period, but I would like to know the figures for the latest period.
This year a number of events have addressed the issue of refugees and migration. We had the Syria Donors Conference on 4 February in London, co-hosted by our Government and those of Germany, Kuwait and Norway. A resettlement conference was convened by the UNHCR in March to gather pledges to resettle people displaced by the Syrian conflict—and, of course, we had the World Humanitarian Summit in Istanbul in May. When we received the report of that summit, I welcomed the Government’s approach in scaling up the methods that we pioneered in the Syria region as a global model for dealing with this protracted crisis of displacement, going beyond people’s basic needs and investing in education, jobs and livelihoods.
In this House, I also welcomed the commitment of an extra £30 million to the Education Cannot Wait fund to make sure that no child misses out on an education. Generations of people in camps face no future and no education. The fund is vital to ensure that that generation is not wasted. Will the Minister update us on the fund and whether and what other countries are contributing?
The September gathering convened by the UN Secretary-General and the summit that preceded it hosted by US President Barack Obama offer a chance to tackle the situation and to strengthen global responsibility sharing. President Obama has declared that he will seek to secure new commitments towards increased and sustained support for UN humanitarian appeals, greater opportunities for resettlement, and expanded opportunities for refugee self-reliance through that programme of education, legal employment and other measures.
The Government have repeatedly said that their approach has been the SDG’s pledge to ensure that,
“no one will be left behind”.
Out of the forum that preceded the May summit, five core principles were adopted which clearly informed the outcome of that summit. The first was to work through national and local systems. We have seen examples in Pakistan, Lebanon and other host countries where children have been educated in national schools. I would like to hear an update on how far those programmes are being expanded.
There is also support for host communities to build social cohesion. That is vital and takes me to the point made by my noble friend Lord Judd in terms of the populations in Jordan hosting a huge number of people. It is not just about the care of the refugees; it is important that we understand and support the host nations, too.
Core principle III is to enable economic participation and stimulate growth. We have seen Jordan’s plan for a special economic zone where Syrian refugees and Jordanian nationals work side by side to develop businesses and to ensure that investment can be attracted by access to the European Union market.
The fourth principle was to provide impactful and innovative financing. I raised the question before about humanitarian programmes that have the potential to make the difference between dependency and development. Will the Minister update us on projects such as providing refugees with cash rather than in-kind goods so that they can stimulate the local economy and benefit the host nations themselves? I know that specific projects have been evidenced in the report.
The final principle, which I know will be addressed at the summit in September, is the need to improve data and the evidence base. We have seen the potential of this with a recent study conducted on poverty and welfare among Syrian refugees in Jordan and Lebanon. How does the Minister think we can improve the data on refugees to ensure the principle that no one is left behind? The inclusion of refugees and displaced people in national poverty surveys would clearly ensure that their needs are properly reflected in national planning. Of course, data on refugees and financing still will not tell us the full story, but understanding the poverty of people forced to flee and the investments needed to help them would constitute a vital step in the right direction.
The Earl of Courtown (Con)
My Lords, I thank the noble Lord, Lord Roberts of Llandudno, for enabling the House to have this debate and me to make some of the points that I will make in this speech. Let me first set the context. As other noble Lords have mentioned, more than 65 million people are forcibly displaced worldwide, a third of whom are refugees. Alongside them, many are embarking on risky journeys for economic reasons. This global crisis has reached unprecedented levels.
As well as the clear humanitarian concerns, the situation risks fuelling organised crime and reducing resources for those in genuine need of protection. It also undermines public confidence in the controlled, safe and legal migration that brings significant economic and development benefits to the global community. As the noble Lord, Lord Judd, said, this is the time for the UK to show itself to be a responsible global player. A more sustainable global response is urgently needed.
The United Kingdom is leading the international policy debate. We are pursuing a comprehensive approach by responding to the immediate humanitarian crisis and using our aid programmes to deliver stability, jobs and livelihoods, reducing the pressures that force people to migrate. As the noble Lord, Lord Collins, mentioned, we hosted the Syria conference in February, which not only raised more in a single day than any previous event, but established a new approach to providing long-term support to neighbouring countries and the displaced Syrians they are hosting. I would mention places such as Lebanon, Jordan, other countries in the region and of course Turkey.
In 2015-16, DfID spent £540 million on economic development in Africa and £500 million on humanitarian support. The noble Baroness, Lady Sheehan, mentioned the problems of poverty, and this will go some way to putting money where it is needed most. The United Kingdom is also at the forefront of the response to the crisis in Syria and the region. As noble Lords are well aware, we have pledged more than £2.3 billion, our largest ever humanitarian response. One must always remember that whichever country and whatever area we look at, the United Kingdom is more often than not among the top three contributors to humanitarian aid.
We are not operating in isolation. The UK is working with the international community and with our partners and allies to shape a global migration framework. We have played a leading role in addressing the situation in the Mediterranean, including joint work with European partners in the Horn of Africa through the Khartoum process and providing expertise and practical help to Greece and Turkey.
2016 is a pivotal year, offering an opportunity to build a sustainable global response, placing greater emphasis on global responsibility-sharing, on reducing large-scale irregular migration and on providing protection and humanitarian support to those who need it. A series of high-level international meetings across the year are providing the context in which we will pursue a new global agenda on migration. Many of these forthcoming international meetings have been mentioned in the debate.
My right honourable friend the Prime Minister discussed migration with his G7 counterparts at their summit on 26 May. I assure the noble Lord, Lord Judd, that the G7 leaders recognise that this is a global challenge requiring a global response. We are committed to increasing assistance to meet the needs of refugees, displaced people and host communities, and to encouraging international financial institutions and bilateral donors to bolster their assistance.
Also mentioned was the first ever World Humanitarian Summit held in May, which was attended by 55 leaders. The United Kingdom led the way to securing agreement that the humanitarian system needs to reform and forge consensus on the way forward, in particular through a renewed commitment to compliance with international humanitarian law. Improving the architecture to tackle forced displacement and migration was a major theme running through the summit, as was the need to ensure that the most vulnerable—girls and women, youth and people with disabilities—are not left behind. We have been exploring with our NATO allies an enhanced NATO role in tackling migration in the central Mediterranean, including when Defence Ministers met in June. Migration will be on the agenda at the Warsaw summit in July.
Her Majesty’s Government have also been working with G20 partners to consider how leaders can build on this new approach to protracted crises when they meet in China on 4 and 5 September. The G20 summit will immediately precede the two summits which the noble Lord, Lord Roberts, highlighted in his title to the debate: the UNGA high-level event on large movements of migrants and refugees, hosted by the UN Secretary-General, and the US summit on refugees to be hosted by President Obama.
The noble Lord, Lord Roberts, mentioned migration and the UN summit. I agree that it is critical that all states, wherever they are in the migration chain, take responsibility to provide protection to those who need it, and for tackling irregular migration. A key UK objective for the summit is to increase global responsibility-sharing. We want those who currently do not offer resettlement to establish mechanisms. The outcome of the summit is likely to call for all equitable responsibility-sharing, according to capacity and circumstances.
The UK hopes that the UN Secretary-General’s summit on 19 September will build on the consensus over the practical actions that should be taken. It will seek to agree a new global compact for refugees and lay the groundwork for a global framework for dealing with irregular migration. The compact will reinforce the 1951 convention and the 1967 protocol and have a focus on responsibility-sharing for refugees. We are discussing with other UN member states, including Ireland and Jordan as co-chairs of this process, what should be included in the compact, engaging both in New York and in capitals.
The noble Lord, Lord Collins, mentioned the Wilton Park forum, and the discussions that have contributed to the development of the guiding principles on responding to protracted enforced displacements: the work through national and local systems; support to host communities and social cohesion; the economic participation and growth; impactful and innovative financing; and improved data and evidence. Those principles exemplify the shift that we want in moving from a purely humanitarian response to protracted enforced displacement to the application of development approaches alongside humanitarian responses.
These principles became the critical input for the World Humanitarian Summit in Istanbul in May. The United Kingdom aims to secure these principles as a key part of the declaration and refugee compact agreed at the United Nations summit. The noble Lord, Lord Collins, went on to ask another question to which I will respond in writing, and I will provide answers in the Library for all those who have taken part in the debate.
As noble Lords are aware, the following day, on 20 September, President Obama will host a leaders’ refugee summit aimed at making new and significant commitments to strengthen the international response to the global refugee crisis. This includes securing increased funding to humanitarian organisations and UN appeals, doubling the number of resettlement places, and providing opportunities for education and legal employment to increase refugees’ self-reliance and inclusion. Senior United Kingdom officials have been engaging closely with the United States, including through a recent visit to Washington and New York, to identify how the United Kingdom can best support its objectives. The United Kingdom is encouraging other countries to put forward resettlement commitments, and to commit to donating money—maintaining the push and forward momentum following the Syria conference.
The noble Lord, Lord Roberts, and other noble Lords asked about the resettlement of unaccompanied minors, in particular in relation to the amendment of the noble Lord, Lord Dubs, to recent legislation. On 21 April, Her Majesty’s Government announced a new scheme designed with the UNHCR to resettle children at risk from the MENA region. The Government committed to resettling several hundred individuals in the first year with a view to resettling up to 3,000 individuals over the lifetime of this Parliament, the majority of whom will be children, where the UNHCR deems it to be in their best interests. The new scheme will be in addition to the 20,000 already committed to and mentioned by many noble Lords. I have figures relating to that which I will come to later in my speech.
The scheme encompasses unaccompanied children, separated children and other vulnerable children, as well as those at risk of child labour, child marriage and other forms of neglect, abuse or exploitation. We established an additional £10 million Refugee Children Fund for Europe which will work mostly in Greece and will prioritise unaccompanied and separated children. It will provide immediate support and specialist care, alongside legal advice and family reunification where possible. UNHCR, Save the Children and the International Rescue Committee were selected to implement this programme.
On 4 May, the Government announced they will work with local authorities on plans to resettle unaccompanied children from Europe. We are looking to transfer children who were already present in Europe before the EU-Turkey deal came into force on 20 March where it is in their best interests. We must put the best interests of children first and avoid any policy that places children at additional risk or encourages them to place their lives in the hands of the people traffickers and criminal gangs. In any response, we need to be careful not to inadvertently create a situation in which families see an advantage in sending children ahead, putting their lives at risk by attempting perilous sea crossings to Europe.
I apologise to the House for going over my time limit but I think it is a good idea to get these points on record. The noble Baroness, Lady Sheehan, referred to Calais. While the management of migrants in Calais is the responsibility of the French Government, the United Kingdom recognises that vulnerable people in the camps are at risk from exploitation and trafficking. This is why the United Kingdom Government fund a project run by a French NGO to identify and direct vulnerable people to protection, support and advice within France. At the UK-France summit on 3 March, both countries reaffirmed their commitment to addressing the issues raised by the migration pressures in Calais and the surrounding area. The United Kingdom will contribute £17 million to joint work with France to ease migrant pressures in the Calais region and further strengthen the UK border.
The United Kingdom and France run regular joint communication campaigns which inform individuals of their rights to claim asylum in France and give them information on family reunification. The frequency of these campaigns has been increased in line with the joint declaration signed by the Home Secretary and French Interior Minister in August 2015.
The noble Lord, Lord Judd, and other noble Lords asked how many people have so far been resettled. In the year ending March 2016, a total of 2,441 people were resettled in the United Kingdom. Of these, 1,667 were resettled under the Syrian VPR programme. The others were resettled under our mandate and Gateway schemes.
I am pleased that the noble Baroness raised the important topic of predictable financing. The United Kingdom was at the forefront of devising and brokering the grand bargain between donors and implementing agencies at the World Humanitarian Summit in May. These 10 principles will make major donor funding more predictable over multiyear timeframes and with reduced earmarking.
I know that I have not answered a number of questions. I will write to all noble Lords and provide the answers as best I can and place copies in the Library. I conclude by assuring your Lordships that we will continue to engage internationally through the range of our bilateral relationships and through multilateral channels at the United Nations and within the European Union, while we remain a member. We will continue to focus on a positive, proactive agenda, building alliances and making the case for a comprehensive and truly global response. And we will continue to ensure that the United Kingdom remains at the forefront, leading the way in both the discussions and through our actions.