House of Commons
Prayers
Tuesday 25th April 2017
(6 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Speaker
Today, 25 April 2017, marks the 200th anniversary of the first printing of the daily Votes and Proceedings and an Order Paper setting out the business of the House. This followed an initiative by my predecessor in the Chair, Speaker Abbot. Members have relied ever since on these papers. This is a good moment for us to thank all those responsible in the House service for their preparation and distribution ever since, and for their unfailing appearance, rain or shine, printed or digital.
Oral Answers to Questions
(6 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Andrew Stephenson (Pendle) (Con)
Mr Alan Mak (Havant) (Con)
The Minister for Courts and Justice (Sir Oliver Heald)
Following our completion of the review we announced our intention to make changes by secondary legislation that would make it easier for victims of domestic violence to access legal aid. These changes include removing the time limit on all forms of evidence and accepting evidence from domestic violence support organisations.
Andrew Stephenson
I thank my right hon. and learned Friend for that answer. I appreciate that he might not be able to go into detail just yet, but can he offer a commitment to the victims of domestic violence of his continued support for them in the justice system in the next Parliament, if a Conservative Government are returned?
Sir Oliver Heald
I can certainly do that, and I can also point to the recent changes made in courts to help victims of domestic violence to give evidence, such as the video links that we have introduced, and the provision for recorded evidence and cross-examination which is about to be rolled out. It is also important to say that the House generally supported the end to cross-examination by perpetrators.
Mr Mak
I thank the Minister for his answer and welcome the announcement. Will he join me in commending the Southern Domestic Abuse Service, a Havant-based charity that helps victims of domestic violence report to the police, and ensure that he continues working with such charities to make sure that the evidential guidelines are consistent with the sensitivity of this issue?
Sir Oliver Heald
I am happy to pay tribute to organisations that help victims of domestic violence on their work, and I know from talking to my hon. Friend, who is a strong advocate for them, that that service in Havant is excellent—so, yes, I agree with him.
Yasmin Qureshi (Bolton South East) (Lab)
The Ministry of Justice committed to reviewing the domestic violence evidence requirements for legal aid. That was a clear admission that the scheme was not working and was not fair. Since the passing of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, the family courts have become more adversarial. Should the Minister not admit that the withdrawal of legal aid for so many family cases has caused real unfairness to families?
Sir Oliver Heald
As the hon. Lady will remember, we promised at the time that there would be a review of LASPO and the legal aid provisions, and we have announced the timetable for that review, which has been welcomed, but I agree that we should have a process of constant improvement in helping the victims of domestic violence.
Ben Howlett (Bath) (Con)
The Government have made huge progress in tackling domestic violence both at home and overseas. However, my surgeries are often filled with people who are suffering or have suffered from domestic violence and who are stuck in the family courts system. They are receiving legal aid, but the situation has caused distress. I know the Minister has personally looked into these issues, but will he meet me, hopefully after 8 June, to discuss them further?
Sir Oliver Heald
I would never take the electorate for granted, but if I am here, I will meet my hon. Friend.
Ian C. Lucas (Wrexham) (Lab)
The Parliamentary Under-Secretary of State for Justice (Mr Sam Gyimah)
This is a matter for the Home Office. The Psychoactive Substances Act 2016 requires the legislation to be reviewed within 30 months, so the review of that Act will happen in late 2018.
Ian C. Lucas
Wrexham, like many other towns up and down the country, is being blighted by the impact of so-called Spice. I received a letter this month from the Home Office that directly contradicts a letter from the Minister on the question of whether the possession of Spice is an offence. The confusion is causing real enforcement problems for police officers, who have already had their numbers cut by this Government. Will the Minister take this matter more seriously and act urgently to confront this really serious problem?
Mr Gyimah
I agree with the hon. Gentleman that it is a serious problem and, as I have said before, it is also a problem in our prisons. Possession of Spice in a custodial setting is an offence and is subject to imprisonment. If the hon. Gentleman could forward me his letter from the Home Office, I will look into this in more detail and get back to him.
Sir Julian Brazier (Canterbury) (Con)
May I say how much I welcome the 2016 Act, having lost two young men to what used to be called legal highs? The extra powers that it provides and the rigorous application of the law to rapidly changing chemicals are extremely welcome.
Lucy Powell (Manchester Central) (Lab/Co-op)
As the Minister will be aware, the use of Spice and its impact on our communities are now reaching epidemic levels. This is particularly hitting city centres such as Manchester and other towns and cities across the country. What discussions is he having with colleagues in other Departments to get a proper handle on this issue and to crack down on it? It is putting intolerable pressure on our public services.
Mr Gyimah
The hon. Lady makes an important point. Spice is a blight on our communities as well as in our prisons, where it fuels the disorder and violence that we see there. We take this extremely seriously and I am working with my colleagues in the Home Office to deal with the issue not only in the custodial system but in the community.
Mr Philip Hollobone (Kettering) (Con)
Banning psychoactive substances is one thing, but physically keeping them out of our prisons is quite another. Will the Minister tell the House what active measures he is taking to prevent these substances from getting inside our jails?
Mr Gyimah
My hon. Friend is right. We are determined to keep these drugs out of our jails, and that is why we have trained 300 dogs to detect them. We have also introduced a new drug test for psychoactive substances, and the UK is the first jurisdiction in the world to do that. The testing has been rolled out, although we cannot comment on its impact because it started only last year. However, we know from the evidence that drug testing has a deterrent effect on use and possession.
Gavin Robinson (Belfast East) (DUP)
With four suspected drug-related deaths in one weekend at the start of this month in Belfast and the coroner reporting that the number of such deaths has doubled in the past two years, this is an important issue that affects cities right across the United Kingdom. Will the Minister confirm that his review in 2018 will also draw on the experience of the implementation of the Act in Northern Ireland, Scotland and Wales in order to get the full picture of how well the legislation has been operating?
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
Rehman Chishti (Gillingham and Rainham) (Con)
The Parliamentary Under-Secretary of State for Justice (Mr Sam Gyimah)
Extremism in prisons is something we take very seriously. The Department has set up a new directorate to oversee all aspects of our work on extremism and terrorism. We have also created a new joint unit encompassing the Prison Service, the national probation service and the Home Office, with enhanced resources to deliver our extremism strategy.
Mrs Gillan
Extremism in prisons means that vulnerable people, such as those with mental health problems or those on the autistic spectrum, could be at great risk in those closed environments. Will the Minister tell me what work the Government are doing to protect people from extremism within the prison system and what reasonable adjustments are being made to help those particularly vulnerable people?
Mr Gyimah
My right hon. Friend, as chair of the all-party parliamentary group on autism, understands the particular vulnerabilities of such people within the prison system. Prison staff take extra care in monitoring and understanding the threats to vulnerable people such as those with autism, and robustly intervene where there are any threats, including of extremism and radicalisation.
Rehman Chishti
There has been an issue with some religious converts being drawn into extremist ideology and going on to carry out terrorist acts without knowing the true values or teachings of those religions. What specific steps are being taken to address that, and what extra support is being given to religious faith representatives to ensure that we tackle this evil issue?
Mr Gyimah
My hon. Friend, the chair of the all-party parliamentary group on communities engagement, makes a vital point. We have to be clear that conversion to a religion, including Islam, does not necessarily mean radicalisation but, where conversion happens in the prison estate, people are encouraged to go on education courses. There is also support for imams to make sure that people do not get drawn to the poisonous ideology that often seeks to prey on vulnerable individuals.
Mr David Hanson (Delyn) (Lab)
Ian Acheson, who reviewed this matter for the Government, told the Select Committee on Justice only last year:
“I do not have confidence that the National Offender Management Service…has the capability or, indeed, if I may be frank, the will to implement some of the recommendations that I have made.”
Does the Minister feel that his changes are not just recommendations but that there is capacity to deliver them?
Mr Gyimah
Absolutely. As I said right at the start, we have a new directorate within Her Majesty’s Prison and Probation Service and a new team across the Home Office and the Prison Service, with new funding to tackle that and to roll out our anti-extremism strategy. The right hon. Gentleman, who is a member of the Justice Committee, will also be aware that just last week we announced the separation centres that Ian Acheson recommended in his review and that will remove the most poisonous individuals from the main population of our prisons.
Keith Vaz (Leicester East) (Lab)
About 1,000 individuals have been identified as extremist or as vulnerable to extremism, so the creation of those separation units is welcome. However, the key is monitoring people when they come out of prison. Can the Minister reassure us that that will happen?
Mr Gyimah
To be precise, there are actually about 700 people of concern. Of those 700, about 180 are in prison or on remand for terrorism-related offences. The right hon. Gentleman is absolutely right about what happens when people come into the community. The multi-agency protection arrangements with law enforcement mean that those people are subject to strict licence conditions, and if they breach those licence conditions, they can and do end up in jail. The police are obviously part of that.
I take this opportunity to thank the police, especially those who protect us here as we go about our daily jobs.
Nigel Huddleston (Mid Worcestershire) (Con)
Are the Government planning to provide any specific training for prison officers to help to identify those inmates with extremist tendencies?
Mr Gyimah
Prison officers play a vital role in combating extremism in our prisons, given the contact and proximity they have with prisoners. Just last December we rolled out a new extensive training programme for all our prison officers to enable them to identify that threat and to help to deal with it.
Jim Shannon (Strangford) (DUP)
Northern Ireland Ministers have had to deal with extremism in prisons over the years, with the segregation of loyalist and republican prisoners being an example. Has the Minister had any opportunity to discuss those matters with the relevant Minister in Northern Ireland in order to learn from what we have learned in Northern Ireland to help him to do his job across the UK?
Mr Gyimah
We have looked very carefully at the lessons from Northern Ireland in setting up the separation centres that we announced last week. There are significant differences between what is happening in England and what happens in Northern Ireland. No prisoner will default to a separation centre. Ending up in a separation centre will be the result of a prisoner’s behaviour behind bars, and they will be selected by a panel that has been told about their behaviour. The panel will decide where those prisoners go in the prison system, so there are appropriate safeguards in place.
Yasmin Qureshi (Bolton South East) (Lab)
These units will affect only a small section of the prison population, but the rising lack of safety in our prisons is itself a potential breeding ground for extremism. Has the Secretary of State considered the extent to which that environment of violence has contributed to extremism?
Mr Gyimah
The hon. Lady is right; the separation centres will hold 28 prisoners, and our evidence suggests that that is sufficient. We have a broader strategy to deal with extremism in our prisons, which includes support to imams, looking at religious texts and a range of education programmes to deal with the challenge of extremism in our prisons.
Yasmin Qureshi
It is understood that the prisoners designated for these separation units will be able to appeal against that decision, and their places in the units will be reviewed every three months. Given the Court of Appeal’s recent decision that denying legal aid to many prisoners is unlawful, will these individuals have access to publicly funded legal advice?
Mr Gyimah
We are considering the result of that Court of Appeal case, and the Government will make their position known on it. As part of due process in prisons, if an individual is selected to go into a separation centre, it is of course right that the panel tells them why they have been selected and allows them to make representations.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The Lord Chancellor and Secretary of State for Justice (Elizabeth Truss)
The Government are clear that they want a smooth and orderly exit from the EU. Legal certainty is fundamental to that, as is laid out in the great repeal Bill White Paper. We will bring an end to the jurisdiction of the European Court of Justice so that our courts will be the ultimate arbiters of our laws.
Gavin Newlands
The recognition of enforcement of judgments across the EU has benefited millions of citizens. Does the Justice Secretary agree with the Law Society of Scotland that if we leave the EU with no deal and return to pre-EU mechanisms, the likely outcome is that the weakest and the poorest in society will suffer, as the processes become costlier?
Elizabeth Truss
I completely agree with the hon. Gentleman that having mutual enforceability of judgments and civil judicial co-operation is very important, which is why we have made it a priority in the Brexit negotiations.
Robert Neill (Bromley and Chislehurst) (Con)
May I commend to the Secretary of State and to the House the Justice Committee’s report on the implications of leaving the European Union for the justice system, which was published last month? In particular, on the basis of overwhelming evidence, we stressed the importance, first, of continuing co-operation in criminal justice matters, including information sharing, the recognition of judgments and having proper transitional arrangements, so that commercial and civil justice sectors have certainty going forward.
Elizabeth Truss
My hon. Friend is absolutely right about that, and I would add to that list by saying that family law co-operation is also extremely important. We are working very closely with the legal profession, a working group is looking at working with industry across Europe, and, as I have said, this is a key priority as part of our Brexit negotiations.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does the Secretary of State share my concern that leaving the EU will weaken our power on extradition? She will know that I have been dealing with a case of someone who fled to Pakistan after killing 11 members of a family, and we have been working across Europe to try to bring this man back. He is now in prison in Pakistan. Will our getting out of the European Union hamper extradition in the future?
Elizabeth Truss
We are working very closely with the Home Office on criminal justice co-operation, and we want to secure a good deal, but it is important that we all get behind what the British people voted for and get a secure deal with the European Union.
Sir Edward Leigh (Gainsborough) (Con)
Elizabeth Truss
My hon. Friend is absolutely right; four of the 10 top global legal firms are based here in the UK. We have huge opportunities to promote English law and Scots law, and we are working on a global Britain legal summit to bring together leading figures in the industry to promote what we do overseas.
Louise Haigh (Sheffield, Heeley) (Lab)
My Bulgarian constituent murdered his wife by stabbing her to death 25 times in broad daylight. The Home Office has finally agreed to have him deported. Will the Secretary of State assure me that he will serve his full sentence in Bulgaria, both pre and post-Brexit?
Elizabeth Truss
It is important that that individual is brought to justice. That is part of how we organise our prisoner transfer agreements and it will be part of our Brexit discussions.
Mr David Nuttall (Bury North) (Con)
Does my right hon friend agree that we cannot remain part of the European single market because that would inevitably mean that the European Court of Justice would retain jurisdiction over us? That is exactly not what the British people voted for.
Elizabeth Truss
My hon. Friend is absolutely right that we are leaving the jurisdiction of the European Court of Justice. The ultimate arbiters of our laws will be our own courts here in the UK. That is incompatible with being in the single market.
Sir Simon Burns (Chelmsford) (Con)
Victoria Prentis (Banbury) (Con)
Craig Williams (Cardiff North) (Con)
The Lord Chancellor and Secretary of State for Justice (Elizabeth Truss)
I pay tribute to my right hon. Friend the Member for Chelmsford (Sir Simon Burns), whose 30 years in the House have been a joy to behold—although I have been here for only seven of them. We recently visited Chelmsford prison together, and I saw at first hand his commitment not only to his constituents but to the cause of improving prisons in this country. Chelmsford prison is one of the 10 prisons we selected for the early recruitment of prison officers. We said that 400 prison officers would be recruited by the end of March. I can confirm that they are now in training or in post in those prisons, including Chelmsford.
Sir Simon Burns
I thank my right hon. Friend for the extremely kind and generous comments at the beginning of her answer. I welcome the fact that, following the recognition that more staff are needed at Chelmsford prison, new staff are now being trained up. Does she know when those staff are likely to come on stream, to ensure that we have proper staffing levels and the proper protection for prison officers?
Elizabeth Truss
The training period for a prison officer is 10 weeks, so we will see them come on stream very shortly. Since November, 43 job offers have been made to new prison officers at Chelmsford. Following our visit to Chelmsford prison, we announced a rise in starting salaries for prison officers there, so they will now be paid a minimum of £26,500.
Victoria Prentis
Prison officers have to be both tough and humane; it is a difficult path and a difficult job to do. What plans does the Secretary of State have to increase the professionalism of the people who do that job? That may in turn help with their retention.
Elizabeth Truss
First, may I say what a fantastic group of professionals we have in our country’s prison officers? I want to make sure there is good career progression right through from entry into the Prison Service to becoming a governor, and good training—we are launching a new apprenticeship scheme for prison officers to make sure people have the right skills all the way through.
Craig Williams
The Unlocked scheme is being rolled out. When will the graduates start?
Elizabeth Truss
The Unlocked scheme is like Teach First for the Prison Service. We have had an incredible number of applications to join it. The final assessment was held on 1 April and we are now able to offer places to 60 candidates, who will start their training on 18 July. It is a really important scheme for not only bringing top graduates into our prisons but exposing employers to the fantastic work that goes on there.
Kate Green (Stretford and Urmston) (Lab)
Of course we all welcome the recruitment of new prison officers, but does the Secretary of State not agree that the problems in our prisons stem from the mistaken actions of her Government in cutting 6,000 prison officers in the first place?
Elizabeth Truss
I have been very clear that we need to recruit more prison officers. It has been my No. 1 priority in this job. We are on track to achieve the 2,500 officers. We have faced a number of challenges across our prison estate, and we have already talked about psychoactive substances, drones and mobile phones. I am clear that we need the prison officers in place. When we have achieved the 2,500 officers, we will be able to ensure that each one has a caseload of six prisoners whom they will look after, and that will help us to turn those lives around.
Mr Gregory Campbell (East Londonderry) (DUP)
I have been pressing for a number of years for a new- build prison in Magilligan in my constituency. Hopefully, that will take place in the next year or two. Will the Secretary of State undertake to ensure that any future Government will closely liaise so that prisoner supervision, whether in prisons in Northern Ireland or in England, is replicated to achieve best practice to ensure the best possible outcomes?
Elizabeth Truss
I absolutely agree with the hon. Gentleman. We need to learn from each other to make sure that our prisons do the best possible job. Of course they are there to punish offenders, but they also must turn lives around and reduce reoffending rates.
Danny Kinahan (South Antrim) (UUP)
What assessment has been made of the high levels of turnover of prison staff and the negative consequences that that has on the management of prisons in Northern Ireland? I know that the matter is devolved. There are extremely low pay rates, low prospects and nothing to encourage people to work in the Prison Service.
Elizabeth Truss
In prisons in England and Wales, 80% of our staff have been with us for more than five years. However, I want us to retain and train up those experienced members of staff. We are creating 2,000 new grade 4 posts at a salary of £30,000 to make sure that we retain those experienced prison officers who are so vital to running our prisons well.
Mrs Flick Drummond (Portsmouth South) (Con)
Will the Secretary of State clarify whether there are any plans to increase the numbers of staff providing education and training to prisoners, because that will help prisoners’ employment prospects and stop them reoffending?
Elizabeth Truss
We are making sure that governors decide how education will work in their prisons. We will set standards. We will see how fast prisoners progress in English and maths and whether they are getting the vocational work skills they need to get a job. I was recently in HMP Onley and saw the fantastic work being done by Halfords, getting those people into employment. Ultimately, the governor will have control of the education budget. Governors can decide how best to spend it and how to get the best results.
Ms Angela Eagle (Wallasey) (Lab)
Jim McMahon (Oldham West and Royton) (Lab)
Pat Glass (North West Durham) (Lab)
The Parliamentary Under-Secretary of State for Justice (Dr Phillip Lee)
I believe the question refers to petition number 1961/2013 by Edward Marnell, on behalf of Cammell Laird strikers, on unjust treatment of Cammell Laird strikers. I welcome the questions and recognise the hard work and dedication of the hon. Members involved in this. Industrial relations and how they were historically dealt with are not a matter for the Ministry of Justice, and as such it would be inappropriate for me to comment. A conviction and/or sentence can be challenged by way of appeal. Once the appeal route has been exhausted it is possible to apply to the Criminal Cases Review Commission.
Ms Angela Eagle
In 1984, workers at Cammell Laird’s shipyard took official strike action over job losses just as the Thatcher Government were trying to privatise British shipbuilders. They were dismissed, jailed in a category A prison for 30 days, and lost their redundancy and pension rights. The Minister has tried to give us a technical answer today, but will he now undertake to release all the documents relating to the decision to prosecute and to the severity of the sentence so that this clear miscarriage of justice can finally be put right?
Dr Lee
I thank the hon. Lady for her question. Of course I am sympathetic to the case and to the individuals affected by it, but as I said, the Criminal Cases Review Commission has the power to review and investigate possible miscarriages of justice in England and Wales and Northern Ireland. Where there is a real possibility that the conviction or sentence will not be upheld, the commission can refer the case to the appropriate court, which will treat the referral as a new appeal.
Jim McMahon
Ten Cammell Laird workers and one apprentice have died since those events without the answers to why the decisions were taken to imprison them and who took those decisions. Surely it is now time to listen to calls from family members and the GMB trade union to do the right thing by having a proper inquiry and publishing the information that the Government have access to. What is there to hide?
Dr Lee
This is clearly a difficult case for the people concerned. As I said, when a conviction is subsequently quashed, compensation can be sought by an application to the miscarriages of justice applications service. I am not in a position to comment on whether a future Government should engage in an inquiry, but I assure the hon. Gentleman that I will look at this case further if I am returned to this role after the election.
Pat Glass
This is the last time that I will speak in this House. Therefore, I was keen that it should be a really important question. This was something I championed when I was the shadow Europe Minister, and I was delighted when the European Union joined the GMB and the Cammell Laird workers in demanding the release of Government evidence and papers. This is about papers that the Government hold. I hope the Minister will respect the fact that this is my last time speaking in the House by giving me a proper answer, not the fob-off that we have had so far. Will he commit to releasing the papers that the Government hold and putting an end to one of the most shameful episodes in British industrial relations?
Dr Lee
The hon. Lady has represented a beautiful part of the country, in which I have some family roots. I am sure that the Prime Minister, as a former candidate in that constituency, would agree with me about that. This case is clearly emotive, judging by the responses on the Opposition Benches. As I have said, I will look at the situation once again if I am returned to this position after the election. I will not make any commitments this side of an election, but I fully recognise the sensitivity of the case, its emotive nature and the individual people involved.
Richard Burgon (Leeds East) (Lab)
GMB union research points towards state interference in the Cammell Laird industrial dispute, yet the picture remains incomplete because of withheld documents, as we have heard. That era of Conservative government is becoming defined by suspicion of institutional interference and state wrongdoing. We know the names: Hillsborough, Orgreave and Cammell Laird. If that interference is extended to the prosecution of those trade unionists, do they not have the right to know?
Dr Lee
I do not share such a jaundiced view of the Conservative Government of the 1980s. As I have said repeatedly, I will look at this case again once we are outside of purdah and once we are returned. I hope and expect a Conservative Government to be returned in a few weeks’ time, and I promise to look at this case again in detail then.
Mr Speaker
As this is the last week of questions, I am especially keen to try to get through the Order Paper. I appeal to colleagues to help each other to achieve that objective.
Bob Blackman (Harrow East) (Con)
The Lord Chancellor and Secretary of State for Justice (Elizabeth Truss)
Of course, prisons should be places of punishment, but they also need to be places of safety and reform. Around half the people who leave prison reoffend within a year. We know that getting offenders off drugs, dealing with their mental health and housing issues, improving family ties and getting them into work are all critical to reducing reoffending. That is why we are giving governors power over all those issues.
Bob Blackman
Hopefully, my private Member’s Bill will become the Homelessness Reduction Act on Thursday. Under the Act, prison governors will have a duty to provide prisoners with homes and prepare them for life outside prison so that they do not reoffend. What communication and training have been given to prison governors in preparation for that Act becoming law?
Elizabeth Truss
First, I commend my hon. Friend on his fantastic Bill. We have recently written to governors about their new powers over areas such as preparing prisoners for release, education and employment. Housing is one issue covered in that communication.
Maria Caulfield (Lewes) (Con)
The Parliamentary Under-Secretary of State for Justice (Mr Sam Gyimah)
A new governor was appointed in January 2017 and is developing an action plan in response to the issues in Lewes prison.
Maria Caulfield
I thank the Minister for his reply. Could he set out how the Government’s prison reform will help HMP Lewes—particularly prisoners who are trying to stop reoffending, and the prison officers, who do a difficult job?
Mr Gyimah
A key part of our reform programme is adding 2,500 staff to our Prison Service. As far as HMP Lewes is concerned, we have made 24 job offers for additional prison officers since November. Starting pay at HMP Lewes is now £26,500, and along with more prison officers, that will enable the prison to support and challenge prisoners to turn their lives around.
Andrew Selous (South West Bedfordshire) (Con)
Prisoners in Lewes, as elsewhere, will reoffend less if they get sustainable work. Many private sector employers are rising to the challenge of providing ex-offenders with work. Will the Minister give us an update on what is happening across the wider public sector so that it can lead by example?
Mr Gyimah
Employment in prisons, but also preparing prisoners for employment on release, is vital if we are to stop reoffending. The New Futures Network, which my right hon. Friend the Secretary of State has launched, will work with a range of organisations, including public sector organisations, to help to create employment opportunities for prisoners.
Carol Monaghan (Glasgow North West) (SNP)
Carol Monaghan
Amnesty International, Liberty and other human rights groups have raised the issue of diminished human rights protection as a result of the great repeal Bill and the Government’s plans to correct the statute book through secondary legislation. Will the Minister provide more detail on the extent of these correction powers and whether the changes will include human rights protections?
Sir Oliver Heald
As the hon. Lady will know, I cannot make any announcements today because of purdah, but what I can say is that, as I explained in giving evidence to two Select Committees, it is not our intention to have any gaps in our human rights protections.
Sir Desmond Swayne (New Forest West) (Con)
Why is it reasonable to expect our justices to be any less creative than European ones?
Sir Oliver Heald
We do want a British jurisprudence, and that is what we will have following Brexit. Human rights were not invented with the Human Rights Act; this country has been a leading pioneer in human rights since its first gasps of breath as a nation, so there is no reason for us to think that we will not continue to express our values.
Greg Mulholland (Leeds North West) (LD)
Why are the Government continuing to confuse and, indeed, deceive people by suggesting that the European convention on human rights is anything to do with the EU? It was signed up to by nations that had just come together after the most disastrous war in our history, and it was supported by Winston Churchill. Why can the Minister not support it?
Sir Oliver Heald
I have always tried to uphold the vision expressed by Sir Winston Churchill in his great speech at the Place Kléber, when he spoke up for the need for human rights across Europe, and, of course, he did not mean the EU.
Patrick Grady (Glasgow North) (SNP)
Patrick Grady
The European convention on human rights guarantees the right to free and fair elections to the legislature, but the vast majority of legislators in this country are unelected peers of the House of Lords. Have the Government ever taken legal advice on whether the existence of the House of Lords is compatible with protocol 1, article 3 of the ECHR?
Sir Oliver Heald
I spent about 18 months on the Joint Committee looking at reform of the House of Lords in the last Parliament, and we took legal advice on every possible issue. If the hon. Gentleman would like to read the proceedings, he will enjoy them.
Mr Speaker
Order. Even though the hon. and learned Lady is a very distinguished lawyer, I shall still appeal to her for reasonable brevity.
Joanna Cherry
Earlier this month, when I met UN officials in New York to discuss human rights issues, they were appalled to hear that the British Prime Minister had said that at the next general election she would be campaigning to withdraw the United Kingdom from the European convention on human rights. Can I take what the Minister said previously as a guarantee that this abhorrent commitment to withdraw from the European convention on human rights will not be in the Tory party manifesto for 8 June?
Sir Oliver Heald
That was a good try, but I am afraid that I am not going to be launching the manifesto here at Justice questions. The hon. and learned Lady will have heard my earlier answer.
Joanna Cherry
Article 8 of the European convention on human rights guarantees the right to respect for family and private life. The Equality and Human Rights Commission has written to the Government saying that the controversial rape clause raises serious issues under article 8. Can we assume from the Government’s insistence on proceeding with the rape clause that article 8 covers one of the rights guaranteed by the ECHR that they find inconvenient?
Sir Oliver Heald
The Government are committed to supporting victims of rape and domestic abuse. This approach is crucial to protect women who face very difficult circumstances, and that is what the Government have been doing through the reforms to which the hon. and learned Lady refers. As part of these reforms, we have made sure that victims are able to use third sector professionals to endorse their claim while they receive support to help them to cope and recover. No Government have a better record on helping victims.
Suella Fernandes (Fareham) (Con)
The Minister for Courts and Justice (Sir Oliver Heald)
The family court has powers to address a breach if someone has been wilfully obstructive. When a child’s welfare requires it, the court can transfer the child’s residence to the other party. This Government are keen that there should be effective action, and a Green Paper on family justice has already been announced.
Suella Fernandes
Unfortunately, enforcement is a serious problem in the courts because of the criminal threshold and a lack of an effective penalty. In some of the worst cases, the non-resident parent—usually but not always the father—can be cut out of the child’s life. Does my right hon. and learned Friend agree that this issue needs to be addressed if we are to see equity in the family justice system?
Sir Oliver Heald
It is right that there should be a clear system to establish the facts about a breach, and it should then be possible to deal with the breach effectively. Of course I am unable to make any announcement today but, as I have indicated to my hon. Friend, a Green Paper on family justice has been announced for later in the year, and she and I have already had the opportunity to discuss some of her ideas.
Mark Menzies (Fylde) (Con)
The Minister for Courts and Justice (Sir Oliver Heald)
We are investing over £1 billion to create a straightforward courts and tribunals system so that people can have confidence in using the system themselves or with the help of their excellent lawyers.
Mark Menzies
The current reliance on printed documents in civil courts burdens people with significant unnecessary costs, and the UK is lagging behind many countries, including Australia and even Turkey, in the use of innovation and technology in civil claims. Does my right hon. and learned Friend agree that we must speed up the process of digitising courts in England and Wales if we are to retain our place as a world-leading provider of legal services?
Sir Oliver Heald
My hon. Friend is absolutely right, and I do agree. We are making progress. We have equipped our criminal courts to work digitally, reducing reliance on paper bundles, and we are doing the same in the civil courts. So far we have saved, in one year, an enormous pile of paper. Devotees of these questions will know that I measure this by the height of the Shard, and we have now saved 4.3 Shard-loads of paper.
Kelvin Hopkins (Luton North) (Lab)
The Parliamentary Under-Secretary of State for Justice (Dr Phillip Lee)
Prisoners are more likely to have mental health problems than the broader population. We are looking at custody and community for improving the mental health offering. We are looking at a community protocol to be followed and enhancing custodial mental health services.
Kelvin Hopkins
There were 119 prison suicides in 2016—an increase of 32% on the previous year—and cases of self-harm were up by 19%, at more than 10,000. Does the Minister agree that these are appalling statistics? What are the Government going to do to address this human misery?
Dr Lee
Each and every one of those cases is a human tragedy, and I have looked at a large number of them in detail. Indeed, last week I was at HMP Downview, a women’s prison at which a suicide took place. We are investing in better healthcare facilities at that prison, and I am also looking at access to secure accommodation across the country, because that might well be an issue.
Mr Andrew Turner (Isle of Wight) (Con)
The Parliamentary Under-Secretary of State for Justice (Mr Sam Gyimah)
The Government introduced an amendment to prison rules last week meaning that prisoners can be placed in a separation centre if they are involved in planning terrorism or are considered to pose a risk to national security. Those who are spreading views that might encourage or influence others to commit terrorist crimes, or whose views are being used in a way that undermines good order and security in prisons, may also be placed in one of the centres.
Mr Gyimah
People in prison convert to religion for all sorts of reasons. As I have said, conversion does not mean radicalisation. It is important that prisons have a regime whereby people who convert are not exploited in any way. The separation centres are one way of removing dangerous people, but obviously education and the support of prison officers play a vital role.
Fiona Mactaggart (Slough) (Lab)
The Parliamentary Under-Secretary of State for Justice (Dr Phillip Lee)
The data on women’s centres are quite mixed. I am a strong advocate of the benefits of women’s centres in the community. On reoffending rates, the figures are somewhat mixed across the county. We continue to look at the situation closely to find out exactly what works about those women’s centres to reduce reoffending.
Fiona Mactaggart
But is it not a fact that most women in prison are extremely vulnerable and have been victims themselves, including of domestic abuse, addiction and mental health problems, and that women’s centres actually deal with the whole problem? I was a Home Office Minister who helped to persuade Baroness Corston to produce her excellent report, and the reason why we did that was the number of women who were killing themselves in jail. The Government are planning new women’s jails, but more women will murder themselves—we are at a record level. How is the Minister going to stop that happening without investing in women’s centres?
Dr Lee
I thank the right hon. Lady for her question. I should have wished her the best of luck as she stands down at the election. She represents a town that I know very well, and I also know that she is a particularly popular Member of Parliament.
The building of the prisons should not be interpreted as increasing the number of places to lock women up in—that should be clear. On women’s centres, I agree that women often have very complex problems, and that is a reason why I, for one, am trying to increase the number of women’s centres in the country. As the right hon. Lady has rightly said, bringing everything under the same roof can really help those women to make the right turn in life, away from crime.
Diana Johnson (Kingston upon Hull North) (Lab)
The Lord Chancellor and Secretary of State for Justice (Elizabeth Truss)
In November I committed that the Government would invest an additional £100 million annually to recruit 2,500 prison officers. I can confirm that our recruitment figures show that we are on track to deliver that. On 3 April we launched the new “You at your best” recruitment campaign to encourage more people to apply. We also launched the new Unlocked graduate programme, which is offering more than 60 places this year.
It is vital that we strengthen the frontline to turn our prisons into places of safety and reform, and to reduce unacceptable levels of violence. That is my No. 1 priority as Secretary of State. Of course that will take time—we will not fix our problems in weeks or months—but the figures show that we are making real progress.
Diana Johnson
With three former Secretaries of State, including the right hon. Member for Surrey Heath (Michael Gove) last year, taking the view that families in Hull deserve to find out what happened to their babies’ ashes, why does the current Justice Secretary refuse to back those families’ calls for an independent inquiry in Hull?
Elizabeth Truss
I am very sympathetic to the hon. Lady’s concerns and I offer my sympathy to her constituents. We are supportive of local historical investigations, but we are not planning to order an historical inquiry in Hull or elsewhere. Hull has made significant improvements, including putting in place measures to improve practices and communication between the cremation authority, local funeral directors and NHS trusts.
Craig Tracey (North Warwickshire) (Con)
The Parliamentary Under-Secretary of State for Justice (Mr Sam Gyimah)
If the Conservatives are returned to government we will, of course, look to see through these vital reforms.
Richard Burgon (Leeds East) (Lab)
Yesterday the Leader of the Opposition confirmed that a Labour Government would launch inquiries into blacklisting and Orgreave; the current Government have blocked all such efforts. Successive Conservative Justice Secretaries have also refused to release papers concerning the Shrewsbury 24. As her final act, will the Justice Secretary do the decent thing, review that decision, and release the papers to give those men and their families a chance of justice?
Elizabeth Truss
I am sure that the hon. Gentleman understands that we are currently in purdah, so we are not able to make announcements at this point.
Richard Burgon
According to the legal commentator Joshua Rozenberg, this is the Secretary of State’s very last Justice questions, so I will give her one last chance. In March, the Lord Chief Justice said that the Secretary of State was “completely and utterly wrong” to say that she could not speak up for the judiciary in the face of personal abuse. Will she finally admit that rather than doing her duty, she kowtowed to her friends in the press?
Elizabeth Truss
I am a great believer in a strong, independent judiciary, but another bulwark of our democracy is a free press, and I do not think that Ministers should be saying what it is and is not acceptable for the press to print.
Will Quince (Colchester) (Con)
Elizabeth Truss
I have heard great things about that facility in Colchester, and I would be delighted to come and visit my hon. Friend, perhaps in the next few weeks.
Ms Angela Eagle (Wallasey) (Lab)
Elizabeth Truss
What we are doing about it is investing £1 billion in modernising our courts, bringing more cases online and improving the physical facilities, including all aspects of the way in which our courts operate. I launched a joint statement with the judiciary late last year about precisely that.
Suella Fernandes (Fareham) (Con)
Mr Gyimah
I pay tribute to the work done by the staff at Dickson House and all who work in approved premises around the country—they do a great job. Accommodating ex-offenders when they leave approved premises is an important issue. We are working with the Department for Communities and Local Government and the Local Government Association on ways in which we can improve this, including by improving statutory guidance.
Anna Turley (Redcar) (Lab/Co-op)
Mr Gyimah
I firmly believe that the punishment must fit the crime. In the case of dangerous driving, there is a need for the law to be toughened up, which was why we launched a consultation to achieve precisely that last year. Obviously a general election is coming up, but if a Conservative Government are elected, I am sure we will see through these vital reforms.
Caroline Ansell (Eastbourne) (Con)
Section 33 of the Criminal Justice and Courts Act 2015 is landmark legislation that makes revenge porn a specific offence. In Eastbourne, we have just had a high-profile case in which a serial offender walked free with a caution. One of his victims was a minor, and to add further insult to injury, images posted with incitements are still online. What more can the Government do to make sure that this groundbreaking legislation really delivers justice?
The Minister for Courts and Justice (Sir Oliver Heald)
My hon. Friend is known for the way in which she has highlighted in the House such incidents of criminality and really pressed the case for proper and effective punishment. In relation to this particular incident, the offence is relatively new, and the good news is that many people have come forward to report instances of disclosure during the short period since it came into force. There have been a number of prosecutions, with more than 60 convictions so far. It is early days, but I agree that the Crown Prosecution Service needs to treat these cases very seriously.
Kate Green (Stretford and Urmston) (Lab)
Elizabeth Truss
We have been working on this issue very carefully, and we will announce the results in due course.
Robert Neill (Bromley and Chislehurst) (Con)
I welcome my right hon. Friend’s statement that a fresh Conservative Government would be committed to ongoing prison reform. Will she use an early reintroduction of the Prisons and Courts Bill as an opportunity to follow the evidence given to the Justice Committee about placing our excellent national preventive mechanism on a statutory basis to fit in with our international obligations?
Elizabeth Truss
I thank the Chairman of the Justice Committee for his question. I know how committed he is to prison reform, given the leadership that he and the Committee have shown. I have to tell him that our manifesto will be announced in due course, and the Prime Minister will be making such decisions.
Tom Elliott (Fermanagh and South Tyrone) (UUP)
Sir Oliver Heald
May I say that our deepest sympathies remain with those affected by the dreadful Hyde Park bombings? Those terrible terrorist atrocities were really dreadful for the nation at the time. Decisions on legal aid in such cases are made through an independent process. A fresh determination was given by the Legal Aid Agency on 2 February, but my understanding is that there is a right of review and that the case is still ongoing with the agency. I therefore cannot comment further at this time, and a decision would have to be made before any meetings occurred.
Dr Matthew Offord (Hendon) (Con)
My constituents very much welcome the Department’s decision not to proceed with the change to probate fees because the increases would have fallen disproportionately on London and the south-east, given the cost of housing there. Will the Secretary of State confirm that the next Conservative Government will not again proceed on such a basis?
Sir Oliver Heald
As the Secretary of State said a moment ago—I think she was about to say this again—I am afraid that we are not in a position to say what will be in the manifesto. However, I thank my hon. Friend for his comments, and we will obviously take full account of them.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Sir Oliver Heald
As the hon. Gentleman is aware, I know Simon Hughes well, having been his opponent in the 1987 general election. I think that I am still the president of Bermondsey Conservatives.
Sir Oliver Heald
No, I deny that I am the only member—we have quite a few.
The Government have announced the timetable for the review, which has been welcomed. It was odd that Simon Hughes called for a review when he was the Minister, but it was a Liberal Democrat press release, and we all know about those.
Mr Speaker
The Minister’s presidential duties are evidently not very onerous.
Amanda Solloway (Derby North) (Con)
Pictures have recently emerged of people on the streets of Derby city centre that reveal the shocking effect of Black Mamba and the zombie-like state the drug can induce. The police in Derby have been very proactive in taking a stance on this matter, but can the Secretary of State assure me that everything is being done to tackle the availability and use of this type of drug?
Elizabeth Truss
I completely agree with my hon. Friend about the effect that such drugs have on people both outside and inside prison. One of our key priorities was to roll out testing, which we did by September, to detect such substances and eliminate their use in prison.
Mr Stephen Hepburn (Jarrow) (Lab)
Sir Oliver Heald
It is, of course, a union campaign to talk about employment tribunal fees. Let us be clear that the number of people taking up cases about the workplace has increased, not gone down—it is up to 92,000. Those people are being helped by a free service from ACAS, which the Labour party used to support. Fewer cases are going to tribunal because of the work of ACAS.
Tom Pursglove (Corby) (Con)
Exclusion zones are an important tool to protect victims, but for those living on a county boundary, an exclusion zone that just covers the county is not particularly helpful. Will the Minister undertake to look into that?
Mr Gyimah
My hon. Friend does great work on behalf of victims in his constituency. He raises an important point about the way in which exclusion zones, which are there to protect victims, are designed and operated. I am sure that that is something we will look at in great detail.
Peter Kyle (Hove) (Lab)
Websites such as Craigslist are being used by corrupt individuals to advertise free accommodation in return for sex. Does the Secretary of State agree that that is currently happening within the law and that a review needs to take place so that the people who are exploiting extremely vulnerable young women in that way face the full force of the law?
Elizabeth Truss
I agree with the hon. Gentleman that this issue is concerning and I am very happy to look at it.
Mr Philip Hollobone (Kettering) (Con)
How many foreign nationals do we have in our prisons, and what steps are being taken to send them back to prison in their own country, at the expense of their own Governments?
Mr Gyimah
We are taking active steps to ensure that every foreign national who should be deported from our prisons is deported. Since 2010, 33,000 foreign nationals have been deported from our prisons. In 2016-17, a record 5,810 were deported, and I am sure that that progress will continue.
Mr Dennis Skinner (Bolsover) (Lab)
Would we not be more reliably informed about justice if we were not hearing from a Tory Minister whose friend the Prime Minister has called a snap election on 8 June, about a fortnight before the Director of Public Prosecutions was due to adjudicate on 30 Tory MPs who are being investigated for election fraud at the last election?
Elizabeth Truss
The Prime Minister is absolutely right to call a general election. We need strong and stable leadership of this country, and we need to ensure that the Prime Minister has a mandate to deliver for Brexit and beyond.
Andrew Selous (South West Bedfordshire) (Con)
The all-party group on preventing modern slavery, chaired in an excellent manner by the sadly departing right hon. Member for Slough (Fiona Mactaggart), heard from the parents of a young man who had been imprisoned for 15 years as a slave. The culprits were sent to prison for only two and a half years. Will the Justice Secretary agree to speak to the Sentencing Council about the severity of sentences for those who imprison our fellow citizens as slaves?
Elizabeth Truss
First, I echo my hon. Friend in paying tribute to the right hon. Member for Slough (Fiona Mactaggart) for her work on modern slavery. I also pay tribute to our Prime Minister, who has made huge strides in putting people away for these heinous crimes. We are doing more, and I am working closely with the Home Secretary to make sure that we crack down on this further.
Imran Hussain (Bradford East) (Lab)
In correspondence with the Criminal Cases Review Commission over recent months, I have repeatedly asked it to release and review crucial evidence that is vital to the case of one of my constituents. However, the CCRC has been less than helpful. As the deadline for the evidence to be deleted approaches, my constituent’s chances of justice could be killed for good. Will the Minister step in to ensure that the crucial evidence is released and reviewed so that justice can be done?
Sir Oliver Heald
If the hon. Gentleman writes to me, I will certainly look at that.
Thangam Debbonaire (Bristol West) (Lab)
The dedicated governor and staff at HMP Bristol do a brilliant job, but right now they are struggling with inadequate staffing ratios, prisoner use of the dangerous drug Spice, and poorly delivered privatised maintenance contracts. When will the Government give the prison in my constituency the tools it needs to do the job?
Elizabeth Truss
I can tell the hon. Lady that when I visited HMP Bristol I found some fantastically dedicated prison officers who are doing excellent work. We are investing £100 million to recruit 2,500 officers across the country, and we are on track with that recruitment.
Alison Thewliss (Glasgow Central) (SNP)
In order to make a claim under the rape clause, a woman has to sign a form stating:
“I believe the non-consensual exemption applies to my child”.
Will the Government explain how that can possibly be in the best interests of the child and in respect of our duties under the UN convention on the rights of the child?
Sir Oliver Heald
The hon. Lady does not seem to understand that this is about supporting victims of rape and domestic abuse. This approach is crucial to protect women who are faced with very difficult circumstances—[Interruption.] I am answering. As part of these reforms, we have made sure that the victims are able to use third sector professionals to endorse their claim while they receive support to help them to cope and recover. No Government have done more to help victims.
Several hon. Members rose—
Mr Speaker
Order. May we please have two short, one-sentence questions? That is what topical questions is supposed to be about.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Will the Justice Secretary have it in her heart to look into the case of Charlie Gard, a very sick eight-month old baby boy with a rare mitochondrial depletion condition who is legally unable to leave Great Ormond Street hospital to receive treatment in the US that might just save his life? His family are constituents of mine and my hon. Friend the Member for Feltham and Heston (Seema Malhotra), and they have raised £1.25 million to get Charlie to the United States. This is a complex legal case, but if the Justice Secretary has any powers to intervene I plead with her to do the right thing.
Mr Speaker
I will say in the hon. Lady’s defence that there were probably a number of semi-colons in there, but I accept that this is a very important matter.
The Parliamentary Under-Secretary of State for Justice (Dr Phillip Lee)
This case is particularly emotive and has been in the media. As I understand it, clinicians at Great Ormond Street have made a judgment on this case. I think that that should be respected.
Greg Mulholland (Leeds North West) (LD)
Knowing the huge cross-party support for better justice for victims of criminal driving, will the Minister today commit to bring in the legislation that has been promised before the end of this year if the Government are re-elected?
Elizabeth Truss
I understand that the hon. Gentleman has been campaigning on this issue for some time, but we cannot make commitments as we are in purdah.
Drumchapel Post Office
Carol Monaghan (Glasgow North West) (SNP)
A similar petition has been signed by 640 people and by a further 456 people online.
The petition states:
The petition of residents of Glasgow North West,
Declares that Post Office Limited has announced that the Post Office on Hecla Avenue in Drumchapel is under threat of closure; further that this provides a vital service for many local residents, the loss of which would have a detrimental impact on the wider community in Drumchapel as well as causing concern for staff; further that whilst there is the opportunity to franchise the current office, this could endanger the ongoing provisions of services and jobs in the local area, as well as this branch’s current convenient location in the heart of the community; and further that visiting the Post Office, it is noticeable just how busy the counters are and how strongly the community feels about this proposal.
The petitioners therefore request that the House of Commons urges the Government to call upon the Post Office to halt any plans to close the Drumchapel Post Office and ensure that these services and jobs can be maintained and protected in the local area.
And the petitioners remain, etc.
[P002033]
School Funding Formula in Calderdale
Holly Lynch (Halifax) (Lab)
I rise to present a petition opposing cuts to school budgets in my constituency, which has been signed by 166 people, further to the 1,072 people who have signed it online.
The petition states
The petitioners therefore request that the House of Commons urges the Secretary of State for Education to reconsider the proposed national school funding formula to ensure that Calderdale schools do not lose out and that no school receives less than £4,800 per pupil.
Following is the full text of the petition:
[The petition of residents of the UK,
Declares that the proposed national school funding formula would see reductions to the budgets of schools in Calderdale at a time when finances are already stretched; and further that an online petition on this matter received 1,042 signatures.
The petitioners therefore request that the House of Commons urges the Secretary of State for Education to reconsider the proposed national school funding formula to ensure that Calderdale schools do not lose out and that no school receives less than £4,800 per pupil.
And the petitioners remain, etc.]
[P002034]
Royal Electrical and Mechanical Engineers and High Town Barracks, Wrexham
Ian C. Lucas (Wrexham) (Lab)
I rise to present a petition of 793 residents of Wrexham.
The petition states:
The petition of residents of Wrexham in the constituency of Wrexham,
Declares that the petitioners recognise the long military tradition of Wrexham and North Wales and its relationship with the Royal Welsh Fusiliers and Royal Electrical and Mechanical Engineers; further declares that they are deeply concerned over the proposal to move the battalion headquarters from Wrexham to Bristol, and away from the area which has served the British Army and Wales for so many years.
The petitioners therefore request that the House of Commons urges the Government to retain the current 101 Battalion Royal Electrical and Mechanical Engineers in Wrexham.
And the petitioners remain, etc.
[P002035]
Royal Electrical and Mechanical Engineers and High Town Barracks, Wrexham
Susan Elan Jones (Clwyd South) (Lab)
I rise to present the petition of several hundred residents of my constituency. It is based on the same petition as that presented by my hon. Friend the Member for Wrexham (Ian C. Lucas). It arises from our deep concerns on this issue, and it is time the Government listened.
The petition states:
The petitioners therefore request that the House of Commons urges the Government to retain the current 101 Battalion Royal Electrical and Mechanical Engineers in Wrexham.
Following is the full text of the petition:
[The petition of residents in the constituency of Clwyd South,
Declares that the petitioners recognise the long military tradition of Wrexham and North Wales and its relationship with the Royal Welsh Fusiliers and Royal Electrical and Mechanical Engineers; further declares that they are deeply concerned over the proposal to move the battalion headquarters from Wrexham to Bristol, and away from the area which has served the British Army and Wales for so many years.
The petitioners therefore request that the House of Commons urges the Government to retain the current 101 Battalion Royal Electrical and Mechanical Engineers in Wrexham.
And the petitioners remain, etc.]
[P002036]
Closure of Marske Medical Centre
Anna Turley (Redcar) (Lab/Co-op)
I rise to present a petition signed by 421 residents of Marske and New Marske in my constituency about a decision to close this medical centre at the end of June.
The petition states:
The petition of residents of Marske and New Marske in the Redcar Constituency.
Declares that the decision to close the Medical Centre of Hall Close, Marske-by-the-Sea, will leave over 5,000 patients, many of whom are elderly, without a local medical practice, and require them to travel to neighbouring towns to register with a General Practitioner.
The Petitioners therefore request the House of Commons to urge the Government to prevent the closure of the Marskse Medical Centre.
And the petitioners remain, etc.
[P002037]
Morningside Post Office Franchising
Ian Murray (Edinburgh South) (Lab)
I rise to present a petition signed by more than 4,000 residents of Edinburgh South.
The petition states:
The petition of Edinburgh South,
Declares that the government has forced a transformation programme on the Post Office that has placed Crown Post Offices and local branches in jeopardy; further that the only independent report carried out on franchising found that the Crown Office closure and franchising programme had been bad for customers, ranking franchises worse than Crown Offices across a range of indicators including queue times, service times, customer service and advice on products, disabled access and staffed counter positions; and further that the Post Office has already spent money refurbishing the Crown Offices it is now closing and franchising, with £5.9 million spent since 2010 on refurbishing the 59 Crown Offices that the Post Office announced it would close and franchise in 2016, an average of £100,000 per branch.
The petitioners therefore request that the House of Commons urges the Government to suspend the Crown Office closure and franchising programme and instead ensure the Post Office works with Crown branches, including Morningside Post Office, to make them more efficient and profitable.
And the petitioners remain, etc.
[P002039]
Fairer Funding Formula for School Pupils in the Congleton Constituency and wider Cheshire East Local Authority Area
Fiona Bruce (Congleton) (Con)
I rise to present a petition of some 1,600 signatures of residents of the Congleton constituency and wider area.
The petition declares
that current Government proposals for a Fairer Funding Formula for schools do not achieve fair funding for pupils in the constituency of Congleton.
Indeed, they and other pupils in the Cheshire East local authority area would be the lowest funded in the country. Local headteachers state that that level of funding would not enable them to provide the standard of education, facilities and support that our pupils deserve.
I fully support the petition, which also states:
The petitioners therefore request that the House of Commons urges the Government to review the proposed funding formula to reflect a fairer level of funding for local schools, to ensure that children in the local authority area of Cheshire East have the same opportunities as children in similar schools and other local authorities across the country.
Following is the full text of the petition:
[The petition of residents of Alsager, Congleton, Holmes Chapel, Middlewich, Sandbach and elsewhere in and outside the Congleton Constituency,
Declares that current Government proposals for a Fairer Funding Formula for schools do not achieve fair funding for pupils in the constituency of Congleton.
The petitioners therefore request that the House of Commons urges the Government to review the proposed funding formula to reflect a fairer level of funding for local schools, to ensure that children in the local authority area of Cheshire East have the same opportunities as children in similar schools and other local authorities across the country.
And the petitioners remain, etc.]
[P002038]
Fairer Funding Formula for School Pupils in Macclesfield Constituency and the Cheshire East Local Authority Area
David Rutley (Macclesfield) (Con)
I rise to present a petition on fair funding for all schools that has been signed by more than 1,500 residents of Cheshire East, including more than 900 from the Macclesfield constituency. It also includes signatures from residents living in the constituency of the Minister for Vulnerable Children and Families, my hon. Friend the Member for Crewe and Nantwich (Edward Timpson); because his ministerial role prevents him from presenting a petition, he has asked me to do this on his behalf. I am pleased to see him on the Front Bench.
The petition states that the petitioners
request that the House of Commons urges the Government to review its proposed national funding formula for schools in order to ensure that all children have access to a properly funded education, and therefore invest in the future of our country.
Following is the full text of the petition:
[The petition of residents of Cheshire East,
Declares that the Government should review its proposed national funding formula for schools; further that Cheshire East schools are set to see their funding budgets cut by the new proposal; further that, with rising statutory employer and staffing costs, along with increasing pupil numbers, Cheshire East schools will need to receive increased funding to cover their basic costs; further that under the new proposal, a child in Cheshire East is worth significantly less than the average child in England; and believes that this funding proposal is unfair.
The petitioners therefore request that the House of Commons urges the Government to review its proposed national funding formula for schools in order to ensure that all children have access to a properly funded education, and therefore invest in the future of our country.
And the petitioners remain, etc.]
[P002040]
Points of Order
(6 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Sue Hayman (Workington) (Lab)
On a point of order, Mr Speaker. I seek your advice and guidance regarding parliamentary protocol in the case of a Member writing to another Member’s constituents as part of an election campaign. The hon. Member for Copeland (Trudy Harrison) has written, as a Member of Parliament, to postal voters in my constituency on Conservative-branded paper ahead of the Cumbria County Council elections asking them to vote for the Conservative candidates. I know of postal voters in her own constituency who have not received any such letter from her.
This is the second time since her election to this place only two months ago that the hon. Lady has campaigned for the Conservative party in my constituency using her status as an MP without informing me. I did not make a fuss the first time as she was new to the House. However, she is now fully aware that in the British parliamentary system one Member represents a single constituency and conventions have developed so that one Member’s relations with her constituents are very much a preserve that other Members should not interfere with.
I have had complaints from constituents, some of whom are now confused about who their Member of Parliament is. My constituency office is receiving phone calls from constituents who think that this must mean that the boundary changes have gone through and that I might no longer be their representative. As far as I am concerned, this is unacceptable. Mr Speaker, I would be grateful for your comments and advice on this serious matter.
Mr Speaker
I will allow the Minister to respond to that point of order now.
Sir Oliver Heald
Further to that point of order, Mr Speaker. Has it not always been the case that if a Member writes, on Conservative party notepaper, a political message to anyone, that is in order, and that it is only a problem if someone represents themselves as an MP for a particular constituency using our stationery?
Sue Hayman
Further to that point of order, Mr Speaker. To clarify, the letters were signed “Trudy Harrison, MP”, and across the top it said “MP”. She described herself as an MP. [Interruption.]
Mr Speaker
Order. We cannot and will not have a debate on the matter. The hon. Lady was courteous enough to give me advance notice of her intention to raise this point of order, for which I thank her, and I have attended both to the substance of what she has said and to the remarks of the Minister.
I must say to the hon. Lady that, disquieting though the experience might have been, and relatively irregularly though it might occur, it is not clear to me that the hon. Member for Copeland (Trudy Harrison) has broken any convention. It is certainly a convention to notify another Member of an intention to visit his or her constituency in a political public capacity. It is also a very well established convention that a Member of Parliament should not purport to represent or offer to represent people who are not her or his constituents. [Interruption.] Order. Writing, however, in a campaigning context on party notepaper, though it might not happen very frequently, is not—and I have some experience of these matters—a demonstrable breach of a long-standing convention.
I say to the hon. Lady, whose concern I treat very seriously, that I appreciate that concern, but it seems to me that courtesies between Members of the House, which are important, are best arrived at and adhered to by informal discussions between colleagues. It is not desirable that they should ritually be attempted to be resolved by being raised on the Floor of the House with the Chair. That is to say, to be clear, that they are not matters of order but matters of informal agreement and understanding. It is much better if such understandings can be reached between neighbouring colleagues.
Clive Lewis (Norwich South) (Lab)
On a point of order, Mr Speaker. You have often stated from the Chair that answers to written parliamentary questions from Back-Bench Members from all parts of the House should be answered in both a timely and a substantive manner by Ministers. On 24 March, I tabled a named day question to the Parliamentary Secretary, Cabinet Office, the hon. Member for Kingswood (Chris Skidmore), asking, very simply, how much the Government had spent on advertising in the Evening Standard in the last financial year. Three days later, I received a holding answer. Now, over a month later, I still have not received a substantive answer. I am concerned that the Government might now simply be winding down the clock, with the intention of not providing an answer before we prorogue. The public might also draw the conclusion that they have something embarrassing to hide that they do not want to reveal during an election campaign. Is there anything you can do from the Chair, Mr Speaker, to encourage Ministers to answer such questions substantively this week, so that both Members of the House and the public can know the truth?
Mr Speaker
I am grateful to the hon. Gentleman for giving me notice of his point of order. I do appreciate his concern. The content of Ministers’ answers is, of course, not a matter for the Chair. That is a matter exclusively for the Minister giving the response. However, the hon. Gentleman references my repeated exhortation to Ministers to provide timely and substantive responses, an exhortation in which I am regularly joined by the Leader of the House. Many Ministers attach a premium to adhering to that principle and expectation. I agree that it is unsatisfactory if the Government are unable to give a substantive answer to a named day question tabled well before Prorogation. No doubt the concern articulated by the hon. Gentleman has been heard on the Treasury Bench. In so far as he further seeks my advice, it is encapsulated in one sentence: the hon. Gentleman should seek to speak to the Leader of the House, sooner rather than later.
Mr Speaker
No semi-colon was required. I was deploying a number of sentences to try to attend to the substance of colleagues’ inquiries, but I am always grateful to the hon. Gentleman for his observations, even when they are proffered in a disorderly manner from a sedentary position.
Mr Speaker
I call Richard Bacon, whom I congratulate warmly upon his choice of tie.
Mr Bacon
That is extremely kind of you, Mr Speaker. This is the tie of Anglia Farmers, one of the largest buying co-operatives in the agricultural sector in this country. I gave one to the last Prime Minister and the last Chancellor of the Exchequer, in the hope that they would wear one on the Treasury Bench, but they have not so far done so.
I was only going to ask whether the hon. Member for Wolverhampton South West (Rob Marris) agreed with me that the semi-colon is a very fine thing and that it should be used more often.
Mr Speaker
I agree; the hon. Gentleman is an authority on the matter and on a number of other matters relating to language and syntax.
Unauthorised Overdrafts (Cost of Credit)
Tuesday 25th April 2017
(6 years, 11 months ago)
Commons ChamberRead Full debate Unauthorised Overdrafts (Cost of Credit) Bill 2016-17 View all Unauthorised Overdrafts (Cost of Credit) Bill 2016-17 Debates Read Hansard Text
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Rachel Reeves (Leeds West) (Lab)
I beg to move,
That leave be given to bring in a Bill to require the Financial Conduct Authority to make rules restricting the cost of credit for unauthorised overdrafts on bank accounts in certain circumstances; and for connected purposes.
I want to begin by urging all parties to include in their election manifestos a commitment to capping charges on unauthorised overdrafts. Following the great work by my hon. Friend the Member for Walthamstow (Stella Creasy), huge progress has been made on the charges faced by people who access finance through payday loans, with the introduction of a cap. Mandated by the Financial Services (Banking Reform) Act 2013, the Financial Conduct Authority has introduced a cap set at £24 a month for anyone borrowing £100 for 30 days. Millions of people are struggling with spiralling debts and overdrafts. They deserve to be protected from excessive charges and rip-off practices that only make their situations worse. We have seen from the payday loan cap that this can be achieved. Legislation would allow the FCA to implement a cap without delay or the risk of the banks taking the matter to the courts.
Imagine, Mr Speaker, that you are £200 overdrawn. It is not great, but as you have an overdraft arrangement with your bank that allows you to go £200 overdrawn without incurring charges, it will not cost you anything except for the interest. Then, imagine that a direct debit goes through and puts you into your unarranged overdraft. Unless you can quickly pay money into your account during any grace period, you will quickly start to rack up charges. Going as little as 10p overdrawn can mean charges of £5 a day from high street banks.
Research published in February by Which? found that consumers needing to borrow as little as £100 could be charged up to seven times more, or £156, by some major high street banks than the Financial Conduct Authority allows payday loan companies to charge when lending the same amount over the same period. Because bank overdraft charges apply to monthly billing periods, not the number of days that money is borrowed for, consumers who need £100 could pay up to £180 in fees if they borrow over two calendar months from their high street bank in the form of an unauthorised overdraft. The same applies if they go just a few pence over the overdraft limit. These charges are totally disproportionate to the offence committed.
Last year banks made £1.2 billion from charges on unauthorised overdrafts, mostly from financially vulnerable customers. These are customers who banks should be helping, not pushing further into the red. These are customers who the Competition and Markets Authority has labelled in its report a “captive audience” for the banks and their “uncomfortably high” charges. The CMA has described unauthorised overdraft charges as
“the biggest single problem in the personal banking market”.
Action needs to be taken.
StepChange Debt Charity estimates that 1.7 million people in the UK are trapped in an overdraft cycle and consistently use overdrafts to meet essential and emergency costs. Too many vulnerable customers who are already struggling regularly have to go into an overdraft or over an overdraft limit, which can exacerbate their financial difficulties. Many hard-working families live constantly on their overdrafts, and those in chronic financial difficulties face impossible choices between meeting the costs of essential bills and going further overdrawn or over their overdraft limit. As fees and interest build up over time, these families find it increasingly hard to get out of their debt.
Last year StepChange surveyed its clients with overdraft debt to explore their experiences of overdraft charges. It found that people with overdraft debt who contact the charity regularly go over their overdraft limit. Almost two thirds—62%—of the people StepChange helps with overdraft debt regularly exceed their overdraft limit as they struggle to make ends meet, and on average they did so in five of the past 12 months. These borrowers face average charges of £45 a month for slipping into unauthorised overdrafts, which adds up to a massive £225 a year of unauthorised overdraft charges, and for many the charges are much higher.
StepChange has told me of two cases of vulnerable customers being unfairly pushed into debt spirals by the decisions of banks. The first is of a 42-year-old man who racked up overdraft charges after losing his job. Interest on his overdraft and persistent charges for going over his limit meant that, on average, £80 a month was added to his debt. Over a year, his overdraft debt increased by more than £1,000 because of interest and unauthorised overdraft charges. The second case is of a 38-year-old woman who faced spiralling overdraft debt after getting divorced. The increased burden of managing financial commitments on her own meant that she slipped into an unplanned overdraft by just £90. That led to a cycle in which she was consistently in and out of an unauthorised overdraft, which increased to £1,000 due to interest and charges. Those people, like so many others, were already in difficulty and trying to manage their debt from day to day.
Overdrafts are among the most widely used credit products in the market and form part of a worrying trend in our economy. Our savings ratio as a nation is now at a record low of 3.3%. Our household debt-to-income ratio is at 145%, up 6% in the past year. Unsecured debt has grown by 10% in just 12 months. I am worried about the sustainability of our personal finances and about a consumer demand too heavily reliant on debt and personal borrowing. The Government need to do more to ensure that our economy is not built on the shallow foundations of debt and overdrafts, but instead on investment and secure, decently paid jobs. Rising debt is symptomatic of a wider problem in our economy, which is reflected in growth levels and rising inequality. We need an economy that works for the many and not just the few, and a banking system that does the same.
Last year the Competition and Markets Authority published a review, which disappointingly fell short of proposing an independently set maximum cap on the charges on overdrafts, as we have with payday loans. Instead, the report said that banks will be required to set their own ceilings on their unauthorised overdraft charges, in the form of a monthly maximum charge. However, most banks already have that—it might be £5 a day or £90 a month. The problem is not that there is not a voluntary cap; the problem is that we need a lower cap, set by the regulators and not individually by the banks. The monthly maximum cap proposed by the CMA will do absolutely nothing to stop the deepening of a person’s debt crisis. Banks should be passing on the low bank rate to their customers, not punishing them with disproportionate charges.
Competition in this section of the market in personal banking is weak, and in the past few years it has become weaker still as a result of the merger of many high street banks. The recent troubles at the Co-operative Bank, which has lower charges than many others, could reduce competition further. As the CMA’s review found, heavy unauthorised overdraft users are the least likely to switch bank accounts. Given the substantial revenues that unauthorised overdrafts generate for the banks, there is little financial incentive for them to lower their charges. I do not want to deny the banks the right to charge for the services that they provide, but what I am calling for is some fairness and proportionality. There are simply no great offers among the high street banks for financially vulnerable customers; in fact, the exact opposite is the case.
Most of us regard banks as more reputable and fair than payday lenders, so it is a bitter irony that it is a better deal for some people who need short-term credit to go to payday lenders rather than their high street banks. Banks need to improve their behaviour, and I urge them to step in and protect their customers. After the CMA effectively passed the buck to the Financial Conduct Authority, the FCA made the welcome decision to include this issue in its ongoing—and welcome—review of high-cost short-term credit, which will report later this year, but in order to take action, the FCA would benefit from a mandate from Parliament.
I urge the Government to support the Bill and make those changes a reality, to help the customers who are being ripped off by their banks. This cannot continue.
Question put and agreed to.
Ordered,
That Rachel Reeves, Stella Creasy, Wes Streeting, Helen Goodman, John Mann, Yvonne Fovargue, Chris Evans, Gloria De Piero, Stephen Hammond, Chris Philp, Sir David Amess and George Kerevan present the Bill.
Rachel Reeves accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 12 May and to be printed (Bill 172).
Finance (No. 2) Bill
Tuesday 25th April 2017
(6 years, 11 months ago)
Commons ChamberRead Full debate Finance Act 2017 View all Finance Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 25 April 2017 - (25 Apr 2017)
The Chairman of Ways and Means (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
Clauses 2 to 6, 16 to 47, and 52 to 56 stand part.
Government amendments 13 to 29.
That schedule 3 be the Third schedule to the Bill.
Government amendments 30 to 56.
That schedules 4 to 15 be schedules to the Bill.
The Financial Secretary to the Treasury (Jane Ellison)
I will speak briefly, as we have a fair amount to get through this afternoon. Obviously, I shall attempt to address any points that are made during the debate.
The Bill is progressing on the basis of consensus and therefore, at the request of the Opposition, we are not proceeding with a number of clauses. However, there has been no policy change. These provisions will make a significant contribution to the public finances, and the Government will legislate for the remaining provisions at the earliest opportunity, at the start of the new Parliament. The Government remain committed to the digital future of the tax system, a principle widely accepted on both sides of the House. We recognise the need for the House to consider such measures properly, as called for by my right hon. Friend the Member for Chichester (Mr Tyrie) and his Treasury Committee. That is why we have decided to pursue those measures in a Finance Bill in the next Parliament, in the light of the pressures on time that currently apply.
Clauses 1 and 3 provide for the annual charging of income tax in the current financial year and maintain the basic, higher and additional rates at the current level. The annual charge legislated for in the Finance Bill is essential for its continued collection, and it will enable the funding of vital public services during the coming year. Maintaining these rates, while increasing the tax-free personal allowance and the point at which people pay the higher rate of tax, means that we are delivering on important manifesto commitments. On top of that, as of April this year, increases in the personal allowance since 2010 will have cut a typical basic-rate taxpayer’s income tax bill by more than £1,000, taking 1.3 million people out of income tax in this Parliament alone.
Clause 4 will maintain the starting-rate limit for savings income—applied to the savings of those with low earnings—at its current level of £5,000 for the 2017-18 tax year; clause 6 will charge corporation tax for the forthcoming financial year; and clauses 17 and 18 will make changes in the taxation of pensions. Clause 18 legislates for a significant anti-avoidance measure announced at the spring Budget. It will make changes to ensure that pension transfers to qualifying recognised overseas pension schemes requested on or after 9 March 2017 will be taxable. The charge will not apply if the individual and the pension savings are in the same country, if both are within the European economic area or if the pension scheme is provided by the individual’s employer.
Before the changes were announced in the spring Budget, an individual retiring abroad could transfer up to £1 million in pension savings, without facing a charge, to a pension scheme anywhere in the world provided that it met certain requirements. Overseas pension transfers had become increasingly marketed and used as a way to gain an unfair tax advantage on pension savings that had had UK tax relief. That was obviously contrary to the policy rationale for allowing transfers of UK tax-relieved pension savings to be made free of UK tax for overseas schemes. This charge will deter those who seek to gain an unfair tax advantage by transferring their pensions abroad. Exemptions allow those with a genuine need to transfer their pensions abroad to do so tax-free.
Clause 17 will make various changes in the tax treatment of specialist foreign pension schemes to make it more consistent with the taxation of domestic pensions.
Clause 21 will simplify the payment of distributions by some types of investment fund. Following the Government’s introduction of the personal savings allowance, 98% of adults have no tax to pay on savings income. In line with that, the clause will remove the requirement to deduct at source tax that must subsequently be reclaimed by the saver.
Clauses 45 to 47 provide for the removal of the tax advantages of employee shareholder status for arrangements entered into on or after 1 December 2016, in response to evidence suggesting that companies were not using the status for its intended purpose and that it therefore was not delivering value for money. The status was introduced to increase workforce flexibility by creating a new class of employee, but it became apparent that it was being widely used as a tax planning device, rather than for its intended purpose of helping businesses to recruit.
Evidence suggests that companies, particularly those owned by private equity funds, were using employee shareholder status as a tax-efficient way to reward senior staff. In many cases, contract provisions were used to replace the statutory rights that had been given up, which was undermining the purpose of the status. That continued to be the case despite the introduction of the £100,000 lifetime limit on capital gains tax-exempt gains in the 2016 Budget. The Government therefore announced in the 2016 autumn statement that they would remove the tax reliefs associated with the status and close the status itself to new arrangements at the next legislative opportunity. The action that we are taking tackles abuse and increases the fairness of the tax system.
Peter Dowd (Bootle) (Lab)
I thank the Minister for her opening remarks about consensus, with which I fully concur. We are here today to debate what is effectively a condensed version of the Bill for which my colleagues and, indeed, everyone else had been preparing, with a view to taking part in a number of Public Bill Committee sittings over a number of weeks to scrutinise properly the longest Finance Bill that has ever been produced. That is the context in which I shall make my comments.
The Prime Minister’s announcement outside No. 10 and the subsequent vote mean we do not have sufficient time in this Parliament to give the full Bill the proper parliamentary oversight it requires and deserves, as I am sure Members will understand. It is clear that the Treasury was unaware of the Prime Minister’s plans for a snap election—otherwise, it would not have introduced the longest ever Finance Bill—but the Opposition recognise the unique scenario we are in and the Government’s responsibility to levy taxes, and I am sure the Minister recognises our responsibility to scrutinise the Bill in as open and transparent a manner as we possibly can. That is why we have acted in good faith to ensure that a version of the Bill can pass before Parliament is dissolved.
Our approach to the pre-election process and the presentation of the condensed version of the Bill has been underlined by two concerns: fiscal responsibility balanced against parliamentary scrutiny. The Opposition have a responsibility to taxpayers to ensure as little economic disruption as possible; we will therefore not attempt to block any measure in the Bill that has to be passed to ensure business as usual for our public services, such as on income tax, and nor will we obstruct tax that is already in the process of collection. But of course we cannot give the Government carte blanche, as we have made clear.
There are many clauses in the Bill that we can and should wait to deal with until after the general election, as that would provide the opportunity for them to be properly scrutinised. The one exception is the soft drinks levy, which I will speak about later.
In relation to alcohol duty, the Bill includes measures that have already been implemented but that we opposed in the Budget resolutions. They include the Government’s decision to raise alcohol duty in line with inflation, raising the price of a pint of beer by 2p, a pint of cider by 1p and a bottle of Scotch whisky by 36p. As I said on Second Reading, rising business rates and rising inflation are creating a perfect storm for many small businesses. Therefore, the decision to raise this duty is a risk.
Another measure that we would have liked to avoid but that is included as a result of the necessity of the compressed process that this Bill is going through is the rise in insurance premium tax. It has already been doubled and this raises it further. Had there been a longer process, we would have sought to challenge that, as we did at the Budget resolution stage, so there is no surprise in this, but the reality is that the measure is already in effect due to the resolutions.
On tax avoidance, it is time for a wholesale shift in how we approach taxation and the treatment of self-employment given the rise of the gig economy in recent years. The Bill originally contained a number of initiatives, and no doubt we will come back to them in due course.
I welcome the Minister’s statement on the digitalisation of tax. It will be a great relief to many small businesses given the onerous requirements for quarterly reporting. No one is against a move to a digital tax system, but we do not agree with the rush to implement it.
A large portion of the Bill relates to the introduction of the soft drinks industry levy, which the Government have consulted on heavily and on which they have cross-party support in this House. The levy has popular public support, too, as a poll has indicated. I want to take this opportunity to pay particular tribute to Jamie Oliver and the Obesity Health Alliance, who have campaigned tirelessly on this issue and on the need for a joined-up Government obesity strategy, and I must compliment the Minister, who in her current and previous roles has been a strong advocate for the levy. We would like to see a review of the sugar tax levy in due course, if possible. The Minister might well wish to comment on that. I am sure that a range of issues, such as in relation to multi-buy discounts, could form part of this.
In conclusion, as a responsible Opposition, we will not stand in the way of passing a Finance Bill before the election, as that is a necessity. There are some measures that a Labour Government would bring back, and we will have an opportunity to scrutinise them in due course, but we need to get this through and we need to be responsible, and we will support the Government where required.
Several hon. Members rose—
The Chairman of Ways and Means (Mr Lindsay Hoyle)
Order. I am about to call the hon. Member for Copeland (Trudy Harrison), but first I remind the House of the courtesy that we do not intervene on a maiden speech.
Trudy Harrison (Copeland) (Con)
I am grateful for this opportunity to deliver my maiden speech as the newly elected Member of Parliament for Copeland, in what is one of the last debates of this Parliament.
First, I would like to pay tribute to my predecessor, Jamie Reed, who was the Member for Copeland from 2005 until he stood down in January this year. It is, in fact, Jamie whom I have to thank for inspiring my introduction to politics. The very first parliamentary debate I ever watched was a Westminster Hall debate called by Jamie and also attended by other Cumbrian Members—my hon. Friend the Member for Penrith and The Border (Rory Stewart) and the hon. Member for Westmorland and Lonsdale (Tim Farron)—to discuss the future of my children’s school, Captain Shaw’s in Bootle. I saw the positive impact that MPs in Westminster could have on their local communities and the powerful influence of their support, even in remote areas, which I had previously felt would never be anyone’s political priority.
Like me, Jamie was born, raised and educated in Copeland, in the fine Georgian harbour town of Whitehaven. He has served the people of Copeland with great talent and dedication. As the elected Member, he worked hard for the rural communities he represented and placed a strong emphasis on improving health and education. In announcing his decision to stand down last December, he said he could achieve more for our community by returning to work in the nuclear industry at Sellafield than by remaining a Labour Member of Parliament.
Jamie was a relentless, proud supporter of our local industry; he championed the world-class specialist skills that make up our towns and villages. He worked hard to make the case for Copeland to host the new nuclear power station, Moorside, adjacent to Sellafield, based on the strong belief that our workforce are best placed to power the northern powerhouse; after all, Copeland welcomed the world’s first nuclear reactor at Sellafield back in 1950. Our local knowledge, experience and skills in the nuclear and other highly regulated industries are internationally recognised and respected.
Sellafield’s safety record is exceptional, and it is seen as an example of outstanding performance across the globe. Jamie said that Copeland’s “best days are ahead”, a statement I agree with and will quote many times. I would like to take this opportunity to thank Jamie for his commitment to Copeland and wish him all the very best in his new role in community development at Sellafield.
Copeland has for centuries pioneered a modern industrial strategy. Our largest town, Whitehaven, was once Britain’s third largest trading port, with an extraordinary shipbuilding reputation thanks to the locally grown, hard-as-nails oak trees used to build the boats. Our ancestors sailed the world, securing deals, and returning with goods which created a crucial global trading centre. Perhaps that is why the Copeland constituency voted to leave the EU with such a high majority: because history provides confidence in our ability to export our knowledge and products across the globe.
Like true pioneers we do not stand still; innovation is in our veins. As shipbuilding and rum sales declined, we dug deep for prosperity. Mining transformed the towns of Egremont, Cleator Moor and Millom; indeed, Millom was widely regarded as an exporter of the world’s highest quality iron ore.
But we are perhaps best known in Cumbria for a delightful little rabbit, Peter Rabbit, and his friends Mrs Tiggywinkle and Squirrel Nutkin, to name just three of Beatrix Potter’s adorable characters. Writers, artists and poets have found inspiration in the beautiful Cumbrian countryside. Wordsworth was sent, under doctors’ orders, to my home village of Bootle, to aid his recovery from a chest infection. With 32 miles of coastline in the Copeland constituency, our air and our landscape are good for the soul.
Three quarters of the Copeland constituency is situated within the Lake District national park boundary, which I hope will become the second world heritage site for the Copeland constituency, complementing that of Hadrian’s Wall in Ravenglass. We eagerly await a decision in July to confirm another world first—the first UNESCO world heritage site to include an entire national park—thanks to a 20-year project by the Lake District National Park Authority and local communities to put Cumbria on the same international must-visit platform as the Taj Mahal and the great barrier reef.
I was brought up in Seascale, and then I moved to Wasdale, where I would open my curtains every morning to reveal Britain’s best view: England’s highest mountain, Scafell. Well before wild swimming was trendy, my childhood weekends would be spent paddling in Wastwater, England’s deepest lake. It is easy to see why Wasdale was the birthplace of mountaineering, and why the beautiful market town of Keswick enjoys such popularity with its annual mountain festival. That is one of the many festivals enjoyed in the Keswick community calendar.
Although the Lakeland topography is the result of glacial formations, our landscape and cultural heritage, for which we are internationally celebrated, are of course man-made. It is vital to support and protect our farming industry, both upland and lowland, to ensure that we can all benefit from quality food production, the highest standards of animal welfare, conservation and our enormously successful tourism industry, on which Copeland is so dependent.
I could not give my maiden speech without acknowledging that I would not be standing in this House today if it were not for the fantastic and unwavering support of my family, friends, community and local association. My husband Keith, my parents, my brother and my daughters—Gabrielle, Savannah, Francesca and Rosemary—have been incredible towers of strength. From the moment I decided to stand, they were there with me, campaigning, delivering leaflets and knocking on doors. My girls have become quite the persuasive activists, and it has been wonderful to see their interest in politics grow.
Having four teenage daughters aged 14, 15, 17 and 18, I was delighted to tip the balance between all history’s women Members and the current number of male Members, equalling it at 456. There was a change of reference in my Mother’s day cards this year, however. Gone were the thanks for the practical tasks of washing, cooking, cleaning and generally being there. Instead, each one referred to a theoretical role, referencing inspiration and pride. That is what a by-election does to family life, and you can only imagine their comments about another round of doorstep challenges! It is, after all, our children and young people who motivate us to secure a bright future for Britain and inspire the next generation of leaders.
I watched my right hon. Friend the Prime Minister’s speech at the Conservative party conference last year and I was so impressed by her strength and commitment to deliver for Great Britain. Her ambitions for our country resonated with my own. As she spoke, I said to myself, “That’s me, that’s who I am, that’s what I want for my community and for my country.” I stood for Parliament because I want to get on and make things happen. I want to be part of a proactive, positive team that makes a tremendous difference to my community: the land of Copeland glory.
My husband and I moved from Whitehaven in the north of the constituency to Bootle, a small village in the south of Copeland, to raise our young family. Our move was motivated by a desire for our girls to attend a village primary school, and in Captain Shaw’s we found our perfect, quintessential Lakeland school. In 2006, I discovered that the school was really struggling to make ends meet. It desperately needed extra funding so I joined the parent teacher association. I soon realised that the problem was a decline in pupil numbers, so I joined the governors. Then I learned that the whole village was declining: we had lost 20 businesses in 20 years. I then applied for the position of regeneration officer at my local borough council, where I realised that the challenge was far more extensive.
Copeland desperately requires investment in infrastructure to be able to thrive. Both professionally, working for the council, and personally, working with the can-do people in my community, I worked to shape policy, giving our planning authority the option to be either the nail in our coffin or the key to our future. We trailed the streets and lanes, collecting and providing the necessary evidence to shape the strategic vision for Bootle, which would become a beacon of hope to other rural communities. We worked hard to secure the Lake District national park’s biggest ever mixed-use planning application for Wellbank, a former 12.5 acre Ministry of Defence base. Wellbank will bring 50 homes, a hotel and enterprise areas, and it will attract public and private investment. For Bootle, that will mean an extra 64 homes, new businesses and, when complete, £20 million of inward investment.
I stood in the Copeland by-election to really make a success of the modern industrial strategy, to be an asset to the northern powerhouse and to realise our full potential as a centre of nuclear excellence and global exporter of knowledge and products. Copeland needs investment. I know that as a pioneering, hard-working and innovative community, we can succeed with the Government’s support. We have people with the skills, the potential, the essential natural resources and a landscape where people love to live, work, learn and invest. We have every reason to be optimistic and to become an asset to the country’s economic performance and world-leading reputation. Copeland is on the brink of the most exciting, game-changing transition, but we need investment to kick-start that transition.
Throughout the election, I campaigned on six vital points. First, I campaigned to make a success of Brexit, as 62% of my constituents voted to leave. Secondly, I campaigned to secure nuclear new build at Moorside benefiting both Copeland and the country. Our Government must commit seriously to new nuclear, now more than ever, if we are to attract international investment. Thirdly, I campaigned to bring our road and rail networks up to modern standards, as they are simply not fit for the modern industrial strategy. Our infrastructure is holding back our ability to diversify and thrive. Fourthly, building resilience against flooding, which wrecks lives and livelihoods, is also essential.
Fifthly, access and connectivity will be key enablers, particularly in our rural area, if we are really going to trade and compete in a global marketplace. Improving mobile and internet connectivity will make a huge difference to our quality of life and our ability to do business in a global market. It will ensure a bright future for our children and young people, and the announcement in the spring Budget supporting an enormous increase in technical apprenticeships is wonderful news for a practical, skilled community such as mine.
Sixthly, I campaigned to secure services. Ensuring that we keep our 24-hour, seven-day-a-week, consultant-led maternity department at West Cumberland hospital in Whitehaven has been one of my key aims throughout my election campaign and as a Member of Parliament. I was born at that hospital and all four of my daughters were born there too. My community has clearly demonstrated the importance of retaining such an essential service. In my first weeks as an MP, I have been able to meet my right hon. Friend the Secretary of State for Health and I have visited the hospital to see the new wards for myself and to meet the staff. I have talked to clinicians and management in order to understand the barriers to having fully operational departments in the future. We now have a fully staffed maternity department, the trust has been removed from special measures and, in addition to the £90 million already invested by this Government, we have secured the funding for the final phase of the hospital’s construction.
Supporting a further recruitment drive with Choose Cumbria is also my priority. Positive action, listening to concerns, tackling problems head on and working with the can-do people in our community who really care—all these have been my mantra for many years. I will continue to strive enthusiastically, because I believe passionately in Copeland, its people and its potential.
Turning to today’s debate on the Finance Bill, I have seen that this Government are the only Government who can deliver a stronger, more secure economy. The economy is getting stronger and growing, the employment rate is at a record high and the deficit has been reduced enormously since its pre-financial crisis peak. We are in a much stronger position than in 2010, but I recognise that we must not be complacent. We must continue to reduce the country’s debt and the deficit even further. We cannot, as previous Labour Governments did, borrow endlessly to plug holes. We need to get the public finances in good order to safeguard the future— the future I want for my daughters and their generation.
Finally, Copeland has been my home since I was born. It is an area I know and love. The opportunity to represent the communities I grew up in as their Member of Parliament is truly a great honour, and I will ensure that the voice of our towns and rural communities is heard loud and clear. I am utterly committed to Copeland, and I will fight hard to deliver on promises made to my constituents during the election.
I am extremely grateful for the time I have been allowed and for the opportunity to deliver my maiden speech in this debate.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
I invite the hon. Lady to join the all-party group on rugby league, as Whitehaven have a great reputation.
Kirsty Blackman (Aberdeen North) (SNP)
I warmly welcome the new hon. Member for Copeland (Trudy Harrison) to what is left of this short Parliament. I am particularly pleased that we have finally broken the barrier of the number of women who have been elected— I am really delighted that that has happened. As a child I holidayed in her constituency, and I fondly remember visiting where Beatrix Potter created her animals and the Beatrix Potter museum. I can see the passion with which the hon. Lady speaks about her constituency and the amount she obviously cares about the area in which she was born and bred. She is a truly local MP, so I offer her a huge welcome to the House. Who knows whether she, or any of us, will be coming back in June? But welcome, anyway.
This first group of measures addresses income tax, but I will also comment on the way that the Bill is progressing through Parliament. With the surprise announcement of a general election, the Bill looks rather different from when it was first introduced. I am sure the Minister is in a similar position, but we received provisional notification of the amount of withdrawals and changes only last night, so there will not be the normal level of scrutiny of some things in the Bill. There will possibly also be slight confusion in today’s proceedings, given that so many things are being withdrawn.
I welcome the Government’s withdrawal of the dividend tax threshold changes, which we argued against on Second Reading. I am pleased that they have chosen to do that because it was a particularly contentious part of the Bill. More generally on the income tax changes, I have said previously and am happy to state again that I appreciate the Government’s increases to the personal allowance and the minimum wage. But I have said previously and say again that the Government have not gone far enough. We have a national living wage, but there has been no calculation of whether people can live on it.
Alison Thewliss (Glasgow Central) (SNP)
Does my hon. Friend agree that the national living wage is not actually a real living wage but a pretend living wage and that it does not go far enough in that it is available only to people over the age of 25?
Kirsty Blackman
I agree that it is a real problem that this increased minimum wage does not apply to people under 25. Just because a person is under 25 does not mean they are doing any less of a job than a person over 25, and the minimum wage should apply to them just as much as to those who are older.
The other issue is that the tax credit changes more than balance out the extra money people are getting from the increased minimum wage and personal allowance. People at the bottom of the pile are worse off as a result of the Government’s decisions. Despite the Government’s talk about how great the new personal allowance and the new minimum wage are, they have to be considered in context. People who work are worse off as a result of the tax credit changes.
More generally, the Government have made a few suggestions on the taxation of self-employment, some of which have been withdrawn and some of which have not. They intend to try to equalise the taxation of employment and self-employment. However, what is missing is that people in self-employment do not receive the same benefits as people in employment, such as maternity leave and holiday entitlement. I have argued before and will argue again that if the Government are making changes to self-employment, they need to do so in the round. The need to stop this piecemeal tinkering and consider the whole situation. They need to do a proper review and come back with the results, and then consult on any changes. Rather than pulling rabbits out of hats—changing national insurance contributions with very little consultation, for example—they need to consult properly on how taxation should look for individuals, whether they are employed or self-employed.
I appreciate that the Government are undertaking the Taylor review, but I am not sure it goes far enough. I would like to see the Taylor review, or a future Government review, take self-employment into account in the round by considering all the factors that face the self-employed. We need to remember the changes in the self-employment landscape in recent years. We have seen a massive increase in the number of women and older people in self-employment, and the Government’s changes do not take into account the changes in that landscape. I would like to see a holistic approach, rather than a tinkering approach.
That is all I have to say on this group but, again, I welcome the Government’s withdrawal of the dividend tax threshold changes.
Mr Andrew Smith (Oxford East) (Lab)
I also congratulate the hon. Member for Copeland (Trudy Harrison) on a fine maiden speech and thank her for her well-deserved compliment to her predecessor on his service. She spoke with passion, wit and understanding of her beautiful constituency, as well as of Peter Rabbit. None of us envies her speedy transition from by-election to general election, but I do congratulate her.
I made my maiden speech to this House on the remaining stages of the 1987 Finance Bill, so there is a certain symmetry in my making my last remarks on this one. On the substance of the Bill, it is too often overlooked—the hon. Lady talked about balancing public spending—that, although the Conservative party often talks about balancing the budget, the last Government to do so were Labour in 2001-02. Right now, it makes sense to invest more in productive infrastructure, training and public services, with action to combat poverty and to secure Brexit terms that enable our country to grow and flourish. I wish we had a Finance Bill for social justice that stands up for the many, not the few. That is what we need a Labour Government for.
It has been a privilege to be an MP, in and out of government, and I thank the staff of the House, the Library, those who keep us safe and you, Mr Hoyle, and your colleagues. I am grateful to all colleagues and wish them well for the future.
I would like to say a huge thank you to all those who have helped me serve the wonderful constituency of Oxford East for 30 years; my family and friends; my neighbours in Blackbird Leys; our party members and supporters; my trade union, the Union of Shop, Distributive and Allied Workers; my office staff and party organisers across the years; and, most of all, my constituents. Thank you.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
I wish you well in your retirement.
George Kerevan (East Lothian) (SNP)
May I, too, thank the new hon. Member for Copeland (Trudy Harrison) for such a passionate and entertaining speech? It is good to have a representative of the land of Beatrix Potter here in this Chamber. I listened to her last points about the deficit and her encomium that this Government are bringing it down. I will be slightly wicked in saying that I am sure she knows that the Office for Budget Responsibility is forecasting a rise in Government borrowing this financial year, and she might care to ask why that is the case.
I have one specific question for the Minister on this group, as her introduction notably failed to explain why clause 5 has been withdrawn. That clause deals with the proposed reduction in the dividend income that investors in small companies can take. Are the Government embarrassed by the clause and is that why it is being withdrawn?
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clauses 2 to 4 ordered to stand part of the Bill.
Clause 5 disagreed to.
Clause 6 ordered to stand part of the Bill.
Clause 7
Workers’ services provided to public sector through intermediaries
Question proposed, That the clause stand part of the Bill.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
Clauses 8 to 15 stand part.
Government amendment 4.
Clauses 48 to 51 and 124 to 127 stand part.
Government motion to transfer clause 127.
Clauses 128 and 129 stand part.
Government amendment 10.
That schedule 1 be the First schedule to the Bill.
Government amendments 11 and 12.
That schedule 2 be the Second schedule to the Bill.
Government amendment 57.
That schedules 16 to 18 and 27 to 29 be schedules to the Bill.
New clause 1—Review of international best practice in relation to tax avoidance and tax evasion—
‘(1) The Chancellor of the Exchequer must, within two months of the passing of this Act, commission a review of international best practice by Governments and tax collection authorities in relation to—
(a) the prevention and reduction of tax avoidance arrangements, and
(b) combatting tax evasion.
(2) A report of the review under subsection (1) must be laid before the House of Commons within six months of the passing of this Act.
(3) In this section, “tax avoidance arrangements” mean arrangements broadly comparable in their effect to arrangements in the United Kingdom which have the obtaining of a tax advantage as the main purpose, or one of the main purposes, of the arrangements.”
Jane Ellison
Before I say something about this group, I wish to comment on the maiden speech and on the retirement speech that we just heard. It was a real honour to be here in the Chamber for the maiden speech by my hon. Friend the Member for Copeland (Trudy Harrison). She told us what inspired her, but she also reminded many Conservative Members of how she inspired us to make the journey up to her beautiful constituency in the knowledge that we were supporting an outstanding woman who is rooted in and passionate about her community. She was generous about her predecessor, which was nice to hear. I had many friendly dealings with Jamie Reed when he was a Labour shadow Health Minister and I was in the Department of Health, so I welcome her comments. It was a wonderful maiden speech and I look forward to many more speeches from her in the future, and I wish her and her long-suffering family well for the weeks ahead. She spoke with conviction about the contribution of nuclear power, but I think that in the forthcoming campaign it will be girl power to the fore.
It is always nice to hear Members reflect on their time in this House and the way they have served. As the right hon. Member for Oxford East (Mr Smith) noted, he has had a nice bookending, with a Finance Bill debate at the start and a final contribution on Treasury matters. Of course, he also paid tribute to his constituents. I am sure that in these circumstances one has a bit less time than one thought to do a round of goodbyes, but I am sure he will continue to be active in his community. I congratulate him on his speech and thank him, on behalf of all hon. Members, for his service to the House.
This group deals with the taxation of employment income, and contains some clauses addressing tax avoidance and evasion. There are a number of clauses and schedules in this group, including a new clause from the hon. Member for Aberdeen North (Kirsty Blackman), but I am going to focus my remarks on clause 7 and schedule 1, which refer to workers’ services provided to the public sector through intermediaries and which might be of interest to Members. I will, of course, address any other areas in the course of the debate.
Clause 7 and schedule 1 reform the off-payroll working rules—also known as the intermediaries legislation, or IR35—for individuals working in the public sector. The tax system needs to keep pace with the different ways in which people are working. As the Chancellor set out at both the autumn statement and the spring Budget, the public finances face a growing risk from the cost of incorporations. Indeed, the Government estimate that by 2021-22 the cost to the Exchequer from people choosing to work through a company will be more than £6 billion. A not insignificant part of that cost comes from people who are working through their own personal service company but who would be classed as employees if it were not for that company. The off-payroll working rules are designed to ensure that where individuals work in a similar way to employees, they pay broadly the same taxes as employees. However, non-compliance with these rules is widespread, and Her Majesty’s Revenue and Customs estimates that less than 10% of those who should operate these rules actually do so. As a result, more than £700 million is lost each year across the economy, of which about 20% relates to non-compliance in the public sector. This is neither sustainable nor fair, and we believe that public authorities, in particular, have a responsibility to taxpayers to ensure that the people working for them are paying the right amount of tax.
Kirsty Blackman
People have told me that no matter what information they have put in, they have always been told that they have to pay more tax than they were expecting. Concerns have been raised with me about that online tool and its shortcomings, and about the fact that HMRC is always asking people to pay a level of tax that they think is wrong or too high.
Jane Ellison
Given where we are in this Parliament, the best thing the hon. Lady can do is to send details on that, immediately and before Dissolution, so that HMRC can look at the factual issues. I am surprised by what she says, but let us ask HMRC to look at the practical issues she raises—while we are off doing other things, it can perhaps look at those if she supplies the information in the next few days. HMRC has worked with the Cabinet Office Crown Commercial Service to produce guidance for public authorities and has supported them to implement the changes.
Government amendment 10 is a technical one to ensure that the reform only applies to the public sector, as set out in the Government’s original announcement.
In conclusion, the Government believe it is essential to ensure that public funds are used correctly and that those in receipt of them are paying the correct amount of tax. The changes being made by clause 7 and schedule 1 will improve compliance with the tax rules, raising a substantial amount of revenue by 2021-22. I therefore ask Members to support this clause and schedule, along with clause 8, schedule 2, clauses 11 and 48, schedule 16 and clause 127.
Kirsty Blackman
I wish to discuss the issues raised in this group, including by my new clause 1. The Minister has covered the IR35 issues in some detail, but the Scottish National party still has real concerns about these changes. Just the other day somebody told me that they are no longer bidding for public sector contracts as a result of the tax changes made on IR35. That is a real concern, which we have raised before, particularly in the context of rural communities. In some of our most rural communities, people such as teachers, doctors and nurses are employed through intermediaries, and for very good reasons: it is sometimes difficult to get people to come to some of the most rural parts of Scotland. We are concerned that this move is going to have a real disadvantageous effect, particularly for rural communities that rely on teachers, doctors and other individuals working in the public sector who are employed through intermediaries. I understand that it is already having an effect, but it would be interesting, and I would very much appreciate it, if the Government let us know what difference it has made, not only to the tax take, but to our communities. Having read through the Government’s document on the impact of the tax changes, called OOTLAR—the overview of tax legislation and rates—I do not think they have recognised the impact the changes could have on communities, so it would be interesting to see what that impact is. The change has already been made and people are now working under it, so I imagine that within six months or so we will be able to see the outcomes and whether or not there is a disadvantage.
New clause 1 is on tax avoidance, which the Scottish National party has spoken about at length in this Parliament, and about which we will continue to speak at length. Tax avoidance is a real concern and contributes to the UK tax gap, which is £36 billion. Back in 2014, Credit Suisse published a report suggesting that larger countries such as the United Kingdom struggle to get people not to avoid tax. Smaller countries are much better at it—I am just pointing that out. The new clause would require the Chancellor of the Exchequer to review within two months international best practice in relation to the prevention and reduction of tax avoidance arrangements and combating tax evasion, and to publish a report of the review. We are asking for that because we do not think that the United Kingdom is the best place in the world at tackling tax avoidance. It is certainly not the best place in the world at all the different ways of tackling tax avoidance; we could learn a huge amount from what different countries are doing. The new clause would be a sensible way forward, so I hope the Government are keen to accept it.
Something else we have mentioned in relation to tax avoidance is the protection of whistleblowers. Some whistleblowers tend towards having poor health as result of their whistleblowing. It is really important that people are encouraged to come forward if they see problems, and that we are making it as easy as possible for them to do so, because we need people to be whistleblowers. We need them to tell us where practice is going wrong and where tax dodging is happening. We would support the Government in any action they take to encourage whistleblowers and to create a better environment in which they can come forward.
Lastly, there has been talk of the possibility of the United Kingdom becoming a tax haven after Brexit. We absolutely reject the notion that after Brexit the United Kingdom should reduce all taxes to nearly nothing. For a start, that just does not work if we want to have public services such as the NHS—
Kirsty Blackman
I hope everybody present is supportive of the NHS, but I get why my hon. Friend has the impression that some people are not. We need our NHS to continue to be supported, and for that we need taxes to continue to come in.
Nigel Huddleston (Mid Worcestershire) (Con)
Does the hon. Lady agree that the focus should be on maximising the tax take? A reduction in tax rates can actually lead to an increase in the tax take.
Kirsty Blackman
I agree that the focus should be on maximising the tax take, but I would go about it in a slightly different way by trying to encourage companies and individuals and by encouraging the economy to grow. I would try to get people back into more productive jobs in order to increase productivity. The Government have mentioned increasing productivity, which is something we have been pretty good at doing in Scotland in recent times; our productivity increase has been significant and much higher than the productivity increase south of the border. Those are the measures I would start with to grow the economy.
Mr David Nuttall (Bury North) (Con)
Will the hon. Lady give way on that point?
Mr Nuttall
Well, we have plenty of time. I am grateful to the hon. Lady for giving way. Does she not agree that by reducing taxes, particularly corporation tax, in this country, we are more likely to attract inward investment and new companies from around the globe to this country, thereby producing the taxes to pay for our public services?
Kirsty Blackman
I do not believe that there is a huge amount of evidence for that. When companies are looking at where to base their headquarters and their staff, corporation tax does not feature all that high up the list. They are looking for good infrastructure, schools and support for individuals in the community. Corporation tax is not at the top of the list, so I would do other things first to try to encourage inward investment, if it were me who was in government and making those decisions.
Kirsty Blackman
Mr Hoyle, that is the end of my comments on this group.
Question put and agreed to.
Clause 7 accordingly ordered to stand part of the Bill.
Clause 8 ordered to stand part of the Bill.
Clauses 9 and 10 disagreed to.
Clause 11 ordered to stand part of the Bill.
Clauses 12 to 16 disagreed to.
Clauses 17 and 18 ordered to stand part of the Bill.
Clauses 19 and 20 disagreed to.
Clause 21 ordered to stand part of the Bill.
Clauses 22 to 44 disagreed to.
Clauses 45 to 47 ordered to stand part of the Bill.
Clause 48
Employment Income Provided through Third Parties
Amendment made: 4, page 49, line 26, leave out
“Schedules 16 and 17 make”
and insert “Schedule 16 makes”.—(Jane Ellison.)
Clause 48, as amended, ordered to stand part of the Bill.
Clauses 49 to 56 disagreed to.
Clause 57
VAT: Zero-rating of Adapted Motor Vehicles Etc
Question proposed, That the clause stand part of the Bill.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
That schedule 19 be a schedule to the Bill.
New clause 2—Review of VAT treatment of the Scottish Police Authority and the Scottish Fire and Rescue Service—
“(1) The Chancellor of the Exchequer must, within two months of the passing of this Act, commission a review of the VAT treatment of the Scottish Police Authority and the Scottish Fire and Rescue Service, including but not limited to—
(a) an analysis of the impact on the financial position of Police Scotland and the Scottish Fire and Rescue Service arising from their VAT treatment, and
(b) an estimate of the change to their financial position were they eligible for a refund of VAT under section 33 of the VAT Act 1994.
(2) A report of the review under subsection (1) must be laid before the House of Commons within six months of the passing of this Act.”
Jane Ellison
No VAT is charged for the buying of an adapted vehicle by or on behalf of a disabled wheelchair user. Unfortunately, this scheme, which supports disabled wheelchair users to live independently, has been fraudulently abused by unscrupulous individuals who make purchases under this relief and then sell the vehicles on for additional profit. For example, HMRC discovered that one person purchased 30 BMWs under the scheme in one day, while another individual bought 100 vehicles that I would describe as high-performance sports cars and the like in under two years. This is clear abuse of the scheme, and its integrity is being brought into question by such behaviour.
Clause 57 will tackle abuse of the relief, while ensuring that it remains available for those with disabilities. The changes made by clause 57 will restrict the number of vehicles that an individual, or someone on behalf of that individual, may purchase under the scheme to one every three years. That will stop fraudsters from purchasing multiple vehicles in one day, or over a prolonged period. The legislation recognises that, in some circumstances, a replacement vehicle may genuinely need to be purchased within the three-year period. In addition, the clause makes it mandatory for vehicle dealers to submit a declaration of eligibility for each car purchased under the scheme to HMRC and applies penalties to those found to abuse the scheme.
Jane Ellison
Let me just complete the exposition of why these bodies do not qualify.
Both those new bodies are funded centrally rather than through local taxation and therefore do not meet the eligibility criteria for section 33 VAT refunds. The Treasury warned the Scottish Government in advance that making these changes would result in the loss of VAT refunds. In deciding to go ahead, the Scottish Government fully considered the costs and benefits of doing so, including the loss of VAT refunds. Therefore, there is no additional benefit to be had from the Government committing resource and time to produce a report on this issue. I therefore urge the Committee to reject new clause 2.
Kirsty Blackman
Just on that, can the Financial Secretary tell us how London Legacy and Highways England are funded?
Jane Ellison
Again, those are matters that have been covered before. I refer the hon. Lady to comments that I have made previously in response to very similar interventions. These measures have been discussed not just in Finance Bills, but during the passage of the Scotland Bill. Again, the message was the same that this was a decision taken in the full knowledge of the VAT consequences. Once again, I urge the House to reject the new clause that calls for a review.
Kirsty Blackman
If the Minister changes the VAT treatment of the Scottish police and the fire and rescue service, I promise not to raise the matter again in the House. I can see that she is fed up with discussing it, but, frankly, so am I. If the Government were to move on this, we would not have to raise it again.
Patrick Grady
The other option open to the Government is to devolve power over VAT to the Scottish Parliament, so that it could make all of these decisions. We were promised the most powerful legislature in the world, so why do the Government not live up to that commitment and give us the powers that we need?
Kirsty Blackman
I agree with my colleague. We have a portion of VAT devolved to the Scottish Parliament, which does not make a huge amount of sense. Although we obviously welcome any new powers coming to the Scottish Parliament, it would be much better if we had control over all of VAT, rather than have a portion of the income from VAT coming to us.
The Scottish police and the fire and rescue service are charged VAT unlike Highways England, which is a national English body, and unlike London Legacy, which is a national UK-wide body. The UK Government have created exemptions for both of those organisations, but not for Scottish police and Scottish fire. This costs the Scottish people, because Scottish police and Scottish fire are having to pay this VAT bill to the UK Government rather than having this money to spend.
Joanna Cherry (Edinburgh South West) (SNP)
This VAT charge is costing Scotland’s emergency services tens of millions of pounds a year. Does my hon. Friend agree that our constituents would rather that this money was spent on fighting crime and funding emergency services in Scotland than on plugging the holes in the Tory Government’s budget because of their poor financial planning and budgeting?
Kirsty Blackman
I absolutely agree with my colleague.
In June 2016, it was reported that, since it was formed three years previously, Scotland’s single police force has paid £76.5 million in VAT, and it remains unable to reclaim that tax. The UK Government have created exemptions for other bodies that they see as important. Why do they see London Legacy and Highways England as more important than Scottish police and Scottish fire? We again ask the UK Government to change that.
Question put and agreed to.
Clause 57 accordingly ordered to stand part of the Bill.
Clause 58
IPT: Standard Rate
Question proposed, That clause 58 stand part of the Bill.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
With this it will be convenient to consider clause 59 stand part.
Jane Ellison
Clause 58 legislates for the increase in the standard rate of insurance premium tax from 10% to 12% as the Chancellor announced in the autumn statement 2016. This change will be effective from 1 June this year. Clause 59 will make minor changes to anti-forestalling provisions, so that insurers cannot artificially avoid paying the new rate of insurance premium tax by adjusting contract dates.
The Government remain committed to our fiscal mandate of eliminating the deficit. Much has already been achieved. The Government are forecast to reduce the deficit by more than two thirds by the end of this year, and in 2018-19, debt will fall for the first time in 16 years. However, we cannot be complacent. The Office for Budget Responsibility’s recent fiscal sustainability report highlights the challenges posed by an ageing population, projecting debt almost trebling to 234% over the next 50 years, if no further action is taken.
Stephen Pound
I am so sorry to interrupt the hon. Lady, but I speak on behalf of the 4th Perivale scout group, which is most concerned about the impact that insurance premium tax increases are having on not just scout groups but other charities. Has she considered this matter since my hon. Friend the Member for Bootle (Peter Dowd) raised it, and does she have any good news if not for the whole charity sector, at least for the 4th Perivale scout group?
Jane Ellison
I am delighted that the hon. Gentleman has had the opportunity to put his local scout group on the record. These issues have been discussed in general terms. In particular, I spoke at the Charity Tax Group conference recently. The point that I made there was that although we are not making exceptions for a number of reasons—some of them logistical—there are many different ways in which the Government exempt tax for charities and try to support them in other ways. The existing tax reliefs that go to charities and community groups in this country are worth many billions, and many are not taken up as much as they should be. In particular, the issue of scout groups got a very thorough airing during the passage of the gift aid small donation scheme measures that we took through the House last autumn. Those measures are designed to help such groups that do a lot of their fundraising outside their headquarters. Although I cannot give him comfort on this issue, I draw his attention to the fact that there are many other ways in which we help to relieve worthy groups. In particular, I refer to that recent change, which I encourage him to discuss with the Perivale scout group, because, as I have said, that was made very much with it in mind, especially with regard to how it collects donations.
George Kerevan
Essentially, this is one of the taxes that the Government are keeping in. It is the third insurance premium tax rise in 18 months. Will the Minister justify why the Government are proposing this third increase, which actually increases the rate by 20%—well above the rate of inflation?
Jane Ellison
I am coming to that, but the Chancellor was admirably clear when he laid the change out for the House when it was announced.
The Government have worked to eliminate the deficit and to invest in Britain’s future. We want to ensure that the public finances remain sustainable and to build resilience to future shocks. We have prioritised tax changes to help ordinary working families, and encouraged businesses to invest in the UK. We are supporting jobs and helping people’s money to go further through increases to the personal allowance and the national living wage. We have committed to investing £23 billion for infrastructure in the national productivity investment fund and an extra £2 billion for social care, which will ease pressures on the national health service.
By increasing insurance premium tax, we will ensure that we can maintain the balance between that investment and controlling the deficit. The additional revenue gives the Government the flexibility to invest. IPT is a tax on insurers. They are not in any way obliged to pass on the tax through higher premiums. However, if insurers do choose to pass on the increase, it will be spread thinly across a wide range of people and businesses. In line with the informal agreement between the Government and the Association of British Insurers, firms have been given more than six months’ notice, which gives time to implement the change. The agreement aims to give insurers proper warning of a rate change and to ensure that the correct rate of tax on a policy is known when the policy is arranged.
The changes made by clause 58 will raise approximately £840 million each year to reduce the deficit, while ensuring that we can fund spending commitments. That really is the answer to the intervention by the hon. Member for East Lothian (George Kerevan). Insurance premium tax is a tax on insurers, not consumers. It will be insurance companies’ choice whether to pass on the 2% rate increase. Even if the increases were passed on in full, the impact would be modest, costing households less than 35p a week on average.
The changes made by clause 59 will protect revenue by ensuring that insurers cannot artificially avoid paying the new rate of IPT by adjusting contract dates. As I have said, the Government are committed to reducing the deficit, while still investing in the UK. This requires some difficult decisions, including this 2% increase to the standard rate of IPT. The change will be invaluable in funding vital public spending, such as the additional £2 billion committed to social care.
Kirsty Blackman
It is really interesting to hear the Minister say that the change will only cost an average of 35p a week. That is quite a lot, particularly for people who do not have an extra 35p a week. The director general of the ABI said:
“UK consumers and businesses already pay relatively high levels of IPT… It cannot be right that people are being forced to pay an increasingly high price for doing the responsible thing”.
As my hon. Friend the Member for East Lothian (George Kerevan) said, this is the third increase. At the start of this Parliament, IPT was at something like 3%. It was then increased to 6.5% and then to 9.5% during this Parliament. This is a tax on people doing the right thing by insuring their homes and properties. I agree with the hon. Member for Ealing North (Stephen Pound), who spoke about a scout group, that this is also a tax on charities and organisations providing a brilliant experience for young boys and girls going through scouting. The change has not been considered in the round; the Government have seen another opportunity to get a few extra pennies in.
Huw Merriman (Bexhill and Battle) (Con)
The hon. Lady, like me, may have a rural constituency, where there are lots of young drivers experiencing high insurance costs. Would she welcome signs from the Minister that the Government will look at the impact of the change on the young in the future, particularly if it has an impact on social mobility for the young?
Kirsty Blackman
I do not actually have a rural constituency, but I do live near one, so I recognise the issues that are faced by young drivers. We want young people, particularly those in rural areas, to be able to access services, learn to drive safely and afford insurance when they do, so that they can travel and access jobs, opportunities and training. I agree with the hon. Gentleman and also ask the Government to look at this area. We cannot continue to see hikes in insurance premium tax. A 20% hike is absolutely ridiculous, especially as it follows hot on the heels of a number of other hikes in insurance premium tax. The Government need to look at this seriously and commit to not making any further increases in the next Parliament.
George Kerevan
I have two points. First, I reiterate to the Minister, who artfully shifted to saying that there was a 2% rise in the tax, that there is a two percentage point rise. It is a 20% rise in the tax. I asked the Minister how she justified that massive, excessive increase relative to inflation. She did not reply—I suspect because, as a Conservative tax cutter, she is embarrassed. I have a further question for the Minister. Will she rule out extending the provision of IPT to reinsurance? Clearly, IPT has been hit on by the Government because it is one of the few things that they have not yet legislated not to increase as a form of taxation. That will doubtless change in the Conservative manifesto. But as long as this is the tax that the Government are hitting on because it is the one they have left, will the Minister state that they will not in future years extend IPT to the reinsurance market, which would net them even more money?
Question put and agreed to.
Clause 58 accordingly ordered to stand part of the Bill.
Clause 59 ordered to stand part of the Bill.
Clause 60
Landfill tax: taxable disposals
Question proposed, That the clause stand part of the Bill.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
With this it will be convenient to consider the following:
Clauses 61 to 64 stand part.
Amendment 1, in clause 65, page 73, line 4, leave out subsection (2).
Clauses 65 to 70 stand part.
New clause 3—Review of oil and gas corporation tax rates and investment allowances—
“(1) The Chancellor of the Exchequer must, within two months of the passing of this Act, commission a review of the corporation tax rates and investment allowances applicable to companies producing oil and gas in the UK or on the UK continental shelf.
(2) A report of the review under subsection (1) must be laid before the House of Commons within six months of the passing of this Act.”
New clause 4—Review of tax regime relating to decommissioning of oil and gas infrastructure—
“(1) The Chancellor of the Exchequer must, within two months of the passing of this Act, 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 or the development of new fields in the UK continental shelf.
(2) In undertaking the review under subsection (1), the Chancellor of the Exchequer must consult—
(a) the Department for Business, Energy and Industrial Strategy;
(b) the Oil and Gas Authority;
(c) Scottish Ministers; and
(d) such other stakeholders as the Chancellor of the Exchequer thinks appropriate.
(3) A report of the review under subsection (1) must be laid before the House of Commons within six months of the passing of this Act.”
Jane Ellison
I plan to focus my comments in this part of the debate on alcohol duties, which I anticipate will be of greatest interest to hon. Members. Other clauses within the group provide for other duty changes, and a new clause has been tabled by the hon. Member for Aberdeen North (Kirsty Blackman) on the oil and gas decommissioning regime, which we may come to.
Clause 65 sets out changes to alcohol duty rates that took effect on 13 March 2017. We announced in the 2017 Budget that the duty rates on beer, cider, wine and spirits will be kept flat in real terms, uprating by retail price index inflation. This is in line with policy and previous forecasts. As hon. Members will probably be aware, the public finances assume that alcohol duties rise by RPI inflation each year, so there is a cost to the Exchequer from freezing or cutting alcohol duty rates. If alcohol duty rates had been frozen or cut at Budget 2017, the Government would instead have had to raise taxes in other areas of the economy, to cut public spending or to increase the public deficit. Consumers and businesses continue to benefit from the previous alcohol duty changes, which initial estimates suggest will save them around £3 billion in duty between fiscal years 2013 and 2017. I will now briefly set out how past duty changes and other Government policies have affected different drinks and the sector.
I will start with spirits duty. The Government recognise the important contribution that Scotch whisky makes to the economy and local communities. The Scotch Whisky Association, which I had a meeting with and had the chance to hear from directly, estimates that Scotch whisky adds over £5 billion overall to the UK economy and supports more than 40,000 jobs, some 7,000 of which are in the rural economy. Distilleries provide an important source of employment in rural communities. The Scotch Whisky Association estimates that exports to nearly 200 countries in every continent were worth nearly £4 billion last year and accounted for about 20% of all UK food and drink exports. Single malt Scotch whisky exports exceeded £1 billion for the first time last year, and more Scotch whisky is sold in France in just one month than cognac in an entire year.
The Government are committed to supporting this great British success story. Scotch whisky was one of the first food and drink products to feature in the GREAT campaign, giving it high visibility internationally in key markets. More recently, the Scotch Whisky Association joined my right hon. Friend the Prime Minister on her trade mission to India last year. Scotch whisky is currently just 1% of the Indian spirits market, but it has the potential to grow to 5% with the right trade agreement. That would be equivalent to a 10% increase in the current global trade in Scotch.
The spirits duty escalator was ended in 2014, and the tax on a bottle of Scotch whisky is now 90p lower than it would otherwise have been. The hon. Member for Aberdeen North has tabled an amendment to reverse the uprating as applied to spirits. To be clear, that would not help exports, because the £4 billion of exports a year are unaffected by the duty change, as no duty is paid on exported spirits. Instead, it would help those selling in the UK market. The amendment would cost the Exchequer, and so increase the deficit by, around £100 million this year. For the reasons I have indicated—not least the bottom line scorecard cost—the Government reject the amendment, which would not help exporters of whisky or other spirits and which is unfunded. Clause 65 will keep spirit duty rates flat in real terms, so consumers will continue to benefit from the previous change to spirit duty rates.
While we are on spirits, I should touch on another great British success: the UK gin industry. When I met the Wine and Spirit Trade Association, it informed me that, in 2016, gin sales exceeded £1 billion for the first time in the UK. I suspect that many of us will be partaking of a number of these products in the weeks ahead. [Interruption.] I said many of us. We will be partaking perhaps in celebration or perhaps for sustenance —who knows what reason. It is good that we put these British success stories on record.
I was also told that the number of gin brands has more than doubled since 2010. [Interruption.] Yes, doubles all round. The price of a typical bottle of gin remains 84p lower than it would have been now that we have ended the spirits duty escalator. As with Scotch whisky, no UK duty is payable on exported gin.
As well as ending the spirits duty escalator, we also ended the beer duty escalator to help pubs. Pubs play an important role in promoting responsible drinking, providing employment and contributing to community life—that sentiment is expressed regularly on both sides of the House. Brewers also make an important contribution to local economies. The increase in the number of small breweries in recent years has increased diversity and choice in the beer market. By promoting interest in a larger range of beers, that has benefited all brewers.
The clause will not undo the previous beer duty cuts or freezes. The Government cut the tax on a typical pint by one penny at Budgets 2013, 2014 and 2015 and then froze duty rates last year. As a result, drinkers are paying 11p less in tax on a typical pint this year than they otherwise would have paid.
On wine duty, the Government are committed to supporting the UK wine industry. The first joint industry and Department for Environment, Food and Rural Affairs wine roundtable last year resulted in a set of industry targets, including to increase wine exports tenfold and to double production to 10 million bottles by 2020. The wine sector will continue to benefit from the previous changes to wine duty rates.
Cider makers, too, play an important role in rural economies, using over half the apples grown in the UK. The duty on a typical pint of cider remains around half the duty on a typical pint of beer. The tax on a typical pint remains 3p lower than it would otherwise have been, as a result of the Government’s changes to cider duty rates since Budget 2014.
To conclude, we fully recognise the importance of the alcohol industry to the economy and local communities. I have talked with and met various representatives from across the industry, and I will, of course, continue to engage with them. The cuts and freezes in duty rates since the ending of the alcohol duty escalators continue to deliver great benefits. They will save consumers and businesses around £3 billion in duty between fiscal years 2013 and 2017. However, allowing alcohol duties to fall every year in real terms would be unsustainable in the long term. If alcohol duties had been frozen or cut at Budget 2017, the Government would instead have had to raise taxes in other areas of the economy, cut public spending or increase the public deficit. The clause simply increases duties in line with inflation, as assumed in the fiscal forecasts. This is not a return to the real-terms increases year after year imposed by the alcohol duty escalator. I therefore suggest that the clause stand part of the Bill.
Kirsty Blackman
I will start by talking about alcohol and whisky, and then I will move on to talk about oil and gas. Specifically on whisky, I appreciate the Minister taking the time to talk about the contribution of the Scotch whisky industry. It does, indeed, contribute to our economy; of particular note are the 40,000 jobs it provides, including the 7,000 in the rural economy, which are really important for Scotland’s rural communities.
The positive changes the UK Government previously made to spirit duty meant there was confidence in the industry again, and we have seen a real change in the industry over the last couple of years, with a dozen new distilleries opening and 14 in various stages of planning, but the changes that have been made this year will put 36p on a bottle of whisky and mean that £4 of every £5 spent on whisky goes to the UK Government’s coffers.
My hon. Friend the Member for Argyll and Bute (Brendan O'Hara), who is the chair of the all-party group on Scotch whisky, spoke about this issue on Second Reading, although not at enough length—he got only four minutes. He is really concerned about distilleries. I appreciate the Minister talking about the success story that the gin industry has been for new distilleries—it takes a long time to mature Scotch whisky but not to mature gin, so distilleries can be up and running pretty quickly. The issue is the context in which things are seen. I understand that, as the Minister said, the change will not affect those selling abroad, but given that most producers sell whisky in the domestic market, it will obviously have an effect on those who also sell abroad.
In the wider context of Brexit, where the trade deals we currently have will no longer exist and we will have to negotiate new trade deals, including with the EU, if we are to sell whisky to France, as the Minister mentioned, we will need to have a trade deal. We will need to have trade deals with all the countries we trade with under the EU’s free trade agreements.
A major concern for those of us who represent constituencies involved with whisky is the protected geographical indication. The EU has protected geographical indication status, so people are not allowed to bottle whisky somewhere else and call it Scotch whisky. We are set to lose that protection when the UK leaves the EU, and it is important that the UK Government do what they can to ensure that the Scotch whisky industry can continue to trade and protect its brand—but I do not see that coming through. If the Government had not raised duty in this Budget on spirits and on whisky in particular, the industry would have known that it had the confidence of the UK Government and been in a much better position to take decisions.
Moving on to oil and gas, we have two new clauses on the amendment paper. New clauses 3 and 4 on behalf of the SNP are in my name, and I particularly thank my hon. Friend the Member for Aberdeen South (Callum McCaig) for his input into them. New clause 3 is about investment allowances. This Tory Government have come up with a line that we are one of the most competitive fiscal regimes for oil and gas, which is all well and good, but we also have one of the most mature fields in the world. In the North sea and on the UK continental shelf, we are also having to do things and implement technologies we have never seen before. A huge amount of innovation from our companies is having to go on in order for them to be able to achieve the UK Government’s and Sir Ian Wood’s maximising economic recovery strategy.
New clause 3 is about investment allowances and corporation tax rates on companies producing oil and gas. The UK Government have put the tax up and put it down, but they have not at any stage sat down and looked at the entire taxation regime for the oil and gas industry and said, “We are operating in a new scenario.” They have kept the level of taxes that we have had since oil and gas began to be taken out of the North sea. It is time for the UK Government to look at that tax structure and those tax regimes to see how they can incentivise companies to ensure that they are getting the best out of the North sea and securing jobs in the north-east of Scotland, and beyond, for as long term a future as possible.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
Clauses 72 to 75 stand part.
Amendment 2, in clause 76, page 81, line 15, leave out paragraph (a).
Amendment 3, page 81, line 20, leave out subsection (2).
Clauses 76 to 107 stand part.
That schedules 20 to 23 be schedules to the Bill.
Jane Ellison
Clauses 71 to 107 contain provisions for a new tax called the soft drinks industry levy to be introduced from April 2018. This is a key pillar in the Government’s childhood obesity plan, and it has been welcomed by a wide range of public health experts and campaigners. Tackling obesity is a national challenge—indeed, an international challenge. The UK has one of the highest obesity rates in the developed world, and childhood obesity in particular is a major concern. Today nearly a third of children aged two to 15 are overweight or obese, and we know that many of these children will go on to become obese adults. Obesity drives disease, as we are reminded at the moment as we come through Westminster underground station by the Cancer Research UK posters. It increases the risk of heart disease, type 2 diabetes, stroke, and some cancers. The NHS spends over £6 billion a year across the UK in dealing with obesity-related costs, and the overall costs to our economy are estimated at between £27 billion and £46 billion a year. This cannot go on.
Health experts have identified sugary drinks as one of the biggest contributors to childhood obesity and a source of empty calories. A 330 ml can of full-sugar cola typically contains nine teaspoons of sugar. Some popular drinks have as many as 13 teaspoons. This can be more than double a child’s daily recommended added sugar intake in just a single can of drink. The Government recognise that this is a problem, and so have many others, with over 60 public health organisations calling for a tax on sugary drinks and many thousands signing a petition in favour. I am delighted that this issue has also received a high level of cross-party support.
Indeed, some soft drinks producers had recognised that sugar levels in their drinks were a problem too, and had started to reduce the sugar content, move consumers towards diet and sugar-free variants, and reduce portion sizes for high-sugar beverages. Nevertheless, reducing the added sugar in soft drinks is now a public health priority, and this new levy is needed to speed up the process. It is specifically designed to encourage the industry to move faster. We gave the industry two years to make progress on this before the levy begins, and we can see that it is already working. Since the Government announced the levy last March, a number of major producers have accelerated their work to reformulate sugar out of their soft drinks and escape the charge. These include Tesco, which has already reformulated its whole range of own-brand soft drinks so that they will not pay the levy. Similar commitments have come from the makers of Lucozade and Ribena, and the maker of Irn-Bru, A. G. Barr. In fact, we now expect more than 40% of all drinks that would otherwise have been in scope to have been reformulated by the introduction of the levy. We see international action too. In recent months, countries such as Ireland, Spain, Portugal, Estonia and South Africa have brought forward similar proposals to our own.
As a result of such reformulation before the levy begins, we now expect the levy to raise around £385 million per year, which is less than the £520 million originally forecast—but we are clear that this is a success. The Government will still fund the Department for Education’s budget with the £1 billion that the levy was originally expected to raise over this Parliament, including money to double the primary schools sports premium and deliver additional funding for school breakfast clubs, and £415 million to be invested in a new healthy pupils capital programme. The devolved Administrations will receive Barnett funding in the usual way. The Secretary of State for Education has made recent announcements about how some of the money will be spent, particularly on the healthy pupils capital programme.
The levy has shown that the Government mean business when it comes to reducing hidden sugar in everyday food. That willingness to take bold action underpins another major part of our childhood obesity plan, namely Public Health England’s sugar reduction programme, which is a groundbreaking programme of work with industry to achieve 20% cuts in sugar by 2020 across the top nine food categories that contribute the most to children’s sugar intake. It has been acknowledged, not least by industry, that that is a challenging target, but one that industry is committed to working with Government to achieve. The sugar reduction programme will cover some of the drinks products that are not part of the levy, such as milk-based drinks. The programme is already bearing fruit: there have been announcements and commitments to reduce the levels of sugar in some of the products.
I know that some would like the levy to go further. In particular, the hon. Member for Aberdeen North (Kirsty Blackman) has tabled amendments 2 and 3, which would remove the exclusion from the levy of high milk content drinks containing at least 75% milk. We oppose those amendments. Milk and milk products are a source of protein, calcium, potassium, phosphorous and iodine, as well as vitamins B2 and B12. One in five teenage girls do not get enough calcium in their diet, and the same is true for one in 10 teenage boys. It is essential for children’s health that they consume the required amount of those nutrients, which aid bone formation and promote healthy growth as part of a balanced diet. Health experts agree that the naturally occurring sugars in milk are not a concern from an obesity perspective, and they are not included in the definition of free sugars, which Public Health England now applies.
Of course, we want milk-based drinks to contain less added sugar, so they will be part of Public Health England’s sugar reduction programme. Producers of the drinks will be challenged and supported to reduce added sugar content by 20% by 2020. Public Health England has committed to publishing a detailed assessment of the food and drink industry’s progress against the 20% target in March 2020, and today I make a commitment to the House that we will also review the exclusion of milk-based drinks in 2020, based on the evidence from Public Health England’s assessment of producers’ progress against their sugar reduction targets. In the light of that assurance, I urge hon. Members to reject amendments 2 and 3, and allow us to review the evidence in 2020, two years after the levy has begun, and to decide at that point whether milk-based drinks should be brought within scope.
Obesity is a problem that has been decades in the making and we are not going to solve it overnight. The soft drinks levy is not a silver bullet, but it is an important part of the solution. This Government’s childhood obesity plan, with the levy as its flagship policy, is the start of a journey and it marks a major step towards dealing with our national obesity crisis.
Kirsty Blackman
The Minister is absolutely correct about the huge amount of cross-party support for the general thrust of the soft drinks industry levy and the move towards tackling obesity, particularly childhood obesity. However, we are concerned that the levy does not go far enough and that the Government could have chosen to close certain loopholes when drafting the Bill.
The single biggest cause of preventable cancer is obesity. More than 18,100 cancers a year are associated with excess weight. Cancer Research says that sugary drinks are the No. 1 source of sugar for 11 to 18-year-olds, which is a pretty terrifying statistic, and I appreciate that the Government have chosen to take action.
I am concerned about the Government’s response on milk-based drinks and about the fact that they are excluded from the levy.
Joanna Cherry
Does my hon. Friend agree that the problem with omitting high-sugar milk-based drinks from the provisions is that parents may mistakenly think that they are healthier than soft drinks that are subject to the extra tax, when that is simply not the case?
Kirsty Blackman
My hon. and learned Friend is absolutely right. It is true, as the Minister has said, that milk-based drinks contain protein, calcium and other nutrients, but so does milk. Children could just drink milk without the added sugar. I do not think people realise quite how much added sugar there is in such products. The same is true of pasta sauce. When parents see a milkshake on the shelf, they do not realise that it could have as much sugar in it as a can of fizzy juice.
The Temporary Chair (Sir David Amess)
With this it will be convenient to discuss the following:
Clauses 109 to 123 and 130 to 133 stand part.
Government amendments 5 to 9.
Clauses 134 and 135 stand part.
That schedules 24 to 26 be schedules to the Bill.
Jane Ellison
These are consequential amendments and I want to move them formally.
Kirsty Blackman
I appreciate the Government withdrawing the making tax digital provisions. I understand their commitment to making tax digital, but the changes are reasonable.
George Kerevan
With your indulgence, Sir David, I thought that this might be an appropriate moment to pay tribute to the outgoing right hon. Member for Chichester (Mr Tyrie), the Chair of the Treasury Committee, which has paid a lot of attention to making tax digital. There could be no more fitting tribute to the right hon. Gentleman leaving this House than the Government withdrawing the making tax digital provisions.
The Temporary Chair
That is certainly news to me, but the hon. Gentleman’s tribute is most appropriate and I thank him for it.
Jane Ellison
On a point of clarity, may I make it clear that the Government do not support clause 108? I apologise for not making that clear before. On making tax digital, I refer colleagues to my statement at the beginning of our debate on the first group.
Question put and negatived.
Clause 108 accordingly disagreed to.
Clauses 109 to 126 disagreed to.
Clause 127 ordered to stand part of the Bill.
Ordered,
That clause 127 be transferred to the end of clause 69.—(Jane Ellison.)
Clauses 128 to 133 disagreed to.
Clause 134
Interpretation
Amendments made: 5, page 126, leave out line 17.
Amendment 6, page 126, leave out line 20.
Amendment 7, page 126, leave out lines 22 to 24.
Amendment 8, page 126, leave out line 30.
Amendment 9, page 127, leave out lines 1 and 2.—(Jane Ellison.)
Clause 134, as amended, ordered to stand part of the Bill.
Clause 135 ordered to stand part of the Bill.
Schedule 1
Workers’ services provided to public sector through intermediaries
Amendment made: 10, page 129, line 32 , at end insert—
‘(3) Subsection (1) is subject to subsection (4).
(4) A primary-healthcare provider is a public authority for the purposes of this Chapter only if the primary-healthcare provider—
(a) has a registered patient list for the purposes of relevant medical-services regulations,
(b) is within paragraph 43A in Part 3 of Schedule 1 to the Freedom of Information Act 2000 (providers of primary healthcare services in England and Wales) by reason of being a person providing primary dental services,
(c) is within paragraph 51 in that Part of that Schedule (providers of healthcare services in Northern Ireland) by reason of being a person providing general dental services, or
(d) is within paragraph 33 in Part 4 of Schedule 1 to the Freedom of Information (Scotland) Act 2002 (providers of healthcare services in Scotland) by reason of being a person providing general dental services.
(5) In this section—
“primary-healthcare provider” means an authority that is within subsection (1)(a) or (b) only because it is within a relevant paragraph,
“relevant paragraph” means—
(a) any of paragraphs 43A to 45A and 51 in Part 3 of Schedule 1 to the Freedom of Information Act 2000, or
(b) any of paragraphs 33 to 35 in Part 4 of Schedule 1 to the Freedom of Information (Scotland) Act 2002, and
“relevant medical-services regulations” means any of the following—
(a) the Primary Medical Services (Sale of Goodwill and Restrictions on Sub-contracting) Regulations 2004 (S.I. 2004/906),
(b) the Primary Medical Services (Sale of Goodwill and Restrictions on Sub-contracting) (Wales) Regulations 2004 (S.I. 2004/1017),
(c) the Primary Medical Services (Sale of Goodwill and Restrictions on Sub-contracting) (Scotland) Regulations 2004 (S.S.I. 2004/162), and
(d) the Primary Medical Services (Sale of Goodwill and Restrictions on Sub-contracting) Regulations (Northern Ireland) 2004 (S.R. (N.I.) 2004 No. 477).
(6) The Commissioners for Her Majesty’s Revenue and Customs may by regulations amend this section in consequence of—
(a) any amendment or revocation of any regulations for the time being referred to in this section,
(b) any amendment in Part 3 of Schedule 1 to the Freedom of Information Act 2000, or
(c) any amendment in Part 4 of Schedule 1 to the Freedom of Information (Scotland) Act 2002.’—(Jane Ellison.)
Schedule 1, as amended, agreed to.
Schedule 2
Optional remuneration arrangements
Amendments made: 11, page 160, line 14, at end insert—
“() section 307 (death or retirement provision), so far as relating to provision made for retirement benefits;”
Amendment 12, page 160, line 26, at end insert—
‘( ) In subsection (5) “retirement benefit” has the meaning that would be given by subsection (2) of section 307 if “or death” were omitted in both places where it occurs in that subsection.”—(Jane Ellison.)
Schedule 2, as amended, agreed to.
Schedule 3
Overseas pensions
Amendments made: 13, page 166, line 18, leave out from beginning to “in” in line 23 and insert—
“(a) that, in the case of any money purchase arrangement relating to a member of the fund that is not a cash balance arrangement, no contributions are made under the arrangement on or after 6 April 2017;
(aa) that, in the case of any cash balance arrangement relating to a member of the fund, there is no increase on or after 6 April 2017 in the value of any person’s rights under the arrangement;
(b) that, in the case of any defined benefits arrangement relating to a member of the fund, there is no increase on or after 6 April 2017 in the value of any person’s rights under the arrangement; and
(c) that, in the case of any arrangement relating to a member of the fund that is neither a money purchase arrangement nor a defined benefits arrangement—
(i) no contributions are made under the arrangement on or after 6 April 2017, and
(ii) there is no increase on or after 6 April 2017.”
Amendment 14, page 166, line 24, at end insert—
‘(6AA) For the purposes of subsection (6A)(aa)—
(a) whether there is an increase in the value of a person’s rights is to be determined by reference to whether there is an increase in the amount that would, on the valuation assumptions, be available for the provision of benefits under the arrangement to or in respect of the person (and, if there is, the amount of the increase), but
(b) in the case of rights that accrued to a person before 6 April 2017, ignore increases in the value of the rights if in no tax year do they exceed the relevant percentage.’
Amendment 15, page 166, line 30, leave out
“ignore increases in the value of a person’s”
and insert
“in the case of rights that accrued to a person before 6 April 2017, ignore increases in the value of the”.
Amendment 16, page 166, line 31, at end insert—
‘(6BA) For the purposes of subsection (6A)(c)(ii), regulations made by the Commissioners for Her Majesty’s Revenue and Customs may make provision—
(a) for determining whether there is an increase in the value of a person’s rights,
(b) for determining the amount of any increase, and
(c) for ignoring the whole or part of any increase;
and regulations under this subsection may make provision having effect in relation to times before the regulations are made.’
Amendment 17, page 166, line 32, leave out “subsection (6B)(b)” and insert “this section”.
Amendment 18, page 167, leave out lines 5 to 7.
Amendment 19, page 167, line 8, after “subsection” insert “(6BA) or”.
Amendment 20, page 167, line 10 , leave out from “(7)” to end of line 16 and insert—
‘(a) for “In this section—” substitute “For the purposes of this section—
‘arrangement’, in relation to a member of a superannuation fund, means an arrangement relating to the member under the fund;
a money purchase arrangement relating to a member of a superannuation fund is a ‘cash balance arrangement’ at any time if, at that time, all the benefits that may be provided to or in respect of the member under the arrangement are cash balance benefits;
an arrangement relating to a member of a superannuation fund is a ‘defined benefits arrangement’ at any time if, at that time, all the benefits that may be provided to or in respect of the member under the arrangement are defined benefits;
an arrangement relating to a member of a superannuation fund is a ‘money purchase arrangement’ at any time if, at that time, all the benefits that may be provided to or in respect of the member under the arrangement are money purchase benefits;
‘cash balance benefits’, ‘defined benefits’ and ‘money purchase benefits’ have the meaning given by section 152 of the Finance Act 2004, but for this purpose reading references in that section to a pension scheme as references to a superannuation fund;
‘member’, in relation to a superannuation fund, has the meaning given by section 151 of the Finance Act 2004, but for this purpose reading references in that section to a pension scheme as references to a superannuation fund;”;
(b) at the end insert—
“‘the valuation assumptions’ has the meaning given by section 277 of the Finance Act 2004.”’
Amendment 21, page 167, line 16, at end insert—
‘( ) After subsection (10) insert—
(11) Where the conditions in subsection (6)(a) to (c) are met in the case of a superannuation fund (“the actual fund”)—
(a) any disqualifying contributions made under an arrangement relating to a member of the actual fund are treated for the purposes of the Income Tax Acts as instead made under an arrangement relating to the member under a separate superannuation fund (“the shadow fund” for the actual fund),
(b) any disqualifying increase in the value of a person’s rights under an arrangement relating to a member of the actual fund is treated for the purposes of the Income Tax Acts as instead being an increase under an arrangement relating to the member under the shadow fund for the actual fund, and
(c) any reference in this or any other Act (including the reference in subsection (3) and any reference enacted after the coming into force of this subsection) to a fund, or superannuation fund, to which subsection (3) applies does not include so much of the actual fund as—
(i) represents any contribution treated as made under, or any increase in the value of any rights treated as an increase under, the shadow fund of the actual fund or the shadow fund of any other superannuation fund, or
(ii) arises, or (directly or indirectly) derives, from anything within sub-paragraph (i) or this sub-paragraph.
(12) For the purposes of subsection (11) a contribution, or an increase in the value of any rights, is “disqualifying” if it would (ignoring that subsection) cause the benefit accrual condition not to be met in the case of the actual fund.
(13) For the purposes of the provisions of this section relating to the benefit accrual condition, where there is a recognised transfer—
(a) any transfer of sums or assets to the recipient fund by the recognised transfer is to be categorised as not being “a contribution” to the recipient fund, and
(b) any increase in the value of rights under the recipient fund that occurs at the time of the recognised transfer is to be treated as not being an increase in that value if the increase is solely a result of the transfer effected by the recognised transfer.
(14) For the purposes of subsection (13), where there is a transfer such that sums or assets held for the purposes of, or representing accrued rights under, an arrangement relating to a member of a superannuation fund (“the transferor fund”) are transferred so as to become held for the purposes of, or to represent rights under, an arrangement relating to that person as a member of another superannuation fund, the transfer is a “recognised transfer” if—
(a) the conditions in subsection (6)(a) to (c) are met in the case of each of the funds, and
(b) none of the sums and assets transferred—
(i) represents any contribution treated as made under, or any increase in the value of any rights treated as an increase under, the shadow fund of the transferor fund or the shadow fund of any other superannuation fund, or
(ii) arises, or (directly or indirectly) derives, from anything within sub-paragraph (i) or this sub-paragraph.’
Amendment 22, page 167, line 19, leave out sub-paragraphs (6) to (8).
Amendment 23, page 169, line 13, leave out “Subsection (4) does not” and insert “Subsections (7A) and (7B)”.
Amendment 24, page 169, line 20, at end insert—
‘(7A) If the lump sum is wholly in respect of rights which have accrued on or after 6 April 2017, there is no reduction under subsection (4).
(7B) If the lump sum is wholly or partly in respect of rights which accrued before 6 April 2017, the amount of any reduction under subsection (4) is given by—
R x A/LS
where—
A is so much of the lump sum as is in respect of rights which accrued before 6 April 2017,
LS is the amount of the lump sum, and
R is the amount which (ignoring this subsection) is given by subsection (4) as the amount of the reduction.’
Amendment 25, page 170, line 22, at beginning insert—
“Where the lump sum is paid under a pension scheme that was an employer-financed retirement benefits scheme immediately before 6 April 2017, deduct so much of the lump sum left after Step 1 as is deductible in accordance with subsection (5A).
Where the lump sum is paid otherwise than under such a scheme,”
Amendment 26, page 170, line 23, leave out
“rights, which accrued before 6 April 2017,”
and insert—
“the value immediately before 6 April 2017 of rights, accrued by then,”.
Amendment 27, page 170, line 39, at end insert—
‘(5A) These rules apply for the purposes of the first sentence of Step 2—
(a) “the post-Step 1 amount” means so much of the lump sum as is left after Step 1;
(b) “the relevant amount” means so much of the post-Step 1 amount as is paid in respect of rights specifically to receive benefits by way of lump sum payments;
(c) “reckonable service” means service in respect of which the rights to receive the relevant amount accrued (whether or not service in the same employment or with the same employer, and even if the rights originally accrued under a different employer-financed retirement benefits scheme established in or outside the United Kingdom);
(d) “pre-6 April 2017 reckonable service” means reckonable service that is service before 6 April 2017;
(e) “pre-6 April 2017 reckonable foreign service” means pre-6 April 2017 reckonable service that is foreign service;
(f) the deductible amount is the value immediately before 6 April 2017 of the rights then accrued to payment of so much of the relevant amount as is paid in respect of pre-6 April 2017 reckonable service if—
(i) at least 75% of pre-6 April 2017 reckonable service is made up of foreign service, or
(ii) the period of pre-6 April 2017 reckonable service exceeds 10 years and the whole of the last 10 years of that period is made up of foreign service, or
(iii) the period of pre-6 April 2017 reckonable service exceeds 20 years and at least 50% of that period, including any 10 of the last 20 years, is made up of foreign service;
(g) otherwise, the deductible amount is the appropriate fraction of the value immediately before 6 April 2017 of the rights then accrued to payment of so much of the relevant amount as is paid in respect of pre-6 April 2017 reckonable service;
(h) “the appropriate fraction” is given by—
F/R
where—
F is the period of pre-6 April 2017 reckonable foreign service, and
R is the period of pre-6 April 2017 reckonable service.’
Amendment 28, page 170, line 42, at end insert—
‘“foreign service” has the meaning given by section 395C,’
Amendment 29, page 171, line 17, at end insert—
‘Relief from tax under Part 9 of ITEPA 2003 not to give rise to tax under other provisions
13 (1) In section 393B(2)(a) of ITEPA 2003 (tax on benefits under employer-financed retirement benefit schemes: “relevant benefits” do not include benefits charged to tax under Part 9), after “646E” insert “or any deductions under section 574A(3)”.
(2) The amendment made by this paragraph has effect in relation to benefits by way of lump sums paid on or after 6 April 2017.’—(Jane Ellison.)
Schedule 3, as amended, agreed to.
Schedule 4
Pensions: offshore transfers
Amendments made: 30, page 172, line 23, after “sub-paragraph” insert “(6C) or”.
Amendment 31, page 174, line 21, at end insert—
‘(4A) In sub-paragraph (4) (power to specify whether payments by scheme are referable to relevant transfer fund), after “payments or transfers made (or treated as made) by” insert “, or other things done by or to or under or in respect of or in the case of,”.’
Amendment 32, page 176, line 28, leave out “with the next 5” and insert—“immediately before the next 6”.
Amendment 33, page 177, line 1, leave out “with the next 5” and insert—
“immediately before the next 6”.
Amendment 34, page 178, line 8, leave out
“for the purposes of sections 244L and 254”.
Amendment 35, page 178, line 28, leave out
“for the purposes of sections 244L and 254”.
Amendment 36, page 178, line 48, leave out
“for the purposes of sections 244L and 254”.
Amendment 37, page 179, line 18, leave out
“for the purposes of sections 244L and 254”.
Amendment 38, page 180, line 19, leave out “was” and insert “has been”.
Amendment 39, page 180, line 21, leave out “was” and insert “has been”.
Amendment 40, page 183, line 17, leave out from beginning to fourth “the”.
Amendment 41, page 184, leave out lines 30 to 38.
Amendment 42, page 188, line 8, at end insert—
“17A In Schedule 32 (benefit crystallisation events: supplementary provision), after paragraph 2 insert—
‘Avoiding double counting of refunded amounts of overseas transfer charge
2A (1) This paragraph applies where an amount of overseas transfer charge is repaid (whether or not under section 244M) to the scheme administrator of one of the relevant pension schemes.
(2) The amount crystallised by the first benefit crystallisation event that occurs in respect of the individual and a benefited scheme after receipt of the repayment is to be reduced (but not below nil) by the amount of the repayment.
(3) If the amount of the repayment exceeds the reduction under sub-paragraph (2), the excess is to be set sequentially until exhausted against the amounts crystallised by subsequent benefit crystallisation events occurring in respect of the individual and a benefited scheme.
(4) In sub-paragraphs (2) and (3) “benefited scheme” means—
(a) the scheme to which the repayment is made, and
(b) any other pension scheme if as a result of a recognised transfer, or a chain of two or more recognised transfers, sums or assets representing the repayment are held for the purposes of, or represent rights under, that other scheme.’”
Amendment 43, page 188, line 38, at end insert—
‘(1A) In those Regulations, after regulation 13 insert—
“14 Claims for repayments of overseas transfer charge
(1) This regulation applies where the scheme administrator of a registered pension scheme becomes aware that the scheme administrator may be entitled to a repayment under section 244M of the Act in respect of overseas transfer charge on a transfer.
(2) The scheme administrator must, no later than 60 days after the date on which the scheme administrator becomes aware of that, make a claim for the repayment to the Commissioners for Her Majesty’s Revenue and Customs.
(3) The claim must provide the following information—
(a) the member’s name, date of birth and principal residential address,
(b) the date of the transfer and, if different, the date of the event triggering payability of the charge on the transfer,
(c) the date on which the scheme manager accounted for the charge on the transfer,
(d) why the charge on the transfer has become repayable, and
(e) the amount in respect of which the claim is made.
(4) In a case where the 60 days mentioned in paragraph (2) ends with a day earlier than 14 November 2017, paragraph (2) is to be treated as requiring the claim to be made no later than 14 November 2017.”’
Amendment 44, page 188, line 39, leave out “this paragraph” and insert “sub-paragraph (1)”.
Amendment 45, page 188, line 42, at end insert—
“( ) The amendment made by sub-paragraph (1A) is to be treated as having been made by the Commissioners for Her Majesty’s Revenue and Customs under the powers to make regulations conferred by section 244M(8) of FA 2004.”
Amendment 46, page 190, line 3, at end insert—
‘(4A) In regulation 3(3)(a) (reporting duty under regulation 3(2) expires after 10 years from creation of relevant transfer fund), after “beginning” insert “—
(i) if the payment is in respect of one or more of the relevant member’s ring-fenced transfer funds (whether or not it is also in respect of anything else), with the key date for that fund or (as the case may be) the later or latest of the key dates for those funds, and
(ii) if the payment is not to any extent in respect of the relevant member’s ring-fenced transfer funds,”.’
Amendment 47, page 191, line 26, after “take” insert “place”.
Amendment 48, page 192, line 26, at end insert—
“3AEA Information provided by member to QROPS: inward and outward transfers
(1) Paragraph (2) applies where—
(a) a recognised transfer or onward transfer is made to a QROPS, or an onward transfer is made by a QROPS or former QROPS, and
(b) either—
(i) the overseas transfer charge arises in the case of the transfer, or
(ii) the transfer is required by section 244B or 244C to be initially assumed to be excluded from the overseas transfer charge by that section.
(2) Each time during the relevant period for the transfer that the member—
(a) becomes resident in a country or territory, or
(b) ceases to be resident in a country or territory,
the member must, within 60 days after the date that happens, inform the scheme manager of the QROPS or former QROPS that it has happened.
(3) In a case where the 60 days mentioned in paragraph (2) ends with a day earlier than 30 June 2017, paragraph (2) is to be treated as requiring the information to be given no later than 30 June 2017.”
Amendment 49, page 194, line 23, at end insert—
“3AK Claims for repayments of charge on subsequent excluding events
(1) Repayment under section 244M (repayments of overseas transfer charge) to the scheme manager of a QROPS or former QROPS is conditional on making a claim to HMRC.
(2) Such a claim in respect of overseas transfer charge on a transfer—
(a) must be in writing,
(b) must be made no later than 12 months after the end of the relevant period for the transfer, and
(c) must provide the following information—
(i) the member’s name, date of birth and principal residential address,
(ii) the date of the transfer and, if different, the date of the event triggering payability of the charge on the transfer,
(iii) the date on which the scheme manager accounted for the charge on the transfer,
(iv) why the charge on the transfer has become repayable, and
(v) the amount in respect of which the claim is made.”
Amendment 50, page 194, line 38, leave out “regulation 3AE(1) to (5)” and insert—
“regulations 3AE(1) to (5) and 3AEA”.
Amendment 51, page 195, line 3, at end insert
“, and
( ) are, so far as they insert new regulation 3AK, to be treated as having been made by the Commissioners under the powers to make regulations conferred by section 244M(8) of FA 2004.”
Amendment 52, page 196, line 28, leave out “potentially excluded” and insert “overseas”.
Amendment 53, page 196, line 32, at beginning insert
“either—
(i) the overseas transfer charge arises in the case of the transfer, or
(ii) ”
Amendment 54, page 196, line 4, at end insert—
‘(3) In a case where the 60 days mentioned in paragraph (2) ends with a day earlier than 30 June 2017, paragraph (2) is to be treated as requiring the information to be given no later than 30 June 2017.’
Amendment 55, page 198, line 41, after “Regulations,” insert—
“and the amendments in regulation 11BA of the Registered Pension Schemes (Provision of Information) Regulations 2006,”
Amendment 56, page 198, line 46, at end insert—
“if it would otherwise be considered for those purposes as charged in an earlier period.”—(Jane Ellison.)
Schedule 4, as amended, agreed to.
Schedules 5 and 6 disagreed to.
Schedule 7 agreed to.
Schedules 8 to 15 disagreed to.
Schedule 16
Employment income provided through third parties
Amendment made: 57, page 607, line 18, leave out from ‘“step”)’ to ‘insert’ in line 19 and insert ‘at the end’.—(Jane Ellison.)
Schedule 16, as amended, agreed to.
Schedules 17 and 18 disagreed to.
Schedule 19 to 23 agreed to.
Schedules 24 to 29 disagreed to.
The Deputy Speaker resumed the Chair.
Bill, as amended, reported.
Bill, as amended in the Committee, considered.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Under the Order of the House of yesterday, we shall now move to the remaining stages, with no amendments on consideration. I shall now suspend the House for no more than five minutes in order to make a decision about certification. The Division bells will be rung two minutes before the House resumes. Following my certification, the Government will table the appropriate consent motion, copies of which will be made available in the Vote Office and distributed by the Doorkeepers.
Madam Deputy Speaker (Mrs Eleanor Laing)
I can now inform the House of my decision about certification. For the purposes of Standing Order No. 83L(2), I have certified clause 2 of the Finance (No. 2) Bill as relating exclusively to England, Wales and Northern Ireland and within devolved legislative competence. Under Standing Order No. 83L(4), I have also certified the following amendment as relating exclusively to England, Wales and Northern Ireland—the omission of clause 60 of the Bill in Committee of the whole House. Copies of my certificate are available in the Vote Office and on the parliamentary website.
Under Standing Order Nos. 83M and 83S, a consent motion is therefore required for the Bill to proceed. Copies of the motion are available in the Vote Office and have been made available to Members in the Chamber. Does the Minister intend to move the consent motion?
Jane Ellison
indicated assent.
The House forthwith resolved itself into the Legislative Grand Committee (England, Wales and Northern Ireland) (Standing Order No. 83M).
[Mrs Eleanor Laing in the Chair]
The First Deputy Chairman of Ways and Means (Mrs Eleanor Laing)
The consent motion for England, Wales and Northern Ireland will now be considered. I remind hon. Members that all Members may speak in the debate, but if there is a Division, only Members representing constituencies in England, Wales and Northern Ireland may vote on the consent motion.
Resolved,
That the Committee consents to the following certified clauses of the Finance (No. 2) Bill and certified amendments made by the House to the Bill—
Clauses certified under Standing Order No. 83L(2) (as modified in it is application by Standing Order No. 83S(4)) as relating exclusively to England, Wales and Northern Ireland and being within devolved legislative competence
Clause 2 of the Bill (Bill 156).
Amendment certified under Standing Order No. 83L(4) (as modified in it is application by Standing Order No. 83S(4)) as relating exclusively to England, Wales and Northern Ireland
The omission in Committee of Clause 60 of the Bill (Bill 156).—(Jane Ellison.)
Question agreed to.
The occupant of the Chair left the Chair to report the decision of the Committee (Standing Order No. 83M(6)).
The Deputy Speaker resumed the Chair; decision reported.
Third Reading
Jane Ellison
I beg to move, That the Bill be now read the Third time.
Before I briefly comment in summary of the Bill, may I beg your indulgence, Madam Deputy Speaker, in making some remarks about a couple of colleagues?
The right hon. Member for Oxford East (Mr Smith) was present earlier and made a valedictory speech. I referred to that in my subsequent speech, but I was not then in a position to mention his record of service to the country. Not only has he been a parliamentarian since 1987, but he was a Minister of State for Education and Employment between 1997 and 1999, Chief Secretary to the Treasury between 1999 and 2002 and, indeed, Secretary of State for Work and Pensions between 2002 and 2004. He is no longer in his place, but I ask his party’s Front-Bench spokesman to confer my sentiments to him and to draw to his attention the fact that I—on behalf of the Government and, I am sure, of all colleagues—have placed on record our thanks for his service to the country as a Minister during that period.
With the House’s indulgence, I will pay tribute to a second Member. I have very recently been informed that my right hon. Friend the Member for Chichester (Mr Tyrie) is not seeking re-selection at this election, so I want to make a few comments about him. He has been the MP for Chichester since 1997. He is a former adviser to Nigel Lawson—Lord Lawson—when he was Chancellor, as he was to John Major when he was Chancellor. Members may be aware that my right hon. Friend was a senior economist at the European Bank for Reconstruction and Development before he entered Parliament. He is of course a very senior parliamentarian, and when we moved to electing our Select Committee Chairs, it was no surprise that he was elected overwhelmingly by the House with cross-party support. In recent times, he has served in one of the most senior positions in Parliament, if not the most senior position, as Chairman of the Liaison Committee. In all those roles across his life of public service, governmental service and service to this House, he has been enormously distinguished, and I think I speak for everyone in saying that he is very well liked. I have known him during the years I have been in Parliament, but as a Treasury Minister, I have of course come to know him better in recent months. Indeed, I have responded to his letters on many occasions, and discussed them with him on the sidelines on many other occasions. Throughout those dealings, I have seen all his experience and qualities being brought to bear. I just want to say that to me, as a Minister, he has been kind and wise, and I will miss him enormously.
To move on to my Third Reading speech, the economy is fundamentally strong, and with this Finance Bill we are taking yet another step forward in building a stronger economy and a healthier society. As we have discussed, the Bill is proceeding on the basis of consensus. A number of key policy changes to the tax system, such as measures to tackle tax avoidance, are not being proceeded with now, but will be brought forward in a Finance Bill at the first opportunity after the election.
Even in its shortened form, the Bill takes action in three areas that have been consistent priorities for us in making changes to the tax system. First, the measures in this Bill take further action to reduce the deficit and secure the nation’s public finances, and the Bill raises much-needed revenue to fund the public services we all value. Secondly, the Bill takes the next steps to achieve this Government’s aim of a fairer and more sustainable tax system. It makes it clear that the tax system must keep pace with the different ways in which people choose to work, and ensure fair treatment between individuals. It also demonstrates our continued commitment to tackling tax avoidance and evasion to level the playing field for the honest majority of businesses and individuals who pay the tax they owe. Finally—this cause is particularly close to my heart, as a former Minister for Public Health—the Bill marks an important step in tackling childhood obesity by legislating for the soft drinks industry levy. As I noted earlier, we have achieved a great deal of cross-party consensus on the levy, which will help to deliver a brighter and healthier future for our children. I am delighted that we will be able to put it on the statute book.
In conclusion, this Finance Bill supports our commitment to a fair and sustainable tax system, one that offers support for our critical public services and will get the country back to living within its means. In that regard, it sits with this Government’s long-term commitment to improving the strength of our economy, and I commend it to the House.
Madam Deputy Speaker (Mrs Eleanor Laing)
Before I call the Opposition spokesman, may I echo on behalf of the whole House the Minister’s kind words about the right hon. Members for Oxford East (Mr Smith) and for Chichester (Mr Tyrie)? We extend those kind words to all other hon. Members who are present this afternoon, who have taken part in the debates on this Bill and many similar Bills assiduously and brilliantly on behalf of their constituents, and who will not be here during the next Parliament. The whole House wishes them all very well indeed.
Peter Dowd
I absolutely concur with the comments that you have just made, Madam Deputy Speaker, and that the Minister made about my right hon. Friend the Member for Oxford East (Mr Smith) and the right hon. Member for Chichester (Mr Tyrie). May I comment on my hon. Friend the Member for Wolverhampton South West (Rob Marris), who is also leaving the House? It seems to me that some people have got time off for good behaviour.
May I just make a point about my hon. Friend the Member for Ealing North (Stephen Pound) and the Perivale scout group? He was very concerned about the insurance premium tax. I do not think he won on that point, but he has won on the sugar tax, which will save the teeth of the scout group. Good news for teeth; bad news for dentists, I suspect.
I alluded earlier to the fact that, as far as I could gather, this was the longest Finance Bill to be presented to the House. It had 135 clauses and 792 pages. It had clauses on pensions advice, overseas pensions, personal portfolio bonds, an employee shareholding scheme, an insurance premium tax, air passenger duty, duties in general, fraudulent evasion, digital reporting, data gathering and search powers, as well as umpteen schedules. Of course, each of the clauses and schedules has had some degree of scrutiny, but not necessarily the amount we would like, because the general election has rather unhelpfully intervened in our deliberations. But, as they say, that’s democracy. Scrutiny is the fundamental role of Parliament, so when we do not have enough time for that role, we need to ensure that measures are not simply pushed through willy-nilly. I do not think that they have been in this regard.
We must always have a balance between raising tax and the dampening effect that that can have on business and society. That can be a difficult balance to draw and I think it has been drawn pretty well today.
I have referred previously to the need to raise our game in relation to productivity in the economy. Higher productivity is a driver of economic growth. Whatever our position, I hope that, to some degree, the Bill will help to push up productivity growth.
On the soft drinks levy, to which the Minister referred, the primary school PE and sport premium will go up from £160 million to £320 million annually, there will be an extra £10 million for breakfast clubs and, of course, 57% of the public support the levy. The Obesity Health Alliance found that the levy could potentially save up to 144,000 adults and children from obesity; prevent 19,000 cases of type 2 diabetes; and avoid, as I alluded to, 270,000 decayed teeth. I welcome the Minister’s commitment to the review in a couple of years, based on the advice of Public Health England.
Some measures are no longer in the Bill, some will no doubt come back and we will bring some measures back before the House. We hope that those measures, in one way or another, will be scrutinised.
Kirsty Blackman
Like this one, the debates today have tended to be fairly quiet, with not many of us speaking.
I echo the comments that have been made about the right hon. Members for Chichester (Mr Tyrie) and for Oxford East (Mr Smith) and the hon. Member for Wolverhampton South West (Rob Marris), with whom I had the pleasure of serving on the Finance Bill Committee last year. I was constantly impressed by his incredible knowledge about all the matters we discussed. I will be sorry to see him go from this place.
I have a few matters to raise on Third Reading. We have had a greatly curtailed debate on the Finance (No. 2) Bill this year. Obviously, we will see a new Finance Bill in the next Session, but this Bill has been one of the most bizarre things I have been part of since I was elected. Last Tuesday, we had Second Reading. On Tuesday morning, everything was going to proceed as normal with the Finance Bill. We were going to have two days of Committee of the whole House, something like six Public Bill Committee sittings and two days for Report stage and Third Reading. As it is, it has all been squidged into three hours or so, with the opportunity for it to last for five hours. It has been totally bizarre.
I appreciated receiving the Government’s notification that they would withdraw some things last night, but that was very little notice to allow us to go through all these matters properly and to work out exactly what the Government had and had not decided to proceed with. It has been difficult to operate under these circumstances and to provide the appropriate scrutiny, given the lack of time. The SNP has done its best. We have spoken on every group today and were the only party, other than the Government, to table amendments to the Bill. We have gone out of our way to provide scrutiny.
Before I talk about the provisions of the Bill, I want briefly to mention the way in which the Government tackle budgetary scrutiny, the way in which the Standing Orders are drafted and the way in which this House considers financial matters. In the past, I have raised at length the shortcomings of the estimates process. The Budget process is marginally better, but still not great.
I have mentioned a number of times the “Better Budgets” report. I absolutely back the call by the organisations that wrote that report for the Finance Public Bill Committee to have public hearings. It is really important for this House to do that. I would very much like whatever Government come in after 8 June to change the Standing Orders to allow hearings in the Public Bill Committee stage of the Finance Bill. That would make a really big difference to the level of scrutiny we are able to provide. I have heard the argument that the Treasury Committee hears evidence from members of the public. However, different individuals sit on the Treasury Committee and the Finance Bill Committee. I will keep making this call—the Minister knows that once I start bringing something up, I am not very good at letting it go—until the Government change the Standing Orders. I recognise that they were not put in place by this Government.
On the provisions of the Bill, I welcome the Government’s withdrawal of certain measures. I note the Government’s position on making tax digital, but I welcome their recognition that it is a contentious matter and that it would be better to bring it back following the general election. I welcome the withdrawal of the changes to the dividend threshold. We did not feel we had adequate time to scrutinise those changes and I appreciate the Government taking that measure out of the Bill.
We are less supportive of some matters that have made it to Third Reading. We still feel that the Government can do more on tax evasion. New clause 1 on tax evasion, which we tabled for debate today, asked the Government to look at international comparators and to bring back a full report on all the ways in which international comparators are successful in tackling tax evasion. I get that piecemeal work has been done on this, but a full report would be incredibly helpful for the UK Government to ensure that the right decisions are taken to tackle tax evasion.
We are clear that there is still not enough protection for whistleblowers. We are very indebted to individuals who come forward and we would like to encourage them to continue to do so. Anything the Government can do on that would therefore be welcome.
On self-employment, last year’s Finance Bill made some changes for those employed through intermediaries and this year’s Finance Bill does the same. The Chancellor proposed changes to national insurance, but then rowed back on them. Those, however, are all piecemeal changes. If the Government want to make changes, they need to do them properly by looking at everything that affects the taxation of self-employed individuals. They also need to look at tax credits, so that self-employed individuals are supported through childcare vouchers and so on. Everything needs to be taken in the round, in addition to pension entitlement, holiday entitlement and maternity leave entitlement. A proper tax system needs to be put in place to tax self-employed individuals appropriately and provide them with appropriate benefits to encourage them to aspire and to leave employment—or leave unemployment—to begin their own businesses. The more we do that, and the less we shift the goalposts, the better situation we will be in.
The UK Government could do more to give confidence to the oil and gas industry. I would very much like them to look at changes to the tax regime on small pools. They have said they are committed to backing the maximising economic recovery strategy put in place by Sir Ian Wood. However, they have not followed up on that with enough measures. I do not feel that oil and gas has been given the priority it should be given. Oil and gas is incredibly important to the UK’s economy as a whole, as well as to the economy of Scotland. It supports a huge number of jobs in our communities, even though there has been a massive reduction in the number of those jobs in recent years.
I am not asking for the Government to significantly reduce the rates of tax for oil and gas; I am asking them to look at incentivising investment and to look at those more difficult to reach pools. I am not asking for massive tax giveaways. In fact, incentives for investing in small pools would be a net benefit for the Government—it would not cost them anything. I am not asking for an amazing massive reduction in headline rates of tax; I am asking the Government to listen to companies that are coming forward and asking for small and reasonable changes, some of which will increase, not decrease, the UK Government’s tax take. I therefore ask the Government to consider the amendments we have tabled and the suggestions we are making.
I appreciate the changes—they are long overdue—the UK Government hope to make in relation to late life assets. The sooner the commission can report and the change can be implemented the better. I would really appreciate that coming forward quickly.
Regardless of which Government are elected, we will have a new Budget and a new Finance Bill. We have not seen from this Government in any discussion of finances, nearly a year on from the Brexit referendum, an acceptance of the effects Brexit will have on the UK Government’s budget and tax take, on employment levels, on our constituents’ jobs, on what businesses will come in and on the level of investment that will be coming in. Nearly a year on, we have not seen any recognition of any of that. I hope that in the next Parliament, the new Government will recognise the financial impact of Brexit on household budgets and jobs. I hope we see real changes that take into account the effects of Brexit.
Rob Marris (Wolverhampton South West) (Lab)
During the coalition Government, fiscal policy was unnecessarily tight and our constituents paid the price. After seven years, we have moved to a position where, despite the Prime Minister in her election campaign saying that taxes will be lower under a Conservative Government—she has not actually said lower than what—this year, on projections which of course may or may not come to pass, taxation as a percentage of national income is likely to be at its highest ever level in peacetime. That is not exactly a low-tax Government.
For the Government to try to pretend that they are a low-tax Government is unfortunate during a general election. It also leads to an unfortunate trend on both sides of the House to talk about taxation as if it were an evil in and of itself. Taxation pays for public services, which all our constituents enjoy. I have no problem with taxation that is fair and sustainable—the Minister talked about that—and if we clamp down on tax avoidance. I only wish that the outgoing Government and the incoming Government, whoever they are, were more forceful on the public register of beneficial ownership of offshore-held accounts and funds, particularly since about half the amount around the world, as far as we can tell, is held in British overseas territories. The UK therefore has a huge role to play. I salute the role the Conservative Government have thus far played, but there is further to go. I hope that an incoming Labour Government on 9 June will take it a lot further.
I have done seven or eight Finance Bills in my time in this House. As some right hon. and hon. Members know, this will be my final speech to the House, as I am retiring at the general election. I will be putting my feet up in the garden and watching the rest of you work. One has to try, as the right hon. Member for Chichester (Mr Tyrie) always tried—he has rightly been praised in this debate—to be realistic about what is going on. What is going on is that, under the coalition Government and the Conservative Government of the past two years, inequality of income has fallen—that is true on the Gini coefficient—and unemployment has fallen fantastically. In round terms, employment is up by 2.75 million. That is a fantastic achievement. About one in five of those new jobs is a zero-hours contract and not all zero-hours contracts are decried by those who have them. The proportion of workers who are working part time has hardly changed in seven years. There will be some who are working part time who would prefer to work full time, but many of those who are working part time, including within that 2.75 million, choose to do so and they should have the flexibility to do so.
The achievement on falling unemployment has, however, been bought on a sea of debt. The national debt in the past seven years has gone up by almost 70%. That is an enormous amount in peace time in seven years. The deficit, I have to say to this outgoing Government, is a bit like Gordon Brown’s golden rule—another can that kept getting kicked down the road—that Government borrowing should, on the economic cycle, be balanced. Gordon Brown, as Chancellor and Prime Minister, kept redefining what the economic cycle was to try to make his figures work out.
With this Government and the previous Government, the annual deficit, which is still enormous, is always going to be sorted out in five years’ time. I am not sure how many of my constituents believe that any more, particularly in a year when, I think I am right in saying, the Government of Greece, through measures that every Labour Member and many Government Member would find far too painful, socially disruptive and unacceptable—measures forced on them by the troika and the International Monetary Fund—are due to record a surplus on their current account.
Here we are, in the wealthy United Kingdom, with a Government who are saying, as did their predecessor Government over the preceding five years, “We want to get the deficit down, and we will get it down in five years”—it is always mañana, always another five years—but who, on that measure, are doing far, far worse than the Government of Greece. It is an indictment of seven years of Conservative-led Government. My constituents have had the pain but not the gain. Inequality of wealth, in contradistinction to inequality of income, has increased very markedly in the past seven years. Not only do I find that distasteful as a socialist; as a citizen of the UK, I find it worrying, because if a society becomes too unequal, it carries a severe risk of social fracture.
We see that in the housing market. On current trends, many people will never have affordable housing. Those in the next generation who have it often have it because their parents or grandparents did as well and they have inherited a deposit or house from earlier generations in their family who owned property. That trend will lock in inequality into our society. Both sides of the House profess to decry and wish to address such inequality, but it will be locked in through the housing market because in the past 10 years, in particular, we have not built or created nearly enough housing units in the UK. It will have huge social implications when that trend creates rigid inequality that cannot be overcome, regardless of what we do on schooling, because it is locked in. Does someone inherit or not inherit a down payment on a house? That is very sad for a society in which average earnings—average incomes have risen because pensioner incomes have risen thanks to the triple lock—are still below what they were nine years ago before the crash.
That is not all the fault of the Government, who have taken some good steps, but they have not gone far enough on what they now call the national living wage. They are converts—the Conservative party opposed the minimum wage on principle when we introduced the legislation in 1998—and with the zeal of converts, they have gone a lot further than I and many Labour Members expected in terms of a statutory minimum wage and national living wage, but they still have not gone far enough. That is bad for social cohesion and poverty in this country and bad for economic growth, because in a capitalist society, one way to drive productivity is through higher wages and a substitution of capital for labour. When we substitute capital for labour, very often—not in every case, but overall and very often—we get higher productivity.
We need to do more. The Government have taken some steps, but we on the Labour Benches do not think they have gone nearly far enough, on productivity as it relates to technical training and upskilling the workforce. The Conservatives have come late to that party. We now have the target of 3 million apprentices, which might or might not be met, but if it is met, one fears it will be through redefining as “apprenticeships” courses and training schemes that many of us would not regard as such, to make the figures work—that is always a danger with targets. It is laudable, however, that the Government want to take policies from Labour and increase training, particularly technical training, in our economy, and the Bill will help in that regard.
Over the past seven years—this is not addressed in the Bill—infrastructure spending has been insufficient, but we have also had, and are having, inappropriate infrastructure spending. Unless there is a change of course, as I hope there will be, we will be spending about £60 billion or more on the HS2 railway line, which is a very bad allocation of capital for transport spending. We are also on course to spend—indirect spending through much higher electricity prices, not direct spending by the Government—upwards of £18 billion on the Hinkley Point C nuclear reactor, which is to be built by a bankrupt French company, EDF, which is only still going because it is being bailed out by its state owners, the French Government, and using a design that has never worked anywhere in the world. It is being tried in Finland and Normandy, but those projects are years overdue and massively over-budget, yet it is part of the Government’s approach to infrastructure spending. We on the Labour Benches recognise that the Government have again started to borrow some of our policies, such as the possible cap on domestic energy prices, but they have not gone far enough on infrastructure spending and have lost their way on some of these big projects.
The final issue, mentioned by the hon. Member for Aberdeen North (Kirsty Blackman), is Brexit, which looms over us all and all our constituents but, surprisingly, not over the Bill. Before the referendum last summer, the Treasury was keen to put out projections of what its officials thought would be the consequences of a Brexit vote. It was an entirely appropriate use of its resources by a Government whose official policy was to support the United Kingdom remaining in the EU. We had all those projections, but since 23 June things have gone quiet. I appreciate that the UK, in round terms, is still 100 weeks away from leaving the EU, which makes it more difficult to come up with projections of what is likely to happen with our economy—partly because we do not know what the Brexit package will be—but there are some signs of concern in the markets about Brexit that I do not think are adequately reflected in the financial measures proposed by the outgoing Government, including the measures in the Bill. If the Government are re-elected—in my view, that would be unfortunate—they will have to get their act together and be a bit more public about where they see the economy going with Brexit.
As I said, I appreciate that that cannot easily be done given that we do not know what the final package will look like or whether it will be a hard Brexit with no package at all, but to reassure the markets and—just as importantly—our constituents, whichever side of referendum they might have been on, the Government of the day, from 9 June, will have to be rather more open about the direction of travel and what they are doing to be proactive, rather than reactive, to the process of Brexit and its effect on the economy. That will be the case whatever the Government’s colour, because without that greater clarity the markets will be more concerned and more spooked, and our constituents will be more concerned and more worried, than they need to be. Of course nobody has a crystal ball, but it would help us all to have a few more projections than we hitherto have had.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Health Service Medical Supplies (Costs) Bill
(6 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Department of Health (Mr Philip Dunne)
I beg to move, That this House disagrees with Lords amendment 3B.
Madam Deputy Speaker (Mrs Eleanor Laing)
With this it will be convenient to discuss Government amendments (a) and (b) in lieu.
Mr Dunne
When we last debated the Bill, I reminded the House of its importance. I do not intend to go over all that ground again, save to note the three primary purposes of the Bill: first, to give powers to align broadly our statutory scheme for the control of prices of branded medicines with our voluntary scheme, by introducing the possibility of a payment percentage for the statutory scheme, which could deliver £90 million of funding for the NHS every year; secondly, to give us stronger powers to set prices of unbranded generic medicines where companies charge unjustifiably high prices in the absence of competition; and, thirdly, to give us stronger powers to require companies in the supply chain for medicines, medical supplies and other related products to provide us with information. We intend to use that information to operate our pricing schemes, to reimburse community pharmacies for the products they dispense and to assure ourselves that the supply chain or specific products provide good value for money for the NHS and the taxpayer.
We agreed with 23 amendments made by their lordships during the passage of the Bill through the other place. Those, we accept, have made this a better Bill. We rejected just a single amendment. Despite the strength of our arguments, the other place has now made amendment 3B, which to all intents and purposes has the same effect as the original Lords amendment 3. It would introduce a duty on the Government, in exercising their functions to control costs, to take into account the need to promote and support a growing life sciences sector and to ensure that patients have access to new medicines. As I explained previously to this House, the amendment, which is no different in its effect from previously, would undermine one of the core purposes of this Bill: to enable the Government to put effective cost controls in place.
In our view, the amendment could encourage companies to bring legal challenges where the cost controls have not in themselves promoted growth in the life sciences industry. That could significantly hinder the Government’s ability to exercise their powers effectively to control costs. That would have a particularly detrimental effect if the Government were to take action to control the price of an unbranded generic medicine where it was clear that the company was exploiting the NHS—a point on which there was cross-party agreement when we debated the matter. That is because the Government might be challenged, not on the basis that the action was inappropriate, but on the basis that it did not promote the life sciences sector. Nevertheless, as I am sure all Members would agree, such action could be the right thing to do for the NHS, patients and taxpayers. The powers in the Bill that enable such action have received universal, cross-party support in both Houses.
Through debate on the issue in the other place, we have clarified that their lordships did not intend to undermine the core purposes of the Bill. Rather, the intent was to ensure a mechanism, laid out on the face of the Bill, to ensure that the Government pause to reflect on the impact of any proposed price control scheme on the life sciences industry and access to cost-effective medicines. With this clarity, the Government are now proposing amendments in lieu of Lords amendment 3B that will achieve that intent without undermining the core purpose of the Bill.
Consultation requirements prior to the implementation of any new statutory price control scheme for medicines are already set out in section 263 of the National Health Service Act 2006. Our amendment (b) in lieu would amend the 2006 Act to include particular factors that must be consulted on before proceeding with a new statutory scheme. They are:
“(a) the economic consequences for the life sciences industry in the United Kingdom;
(b) the consequences for the economy of the United Kingdom;
(c) the consequences for patients to whom any health service medicines are to be supplied and for other health service patients.”
The requirements are framed in that way to allow us not only to consider the economic consequences for the life sciences industry and for patients who may benefit from new medicines, but to balance those factors against wider considerations. I am sure the whole House can agree that while a thriving life sciences industry and access to new medicines are highly desirable, they must not come at any cost. It is the Government’s responsibility to achieve the right balance, and, indeed, to be held to account for it.
Justin Madders (Ellesmere Port and Neston) (Lab)
I thank the Minister for approaching the outstanding areas of concern in a constructive and conciliatory manner that has allowed us to support the Government’s proposal, and hence to support the Bill as a whole. We too are keen for the NHS to gain better control of the cost of medicines. We are anxious to close loopholes in the system which have been the subject of blatant abuses over the last few years, and which we have discussed during the Bill’s passage. The negotiations on the amendments were, by their nature, speedy, but they were no less effective for that. I doubt that we will be so fortunate with the Brexit discussions in the future.
During the passage of the Bill, we have heard very clearly that the current state of affairs is not serving patients or the taxpayer as well as it could. As we have heard, expenditure on medicines has constituted a significant and growing proportion of the NHS budget, standing at £15.2 billion in England in 2015-16. That is an increase of over 20% since 2010-11. Had that been applied to health spending across the board, many of our exchanges across the Dispatch Box during the last 12 months or so might have been a little less lively.
The Minister will be aware, however, that despite that increase in spending, serious concerns are still being raised about the availability of new treatments. I should like to take a few moments to raise some of the specific concerns expressed by patients about the introduction by the National Institute for Health and Care Excellence and NHS England of a “budget impact test”, which could cause the introduction of new treatments costing more than £20 million a year to be delayed by up to three years. We fear that some patients with particular conditions will be disproportionately affected. Let us take just one condition: type 2 diabetes. There are several drugs for that condition that already cost the NHS more than £20 million a year owing to the patient numbers involved, including Exenatide, which costs £21 million, Liraglutide, which costs £41 million, Sitagliptin, which costs £77 million, and human analogue insulins, which cost £70 million.
Can the Minister tell us what estimate has been made of the number of patients in England who could be affected by delays in accessing treatments owing to the introduction of the budget impact test? Can he also comment on what impact that might have on patients’ right to treatment under the NHS constitution? We have already seen the 18-week commitment effectively abandoned; does the Minister now consider the constitution to be an optional extra? It is also of particular concern that the test could apply to important end-of-life drugs: in the case of those patients there is, of course, no time to waste. What can the Minister do to ensure that valuable time is not wasted when drugs hit the impact test for that group of patients?
Returning to the Government amendments, we are content that they take us to more or less the place that our previous amendments did, without binding the Government’s hands totally. We welcome the concessions made, which enable us to support this proposal, because by requiring the Secretary of State to consult, in particular on the consequences of enacting any powers on the life sciences sector and, most importantly, patients, we now have an extra safeguard that we hope will ensure that the right balance is struck between controlling cost, promoting our life sciences industry and making sure patients get access to new treatments as quickly as possible. The Bill has always addressed the first of those three areas, but we consider it just as important for the other two areas to be clearly factors to be taken into account when new rules are developed. We believe this is important because we have significant concerns about the current system denying patients access to new treatments and stifling investment. As we have said previously, the imminent departure of the European Medicines Agency from our shores should be set against the worrying backdrop of investment in research and development in the sector falling by 20% in just over three years.
The reduction in investment does not just impact on growth and jobs in the country; it also has a profound impact on patients. The “International Comparisons of Health Technology Assessment” report published in August by Breast Cancer Now and Prostate Cancer UK shows that NHS cancer patients in the UK are missing out on innovative treatments that are becoming available. For every 100 European patients who can access new medicines in the first year that they are available, just 15 UK patients have the same access; we must reverse that. We hope that this amendment will go some way to reversing that trend, as a consultation process that requires the Secretary of State to specifically consider these issues will mean that if the consultation is genuine, open-minded and involves a complete, conscientious and considered examination of the responses to it, we will hopefully see a system that protects and supports our industry, and, most importantly, reaffirms one of the founding principles of the NHS: that treatment should be available to all and be free at the point of use. That is a principle that we on the Labour Benches are very keen to defend.
In conclusion, we will support this amendment and keep a close eye on the many issues raised today, which are not going to go away just because there is now a general election.
On that point, I hope that you will allow me a small indulgence, Madam Deputy Speaker: this will be my last appearance in the Chamber before the Dissolution of Parliament and I want to thank you and your Clerks for the time and courtesy you have afforded both me and other new Members as we have learned the intricacies of this place. A lot goes on behind the scenes to ensure that these debates have a coherence and fluency; that might appear effortless to the outside world, but we can assure people that that certainly is not the case. I have found everyone who works behind the scenes here to be very helpful and welcoming, which has made it easy for me to do my job.
This has been much more than a job to me; it has been an absolute privilege of my life to be here and represent the people of Ellesmere Port and Neston. I hope that after the election I have the opportunity to continue to do that.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I thank the hon. Gentleman for his extremely kind words, and for his courtesy, which he always shows at the Dispatch Box and in the Chamber.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Like the hon. Member for Ellesmere Port and Neston (Justin Madders), this will be my last time speaking in the Chamber before Dissolution, and as a newbie I also want to pay tribute to the staff of the House, who made coming here much easier than we had expected it to be. I am also glad that my final speech before Dissolution is on a Bill that, despite some of our disagreements, we have worked on on a cross-party basis to produce a piece of work that we all agreed needed to be done.
I, too, welcome Government amendment (b), although I would have laid out the three paragraphs the other way around, because the whole point of the NHS, and the whole reason we are discussing this, is patient access: that is the No. 1 concern. I would have put patients first, not third. The fear of not getting access to drugs is a great issue for patients. As the hon. Gentleman mentioned, we have a significant delay that is measurable in comparison with other countries. For certain types of cancer, our performance in relation to patients with early disease is as good as anywhere, but we fall down in dealing with people with difficult or advanced disease. That is because of the delay.
I want briefly to mention the interaction of the budget impact assessment with our no longer being part of the European Medicines Agency. I am not talking about the United Kingdom losing the agency itself; I am talking about our no longer being part of the scheme. We know that there is a danger that drugs are presented for licensing in the United Kingdom at a later date than in the United States and the European Union, which are major markets. It is likely that we could also be behind Japan. I am not suggesting that we should simply hand over any amount of money, but if we were also seen as a hostile market in which there was an expected delay of three years for expensive drugs, there would be a danger that international pharma would simply say, “You know what? We’ll license everywhere else, then we’ll come back to the UK in a few years.” That could result in significant delayed access for our patients.
We need to think about how all this feeds into trials and research, and into the life sciences system. If we are not using what is considered to be the gold standard drug at the time of a new international trial, we will not be able to take part in the comparison of the gold standard with the new drug. The UK has led the EU research network, which is the biggest research network in the world. We have been a major player in that, and it is important to realise how building in this delay from NHS England could undermine that. Surely this should be part of the NICE process. It should be clear to pharma, when it comes with a drug at a price, what process it will have to go through, what evidence it will have to bring forward and how it will have to negotiate a price. I fear that there will be delays in drugs being licensed.
This will affect us in Scotland even though NICE decisions do not apply to us. If a drug were simply not licensed here, it would be irrelevant that the Scottish Medicines Consortium chose to fund it—as it did the other week with Kadcyla—because it would still be an unlicensed medicine. We need to look at how the loss of the European Medicines Agency will work in this regard. There should not be a separate procedure after NICE that could suddenly hit pharma with another barrier to jump over. This will hit new cancer drugs, because they are expensive. It will particularly hit drugs for rare diseases, which the EMA has led on, because they are bespoke and therefore inevitably expensive. The £20 million limit would mean that if someone came up with a fabulous cure for dementia, for example, a budget impact assessment would be triggered.
Mr Jim Cunningham (Coventry South) (Lab)
I agree with what the hon. Lady says about the European Medicines Agency. I have had a lot of letters from people who are very concerned about that issue. There is another factor involved in the delays that can occur in the Government agreeing a price. I think that the drugs companies often take the Government to the cleaners.
Dr Whitford
I thank the hon. Gentleman for his intervention. That is obviously why the Government are introducing the Bill. They are trying to achieve a degree of control and to prevent runaway drugs costs. Of course we agree with that objective, which is visible in the Bill. The Government are trying to establish a predictable system of licensing in the UK, so that a pharmaceutical company knows what it has to bring to the table. That might mean a bit more flexibility during the NICE process, because we could appear hostile if a drug goes through that process and is defined as cost- effective, only to be hit with another, less predictable, barrier. The danger is that that will affect Scotland just as much as England, regardless of our drug funding decisions, because licensing is a reserved matter. The Government need to take that into account, because patients come third in the order set out in the amendment, and I believe that they should come first.
Mr Dunne
I had not intended to make a significant response in the light of this debate, but other colleagues have taken advantage of this being their final appearance at the Dispatch Box or speaking for their party in this Parliament and I cannot resist the opportunity to join the club.
I follow the hon. Member for Ellesmere Port and Neston (Justin Madders) in thanking Members for their work both in Committee and on the Floor of the House during the passage of this Bill. He gave us a valedictory, perhaps hinting that he may not be returning to this House, which in some respects I would welcome and in other respects I would regret because he has been a co-operative colleague on this Bill.
Again, I place on record my thanks to the hon. Member for Central Ayrshire (Dr Whitford) for her contribution to the passage of the Bill. I also briefly thank my Parliamentary Private Secretary, my hon. Friend the Member for Kingston and Surbiton (James Berry), who has been a stalwart supporter throughout the Bill. I also thank the departmental Whip, my hon. Friend the Member for Beverley and Holderness (Graham Stuart), who has also joined us today, for his efforts in this Parliament to help the work of the Department of Health, which is not always the smoothest ride for Government Whips.
The hon. Member for Ellesmere Port and Neston spoke about the budget impact test, and he challenged me to identify whether certain specific drugs will be caught by it, which is a nice try. The test applies for new drugs, of course, so drugs that are already licensed and on the list will not be caught because they are already licensed and in use. The intent, which came through in the consultation that concluded in January, is that this should not be seen as a threshold that will have a direct impact on the applicability of these drugs; it was designed to provide an opportunity for the NHS to have negotiating scope to try to get a better price on prospective drugs that will have a significant cost.
Although the hon. Member for Central Ayrshire is concerned about the delay resulting from the Bill and the delay from the potential loss of the EMA, we do not necessarily see it impacting in quite that way. We think it will have on impact on one in five new medicines that are brought forward for use in this country. As we have said repeatedly, we have a strong desire to see a vibrant life sciences industry in this country. There have been some significant investments by life sciences companies in this country since the referendum on 23 June, with this Bill in prospect, so we do not share the fears expressed today.
Finally, the hon. Member for Wolverhampton South West (Rob Marris) was here for the previous debate, but he served on the Health Service Medical Supplies (Costs) Public Bill Committee. He has had a distinguished career in this House and served on Finance Bill Committees with me ad nauseam. I was therefore pleased but somewhat trepidatious to see him put himself forward to serve on the Health Service Medical Supplies (Costs) Public Bill Committee. He lived up to all expectations, and I wish him well.
Lords amendment 3B disagreed to.
Government amendments (a) and (b) made in lieu of Lords amendment 3B.
Business without Debate
Madam Deputy Speaker (Natascha Engel)
With the leave of the House, we shall take motions 4 to 11 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Local Government
That the draft Greater Manchester Combined Authority (Functions and Amendment) Order 2017, which was laid before this House on 20 March, be approved.
That the draft Combined Authorities (Finance) Order 2017, which was laid before this House on 13 March, be approved.
Criminal Law
That the draft Specified Agreement on Driving Disqualifications Regulations 2017, which were laid before this House on 9 March, be approved.
Income Tax
That the draft Major Sporting Events (Income Tax Exemption) Regulations 2017, which were laid before this House on 19 April, be approved.
Representation of the People, Scotland
That the draft Representation of the People (Scotland) (Amendment) Regulations 2017, which were laid before this House on 8 March, be approved.
That the draft Electoral Registration Pilot Scheme (Scotland) Order 2017, which was laid before this House on 8 March, be approved.
Representation of the People
That the draft Electoral Registration Pilot Scheme (England and Wales) Order 2017, which was laid before this House on 8 March, be approved.
That the draft Electoral Registration Pilot Scheme (England) (Amendment) Order 2017, which was laid before this House on 8 March, be approved.—(Christopher Pincher.)
Question agreed to.
Petitions
Carol Monaghan (Glasgow North West) (SNP)
A similar petition has been signed by 640 people and by a further 456 people online.
The petition states:
The petition of residents of Glasgow North West,
Declares that Post Office Limited has announced that the Post Office on Hecla Avenue in Drumchapel is under threat of closure; further that this provides a vital service for many local residents, the loss of which would have a detrimental impact on the wider community in Drumchapel as well as causing concern for staff; further that whilst there is the opportunity to franchise the current office, this could endanger the ongoing provisions of services and jobs in the local area, as well as this branch’s current convenient location in the heart of the community; and further that visiting the Post Office, it is noticeable just how busy the counters are and how strongly the community feels about this proposal.
The petitioners therefore request that the House of Commons urges the Government to call upon the Post Office to halt any plans to close the Drumchapel Post Office and ensure that these services and jobs can be maintained and protected in the local area.
And the petitioners remain, etc.
[P002033]
Holly Lynch (Halifax) (Lab)
I rise to present a petition opposing cuts to school budgets in my constituency, which has been signed by 166 people, further to the 1,072 people who have signed it online.
The petition states
The petitioners therefore request that the House of Commons urges the Secretary of State for Education to reconsider the proposed national school funding formula to ensure that Calderdale schools do not lose out and that no school receives less than £4,800 per pupil.
Following is the full text of the petition:
[The petition of residents of the UK,
Declares that the proposed national school funding formula would see reductions to the budgets of schools in Calderdale at a time when finances are already stretched; and further that an online petition on this matter received 1,042 signatures.
The petitioners therefore request that the House of Commons urges the Secretary of State for Education to reconsider the proposed national school funding formula to ensure that Calderdale schools do not lose out and that no school receives less than £4,800 per pupil.
And the petitioners remain, etc.]
[P002034]
Ian C. Lucas (Wrexham) (Lab)
I rise to present a petition of 793 residents of Wrexham.
The petition states:
The petition of residents of Wrexham in the constituency of Wrexham,
Declares that the petitioners recognise the long military tradition of Wrexham and North Wales and its relationship with the Royal Welsh Fusiliers and Royal Electrical and Mechanical Engineers; further declares that they are deeply concerned over the proposal to move the battalion headquarters from Wrexham to Bristol, and away from the area which has served the British Army and Wales for so many years.
The petitioners therefore request that the House of Commons urges the Government to retain the current 101 Battalion Royal Electrical and Mechanical Engineers in Wrexham.
And the petitioners remain, etc.
[P002035]
Susan Elan Jones (Clwyd South) (Lab)
I rise to present the petition of several hundred residents of my constituency. It is based on the same petition as that presented by my hon. Friend the Member for Wrexham (Ian C. Lucas). It arises from our deep concerns on this issue, and it is time the Government listened.
The petition states:
The petitioners therefore request that the House of Commons urges the Government to retain the current 101 Battalion Royal Electrical and Mechanical Engineers in Wrexham.
Following is the full text of the petition:
[The petition of residents in the constituency of Clwyd South,
Declares that the petitioners recognise the long military tradition of Wrexham and North Wales and its relationship with the Royal Welsh Fusiliers and Royal Electrical and Mechanical Engineers; further declares that they are deeply concerned over the proposal to move the battalion headquarters from Wrexham to Bristol, and away from the area which has served the British Army and Wales for so many years.
The petitioners therefore request that the House of Commons urges the Government to retain the current 101 Battalion Royal Electrical and Mechanical Engineers in Wrexham.
And the petitioners remain, etc.]
[P002036]
Anna Turley (Redcar) (Lab/Co-op)
I rise to present a petition signed by 421 residents of Marske and New Marske in my constituency about a decision to close this medical centre at the end of June.
The petition states:
The petition of residents of Marske and New Marske in the Redcar Constituency.
Declares that the decision to close the Medical Centre of Hall Close, Marske-by-the-Sea, will leave over 5,000 patients, many of whom are elderly, without a local medical practice, and require them to travel to neighbouring towns to register with a General Practitioner.
The Petitioners therefore request the House of Commons to urge the Government to prevent the closure of the Marskse Medical Centre.
And the petitioners remain, etc.
[P002037]
Ian Murray (Edinburgh South) (Lab)
I rise to present a petition signed by more than 4,000 residents of Edinburgh South.
The petition states:
The petition of Edinburgh South,
Declares that the government has forced a transformation programme on the Post Office that has placed Crown Post Offices and local branches in jeopardy; further that the only independent report carried out on franchising found that the Crown Office closure and franchising programme had been bad for customers, ranking franchises worse than Crown Offices across a range of indicators including queue times, service times, customer service and advice on products, disabled access and staffed counter positions; and further that the Post Office has already spent money refurbishing the Crown Offices it is now closing and franchising, with £5.9 million spent since 2010 on refurbishing the 59 Crown Offices that the Post Office announced it would close and franchise in 2016, an average of £100,000 per branch.
The petitioners therefore request that the House of Commons urges the Government to suspend the Crown Office closure and franchising programme and instead ensure the Post Office works with Crown branches, including Morningside Post Office, to make them more efficient and profitable.
And the petitioners remain, etc.
[P002039]
Fiona Bruce (Congleton) (Con)
I rise to present a petition of some 1,600 signatures of residents of the Congleton constituency and wider area.
The petition declares
that current Government proposals for a Fairer Funding Formula for schools do not achieve fair funding for pupils in the constituency of Congleton.
Indeed, they and other pupils in the Cheshire East local authority area would be the lowest funded in the country. Local headteachers state that that level of funding would not enable them to provide the standard of education, facilities and support that our pupils deserve.
I fully support the petition, which also states:
The petitioners therefore request that the House of Commons urges the Government to review the proposed funding formula to reflect a fairer level of funding for local schools, to ensure that children in the local authority area of Cheshire East have the same opportunities as children in similar schools and other local authorities across the country.
Following is the full text of the petition:
[The petition of residents of Alsager, Congleton, Holmes Chapel, Middlewich, Sandbach and elsewhere in and outside the Congleton Constituency,
Declares that current Government proposals for a Fairer Funding Formula for schools do not achieve fair funding for pupils in the constituency of Congleton.
The petitioners therefore request that the House of Commons urges the Government to review the proposed funding formula to reflect a fairer level of funding for local schools, to ensure that children in the local authority area of Cheshire East have the same opportunities as children in similar schools and other local authorities across the country.
And the petitioners remain, etc.]
[P002038]
David Rutley (Macclesfield) (Con)
I rise to present a petition on fair funding for all schools that has been signed by more than 1,500 residents of Cheshire East, including more than 900 from the Macclesfield constituency. It also includes signatures from residents living in the constituency of the Minister for Vulnerable Children and Families, my hon. Friend the Member for Crewe and Nantwich (Edward Timpson); because his ministerial role prevents him from presenting a petition, he has asked me to do this on his behalf. I am pleased to see him on the Front Bench.
The petition states that the petitioners
request that the House of Commons urges the Government to review its proposed national funding formula for schools in order to ensure that all children have access to a properly funded education, and therefore invest in the future of our country.
Following is the full text of the petition:
[The petition of residents of Cheshire East,
Declares that the Government should review its proposed national funding formula for schools; further that Cheshire East schools are set to see their funding budgets cut by the new proposal; further that, with rising statutory employer and staffing costs, along with increasing pupil numbers, Cheshire East schools will need to receive increased funding to cover their basic costs; further that under the new proposal, a child in Cheshire East is worth significantly less than the average child in England; and believes that this funding proposal is unfair.
The petitioners therefore request that the House of Commons urges the Government to review its proposed national funding formula for schools in order to ensure that all children have access to a properly funded education, and therefore invest in the future of our country.
And the petitioners remain, etc.]
[P002040]
Contaminated Blood
(6 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Andy Burnham (Leigh) (Lab)
Through you, Madam Deputy Speaker, may I thank Mr Speaker for giving me this opportunity to make what will be my last speech in this House? I make it on the subject of contaminated blood for a simple reason: knowing what I know, and what I believe to be true, I would not be able to live with myself if I left here without putting it on the official record. I will be honest: this is a speech made with a sense of guilt in that all of us here are collectively culpable of failing to act on evidence that is there before us if only we cared to look and, by extent, failing thousands of our fellow citizens who are the victims of perhaps the greatest untold injustice in the history of this country.
First, let me explain the genesis of my speech. Last year, the chair of the all-party group on contaminated blood, my hon. Friend the Member for Kingston upon Hull North (Diana Johnson), who has done absolutely outstanding work on behalf of those who have continued to struggle for truth and justice, invited me to a meeting to discuss where next for the campaign. There was a raising of expectations in the last Parliament—I am talking about a lot of goodwill on both sides of the House and a sense that people wanted to do something to help. That continued in the early part of this Parliament, with a sense building that something was going to be done. However, following those expectations, victims now feel that they have been led up to the top of the hill only to be let down once again.
Although I do not doubt the sincerity of the former Prime Minister’s apology at his last PMQs, the Government’s failure to back it with substantial action has left people feeling in the wilderness all over again. To try to find a way forward for them, my hon. Friend asked me to speak to the all-party group about whether my experience on the Hillsborough campaign might provide some insights that would help those still campaigning today, after all these years, for justice for those who have suffered from contaminated blood.
When I focused on that question, I had something of a penny-drop moment—this was when I was preparing to speak to the group. The more I thought about it, the more the parallels between the contaminated blood scandal and Hillsborough became clear. Obviously, both relate to the 1980s and both resulted from appalling negligence by public bodies, but there is also the fact that both have been subject to an orchestrated campaign to prevent the truth being told. It is that failure to give the victims the truth that compounds the injustice and the suffering.
Here is what I think is the crux of the problem. Contaminated blood has always been viewed through a financial prism. That suits the Government. It keeps the victims in a position of subservience, forced to beg for scraps of help from the various funds that have been set up. By the way, let me make it clear that I am talking about not just this particular Government—although I am talking about this Government—but all Governments. To the extent that the public know anything much about this scandal, there is a vague sense that it is an argument about money. In my view, it is in the Government’s interests to keep it there; they want to keep it there. Why is that? Just as with Hillsborough, if the great British public knew the real story here, there would be such a wave of public support for the victims that demands for full and fair compensation simply would not be able to be resisted by the Government. That is the experience of Hillsborough. When the truth was told, such was the huge groundswell of popular support that there had to be action. Perhaps that is why the Government do not want the truth to be told—they know that there would be little place for them to go in answering those calls.
I have brought this debate to the House today to try to break through that impasse. I want to refocus everybody on giving victims what they have never had—the truth. From what I know, this scandal amounts to a criminal cover-up on an industrial scale. I will present direct evidence to support that claim. There are hundreds of victims of this scandal who can point to evidence of crucial pages missing from their medical notes. Of course, the authorities have an excuse in these cases. They can always say, “Human error—they were lost. When we moved offices, the box got misplaced.” As implausible as that excuse is, they get away with it because how can we prove otherwise? But I want to focus on a small number of specific cases that reveal deliberate, provable acts of cover-up.
Diana Johnson (Kingston upon Hull North) (Lab)
I pay tribute to my right hon. Friend’s outstanding work on the Hillsborough inquiry and what he achieved there. Obviously there is still more to do. On behalf of the all-party group, I am so grateful that my right hon. Friend was willing to share his experiences with us in relation to contaminated blood.
I want to raise a point about Lord Owen’s request for documents, when he was the Health Minister in the 1970s. He was told then by officials that those documents had all been destroyed. The Archer inquiry, which I am sure my right hon. Friend will refer to, found no reason why that should have happened. I know he is going to talk about specific cases of documents being lost or doctored in some way. From what happened to a Government Minister, and given this idea of an industrial scale cover-up, does my right hon. Friend think that what happened with the individuals he is about to describe and with Lord Owen just shows how deep-seated this cover-up is?
Andy Burnham
My hon. Friend has put her finger on the point. With Hillsborough, when we finally got to match up documents held at a local level with those held at the national level, the full picture began to emerge. It is my contention that exactly the same would emerge here. The direct examples of a cover-up that I am about to give, relating to individual cases, would then be put together with what we know about documents held—or, indeed, not held, which itself implies wrongdoing—at a national level. In the end, it is the putting together of that picture that gives people the truth and allows them to understand how this happened. I will come directly to that point later.
I will focus on three cases. I highlight them not because they are the only ones I have seen or been sent, but because I have met or spoken directly to the individuals concerned, have a high degree of confidence in the facts and believe that these cases are representative of many more. The first case is of a gentleman who does not want to be named. I will call him Stuart, but I do have his full details.
Sir Peter Bottomley (Worthing West) (Con)
One of the reasons why this has not taken off widely as a real campaign is that victims understandably do not want to advertise their condition to those around them. I pay tribute to those who have talked to Members of Parliament, even on a confidential basis, so that some of us have some ammunition.
Andy Burnham
The hon. Gentleman is absolutely correct. There is a stigma related to HIV and hepatitis. People do not want to talk about it openly. Although I have drawn a parallel with Hillsborough—the hon. Gentleman was outstanding in his support for me on that issue—there are many differences, and one major difference is that, with Hillsborough, the event happened on one day, and everybody was watching it and can remember where they were when the pictures came through. This scandal was a silent one, which affected people in all parts of the country and all walks of life—not people from a similar place. These people were spread about and unable to organise in the same way the Hillsborough campaigners were. That is another reason why they have not been able to move things forward, and the reason the hon. Gentleman gave is true, too.
When Stuart was six years old, he was sent by Maidstone hospital to the Lewisham and Oxford haemophilia centres to have tests to see whether he had haemophilia. When he was seven, they wrote back and said that all the tests were normal and that he did not have a bleeding problem. When he was eight, he attended Maidstone hospital with a swollen knee—nothing more. It was not life threatening, and he had no bleeding problem associated with it.
Then, with no warning to Stuart or his parents, Maidstone hospital treated him with 12 transfusions of contaminated blood products over three days. According to his medical records later, that should not have happened. Then, in 1986, the hospital, unbeknownst to Stuart, carried out an HIV and a hepatitis B test on him. He was never tested for hepatitis C, even though his records show that a test was available at the time. He was not tested in 1989 or called back as other tests became available. He has all his medical records, but one thing is missing: the batch numbers for the contaminated blood products.
Stuart was eventually told he had a hepatitis C infection in—listen to this, Madam Deputy Speaker—January 2013. He was also told that it was too late for him to pursue a court case, despite the fact that legal experts said that what had happened to him was negligent and he firmly believes there has been a cover-up.
Let me move on to the case of a woman called Nicola Enstone-Jones. She wrote:
“As a female with haemophilia diagnosed in the ‘70s. From the age of 9 my parents spent years trying to find out what happened to me after receiving Factor VIII, this was in 1980…Dr’s denying anything was wrong with me, referring to me as having psychological problems, as there was nothing wrong with the treatment they gave.”
She says that that was not unusual for haemophiliacs growing up then. She goes on:
“It was when I was 24”—
24!—
“in 1995 that I asked a nurse if I’d ever been tested for Hepatitis C, as my mum had seen on the news about Haemophiliacs being diagnosed and dying from this new strain of Hepatitis, and all the signs and symptoms listed was me.
The nurse laughed at me and said ‘you won’t have that’; then came back with my medical notes and informed me I was positive to Hepatitis C from a test…done in 1991. A test I knew nothing about... like a true haemophiliac and after spending years of searching for answers I had suddenly found out why I had suffered health problems since childhood.”
However, it was only later, when Nicola was able to access her medical notes, that she found an entry for 1990, which she has drawn to my attention, and I have it in my hand. The notes say: “Discussed hepatitis C”. Nicola has told me directly that that never happened—it was never discussed with her in 1990. She found out for the first time in 1995.
This story actually gets quite a lot worse. Let me read out what Nicola goes on to say:
“Little did I know almost 19 years later I would be at a police station reporting what I”
believe
“to be a criminal act and a form of abuse on my own child, once again…Dr’s performing tests”
without consent,
“another well-known”
practice
“which Haemophiliacs are sadly used to.
I had found out in 2013 that my 9 year old haemophilic son had been tested for HIV and hepatitis’s and no doubt a whole host of other viruses and pathogens, just like I had been when I was younger. Given my daughter has a bleeding disorder too, there is no doubt in my mind she will have been tested...I found this out third hand, by chance in a letter which was another professional”
asking
“if my son needed treatment abroad. The letter stated ‘This 9 year old haemophilic has a factor VIII level of 10% and…has been tested for HIV and hepatitis…which he is negative to.’”
She had never been told about this or given consent for her son to be tested. She says:
“Surely this isn’t right, in this day and age”.
In my view, it is a criminal act to test a child without a parent’s knowledge.
Let me come on to the third case, which, in my view, is the most troubling of them all. It relates to a gentleman called Kenneth David Bullock—Ken Bullock. Ken was a very high-ranking civil engineer who worked around the world. In his later career, he spent time advising what was then called the Overseas Development Agency. He was a haemophiliac. Sadly, Ken died in 1998—a very traumatic death, unfortunately. Let me read from the letter that his widow, Hazel Bullock, sent to me a few weeks ago:
“I am so relieved to hear you are still committed to an active”
inquiry into
“the contaminated blood tragedy…Between the 15th November, 1983 and the 3rd December, 1983, my husband stopped being a Haemophiliac patient who had been infected with NonA-NonB type Hepatitis to being a clinical alcoholic…This accusation continued and escalated during the next fifteen years completely unknown to him, he was refused a liver transplant in 1998 and left to die still unaware of these appalling accusations. He did not drink alcohol.”
Mrs Bullock has examined her late husband’s medical notes in detail. Again, I have them here in my possession today. An entry in his notes from February 1983 says, “Acute Hepatitis”. Another from March says:
“NonA NonB Hepatitis which he probably obtained from Cryo-precipitate”—
the recognised treatment at the time. Again in 1983, the notes say:
“In view of his exposure to blood products a diagnosis of NonA NonB was made.”
However, it would seem at that point that all mention of blood products was to be stopped, very suddenly. Mrs Bullock says:
“They were never again to be found anywhere in my husband’s notes. From the 15th December, 1983 all the hospital records refer only to alcoholic damage to the liver. I have in my possession full copies of all the following notes.”
In December 1983, the notes say, “alcohol could be considered”; in 1994,
“likes a few beers at week-ends”;
in 1995, “alcohol related hepatic dysfunction”; in 1995 again, “clinical alcoholism”; and in 1996, “chronic high alcohol consumption.” In 1998, the year that Mr Bullock died, they say, “alcoholic cirrhosis.”
Mrs Bullock concludes her letter:
“My husband died on the 3rd October, 1998. At no time during this 15 years should alcohol have been mentioned. My husband’s rare and occasional glass of wine was minimal. He never drank beer or spirits. Alcohol was never a part of our lives and he had his last glass of wine on 18th June 1995, my 60th birthday. My husband died completely unaware of these accusations that have shocked family, friends and colleagues alike.”
Just as the evidence of amended police statements provided the thread that we eventually pulled to unravel the Hillsborough cover-up, so I believe the evidence that I have just provided must now become the trigger for a wider inquiry into establishing the truth about contaminated blood. There is a very disturbing echo of Hillsborough—is there not?—in what I have just said. People who were the victims of negligence by the state were suddenly the victims of smears perpetrated by those working on behalf of public bodies, particularly smears related to alcohol, suggesting that the disease that afflicted Mr Bullock’s liver was self-inflicted. That reminds me, of course, of the front-page newspaper stories that appeared straight after Hillsborough that alleged that Liverpool fans were drunk. It is a time-honoured tactic—is it not?—to deflect the blame from where it should be over to somewhere else.
It is of course possible that in each of the cases that I have mentioned the hospitals and clinicians concerned were acting on an individual basis to prevent their negligent practices from being known. I have to say, however, that I doubt that that was the case. My suspicion, as I said a moment ago to my hon. Friend the Member for Kingston upon Hull North, is that there are documents held at a national level, either by the Government or by regulatory or professional bodies, that point to a more systematic effort to suppress the truth.
I actually have two documents in my possession—this will save the Minister and the Government time if they want to suggest that there are no such documents—and I want to put them on the official record. The first is a letter sent in January 1975 by Stanford University’s medical centre to the Blood Products Laboratory, which was the UK Government’s wholly owned blood products operation. The letter goes to great lengths warning about the risk of the new factor VIII products that were coming on to the market. The gentleman who wrote it, Mr Allen, said of one particular product that the
“source of blood is 100 percent from Skid-Row derelicts”.
He was writing to warn the British Government about the blood products that were being used.
The second document is from the Oxford Haemophilia Centre and it was sent in January 1982 to all haemophilia centre directors in England. It says of the new products coming on to the market:
“Although initial production batches may have been tested for infectivity by injecting them into chimpanzees it is unlikely that the manufacturers will be able to guarantee this form of quality control for all future batches. It is therefore very important to find out by studies in human beings to what extent the infectivity of the various concentrates has been reduced. The most clear cut way of doing this is by administering those concentrates to patients requiring treatment who have not been previously exposed to large pool concentrates.”
In other words, it is saying: let us find out whether there is “infectivity”—to use its word—in the products by using patients as guinea pigs, without regard for the consequences. That is proof, in my view, of negligence of a very serious kind.
That brings me to the point that my hon. Friend the Member for Kingston upon Hull North raised earlier. When we read the warning from the Americans in 1975 about blood products being derived from blood that had been taken off convicts on skid row and the letter some seven years later in which the Oxford Haemophilia Centre stated that it was necessary to push on with trials—to find out whether the products were infectious by giving them to patients—we soon start to see that there was something here that needed to be hidden.
In addition, we must consider the fact that all the papers belonging to a Health Minister were, as I understand it, comprehensively destroyed under something called the 10-year rule. I have been a Minister, and I have never heard of the 10-year rule. Have you, Madam Deputy Speaker? It is a new one on me. A Minister’s papers were destroyed without his consent. To me, that sounds alarm bells and suggests that something is seriously amiss.
Diana Johnson
Was my right hon. Friend shocked, as I was, to learn that in November 1983, the then Health Secretary told Parliament:
“There is no conclusive evidence that acquired immune deficiency syndrome (AIDS) is transmitted by blood products”?—[Official Report, 14 November 1983; Vol. 48, c. 328W.]
Only months earlier, however, the Department had been preparing a document that stated that AIDS was almost certainly transmitted in such a way, and the Advisory Committee on Dangerous Pathogens had also told of strong circumstantial evidence that the disease was blood-borne. It seems as though there were real issues about what people and Parliament were being told. Ministers must never mislead Parliament, yet clearly the information that was being given to Parliament at the time was not correct.
Andy Burnham
I fear that my hon. Friend is right once again. I am aware that individuals received Crown immunity to protect the Government from litigation at the time. That paints a strong picture, and that is why we need to see the papers and find out what happened. I do not want to stand here and accuse Ministers in that Government of anything—that is not my aim—but let us have a look at the papers, so that we can at least see whether any misleading statements were made.
The cases that I have brought before the House provide evidence of several things. First, people were used as guinea pigs. Secondly, people were given inappropriate treatment, as Stuart was. Thirdly, tests were done without people’s knowledge or consent. Fourthly, the results of tests, even when they were positive, were withheld for years—decades, in some cases—from individuals. It has even been suggested that those individuals, who were simply living their lives and did not know that they were HIV-positive or hepatitis C-positive, subsequently infected others who were close to them. Fifthly, as we saw in the case of Ken Bullock, medical records were falsified with slurs and smears to suggest that liver disease was self-inflicted. These are criminal acts.
Mr Jim Cunningham (Coventry South) (Lab)
I pay tribute to the work that my right hon. Friend did when he was Secretary of State for Health. I was in the Department with him as a Parliamentary Private Secretary. Are we saying that the information is immune from the Data Protection Act and the Freedom of Information Act? Have they ever applied in this situation?
Andy Burnham
I think people have applied for documents, but many of those documents have been withheld. I will come on to that in a moment.
I was a Minister in the Department of Health just after the publication of the Archer report and the Government’s response to it. At the instigation of the late Paul Goggins, I sought to reopen the whole issue, and I encountered a lot of institutional resistance, if I may put it that way. I am myself standing here out of a sense of guilt—I wish that I had done more over the years—but having looked at it all and having pieced it all together, I think the documents that have been withheld would fill in some of the gaps I have described.
Chris Stephens (Glasgow South West) (SNP)
I pay tribute to the right hon. Gentleman for the work he has done on this issue and many others. The third case he described is surely one of defamation. Does he not agree that all families affected must, if they have not done so already, access their medical records and those of family members who have passed away?
Andy Burnham
It is a case of at least defamation. A range of potential offences, such as misconduct in public office, could be considered. It remains the case that people have not had access to their full medical records. There are just so many examples of people saying that crucial pages are missing. They obviously cannot prove that, but I have put on the record things that I think are provable and are, in my view, criminal. This cannot be left there, and the Minister is going to have to answer that point directly when she responds.
Jim McMahon (Oldham West and Royton) (Lab)
I pay tribute to my right hon. Friend and my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) for the work they have done in exposing this issue. When Alex Smith, a constituent of mine, first came to my advice surgery to tell me the story of how he lost his wife through contamination and how he had contracted hepatitis C through a contaminated blood product, I could not help but feel aggrieved on his behalf. It now feels, however, as though this has moved on to something completely different—a very sinister cover-up—and I pay tribute to my right hon. Friend for his work in exposing it and for getting this far.
Andy Burnham
I think it has such a feel. For me, the whole thing about finance—it is always about finance, and about whether we can give them a bit more—has been helpful to the Government, because it has meant that they have never focused on the issue they should really focus on. As I said at the beginning, if this had been known about, the wave of support behind the people struggling to find out the truth would have been massive—absolutely massive—and the Government would have had nowhere to go and would have had to respond. Consequently, people are still struggling, such as my hon. Friend’s constituent, and I hope that they will not have to struggle for much longer.
Sir Peter Bottomley
It seems to me that the right hon. Gentleman is making three major points. The first is that those still alive who are affected and their families need proper, generous help without delay. The second is that there should be an inquiry into what went wrong all the way through, especially about whether people have interfered with the preservation of evidence. Whether people are prosecuted is a separate issue, but actually knowing what happened is what matters most. The third point—this is really the one in my mind—is that there was a difference, as Richard Titmuss pointed out in 1970 in his book “The Gift Relationship”, between blood donations in Britain, where they were freely given by the healthy, and donations in the States, which came from the sources the right hon. Gentleman has mentioned. If that was stated in a book in 1970, people should have paid attention as soon as they had any warning at all, whether from Stanford or from anybody else.
Andy Burnham
That was the direct content of the Stanford letter. There was a worry that the NHS was using such products in a completely different context, not understanding the difference between the two systems. That was the Stanford letter.
I am not standing here claiming to be an expert on all the papers, because I am not; I am saying what I know, from the people I have spoken to, to be wrong, and linking that to the documents in order to say what I believe to be the case. I may not be right, but we need to find out whether I am right, and that is the point that I will be putting to the Government.
Barbara Keeley (Worsley and Eccles South) (Lab)
I was not going to intervene, but the hon. Member for Worthing West (Sir Peter Bottomley) made the point that generous treatment is needed. The victims of this NHS scandal are not receiving generous treatment. I have a constituent who was infected during the scandal as a child at the Royal Manchester children’s hospital. When he discovered that his cirrhosis, if it remained untreated, meant that he ran a 25% chance of developing liver cancer, he was told that he would be denied treatment by the NHS. The treatment he needed to clear the virus load from his system cost £100,000, and at that point he decided to use the ex gratia payment that he had been given—such a payment is supposed to be some compensation, although it is not enough—to try to do so. That is the situation that victims such as my constituent are in at the moment, and it is a disgrace: they should not be fighting this and having to use their own money for their own treatment.
Andy Burnham
It is a total disgrace. Absolutely there must be full, fair compensation now. I say to the Government, do not delay; do what Ireland and other countries have done. They should do that now. They raised expectations and they should do it. We would all support it.
Mrs Bullock, whom I mentioned, is reduced to sending begging letters. She has had to sell the family home and move away from everything. She is sending begging letters to the Skipton Fund for a stair-lift. She is not well herself now. How can that be right? We are making a woman who has lost everything send begging letters for a stair-lift, as she tries to cope on her own because her husband is no longer there. On the point about medical treatment, I understand that Mr Bullock may have been refused a liver transplant because his notes said that he was an alcoholic. There is injustice upon injustice here. It is absolutely scandalous. I hope the House now understands why, as I said at the beginning, I could not live with myself if I left this place without telling it directly what I know to be true.
Mr George Howarth (Knowsley) (Lab)
My right hon. Friend is making a powerful case that there was a systematic cover-up. By joining together the dots in the way that he has, a picture seems to emerge that needs to be examined further. Even if he is wrong and what we are confronted with is systemic administrative and medical failures, the argument for immediate compensation for all the people affected is so powerful that the Government need to look at it urgently and, if possible, say something sensible about it today.
Andy Burnham
Absolutely; I could not agree more. It is downright immoral to make these people carry on begging in the way they have been forced to do. The Government raised their hopes; they should deliver on the former Prime Minister’s promise and do what my right hon. Friend has just described.
The story is becoming clear, is it not? Warnings from the United States were ignored. There was a wish to drive on with these new products from the Oxford haemophilia centre: “We’ll just push them out there to find out the results before we really know whether there is infectivity.” Problems started to happen and perhaps there was the idea, “Oh no, the Government might be exposed to litigation. Let’s not have it in people’s notes so that a story does not build about how there has been negligence and people might have a compensation claim.” That is the story I have got; I do not know what anybody else thinks. Worse, for some people, they said, “Don’t just destroy their notes; falsify their notes.” That is the story. We need to find out whether it is true or not. In my view, these are criminal acts. They did not just happen by chance. A major injustice has happened here.
In making this speech tonight, I think of our late, great friend Paul Goggins, who I miss every single day. He did so much to advance the cause of justice for those who suffered. I also think of his constituents, Fred and Eleanor Bates, and of the promises I made to act for them in Paul’s name. In a 2013 debate like this one just before he died, Paul made an impassioned call for:
“A serious Government-backed inquiry…with access to all the remaining records and the power finally to get to the truth of what happened and why.”—[Official Report, 29 October 2013; Vol. 569, c. 201WH.]
His demand was as undeniable then as it is now, yet it pains me that, in the four years since then, this House has not moved it forward at all. If that continues to be the case after what I have said tonight, I am afraid that this Parliament will be complicit in the cover-up.
In reply to the demand of my hon. Friend the Member for Kingston upon Hull North for an inquiry in a letter she wrote in October 2016, the Prime Minister said:
“the relevant documents have been published on the Department of Health and the National Archives websites and it is unlikely that a public inquiry would provide further information.”
In my view, that is a highly debatable statement. I do not think that a Prime Minister who has a good track record in helping to secure justice for those to whom it has been denied should have put her name to such a letter, which was probably drafted by the Department of Health. I remember exactly the same thing being said to me by those who opposed the setting up of the Hillsborough independent panel. “Everything is out there, it’s already known,” is what they always say. If the Prime Minister is confident in her assertion—I say this to the Minister—then rather than just publishing the documents the Government have selected as relevant, why not publish all the Government-held documents so that we can all decide whether her claim is true? On the basis of the evidence I have presented tonight, I believe it would be quite wrong for this House to resist that call.
To be clear, I am not calling for a lengthy public inquiry; I am calling for a Hillsborough-style disclosure process, overseen by an independent panel, which can review all documents held by government, NHS and private bodies. Just as with Hillsborough, the panel process should be able to view documents withheld under secrecy protections and make the necessary connections between documents held locally and nationally. It should then produce a report on the extent to which the disclosure of those documents tells a new story about what has happened.
So tonight I issue a direct challenge not just to the Government but to all parties in this House, including to my own Labour Front Bench and the Scottish National party: do the right thing and put a commitment in your election manifestos to set up this Hillsborough-style inquiry into contaminated blood. That, in my view, would be the most effective way to get as quickly as possible to the full truth and the whole story, as it was, effectively and efficiently, with Hillsborough.
I want to be very clear tonight with the Minister and with the House. If the newly elected Government after the general election fail to set up the process I describe, I will refer my dossier of cases to the police and I will request a criminal investigation into these shameful acts of cover-up against innocent people. I say to the Minister that the choice is hers. People are asking me why I do not just go straight to the police with the evidence I have, and I owe them an explanation. It is my view that the individual crimes I have outlined tonight are part of a more systematic cover-up and can only be understood as a part of that. If we refer them piecemeal to the police, they may struggle to put together the bigger picture of what lies behind the falsified medical records. That, in turn, may delay truth and justice. If the Government will not act, however, I believe a police investigation is the correct next step and that is what I will request. I cannot keep this information in my possession and not do something with it.
As we know, time is not on the victims’ side, so I will set a deadline. If the Government do not set up a Hillsborough-style inquiry by the time the House rises for the summer recess, I will refer my evidence to the police and request that investigation.
Barbara Keeley
My right hon. Friend is making an incredibly powerful case in his final speech in this place. The shadow Health team discussed this matter earlier and entirely support his call.
Andy Burnham
I am very pleased to hear that. I hope that means a commitment in the election manifesto of the kind I have just called for.
Chris Stephens
Does the right hon. Gentleman agree that there should be a Backbench Business debate on this issue when Parliament returns and before the summer recess, so that Back Benchers from all parties can pressure the Government to meet his demand?
Andy Burnham
I will not be here, but I make a plea to the hon. Gentleman, if he is returned—do not rule out Labour in Scotland, it is on the way back. I make a plea to everybody here in the Chamber today and to the candidates who may be coming here that they must act on this information. They cannot leave this where it is. Their conscience must tell them that they have to do something about it.
When the Government ruled out an inquiry into Orgreave, despite the existence of clear evidence of serious wrongdoing by the police, they did so on the basis that “nobody died”. I am afraid that that threadbare defence will not hold here. People have died—2,000 in all—and they have been the victims of both negligence and a cover-up. In its heart of hearts, this Parliament knows that to be true, and so the question is: what are we going to do about it?
I will end with a quote from an email I received from another victim, Roger Kirman, who became infected with Hepatitis C in 1978 but only found out by accident when having a hip replacement operation in 1994—this despite having raised his family in between. His brother George died from AIDS in 1991. He wrote:
“I have been fortunate to make it as far as I have but I have a real sense of anger against successive governments for their indifference to the plight of so many. Politicians should not be surprised at the loss of confidence in Parliament when candour is not forthcoming and they are seen as interested only in preserving their own position and the status quo.”
I suspect that Roger speaks for every single family affected by this scandal.
It has been an enormous privilege to serve my constituents in the House, and it is with real sadness that I prepare to leave, but in my 16 years here I have also had my eyes opened to its shortcomings. The simple fact that since Hillsborough I have been approached by so many justice campaigns—many of them from the 1970s and 1980s—tells me that this place has not been doing its job properly. Westminster will only begin to solve the political crisis we are living through when, in the face of evidence, it learns to act fearlessly and swiftly in pursuit of the truth and gives a voice to those of our fellow citizens who through no fault of their own have been left in the wilderness.
Collectively, we have failed the victims of contaminated blood. I do not exempt myself from this, and I wish to apologise to all those affected for coming so late to this issue in my speech tonight. I also apologise to you, Madam Deputy Speaker, for the length of my comments—but in a way I do not actually: the House should be delayed tonight on this matter. Truth and justice have been delayed for people, so the House should be delayed tonight, as it hears directly what they have been through. I hope that we have given a flavour of that tonight. I say to Members here and those who might follow: it is never too late to do the right thing. [Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I do not want any clapping; “Hear, hear” will be fine.
As the right hon. Gentleman concludes his valedictory speech in the House, I am sure that the whole House will join me in wishing him well.
The Parliamentary Under-Secretary of State for Health (Nicola Blackwood)
I thank the right hon. Member for Leigh (Andy Burnham) for securing this debate, his last in the House, on what is a very important issue, not just for him and his constituents, but for many other Members and their constituents. I would like, in particular, to pay tribute to the courage of all the victims who have allowed their stories to be told today. The value of this, in reminding us why we are all here and in driving us to find the best solutions to this very difficult issue, cannot be overestimated. We should all take a moment to remember that.
That is exactly why the Government have introduced the infected blood payment scheme, alongside the commitment of up to £150 million up to 2020-21 for all those affected. It will more than double the annual spending during that time. I am sure, though, that the whole House will share my view that nothing can make up for the suffering and the loss that families have experienced, and no financial support can change what has happened to them, as the right hon. Gentleman said. I hope, however, that all those here today will recognise that the support provided is hugely important for those facing such significant medical challenges and is materially more than any previous Administration have provided, and recognise that it is a measure of how seriously the Government take the issue.
I would also like to take a moment to clarify some issues to do with the consultation, because there has been confusion about it in recent weeks. The consultation response announced on 13 July 2016 introduced for the first time an annual payment for all individuals affected with HIV or chronic hepatitis C through NHS-supplied blood or blood products. The recent consultation, which closed on 17 April 2017, asked for comments on the special category mechanism. This mechanism will allow those with hepatitis C stage 1 who consider their infection or its treatment to have a substantial or long-term adverse impact on their ability to carry out routine daily activities to apply for the higher annual payment, which is equivalent to the annual payment received by beneficiaries with hepatitis C stage 2 disease, such as those with cirrhotic liver and its complications, or those infected with HIV. We anticipate that a significant proportion of stage 1 beneficiaries will benefit from the new process and the higher annual payment it will offer.
Those co-infected with HIV and hepatitis C stage 1 will also be eligible to apply through the SCM. Those co-infected with HIV and hepatitis C stage 2 already receive the higher annual payments for both infections. The consultation proposes, however, that those payments will not increase in 2018, as originally set out in the 2016 consultation response. The recent consultation also included a question on the type of discretionary support that beneficiaries would find most useful. We remain keen to ensure fairness of support between all beneficiaries, based on need and individual circumstances. We have had consultation submissions, but we have to consider them over the purdah period. We cannot make decisions until after that.
I wanted to make those points before turning to the right hon. Gentleman’s point about a further inquiry. As he will know from a number of previous debates on the issue, the Government have been clear that we do not at this point believe that a further inquiry would be beneficial, because there have been previous inquiries. I would like to say a little about why those inquiries were quite useful. Lord Archer of Sandwell and Lord Penrose have already separately undertaken independent inquiries in the last decade. Neither inquiry found the Governments of the day to have been at fault and they did not apportion blame.
The Penrose inquiry began in 2009, when the right hon. Gentleman was himself the Health Secretary. In the course of the inquiry, evidence was taken over nearly 90 days of oral hearings, resulting in more than 13,000 pages of transcript, in addition to 200 witness statements and more than 120,000 other documents.
Andy Burnham
I accept that there have been two inquiries—Penrose was commissioned by the Scottish Government—but it is not acceptable for the Government to point to Archer. That was not a Government-backed inquiry. It did not have access to all the Government papers. The Minister cannot use that as an excuse or say, “We don’t need an inquiry because of Archer.”
Nicola Blackwood
That is why I was speaking about Penrose. The final report from the inquiry was published as recently as March 2015 and includes an appendix that lists witnesses and many of the most significant statements and reports that the inquiry considered. Although the Department of Health was not called to provide witnesses to the Penrose inquiry, it co-operated fully with Lord Penrose’s requests for documentary evidence, and the departmental evidence that Lord Penrose used is referenced in his final report. Lord Penrose published the report of his public inquiry into infections acquired in Scotland on 25 March 2015. Nothing was withheld. Any redacted documents provided to the inquiry were redacted in line with both standard practice to protect personal information and current freedom of information requirements.
Diana Johnson
I really do not think it is acceptable to rely on Penrose. The inquiry could not compel witnesses to give evidence if they were outside Scotland, because of the jurisdictional issues, so it seems that there was not a complete picture in Penrose either, despite the picture of full disclosure that the Minister is trying to paint.
Nicola Blackwood
Of course, that was only part of the picture, because further documents have been disclosed. The Department has published all relevant information that it holds on blood safety, in line with the Freedom of Information Act 2000. All papers that are available for the period between 1970 and 1985, amounting to more than 5,500 documents, have been published on the Department of Health website, as the Prime Minister said in her letter to the right hon. Gentleman. In addition, more than 200 files of documents covering the period between 1986 and 1995 are available to the public through the National Archives. Of course, papers from more than 30 years ago are already a matter of public record.
We are also aware of six documents among those published on the Department’s website that are currently being withheld under the Freedom of Information Act, either on the grounds that they contain only personal information and nothing relevant to the issue of blood safety, or on the grounds that they hold legally privileged material that still has the potential for future litigation. A further 206 files containing documents covering the period between 1986 and 1995 have been published on the National Archives website and are available to the public. We cannot provide a figure for the number of individual documents that have been withheld from those files, but if documents have been withheld, the files will hold an indication of that which will be visible to the public. Files that contain only some information that is unsuitable for publication will have been redacted.
Mr George Howarth
My right hon. Friend the Member for Leigh (Andy Burnham) made a direct comparison between this case and the Hillsborough scandal. Following Hillsborough, there was the Taylor report, which was produced hurriedly but was actually useful. There was then the Stuart-Smith inquiry. Between the two, there were all the coroner’s inquests. It was not until the process that my right hon. Friend described, involving an independent panel that was able to look at all the documents—as an independent panel would be able to do in this case—that the truth finally emerged. The Minister ought to accept that that process is the best way to get at the truth. She cannot guarantee that everything that has gone on so far has got at the truth.
Nicola Blackwood
The right hon. Gentleman has made a good point. However, given the release of Government papers that has already taken place and the numerous statements made about the issue by Ministers in both Houses, it is hard to understand how an independent panel would add to current knowledge about how infections happened, or the steps taken to deal with the problem. As with a public inquiry, the Government believe at this point that setting up such a panel would detract from the work that we are doing to support sufferers and their families without providing any tangible benefit.
Nicola Blackwood
Will the right hon. Gentleman allow me to proceed to the next paragraph, which I think he will want to hear?
Let me now turn to the evidence that the right hon. Gentleman has presented today, with a great deal of passion. He will appreciate that I have not seen that evidence; this is the first that I have heard of it, so I have had no chance to give it proper consideration. He will also be aware that we are now entering the pre-election period, and that we are therefore in purdah. I ask him please to submit his dossier to the Secretary of State for Health, and also to Lord O’Shaughnessy, who is the Minister responsible for this area of policy. Of course, if the right hon. Gentleman does indeed have evidence of criminality, he should contact the police, but I want him to be aware that the Health Secretary has made patient safety, learning from mistakes and transparency key personal priorities, and I am sure that if the papers hold the concerning matters to which the right hon. Gentleman has referred, he will give them the highest priority.
I do not doubt the right hon. Gentleman’s sincerity. He knows a great deal about this issue, because it was live when he was Health Secretary, and I appreciate the apology that he has made to victims today. I must, however, ask him to recognise that we are taking action on what is an undeniably difficult and complex issue, and trying to get things right for the victims who have waited far too long for action. I also ask him to recognise that we are acting with the best of intentions, even if he disagrees with the way in which we are doing so.
Let me end by offering the right hon. Gentleman my very best wishes for his future. He has left an indelible mark on British politics, and I am sure that he will experience great success in that future, wherever it may be.
Sir Peter Bottomley (Worthing West) (Con)
May I speak briefly in this debate? The right hon. Member for Leigh (Andy Burnham) has helped, and the Minister has rightly said that she will consider what he has said and the papers he might be able to provide. May I add that there are still victims who have unmet costs; I have one in my constituency whom I am concerned about? May I suggest that over the election period ministerial advisers pay attention to the comparisons with Hillsborough, and say that it is not just the Government-held papers that matter, but also the ones held in the health service? So, for example, if someone who has died had been told he drank too much when he did not drink seriously at all, that could be part of the evidence that comes into an inquiry.
Mark Tami (Alyn and Deeside) (Lab)
There people are dying, yet this goes on and on. People want closure; they know they are coming to the end of their lives, and that they will not get that closure.
Sir Peter Bottomley
That is one of the reasons why I believe that over the election period the advisers to Ministers—not just to Health Ministers, but perhaps also to Home Office Ministers—should consider what could be obtained by the kind of call for evidence and inquiry that the right hon. Member for Leigh has rightly proposed.
Sir Peter Bottomley
If the right hon. Gentleman has any other points he wants to make through me, he is welcome to do so.
Andy Burnham
I am grateful for the opportunity. The Minister was very kind in her remarks, but the point that perhaps was missed when referencing Archer and Penrose is that I am calling for a different process that takes documents at a very local level and matches them with documents higher up the chain. It is only then that we can put the jigsaw together and start to understand why someone was acting in a certain way in a particular hospital. That is what we are looking for, and that was the strength of the Hillsborough independent panel: it was able to paint that canvas and put all the pieces of the jigsaw together.
I will send the evidence to the Department. The amended police statements only came to light properly just before the 20th anniversary of Hillsborough. What I have presented to the House tonight is altered medical records—that is a fact; that has been given to me. In my view, that is the same trigger and it should be looked into so that the facts can be established. That is new evidence that the Government now need to consider, to take a new decision on this.
Sir Peter Bottomley
The right hon. Gentleman has taken the words out of my mouth, and has said it better than I could have. We are all grateful to him. The point is that this scandal should never have happened, when it was started it should have been stopped, and when it had been stopped people should have known why it had gone on for as long as it did. The right hon. Gentleman has done a service.
Mark Durkan (Foyle) (SDLP)
The House should not forget that there was a tribunal of inquiry in Ireland. The Lindsay inquiry found that the state knew of the risks and continued nevertheless, because that was what other states such as the UK were doing. So is it credible that an inquiry in Ireland could find that the risks were known but the practice carried on anyway, and that a further investigation through a panel such as that mentioned by the right hon. Member for Leigh (Andy Burnham) would not come to that same conclusion?
Sir Peter Bottomley
That is one of the questions to be asked.
I conclude by thanking the right hon. Member for Leigh and the hon. Member for Kingston upon Hull North (Diana Johnson) who leads the all-party group on haemophilia and contaminated blood, and my right hon. Friend the Member for North East Bedfordshire (Alistair Burt), sitting in front of me, who has done so much, both as a Back Bencher and a Minister, to make sure that these issues are dealt with.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Will the hon. Gentleman give way?
Dr Whitford
I know that the Penrose inquiry is always cast up as having dealt with this issue, but that was a Scottish inquiry and it was not able to summon people from the rest of the UK who did not want to attend. Therefore, the idea that Penrose has dealt with this is fallacious. We must have a system where we can summon people to give evidence right across the United Kingdom.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. We have an unusual procedural situation here. Of course there is plenty of time for our Adjournment debate, given that it started as early as this, and we are discussing a very serious matter, but Members who are now rising to speak gave no indication before the Minister spoke that they wished to do so. That does not mean that they will not be permitted to speak, but just because this happens to be the end of a Parliament, and there is time available to discuss this important issue, does not mean that I will ignore the—[Interruption.] Order. Mr Durkan! I am addressing the House. This does not mean that I will ignore the normal courtesies of this Chamber. Two people have indicated that they wish to speak. They must know that they ought to have done so before the Minister spoke. It was quite obvious when I was going to call the Minister. In these unusual circumstances, I will allow those two Members to speak very briefly now, and I do not expect further interventions.
Barbara Keeley (Worsley and Eccles South) (Lab)
I thank you on behalf of my constituent, Madam Deputy Speaker. I want to speak further, briefly, about that case. The Minister has made certain assertions and I want to give the House some more information. The main part of the debate has been about the excellent revelations from my right hon. Friend the Member for Leigh (Andy Burnham), but we have also referred briefly to the situation of people who were in many cases infected as children as a result of this scandal in the NHS. We need to keep reflecting on the fact that many people were children when this happened. My constituent was a child receiving the treatment that he needed from the NHS. I have already talked about him having to pay for his own treatment, and for the drug that he needed to clear the hepatitis C virus from his body .
The Minister referred to the consultation recently conducted by Health Ministers on reforming the system. I would like this Minister to know how that has gone down with my constituent. He tells me that he received a letter summarising the proposals. He says:
“For me personally, as someone who has progressed to stage 2, I would be significantly worse off. In real terms, the proposals mean that financial support will decrease over time as the annual payment will no longer be index linked. I will even lose the £500 winter fuel payment, and I will no longer receive a pre-payment prescription certificate which I use for painkillers and anti-inflammatory medication.”
It is disgraceful that people who were infected as children by the NHS are being treated in this way. My constituent goes on:
“I believe the Government is being deliberately punitive and exceedingly cruel in using the affected community’s request to reform the various support schemes to actually make cuts to those people who were infected by contaminated blood given to them by the NHS through no fault of their own.”
I just wanted to add those observations to what has been a powerful debate. It has already been stated by other Members that our constituents have no time left. This is the situation that they find themselves in, and this miserly treatment beggars belief. It is time we did something better.
Jim McMahon (Oldham West and Royton) (Lab)
Thank you for your courtesy in allowing us to speak, Madam Deputy Speaker. I fully accept that we ought to have spoken before the Minister responded. I have to say that I expected her response to go on for longer, and that I would have had an opportunity to make a short intervention on her.
I feel compelled to speak because one of my constituents, Alex Smith, has been so badly affected by this. It is not just me who is affected when I see the Government refusing, time after time, to do the right thing. It genuinely haunts me. None of us comes into politics to do the wrong thing. We come here to try to make the country a better place and to give a voice to people who have been ignored. These people have been ignored for such a long time, and it just feels as though the abuse is going on and on. Fear went through my body when the Minister stood to read from her folder and it became clear that she was determined to go down the cul de sac of denial and deferral. Mark my words, while there is breath in my body and in those of the people on this side of the Chamber, this issue will not go away. More than that, if this issue is not resolved, it will haunt the Minister.
Question put and agreed to.
Westminster Hall
(6 years, 11 months ago)
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Post Office Closures
(6 years, 11 months ago)
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Tim Loughton (East Worthing and Shoreham) (Con)
I beg to move,
That this House has considered Post Office closures.
It am grateful to the Backbench Business Committee for the opportunity to discuss this important subject. The number of right hon. and hon. Members present shows how important it is—who would have thought that there was an election on? I am aware that many Members wish to speak, so I will keep my comments as brief as possible. If hon. Members wish to intervene rather than make their own speeches, I will try to take some interventions. To help with the timing, I intend not to speak at the end of the debate.
I appreciate that the last debate on the subject, which was held as recently as November and was led by the hon. Member for Luton North (Kelvin Hopkins), aired many issues that I am sure hon. Members will wish to repeat today. There is concern that plans for the Post Office will be delayed by the forthcoming election, and there are also outstanding concerns from November’s debate—I think the Minister was rather rudely cut off by Divisions in the House—on which it would be good to get some clarity today. I will briefly mention, first, my local post office closures—I am sure that every hon. Member present wants to air a local post office closure —and secondly, the bigger picture of the long-term sustainability of, and game plan for, the whole post office network.
I recognise the good work done by the Government since 2011. The network has been stabilised, the number of closures has been reduced substantially and the subsidy to the network has been managed down from £210 million in 2012 to some £80 million this year as a result of flexibilities under some of the new arrangements. There are upsides as well as downsides. There are something like 200,000 additional opening hours every week, many of them at weekends when post offices would normally be closed, and some £2 billion has been invested in the network transformation plan since 2012. That stands in contrast to the previous 10 years or so, in which half the network branches were closed. My constituency lost more than half its post office and sub-post office branches. When I became an MP in 1997, there were nearly 20,000 branches, and that figure is now down to about 11,500. There are some encouraging signs, but also some very worrying signs when people are faced with the sudden closure of post offices in their own area. When the branches were being closed, we were promised that the Crown post offices were absolutely sacrosanct and would remain the main flagship of the Post Office on the high street.
Post office branches and Crown post offices are very important parts of the local community. Local businesses, including retail and other small businesses, rely on them heavily, because without an excuse to come to the high street to use the post office, people do not use the neighbouring shops. Post offices act as community hubs. They are well used by the elderly population, particularly in areas such as mine that have a high population of pensioners, and by those from disadvantaged backgrounds, particularly those who do not have conventional bank accounts. For those reasons, post offices remain popular and well used, with something like 17 million customers a week.
David Simpson (Upper Bann) (DUP)
I congratulate the hon. Gentleman on securing this debate. Does he agree that the Government need to look at the services that post offices provide, which they are losing, and the return that they are getting on them?
Tim Loughton
That is a very important point that I would like to come on to; it is a question about why the Post Office is not growing rather than retrenching.
In 2016, the Post Office announced the closure of 31 Crown post office branches— even though the Crown offices are now breaking even, after making a £46 million loss four years ago. Some of those post offices have not been converted into the new type of post office and their future is still uncertain. In January this year, a further 37 Crown post offices were identified for closure, including the last two remaining Crown post offices in my constituency, which were in Lancing and Shoreham. That caused huge concern among my constituents and gave rise to lots of petitions and demonstrations by people from all parties. I found it particularly disrespectful that the first I heard of it was when a constituent rang me up to ask what I was doing about it; the Post Office had not even had the courtesy to let the sitting Member of Parliament or councillors know what it was planning.
I organised an urgent meeting with the Post Office and it went through the procedures. I was reassured that firms such as WH Smith had taken on more than 100 of the franchises and everything was supposedly working well. I gather that the other firms that have taken post offices on include a chain called Bargain Booze, an off-licence with some 30 post offices—some hon. Members may have concerns about how appropriate that is. I was told that both the Crown post office branches in my constituency were unprofitable, which was why they were to be franchised out, yet the Lancing branch, along with one very small sub-post office right on the fringe of the village of Lancing, now looks after a population of 27,000. Not surprisingly, queues are frequent. It also services the second largest business park in the whole of West Sussex, with 228 firms that employ more than 3,000 people. The village has lost almost all its bank branches; we were told that when we lost them, we could do all our banking at the post office, so there was no great concern. If the post office branches are not making a profit, that suggests that they are not being run very well—it is certainly not for lack of usage or lack of demand from the local population.
I was told today that one of those Crown post office branches is to be transferred to a nearby convenience store, which is much smaller than the existing post office and has operated since only 2013. On the upside, there will be extended opening hours on Saturdays and Sundays and new disability access, but on the downside, nobody believes that the store is big enough to house a replacement Crown post office. It will have fewer serving positions, when there are already serious concerns about queues, and it will not be able to offer the biometric enrolment service for Home Office applications. There are also concerns about staff transfer: we know that in the post offices that have so far converted, only 10 of the 400 staff have been TUPE-ed across and they are often going into minimum wage jobs. There are question marks over ongoing training for staff who now work in non-Crown post offices, which have tended to have a big turnover of staff. In many of these shops, staff hours get cut and, after initial promises about extended opening times, the shops tend to retrench.
What happens if the model fails? Some 8,000 sub-post offices are now in convenience stores, which have seen a 4% reduction in staff hours since the national living wage came in. Some 30% of businesses also face challenges with the revaluation of business rates. The Daltons website currently shows 705 post office branches for sale. There is a lot of change and churn in the sector, so longer-term questions arise about the viability and sustainability of the new arrangements.
Both my Crown post offices are co-located with sorting offices. Although the sorting offices are run not by the Post Office but by Royal Mail, they are very conveniently placed next to the post offices. Experience has shown that without those anchor partnership tenants, sorting offices are relocated to out-of-town sites, which are much less convenient for people who need to get their deliveries, particularly in places with many elderly people who may not be so mobile.
There is going to be a consultation on my post office. It will be extended because of the election, but we all know that not a single consultation has overturned any of the proposals to transfer these post offices, so I fear that it will be something of a token exercise. The measurements of an access door may be changed by a few inches or the sweet counter may be relocated because it gets in the way of guide dogs, but frankly the consultation will be a token exercise.
I am aware that Citizens Advice does a good job as the oversight body and that some of its research has suggested that in some cases there have been some improvements to access and to service with the new format, but overall the fears are that the queues will get longer, transactions will take longer and the service will be less consistent. People are dealing with different and new staff, and it is just not as good as it used to be.
That brings me to my second point. Where exactly is the Post Office going? Everything that the Post Office has done—I have cited the statistics about making it more efficient, reducing losses and so on, and perhaps extending some opening hours—is all based on retrenchment, which is a policy that sees the post office, especially the directly owned post office, getting smaller and offering fewer services to its customers. There are now fewer than 300 post offices that are directly owned Crown post offices.
The financial services part of the Post Office, which should be a big money-spinner, is diminishing. At the beginning of the year, 150 financial specialists were made redundant. There was a specialist financial office in the Lansing post office, but it was closed earlier this year. I gather that the specialist mortgage advice that the Post Office gives, because of its relationship with the Bank of Ireland, generates a one-off payment of just £800 for brokering mortgages, and there is no ongoing revenue. The Post Office seems to be selling itself very cheap in that regard and it is caught in that relationship until 2023, and it does not sound as though it is a very profitable one for the Post Office.
My question to the Minister, which I hope she will be able to answer to enlighten us, is: why is the Post Office not making more of banking and financial services in particular, given that it is a trusted name and a presence on the high street, at a time when conventional banks are disappearing from high streets?
Post Office revenues roughly break down as follows. I gather that about 47% of the revenue of post offices is from stamp sales, but increasingly stamps are available to buy anywhere. There are also Government services, including Driver and Vehicle Licensing Agency services, fishing licences and the Department for Work and Pensions card account, but of course those services are all being squeezed and the revenue from them has been diminishing. The Post Office also offers access to current accounts. Banking protocols have been sorted out so that there can be cross-fertilisation of different bank services within a post office, which had been a problem. And then there are the Post Office’s financial services, but again that seems to be a declining market for the Post Office.
Why is the Post Office not copying the challenger banks, for example? Banks such as Metro Bank and Handelsbanken are making a really good fist of expanding into new markets. Metro Bank now has 915,000 customers; it has taken £8 billion in deposits and has 110 branches, and it is growing. Alternatively, as hon. Members have asked in these kinds of debates before, why are we not doing what has been done in France? One thing that we might want to copy from France is La Banque Postale, which was founded in 2006 specifically as a tool to help to tackle financial exclusion and in 2016 had a turnover of €5.6 billion and a pre-tax profit of just over €1 billion. There are similar examples in New Zealand and Italy. There is surely a fantastic opportunity for the state-owned Post Office to take advantage of changing markets and changes in how we conduct our financial business, as a body that is trusted and that is already on the high street. For some reason, the Post Office is not taking that opportunity.
Similarly, why is the Post Office not making more of click and collect services? Everywhere I go now there are shops sprouting up on high streets specifically for people to collect their Amazon and other deliveries, because they are not at home to receive them. The Post Office is already on high streets and surely could offer that kind of service, and yet I gather that 80% of post offices do not have those kinds of facilities. There will be even fewer post offices with them if they are moved to smaller premises that just not do have the room to store and collect parcels.
The overall commercial revenue of the Post Office has been virtually stagnant in the last few years. So it is a great mystery why it is not expanding and becoming more profitable, which would be better for the taxpayer and customers, rather than following a long-term strategy that appears to be based on retrenchment and shrinkage.
Finally, I have some questions for the Minister, in addition to the bigger question of what the big game plan is for the Post Office. The network transformation programme is due to end by March 2018, by which time some 7,500 traditional sub-post offices will have been converted to the new model, but what comes after March 2018 in terms of subsidy and further transformation revenues? In opinion polls, 85% of the public have expressed support for the Government—the taxpayer—continuing to subsidise the Post Office, and not just to deal with the obvious challenges that face rural post offices, which will always face the sparsity challenge. Are any further reductions in Crown network offices planned for the next year? Citizens Advice has suggested that there should be an automatic break if 5% of branches announce that they are to be closed without breaking the access criteria, which is quite hard to do anyway. Will that happen?
The biggest question is: why is the Post Office not taking current opportunities to expand instead of retrenching, particularly as it has the security of Government backing for its revenues and is a trusted name? In 2010, when the Government promised to transform the Post Office—
Sir Edward Leigh (in the Chair)
Order. I have a list of 12 Back Benchers who wish to speak.
Tim Loughton
I am on my final sentence, Sir Edward. In 2010, the Government promised to transform the Post Office into a genuine front office for the Government and that there would be a significant expansion of the Post Office’s banking services, but they have failed so far to implement those measures, as the revenue from Government services has fallen by 40% and income from financial services has stagnated. Closing down flagship branches, getting rid of experienced staff and putting counters into the back of a WH Smith store or a Bargain Booze outlet is surely not a plan for greater innovation, which I think is what our constituents want to see.
Several hon. Members rose—
Sir Edward Leigh (in the Chair)
I have a problem, because I have got a list of at least 12 people who want to speak. I will have to impose a four-minute limit on speeches. If people intervene, then some other people will not get to speak.
I should probably choose first our most senior Member here today, David Winnick.
Mr David Winnick (Walsall North) (Lab)
Thank you, Sir Edward, for calling me to speak.
I am pleased to follow the hon. Member for East Worthing and Shoreham (Tim Loughton), who made some valid points. Because of time, I will simply concentrate on the Willenhall Crown post office in the Walsall borough. A second attempt is being made to close it. The first attempt was in 2013, which led to an Adjournment debate. The town was unanimously opposed to closure, which should have come as no surprise, even in a place where, as in other areas, there is not normally unanimous opinion. I found no one in Willenhall who wanted to see the post office close.
Then came the welcome news, and it was indeed welcome, that the Post Office management had changed their minds. Instead of closing the Willenhall post office, it had decided to retain it and invest in it, which was part of—listen to these words—
“building a modern, profitable and sustainable network”.
Joy does not last long where the Post Office management are concerned; under the latest proposals for closures, Willenhall post office is due to face the axe.
The hon. Gentleman was right to talk about public consultation. I am all for consultation, but as far as the Post Office is concerned there is as much consultation as there is in North Korea. There is as much choice as Henry Ford offered when he said of his cars:
“You can have any colour as long as it’s black”.
So there is no consultation. Indeed, when I received the original letter that stated there would be consultation, I asked, “If residents come along, or write, and make it clear that they are opposed, will it make any difference?” The answer was quite clearly no. There would be consultation on alternatives to the Willenhall post office, on whether there would be toilet facilities in any alternative location, on car parking, and so on, but on the crucial issue of whether the Willenhall post office should close, the decision had been made and there would be no change. So much for consultation.
What concerns me is not simply the closure of Willenhall post office. What I have found is that bank and post office closures tend to go together, whether the bank or the post office closes first. Such closures certainly have—as is bound to be the case—an adverse effect on local communities.
We had a demonstration the other week. The union was involved, along with elected representatives and, of course, the public. We were just outside Willenhall Crown post office staging our opposition to the closure. What was happening inside? I will tell the Minister, if she is listening: there was a lengthy queue. There was no lack of business. This post office is clearly central to Willenhall, but that does not seem to matter to the Post Office or to the Government. The Post Office management is acting under intense pressure from the Government; we should have no doubts about that.
What is happening is most unfortunate and I will continue to do my best with other people in Willenhall and with the unions to retain the Crown post office there. The chances are very slight, but I conclude with these words: I used the opportunity in the last Adjournment debate to make the voice of Willenhall heard in the House of Commons and I do so again today in the hope of a reprieve.
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
I will be brief. I completely support my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), who initiated the debate. He has made all the basic national points. I also support much of what the hon. Member for Walsall North (Mr Winnick) said about his post office.
I am here because it has been announced, although I do not think I received any specific notice of the proposal, that the Crown post office in George Lane in my constituency is to be closed. Ironically, it is situated very close to a sorting office, which I understand the other side of the fence now wants to shut. We will therefore have a serious blight in the area. With the loss of the post office, people who want to pick up parcels will perhaps have to go all the way up to north Chingford, which is some distance away and the traffic is never that easy. We will have a real calamity on the high street.
It is worth reminding the Post Office and the Government that post offices are part of the chain of integral elements on a high street which, bit by bit by bit, are being removed. The banks have disappeared, and now, in many areas and even in my own, there is real pressure to get rid of small industrial estates, which are vital to the life of communities because people who work on them use the high street during the day, to find their food, to shop generally and so on. There is continuous life there. The post office is an integral element because it brings people into the community, particularly elderly people who do their shopping there. The high street will therefore suffer as a result of the closures.
As my hon. Friend the Member for East Worthing and Shoreham said, there are much better ways to do this. The absence of any sense of innovation in the Post Office is remarkable, given that it owns prime sites that could be used flexibly. When I was at the Department for Work and Pensions, I wanted to persuade the organisation to allow post offices to be used for outreach. The Post Office was utterly negative about the idea and did not want to entertain it, but the Government need to press it again. With terminals where people, particularly the elderly, could receive at the very least reasonable advice about benefit claims, post offices could easily be utilised for further Government activity, beyond all their other work.
The banking side is another consideration. About five years ago, the Post Office was told absolutely clearly by the Government that if it came back with positive responses about how to set up a banking facility, it would be given a reasonable hearing. It took a year for it to come back with absolutely no response whatsoever, except to say—this was connected with the Post Office card account or POCA—that it did not think it was feasible for the Post Office to do that. All along, there has been negativity from the Post Office regarding any ideas about using its facilities in ways that could genuinely increase its revenue and make it more flexible.
Nearly eight years ago in my community we lost a sub-post office on the high street. We were told, “Don’t worry, the Crown post office will be able to take all that business”, and now we find that that post office is about to close as well, leaving us with no postal service at all in the area. I, the community and the unions are absolutely adamant that that is the wrong way to go. The Post Office must think again, and I call on it to be more flexible and reasonable.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
It is a pleasure to take part in the debate and to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for East Worthing and Shoreham (Tim Loughton), who introduced the debate, and his colleagues on obtaining time from the Backbench Business Committee.
It is almost trite to say that post offices, and sub-post offices in particular, are central to the life of many of our small rural and village communities, but that is very much the case. Indeed, as we see the withdrawal of other services, such as clearing banks, from such communities, they will only grow in importance. Maintaining a vibrant and viable network of sub-post offices across our smaller and more rural communities is therefore now more important than ever.
In my time in Parliament I have seen a large number of post office closures, although whenever there is a structured programme of closures we, in Scotland, generally do quite well out of it; we do not see very many post offices close because we have a small population spread over a large area of terrain. However, there has been a constant process of attrition. Time after time, sub-post offices have closed temporarily because the person running them has retired or moved away or is simply fed up with managing the business—and who can blame them? In fact, I have one post office that is about to reopen in the next month or two in the village of Finstown in Orkney. It has been a Herculean effort to find someone to take it on, but it shows that it is still possible to achieve that if there is willingness from a handful of people to make it work.
It is difficult now to make a sub-post office work as a stand-alone business, and for that reason the few businesses that are left are generally being folded into shops, garages, cafés and other places. That is good for those businesses, but it requires a bit more flexibility and sensitivity on the part of the Post Office. I am thinking of the example of Stromness, the second largest town in Orkney, which for years had a stand-alone sub-post office. When that sub-post office was no longer allowed to continue, it was moved into a bakers and general store. The community does not feel comfortable, despite the best efforts of the shop owner, to go along and get their pensions on one side of the counter while standing next to someone buying their messages on the other.
The Post Office needs to be more proactive in supporting people who are prepared to provide a sub-post office service. I spent an hour on Sunday night with the owners of the Palace Stores in Birsay in Orkney—a great little local shop that also includes the post office. They tell me that they have probably lost about a month of post office business because of poor connectivity. The broadband connection that is necessary to run a sub-post office is unreliable. That obviously has more to do with BT Openreach and Fujitsu, which provide the internet services for the Post Office, and their inability to speak to each other, but it is a good example of how the Post Office could make a real difference if it took a more proactive role in supporting its sub-postmasters and sub-postmistresses. A small country shop in Orkney going to talk to BT will get treated as if it were a small country shop, but a big organisation such as the Post Office would be listened to and taken much more seriously and, in that very practical sense, it would be able to support people who have for years provided one of the most important services in the communities I have been privileged to represent. For that reason, I hope that the Minister will take to the Post Office management the message that that should be its priority.
Mr Richard Bacon (South Norfolk) (Con)
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) on securing the debate.
I would like to raise the case of Diss Crown post office in my constituency, which is at the heart of the marketplace in Diss. In that geographically central area of Diss, 10,000 local residents, which is more than twice the number of people on the electoral role for the area at the time, turned up to welcome the Royal Anglian Regiment—the Vikings—home after its tours in Afghanistan and Iraq. The post office is very much at the heart of the community. In particular, it is not only at the heart of Diss, but it will be at the centre of the regenerated Diss following the newly reinvigorated Diss heritage triangle project. That £3 million regeneration includes £1.65 million from the Heritage Lottery Fund. Part of the scheme will relocate some of the town’s facilities, including the tourist information office, further north towards the centre, away from the supermarkets on the fringes of the town. The proposal to close the Diss Crown post office cuts completely against that project.
WH Smith has expressed an interest in taking on the franchise, but the WH Smith branch in Diss must be one of the smallest in the country. It is up some very narrow steps through a narrow door. In fact, there are two narrow doors either side of the shop window, but they are not in the remotest bit suitable for disabled access and nothing that could be done would make a serious difference, because the footprint of the store is very small. My local district council, South Norfolk Council, has invested £400,000 of council tax payers’ money in the heritage triangle project. Indeed, paragraph 2.32 of the South Norfolk local plan refers to the need to protect primary shopping centres, including the Diss heritage triangle.
The proposal to transfer the post office further south to the WH Smith branch would, apart from the inaccessibility problems, put it on the wrong side of town. That would be to the clear detriment of public investment in restoring the old town centre. It would also mean that many public events, such as the welcome home parade to which I referred and the annual Remembrance Day parade, would, instead of taking place against the background of a heavily used, vibrant public building—as other Members have said, it is surprising that it is not possible for such branches to be profitable, and I find it almost impossible to believe that it is not—take place against the background of a closed, redundant, empty building, since there is no word on what Post Office Counters would do with it. In the case of Diss, it would have a damaging effect by counteracting significant public investment in a project that aims to revive Diss town centre.
The Post Office’s current proposal is to relocate the branch to WH Smith, which are the wrong premises in the wrong place. That goes against the trend of local public investment aimed at securing regeneration in one of our finest market towns, which has some of the oldest town records anywhere in the country. Diss could and should be a flagship example of the regeneration of our market towns, with the successful Crown post office at its heart. I hope the Minister will take these points to the Post Office. She should explain not only that we want a much more commercial and proactive approach, as my hon. Friend the Member for East Worthing and Shoreham said, but that there are certain Crown post offices where the proposals are wholly unsuitable. We need and deserve something better.
Albert Owen (Ynys Môn) (Lab)
The hon. Member for East Worthing and Shoreham (Tim Loughton), who moved the motion, was absolutely right in his thoughtful speech when he said that there would be repetition of many issues, but that we would concentrate on our local areas. Post offices are the heart of our communities and are vital for businesses and local communities.
The beautiful isle of Anglesey, Ynys Môn, is well known to the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith). In 2014, the Post Office tried to close down the branch in the market town and put it out to franchise. There were no suitable premises and nothing has changed, yet the Post Office has come back, repeating exactly the same measures to close it down. The branch is purpose-built in the centre of town. It has access outside for buses and elderly people. It is perfect.
When there were sub-post office closures in rural areas in my constituency, we were told that the Crown post office was the hub of the whole area. Now the Post Office wants to close down the hub. The Post Office is not listening, but it needs to start listening to local communities and local businesses, because across the country we are seeing not only local post office closures, but mass bank closures as well. Local businesses are finding it difficult to do cash handling and run their businesses. When the Post Office closes down Crown post offices, we get empty buildings where lots of money has been spent on regeneration. That will be the legacy of the Post Office, and it is counterproductive. I know that the Minister is as anxious as we are that that should not happen, but we need a proactive Government and a proactive Post Office. We need to look at innovation. We need to look at the brand, to improve it and Post Office products. There are great opportunities.
We are going through a period of mass bank closures. I suggest that the Minister listen to the Communication Workers Union, which is proposing a Post Office bank, which would help with loans for local businesses. We have just been through global financial difficulty, where local banks were not facilitating local businesses in the way that they should have been. I believe in a mixed economy. When the Government have a stake in the Post Office, as they do, they should intervene in a sensible way through the Post Office with a Post Office bank.
People regularly go to do their business and their trade in Llangefni. It is an historic market town, but it is modern too. People do things in a more digital way these days, but as the right hon. Member for Orkney and Shetland (Mr Carmichael) said, broadband facilities can be poor. We need to improve our infrastructure and our post offices. We need to begin listening to local businesses and local communities, because post office and bank closures are ripping the heart out of our local communities.
The Government rightly talk about localism, but local people and local businesses do not want this closure programme. They oppose it firmly. As representatives—this is not the first time I have stood up here for my constituents—we are making coherent points. We want the Post Office to work for our communities, our businesses and the future. I urge the Minister to look closely at the CWU proposals. Let us have the Post Office doing what it used to do when I was a kid: having savings banks and helping businesses in communities. That is the way forward, and I hope the Minister will take it on, on behalf of the people of Ynys Môn.
Several hon. Members rose—
Sir Edward Leigh (in the Chair)
Order. I am afraid that three more Members have put in a request to speak. I want to try to get everyone in, so I am afraid I have to reduce the limit again, to three minutes.
Mrs Sheryll Murray (South East Cornwall) (Con)
Thank you, Sir Edward. It is a pleasure to follow the hon. Member for Ynys Môn (Albert Owen). I want to talk about three post offices in my area, the first of which is in Lostwithiel. The post office closed, but it now half-opens, for two days a week. Sadly that announcement was made on social media for political gain before consultation with the local community, but it was welcome. However, Lostwithiel is due to lose its permanent bank, and it will have a mobile banking service for two sessions a week. There is no bus service. I am pleading for the Minister to do everything she can to ensure that my constituents in that town, which is bereft of vital public services, can have a permanent post office again. It is an ancient stannary town. It has a lot of antiques businesses and privately owned local businesses. They need a permanent post office service that is open for hours that serve everyone in the community, particularly workers.
We have had a bit of a reprieve in Looe, where my late husband was a fisherman. We saw the post office closed in east Looe. Fortunately, just like in Lostwithiel with its two days, a hard-working postmaster from another village has come in and taken over. Working very closely with my local councillors and local council candidates, we have secured a temporary reprieve, but we need a permanent solution. It is a major tourist town. Tourists do not want to come to a town where they cannot even access post office services.
Finally, in Torpoint, which is very close to my home town, we have had the bank close. People have been told that to use banking services they can go to the post office or make a three-hour round trip. Someone has looked on a map and measured the distance and not taken account of the fact that, on the Rame peninsula, it is an hour and a half’s bus ride to access the alternative bank. The post office is already heavily used and people are very worried that it will not be able to cope with the extra pressure. Will the Minister take account of rural post office services in places such as South East Cornwall to ensure that people get the service they want?
Carol Monaghan (Glasgow North West) (SNP)
Drumchapel post office on Hecla Avenue is under threat of closure. Drumchapel is an area in the north-west of Glasgow with a population of about 13,000. It was developed post-war to move people from urban slums to the outskirts of the city, but much of the housing that was built was poor quality, and lack of amenities meant that Drumchapel experienced serious social issues, many of which persist. Digital literacy is low and one in every two children lives in poverty. Although there are one or two shops around the estate, the heart of Drumchapel is the small shopping centre where the Hecla Avenue post office is located.
There is a small post office counter at the opposite end of the estate, but it offers a much reduced service. A quick check shows that it offers Drop & Go and foreign currency, whereas our main post office on Hecla Avenue offers passport services, banking, car tax, travel insurance and bus tickets, to name a few things. This is of greater importance when we consider that, in Drumchapel, a high number of people are not able to access the internet. A recent study by Citizens Advice Scotland estimated that 50% of people in areas of deprivation do not have internet access. Many of the tasks that we can do at home are not possible for many of the residents of Drumchapel.
I have visited the Hecla Avenue post office numerous times in the past few months and have listened to residents’ concerns. They have said that it will be difficult to travel to the next-nearest post office—for some disabled people it will be impossible. The post office is busy with queues at the counter, so the locals feel strongly about its potential closure. I have a petition with 640 signatures and another 500 online, which I will present today.
The post office is at the heart of the local community. Its removal would be devastating for Drumchapel. This is about more than commercial viability. The post office is a key public service that must be protected. Will the Minister tell us whether there has been an impact assessment on the area of Drumchapel? Has the mobility of residents been considered when looking at closures? Closure of the post office must not go ahead. It would be devastating for the community.
Huw Merriman (Bexhill and Battle) (Con)
The title of this debate was the title of the first debate that I had in my name in Westminster Hall when I was elected in 2015. I vowed I would continue to speak on the subject, so I thank my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) for giving me this chance.
For more than a year in my constituency, 8,000 constituents were unable to access a post office in Heathfield because the previous landlord had locked the doors and refused to allow trading. Alternatives were suggested during that time, but no business was willing to take the post office on. I therefore use this opportunity to thank Mr Sanjiv Patel from Unique Wines in Heathfield, who had vision and was willing to take the risk and take the post office on. Almost 12 months on, that business is thriving and I pay tribute to him for taking that risk. I hope other hon. Members will find entrepreneurs willing to do likewise in their constituencies to solve the problems that have been outlined.
At this juncture, I want to give credit to post office business. There are 25 branches in my constituency. As a result of a lot of co-operation, 17 branches have received investment to modernise, transforming into either a main post office or a local. I have six branches that have community status as the last shop in the village—they have received access to investment funding. I have 600 additional branch opening hours per week and 10 branches open on a Sunday. I wish our GP surgeries would follow suit.
I want to come back briefly to three points made during the debate, which are important for reform. First, despite not having a post office or a single business willing to put itself forward, and having only one option, Heathfield still had to run a consultation exercise, which delayed the inevitable decision to go with the one business willing to put itself forward. Secondly, the point has been made as to whether franchises such as Bargain Booze are suitable. Unique Wines is obviously an alcohol-selling business, but we have not seen any notable impacts as a result. Frankly, if such a business is willing to take a risk when no others will, I will support it.
Thirdly, the point was made about the post office as a financial services provider. My hon. Friend the Member for East Worthing and Shoreham had a great idea. Given that such a large part of the customer base is pensioners, and that we need more high street providers to provide equity release solutions to pensioners for social care, perhaps there is an obvious match.
Finally, in a settlement where there are more than 5,000 residents who have had no post office for six months, I would like to see the post office provide both the base and the postmaster for the future.
Stella Creasy (Walthamstow) (Lab/Co-op)
Today’s debate is not about being against change. Those of us who have concerns recognise that the world is a very different place. I will wager there is nobody here who managed to do a degree with the help of Wikipedia. Indeed, some of us have jumpers older than the internet. [Interruption.] I have to say I have seen them on the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith). However, the question is about what drives the changes. Opposition Members are concerned that changes driven by the market alone rarely deliver the best outcomes for the public and often end up hitting the poorest hardest. Of the changes and closures that we have seen in the past couple of years, 40% have been in poor urban communities such as my own. Indeed, under the latest proposal, two post offices in Walthamstow are threatened.
In the short time available, I want to flag up a couple of points with the Minister. First and foremost, closures are not happening in a vacuum, but against a backdrop of bank closures, as many of my colleagues have said. I caution the hon. Member for East Worthing and Shoreham (Tim Loughton) because, with the closure of banks and the services that post offices provide, it is simply not the same for residents. They might be able to get cash out or do a balance enquiry, but they can do precious little else. That matters in communities such as mine.
I disagree with the hon. Member for Bexhill and Battle (Huw Merriman), who said he is happy to see franchises with anybody and everybody. I am not sure we want shots with our stamps, and I am certainly concerned about the evidence that services have deteriorated in franchises with WH Smith, particularly in terms of disabled access and queue times.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
I agree with my hon. Friend. I am concerned that I have been unable to get any figures on profitability for the New Cross Gate post office. The Minister needs to ensure that we get that information.
Stella Creasy
I complete agree. For those of us facing closures such as those in Walthamstow and on Lea Bridge Road—our main post office is in Walthamstow—the question is the alternative future. What could make them sustainable, not as white elephants in the provision of public services locally, but as jewels in the crown? For me, that comes with the role of financial services, particularly the missed opportunities with the link-up that could happen with organisations such as credit unions. I know that some Government Members did not think DWP services should be part of our post office system, but there is an opportunity when it comes to financial services.
We know that under-banking is still a major problem in this country. Some 2 million people have no access to a bank account, including 8% of all 18 to 19-year-olds. We know there is rising debt in our communities. We see it in our surgeries. In London alone, we see people who have too much month for their money and there are big increases in consumer borrowing, so the credit union is never more needed. It is a missed opportunity. I want to hear the Minister tell us why in six years of the Government talking about working with credit unions, we have not seen a link-up with post offices. We know that the trade unions, which have done fantastic work uncovering the impact of the closures on communities such as mine, would support such work. In my local area, the Government have not even asked the credit union whether they could work together, and they are talking about closing two local post offices. They now say the consultation is over and it is too late to start that conversation.
We must not lose the opportunity to build the financial inclusion that all of our communities need by bringing those two communities together. As the hon. Member for East Worthing and Shoreham has pointed out, there is a very different future for post offices in France, rooted in those financial inclusion services. What is the Minister doing to bring credit unions, not Jägermeisters, into our post offices, to give them a properly sustainable future that will serve everyone in our communities?
Ian Murray (Edinburgh South) (Lab)
I am grateful to the hon. Member for East Worthing and Shoreham (Tim Loughton) for securing this incredibly important debate. I was the shadow Minister for postal services for most of the last Parliament and was told by many Ministers that this closure programme would be the last, in order to make the Post Office sustainable. It appears that that is not to be the case. I remember the phrase in the Conservative party manifesto of 2010—that dusty tome now on the shelves of political history—that said that the Government would make the Post Office the front office of Government. They have done little to do that, which has led to the situation today, where we have a number of post office and Crown office closures, including the incredibly popular Morningside post office in my constituency.
Having been in this place for seven years, I may be cynical, but I do not see the Morningside post office franchising system as being about franchising—it is about closing the post office. I remember doing a public meeting in Alloa when the first Crown post office franchising policies were going through. The Post Office was pressed on what would happen if a franchisee did not come forward to take on one of those post offices. The answer was, “We would probably have to invest in it.” I would suggest to the Government that they have perhaps got this a little bit round the wrong way. They should be investing in our post offices to make them places on our high streets that people can use, enjoy and access the services they need.
We have a crisis on our shopping streets and high streets. Clearing banks are closing their branches—incidentally, if a clearing bank closes its branch on a local high street, people get a letter to tell them they can use the post office for the services that it will no longer supply. Local shops are in trouble. Pubs are in trouble. The post office is the iconic place on the high street that drives footfall, drives pride in the high street and gives stability to the operations of retail units. As an aside, it is not just the franchising and potential closure of Morningside post office that is not helping in terms of the high streets in my constituency; the rates for some retailers in some of those shopping districts have just gone up by more than 100%. That is surely unacceptable if we want our high streets to thrive.
Ian Murray
I would love to, but we are going to struggle to have enough time to get everyone else in.
I have seen the financial figures for the Morningside Crown post office. It is financially viable for the Post Office to run it, but it is financially unviable for anyone else to go in, given the capital and rental payments required to make it a sustainable business, which makes me suspicious that it is just a vehicle for closing the post office.
It is time to make the post office the front office of Government. The Minister has to abide by that phrase and do something that the previous 2010 to 2015 Government did not, and invest in our Crown post offices.
Clive Lewis (Norwich South) (Lab)
I am grateful to the hon. Member for East Worthing and Shoreham (Tim Loughton) for securing today’s debate on this extremely worthy subject, given that it could be one of the last debates we have in this Parliament. I declare an interest as a proud trade unionist. I believe that the Communication Workers Union has done as much as anyone. It has put post office closures at the forefront of political debate and campaigns in communities, such as the one I represent in Norwich South, to defend vital public services—the Post Office is a vital service.
The issue needs to be aired thoroughly, not least because of the job losses that sit behind the closures, and the substitution of good jobs with insecurity, and not just because it shows the Government’s contempt for those who responded to the closure consultations, who contributed time and expertise, and took the process seriously, only to be met with silence from the Government. Perhaps the Minister could today touch on the reason for that.
It needs to be aired not just because the closure of Crown branches is very likely to have a negative impact on the Post Office’s overall revenue—some might describe that as deliberate managed decline. For me, a key issue that draws the impacts together is this Government’s attitude to communities and those who live in them. When branches are closed or franchised, the lives of many of the people we are here to represent get a little bit worse. The small amount of research that we have points to a longer time spent queuing, lower levels of expert advice and poorer disabled access—in short, a poorer service.
I feel strongly that we must add to that a further erosion of what it means to live in vibrant community—a place that has resources and services that are not dependent simply on the ongoing existence of WH Smith; where people and the details and experiences of their lives count; where the expertise of those such as postal workers is valued; and where we can rely on their support to run our businesses, send parcels to our families, and send and receive goods. We do so in the knowledge that those serving us fully participate in our community, and that those with disabilities can be part of that normal life.
Every week we make 17 million visits to post offices. That is not a niche activity but part of ordinary life. Chipping away at that is yet another example of this Government’s thinning out of everyday life. Those are policy choices and those who make them erode the quality of people’s lives.
Andy Slaughter (Hammersmith) (Lab)
We have seen the decline of a great British institution over a long period of time, and it is one that the public are very attached to, not just on sentimental grounds, but on practical ones. There has been a radical shift in the delivery of postal services, and not for the good. There has been a contraction in the network of about a half over a period of time, and a withdrawal of support.
Ten years ago, there was a major closure of sub-post offices, but on that occasion, at least the Post Office listened. Eight sub-post offices were threatened with closure in my borough. With a very vigorous campaign, we managed to keep five open. That left us with a viable working network. Unfortunately, despite successive Governments promising that there will be no further closures, what has happened since then is almost as bad: main post offices are moving to less good sites because they are cheaper, and there are what are described as temporary closures, which sometimes run into months or years.
Let me explain what I mean with reference to what is happening at the moment in Shepherd’s Bush, the second main town centre in my constituency. At the moment, the last of our Crown post offices is very busy, with queues out of the door. The staff are incredibly good and have been there a long time—they are even quite famous because they often feature in the columns of the comedian Richard Herring, who is a regular user of that post office. That office is being forced out of its current premises. I spent many hours trying to negotiate another location in the town centre, particularly the West 12 shopping centre, but it is going to the Westfield regional shopping centre, which is very inaccessible to local people because it will go into the back of a WH Smith branch.
The WH Smith deal is good for the Post Office because it is cheap space. It is good for WH Smith because it increases footfall. It is not, on the whole, good for customers. Therefore, I am pleased that we are retaining our last Crown office, but it is in a much less satisfactory way. The Post Office’s concession—it has at least listened on this—is to provide a new sub-post office in the town centre of Shepherd’s Bush. Unfortunately, I see little prospect of it finding a location, because the two nearest sub-post offices have been closed—one in White City since last year and one on St Anns Road for two years. Both of them serve large, very deprived communities—the White City estate and Edward Woods estate. They are also growing communities because there is a lot of development in the area.
I fail to see what is going wrong. We must have a continuing network. We cannot have those temporary closures. They are happening because the offer made to shops and to existing sub-postmasters is simply not good enough. As other Members have said, this is part of the decline of our high streets—the loss of banks and markets and of everything that local people rely on.
Alex Cunningham (Stockton North) (Lab)
In 2014, the post office on Stockton High Street was downgraded from a Crown office to a lesser franchised branch buried away inside a WH Smith store. At the time, I likened that to privatisation through the back door. It ignored the public consultation that took place and put staff at risk of losing their employment. Last year, the Norton post office was franchised and moved half a mile away from the high street and main shopping thoroughfare, again to be buried inside a shop. Then in January this year, the Post Office announced that it would be closing the Billingham Crown office branch, making it yet another franchise. It is therefore more than a little ironic that, within the past few days, I received a briefing from the Post Office that talked about bank closures and about how it could help to fill the service gap. The hon. Member for East Worthing and Shoreham (Tim Loughton) talked about the opportunities, but if we do not have a robust post office network, branches will not be able to deliver their usual services, never mind others on behalf of the banks, which are axeing their branches on our high streets more and more.
Citizens Advice pointed out that 88% of people think that their local post office has the same or more importance to their local community than it had five years ago. The Government should adopt its recommendations by confirming appropriate levels of funding to maintain the current network and raising awareness about public consultations on the closing or franchising of branches.
The Communication Workers Union sent me a great brief outlining the key issues and wrote to me about the idea of a post bank, which I support. It talked about the impact on customers, queue times, service times, disabled access, customer service and replacing good jobs with insecure employment—the majority of staff in a Crown office will leave when it is closed and a franchise partner is found. The Post Office will not confirm how much public money is given to retailers such as WH Smith. Perhaps the Minister can enlighten us. There is also a wider social and economic impact with the loss of jobs and the physical removal of the shop from the high street. Those are all valid and strong points.
If we do not fight and challenge the proposed changes and closures—the post office in every single major community in my constituency has been downgraded—it will be to the great detriment to our constituents, who rely on us to speak out for them. I just hope the Minister will rattle some cages.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member for East Worthing and Shoreham (Tim Loughton) on securing this debate and on setting the scene so well. I thank him for giving us all a chance to speak by curtailing his time.
I am an advocate of the Post Office. I represent a community that is both urban and rural, and I have long been concerned about the isolation of my constituents—my rural constituents in particular—who rely on the Post Office. That reliance is greater in the Ards peninsula and Strangford—the area I represent—because the banks are closing. As other hon. Members have said, when banks close, they always state that they have an agreement with the local post office, but when the post office closes, people have to jump on the bus and go on long journeys on already limited public transport to towns to access banking services.
The news in January that the Post Office would close 37 of its largest branches, leaving more than 300 people out of a job, was shocking and unexpected. Although I understand that the idea behind franchising branches is to keep services
“where customers want and need them”,
and to allow post offices to operate in rural areas, the fact that the large post offices are under pressure does not bode well for smaller post offices.
During the five-day strike, members of the Communication Workers Union referred to jobs and pensions. Branch closures, including the proposed closure of my local branch, have unsettled them. The fact that the Post Office is now seeking partners for 37 of its directly managed branches as part of its effort to secure its services in communities around the UK has added to workers’ job uncertainty.
The fact is that each and every one of us as MPs has fought hard to ensure that benefit payments are made to post office accounts. The number of post offices has reduced by some 50% in the past 30 years, and people are uncertain about where they will be employed. Staff must have more security. I have been told that staff confidence levels are at an all-time low, and morale levels are at a critical level. I call on the Government to respond as a major stakeholder and investor in the Post Office, and I urge the Minister to confirm that this rate of closure will not continue and that there will be investment to enhance, rather than cut, services.
Just before Christmas, I received word of the strike action that was to affect my area. The letter stated:
“As you may be aware, the CWU has called for further strike action, on 19th , 20th and 24th December, in 300 directly managed Post Offices and, on 22nd and 23rd December, in our cash distribution operation.
I would like to reassure you, and your constituents, that people working in 97 percent of our network—the 50,000 individuals who work in over 11,000 independently-run Post Office branches—will not be involved in this industrial action.”
Those are not accountancy figures. They are people who work hard to pay their mortgage and who need our support. That is what I am doing now, and I ask the Government to do the same and to offer the support that is needed, not just for the workers in post offices but for those who use post offices across Strangford, the Ards peninsula and the whole of the United Kingdom of this great nation of Great Britain and Northern Ireland.
Marion Fellows (Motherwell and Wishaw) (SNP)
It is a pleasure to serve under your chairmanship, Sir Edward. I thank the hon. Member for East Worthing and Shoreham (Tim Loughton) on securing this debate. It is testament to how passionately people feel about this issue that so many Members are here fighting for their local community in the last week of this Parliament. I expected to walk into an almost empty room, but I am amazed and delighted that so many people are here.
This is the second time I have spoken on this issue. I could not possibly sum up everything that everyone has said, but I can give examples from my own area. Motherwell is about to lose its post office, which is situated in the town centre. The number of businesses that will be affected if the closure goes ahead is incalculable. People go to the town centre to go to the post office, to get their pensions and to spend money. We do not have a WH Smith in Motherwell any more. We do not have one in Wishaw, either: it closed very recently. The Wishaw Crown post office closed a number of years ago, and we saw the effect that that had. It was relocated into a nice, good shop which, unfortunately, was not designed to be a post office. Access is difficult and queues snake round what are effectively the old Woolworths long shelves. It does not work. We are really concerned.
The CWU has been out trying to save the Motherwell Crown post office. I conducted a survey of customers, and they are all absolutely incandescent: 84% of the people I spoke to said that they use the post office every week, and they have to queue. People said that if they lose that post office, small businesses that use the post office services will be hugely affected. They do not know where they will go, because we are losing banks in the area. Although there are still other banks, that is not what those small businesses want. They want to use banking services in the post office and do postal work at the same time, because many of them rely on the post office to get things out to customers.
It is really disturbing that, although the Government claimed that they would use post offices as the front office for Government, that has not happened. I have spoken to postmasters and postmistresses, and the loss of Government business has affected their business in general. I could not find any figures about Motherwell Crown post office’s turnover and why it was picked. I was told that it was all commercially confidential. If some Members have accessed that kind of information, why cannot all Members do so? It is not right.
At the end of the day, we need to keep our post offices. We have lost a number of sub-branches, which have moved from very accessible local places further out into estates and housing schemes that are not accessible for the majority of people. They suit the people who are there, who can go to their local convenience store, but they do not suit other people. In fact, a post office in the Motherwell civic square closed, right next to where the local authority has hundreds of workers. They cannot access a post office. If the one in the main town centre closes, there is going to be a loss of work for those in the post office and in the businesses around it.
I feel very strongly about this issue, and I am glad that there is such cross-party opposition to the recent round of closures and the effect it has on the poorest and most elderly in our communities, who use post offices the most. I ask the Minister to put pressure on the Post Office to halt this latest round of closures.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
It is a pleasure to serve under your chairpersonship, Sir Edward. I congratulate the hon. Member for East Worthing and Shoreham (Tim Loughton) on securing this debate. I pay tribute to the Communication Workers Union, which helped us highlight these issues to the public and MPs.
The Post Office is a trusted national brand with a long history. It is instantly recognisable to people across the United Kingdom. It forms part of the everyday fabric of life, offering a wide range of products and services, but it also provides an anchor for communities, decent jobs and, importantly, access to services in rural or urban deprived areas. Instead of making the Post Office fit for purpose for the 21st century, the Government have let that well-loved and trusted institution fall by the wayside and contributed to its managed decline. The Government are intent on privatising our public services. They used to say that they would support a robust Post Office, which former Prime Minister David Cameron promised would be the front office for Government, but they have totally failed on that promise by overseeing a steadfast strategy of cuts to the service that have caused thousands of job losses as well as a decline in the services provided.
The Labour party has made it clear that it would halt further privatisation of the Post Office and instead invest the £80 million of public money that goes into it to ensure the long-term sustainability of branches and services. We will ensure that services are retained and promoted, click and collect facilities are expanded, and banking and financial services, which we know are vital to financially excluded people, are provided.
There were 62 closures and franchising programmes and 500 job losses from the Post Office’s cash handling section in 2016, and more than 2,000 jobs have been lost in total since 2016. On 10 January 2017, it was announced that a further 37 Crown post offices would go under the same franchising scheme, meaning that 300 experienced post office staff and some 127 financial specialist roles will be cut across the network.
Crown post offices typically are directly owned and run by the Post Office. They have directly employed staff and they are often located on prominent high streets. Although there are only 286 Crown branches, they bring in a significant amount—between 10% and 20%—of the Post Office’s overall revenue. Privatising Crown post offices and transferring them into shops such as WH Smith hugely compromises the services provided, causing overall consumer satisfaction to fall, longer waiting and servicing times and poorer access for disabled customers. There are 10% fewer counters per branch in WH Smith branches than in Crown post offices, and 17% fewer foreign currency and business banking positions. At least 30 postmasters have retail businesses in a Bargain Booze franchise.
Not all franchises have worse provision than before, but the overall trend is saddening. Recent independent research for the Government showed that the Post Office continues to deliver more than £4 billion in social value each year to people and businesses throughout the UK.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
My hon. Friend highlights research that proves that the service deteriorates when post offices move into WH Smith branches. When we add the fact that 40% of closures are in the most deprived urban communities, we can see that the most disadvantaged people in this country are in dire straits when it comes to having access to a good post office.
Gill Furniss
I completely agree. It is saddening that people in deprived areas get further and further away from accessing the financial services that are necessary to them.
The privatisation of Royal Mail was, quite simply, the transfer of large sums of public money to the already well-off. Since that privatisation, the Government have promised a transformative vision for the Post Office as
“a genuine Front Office for Government”,
and a significant expansion in its banking services, but neither of those promises have borne fruit. Post Office revenues from Government services have fallen by some 40%, and its income from financial services has risen by only 2%—it has not even kept up with inflation. The Government talk about cost-cutting measures, but £3.3 million was spent on refurbishing branches that were then franchised in 2016, at an average cost of £100,000 per branch.
I was pleased that the Government initiated a consultation about the Post Office last December. At that time, the CWU delivered 75,000 postcards signed by members of the public calling for the Post Office—the “People’s Post”—to be saved. Only weeks later, before a consultation response had even been produced, the Post Office announced 37 more Crown post office closures. In fact, nearly five months later, we still await the Government’s response.
The Government’s track record shows that they have been happy to cut public funding at any cost. They have shied away from communicating with the people affected. The Government’s response to the consultation that closed on 21 December has been delayed. Will the Minister tell us when she planned to publish that response? Why have financial services been cut instead of a promoted? Why have we not looked at the example of a Banque Postale in France, which has successfully provided income for the Government and, crucially, financial services for those who need them most? What contingency plans are there for franchises that are coming up for renewal and new franchises? The Association of Convenience Stores has major problems with its members who, due to the hike in business rates, may no longer wish to provide franchise services.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) on securing this crucial debate. Today’s attendance and the passion with which Members have spoken about the value of post offices in their local areas shows what an important topic this is. I suspect that, for several of us, this will be our last debate in this Parliament.
The Government certainly recognise the crucial role that post offices play in communities across the country. Between 2010 and 2018, we will have provided almost £2 billion to maintain, modernise and protect a network of at least 11,500 branches across the country. My hon. Friend talked about post office closures. There are more than 11,600 post office branches in the UK, and the network is at its most stable for decades. The number of branches declined substantially in the 13 or so years before 2010, but since then it has been kept absolutely stable. Graphs show that that is absolutely accurate. That is down to the transformation and modernisation of the network, thanks to taxpayers’ investment.
I thank my hon. Friend for his positive remarks about that network transformation programme, which has secured the transformation of more than 7,000 branches. I am sure that I am not alone as a constituency MP in having felt and seen the benefits of that transformation in the branches in my constituency. More than 4,300 branches now open on Sundays, nearly 1 million additional opening hours are to be added to the network every month, and losses have been reduced from £120 million to £24 million. That is a substantial result achieved by management and workers in the Post Office network. The subsidy that the taxpayer is obliged to put in has fallen by 60% since 2012. That is why the network is more stable than it has been for a generation. The Post Office has managed that transformation while maintaining customer satisfaction at more than 95% throughout the programme.
Alex Cunningham
The Minister boasts of the 60% reduction in taxpayer subsidy. Would it not be better for the taxpayer to invest in Post Office services, perhaps prevent some closures and downgrading and therefore maintain services for our communities?
Margot James
I agree that we need to invest in the postal service, and we are doing that. I hope that we shall continue to do so. However, I am afraid that one aspect of investment is making the existing structure of Crown post offices more efficient and affordable. Through the process of modernisation and franchising of Crown post offices, we have been able to reduce losses. That is a way for us to uphold our promise to keep post offices open in poorer and more rural areas that are not economically sustainable. I hope that the hon. Gentleman will at least understand that we are not just closing branches; we are franchising them and making them more efficient. We are then able to fulfil our promise to areas that need a postal service but would not have one if we continued to invest in loss-making Crown post offices.
Margot James
I will not give way. I accept that not all Crown post offices lose money; but the majority of those that have been franchised did.
My hon. Friend the Member for Bexhill and Battle (Huw Merriman) put the case very well for the investment made by taxpayers and the Post Office in the service in his constituency; I join him in congratulating Mr Sanjiv Patel on taking the risk, as many others around the country have done. They have then found that it was good not only for their business but for the consumer. The Post Office is doing more for customers and doing it more efficiently for the taxpayer, and it is ensuring that post office services remain on our high streets throughout the country.
Franchising or hosting some Crown branches is part of the Post Office’s long-term plan to ensure that the network is sustainable. It is not about closing services; it is about moving a branch to a lower-cost model, often in a better location for customers, and securing and improving delivery of services. The change from a Crown to a franchise or host branch has been undertaken previously in many locations and is a proven success in terms of sustaining services, as post offices share staff and property costs with a successful retailer. We have heard examples of that this morning. As I was saying, Crown branches have moved from a £46 million annual loss in 2012 to a break-even position today. That is no mean feat. There are still loss-making Crown branches, which is why I do not think we can stand in the way of the Post Office as it makes its service more efficient and sustainable and more accessible to a wider number of people.
Gill Furniss
The Chamber is packed. What the Minister believes to be the facts, as she has given them to us, do not ring true with the concerns and experiences that even Conservative Members have described. It seems bizarre that when so many of us tell her there are problems she says the Government should not stand in the Post Office’s way; it does not seem the correct response. It seems to me that we have the responsibility; the Government must provide a proper service for all communities. Clearly, the figures that many eloquent Members have given today are at odds with the Minister’s view.
Margot James
I have talked so far mostly about financial issues. It is undisputed that the Crowns were losing £46 million and are now breaking even. There are still some loss-making ones to deal with. I appreciate that changes of the kind we are considering are not easy, especially when they involve staff who have worked in a place for many years. I know that the hon. Lady has had a briefing from the Communication Workers Union, and I have had meetings with it on several occasions; I sympathise with its position. However, it is essential that the business should continue to manage its costs to ensure that it can meet the challenges faced by high streets, let alone the Post Office, now and in the future, as the way we shop and get access to services continues to change.
Several hon. Members made points about Government services, and I agree that in 2010 the Government had hopes that the Post Office could take over many more such services; but the rapidity with which some of them migrated to the internet meant that that hope did not bear enough fruit. The staff in Crown branches that are being franchised have the opportunity to transfer to the franchisee in line with the TUPE process; or they can choose to leave the business. The Post Office offers a generous settlement agreement, which reflects the hard work, commitment and dedication that many employees have shown over the years. However, I reiterate the point that a more efficient Post Office is able to support and supplement thousands of small businesses, as my hon. Friend the Member for South East Cornwall (Mrs Murray) noted; she spoke with great authority about the needs of people in her largely rural constituency. The Government take those needs seriously and have honoured a commitment to maintain a service, even where it is not viable on a financial basis, to people living in the rural parts of her constituency.
Margot James
I will not give way; I have no time left, really.
I agree with the hon. Member for Washington and Sunderland West (Mrs Hodgson) that poorer urban areas also have a great problem with access to local services—it is not just rural areas. I am pleased to tell her that the Post Office is now focusing on that issue. The Post Office is revisiting some poorer urban areas where it closed branches 10 years ago, to talk to retailers about setting up a local post office counter. I hope that that will succeed in the hon. Lady’s area.
Margot James
No; I have very little time.
I want to reassure the hon. Member for Motherwell and Wishaw (Marion Fellows); I listened to her heartfelt concerns about an accessible post office in the town centre in Motherwell, and I will ask the Post Office to meet her again to discuss the most sustainable option for a service there.
Many hon. Members talked about banking, and I agree that that is an opportunity for the Post Office. However, the Post Office bank idea was looked at closely in 2010-11, and it was decided at that time that the money that the Government had would be better invested in the transformation of networks to secure sustainable access to services.
Margot James
I cannot give way now; I have no more time.
The Post Office banking services are increasing now. They have grown 6% in the past 12 months. Credit unions are also being looked at.
Margot James
They are. I will write to the hon. Lady, if I am returned, and tell her what the Post Office plans on credit unions are.
Albert Owen
On a point of order, Sir Edward. As we are at the end of term, and as many of us have raised issues, which the Minister is refusing to give way to answer, can you give me some guidance as to whether the Department will be able to give us the information as quickly as possible?
Sir Edward Leigh (in the Chair)
That, I am afraid, is not a matter for me. I am sure that in the remaining 30 seconds of her speech the Minister will do her best to answer any points.
Margot James
I am not refusing to take interventions; I am trying to conclude my response to Members’ legitimate concerns. I think that I have responded to quite a number; but I must allow time for my hon. Friend the Member for East Worthing and Shoreham to conclude the debate.
Margot James
Okay, but I am not going to fill it with interventions; I am going to carry on.
Hon. Members have said that post offices do not have click and collect services, but I want to reassure them that there are 10,500 local post offices that do provide those services. That is another area of potential growth. I invite Members to write to me if their constituency branches do not have them; we will look into it. As to the allegation about hours being reduced in convenience stores, I am pleased to confirm that that is not the case. Opening hours are not decreasing in the fullness of time.
Stella Creasy
The Minister has just told the House that the Post Office is working with credit unions, but that is not what they tell us; they say that they are open to doing so, but that nothing has happened in the past five years. The Opposition are all talking about financial inclusion; will the Minister commit to revisiting the issue and actively working with alternative providers who will deliver?
Margot James
The Post Office does work with credit unions where it can, but there is a common link through the Co-op in some transactions. The difficulty has been—and as the hon. Lady is an expert on credit unions perhaps she can help us to solve the problem—not having a common banking platform. When a common banking platform has been developed, further inter-working with credit unions should be possible. We take financial inclusion seriously.
I want to talk a little more about banking; I think that my hon. Friend the Member for East Worthing and Shoreham is happy for me to continue.
Motion lapsed (Standing Order No. 10(6)).
Dog Attacks on Dogs
(6 years, 11 months ago)
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Nicky Morgan (Loughborough) (Con)
I beg to move,
That this House has considered police force and local authority guidance on dogs attacking other dogs.
It is a pleasure to serve under your chairmanship, Sir Edward. I am delighted to open the debate, the aim of which is to raise the issue of dogs attacking other dogs and to call for effective legislation and guidance to help tackle the problem.
Dangerous dogs are clearly a serious problem. While we know that dogs can attack humans, sometimes with tragic and even fatal consequences, in recent years there have also been a number of high-profile dog attacks on other dogs, which are often caused by irresponsible owners failing to keep control of their animal. That is exactly what happened to one of my constituents, Jill Mayes, and her cocker spaniel, Ozzy. In 2013, Ozzy was set upon in a local park by two large dogs that had been let off their leashes. Thankfully, Ozzy survived the attack, but the experience has traumatised them both to such an extent that my constituent will no longer go to that park and Ozzy’s confidence remains shattered.
Sadly, another of my constituents has also been left traumatised, after her Jack Russell cross was killed by a Rhodesian Ridgeback while out for a walk by the Grand Union canal near their home in my constituency. To make matters worse, the owner of the other dog refused to take responsibility for the attack, leaving my constituent to cover all of the vet bills. Both of my constituents were told by police that the incidents were classed as dog on dog, meaning no criminal offence had occurred and therefore no criminal charges could be brought.
Those cases are in no way uncommon. At the end of last year, I put in a freedom of information request to all police forces in England for information on how many dog-on-dog attacks had been reported in the past two years—14 of the 39 forces that responded held easily accessible data on that type of incident. In those 14 areas, there were more than 1,700 reported dog attacks on other dogs. Sussex police alone recorded 828 such attacks in the past two years, while the force responsible for my constituency—Leicestershire police—recorded 32 incidents of a dog attacking another dog, and an additional 82 cases in which a dog attacked both a dog and a person in the same incident. That is clearly very concerning, and it is important that police forces and local authorities have the powers that they need to tackle the problem and reduce the number of attacks.
I have worked on this since becoming a Member of Parliament, and in 2013 I was delighted to support a campaign led by two of my constituents to highlight the problem. As part of that, we submitted a petition to the Government asking for the law to be tightened and calling for the same legal rights for dogs when they are attacked as currently stand for humans and guide and assistance dogs. The petition collected 2,080 signatures and received the backing of a number of animal charities, including the Dogs Trust, the Blue Cross, the RSPCA and the Kennel Club. I was pleased that the then Minister for Policing, my right hon. Friend the Member for Ashford (Damian Green), visited Fearon Hall in my constituency to hear first-hand the problems faced by dog owners and to collect the petition. His enthusiasm for the campaign was welcomed by local residents.
Since then, the Anti-social Behaviour, Crime and Policing Act 2014 has been passed into law, which provides police forces, local authorities and courts with greater powers to respond to cases of antisocial behaviour involving a dog before the situation becomes dangerous. When considering whether a dog is a danger to public safety, courts have to consider a number of relevant circumstances, including whether the owner or person in charge of the dog is a fit and proper person to look after it. I am pleased that that gives courts the ability to intervene earlier to prevent attacks on people and other dogs.
I recognise that the Act also strengthens the Dangerous Dogs Act 1991 and improves the response where a dog presents a risk to public safety. For instance, the offence of owning or being in charge of a dog that is dangerously out of control has been extended to all places, including the owner’s home.
Mr Jim Cunningham (Coventry South) (Lab)
I congratulate the right hon. Lady on securing this timely debate. She will recall that, only a few months ago, police had to shoot a dog in the street because it was totally out of control. I am concerned by the number of cases of babies being attacked by dangerous dogs. In my view, the prison sentence—it is only six months—for allowing that should be extended a lot further. I support everything she has said.
Nicky Morgan
I thank the hon. Gentleman for his support, which shows that, although the Chamber may not be packed, this is a great concern right across the country in all of our constituencies—I also know that from looking at social media. He is absolutely right, and I will come to sentencing and the fact that incidents can sometimes lead to personal injury or even fatality, particularly of young children. He makes an excellent point.
The amendments to the 1991 Act extended the maximum penalty in a case involving the death of a person to 14 years, to five years where a person is injured and to three years in any case involving the death or injury of an assistance dog. That is welcome, but it still does not give the legal rights to dogs when they are attacked that it gives to humans and guide and assistance dogs. It is important that all dogs have the same protections, and that local authorities and the police have the power to properly punish the owner of the dog responsible. I am interested to hear more about the Minister’s current thinking on that.
As well as the 2014 Act, Ministers have introduced new powers to help frontline professionals to tackle antisocial behaviour involving dogs. Police and local authorities can intervene and issue community protection notices if a dog is causing a nuisance by repeatedly escaping or acting aggressively, while the owners of such dogs can be required to take a range of remedial action, such as attending dog training classes, keeping the dog on a lead in public or repairing fences to prevent the dog leaving their property. Those are clearly steps in the right direction.
However, that brings me to the other reason that I applied for the debate: local authorities and police forces need to be made properly aware of the existing powers the Government have provided to successfully tackle the problem. I know the Minister is working on this. Last December, the Department for Environment, Food and Rural Affairs animal welfare team issued a voluntary survey to police forces, local authorities and social landlords on measures to address dog control and reduce dog attacks in England. The survey’s aim was to inform the team of the existing measures’ effectiveness, and to allow it to identify how intervention can be made more effective with minimal burden on enforcement agencies. I look forward to hearing the outcome of that survey.
Charnwood Borough Council in my constituency responded to that survey and raised some interesting points that I will raise with the Minister. First, it feels that the incremental approach to processing dog attacks, as well as the need to prove persistence, makes the process lengthy, which can often lead to frustration for the victim. The need to prove a breach of process means that a dog has to attack three times before the owner can face the ultimate sanction of prosecution. That is clearly concerning because it provides the opportunity for a dangerous dog to attack two further times with potentially tragic or fatal consequences for another dog, or even a child or adult, exactly as the hon. Member for Coventry South (Mr Cunningham) has said.
Sadly, that is what happened in another case that I am assisting with. My constituent’s niece, four-year-old Lexi Branson, was killed by a dog at her home in the constituency of my hon. Friend the Member for Charnwood (Edward Argar). Her family had adopted the dog from a local rehoming centre and were unaware that it had previously attacked another dog. I will raise specific issues from that case with the Minister separately, I wanted to mention it today because it demonstrates the need for urgent action to be taken to ensure that a dangerous dog is not free to attack again. I cannot emphasise enough that, just because a dog has attacked another dog, it does not mean that there might not later be an attack on a human involving serious injury or potentially fatal consequences. One fatal incident is one incident too many. I would welcome the Minister’s comments on that.
Mr Cunningham
I am sure the right hon. Lady agrees—we do not want imbalance in the debate—that the other side is human cruelty to dogs. The Battersea Dogs and Cats Home has made proposals, which I support, and I hope the Minister will say something about them.
Nicky Morgan
The hon. Gentleman is absolutely right. I welcome the Battersea Dogs and Cats Home campaign to stiffen the sentences for animal cruelty. There are some truly horrific cases of animals being mistreated.
I do not intend to labour the point, but there is also the issue of irresponsible ownership. As candidates, I suspect we have all been in situations, and perhaps will be in the next few weeks, where we are walking up a path, intending to knock on the door or deliver a leaflet, and are faced with a rather angry looking dog. The owner may say it is friendly, but we are never entirely sure—I see you smiling, Sir Edward—whether it really is friendly or has a particular appetite for canvassers. [Interruption.] The hon. Member for Coventry South speaks from personal experience.
Returning to the survey, Charnwood Borough Council finds the guidance provided helpful but feels that it can sometimes be too generic. For example, the advice on criminal behaviour orders is difficult to apply to a case involving a dog. The council has therefore suggested that it would be useful if the guidance were made more specific to dogs being living beings rather than property, and if it dealt with the issues that arise for the welfare and cost of keeping the dog once action—for example, seizure—has been taken. It would also welcome more advice on escalating cases when there is no other option but for the owner to forfeit the dog.
I am pleased that Charnwood Borough Council has a good compliance rate of around 91% when it issues a warning to owners at the first stage of a community protection notice. However, the council feels that there is a lack of clarity in the Government’s guidance on whether a case should be handled by the police under the Dangerous Dogs Act or as a civil case by the local authority. I note that all Leicestershire local authorities have a memorandum of understanding with the local police about who handles each type of dog attack, but the council has said to me that it would like to have more formal guidance. I would be grateful if the Minister would consider those points as part of his Department’s review.
It is clear that dangerous dogs continue to be a serious problem in our local communities. Of course, many tens of thousands of dogs are walked responsibly every day, and their owners take great responsibility for them and go about their daily lives with no incidents or trouble whatsoever, but there is a problem. The freedom of information numbers show that the level of incidents is serious, but I pay tribute to those who look after their dogs well, deal with any aggression and take responsibility.
I welcome the positive work that previous Governments and the current Government have carried out to help tackle this problem, but I believe that the law needs to be tightened further to ensure that dog attacks on other dogs are a criminal offence. That would bring the legal rights of dogs in line with those of humans and guide and assistance dogs. In addition, it is crucial that local authorities and police forces have comprehensive guidance available to them that details all the powers at their disposal to prevent the tragic consequences that can arise when dangerous dogs attack.
I am grateful to the House authorities for allowing me to bring this debate to the Chamber. I know the Minister is committed to animal welfare and all related issues, and I look forward to hearing his response.
The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)
I would like to begin by congratulating my right hon. Friend the Member for Loughborough (Nicky Morgan) on securing this debate on police force and local authority guidance on dogs attacking other dogs. I understand that it must be incredibly traumatic for owners whose dogs are attacked by other dogs, particularly as the owner is often a witness of the attack. She described two incidents, and I would like to express my sympathy for her constituents, the owners of Ozzy the dog and of the terrier that was attacked by a Rhodesian Ridgeback. I completely understand that it is an incredibly distressing time. It is completely unacceptable for owners to allow their dogs to be dangerously out of control, whether it is around people or animals. Attacks of this sort can affect animals’ confidence and lead to dogs changing their behaviour and becoming afraid of going out.
Over recent years, the law on out-of-control dogs has been strengthened, and the Government looked at that area in the previous Parliament quite closely. The Dangerous Dogs Act 1991 now applies the offence of allowing a dog to be dangerously out of control to all places, not just public places or places where a dog has no right to be. That means dogs need to be under control in all places and at all times. As my right hon. Friend said, that is of particular relevance to those of us who will be delivering leaflets and going on to people’s property. I am sure we have all had experiences of dogs in those circumstances.
The law also makes it a specific offence to allow a dog to attack an assistance dog, for which the maximum penalty is three years’ imprisonment. As my right hon. Friend pointed out, we introduced that provision recently. The reason for specifically including an offence in relation to attacks on assistance dogs was to emphasise people’s dependence on them. It was considered that an attack on an assistance dog in these circumstances was an aggravated attack and almost an attack, by extension, on the individual person.
There are real problems with attacks on assistance dogs. A huge amount of work goes into training those dogs. There have been many sad examples of assistance dogs that, despite all the work to train them, lose their confidence to do their job as a result of a one-off attack and have to be retired from duty. That is why we took the view that assistance dogs were a very special case.
Other penalties under the 1991 Act were also increased significantly. In particular, the maximum penalty for allowing a dog to be dangerously out of control was increased from two years’ imprisonment to 14 years’ imprisonment in cases where it results in the death of the victim, and five years’ imprisonment where the victim suffers serious injuries.
Other laws were introduced as preventive measures. Measures under the Anti-social Behaviour, Crime and Policing Act 2014 allow police and local authorities to take action in low-level incidents of antisocial behaviour, including those that involve a dog, where the dog is causing a nuisance but no offence is committed under the Dangerous Dogs Act. In such circumstances, police or local authorities can take action by issuing a community protection notice to the owner or person in charge of the dog at the time, ordering them to control the dog and stop the nuisance behaviour. Failure to comply with a CPN can lead to a fine of £2,500. That power means the police and local authorities can take action before a dog becomes dangerously out of control. A criticism of the Dangerous Dogs Act was that it dealt with issues only after they had happened. Many animal welfare organisations, dog-keeping groups and veterinary organisations campaigned for the introduction of those types of notices.
For more serious incidents of antisocial behaviour, such as using a dog to actively intimidate someone, there is the criminal behaviour order. A CBO would be used in cases where a court was satisfied that an individual had engaged in behaviour that caused or was likely to cause harassment, alarm or distress. Finally, for more general matters, there are public spaces protection orders, which place restrictions on dogs using clearly defined areas such as children’s playgrounds or sports fields. PSPOs are aimed at all dogs rather than individual dogs.
My right hon. Friend the Member for Loughborough reported that Charnwood Borough Council wants to see dog-specific guidance on the antisocial measures. In October 2014, to assist local authorities and the police, DEFRA published a practitioners’ manual entitled, “Dealing with irresponsible dog ownership”, which provides practitioners with guidance on how to use the antisocial behaviour measures specifically in relation to dogs. I was a Minister in DEFRA at the time. I did not have responsibility for this part of the portfolio, but we had a debate in 2014 in which a number of people said that we should adopt measures similar to those in Scotland, where there are specific dog protection orders. Our legal analysis was that community protection notices served the same function, but because a number of people had raised concerns about whether they could be applied to dogs, I asked my noble Friend Lord De Mauley, the then Minister with responsibility for dogs, to address the issue, and that prompted the guidance sent in 2014, almost three years ago, to all local authorities.
The practitioners’ manual differs from the Home Office guidance document, which was aimed at the broader use of antisocial behaviour measures and perhaps is what Charnwood Borough Council has read and what my right hon. Friend has referred to. My Department’s practitioners’ manual can be found on the gov.uk website, but after this debate I will arrange for my office to send her office a paper copy of it.
Mr Cunningham
Will the Minister express a view on the Battersea proposals, to balance out the argument?
George Eustice
I am sorry, but I have lots of proposals from Battersea and I am not sure which ones the hon. Gentleman has in mind. I come back to the point that we issued very specific guidance on how CPNs could be used.
George Eustice
I will give way again if the hon. Gentleman is going to clarify the point.
Mr Cunningham
Simply put, there is a proposal for longer sentences for people who abuse animals.
George Eustice
I refer the hon. Gentleman to a debate that took place on that very matter a few weeks ago. The Sentencing Council recently issued new guidance, which took effect this week, that makes it far easier for courts to award custodial sentences at the upper end of the range for those sorts of offences. Obviously, sentencing is a matter for the Ministry of Justice, and I am sure that it keeps those issues under review.
My right hon. Friend the Member for Loughborough said that the police claim that there is a three-strikes rule and that unless a dog has attacked three times, prosecutions cannot be brought and a community protection notice cannot be used. I am reliably informed by my officials that that is not the case. There is nothing in the law that says that there must be three offences. The Dangerous Dogs Act can be used the first time there is an offence. There is nothing in the law that stipulates that there must be three offences before a CPN can be issued. I therefore think that there is an issue, which I was going to come on to, about enforcement. It may be that sometimes police forces that are reluctant to look at these issues because they want to focus on other things will come up with internal operational procedures of that sort and internal operational guidelines, but those are created by the police and are not a matter of law.
Nicky Morgan
I thank the Minister very much for that clarification; it is really helpful to hear it. I will certainly pursue it with Charnwood Borough Council, but I have to say that I think Charnwood is a very responsible authority. As I said, it works closely, through the MOU, with Leicestershire police, so if they are labouring under misapprehensions, I suspect that that is very widespread among local authorities and police forces. One purpose of today’s debate was for MPs to express their concerns and for the Minister to show how seriously the Government take these incidents. Does he think that it might be worthwhile to write to local authorities to reiterate some of the powers that they have?
George Eustice
My right hon. Friend is absolutely right. I very much welcome this debate, which is timely. As a Minister in DEFRA in 2014, I felt that we had addressed this matter by issuing the practitioners’ guidance, but although I accept that the powers are available for local authorities to use in all sorts of situations in which dogs are causing problems, I also accept that there are still many instances of dogs being out of control. That is why, as my right hon. Friend pointed out, my Department has been looking at whether the powers are being used by the police and local authorities and, if so, what effect they are having. And that is why, as she said, we issued a voluntary survey. We invited all police forces and local authorities in England and Wales to respond to the survey about the use of those antisocial behaviour measures.
We received many responses to the survey and are currently analysing them. I am told that we expect to complete that analysis by the end of May, so while we are all busy avoiding dogs on the doorstep during the election campaign, officials will be studying those responses, but I understand that initial indications and impressions from the evidence that we have received are that there remains some misunderstanding about the powers that are already available to local authorities and police forces and, if that is the case, we will obviously want to ensure that we raise their awareness of the powers that they have.
The focus of this debate is obviously dog-on-dog attacks. As I mentioned at the start of my speech, section 3 of the Dangerous Dogs Act makes it an offence to allow a dog to be dangerously out of control, regardless of where it is. It is a long-held belief among enforcement agencies that so-called dog-on-dog incidents cannot be dealt with under the 1991 Act. We do not believe that is the case. The 1991 Act provides a definition of when a dog must be regarded as dangerously out of control. That refers to a dog being dangerously out of control when there are grounds for reasonable apprehension that it will attack someone. However, that definition is not exclusive. The words of section 3 could include, for example, a case in which a dog attacks another dog or other animal.
There is case law in this area. In 2008, a Court of Appeal judgment specifically pointed out that the definition of “dangerously out of control” in section 10 of the Dangerous Dogs Act is not exclusive, and made it clear that the ordinary meaning of the words in section 3 should be applied to any given circumstances. The case in question was the Gedminintaite case. The Court said that it was inclined to go further than existing case law. It stated:
“In any event, the definition section, section 10, is not exclusive. It does not read as a matter of construction, ‘for the purposes of this Act, a dog shall only be regarded as dangerously out of control...’ and then proceed to the definition. Therefore we feel ourselves entitled to go back to the straightforward words of section 3”.
Our lawyers believe that that does indeed mean that there are instances in which the Dangerous Dogs Act could be used for dog-on-dog attacks, but I appreciate that there is a widely held view that it cannot. Our officials can of course consider that as part of their wider review of the evidence that we have received from the survey that I mentioned.
I again congratulate my right hon. Friend on this timely debate. I am sure that the contribution that she and others have made will be taken on board by my officials and considered as they reflect on the survey responses that they are looking at now. Although, as I have explained, I believe that the law already allows police and local authorities to take action in incidents involving dangerously out of control or even just nuisance dogs, I completely agree that there are some issues about consistency of enforcement. That is why the review of evidence and survey responses is going on. I look forward to seeing the results of that, and no doubt my right hon. Friend will also follow it closely.
Question put and agreed to.
Food and Farming: Employment Opportunities
(6 years, 11 months ago)
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Derek Thomas (St Ives) (Con)
I beg to move,
That this House has considered employment opportunities in food and farming.
It is a pleasure to serve under your chairmanship, Mr Walker. The agricultural sector is essential to the social, environmental, cultural and economic landscape of this great nation. Food production and farming not only make a valuable contribution to feeding the nation but provide employment, help preserve and maintain our beautiful countryside, and contribute to tourism.
Agriculture is the bedrock of the UK food and drink sector. It is the largest manufacturing sector in the UK, providing 3.9 million jobs and opportunities across the country. Some 476,000 people are employed on agricultural holdings across the UK, including full-time, part-time and seasonal workers. In west Cornwall, my neck of the woods, the agricultural sector’s contribution is hugely important, accounting for £1.4 billion of the south-west’s economic output, 8,800 businesses and 27,300 employees. Working in farming or fishing can be an exciting career choice, offering a huge variety of opportunities for highly skilled and ambitious people. It is a global industry that uses cutting-edge technology, innovates constantly and makes important contributions to the national economy.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
As co-chair of the all-party parliamentary group on manufacturing, I agree that food, not aerospace or engineering, is our major manufacturing sector. Is the hon. Gentleman aware that the brilliant further education provision in his area of Cornwall has been largely responsible for its great innovation skills? I wish we had provision as good as that all over the country.
Derek Thomas
The hon. Gentleman is right about the sheer scale of manufacturing in the sector and the good work done by FE in west Cornwall, but the manufacturing opportunities in farming and food production, and the wealth that they share and create, are spread across the country rather than being concentrated in one area.
Sir Greg Knight (East Yorkshire) (Con)
Does my hon. Friend agree that British farmers will be able to promote themselves and their products far more effectively when we leave the European Union and gain control of food labelling?
Derek Thomas
My right hon. Friend may be aware that I held a debate here early last year on food security and the need to create confidence in what we produce. The only way to do so is with clear labelling, so that consumers know exactly what they are buying, know that we are looking after animal welfare and the environment, and know that people are being paid properly. I agree completely that leaving the European Union allows us to provide direction and clarity about those things.
The food sector generates £1.8 billion in value to UK plc. Jobs in the sector range from engineers and scientists, to farm managers and vets. Given that the industry faces the challenges of an ageing workforce, it is clear that, like any industry, it will need a ready supply of new entrants with new ideas, energy and enthusiasm. As the industry becomes increasingly technologically driven and more reliant on its ability to understand and implement the latest science, businesses across the sector will need the right mix of skills among their employees.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
I congratulate my hon. Friend on securing this important debate. I am the chairman of the all-party parliamentary group on youth employment, which reviews unemployment statistics every month. The latest show that just over 500,000 young people are unemployed. Does he agree that the sector provides a great opportunity to tap into some of that talent, upskill those young people and, most importantly, give them a place in the working world?
Derek Thomas
I am sure the Minister will want to comment on that. There are jobs to be filled in the sector—that is certainly the case in my part of the world. The challenge of offering jobs to those young people is ensuring that their schools properly prepare them for the work, so that they understand what is required and have the skills needed. Employers would then provide them with opportunities and training. I will consider apprenticeships and training opportunities later in my speech.
Jim Shannon (Strangford) (DUP)
The hon. Gentleman is talking about jobs. In Northern Ireland, we have 70,000 jobs in the agri-food sector, including 50,000 farmers and workers, 23,500 of whom are involved in food and drink processing. It is worth 3.25% of Northern Ireland’s gross value added and £1.1 billion in basic prices. Does he believe that, when we leave the EU through Brexit, the agri-food sector will be able to grow even more?
Derek Thomas
I completely agree that there will be opportunities to invest in, grow and encourage food production and farming. I also recognise that population growth here and around the world means more mouths to feed. The UK has an opportunity to rise to that challenge and ensure that people, wherever they live, have the food that they need to survive. We have an opportunity and a moral responsibility to invest in and empower the food and farming sector to meet our growing needs.
So far, I have concentrated on agriculture, which is natural, but it is important not to forget the economic and social contributions made by the fishing industry. In 2015, fishing contributed £604 million to the UK’s gross domestic product, employing just over 12,000 fishermen—meaning people with fishing expertise—half of whom were based in England. One need only visit Newlyn in my constituency, which the Minister knows well, and see the small open boats, beam trawlers, longliners and crabbers in its 40 acres of harbour to realise how essential fishing is to the region.
It is fair to say that fishing and farming, like other parts of the food chain, face numerous challenges in attracting the right number and quality of new entrants. Some of those challenges relate to the perception of such jobs as low-skilled, low-paid, lacking in career progression opportunities and involving hard physical labour in all weathers. When I was at school, I was frowned on for choosing a vocational career in the construction sector rather than going to university, but times have changed and we must recognise that a job in the countryside is a worthwhile career choice that has many benefits not offered by other careers.
Mr Sheerman
The hon. Gentleman is making a strong case for fishing and farming, which are essential to the economy of Yorkshire, as he will know. However, as we approach the election, will he please address the deep uncertainty in the farming and fishing community about what will replace the present system of farm subsidies and fishing rights?
Derek Thomas
I thank the hon. Gentleman for that intervention—we have until 4 o’clock. I am not gifted with that particular answer, but if we can encourage farmers and fishermen to continue caring for the environment and providing the food and skilled jobs that we need, I cannot see any reason why a Government of any colour would not support that.
Derek Thomas
On exports, we have a wonderful opportunity. We should be proud of and talk much more about the sheer quality and diversity of what we produce. Small and large businesses deliver produce that other people around the world deserve to know about and get their hands on. That is how I would like to approach leaving the European Union.
Other considerations include the rural location of farming and fishing businesses and the cost of rural housing. Also, many young learners consider that it is a career only for those from a rural background. As a result of those challenges, fewer and fewer individuals are interested in pursuing a career in the sector, which is why I requested this debate. We face a generational crisis in the farming, fishing and food sector. According to the Department for Environment, Food and Rural Affairs, only 13% of farm holders in the UK are under the age of 45. That figure represents a decrease of 5% in the last 10 years alone.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
I congratulate my hon. Friend on securing this debate. He makes a good point, because although the Government have had tremendous success in expanding apprenticeships and vocational training opportunities in many industrial sectors, there is a problem in getting younger people engaged in farming. What are his thoughts on taking a more holistic view of farming, in the context of the whole supply chain and the food and drink industry generally, as an opportunity to get young people engaged in training courses?
Derek Thomas
I have personally done some work on that. Only last year, I brought 36 producers, many of them farmers, into Westminster Hall, the Jubilee Room and other rooms of the House, to celebrate their wonderful, innovative work to develop their produce. I wished to expose their produce to the London market and we made some progress. My hon. Friend is absolutely right that we must celebrate all avenues in the sector, so that more and more people see the opportunities.
Derek Thomas
I have always wanted to say that.
According to data from the Department’s farm business survey in 2013-14, the greatest barriers for individuals who want to join the farming sector are the non-competitiveness of salaries, which was cited by 64% of respondents; the lack of job opportunities, which was cited by 55%; and the fact of not owning a family farm, which was also cited by 55%. You can do the maths, Mr Walker. We must increase our efforts to change the perception of the sector, to attract new entrants, to come up with solutions and to provide assistance for young people to overcome barriers to the industry. I will be interested to hear from the Minister what has been done since the release of those figures to address the concerns that they raise.
Examples of initiatives to address this challenge include the industry-wide careers initiative Bright Crop, which seeks to inform school pupils, parents and careers advisers about the range of careers and progression opportunities available in the industry. Other industry career campaigns should be co-ordinated around Bright Crop to provide consistent information that helps to inform and inspire young people about careers in the sector, and outline clear career frameworks that show progression. We need young people, as well as people of all ages, in the food, farming and fishing sectors, because they bring ambition and creativity.
Events over the last decade have demonstrated that food security should not be overlooked. We are still dependent on food imports, because the UK’s farmers produce only 61% of what the nation consumes. Productivity has been rising at an average of 1.5% per annum, but we are in great need of young and highly skilled farmers to come up with ways to keep increasing it. We need technically savvy entrepreneurs and driven young people to use the available state-of-the-art technology, from GPS mapping systems to high-tech milk machines, to keep British farming at the cutting edge of production trends and to fulfil demands. Additionally, because of the current uncertainty over the value of sterling, retailers and consumers are looking increasingly closer to home to meet their needs. The creativity of young people would also help farms across the UK to achieve diversity goals highlighted in a VisitEngland survey in 2016, which showed that 28% of young people were looking at tourism, 16% at contracting, 14% at property and 12% at opening farm shops.
I regularly meet fishermen and farmers and their representatives. On Friday, I met the National Farmers Union and local farmers and we discussed the skills gap at length. The NFU is a founding member of the industry-wide AgriSkills Forum, which seeks to respond to the skills gap by professionalising the industry through skills development and lifelong learning, so that it is seen as a career of choice rather than a last resort. As people enter the industry, it is important that they are encouraged to undertake professional development that helps them to progress in their careers. Continued emphasis on lifelong learning and development will help to attract new entrants to the industry and retain skills within it. The agricultural industry has put significant effort into working towards that goal by launching training and professional development schemes across different sectors. For example, the dairy sector has launched Dairy Pro, which enables workers across the sector to participate in relevant, demand-led training that recognises their experience and builds on their practical skills.
I am concerned that not enough is being done in schools, by careers advisers or in Departments to promote careers and opportunities in the sector. Having said that, I recently joined hundreds of children at an open farm day in Chyvarloe, near Gunwalloe and Helston, at the invitation of local farmer Paul Parfitt. It gave the children the opportunity to see at first hand how our food is produced and what careers are available in food and farming. I also took my family to Tregullas Farm, which is run by the Amiss family on the Lizard, for its open farm Sunday. Open farm Sundays are a successful initiative to increase public awareness of farming and food production. Such initiatives help to dismiss the image of something similar to Tolkien’s character of Farmer Giles. In case hon. Members are not familiar with him, Farmer Giles was a fat gentleman with a red face who chewed on straw and enjoyed a slow and comfortable life which, given recent events, may be something that hon. Members covet over the next few weeks. I may well find myself doing so on 9 June, but I am not quite there yet.
In reality, farming is far from that picture. Farmers are dynamic and hard-working members of society. I have been privileged to discuss with farmers, both during my time in this place and in my pursuit of becoming a Member of Parliament, the opportunities and challenges that they have faced and will continue to face. If we are to address the specific challenge of recruitment, we must move away from this image of Farmer Giles. We must inspire young and talented individuals to look at the sector and do justice to those who already work in it. I echo the sentiments expressed by my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs about hoping to see
“more young people being encouraged to engage with countryside matters”.
We must change young people’s attitudes towards agricultural careers and inspire more young people to get involved. I ask what the Government can do. In an age of population growth both here and overseas, in which there are more mouths to feed, there still seem to be more jobs than people. What can the Government do to address the exodus of talent from rural areas, which is something that we are very aware of in Cornwall and on Scilly? I support farmers and food producers who say that schools and careers services must work with the industry to promote farming as an aspirational career choice, and must make better links between STEM subjects—science, technology, engineering and maths—and their applications in farming. A greater understanding of the range of opportunities in the sector would help to dispel the myth that farming is low-paid and low-skilled. It is important for there to be opportunities for the industry to engage with organisations such as the Careers and Enterprise Company, and for the National Careers Service to work with the sector to provide continuous careers advice and informed information about career and work prospects in the agriculture sector. We need a partnership approach with the industry, with cross-party support, that recognises agriculture as an important and attractive sector to be in. That would be of benefit in further challenging the existing perception.
It is important to recognise that fit-for-purpose qualifications have a crucial role to play in apprenticeships for our industry. I understand the Government’s aspiration for apprenticeships to be the qualifications of the future, but the industry, the employers and the apprentices, and their parents and families, will need a minimum period of transition to allow the inclusion of qualifications that fall outside the current Government criteria while the new trailblazers provide their credentials. I ask the Government to work with employers in the industry even more than they are doing already to develop the 16-to-19 skills plan, so that vocational and technical qualifications and courses are made relevant to the industry and appealing to young people.
Mr Sheerman
I thank the hon. Gentleman for allowing me to intervene again—he did say that we had a reasonable amount of time. I do not want to criticise his very good speech, but it is a bit male-dominated. Does he agree that one of the real challenges is the number of women who are becoming farmers or coming into the sector, and that it is time we did something about it?
Derek Thomas
I mentioned young people, and I am sure they include men and women.
Derek Thomas
I was talking about a story that was written several decades ago, but the hon. Gentleman is right. What encourages me is that, when I am out and about on farms or visiting food and farming businesses, I see a number of young people engaged in them, particularly girls. I am a member of the Science and Technology Committee, which is doing a huge amount of work to understand how we can encourage more girls and young women into STEM subjects, because there is a shortage of them and they provide a viewpoint from which we can and must benefit.
My next point might help to reassure the hon. Gentleman. The Department for Education must encourage schools and careers services to work with the industry. It is vital that the Department understands that, although the five GCSEs that we all want our young people to achieve are important, we need to work equally hard within our schools to help young people to realise the opportunities that are available to them outside the school gates in their local area. That would be of huge benefit in addressing some of the challenges that exist. It could allow young people to avoid the pressures of getting into student debt, which I know concerns many people. I am asking the Department for Education to work with the industry to promote farming as an aspirational career, and to establish better links between farming and STEM subjects and their applications.
To conclude, the agricultural industry has been incredibly resilient and courageous in facing numerous challenges in the past. The problems it faces today require the same approach to be adopted. We must be able to maintain the vibrancy of the rural economy and we must also continue to meet our food security needs. Overseas conflict and increasing population growth mean that British farming must have the capability to produce the lion’s share of the food we need to feed this nation, and young people—both girls and boys—offer us an opportunity to meet that challenge. The fishing industry also needs fresh blood. Ensuring that youngsters are recruited to fill the jobs available is crucial not only for the future of south-west Cornwall, but for the future of the entire UK fishing fleet.
Owen Thompson (Midlothian) (SNP)
It is always a pleasure to serve under your chairmanship, Mr Walker.
I congratulate the hon. Member for St Ives (Derek Thomas) on securing this debate. Food and farming is clearly a significant industry in Scotland, where 98% of the landmass is considered rural, whether that is “remote rural”, which is defined as an area that is more than a 30-minute drive from the nearest settlement, or merely “accessible rural”, where an area is within 30 minutes of a settlement of 10,000 people or more. Almost one in five of the population of Scotland lives in a rural community. Therefore, jobs in the rural sector are vital to the Scottish economy. It is important that, despite the uncertain times we are in, we continue to support the industry, to ensure that it is on a sustainable footing for the future.
Currently, Scotland’s natural environment is worth more than £20 billion per annum and supports more than 60,000 jobs. Between 2010 and 2015, the total turnover of our food and drink industry increased from £10 billion to £14.4 billion; exports in 2016 were worth £5.5 billion, which was an increase of 40% since 2007. So Scottish food and drink really is going through something of a renaissance at the moment. We can see that and we also know the quality that exists within the industry, which is something I will return to later in my comments.
However, there are challenges. The average age of Scottish farmers is now around 58, and only 9% of farm occupiers in Scotland are aged 40 or under. So, as the hon. Gentleman highlighted, it is incredibly important that we find ways to bring new young people into the sector, to ensure that it remains sustainable and resilient. We must continue to support industries that are so vital to all of us.
In Scotland, the Scottish National party Government are very keen to support young people to go into the industry, to make sure that fresh and bright young farmers keep the rural economy going in the future. Earlier this month, the Scottish Government announced a fund of £2.5 million to help to develop new entrants into farming. That funding will support the next generation of farmers while increasing the opportunities for young people to establish a career in agriculture. The latest award will see a further 47 new farming businesses share the money, to help them to create and develop their businesses.
I suppose that one of the biggest challenges for any business in a rural economy is the access and uptake of broadband. That is an issue we continue to return to in this House and, as I say, with 98% of Scotland being considered rural, the rollout of broadband to support businesses as we move into an ever more technical world is critical, as it helps the running of rural farming and food businesses.
We are in an uncertain world just now. The UK vote to leave the EU has created significant uncertainty in the agriculture sector. The “hard Brexit” that we so often hear about would be absolutely devastating for sections of Scottish agriculture. For example, cattle and sheep farmers potentially face both high tariffs and loss of subsidy support. There is also the risk to the protection of Scottish protected food names, such as Scotch beef or Stornoway black pudding. We do not yet know what will happen to protected name status. Will we have a scheme here in the UK, given that we will no longer have access to the European scheme?
We also risk losing the common regulatory frameworks that help to maintain food safety, and animal and plant health standards, as well as to reduce non-tariff barriers to trade. Jobs and investment opportunities have been put at risk. For example, there is uncertainty over entering into multi-annual contracts under the Scottish rural development programme agri-environment or forestry schemes. Some of Scotland’s remote rural communities have fragile populations, and EU migration helps to ensure the resilience of those communities. Without that movement of people, there is a real risk, not only for the food and farming industries but for entire communities across Scotland.
The Government’s gamble with our EU membership has created significant uncertainty, with Scotland now facing the loss of much-needed seasonal workers. Agriculture directly employs 65,000 people and underpins our £14 billion food and drink industry, which is one of the fasting growing and most successful sectors in the Scottish economy. Along with other rural businesses, agriculture relies heavily on seasonal workers. However, despite repeated questioning, we have not yet had a clear answer from the UK Government as to what rights will be protected for seasonal workers; an estimated 5,000 to 15,000 seasonal workers are employed in the sector annually. Berry picking alone requires a significant number of seasonal workers, and more than a third of the UK’s soft fruit comes from Scotland.
Clearly, the industry faces challenges. There are common agricultural policy payment issues—there is no point trying to pretend that there are not—and addressing them will be the No.1 priority for the Rural Economy Secretary in the Scottish Government. We have started making 2016 CAP payments, and it is expected that by the end of June the vast majority of farmers and crofters will have received their 2016 basic payments. We understand the frustration felt by the President of the National Farmers Union Scotland with the current IT system for CAP payments. The Cabinet Secretary in Scotland has kept him and other NFUS officials advised of developments in that area, in order to get their valuable input into what else the Scottish Government need to do.
As I have said, the industry provides so many benefits and opportunities for Scotland. It is growing quickly, but for it suddenly to come up against the challenges and risks that Brexit will create has put a big question mark over what we can get by way of guarantees from the UK Government. What protections can we secure for Scotland’s burgeoning food and drink industry, so that it can continue to grow and contribute to the Scottish economy?
Mary Glindon (North Tyneside) (Lab)
It is an honour to serve under your chairmanship, Mr Walker.
I congratulate the hon. Member for St Ives (Derek Thomas) on securing this debate; he demonstrated that he has a passion for this issue. Although I am not the shadow spokesperson for fishing and farming, I think it is really important that he has raised this issue, which includes the future of fishing and farming, for debate today. This debate is particularly important because across the sector there are serious skill shortages that must be addressed if the success of the industry is to be maintained.
I will start by highlighting the situation in the UK food and drink manufacturing industry, which has up to 400,000 direct employees in roles ranging from sales and marketing to supply chain and logistics, and from production management to engineering. This industry has enormous potential as a high-value manufacturing sector, using innovative technologies in engineering, digital and life sciences to meet all the challenges of managing future food supplies and contributing to the wider carbon reduction agenda. That potential is being put at risk.
The Food and Drink Federation has highlighted that by 2024 more than a third of the sector’s workforce will have retired and 130,000 new recruits will be needed to fill the looming skills gap. A recent survey by the federation revealed that the top five skills gaps in the sector were in engineering, food science and technology, innovation, including product and process development, leadership and management, and customer service management. Although the ageing workforce and the skills gap are not new, the need to close the gap has become more urgent because, as in the rest of the agri-food supply chain, food and drink manufacturers currently benefit from bringing in skilled labour from the EU, which represents 29% of their workforce—120,000 workers. A high number of these workers carry out vital production, technical and specialist roles. Post-Brexit, the industry expects there to be restrictions on accessing non-UK EU workers, which will only intensify the skills gap.
To address the problem, the industry wants to see co-ordinated careers action and a more strategic approach to engagement with schools, to encourage homegrown talent for the long term. The Food and Drink Federation is also asking for technical education reforms, including with the institutes of technology, as the proposed T-levels fall short for the food and drink industry. The federation hopes to fulfil its pledge to increase the proportion of the workforce in food and drink manufacturing who are on apprenticeships to 3%—from the current 1%—by 2020, and to tackle market failures such as the fragmented apprenticeship provision for the sector and the lack of new standards at level 4 and above. I hope sincerely that the Minister will commit to addressing those issues with his appropriate colleagues in the relevant Departments as a matter of priority.
Some 11% of workers in the sector are employed in agriculture, with a high dependence on people from outside the UK. Up to 80,000 workers come to the UK every year to pick fruit and vegetables, 98% of them from the EU. In my own region—the north-east—farmers have told me that they rely on workers from abroad not only for seasonal jobs but to work on their farms throughout the year. Although it is important that young people are encouraged to take up careers in agriculture, the uncertainty in the agricultural and horticultural sectors about their workforce post-Brexit means that there is a need for urgent assurance from the Government. Farmers need the certainty of a good stream of seasonal workers, so if the Government will not give in to pressure to reintroduce the seasonal agricultural workers scheme—SAWS—will the Minister say exactly what measures are being put in place to encourage local people to fill the jobs?
Will the Government support schemes such as Wheels 2 Work, which helps young people in particular to access jobs in rural areas when there is no public transport? Finally, how much resource have the Government invested in plugging the gap left by the removal of SAWS? As food and farming accounts for 13.6% of the total workforce in employment, I hope that the Minister can fully address all the issues raised in the debate.
Mr Charles Walker (in the Chair)
Mr Thomas, you will have two minutes once the Minister sits down.
The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)
It is a pleasure to serve under your chairmanship, Mr Walker. I congratulate my hon. Friend the Member for St Ives (Derek Thomas) on securing the debate, which gives us an opportunity to recognise the importance of the food, farming and fisheries sector, which, let us not forget, employs about one in seven of all workers in this country.
I should declare an interest, in that I, as some of my colleagues know, studied agriculture. I attended Writtle Agricultural College in the early ’90s and studied for a higher national diploma in commercial horticulture. I also did a number of other courses through the local further education college that was mentioned earlier—Cornwall College, down in Camborne in my constituency—which offered some very good work in this area. Also in my constituency I have Duchy College, which is linked to Cornwall College and is one of the country’s leading agricultural colleges. This is an issue that I am passionate about because it is an issue I chose to study myself.
The food, farming and fisheries sector provides a huge variety of career opportunities, including many requiring skills in science, technology, engineering and maths—STEM. Food manufacturing is the biggest manufacturing sector in this country, as other hon. Members have pointed out. It employs about 400,000 people and provides about one sixth of the UK’s total manufacturing gross value added. In its 2016 productivity report, the Food and Drink Federation estimated that 130,000 jobs would need to be filled between 2014 and 2024, with food engineers and scientists particularly in demand. Clearly, therefore, there are great opportunities in the food manufacturing sector for today’s talented young people to build their careers.
Agricultural technologies are also transforming farming, creating new types of jobs needing new kinds of skills. Successful modern farming requires technical proficiency, business acumen and entrepreneurial skills. For example, I recently met a group of Tesco young farmers who were investing in developing their business, leadership and management skills and their understanding of the wider supply chain issues, while balancing busy jobs on poultry, dairy, arable and sheep farms.
The food and farming sector is also important to our nation as an industry that has a presence right across the country. It is interesting that we have had contributions from the far south-west—St Ives—and from Midlothian at the other end of the country about the importance of the sector to those areas.
George Eustice
And, let us not forget, Yorkshire. The sector is a particularly significant employer in Cornwall; indeed, I have a number of important food manufacturing businesses in clotted cream and fisheries in my own constituency. Farming alone employs about 64,000 people in the south-west, and the Food From Cornwall website lists more than 330 businesses producing quality Cornish food and drink. Cornwall is, of course, famous for Cornish clotted cream and Cornish pasties, but also for Cornish sardines, or pilchards, and Fal oysters.
Sardines and oysters lead me on to another sector that is important in parts of Cornwall, including, of course, in Newlyn in the constituency of my hon. Friend the Member for St Ives. The UK seafood industry offers a wide variety of careers, including in fishing, aquaculture, processing, retail and food service. There can be no doubt, therefore, that across the food, farming and fisheries sector there are fantastic opportunities for our young people to build exciting, challenging and successful careers.
I want to talk a little about the industrial strategy and the post-16 skills plan. To secure the skilled workforce that the food, farming and fisheries sector needs for the future, Government and industry must work in partnership to prioritise training and skills. It is crucial that there are clear entry routes into the sector to help young people embark on their careers, and that employers invest in recruiting, training and developing their staff. The Government have introduced a number of policies on skills. The industrial strategy Green Paper, published in January this year, includes skills as one of its core pillars and has a particular focus on STEM. The post-16 skills plan, published in July 2016, aims to reform technical education by introducing 15 routes, or T-levels. These will include agriculture, environmental and animal care; engineering and manufacturing, which will include food manufacturing; and catering and hospitality. T-levels will provide technical education to equip students for skilled occupations, creating clear routes into the sector.
Reforms to apprenticeships will create fresh opportunities for people to develop new skills and progress their careers. The apprenticeship levy, which came into force this month, provides a new incentive for employers to invest in training. Many employers in the sector are rising to the challenge, and the number of apprenticeship starts in agriculture, horticulture and food manufacturing increased by more than 20% in 2015-16 compared with the previous year.
The Department for Education is exploring options to allow up to 10% of apprenticeship funds to be transferred down the supply chain from 2018, bringing the benefits of apprenticeships to even more businesses. We were keen to promote that idea in DEFRA because it means small farm enterprises within a supply chain could find it easier to benefit from the apprenticeship levy.
Apprenticeships provide great opportunities both to train new entrants and to upskill and develop existing members of staff. I am delighted that exciting new apprenticeship standards for butcher, advanced dairy technician, and food and drink maintenance engineer have now been approved for delivery. Many more are currently in development.
James Cartlidge (South Suffolk) (Con)
The sharing of the apprenticeship levy down the line is welcome, although I have one point. In Suffolk, a lot of the businesses involved in the sector are small and medium-sized businesses. What will the Minister do to ensure that the discussions he has on T-levels and maintaining quality are not dominated by the larger sector, and that small and medium-sized enterprises that need the staff have their input?
George Eustice
That is an important point. We have experienced people from the food sector involved in the development of the new apprenticeships. The idea that I had came when I visited a McCain factory, which manufactures chips from potatoes. It was clear to me that it had a well-resourced and well-managed apprenticeship programme within McCain, but there are 300 potato farmers in its supply chain. In most cases, those farmers do not have a human resources director to take care and look after an apprenticeship programme professionally. There was an opportunity to use the organisation and the skill sets that companies such as McCain have to foster apprenticeships on farms in Norfolk and Suffolk and wherever potatoes are grown.
I have been privileged to meet apprentices as the Minister responsible for agriculture, fisheries and food at DEFRA, and I know what great careers can begin from an apprenticeship. For example, I recently spoke alongside a former apprentice at a Feeding Britain’s Future event for unemployed young people interested in careers in food and farming. The young man had decided to do a mechanical engineering apprenticeship instead of following a conventional university degree, and after four years of training was earning more than £40,000 a year. Apprenticeships are a brilliant alternative to university because they allow apprentices to earn while they learn. New apprenticeship standards are being developed at degree level. Apprenticeships provide fantastic learning opportunities by allowing apprentices to develop their new skills on the job.
Employers benefit from apprentices. It has been calculated that the average person who completes their apprenticeship increases business productivity by around £214 a week through increased profits and productivity, and better-quality products. Small employers provide fantastic opportunities for people to get on the career ladder. Some 96% of the food manufacturing sector are SMEs, which can also benefit from hiring apprentices. SMEs have to pay only 10% of the costs of training their apprentices—the Government pay the remaining 90%.
Dr Poulter
The Minister is making an excellent case for the steps that the Government are taking to promote apprenticeships in the agricultural sector. Given the fact that many people decide on where their careers will take them at a relatively early age—it is probably around age 13 or 14—what steps can be taken to encourage younger people to think about careers in agriculture and the whole supply chain, and what work is he doing with schools?
George Eustice
My hon. Friend the Member for St Ives also made that important point, which I intend to cover later in my contribution.
The Institute for Apprenticeships began work on new apprenticeships this month and will in time oversee the development of both T-levels and apprenticeships, helping to drive up standards and ensure quality. I am delighted that two members of the board, Dame Fiona Kendrick of Nestlé and Paul Cadman from Walter Smith Fine Foods, bring expert knowledge of the food sector.
Finally, it is important to recognise that we must have continuous career progression once people are in the industry. The Agriculture and Horticulture Development Board runs a series of activities to boost farm competitiveness and sustainability, including farmer-to-farmer learning through business improvement groups and demonstration farms, so that there can be a sharing of expertise through open meetings, digital tools and knowledge exchange publications. Of course, there will be international benchmarking to learn from the experiences of other countries.
The Landex colleges last year came together to launch a new national college in agriculture, to thread together some of the activities that all of the Landex colleges are engaged in, and to try to secure the progression of more people towards level 3 qualifications, again with the aim of continuous professional career development.
My hon. Friend the Member for St Ives mentioned the image of the industry and the work being done to encourage more young people to go into it. Clearly, there are opportunities in the food, farming and fisheries sector, so we should encourage more young people to explore the sector when they think about their future. Overall, we currently have the highest employment rate—74.6%—since comparable records began, and youth unemployment has been falling, but it remains important to ensure that young people are able to make a smooth transition into the labour market, and that they consider the full range of options available as they prepare to launch their careers.
Careers in food and farming are too frequently perceived as low-paid, low-skilled and lacking in career progression opportunities. We need to challenge some of the outdated myths and champion the great careers that the sector offers. Across the country, engineers, scientists and technicians are at the cutting edge of innovation in agri-tech and food production. Industry-supported organisations such as Bright Crop, which my hon. Friend mentioned, IGD and the National Skills Academy for Food & Drink are working to tackle misconceptions and increase awareness of careers in the sector through initiatives such as Tasty Careers and Feeding Britain’s Future, which is run by IGD, and “The World is Your Oyster”, a campaign run by Seafish. All of those projects highlight the varied career paths that the seafood industry has to offer and the unique opportunities it can provide.
We are highlighting some of the superb apprentices already working in the industry, including by featuring them in the Government’s “Get In Go Far” careers campaign. In February this year, the Secretary of State for Environment, Food and Rural Affairs hosted a roundtable, bringing together a range of organisations to start a dialogue about what more industry and the Government can do together to champion the fantastic employment opportunities available in the food and farming sector. The roundtable heard directly from apprentices working in two leading food businesses—Nestlé and Mondeléz—about their experiences in the sector. The best people to sell the sector are often the young people who are starting out on their own careers in the industry.
Mary Glindon
The Minister is setting out some fine examples of what is happening, but may I press him on the industry’s need for seasonal workers? We want young people to get into the long-term jobs that he talks about, which is really important and probably the basis of the debate today, but there will be a continual need for seasonal workers. Without the seasonal agricultural workers scheme, how can we perpetuate our agricultural industry?
George Eustice
I shall return to that point—the hon. Lady also made it in her speech—as we have some time available, but the debate is predominantly about careers in agriculture and I wanted to focus on how to encourage more young people into those careers.
A number of hon. Members mentioned women in farming. I spoke at a “Ladies in Agriculture” event at the Farmers Club a couple of years ago—the former Secretary of State, the current Lord Chancellor, has also addressed that event. I mentioned a Tesco young farmers group earlier. Four of the 10 farmers in the group I met were women, so I believe we are making progress. It is essential not to overlook the great contribution that women can make, particularly when they are doing increasingly well in areas such as science. Many countries face the same challenge. Indeed, when I attended the G7 in Japan last year, one of their areas of focus was how to encourage more women into farming. Some of their ideas probably would not cut it over here—it was thought that a demonstration of a tractor with pink patterns on the side of the bonnet might help. I am not sure that would work here, but getting more women engaged in farming is a challenge for a lot of countries.
My hon. Friend the Member for St Ives mentioned the importance of encouraging school-age children to consider farming. The current school food plan actively encourages all schools to give children of primary school age an experience on a farm, so that they can see how food is produced. A number of the county show associations also run good projects. The Royal Cornwall Agricultural Association runs an event every year. It invites schools from across the county to come and learn about farming and farming careers. The Devon County Agricultural Association has as usual copied Cornwall and is running a similar project, which is great. We need as many areas as possible to promote farming as a career in schools.
The hon. Member for Midlothian (Owen Thompson) talked about the importance of farming and fishing north of the border, in Scotland. I regularly visit Scotland, particularly in connection with the fishing industry. I remember a visit to the Shetland Islands last year, where there is one of the key training academies for skippers and captains of fishing vessels. He mentioned the average age of farmers, which is another long-standing problem faced by many countries. The statistics often mask the reality, which is that the father is reluctant to let go of the purse strings but the actual manager of the holding is in the next generation down. Nevertheless, we are keen to do more to encourage more new entrants. There have been a number of projects, including some in Wales and some in Scotland. In Cornwall, the “Fresh Start” initiative worked on helping people to retire and creating opportunities for new entrants.
The hon. Gentleman mentioned that, because of Brexit, it is an uncertain world. Brexit is a fantastic opportunity. I take a glass-half-full view of it. We have a great opportunity to design an agriculture policy that is better suited to all parts of the UK. Last week, I had a meeting with NFU Scotland to talk about some of its thoughts and ideas about how we could deal differently with policy in future. One thing of which I can assure him is that I have yet to find a fisherman in Scotland who would like us to rejoin the common fisheries policy having left it. The fishing industry almost universally believes that the decision to leave the EU was the right one, and relishes the opportunities that that brings to the Scottish fishing fleet.
The shadow Minister, the hon. Member for North Tyneside (Mary Glindon), and indeed the hon. Member for Midlothian, mentioned labour. As the hon. Lady will know, the Prime Minister has made it clear that she wants to respect the rights of EU citizens who are here working in the UK. She made that point early on, soon after the decision to leave the EU, and also made the perfectly reasonable point that obviously we would expect that to be reciprocated, which is not controversial. She has also made it clear that she hopes the matter can be settled early in the negotiations. I believe we can give that reassurance to those living and working in the UK now.
The hon. Lady asked about seasonal labour. Having a controlled migration policy and ending the presumption of free movement does not mean pulling up the drawbridge and stopping all immigration. It simply means what it says—having control of migration. It would be for a future Government to decide what work permits they wanted to grant, and whether they should be short-term permits or permits for more skilled people. That could be done based on an assessment of our needs. If there is a need for seasonal agricultural labour, a future Government will have at their disposal the ability to grant the types of permit that would be needed. All those issues can be dealt with.
This was an important debate on an important subject that is dear to my heart. We have made good progress with our work on apprenticeships, and we have done some great work in schools to promote agriculture and food careers. There is further to go, but I believe we have made a good start.
Derek Thomas
I thank the Minister for encouraging me when I first arrived in this place to speak in plenty of Westminster Hall debates. I have done that, and he has had to respond to most of them.
The Minister said that opportunity exists in food and farming, and that jobs are increasing in the high-tech area. I agree that there is real potential to create many new well paid jobs. That is exactly what rural areas need to hear and to see realised.
The new T-levels are welcome. They are an important step in addressing the skills gap. I urge the Minister to encourage DEFRA and other Departments, including the Department for Business, Energy and Industrial Strategy, to work with the Department for Education to assess how effective and clear the pathway for children into food, fishing and farming really is, so that schools can be encouraged to focus on other things besides the journey towards a university degree or something similar.
Finally, as we introduce measures such as making tax digital, will the Minister contribute to the debate on how people in fishing, farming and food production, particularly those with small businesses, can embrace the opportunity of tax digitalisation, and how we can ensure we have the broadband and mobile phone capacity to deliver that?
I am grateful for the opportunity to have this important debate, and I thank all those who took part.
Question put and agreed to.
Resolved,
That this House has considered employment opportunities in food and farming.
Wells Bid for UK City of Culture
(6 years, 11 months ago)
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James Heappey (Wells) (Con)
I beg to move,
That this House has considered Wells’s bid for UK City of Culture.
It is an honour to serve under your chairmanship, Mr Streeter. I am honoured to have secured a debate today—the penultimate day of this Parliament—to raise Wells’s bid to become UK city of culture in 2021. As a proud constituency MP, I have supported the bid since its genesis, which was not long ago. I will continue to support it because it has enormous potential to change the stars of both Wells and the wider Somerset area. Before I get going, it is important to place on the record that, in the absence of a large civic construct to put together this bid, it has fallen to volunteers in and around Wells to do so. One of those volunteers, Andy Webb, deserves particular note. The amount he has achieved in such a short time is phenomenal.
Before I talk specifically about Wells’s bid, I want to say a few words in my capacity as chairman of the all-party parliamentary group on the UK events industry, not least because I see that Nick de Bois hopes to return to Parliament and may well be restored to the chairmanship of the APPG when he gets here. It has been an absolute pleasure to chair that APPG for the past two years. I have learned an enormous amount about the ingenuity of the UK events industry and its role in driving our visitor economy and showcasing British business through the calibre and expertise of the events that we put on around the world. I have also seen the value of local, regional and national events, including the city of culture, which is a series of events over the course of a year or so. In Londonderry, city of culture status was worth £100 million to the local economy, and in Hull it has already been worth £60 million. Hon. Members can therefore perhaps see why Wells and the wider Somerset area are so keen on securing city of culture status. It would be transformative.
John Penrose (Weston-super-Mare) (Con)
I congratulate my hon. Friend on securing this debate about an issue that is tremendously important for his constituency and surrounding constituencies. He mentioned that, unlike larger civic constructs—that is the phrase he used—the bid is being put together by a small, dedicated band of volunteers. I am sure that he has therefore already spoken to Visit Somerset, which used to be called Somerset Tourism. I hope it has engaged strongly in creating Wells’s bid, if only because the knock-on effect for the local accommodation industry close to my home in Weston-super-Mare may be profound. I hope Visit Somerset is providing the support my hon. Friend hopes for.
James Heappey
I very much agree. This is a huge opportunity, not just for Wells but for Western-super-Mare. Visit Somerset has been involved, along with several other local bodies, in supporting the volunteers in putting together the bid. However, we need to discuss the differences in Wells’s bid so that the Minister might satisfy himself that the bid process lends itself as keenly to rural areas as to urban areas. Wells’s bid is not about post-industrial regeneration, which was the centrepiece of the bids by Londonderry and Hull. There is a very different opportunity down in Somerset, which I will talk about later.
Our bid draws on a rich cultural heritage that is way out of proportion with the size of our city. We are England’s smallest city, but our cathedral has a centuries-long tradition in music, as has the now ruined Glastonbury abbey, which still hosts wonderful musical events during the year. We have the Glastonbury festival just down the road. There is Arthurian legend all over, with Avalon and Glastonbury itself, which will be a wonderful theme to draw on throughout the city of culture year. There are now internationally significant art galleries in Bruton. There is an opera festival in Wedmore, there are comedy festivals in Wells, and there are literature, food and film festivals. We have Cedars Hall, a brand new world-class concert hall. We are the location for many movies and TV programmes, and so much more. That all goes alongside a rural, agricultural life and an incredible natural history, but we are also embracing our emerging digital arts industry as we tap into the success of those sectors in Bristol and Bath.
The cultural offer is perhaps more developed and diverse in Wells, the smallest of the bid cities, than in other large cities, but let us be clear: we are much less well funded. The bid document quite understandably requires certain commitments about a bid’s underpinning. Does the Minister believe that that is fair, given that we are trying to build a country that works for everyone? We must recognise that that includes developing the economies of rural areas as well as urban areas. I wonder whether, in the few days he has left—I accept that his civil servants are almost locked down in purdah—he will satisfy himself that, when smaller local authority areas bid for such things, the process perhaps needs to be weighted to recognise that they are unable to underwrite bids in the same way as larger metropolitan areas. Are there other ways of doing it?
The great advantage of volunteers coming together as they have in Wells is that there is private sector engagement, which is encouraging. The Heritage Lottery Fund has been forthcoming in explaining what involvement it may have. If we are aiming to create a country that works for everyone, I hope the Minister will look carefully at the process to ensure that all regions can compete equitably, and that the bid process does not disadvantage rural areas and those where local authorities are unable to resource bids more fully.
Rebecca Pow (Taunton Deane) (Con)
I applaud my hon. Friend for bringing this debate to the Chamber. One of the big drivers behind cities of culture is improving economic prosperity. As my hon. Friend says, Wells, with its cathedral, is a glorious location. It was the location for the film “Hot Fuzz”. My dad went to school there, at the Blue School. It is important to recognise that Wells sits in a poor rural environment. The effect of Wells securing city of culture status might reverberate out into the surrounding rural areas, including to my constituency of Taunton Deane and the rest of Somerset, and improve our productivity, which we so badly need to address. As Conservatives, we are addressing it, but we need to do more.
James Heappey
My hon. Friend is exactly right. If someone flew over our constituencies, they would see so many trees and fields that they would think all was well down below. It is so easy to assume that, but there is a hidden deprivation in rural areas that is just as significant a challenge as the challenge in inner-city areas. In fact, dealing with that deprivation is arguably a much greater challenge. Too often in rural areas, rather than deprivation being concentrated in one area and the aim of intervention therefore being clearly defined, families who live in deprivation are on their own. There might be only one family in a hamlet who live in such circumstances, or deprived families might be scattered across a town or a large village, making it much more challenging to intervene in their lives. There is an opportunity for city of culture status to uplift the entire area, so that we can find and engage deprived people who live in isolation—we can do something that could be transformative to their lives.
The Minister will be well aware of several obvious benefits of city of culture status that are common to all bid cities. The most obvious place to start is the visitor economy. Somerset’s visitor economy is already growing—it has grown from £1.2 billion to £1.3 billion in just the last few years. Visit Somerset has been on the front foot in looking at all sorts of ways of marketing our county, with huge success, as have the various tourism expos that have come to the county, several of which I have had the pleasure of hosting. I suspect that the Minister will want to pass back congratulations to Visit Britain, which has brought several international delegations of tour operators to Somerset. I hosted a group of Spanish, Italian, Portuguese and Mexican tour operators in Glastonbury just a month or two ago. It was great that Visit Britain brought them to the area to see what we have to offer.
Despite that, the reality is that Somerset is still too often the drive-through county on the way to the far south-west—that is music to your ears, Mr Streeter, but Somerset has so much more to offer and I am sure you will not begrudge us if we hold up visitors a little longer at our end of the peninsula. So much more could be done in the visitor economy in our part of the south-west, and it would be great to see the city of culture status acting as a catalyst for a growth in visitor numbers. It would also be fantastic to see the city of culture status acting as a catalyst for infrastructure improvement—the railway lines south of Bristol are not planned for electrification, while the line from Reading to Taunton and down to the far south-west is perhaps not being electrified as quickly as we might have hoped. Perhaps a major, internationally significant tourism event, such as city of culture events or something along those lines, might be a reason to accelerate the improvement of those lines.
City of culture status might be a great hook for a number of airlines that have been looking at bringing in daily services from Bristol airport to New York, Doha and Istanbul. Perhaps city of culture status might be the final encouragement they need to commit to those services, which would be great not just for Bristol and the greater Bristol area, but for the whole south-west peninsula. City of culture status could be a catalyst for that, and for road improvements. My hon. Friends the Members for Bath (Ben Howlett) and for North East Somerset (Mr Rees-Mogg) have been doing some great work on improving the route from the M4 down through Bath and into Somerset and west Wiltshire—it would be great to see that succeed. I have been working on getting some improvements to the A39 and the A361 for cars coming in from the M5 at Bridgwater north, in order for them to access Mendip more quickly. What a great thing it would be if city of culture status was to be the catalyst for those road improvements.
The Minister has been doing great work on broadband and mobile phone coverage—they have improved enormously in our part of the world in recent years. Given that there might be some growth in the emerging digital arts industry in the Somerset area, city of culture status might also catalyse that need for digital connectivity and see us accelerate.
Rebecca Pow
I wonder if my hon. Friend will give me the pleasure of intervening again, as I am the only other Back Bencher here?
Rebecca Pow
I feel I am speaking up for the rest of Somerset, and perhaps the Minister might listen to this. Productivity in the south-west has historically been below that of the rest of the country—we are at about 7% and the rest of the country is at about 8%. Does my hon. Friend see city of culture status as a great opportunity to address that? The knock-on effect could be enormous. If we had a city of culture in the south-west—that would be unusual because the money is all going north—it could do so much good and have a big impact on productivity.
James Heappey
My hon. Friend is an excellent battle buddy to have in today’s pursuit of the Minister. She is entirely right that productivity is potentially one of the big gains, and I will come to it shortly.
City of culture status might help to achieve other things. We are blessed in Somerset with some outstanding schools and colleges, but too often we are training people up and giving them an education with which they think they have no option but to move away to pursue their careers. City of culture status might attract inward investment and create a buzz about living in Somerset. It might come about alongside the introduction of a university of Somerset in my hon. Friend’s constituency, and alongside excellent work on the arts—Strode College in my constituency delivers skills in digital arts and marketing and so on. In some small way, city of culture status might help to rebalance Somerset’s demographics by keeping young people in the county.
If we manage to improve the infrastructure and create a younger workforce with the right skills that are needed by the industries that are there and that are emerging, we will achieve a significant productivity boost, as my hon. Friend suggested. That would be a fantastic legacy for Somerset, not only because it would change Somerset’s stars in terms of the population’s skills and the availability of the workforce, but because the availability of the newly skilled workforce would bring with it inward investment, which would bring new companies. That would be hugely exciting. Perhaps we could see city of culture status as part of the legacy of Hinkley Point, which is already doing something to rebalance our region’s economy.
What if, having brought all of that expertise and know-how to the county, and with follow-on industries coming behind, there was city of culture status helping to reinforce what a wonderful quality of life one can have when living in Somerset? It all seems to work and the timing is right. I hope the Minister agrees that he has a significant opportunity to do something not just for the city of Wells but for the south-west region as a whole.
Rebecca Pow
My hon. Friend is giving a catalogue of reasons that make Somerset glow and sound such an attractive place, which it is. We also have the massive wildlife offer in the Somerset levels, which is very close to Wells and which we could build on. Taunton in my constituency is the county town of Somerset, but it could build its links with Wells. We are trying to build our cultural offer. Similarly, we have the international Somerset County Ground. We could build the whole offer in Somerset, focused in Wells, but with spin-offs.
James Heappey
My hon. Friend is contributing powerfully on behalf of our county and her constituency. She is entirely right. England’s smallest city cannot do this alone. This offer encompasses Glastonbury, Shepton Mallet, Frome, Cheddar, Wedmore, Street and villages all over the county, but also places slightly further afield such as Taunton, Bath and Bristol. This is a hugely exciting regional opportunity.
The Minister might say: “So what? Every bid says city of culture status will bring more tourism, boost productivity and bring inward investment.” He is not wrong. However, that is where a bid from a small city in a rural setting becomes interesting. The challenge of yesteryear was the regeneration of post-industrial cities. The new challenge for the next decade is how we build more resilient communities that can deal with loneliness, an ageing population and the challenges of mental health, and particularly dementia among that ageing population.
Somerset has those problems acutely and is in the nation’s vanguard when it comes to the ageing population. City of culture status could be seen as an opportunity for the arts to bring communities together and enhance the culture of volunteerism, which already exists in our communities but which could become so much more, and therefore to build networks of people who are looking out for one another. It would be hugely exciting if the arts and city of culture status brings them together in the first place.
I hope the Minister will reflect that there is an economic challenge in the south-west. Although there are not the brownfield sites seen previously in other bid cities, he might reflect that the south-west has lagged behind in inward investment for some time, and that a flagship project of international significance could really drive the local economy. It would be exciting, and therefore ticks all of the boxes of a more conventional bid.
I hope the Minister also sees that one of the Government’s great challenges over the next decade will be tackling loneliness and helping the elderly to live independently in their own homes, so that they do not need adult social care and do not need to be in hospital. City of culture status could be a catalyst for developing that resilience, building that network of volunteers and embracing the huge horsepower that exists within community and voluntary groups. If a celebration of our community, culture and shared history can be used to create a legacy of support and of looking out for one another in a resilient community, that is hugely exciting.
Mr Streeter, you have indulged me and my colleagues from Somerset for long enough. It has been a huge honour to pitch to you and the Minister the value of a bid for Wells to become the UK city of culture. I know the Minister does not make the decision, but I hope that we might be successful in reaching the shortlist in due course, and that he will go away full of enthusiasm for what we have to offer.
The Minister for Digital and Culture (Matt Hancock)
It is a great pleasure to serve under your chairmanship, Mr Streeter, in what I expect to be the final Westminster Hall debate that I will respond to in this Parliament. I congratulate my hon. Friend the Member for Wells (James Heappey) on securing this debate and on so powerfully arguing for Wells to become the UK city of culture in 2021. We can see why the people of Wells elected him. He has a deep passion for his city, and he touched on some of the things he has been able to do in the two years he has been an MP to improve the city and life for its residents. I wish him well in his bid to gain their trust to do that in the next Parliament. We can see today why such a passionate advocate is needed for the city of Wells and the surrounding areas. He made the broader case, including for the value of Wells becoming the city of culture to Somerset and the south-west more widely.
Under the UK’s city of culture programme, places can compete to hold the title once every four years, and the prize is that title. There is no formal funding support, although there is a huge amount of support to draw in funding from all sorts of places, private and public. The programme uses creativity and culture to transform a place, attracting visitors and bringing communities together. The competition was launched in January, and 11 places have registered their intention to bid: Sunderland, Perth, Paisley, Stoke-on-Trent, Coventry, Swansea, Hereford, Warrington, St David’s, Portsmouth and Wells. The bids need to be received by the end of this week, so this is a very timely debate. They will then be assessed by the independent advisory panel, while Parliament is dissolved. A shortlist will be announced after the election and the winning city announced by the end of this year.
I thought it was striking how my hon. Friend described the way that a largely voluntary bid is coming together, drawing people from the community and the private sector—within the council area, of course, but led by volunteers. I pay tribute to those who have worked on the bid so far. As the smallest city, Wells has an iconic selling point.
We have heard today about the cultural assets that already exist in Wells. The city of culture is all about boosting the assets that already exist, as well as adding new ones. In Wells in particular, those draw from an ancient tradition and a long and illustrious history. There is the cathedral and the bishopric, which has been in place since 909. The seat has been the Bishop of Bath and Wells since 1245. The current bishop is Peter Hancock—no relation, but a great man. There is a great heritage, with 341 different listings, four of which are for the Bishop’s Palace alone. My hon. Friend also mentioned Glastonbury festival and Cheddar, the home of cheese. The variety and depth of the history is a real attribute.
The area has enjoyed significant investment from both Arts Council England, which has invested almost £700,000 in 48 projects since 2010, and the Heritage Lottery Fund, which has invested almost £3.5 million over the same period. The theatre and circus area of Glastonbury festival are benefiting from grants this year. Last year, the Palace Trust was awarded money for its “Dragon’s Lair” project to help children and families engage with the Bishop’s Palace. There has been significant public investment, as well as the private investment that my hon. Friend talked about.
I want to touch on a couple of things that my hon. Friend said. The backing of the steering team’s vision by Visit Somerset and the support of local councils, institutions, businesses, events, artists, festivals and carnivals working together are important. There is a strong sense of pride in the area. Wells has been a candidate city for a couple of months now, and I know from some of the officials who have visited that that coming together is an important part of delivering the project.
The thing that struck me most was what my hon. Friend said about looking at the city of culture competition in a different way, not only to support primarily physical and economic regeneration but to support and strengthen the resilience and value of communities in a small city and rural setting. He put that very well. He is right that Wells would be a different choice from previous winners, where the focus has been on the economic regeneration and social rejuvenation of an area that has had a difficult time over recent generations. Wells is about building on success and building stronger and more resilient communities. He put that well, and I have noted that and will ensure it is noted by the judging panel too.
The evidence is that the value of the UK city of culture competition comes to all bidders; just bidding brings value. It brings people together and it brings national attention, as this debate is doing. Preparing the bid can generate new ideas and create new partnerships. Bidding areas often think about the plans and development over time. Hull was successful only on the second attempt, but it has been hugely successful this year. Indeed, Rough Guides said that Hull was one of the top 10 cities in the world to visit this year. Hull expects a £60 million boost to its local economy and more than £1 billion of investment. That is the benefit of winning, but it is the taking part that counts also, because people pulling together with the goal of winning has its value.
I want to acknowledge the support that my hon. Friend has from my hon. Friend the Member for Taunton Deane (Rebecca Pow), who put powerfully the case for the wider benefits to Somerset, and from my hon. Friend the Member for Weston-super-Mare (John Penrose), who made powerful supportive comments. Their contributions showed the value expected to the wider community, not just Wells. The bid is really about Wells in Somerset.
Rebecca Pow
To pick up the Minister’s point about the rural connection, this is a massive selling point for the Wells bid. We are finding that the urban-rural divide is getting larger. If we could do something to link the two better, perhaps through the arts, that would be a really positive move.
Matt Hancock
My hon. Friend is a powerful advocate for her constituency and makes the case incredibly well for the importance of closing the urban-rural divide and ensuring that people in Taunton and right across rural and urban areas of the country benefit from the arts, culture and technology. I have very much taken that on board.
I will end by saying that my hon. Friend the Member for Wells is a brilliant local representative and a terrific advocate for Wells. I give him and the bidders all encouragement in this bid. There is only one thing I cannot give him, and that is that which he seeks—victory today in his bid, along with many others, to make Wells the UK city of culture in 2021. However, thanks to his efforts, the bid that they are making has been brought to the attention of people at the most senior levels, so it will get the very best shot that it can.
Motion lapsed (Standing Order No. 10(6)).
Grandparents' Rights: Access to Grandchildren
(6 years, 11 months ago)
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David Mackintosh (Northampton South) (Con)
I beg to move,
That this House has considered grandparents’ rights of access to children.
It is a pleasure to serve under your chairmanship, Mr Streeter. I am pleased to be able to bring this important debate to the House today, because the issue of grandparents being unable to access their grandchildren affects families right across the UK. I have received a significant amount of correspondence from my own constituents. They write to me after family breakdowns and changes in circumstances, seeking guidance on how to go about reaching out to their grandchildren or having legal access.
I adored all my grandparents from both my mum’s and my dad’s family and have fond memories of them from when I was growing up. It is a sad reflection on us that we have not managed properly to reflect in legislation the hugely important role that grandparents play in society. My own dad adores his grandchildren, Finley and Neve, and they adore him back, so whenever I am contacted by constituents, I naturally refer to my own family and simply cannot imagine how hard not having contact must be for everyone involved.
As many hon. Members will know, this is never a straightforward issue to resolve. Distance between grandparents and their grandchildren can come about in a number of ways: marital breakdown, bereavement and family disagreements, to name but a few. For the grandparents and the children from whom they are separated, it can be an incredibly distressing time. The issue has been discussed previously in the House in debates on private Members’ Bills, in Adjournment debates and, indeed, in conversations with colleagues on both sides of the House.
Julian Knight (Solihull) (Con)
I heartily congratulate my hon. Friend on raising this important issue in the House today. Like me, he has received many communications showing the real emotional turmoil that many grandparents feel when they are estranged from their grandchildren. Does he agree that it is always an error when, as is sometimes the case, grandchildren are used as weapons in messy divorces?
David Mackintosh
I am grateful to my hon. Friend for his intervention. I agree that this situation can be very distressing, and it is obviously wrong for children to be used as weapons by anyone, in any situation. It is very distressing for everyone involved. Often, with the constituents who come to see me, I see only their side, their version of events, and not that of the children involved, but I can tell from my own family that it would be very distressing for the grandchildren not to see their grandparents. This is an issue that does not go away and that does not have a simple solution, no matter how much I wish that there were one. In debates such as this, it is important to remember that the rights of the grandchildren matter as much as those of the grandparents. Children should be given the opportunity to visit their grandparents if they wish to do so.
I would like to use the opportunity provided by the debate to praise the charities and organisations that aim to help grandparents who have become estranged from their grandchildren, often through no fault of their own. One such charity is GranPart, which operates in my constituency of Northampton South and aims to help grandparents in the county with advice and services that allow them to try to reconnect with their grandchildren, or at least to share their experiences with others and share best practice in order that people can try to reconnect with their own families. I have attended the monthly meeting and listened to some of the distressing stories of how grandparents have ended up losing contact with their grandchildren. Sometimes that is because arguments have gone too far; sometimes it can be due to families separating; and sometimes people never really understand the reasons why.
Some people have written to me to suggest that the situation could be changed with a few minor amendments to the wording of the Children Act 1989. That primarily means adding in a reference to a child’s extended family as well as to their parents. That minor change could ensure that grandparents were given rights to see their grandchildren that were similar to the rights of any parent in order to help to secure the child’s welfare, and ensure that grandparents were not negatively impacted by any change to a child’s family situation. However, I can envisage situations in which that could lead to conflict. In most families, the primary responsibility for bringing up children lies with the parents, and I would not wish to see parental responsibility confused in any way by giving additional rights to grandparents that superseded the role of a parent or, as my hon. Friend the Member for Solihull (Julian Knight) said, that could be used as a weapon in any disagreement.
Dr Matthew Offord (Hendon) (Con)
My hon. Friend will recall that on 31 January my constituent, Lorraine Bushell, and the Hendon grandparents support group had a lobby day here in Parliament. One issue that they raised was not that grandparents should have a specific right to access to their grandchildren, but that the child should have a right, as in France, to have contact with their extended family.
David Mackintosh
I am grateful to my hon. Friend for his intervention. I do recall the event that was held here. I think that it was held in a room not far from this Chamber, and the room was packed to overflowing. Many hon. Members were present to lend their support to the campaign and to receive the advice and information on best practice that was offered on the day.
Caroline Ansell (Eastbourne) (Con)
My hon. Friend will be dismayed but not surprised to learn that at my last advice surgery I, too, saw grandparents who were suffering in this way. Their plea was for a change in thinking, a change in culture, because they had been advised that their only recourse was through the courts, and they did not want to put their grandchildren through that or to create further tensions within the family.
David Mackintosh
I am grateful to my hon. Friend for her intervention. I have had similar constituency surgeries, at which similar stories have been relayed to me. I am also grateful for the previous intervention, in which my hon. Friend the Member for Hendon (Dr Offord) talked about the law in France. That point should be considered, and I am sure that my right hon. and learned Friend the Minister will come to it when he responds to the debate. I understand that the law in England and Wales gives the family court the power to make various orders about children, including about with whom they can spend time. Grandparents would be required to seek the permission of the court before applying, but that would probably be allowed if deemed to be in the child’s best interests. Perhaps—this is an issue for the Minister to address—that could be reconsidered to give grandparents an automatic presumption for the family court.
When grandparents lose access, it can be even more difficult if they do not have any access to information about the children or know their whereabouts. In the same way as my hon. Friend the Member for Eastbourne (Caroline Ansell) described, a lady came to my surgery and told me that she did not know where her grandchildren were living or what they looked like any more and she had no access to information about them. She would have loved to have had contact with her grandchildren, but it also kept her very worried that she did not have any information about them and did not even know whether they were safe and being looked after. In that situation, I was able to write to Northamptonshire County Council and say that if any information was able to be passed on, I would be able to do that. It replied simply that the children were safe.
There are sometimes obvious safeguarding reasons why information cannot be shared, but I think that the matter could be looked at again to see how the law can ensure safeguarding while also allowing grandparents to have basic information about their grandchildren just to reassure them that they are safe and well. I hope that, after the election, the issue of grandparents’ access to children can be taken forward by working together to ensure that the voice of grandparents, too, is taken into account when working with families. I will now draw my comments to an end. I look forward to hearing from other hon. Members and from the Minister.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this debate. I congratulate the hon. Member for Northampton South (David Mackintosh) on securing it and on introducing it so well. This issue is clearly of importance to those of us who are in Westminster Hall today, and I believe that it is also of importance to other hon. Members who unfortunately, for whatever reason, have been unable to make it to the Chamber or, indeed, are preparing for the election, which two weeks ago none of us was aware of. This issue comes up at advice centres. It comes up at my advice centre back home as well.
I declare an interest—because I am of that age—as a doting grandfather. Looking round the Chamber, I am not sure whether everyone is a grandparent, but I know that you, Mr Streeter, have achieved that goal. When I held my eldest son Jamie in my arms some 29 years ago, I thought that nothing in this world could top the pride and love that I felt as I looked into that perfect little face. I was wrong. There was a little girl who made her way into this world and into a special place in her grandfather’s heart that had never been touched before. My little Katie is eight years old. When I thought there was no more room left in my heart, little Mia came along—she is just three years old—underlining the fact that there is nothing more enjoyable than time with grandchildren. There is also the fact that, as we all know, they can be handed back whenever they get a bit stroppy. That is one of the great advantages of being a grandparent.
The fact of the matter is that we are here today in Westminster Hall to debate this issue because we want to ensure access for grandparents. I am lucky; I have access to my grandchildren. I am very fortunate. I am also fortunate that most of my family and friends are in the same position.
Julian Knight
I am absolutely convinced that the hon. Gentleman is a magnificent grandfather in many respects and an archetypal grandparent. This is a two-way thing. Both my grandmothers are still alive, and they are both 91 years old. One of them virtually brought me up from what was effectively a broken home. The relationship and bond that we formed is something that has carried me through my entire life. I cannot imagine anything worse than not having access. Does the hon. Gentleman agree that the right of children to have access to their grandparents is so important?
Jim Shannon
I fully and totally agree with that. I thank the hon. Gentleman for his intervention and for the words he put forward. I do not think anyone in the Chamber would not have the same opinion. There is something special about a grandparent’s relationship with their grandchildren, and I do not say that just because I am one. My mother is still living. She is 85 years old, and will soon be 86. As a great-grandparent, she dotes on the wee children. She always wants to hear what they are doing. That bond develops at a very early stage, even between my grandchildren and their great-grandmother. It creates a nice warm feeling. Unfortunately, there are many who long to see their grandchildren and are denied that opportunity. That is the reason for this debate today.
I am hoping to get away on a holiday this summer—probably for the first time—with my wife and the grandchildren. The memories made on that trip will be the stuff of dreams, because that is how dreams are made. The photographs will be special, and I will be able to spend quality time with them with no pressure. One way of ensuring that there is no pressure is to leave that mobile phone at home, because then you are incommunicado for a certain period of time. I can do that because my son and his wife are happy for me to be with Katie and Mia as much as I want.
I do not take that for granted, when I see so many grandparents shut out of their grandchildren’s lives, whether that is due to marital break-ups, a spin-off from the breakdown of a relationship, people moving away, or grandchildren being used as a tool against the grandparents. The guidance on access for grandparents to their grandchildren states that access should initially be sought through agreement with the parents or carers of the child, as the hon. Member for Northampton South outlined in his introduction. However, where such an agreement cannot be made, the grandparent can seek the leave of the court and, if successful, apply for a child arrangements order to agree access. That is all very well, but it is not as simple as that. It is not easy to do when parents are estranged, and unfortunately children are often used as a weapon, which is very painful.
As a grandparent, I can only imagine being cut out of my beautiful granddaughters’ lives. I would certainly do everything in my power to facilitate Katie and Mia visiting, no matter what, but if that was not possible and could not be achieved, I would have to go to court for access, which is expensive and soul-destroying when grandparents’ rights are so restricted. The hon. Gentleman made a salient point in his final few words about the pain that going to court causes not only to grandparents and parents but to children. They cannot quite understand what is going on or what all the arguments and fights are about, but they know that something is wrong and that they are the piggy in the middle, if I can use that terminology, being pulled from all sides. All sides may genuinely love their children or grandchildren, but access can be denied.
It is good to see the Minister in his place, and we look forward to his response. More must be done to support access rights. If that means enacting legislation to enshrine clearer rights for grandparents—that is what has been suggested by the hon. Gentleman and in interventions, and it is what I would look for, too—then that is what needs to happen. The Government enjoy the fact that one in four working families rely on grandparents for childcare, which saves the Government money in tax credits and childcare vouchers; it follows that grandparents should receive the benefit of Government notice and attention. That is what we are here today trying to achieve—that their rights are protected should the unthinkable happen. If today’s debate moves that process on and enables legislative change to come in the next Parliament, and if the Minister is able to respond in a suitable way, I would speak strongly in support. A nanny tax credit and such things are great, but it is clear that more support is needed for those who are not able to see their grandchild or grandchildren.
I fully support the motion and look to the Minister to ensure that, when the new Government are in place after 9 June, they take the issue on board and take steps to clarify further the rights of grandparents in the UK as a whole. On behalf of grandparents who do not have access to their grandchildren, I say passionately that that would be a step in the right direction.
Yasmin Qureshi (Bolton South East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Streeter. I thank and congratulate the hon. Member for Northampton South (David Mackintosh) on bringing such an important issue before Parliament. His speech set out the various considerations associated with this sensitive issue.
Grandparents can enrich the lives of children and provide support to parents trying to balance work and home life. They can also be the only people who tell parents off—I remember it was great hearing my mum’s mum telling her off—and often grandparents are the ones who stick up for the children and give them treats and things. The importance of grandparents in the lives of children cannot be stated often enough. Many people who have been lucky enough to enjoy a close and loving relationship with their grandparents accept that it is one of the best experiences a person can have, as the hon. Member for Solihull (Julian Knight) said.
However, family relationships sometimes break down. Having worked in family law, I am well aware of the pain and distress that frequently accompanies family breakdown. At its most extreme, it results in children being taken into care. Where there is a responsible grandparent available who can step in and avert that outcome, that is surely to be welcomed. A more frequent occurrence, as hon. Members have said, is grandparents becoming detached from their grandchildren when the parents separate. When that happens, grandparents who have been a central part of the child’s life can feel understandably excluded. It is quite right that they should have some form of redress to apply for access.
The current means used to decide where a child lives and with whom they have contact is child arrangements orders, which were introduced by the Children and Families Act 2014 to replace the previous framework of contact and residence orders. A child arrangements order can determine where a child lives, who a child spends time with— those persons are named in the order. It also details who they can make phone calls to, who they can visit and what activities they can do with a named, specific person.
Under the present system, the grandparents have to seek leave from a court to apply for a child arrangements order, and only if they have lived with the child for three years. The application generally requires leave from the court. That can cause a lot of problems. The stipulation of having stayed with the child for a minimum of three years can exclude various different arrangements, such as those applying to grandparents who have not specifically spent three years with the child, but are on the scene and see the children and provide a lot of support.
Over the past number of years, it seems that the number of grandparents applying for rights of access has gone down. That is unusual, bearing in mind that a lot of grandparents want to have access to their grandchildren. One reason is that they have to jump through the hoop of applying for leave, then going through the process, which can be quite costly and time-consuming. Many grandparents are not able to avail themselves of the process.
The Labour Government produced a Green Paper in 2010 with the intention of removing the requirement to seek the leave of the court, and a family justice review was set up in March 2010. That provision was supported by the coalition Government, who ordered a review in November 2010. However, they took the view that the need for grandparents to apply for the leave of the court before making an application for contact should remain. That is a plausible explanation for why the number of grandparents applying has reduced.
Obviously, everyone wants to prevent vexatious claims from grandparents or people doing it for malicious purposes—we want to ensure that those who go for it do so with the best motives at heart—but I am sure that if people in the legal profession put their heads together, they could come up with an acceptable halfway house. Perhaps we could offer free legal advice to grandparents about their options, or make the process simpler and speedier.
Jim Shannon
As elected representatives we look for solutions to problems, and one way of finding a solution is through the mediation process. Does the hon. Lady think that that might be a way of doing it? I am looking to the Minister for an answer to that, too.
Yasmin Qureshi
That is a helpful way to deal with these things. Arbitration or mediation has been found to work in many scenarios—whether for the divorce settlements of couples who are separating or for access to children, even if the person is in employment. We could explore that option, which is not expensive and is much more straightforward.
As I said, I am sure that if legal professionals and others in the system put their heads together, they would come up with a system that is much more flexible and responsive to grandparents’ needs and enables them to see their grandchildren without enormous legal obstacles and hoops that they have to jump through. This is not a party political issue: everybody accepts that grandparents have a very important role to play. I am sure the Department can come up with a more flexible, less costly solution that requires grandparents to jump through fewer hoops.
The Minister for Courts and Justice (Sir Oliver Heald)
We have had a very constructive, warm-hearted debate. I think we all found it moving to hear the hon. Member for Strangford (Jim Shannon) and my hon. Friend the Member for Solihull (Julian Knight) talk about the love they feel for their grandchildren and the very special role that grandparents can play. The hon. Member for Bolton South East (Yasmin Qureshi) talked about her grandmother telling her mother off and what fun that was. I think we all recognise that. Extended family life is important to all of us.
The hon. Member for Strangford made a good point about mediation. I did some family law cases as a barrister, and I have often thought that mediation can lead to the settlement of a family dispute or the breakdown of a relationship with less confrontation and heartache for everybody involved, so I think that was a very wise point. Comments were made about the pain of family breakdown and the court hearing. All of that is very well taken.
I cannot make any announcements today because we are in purdah, but I have previously said that, assuming the electorate allow it, we will introduce a Green Paper later in the year on family justice, which will provide the opportunity to look at these issues and a number of others that hon. Members touched on. Having said all that, I congratulate my hon. Friend the Member for Northampton South (David Mackintosh) on securing this debate on an issue that is vital and, as he said, complex. It is a pleasure to serve under your chairmanship, Mr Streeter.
The sorts of experiences that we are discussing—heart-breaking stories, as my hon. Friend put it—were recognised at his meeting with GranPart in Northampton, an organisation in which I know he takes a particular interest, as well as talking to his constituents more generally about the issue. We heard from my hon. Friend the Member for Eastbourne (Caroline Ansell) what constituents have told her about the issue. I agree with my hon. Friend the Member for Hendon (Dr Offord), who said that he has a strong support group in his constituency, that children should not be used as weapons.
I am sure that most children see their grandparents as important figures in their life and benefit tremendously from a positive relationship with them. For many children, loving relationships with grandparents enrich family life. As was mentioned, grandparents often play a key role in the raising of their grandchildren, particularly with so many parents at work these days, and I recognise that grandparents can be a great source of stability for children when parents decide to separate. They can provide a sense of continuity in traumatic circumstances at a time when children are fragile. Sometimes, when parents are unable to meet their children’s needs, grandparents can take on full responsibility for their care.
After parental separation, in many cases, grandparents continue to enjoy relationships with their grandchildren, although the circumstances are obviously different as the parents live apart. However, there are some cases in which grandparents are prevented from seeing their children, with no good reason. The Government recognise the immense distress caused to grandparents and children when parents separate. In such difficult circumstances, which are similar to bereavement, children often feel a greater sense of loss: they have lost not only a parent, but grandparents too. I am sure that some hon. Members and hon. Friends who have spoken in this debate will recognise such scenarios from the constituency experiences that they have described.
High-conflict cases involving disputes over children can have an impact on those children. Parents can end up viewing grandparents as being on the other party’s side, which can become a barrier to their continued involvement in their grandchildren’s lives. Grandparents, too, can be tempted to see the other parent as the enemy because they feel that their son or daughter has been wronged. That is part of the difficulty, unpleasantness, hurt and distress of a break-up, and such feelings of hurt are fully understandable, but if the children are exposed to that sort of adult conflict, it is damaging for them. That is why the current law does not provide for any automatic decisions, but gives the court great flexibility.
On grandparents in private law disputes, when grandparents’ informal attempts to secure ongoing involvement in their grandchildren’s lives fail, they have the option of asking the court to intervene. They might not want to; as my hon. Friend the Member for Eastbourne said, they might feel that there has been enough hurt and distress in the family without going to court and facing it all again. The Children Act 1989 includes arrangements that help grandparents to re-establish relationships with their grandchildren when things go wrong, but a court process is involved. Family courts can make a child arrangements order to determine with whom a child is to live, spend time or otherwise have contact, and when and where such arrangements are to take place.
A child arrangements order will usually provide for direct face-to-face contact, such as long or short visits and overnight stays where appropriate. It may also provide for the child to have no contact with a person or specify that that contact is to be indirect, through emails, telephone calls, letters or cards. There is a lot of flexibility in the court’s powers to make a child arrangements order, but the welfare of the child is the paramount consideration when the court considers any matter that relates to their upbringing. That is in contrast to any perceived rights of any adult family members.
Whether the court will order that a grandparent should have involvement in a child’s life will depend on a number of factors. Where one or both parents oppose such involvement, the court will apply the factors in the welfare checklist in section 1 of the 1989 Act. It may ask the Children and Family Court Advisory and Support Service to produce a welfare report on the beneficial impact of grandparent involvement and on any risks of harm from ongoing parental opposition to such involvement and from the exposure of the child to the resulting conflict. That report may include the ascertainable wishes and feelings of the child; obviously, the older the child is, the more important those are considered to be.
It is open to anyone, including a grandparent or other family member, to apply for a child arrangements order. However, the situation is not the same as that for parents; as has been said, grandparents and other family members usually need to obtain the permission of the court before proceedings can begin. This may appear to be an extra hurdle, but experience suggests that grandparents do not usually experience any difficulty in obtaining permission if their application is really about the interests of the child. Permission to apply may be sought at the same time as making the application itself, just by ticking a box—there is no extra fee, process, or hearing.
The leave requirement is designed not as an obstacle, but as a filter. The idea is to sift out applications that are not in the child’s best interests, such as vexatious applications. I reassure hon. Members that the law sets out clear objective criteria for the court to determine these issues. There are exceptions; not every case requires leave. In certain circumstances, grandparents do not have to apply for permission. Under section 10(5) of the 1989 Act, a grandparent may automatically be entitled to apply for a child arrangements order if
“the child has lived for…at least three years”
with them; the three-year period
“need not be continuous but must not have begun more than five years before, or ended more than three months before, the making of the application.”
A grandparent may also apply under section 10(5) if they have the consent of both the parents or
“the consent of each of the persons named”
in an existing child arrangements order, in which case there is no need to obtain leave to apply.
Jim Shannon
I referred to the fact that many grandparents look after their grandchildren when they are out of school and the parents are working. Has the Minister had a chance to consider whether the childminding that grandparents do could be part of the solution that we are trying to find? If the grandparents are making a constructive contribution, such as by childminding, will the Government look at whether we can use that as a method of coming to an agreement?
Sir Oliver Heald
That is certainly an interesting thought. Of course, I cannot say what the next Government will do. As the hon. Gentleman knows, we are in the funny—well, the important and democratic—period of seeking re-election. [Interruption.] Very, very important, yes. We must not take the electorate for granted, and one Parliament cannot bind another, but if the Green Paper process goes ahead, which I hope it will, all these issues can be looked at in that context. A history of having minded the child in the way that the hon. Gentleman mentioned is an important factor.
I think we would all agree that disputes over children can be very complex—a point made by my hon. Friend the Member for Northampton South. Parental disputes over children can also affect wider family relationships, and the relationship between the children and their significant relatives can be vulnerable to an unpleasant breakdown involving a lot of distress. No one would want to rekindle distress or make it worse for the child.
Research has provided some insights. A study funded by the Nuffield Foundation, a charity that aims to improve social well-being, gives some insights into how easy it can be for wider family members to become embroiled in conflicts over children. The study was of 197 case files from county courts in England and Wales in 2011, and its primary aims were to understand the detail of different types of childcare arrangements set up during litigation at county court level and to shed some light on how the different types of county court orders then in existence were used and understood. Some 12% of the cases examined were not disputes between parents but involved non-parents, such as grandparents or other relatives who were caring for the children, and three of the cases concerned applications from grandparents to have contact.
Although the sample size was small, the findings shed light on how some grandparents can become directly involved in conflicts that can negatively influence their grandchildren. The findings also demonstrate the considerable lengths to which the court will go to facilitate a child’s involvement with their grandparents, and the court’s difficult task of weighing up the benefits and risks of such contact. I think we would all agree that the principle of grandparents being part of a child’s life is a very important one, and the research shows that the courts take it seriously too.
I will say something about public law cases because grandparents play an important role in them. It is a principle of the 1989 Act that local authorities should support the upbringing of a child by their family wherever possible, if it is the most appropriate way to safeguard the child’s welfare. Local authorities can apply to the court for a care order when they believe that a child has suffered or is likely to suffer risk of significant harm. The care order allows the authority to take over the welfare of the child. Local authorities must seek to give preference to placing looked-after children with wider family members first, if it is not possible to return them to the birth family and, if that is not possible, with a friend or another person connected with them. The court can appoint a special guardian as a permanent alternative to long-term foster care or adoption, and that is often a family member such as a grandparent, or a friend.
In conclusion, the courts recognise the importance of children maintaining relationships with their grandparents following parental separation. Family courts are cognisant of that when considering applications relating to child arrangements. However, such cases are not straightforward, given the tensions and ongoing conflict that can often arise when parents separate, and for that reason, as I am sure hon. Members will agree, the welfare of the children must continue to be the paramount concern.
We have had a good debate and some good points have been made. If the Green Paper process goes ahead, as I hope it will, there will be an opportunity for us to consider the matter more fully and for organisations that have particular viewpoints to make a contributions.
Mr Gary Streeter (in the Chair)
Mr Mackintosh, you have a couple of minutes to wind up if you wish.
David Mackintosh
Thank you, Mr Streeter. I will be brief. I thank the Minister for his response and all hon. Members who have taken part. I know that my constituents who have experience of this type of separation from their grandchildren and are watching the debate will be grateful that the matter has been talked about here in Parliament and will look forward to the Green Paper process hopefully continuing in the autumn.
Question put and agreed to.
Resolved,
That this House has considered grandparents’ rights of access to children.
Written Statements
(6 years, 11 months ago)
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ECOFIN: 21 March 2017
(6 years, 11 months ago)
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The Chief Secretary to the Treasury (Mr David Gauke)
A meeting of the Economic and Financial Affairs Council (ECOFIN) was held in Brussels on 21 March 2017. EU Finance Ministers discussed the following items:
Early morning session
The Eurogroup president briefed Ministers on the outcomes of the 20 March meeting of the Eurogroup. Ministers discussed the current economic situation. The European Commission presented its review of national provisions adopted in compliance with the treaty on stability, co-ordination and governance in the economic and monetary union (the fiscal compact) conducted in accordance with article 8 of the fiscal compact, which was followed by an exchange of views by Ministers. Austrian Finance Minister Schelling explained his views as regard a proposed fine for the manipulation of debt statistics in Austrian land of Salzburg, and the Polish delegation, on behalf of the Chairman of the EIB’s board of governors, outlined the suggested process for the upcoming election of the EIB president.
Reduced VAT rate for electronically supplied publications (e-publications)
Ministers discussed political issues in relation to the proposal for a Council directive regarding rates of value added tax applied to books, newspapers and periodicals. The proposal would give member states the ability to apply reduced rates or a zero VAT rate to e-publications and physical publications.
General reverse charge mechanism
Ministers discussed the political issues in relation to the general reverse charge mechanism (GRCM). This is a proposal for an amendment to Council directive 2006/112/ on the common system of value added tax to allow the temporary application of a GRCM to supplies of goods and services above a certain threshold, with the aim of combatting VAT fraud.
Current financial service legislative proposals
The Council presidency provided an update on current legislative proposals in the field of financial services.
European Semester 2017:
a) 2017 country reports and in-depth reviews
b) Implementation of country-specific recommendations (CSRs)
Following a presentation by the Commission, Ministers discussed the country reports published by the Commission on 22 February, including the assessment of CSR implementation and, where relevant, the framework of the macroeconomic imbalance procedure. The Czech Republic, Italy and Slovenia were invited to reflect on their experiences of implementing reforms to the business environment, followed by an exchange of views.
Follow-up to the G20 meeting of Finance Ministers and Central Bank Governors on 17-18 March 2017 in Baden-Baden
The presidency and the Commission informed Ministers on the outcomes of the G20 meeting.
Any other business
a) European Defence Fund
The Commission informed Ministers about its European defence action plan, focusing in particular on the launch of a European defence fund. This item was delayed from February ECOFIN.
b) Status of implementation of financial services legislation
The Commission informed Ministers on the status of implementation of financial services legislation.
[HCWS614]
ECOFIN: 7-8 April 2017
(6 years, 11 months ago)
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The Chancellor of the Exchequer (Mr Philip Hammond)
An informal meeting of the Economic and Financial Affairs Council (ECOFIN) was held in Valletta, Malta on 7-8 April 2017. EU Finance Ministers discussed the following items:
Working Lunch
The Eurogroup president briefed Ministers on the outcomes of the 7 April meeting of the Eurogroup. Ministers discussed the challenges and opportunities faced by the Economic and Monetary Union (EMU), on the basis of the progress made with respect to the Five Presidents’ report, and the Commission’s White Paper on the future of Europe.
Working Session I: Non-performing loans
Ministers were joined by Central Bank Governors to discuss the current situation of non-performing loans (NPLs) in European banks.
Working Session II: Boosting private investment in North Africa and beyond—What role for the EU institutions?
Ministers discussed ways to encourage further private investment in North Africa and beyond, given the importance of these neighbouring regions to the EU. The discussion drew on analysis by Bruegel and included participation from a number of actors in the region including the European Investment Bank (EIB), the World Bank and the European Bank for Reconstruction and Development (EBRD).
Working Session III: Tax certainty in a changing environment
In the context of rapid changes in the international tax system and work being conducted by the OECD and the IMF, Ministers reflected on ways to improve tax certainty in support of the EU’s attractiveness as a place for doing business.
Any Other Business: IMF and G20 issues
Ahead of the April spring meetings in Washington DC, Ministers agreed the EU terms of reference for the G20 meeting of Finance Ministers and Central Bank Governors to be held on 20-21 April, the EU statement to the IMFC, and an updated agreement on EU co-ordination in the IMF.
[HCWS613]
Employment, Social Policy, Health and Consumer Affairs Council: Informal Meeting
(6 years, 11 months ago)
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The Minister for Employment (Damian Hinds)
The Employment, Social Policy, Health and Consumer Affairs Council met for the informal meeting of Ministers on 3 and 4 April 2017 in Valletta, Malta; I represented the UK. The informal meeting does not tend to include legislative matters, but provides an opportunity for in-depth policy debates. The subjects for discussion are determined by the presidency, who hosts the meeting.
The European Commission presented an EU road map for “making work pay”, which was the theme of the informal meeting. The Commission set out details of the White Paper on the future of Europe as well as an update on expected proposals for the European pillar of social rights.
The presidency led a discussion on skills, emphasising how poor skills lead to social exclusion. Member state interventions highlighted the importance of investing to raise skill levels and improve the quality of jobs.
A plenary discussion was held on the subject of addressing inequalities in the labour market, with a focus on the challenges of responding to digitalisation, the rise in self-employment, new types of employment, and demographic change.
The presidency gave a presentation on “moving away from benefit dependency—a Maltese perspective”, setting out how work has to be incentivised over benefits and how activation is critical. The Social Protection Committee chair outlined a framework of six key themes, including the balance between activation and income support; the provision of individualised support; and the availability of affordable services.
The final plenary of the informal meeting considered the labour market as a vehicle for social inclusion. Member states emphasised the importance of activation for the long-term unemployed, as well as the role of access to child and social care.
[HCWS615]
House of Lords
Death of a Member: Lord Williams of Baglan
The Lord Speaker (Lord Fowler)
My Lords, I regret to inform the House of the death of Lord Williams of Baglan on 23 April. On behalf of the House, I extend our condolences to the noble Lord’s family and friends.
Leaseholders: Holiday Letting
(6 years, 11 months ago)
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Baroness Gardner of Parkes
To ask Her Majesty’s Government what plans they have to prevent leaseholders whose leases do not permit the short-term subletting of their properties from registering those properties with holiday letting firms.
Baroness Gardner of Parkes (Con)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as in the register.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, the Government support the sharing economy. Individual leases and tenancy agreements are a matter for landlords and tenants. Tenants should always seek permission before subletting where that is contractually required.
Baroness Gardner of Parkes
One only wishes that was the situation. Too often, these are illegal lets, quite contrary to the tenancy agreement and the lease. Will the Minister consider, as he is still working on regulations, allowing people to have some access through the council whereby they could apply for a certificate indicating that they had the right to a short let? Then people would know that those were legal rather than illegal.
Lord Bourne of Aberystwyth
My Lords, the Government are not intent on interfering with freedom of contract. It is a matter between landlords and tenants. I must make it clear that we are not considering regulations in this area at all.
Lord Palmer of Childs Hill (LD)
My Lords, as the Minister will know, the Residential Landlords Association says that there are now 33,000 listings on the Airbnb website for holiday-type and short-term lettings. Alarmingly, 65% were available for more than 90 days a year, which is the point that the noble Baroness, Lady Gardner, is really getting at because that is in breach of planning law. Will the Minister please say whether central Government have made any assessment of what that has done to the housing market? Is it sufficient to leave it to local authorities, which do not enforce this? We make laws and we do not enforce them.
Lord Bourne of Aberystwyth
My Lords, breach of planning regulations is very different from the issue of freedom of contract. In relation to that matter, I have met with Airbnb. It does not now carry anyone who lets their property for more than 90 days at a time unless they have planning permission to do so. That is the company’s rule and it has contacted all those who propose to let property to let them know that. Since then, the Minister for Housing and Planning has written to all the other suppliers indicating that they should do similarly and that if there is a contractual provision they should abide by that as well.
Lord Campbell-Savours (Lab)
Why not just reduce the time from 90 days to a lower number?
Lord Bourne of Aberystwyth
My Lords, the 90-day limit was set in the Deregulation Act. Other towns throughout Europe might have different limits. Outside of London, there is no limit. Ninety days was the limit set in the Deregulation Act.
Lord Bourne of Aberystwyth
No, indeed it does not, but we are not going to.
Lord Kennedy of Southwark (Lab)
My Lords, I refer noble Lords to my entry in the Register of Lords’ Interests. The noble Baroness, Lady Gardner of Parkes, raised an important issue. Will the Minister say a little more about why they are not prepared to act?
Lord Bourne of Aberystwyth
My Lords, it is very clear that it is up to individual landlords. In the case of Nemcova v Fairfield Rents Ltd in 2016, just a year ago, a landlord enforced a provision in the lease to ensure that the tenant did not act in breach of the lease. It has never been the case that any Government would interfere with freedom of contract where parties are open to go to court in relation to a contractual matter. This is not a planning issue.
Lord West of Spithead (Lab)
My Lords, in four years’ time Annington Homes, which controls all of the Ministry of Defence’s married quarters, will be able to reassess the cost for rent and letting these back to the MoD. There is bound to be a huge increase. Does the Minister not think that we need to look at this, because it will impact yet again on the defence boat and there will be even fewer ships?
Lord Bourne of Aberystwyth
My Lords, I am pleased to see that over the Recess the noble Lord has not lost his ability to get questions relating to defence under the radar, as it were. I will of course ensure that he gets a full response.
Baroness Gardner of Parkes
My Lords, is the Minister aware that in some cases people coming in are endangering lives and threatening long-term residents in blocks? Is he also aware—I think I have drawn the House’s attention to this before—that in New York and Berlin blocks that have long-term residents are not allowed to do short lets at all? All the short lets have to be done in places that are designated as such and therefore do not destroy the lives of people. I know personal cases where people have lived in these blocks for more than 50 years and they find that their front door is smashed and they are threatened. It is really quite a terrifying situation.
Lord Bourne of Aberystwyth
My Lords, the whole House will of course sympathise with the situation that the noble Baroness is in if she is suffering from these sorts of situations, but there is a whole panoply of criminal law to deal with these issues. This is nothing to do with Airbnb; it is a breach of the law relating to violence and criminal damage. It is not a matter for Airbnb. I note what she says about other cities, but that is not the provision here. The provision set in the Deregulation Act specifically for London is 90 days. If companies are acting within that, as Airbnb is, we can ask little else of them.
Lord Kennedy of Southwark
My Lords, the noble Baroness raised a really important issue. Why can the noble Lord not say that he will have a look at those matters?
Lord Bourne of Aberystwyth
My Lords, for any criminal damage, which is admittedly a very serious issue, there is of course a panoply of the law, such as the Criminal Damage Act, to deal with such a situation. Breach of contract is a matter for the landlord and tenant to sort out between them. The Government have no role in enforcing contracts.
Brexit: United Kingdom-Africa Trade and Development
(6 years, 11 months ago)
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Lord Oates
To ask Her Majesty’s Government what measures they intend to take to promote United Kingdom–Africa trade and development co-operation in the transitional and post-Brexit periods.
The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, unlocking barriers to trade to reduce poverty is an important part of our economic development strategy. As we leave the EU, our priority is to ensure that we do not disrupt vital trading relationships, including with our African partners.
Lord Oates (LD)
I thank the Minister for his reply. I hope he is aware of the Africa All-Party Group’s report on UK-Africa trade, which underlines the potentially damaging impact of Brexit on African economies. Will the Government consider carefully the report’s recommendations, in particular the need to prioritise a transitional regime to maintain preferential, non-reciprocal market access to the UK for those African economies?
Lord Bates
I thank the noble Lord for his Question, but I do not accept his pessimistic outlook. We have said that the economic partnership agreements we have in place through the EU are working well and we want them to continue. We set that out in the exiting the EU White Paper. Our intention is to have other measures in place by the time that exiting happens. The great benefit of this is that we will not be bound or limited to the trade preferences currently through the EU. We can have a broad new arrangement that will benefit African countries as well as our own.
Baroness Royall of Blaisdon (Lab)
My Lords, I am glad that the Prime Minister has made clear her commitment to the 0.7% figure. That is terribly important. As the House will be aware, while there is global growth, poverty is growing in Africa, where there is increasing inequality. What are the Government doing to ensure that trade and development policies are inclusive and pro-poor? Will the noble Lord agree that, as we step up our trade relationships, we must ensure that they enhance sustainable and inclusive development?
Lord Bates
That is right. All those points were made by the Secretary of State when she launched the economic development strategy in Ethiopia in January. We have taken this matter forward seriously. No country has ever successfully defeated poverty without economic development and economic growth. We want to be at the forefront of ensuring not only that there is FDI but that those countries can have access to our markets on the most preferential terms.
Lord Hannay of Chiswick (CB)
My Lords, does the Minister recognise that the relationship with the African, Caribbean and Pacific countries which we have as a member of the EU covers a lot more than just trade and aid? It also covers guaranteeing the export receipts from primary materials and sugar. What plans do the Government have to look after those aspects when we have left the European Union?
Lord Bates
Those are all important points, as the noble Lord will know, which is why we want to make sure that arrangements relating to all matters covered by the EPAs continue not just until the point at which we leave but beyond. We want also to take the opportunity to discuss with our bilateral partners in Africa, the Caribbean and elsewhere how we can improve on the current arrangements so that they might work better for those in poor countries.
Viscount Ridley (Con)
My Lords, further to the point that my noble friend the Minister has just made, can he confirm that African exporters to Britain face the high EU external tariff and that, after Brexit, there will an opportunity to review that and therefore to increase trade between the UK and Africa?
Lord Bates
My noble friend is right to raise that point. The lowest-income countries are able to come in duty free and tariff free under the Everything but Arms agreement, but there is more to be done on the middle-income countries. There is now more flexibility: we are leaving the EU, but we are still embracing the world. We want to put free trade at the heart of everything that we do—that has been set out clearly. The opportunity for free trade to lift ever more people out of poverty around the world is something that we will grasp with full measure.
The Lord Bishop of Southwark
The Minister may know that I am a regular visitor to Zimbabwe, where my diocese has links with four of the five Anglican dioceses there. How do Her Majesty’s Government propose to respond to the preponderance of Chinese investment both there and in other African nations, both in infrastructure and major economic undertakings?
Lord Bates
I do not think that we see investment in Africa by any country as a problem. We see a significant gap in finance and investment, which Africa needs. The gap to meet the global goals is some $2.5 trillion per year whereas aid flows amount to only some $150 billion. The gap has to be filled by private investors. We welcome them from wherever they come. As the right reverend Prelate will know, we are certainly playing our part in Zimbabwe to encourage investment and to identify investment opportunities in both directions.
Lord Chidgey (LD)
My Lords, in January this year, Dr Rob Davies, the South Africa Minister of Trade and Industry, reminded the Government that the United Kingdom is the major destination among EU nations for South African investment. It invests more here than in any other EU country. The UK also accounts for 20% of South Africa’s wine exports and 30% of its fruit exports under the current EU economic partnership agreements. What specific actions are the Government taking to allay South African concerns and to maintain the strength of what is a key strategic market post Brexit, when the UK will be excluded from some of those treaties?
Lord Bates
That conversation happened when Liam Fox, the Secretary of State for International Trade, was in South Africa talking about how we could enhance trade co-operation between our two countries. It is important that we do that. We also need to see Africa as a tremendous opportunity—I know that the noble Lord shares my view on this. Africa will be a market of some $30 trillion by 2050 and will have a middle class the size of Europe. It is in our enlightened self-interest to build those strong links and maintain free trade.
Lord Lea of Crondall (Lab)
Does the noble Lord accept that the elephant in the room in this debate is a country called China? China is growing very fast in Africa and says quite explicitly that it thinks it very important that the main Chinese relationship will be with the EU. Instead of saying that everything in the garden will be lovely, would not the Minister find it more useful to think how the constructive relationship with EU countries and the EU as such will continue?
Lord Bates
I totally agree but refer to the point I made before that the problem in the crisis we face at the moment, particularly in sub-Saharan Africa, is a shortage of investment rather than too much. All the investments made by other countries and private investors are of course a matter between that particular country and the investor making those decisions. We do not want to get in the middle of that. We want to encourage as much investment as possible in that area so that growth can happen.
Lord Collins of Highbury (Lab)
My Lords, the key to what the noble Lord said is that there are opportunities here but principles must govern them. The most important principle is a pro-poor and pro-development policy. Can the Minister assure the House that his department will be heavily involved in future trade negotiations with Africa? I do not have confidence in the Minister responsible for international trade to carry through those principles.
Lord Bates
That is the reason we set up a cross-government programme including the prosperity fund to build economic trade and development. It is why we hosted the Commonwealth Trade Ministers’ meeting here last year. It is the reason the Secretary of State for International Trade is travelling round the world with his other Ministers, trying to put in place the groundwork for these trade agreements in future. We all recognise that free, unfettered trade is one of the best routes out of poverty ever known and we need to do more to encourage it so that people get the opportunity to come off aid dependency and into a self-sustaining economic future.
Baroness Hayman (CB)
My Lords, today is World Malaria Day. I do not expect the Minister to have read and digested the report published today, Global Britain and Ending Malaria: The Bottom Line, compiled by Malaria No More and Ernst & Young, but it sets out that malaria costs this country £765 million in lost trade opportunities with the most affected countries. Does he agree that investment in malaria control not only saves lives and improves the economies of the affected countries but is a major benefit to this country in terms of life sciences investment and boosting British trade?
Lord Bates
I am very happy to do that on World Malaria Day. I have not seen that particular report but the World Health Organization’s annual report, published in December, pointed to the fact that malaria-related deaths have reduced by some 60%, which means about 6 million lives have been saved as a result. That was why the Secretary of State announced in September that we will invest a further £1.1 billion in the global fund to tackle AIDS, TB and malaria, which is another demonstration of this Government’s commitment to the poor.
Literacy in the Workforce
(6 years, 11 months ago)
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Baroness Rebuck
To ask Her Majesty’s Government what steps they are taking to improve standards of literacy in the workforce.
Baroness Rebuck (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare my interests as listed in the register.
The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)
My Lords, we know that strong literacy skills are fundamental to people’s education and employment prospects. That is why we have taken steps to improve literacy standards for people in the workforce by embedding English into our major education and work-based training programmes. We are also providing full funding for adults to access free English courses up to the equivalent level of GCSE, supporting community and workplace programmes, and working to improve the quality of English teaching for adults.
Baroness Rebuck
I thank the Minister for that Answer, but 9 million adults in England suffer from poor literacy and would struggle to send a simple email or fill in a basic job application form. The CBI’s 2015 business survey shockingly showed that the problem was getting worse, not better. Some 50% of businesses reported a workforce literacy deficit, up from 40% in 2009. The Learning and Work Institute and the Joseph Rowntree Foundation estimate that an extra £200 million needs to be spent on adult literacy every year to ensure that by 2030 all adults will have sufficient basic skills. Communication, numeracy and digital skills all depend on literacy, so does the Minister agree that scaling up local literacy interventions in the 100 worst-performing constituencies, as identified by the National Literacy Trust and Experian, is a prerequisite to fulfilling the post-Brexit industrial policy? Would he agree to prioritise adult literacy—this is an important question—and provide the necessary funds to address this chronic and worsening problem?
Noble Lords: Too long!
Lord Nash
The noble Baroness is absolutely right to highlight this important issue, which is why we are increasing funding for adult skills participation by 40% from 2015-16 to 2019-20. We have integrated English study requirements into 16-18 education, future technical routes and apprenticeships, and we are working closely with employers to ensure that courses and qualifications meet their needs. I also agree with the point the noble Baroness makes about the importance of local provision, which is what our focus on opportunity areas and the importance of a local offer is all about.
Baroness Whitaker (Lab)
My Lords, there are also children who drop out of school before they become adequately literate but who would nevertheless really like to work. Could the Minister arrange to make apprenticeships more open to those who need to further develop their literacy skills?
Lord Nash
The noble Baroness makes a very good point and we are doing this; for instance, the Maynard report was very focused on the issue. There has in fact been a doubling of pupils who did not have their grade C in English at 16 achieving it by 19—the number of pupils who have caught up has doubled since 2010.
Lord Bird (CB)
My Lords, if the Government are really determined to tackle the question of literacy, can we see a more vigorous defence of our libraries as well as a more vigorous intervention in our prisons where many of our young men and women are left with deep literacy problems?
Lord Nash
I agree entirely about the importance of books and libraries. We have seen some library closures but this is a responsibility for local authorities, and there are many good libraries. As far as prisons are concerned, the Prison Safety and Reform White Paper has committed to assessing on entry all prisoners’ education needs, including maths and English, in order to create a personalised learning plan and to focus very much on their literacy skills. I agree it is absolutely essential that we educate prisoners so that they can gain employment after their sentence.
Lord Watts (Lab)
My Lords, the Minister says he accepts that this is a major problem. Does he intend to find £250 million to address it, as was highlighted in the report?
Lord Nash
I think that we have made significant progress. I have talked about the 40% increase in funding over the next five years. We know that the OECD told us that our 2012 school leavers were among the most illiterate and innumerate in the developed world after more than 11 years in education up to 2012. We have made considerable progress on that, which is partly what our apprenticeships and T-level reforms are all about.
Lord Tebbit (Con)
Does my noble friend not think that at the root of this problem is the poor performance of teachers in many of our schools? They simply do not seem to be interested in teaching the basic skills of literacy and other subjects. Perhaps while they are at it, they could also, with benefit, teach some of their pupils how to ask a question briefly and succinctly and not stand and read it for hours on end.
Lord Nash
On the last point, I entirely agree with my noble friend about the benefits of précis. I remember spending a lot of time at school studying précis and I am sure that many people, including civil servants, could benefit from some training on that. But I pay tribute to our hard-working teachers who have supported with enthusiasm our phonics programme, which has resulted in many more children being on track to be confident young readers, and of course we now emphasise the importance of grammar in our curriculum.
Lord Storey (LD)
My Lords, the Minister will confirm that literacy levels are the highest they have ever been, and that is thanks to the dedication of our teachers. However, a small number of young people slip through the net and there are some enlightened employers who help their workforces to develop their literacy skills while they are at work. That not only gives them greater employability but helps with their personal confidence. Sainsbury’s is an example of a company which does that. Will the Minister look at how other companies might be involved in similar schemes?
Lord Nash
The noble Lord is quite right and is always well informed on this. We now have a higher proportion of young people than ever leaving compulsory education with a C or equivalent in English. We also work with organisations such as Unionlearn and the Learning and Work Institute to promote literacy training for people in the workplace. But I shall certainly look at the points he has made and I would be delighted to discuss them with him further.
General Election: Voting Rights
(6 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Walmsley
To ask Her Majesty’s Government what plans they have to allow British citizens who have lived outside the United Kingdom for more than 15 years to vote in the forthcoming General Election.
Baroness Walmsley (LD)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and I declare an interest as the mother of an expat of more than 15 years.
Lord Young of Cookham (Con)
My Lords, legislation scrapping the 15-year rule will not now be introduced in this Parliament. I understand the disappointment of those affected. However, it is my hope that this will be delivered in the next Parliament, so that those who have lived abroad for more than 15 years will be able to participate in future elections.
Baroness Walmsley
My Lords, I thank the Minister for his reply, but I do not think that hundreds of thousands of disenfranchised British expats will thank him. The Government have been in place for two years now. Why have they not fulfilled their promise in the 2015 manifesto to give votes for life to these people? Is it not because the Government are afraid of how they might vote, given that the Government have ruined the lives of many of them who live in other parts of the EU by choosing a hard Brexit?
Lord Young of Cookham
My Lords, when Members of Parliament, including Liberal Democrat Members, voted overwhelmingly last week that this Parliament should come to a premature close, it was inevitable that certain measures would not be introduced in this Parliament. However, I hope that if this measure is introduced in the next Parliament, it will have the full support of the Liberal Democrats, in view of the interest that the noble Baroness has just shown.
Lord Kennedy of Southwark (Lab)
My Lords, I refer noble Lords to my entry in the Register of Lords’ Interests. Can the noble Lord tell the House what additional resources the Government are providing to enable local government to register more citizens to vote? What representations are they making to the Residential Landlords Association and the Association of Residential Letting Agents to encourage them to bring it to the attention of their tenants that they could be eligible to vote—because tenants in the private sector are one of the most underrepresented groups at elections?
Lord Young of Cookham
The noble Lord is quite right that a number of groups are unregistered in the current regime. Over recent years, the Government have devoted resources to trying to increase registration of those groups, particularly students. We have also made it much easier for people to register to vote: you can vote online in about three minutes. A number of initiatives are also being taken by the Electoral Commission, focused on some of the groups that the noble Lord rightly mentioned, to encourage them to vote. Over forthcoming weeks, the Electoral Commission will of course have an additional campaign as part of its responsibility of informing people how and where to register to vote.
Lord Lexden (Con)
I have asked the Government on many occasions to expedite this important matter, and the disappointment will be widespread and great among our fellow country men and women living abroad. When will the Government reach decisions on the issues set out in their policy statement relating to this area, which was published last October?
Lord Young of Cookham
My noble friend is quite right to draw the attention of the House to the progress that we have made in this Parliament by publishing the Ministerial Statement on 10 October. That Statement made it clear that our plan was to have the policy implemented before the next scheduled parliamentary election. Discussion is now taking place on how to register and who will be eligible to register. I hope that Ministers, if they are indeed returned after the next election, will be able to take this initiative forward.
Lord Wallace of Saltaire (LD)
My Lords, the Government will recall that in the referendum campaign a number of voters living abroad did not receive their postal vote in time to vote. There was much discontent over that. Can the Government make sure that on this occasion, those who wish to vote while living abroad and who are registered are provided with the opportunity to vote in good time?
Lord Young of Cookham
My Lords, I understand that I said earlier that people could vote online; I should have said that they could register online. I am happy to put the record straight.
When people tried to register before the last referendum, there were times when the system could not cope. Since then, steps have been taken not only to increase the capacity of the system but to build in extra safeguards against any attempt at sabotage.
Lord Dubs (Lab)
My Lords, would it not be more important to give the vote to 16 and 17 year-olds, whose future is in this country, than to people who have left this country, do not pay taxes and seem to have no interest in us?
Lord Young of Cookham
Since the last election, the issue has been discussed on several occasions in the other place. Each time that it was put to a vote, the proposition that the noble Lord has just referred to was voted down. We are in line with most mature democracies in having a voting age of 18, which is aligned with the age for jury service. I do not detect a huge public demand to lower it.
Lord Hayward (Con)
My Lords, what efforts are being made by different agencies and government to ensure not only that there is participation in terms of registration to vote but that those people who will be on holiday on general election day can vote?
Lord Young of Cookham
My noble friend takes a keen interest in matters psephological. He is quite right that a large number of people who have retired will be taking their holiday in June. The Electoral Commission is aware of this propensity and, as part of its campaign to encourage people to register to vote, it will be taking on board the necessity to remind people who are going to be away that they should vote by post. I suspect that the political parties will be taking similar initiatives.
Lord Grocott (Lab)
Will the Minister explain what principle he is defending? He seems to be saying that someone who has lived and worked abroad and has not paid taxes or lived in the United Kingdom for, let us say, 50 years, and has not even been on an electoral register in the United Kingdom to tie him or her to a particular part of the United Kingdom should have exactly the same rights in determining who the Government of the United Kingdom should be as a lifetime resident of this country.
Lord Young of Cookham
British citizens living abroad have been entitled to vote ever since I have been a Member of Parliament. Initially, it was 20 years, which was then reduced to 15 years. So the principle that the noble Lord seems to object to has already been conceded; the debate is where you draw the line. At the moment, it is 15 years. My party stood on a manifesto to increase it. Those who have lived abroad for more than 15 years quite often have families in this country and connections in this country, and in many cases they may want to return to this country, so it is perfectly right that they should be enfranchised for future elections.
Northern Ireland (Ministerial Appointments and Regional Rates) Bill
Tuesday 25th April 2017
(6 years, 11 months ago)
Lords ChamberRead Full debate Northern Ireland (Ministerial Appointments and Regional Rates) Act 2017 View all Northern Ireland (Ministerial Appointments and Regional Rates) Act 2017 Debates Read Hansard Text
Technical and Further Education Bill
Tuesday 25th April 2017
(6 years, 11 months ago)
Lords ChamberRead Full debate Technical and Further Education Act 2017 View all Technical and Further Education Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 125-I Marshalled list for consideration of Commons reason and amendment (PDF, 64KB) - (24 Apr 2017)
The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)
My Lords, this Bill is integral to the Government’s ambitious reforms for creating a world-class technical education system. These reforms will help to ensure that technical education in our country provides everyone with the skills and opportunities they need to succeed and gain skilled employment on a long-term basis, and at the same time they will serve the needs of our economy and reduce our skills gap. The Bill’s further education insolvency regime will also protect students at FE colleges in the event that their college faces financial difficulty.
I am very grateful for the interest and input from noble Lords across the House on the Bill, and in particular how they have helped strengthen the Bill and its related policy areas. It is quite clear that the Bill has strong cross-party support. I am glad that the Bill returns to this House for further debate on two amendments from the other place. I will deal with these amendments in turn. Given the volume of business we need to get through today, I will try to keep this brief, and I hope other noble Lords will join me in that endeavour.
Noble Lords will know that Lords Amendment 1 was rejected in the other place on the basis of financial privilege, and I request that this House respects the decision reached there. However, I would like to acknowledge the sentiment behind the amendment and to address some considerations. First, I understand that a drop in household benefits income and a shift of income from parents to a young person can be difficult to manage. However, we should give parents credit for supporting their children to enter apprenticeships and develop their own financial independence and long-term careers. The numbers testify to this: last year more than 200,000 young people under 19 were in apprenticeships.
Secondly, during the Bill’s passage, the Opposition compared the financial support available to full-time students and that available to apprentices, while giving very little attention to the matter of remuneration. Full-time students are forgoing employment and income opportunities to gain qualifications, often while paying to invest in their future. Apprenticeships are paid jobs, with high-quality free training. The 2016 apprenticeship pay survey showed that the average wage for all level 2 and 3 apprentices was £6.70 an hour. Apprentices are also increasing their future employment prospects and earnings: on average, level 2 and level 3 apprenticeships increase earnings in employment by 11% and 16% respectively.
Finally, we must target resources. The cost of the amendment is estimated at over £200 million per year by 2020. The benefits system quite rightly targets financial support towards greatest need, including for example dependants in low-income families. Benefits awards must take other sources of income into account. We also target funds carefully to support apprenticeships among key groups. We pay additional amounts to training providers in the most deprived areas. We also steer funding towards providers and employers for the youngest apprentices and for care leavers, as well as for those with learning difficulties and disabilities. As the new funding system beds in, we will continue to review how funding is targeted, including to support access to apprenticeship jobs for those from disadvantaged backgrounds.
Amendment 6A was tabled in the other place in lieu of an amendment tabled on Report by the noble Lords, Lord Storey and Lord Watson, and the noble Baroness, Lady Garden. The amendment proposes a new clause to the Bill which will require Ofsted to consider the quality of careers provision when conducting standard inspections of further education colleges. I am grateful to noble Lords and the noble Baroness for raising the issue of careers guidance in colleges and giving the Government the opportunity to consider this important matter further.
As the noble Lord, Lord Storey, explained so eloquently on Report, one of the most important things we need to do for young people is provide guidance and knowledge about careers. He rightly pointed out that this is particularly true for young people from disadvantaged backgrounds, who may not have access to networks of support to inform them about options and perhaps provide opportunities for them to do work experience. That is why it is vital that FE colleges—which take many students from areas of educational disadvantage—should make high-quality careers advice available to everyone.
Of course, there are a number of colleges already leading the way in this. Gateshead College embeds careers in all aspects of a student’s learning. JobLab provides dedicated support to help their students develop practical employment skills, and Career Coach provides labour-market data and maps out education, training and career options. I also recognise Ofsted’s commitment to evaluating the quality of careers advice and guidance in further education. Matters relating to careers provision feature in all four graded judgments that Ofsted makes when judging the overall effectiveness of a college. However, the Government are persuaded of the need to go further to ensure that young people can benefit from the best possible preparation for the workplace and acquire the skills and attributes that employers need. The amendment will send a clear signal that a high-calibre careers programme must be embedded in every college.
I hope I have reassured noble Lords that we agree wholeheartedly with the principle of the original Lords amendment. The drafting changes serve only to ensure that the amendment achieves its intended effect and that the language conforms to current legislation. The amendment now includes an explicit requirement for Ofsted to comment on the quality of the college’s careers provision in the inspection report.
I urge noble Lords to accept this amendment in lieu. It is our chance to ensure that all FE students can access the support they need to help them to achieve their full potential. As discussed earlier, I also ask noble Lords to respect the other place’s decision to reject Amendment 1 on the grounds of financial privilege. I beg to move.
Lord Watson of Invergowrie (Lab)
My Lords, I acknowledge that the Bill is a better one than when it began its progress through both Houses. We shall not seek to impede its journey to the statute book.
The addition of the amendment promoted by the noble Lord, Lord Baker, and others, represents an important step forward in ensuring that school pupils have explained to them the full range of options, not just those whose choice of an academic route might benefit the school’s coffers. It should not have been necessary for an amendment to be passed to secure that, because strong careers guidance is critical to promoting apprenticeships in schools. If the Government’s target for apprenticeship starts is to be achieved and sustained, as we all hope, then it is crucial that young people are alerted early enough in their school life to the importance and attraction of technical routes.
However, it is disappointing that the Government have not been willing to accept Amendment 1 passed by your Lordships on Report. The decision to exclude apprenticeships from the category of approved education or training will serve as a deterrent to some young people, particularly those from disadvantaged backgrounds. The Minister for Apprenticeships and Skills said last week:
“The crucial point is that the vast majority of level 2 and 3 apprentices are paid more than £6.30 an hour, and 90% of them go on to jobs or additional education afterwards”.—[Official Report, Commons, 19/4/17; col. 714.]
But that is not the crucial point; in fact, he has missed the point. At least 90% of university graduates go on to jobs or additional education, so there is no difference in that respect. And whether apprentices earn £3.50 an hour—the legal minimum, which, as I said on Report, not all of them get—or £6.50 an hour, their parents are still disqualified from receiving child benefit. That is the nub of the issue. Clearly, though, we have not been successful in convincing Ministers of that point.
It was interesting to read last week of the Minister for Apprenticeships and Skills, in defence of the Government’s position, coming up with a figure of some £200 million a year by 2020-21. So apprentices—the young people we need to train in order to fill the skills gaps that we know exist—are to be treated unfavourably compared to their peers who choose full-time study because of the cost. The Government can miraculously find £500 million to create new grammar schools yet cannot find £200 million to ensure that the number of apprentices from the poorest families rises from its current very low level of just 10%. If there is logic in that policy stance, it escapes me. The noble Baroness, Lady Buscombe, said in Committee that she would discuss this issue with ministerial colleagues in the DWP. By Report there had been no such meetings, and we learned from the debate in the other place last week that those meetings have still not taken place. So where did the £200 million figure appear from, if not the DWP?
In passing, I say to the Minister that I submitted a Written Question asking for the Government’s workings that produced the £200 million figure. As I understand that those Questions disappear on Dissolution, I ask him to write to me with the answer so that we can gain an understanding of the foundation on which the Government have erected the barrier to treating apprentices as “approved learners”.
On Amendment 6, initially I was dismayed that the Government were unwilling to accept the will of your Lordships’ House on careers advice in further education colleges, although that was perhaps not too surprising as the Minister told us on Report that it was not necessary. However, the Government’s amendment in lieu actually appears to be stronger than the original amendment. First, it goes further than further education colleges and refers to “FE institutions”, which of course covers all training providers on the register.
Secondly, the original amendment in the name of the noble Lord, Lord Storey, which your Lordships’ House voted for at Report, called on Ofsted to “take into account” the careers advice made available to students by colleges. Government Amendment 6A states that Ofsted must,
“comment on the careers guidance provided to relevant students at the institution”.
For that reason, I welcome Amendment 6A, as Ofsted will be obliged to be proactive in reporting what it discovers in FE colleges that it inspects. That is certainly to be welcomed, although it comes with the caveat that it will apply only to those colleges that Ofsted actually inspects. How many will be? Realistically, how many can it be?
At Report, I asked the Minister to give an assurance that Ofsted would be adequately resourced; I fear that he did not reply. Mr Marsden asked the same question of the Minister for Apprenticeships and Skills, and he did not reply, so perhaps the Minister can now tell noble Lords how many additional staff Ofsted will have to enable it to inspect as many training providers as possible out of the 2,000 likely to emerge. It cannot do that with its existing staff, and we have a right to know what additional resources Ofsted will receive to enable it to cope with large new demands. I look forward to his response on that. I suggest that he must have one because it is surely inconceivable that he and/or his officials have not met Amanda Spielman or her deputy, Paul Joyce, to discuss the resources that they will require as a direct result of the Bill.
We are now at the end of a process that has produced the Bill, which will strengthen the sector but could have achieved much more. I thank all noble Lords who have participated in our debates, as well as Ministers, who have moved some way, if not as far as we would like, during our deliberations.
Lord Storey (LD)
My Lords, I shall speak to Amendment 6A. The Minister has put it better than I could, so I shall be very brief. I have always thought that the key to making the Bill successful was twofold. First, there was breaking the logjam of mainstream schools not allowing for or understanding the important role of technical education, whether it be FE colleges or university technical colleges. The acceptance of the amendment of the noble Lord, Lord Baker, was a crucial step forward. Secondly, there was careers. You can have all the courses in the world, but unless young people get a successful career at the end of it and an understanding of what is available to them, it is all for naught. I am delighted with the amendment. It sends a clear signal not only to the further education sector but to schools themselves. The explicit wording in the amendment means that there is no hiding place.
This is an important Bill, and I congratulate the Minister and his colleagues on carrying it through the Chamber in such a sympathetic way. I also thank the civil servants, who have been exemplary in the support that they have given us all. We could not wish for anything better. Finally, I thank my noble friend Lady Garden—she cannot be here—who led for my party on the Bill, and other colleagues who have supported us.
Lord Baker of Dorking (Con)
My Lords, I thank the noble Lord, Lord Watson of Invergowrie, for deciding not to press his amendments on this case. I know how strongly he feels about it, but it will be possible to revisit that after the whole principles of apprenticeships have been set up. I think that it is generally agreed by all sides of the House that this is an important Bill and a beneficial Bill. It is a major step forward in improving the technical education of our country. It has been handled very well by the Minister and his department, and we should speed it to the statute book.
Lord Nash
My Lords, I have discussed the Government’s response to the two amendments that have returned to this House from the other place and asked noble Lords to agree the Motions from the other place on those two amendments. In response to the noble Lord, Lord Watson, about where the £200 million estimate came from, I can say that it is estimated by the DfE, HMRC and HM Treasury, using apprenticeship participation data and HMRC child benefit data—HMRC, not the DWP, pays child benefit—but I will still write to him on the matter he mentioned.
As for Ofsted, I have personally discussed this with it. It is satisfied that it is adequately resourced at the moment, but we will keep this under review. As I said, the Bill has strong cross-party support. Several noble Lords from across the House have mentioned that previous Governments have attempted unsuccessfully to raise the status of technical education—I remember a particularly powerful speech by the noble Baroness, Lady Morris, on this—but I am confident that under the leadership of Minister Halfon, who I am delighted to see is in the House today, we will seize this opportunity to raise the status of technical education in this country.
I thank again all noble Lords for their participation on this Bill. I am absolutely sure that the legislation is in much better shape thanks to their scrutiny, as always. I commend the Bill to the House.
“Careers advice in further education institutions: Ofsted inspection
(1) Section 125 of the Education and Inspections Act 2006 (inspection of further education institutions) is amended as follows.
(2) In subsection (4) (matters to be dealt with in inspection report), after paragraph (a) (but before the “and” at the end) insert—
“(aa) must, in a case where it relates to an institution within the further education sector, comment on the careers guidance provided to relevant students at the institution,”.
(3) After subsection (7) insert—
“(8) In this section—
“careers guidance” includes guidance about undertaking any training, education, employment or occupation;
“relevant student” means a student—
(a) who is aged under 19, or
(b) who is aged 19 or over and is someone for whom an EHC plan is maintained.””
Neighbourhood Planning Bill
Tuesday 25th April 2017
(6 years, 11 months ago)
Lords ChamberRead Full debate Neighbourhood Planning Act 2017 View all Neighbourhood Planning Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 121-I Marshalled list for consideration of Commons reason and amendments (PDF, 67KB) - (24 Apr 2017)
Lord Bourne of Aberystwyth
That this House do not insist on its Amendment 12 to which the Commons have disagreed for their Reason 12A.
Commons Reason
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I wish to update the House following the consideration of the Lords amendments to the Neighbourhood Planning Bill in the other place on 28 March. There are two matters before your Lordships’ House that will be discussed today: pubs and planning conditions. I shall be brief in relation to those two areas.
I turn first to planning conditions. As highlighted during the Bill’s passage, the power to make regulations prescribing what kind of conditions may or may not be imposed and in which circumstances is already constrained in the clause. To reiterate, new Section 100ZA(2) already provides that the Secretary of State may make regulations under subsection (1) only if he considers that these regulations are appropriate to ensure that conditions imposed on a grant of planning permission meet the policy tests in paragraph 206 of the National Planning Policy Framework, which states:
“Planning conditions should only be imposed where they are necessary, relevant to planning and to the development to be permitted, enforceable, precise and reasonable in all other respects”.
The amendment originally proposed by the noble Lord, Lord Stunell, sought to restrict the Secretary of State from using this power under subsection (1) to prevent a local planning authority imposing a condition that would otherwise conform to the National Planning Policy Framework. At the heart of the amendment sits a test of whether the regulations prevent a local planning authority imposing a condition that meets the National Planning Policy Framework and, in particular, those policy tests in paragraph 206.
It is right that the Government do not intend to use the power to prevent local authorities imposing planning conditions that accord with the National Planning Policy Framework. However, the specific amendment is unnecessary, as subsection (2) has the effect already that any regulations made under these powers must be consistent with the long-standing policy tests for conditions. Indeed, the subsection makes it clear to those reading the legislation that the power seeks to ensure conformity with those tests. The position of the other place during the consideration of the amendment was that it agreed with the Government that the amendment was unnecessary, and there was no Division on this point. Therefore, I ask noble Lords not to insist on the amendment.
On consideration of the other matter, planning protection for pubs, I am sure I need not remind noble Lords of the amendment introduced by the noble Lord, Lord Kennedy of Southwark. I thank him and others who have worked so constructively with me on this issue, in particular, my noble friends Lord Framlingham, Lady Cumberlege and Lord Hodgson and the noble Lords, Lord Shipley, Lord Tope, Lord Scriven, Lord Berkeley and Lord Cameron of Dillington, the noble Baroness, Lady Deech, and the most reverend Primate the Archbishop of York. The Government have carefully reflected on the points raised during the Bill’s passage about the importance local communities place on valued community pubs. I hope noble Lords will agree that we have reflected the will of this House in bringing forward our amendment in lieu, which sets out the detail of the changes we will make to protect and support pubs.
We will amend the Town and Country Planning General Permitted Development (England) Order 2015 to remove all existing permitted development rights for the change of use or demolition of A4 drinking establishments, including pubs. This will include the rights to change to a restaurant or café, financial or professional service, a shop or a temporary office or school. We believe that this is best achieved by retaining the A4 drinking establishments use class for pubs, wine bars and other types of bar. Our intention in doing so is to allow pubs to develop within this use class—for example by opening the pub garden—without facing uncertainty about whether planning permission is required. I hope noble Lords will recognise the benefit of the Government’s approach.
Separately, we have listened to points made in this House about the need for pubs to be able to expand their food offer to meet changing market needs and support their continued viability. Therefore, as part of our support for pubs, we will introduce a new permitted development right to provide them with an additional flexibility. The right will allow the pub to expand its food offer beyond what is ancillary to the pub business without planning permission being required but, importantly, it will not allow the pub to become a restaurant with only a token or ancillary bar.
The changes we are bringing forward address the long-standing call that proposed development which would result in the local pub ceasing to operate should be considered locally, allowing the community to comment on the future of its local pub. It is important that local planning authorities have relevant planning policies in place to support their decision-taking. Noble Lords will be reassured to know that both the Campaign for Real Ale and the British Beer and Pub Association have welcomed our proposed approach and personal commitment to helping our pubs survive and prosper. Noble Lords will be keen to see regulation as soon as possible, to prevent any further loss of pubs without local consideration. I can therefore commit to laying secondary regulation immediately after Royal Assent, to come into force before the end of May.
Noble Lords will be reassured to know that the regulations will contain provision to guard against opportunistic use of the permitted development rights before they are withdrawn. Under the current regulations, a developer must first make a request to confirm whether the pub is nominated or listed as an asset of community value. Where a request has been made fewer than eight weeks before the order comes into force, the order will not allow development to take place. I therefore ask noble Lords not to insist on Amendment 22 and to agree with our amendment in lieu. On that basis, I ask the noble Lords to withdraw the points they made earlier in relation to these two matters and to agree with the two Motions put forward by the Government.
Lord Stunell (LD)
I thank the Minister for what he has said. I remind the House that the matters in Clause 12 have been debated at each stage of the Bill. There is widespread understanding that this is a good Bill and it has a lot of support, but to many noble Lords Clause 12 seemed out of place. It either gives new powers to the Secretary of State to regulate, as he sees fit, the decisions of local planning authorities—which it is feared could be at the expense of the National Planning Policy Framework—or it is of nil effect because the NPPF already provides the boundaries and constraints. The critics have tended to the first view and the Government to the second. The critics, including me, feared that this Government, or a future one, might use this regulatory power in a way that undermined the capacity of local planning authorities to use the NPPF as it was intended. The Government have, quite understandably, taken the contrary view, which the noble Lord, Lord Bourne of Aberystwyth, has just put.
This House accepted my amendments limiting the Secretary of State’s ability to regulate. That came not just from this quarter of the House—it had widespread cross-party support. Indeed, beyond cross-party, the most reverend Primate the Archbishop of York also contributed to the debate on Report and supported us in the Lobby. Therefore, this is not in any way a party political or partisan issue; rather, it is about firmly entrenching the right of local planning authorities to set planning conditions in accordance with the NPPF and without fear of being second-guessed or overruled by the Secretary of State’s regulatory power. Putting it another way round, it establishes, or was intended to establish, the primacy of the NPPF as the touchstone of legitimacy in judging planning conditions rather than the latest fad of the spads in the DCLG. That is what my amendment did. The Minister—the noble Lord, Lord Young—was very helpful on Report, as far as his brief would allow, but not sufficiently eloquent to persuade your Lordships of the Government’s point of view, and the amendment was passed.
I thank the noble Lord, Lord Bourne, for the work he put in subsequent to that and the discussions that we had. We clearly did not have a full meeting of minds, which was probably as much my fault as his. However, gradually, the essence of the argument made across parties at each previous stage of the Bill has seeped into our proceedings and on to the record.
The noble Lord, Lord Bourne, referred to the letter that he circulated, and we see it in the reasons before us for rejecting your Lordships’ original view on this matter. It is extremely important that it is clear that it will always remain lawful and legitimate for conditions to be imposed by local planning authorities provided they conform to the requirements of the National Planning Policy Framework. Indeed, that is the reason before us for the Commons rejecting the amendment. I remind your Lordships that the reason states:
“Because section 100ZA already has the effect that the regulations must be consistent with the tests for planning conditions in the National Planning Policy Framework”.
That is clearly the Government’s view and the view of the other place. I hope it will turn out to be the view of all future Governments and Ministers and, in the case of dispute, that the courts will share that benign view and interpretation of Clause 12. I believe that the Government’s declared intentions would be far clearer with the amendment that was originally proposed. However, on this occasion, with grateful thanks to those around the House who supported the original amendment on Report and valiantly joined me in fighting the fight, I will not press the matter any further.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I rise to say a word or two on the drinking establishments —pubs—amendment. I was very concerned about the direction of the debate in your Lordships’ House because this sector is under pressure and the more legislative restrictions that are placed on it, the less likely it is that people will invest in it. I accept that the will of the House was not with me. However, I am grateful to my noble friend for considering the matter further. We have reached a reasonable compromise that will provide a way forward. It is obviously a very good thing that both CAMRA and the BBPA have accepted and supported it. It is important that we find a point at which those who own and operate pubs can draw a line under the further changes that may be made to the regulatory environment, given that there is already talk of needing to change the Pubs Code regulator as it is not satisfactory. That came in a couple of years ago. For the moment, however, this is a good compromise that will enable both sides to emerge from the discussions with honour.
Lord Framlingham (Con)
My Lords, pubs are a vital part of our nation’s life. I am delighted that the Government have decided to take this action, as I am sure are both CAMRA and the British Beer and Pub Association. The Minister has been the essence of competence and courtesy throughout the whole of this debate and I am extremely grateful to him. I trust that in due course glasses will be raised in pubs up and down the land to both the Minister and the Government.
Lord Shipley (LD)
My Lords, first, I thank my noble friend Lord Stunell for his work on the amendments in relation to the National Planning Policy Framework and for his contribution today. We shall see in the months ahead whether the solution proposed by the Minister manages to hold up against any challenge.
As we have heard, as the Bill progressed we had several lengthy debates in this Chamber on pubs and permitted development for alternative uses. I, too, am grateful to the Minister and to the Government for listening so carefully to the views from across this House and for this revised amendment from the other place, which will help greatly with the protection of pubs at risk. It has the advantage of introducing a permitted development right where the proposal is to extend the range of food to be offered while maintaining the pub itself. Beyond that, planning permission will be required before a pub can be demolished or face a change of use. That puts powers into the hands of local people and local planning authorities—here, I remind the House of my vice-presidency of the Local Government Association—and that has to be beneficial.
I pay tribute to all those who have campaigned on this issue, including the Campaign for Real Ale and the British Beer and Pub Association, and to those from all parties—including my colleague in the other place, Greg Mulholland—who have spoken and campaigned in support of it. I am very pleased to commend the Commons amendment.
Lord Kennedy of Southwark (Lab)
My Lords, as this is my first contribution on these matters, I refer Members to my declaration of interests in the register. I declare that I am an elected councillor in the London Borough of Lewisham, a vice-president of the Local Government Association and the vice-chair of the All-Party Parliamentary Beer Group.
In respect of Motion A, I am disappointed that the other place did not accept the amendment from the noble Lord, Lord Stunell, although I accept the point made by the noble Lord, Lord Bourne, that the other House did not divide on the issue. I hope that the noble Lord, with his colleagues in the department, will keep this matter under review so that, if it turns out that the provision needs to be strengthened, we can return to it at a later date. The noble Lord, Lord Stunell, made a very important point about the primacy of the NPPF.
In respect of Motion B, I am delighted that the Government have listened to the campaign both inside and outside Parliament. I pay tribute to two Members of the other place—Charlotte Leslie, the Conservative Member of Parliament for Bristol North West, and Greg Mulholland, the Liberal Democrat Member for Leeds North West—for their campaigning over a number of years to bring about this change.
I also thank all the Members of your Lordships’ House who supported me in the debate and in the Division Lobbies. I particularly want to thank those Conservative Members who voted with me and those who kindly abstained, as that played an important part in getting a large majority when I tested the opinion of the House. I also thank the noble Lord, Lord Bilimoria, for his generous support in the debate, as well as others, such as the noble Lord, Lord Cameron of Dillington, the noble Baroness, Lady Deech, and the most reverend Primate the Archbishop of York. I am also grateful for the support that I received from the noble Lords, Lord Shipley and Lord Scriven, and others.
The amendment proposed by the noble Lord, Lord Bourne, corrects a loophole that was of great harm to successful pubs, and it protects and helps them. In the previous debate I was very clear that the intention behind what I proposed was never to keep open a pub that was not a successful business but to support successful businesses.
I like pubs and I like a pint. Like the noble Lord, Lord Framlingham, I probably should have bought a few shares in the odd pub or brewery; I have certainly spent enough money on beer over the years.
I also pay tribute to the fantastic work done by Tim Page, the chief executive of CAMRA, Amy O’Callaghan, its senior campaigns officer, and all the members of CAMRA in branches across the country who emailed and phoned us and Members of the other place.
This amendment is important, and I am grateful to the Government and the noble Lord, Lord Bourne, for listening. It is an example of the House of Lords doing its job well. By winning the argument on the original amendment, we created the conditions for the Government to think again and we have a great solution today that I am delighted to support.
Lord Bourne of Aberystwyth
My Lords, I thank all noble Lords who participated in this debate on Motions A and B; I will not detain the House long. I genuinely thank all noble Lords who participated in the discussion on this important piece of legislation. I also thank my right honourable friend in the other place, Sajid Javid, and my honourable friend Gavin Barwell, the Minister for Housing, who have been very supportive and helpful.
Turning first to Motion A, I thank the noble Lord, Lord Stunell, for his generosity of spirit. I agree that there is a difference between us on the way that this is to be interpreted. I believe that the National Planning Policy Framework provides the necessary security, but I am most grateful for his generous words and the very fair summary that he gave.
Turning to Motion B, I first raise a metaphorical glass to my noble friend Lord Hodgson on his birthday. Perhaps there will be an opportunity for people to exhibit support for this new position after the debate. I thank him for what he said about our having harnessed the support of both CAMRA and the British Beer & Pub Association, as well as this House. I also thank my noble friend Lord Framlingham for his extremely kind words and the noble Lord, Lord Shipley, for his support of this amendment. He has been a pleasure to work with throughout this legislation—always fair and always with good advice.
I join the noble Lord, Lord Kennedy, in thanking Charlotte Leslie and Greg Mulholland in the other place for their help, and I thank the noble Lord for what he has done in this legislation and what he does for pubs on a continuing basis; it has not gone unnoticed and has certainly helped the sector greatly. I thank all noble Lords very genuinely, as the noble Lord, Lord Kennedy, said, for having demonstrated the House of Lords at its best in looking at and amending this legislation, and in moving forward very sensibly, not least in respect of matters raised by my noble friend Lady Cumberlege. On that note, I commend Motion A.
Lord Bourne of Aberystwyth
That this House do not insist on its Amendment 22 and do agree with the Commons in their Amendments 22A and 22B in lieu.
Commons Amendments in lieu
“Permitted development rights relating to drinking establishments
(1) As soon as reasonably practicable after the coming into force of this section, the Secretary of State must make a development order under the Town and Country Planning Act 1990 which—
(a) removes any planning permission which is granted by a development order for development consisting of a change in the use of any building or land in England from a use within Class A4 to a use of a kind specified in the order (subject to paragraph (c)),
(b) removes any planning permission which is granted by a development order for a building operation consisting of the demolition of a building in England which is used, or was last used, for a purpose within Class A4 or for a purpose including use within that class, and
(c) grants planning permission for development consisting of a change in the use of a building in England and any land within its curtilage from a use within Class A4 to a mixed use consisting of a use within that Class and a use within Class A3.
(2) Subsection (1) does not require the development order to remove planning permission for development which has been carried out before the coming into force of the order.
(3) Subsection (1) does not prevent—
(a) the inclusion of transitional, transitory or saving provision in the development order, or
(b) the subsequent exercise of the Secretary of State’s powers by development order to grant, remove or otherwise make provision about planning permission for the development of buildings or land used, or last used, for a purpose within Class A4 or for a purpose including use within that class.
(4) A reference in this section to Class A3 or Class A4 is to the class of use of that name listed in the Schedule to the Town and Country Planning (Use Classes) Order 1987 (SI 1987/764).
(5) Expressions used in this section that are defined in the Town and Country Planning Act 1990 have the same meaning as in that Act.”
“( ) section (Permitted development rights relating to drinking establishments);”
Lord Bourne of Aberystwyth
My Lords, I omitted to thank my noble friend and co-pilot, who has more air miles than most, for his support on this. I beg to move.
Bus Services Bill [HL]
Tuesday 25th April 2017
(6 years, 11 months ago)
Lords ChamberRead Full debate Bus Services Act 2017 View all Bus Services Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 27 March 2017 - (27 Mar 2017)
Lord Ahmad of Wimbledon
That this House agrees with the Commons in their Amendment 1.
The Parliamentary Under-Secretary of State, Department for Transport (Lord Ahmad of Wimbledon) (Con)
My Lords, it will also be convenient at this time to speak to Amendments 2 to 4, Amendment 6, Amendments 12 and 13, Amendments 15 to 19 and Amendments 21 to 23. These amendments cover a range of issues demonstrating the variety of important topics debated during the passage of this Bill through both Houses. I know that all noble Lords will agree that bus passengers should be at the heart of this Bill. Its provisions will enable improvements to bus services where they are needed, and help grow passenger numbers. By working together, local authorities and operators can tackle key transport issues such as pollution and congestion. They can support local businesses and help drive the local economy.
I recognise that congestion in particular can have a major impact on local bus services. This brings me on to Amendment 1, which relates to powers to enforce moving traffic offences. The other place debated the changes made to the Bill by this House, which confer powers to enforce moving traffic offences such as those in yellow box junctions on authorities that have established an advance quality partnership scheme. However, it was recognised that Part 6 of the Traffic Management Act 2004 already provides the Secretary of State with the ability to confer powers to enforce moving traffic offences on authorities. It was also further acknowledged that local authorities already had the ability to address issues of congestion, be that through using new infrastructure measures or technological solutions or by enforcing moving traffic offences in bus lanes. Additionally, through franchising and partnership schemes local authorities and bus operators will be able to further work together to address local congestion in a more targeted way.
A key concern remains that such powers could be misused to generate revenue for local authorities rather than for traffic management purposes. Instead, we shall be encouraging local authorities and bus operators to use the powers in the Bill to develop local solutions to local congestion pinch points.
Amendments 2, 6 and 15 respond to what I know were well-intentioned moves by this House to seek the greater use of low-emission buses. We are all in agreement that we should encourage these sorts of behaviours. Following early discussions in this House, the Government set it out explicitly in the Bill that emissions standards may be included as part of both franchising and partnership schemes. However, I believe that the Bill needs to strike the right balance between giving authorities the right tools for the job and being overly prescriptive about how improvements are to be achieved. There is a real danger that requiring all new buses used to deliver services as part of a partnership or franchising scheme that come into service after 1 April 2019 to be low emission would simply mean that bus schemes could become prohibitively expensive, with the real risk of authorities being unlikely to pursue these schemes at all. This could lead to less bus use and, with that, worse environmental outcomes than would have been achieved without these provisions. I hope that my further explanation as to why we have taken the approach that we have to these subjects will mean that noble Lords can support the current Motion.
I turn now to Amendments 16 to 18 on the open data provisions. There has been a positive welcome to Clause 18, which will facilitate the provision to passengers of information about timetables, fares, routes and tickets, and live information. Since the Bill was last in this place, my officials have held workshops to develop further the practical delivery of these provisions. Stakeholders have stressed the importance of two existing datasets that are currently maintained by local authorities which accurately and uniquely describe and locate all bus stops in a common format. These datasets are vital to the production of meaningful journey-planning information for passengers. However, they are currently maintained by local authorities on a voluntary basis. These amendments simply ensure that if it becomes necessary, regulations could be made that require local transport authorities to provide information other than in the context of franchising, and information about stopping places to be provided by local transport authorities or operators.
I turn now to those who work for local bus companies. In this House we quite rightly had a great deal of debate about the importance of consultation in relation to bus partnership and franchising schemes and who must be consulted. The Government accepted and were happy to include Transport Focus and the national park authorities as statutory consultees. Special thanks must go to the noble Lord, Lord Judd, who is not in his place this afternoon, for his passionate advocacy of the latter’s importance.
We also introduced amendments to require authorities to consult employee representatives about proposed franchising schemes. The noble Lord, Lord Whitty, provided helpful input to our thinking on this matter. I completely understand the need for employee representatives to be consulted on franchising schemes, as those proposals could have a direct impact on bus industry employees in such an area. Following a debate in the other place, it was agreed that some of the potential duplications in the Bill relating to the consultation of employee representatives and trade unions on franchising schemes should be clarified. This is reflected in Amendments 12 and 13. It was also felt that authorities should have greater freedom on who to consult in relation to the advanced quality partnership schemes than had been provided for in the Lords text. This is reflected in Amendments 3 and 4. The Bill, therefore, now provides for an authority to be required to consult employee representatives on franchising schemes, and it may choose to do so for partnership schemes should it consider that appropriate.
Finally, this group contains Amendments 19 and 21 to 23, which address housekeeping matters and remove the privilege amendment. The latter is a procedural technicality. I hope noble Lords feel that I have given the variety of topics justice here and will agree to support the Motion to approve these Commons amendments.
Baroness Randerson (LD)
My Lords, throughout its passage, the Liberal Democrats have supported the principles behind the Bill and we believe that it is a long overdue response to a fairly chaotic situation with bus services in many parts of the country outside London. Indeed, while we have been debating the Bill, the number of bus services and miles covered by those services throughout England outside London has reduced significantly as the number of local authorities’ subsidised routes has reduced and some bus companies have ceased to function. There is a desperate need to do something and we agree with the general tenor of the Bill.
We would have wished to make the Bill more radical, as I have made clear on a number of occasions. We would have wanted more devolution and powers to local authorities, more action to assist disabled passengers, more measures to protect the environment and the health of our citizens and more consultation. Indeed, some of our amendments were accepted and have remained in the Bill throughout the Commons process, but not all of them. I am disappointed that so many were removed.
However, we are grateful that in this group there are government amendments to clarify the role and independence of auditors. The first amendment in the group was put forward by my noble friend Lord Bradshaw in relation to giving local authorities powers over moving traffic offences. The Minister said just now that the Government feared that local authorities would use that power simply to make money. That is a fairly flimsy excuse for rejecting the idea because it would be so easy for the Government to produce an amendment that restricted local authorities’ ability to do that. That could have been dealt with within the regulations that will flow from the Bill or within the Bill itself.
In relation to the Minister’s comments on emissions and the speed with which we can replace bus fleets, London is of course well under way with the process, as are several other local authorities and cities. The technology is there. The alternative fuels are there. It is the Government’s role to at least push businesses into operating in the most environmentally friendly way. On bus emissions, of course there is the pressing issue of the health of our citizens. The Government are only too aware, despite their failure yesterday to produce a plan to address this issue, of the need for urgent action on this. Not only am I disappointed that the Government failed to meet the legal timetable for producing a response on air quality in general, I am disappointed that they have taken the view on this particular Bill that there does not need to be a stronger government steer on the issue of emissions from bus services.
I support the Government’s changes on the provision of data. That is very important. Evidence shows that many people are deterred from becoming bus passengers because of a lack of knowledge and information about where the bus stops and how they pay for a ticket. How one pays for a ticket can vary from one local authority area to another. That kind of information can be so easily supplied and the Government have rightly emphasised that in the Bill. We support that.
Having said all that, we are grateful for the hearing the Minister gave us and for the way many organisations involved in bus services across Britain engaged in the process of the Bill so we could use and harness their knowledge and expertise, which has helped. My final point is that we shall not seek to oppose the changes made in the Commons, but we accept them with some sadness.
Baroness Scott of Needham Market (LD)
My Lords, I thank the Minister for listening to and taking away the concerns I raised with my noble friend Lord Shipley on independent audit. It is an important point. These schemes, however welcome, are potentially extremely expensive. The risk, as always, will fall on local council tax payers and therefore robust independent audit is key. We look forward to seeing the regulations and guidance as they emerge.
Lord Whitty (Lab)
My Lords, I remain generally supportive of the thrust of the Bill, but I have been dismayed by some of the measures taken by the Government in the Commons with some of the amendments in this group and others. It is regrettable because during the process of the Bill in this House there has been a high degree of consensus and the Minister has been very helpful in a number of respects. However, in some areas he has been chopped off at the knees by his colleagues steamrolling it through the House of Commons.
I echo what the noble Baroness, Lady Randerson, said on the low emissions provisions. If the Government were concerned about the timescale and the economics, they could have amended the timescale and put in a few qualifications. Instead, they have deleted the requirements in Amendments 2 and 6 that new vehicles should meet new low emissions standards. This is a very poor signal. As the noble Baroness said, it comes a day or two after the Government’s attempt to use the election to defy the previous court injunction that a new air quality strategy should be produced because of the inadequacy of their earlier air quality strategy produced by Defra.
The Government’s record on this is shaky and they are extremely vulnerable. Buses are one of the main diesel-based pollutant vehicles in many of our towns and villages. There was an opportunity to put in the Bill that we would do what a number of local authorities in London and elsewhere are already doing and replace those buses immediately when a new vehicle is brought on with one with high-quality emissions standards. As I said, we could have put in slightly different dates and slightly greater qualifications, but nevertheless that needed to be in the Bill. It undermines the Government’s commitment to do something about air quality on which they have been and will continue to be widely criticised. I regret that and I think the Government will come to regret it too. As was said in this House yesterday by my noble friend Lady Nye, it is a major public health issue. There are provisions for avoiding the purdah prohibitions concerning air quality that were already in the Bill when it reached the Commons. The Government chose, wrongly, to delete those provisions, and I regret that profoundly.
I also regret the deletion or dilution by Amendments 3, 4 and 13 of the provisions we inserted in this House that worker representatives in the bus industry should be clearly consulted on any changes, whether an advanced quality partnership or the new franchising operations. The Minister has continued to make positive noises in that respect, and I appreciated his acceptance of the principle in our earlier proceedings. However, his colleagues seemed to have deleted most of that, which is a mistake. We are talking here, whether the Government like it or not, of a pretty highly unionised sector where by and large there are good relations between the bus companies and their employees. Anything which deletes a continued commitment to those outcomes makes some of these provisions more problematic when they never needed to be. Again, the Government may live to regret that; I hope not. I know that the unions intend to be constructive and by and large welcome the objectives of the Bill, but from a long list of those who are required to be consulted about these changes, the people who are omitted are the ones who actually drive and operate the buses. That seems to me a triumph of ideology over common sense and the Government should not have done it.
The Minister will no doubt be relieved to hear that I intend to intervene only once on this Bill. I have some concerns about the third group of amendments in relation to the reinstatement of the clause which prohibits local authorities from setting up their own companies. That is a restriction on local authority strategic decision-making. I do not intend to belabour that point because we will come on to it in a moment.
I hope that the outcome of the Bill is positive. It is regrettable that these changes have been made by the Government at this relatively late stage because they make it more difficult to achieve what the Minister himself set out as the objectives when he introduced the amendments. Taking the changes together, I hope that in the coming weeks the population will recognise that even in this relatively minor area of legislation the Government have decided, contrary to what was a pretty consensual view in this House, to delete commitments on environmental standards, commitments on the rights to representation of workers, and commitments on flexibility and devolution of powers to local authorities. All of that amounts to an unnecessary and significant reduction in my enthusiasm for what in general is a positive Bill.
Lord Kennedy of Southwark (Lab)
My Lords, I intend to speak relatively briefly on this group of amendments. The Opposition have generally supported the overall aims of the Bill. We have welcomed it and see it as an important step towards increasing the number of bus journeys, particularly outside London where there has been a collapse in the number of journeys in recent years. Like the noble Baroness, Lady Randerson, we would have liked the Bill to have gone further, but equally we accept that we have made welcome progress on it; as I say, we support its overall aims. Like other noble Lords, we generally accept the changes on data. The deletion of provisions in respect of emissions is regrettable. Air quality is now a very big issue in terms of people’s health. The number of deaths which can be attributed to poor air quality is something we should all be concerned about and I think that the Government have taken a retrograde step.
My noble friend Lord Whitty mentioned consultation of employees. That is very important and again it is a shame that the Government have largely deleted or watered down the provisions in that regard. Whether the Government like it or not, the bus industry is heavily unionised, which has generally been of benefit to it. The unions work well with the various bus companies and seek to provide a public service. I do not see any benefit in what the Government have done. As my noble friend suggested, I suspect that other forces in the Commons are at work here who do not quite see it that way. What the Government have done is a mistake. I will come on to other things I regret when we consider further amendments.
Lord Ahmad of Wimbledon
My Lords, first, I thank all noble Lords for participating in this short debate and for the broad support for the Bill. Indeed, that was quite clear during its passage through your Lordships’ House. Particularly on the issue of data sharing, I thank both the noble Lord, Lord Kennedy, and the noble Baroness, Lady Randerson, for their evident welcome for data sharing, which we all believe is a positive step forward. On the issue of emissions, I suggest that this is not a low priority given that quite specific reference is made to it in the provisions in the Bill. Indeed, local authorities can specify this element in any proposals they make when procuring bus services.
Finally, the noble Lord, Lord Whitty, talked about me being cut down at the knees. When you stand at only about five feet six you are quite protective of your knees anyway so any further cutting down is not welcome. I assure the noble Lord that the sentiments of your Lordships’ House were fully expressed and I challenge the assumption that employee representatives are not being consulted. On the contrary, they will be. I suggest to the noble Lord that trade unions are an important employee representative. Of course, trade unions fall within the scope of what an employee representative body is, so in that sense I disagree with him. In saying all that, I again welcome the contributions that were made during the passage of the Bill and the broad support for the proposed Commons amendments.
Lord Ahmad of Wimbledon
That this House agrees with the Commons in their Amendments 2 to 4.
Lord Ahmad of Wimbledon
That this House agrees with the Commons in their Amendment 5.
“But each of paragraphs (b) to (f) has effect only if the Secretary of State by regulations so provides.”
Lord Ahmad of Wimbledon
My Lords, I will also speak to Amendments 7 to 11. Bus franchising has received a great deal of attention both in your Lordships’ House and in the other place, as well as across the country. In particular, there has been discussion about which local authorities in England should be able to access the franchising powers within the Bill.
It was felt in your Lordships’ House that in the spirit of fairness, all local authorities should have automatic access to these powers regardless of whether a local authority is serious in its intent to franchise and without any consideration of its suitability to take franchising forward. Moving to franchising is a serious step and should not be undertaken lightly. That is why Amendments 5 and 7 are so important. During the debate in the other place, there was significant concern that the ability of any local authority to move to franchising at any time would lead to operators across England thinking twice about their investment decisions, thus reducing the quality and attractiveness of local bus services. Given this risk, it was agreed that automatic access to franchising powers should be available only to mayoral combined authorities.
I am sure that noble Lords who wish to see franchising happen want it to be successful, as indeed we all do. We want to ensure that franchising powers can be made available to authorities which have the ability, powers and, most importantly, the financial capacity to make a success of franchising where that franchising will benefit passengers. Combined authorities with mayors, when established, will provide clear, centralised decision-making for transport across a relatively wide local area, such as a city region. However, let me stress that other areas should also be able to access franchising powers where they are well placed to make franchising a success and have a clear plan to benefit passengers. These amendments enable other authorities to apply to the Secretary of State to access the powers.
Let me be clear: the Secretary of State will not take the final decision on whether franchising proceeds in those areas. That will be a local decision. The Bill sets out clearly the process that any authority needs to follow before the mayor or a named individual such as a council leader can take the decision to move to franchising. This refresh of bus franchising powers honours our devolution deal commitments. Included in this process is the development of an assessment of the proposed franchising scheme—essentially a business case. Within this assessment, the authority would need to consider value for money and the affordability of the proposal.
Amendments 8 to 11 clarify further the independence of the auditor—a point we covered briefly in the previous debate—that a franchising authority is required to use to produce a report on certain aspects of its proposed scheme. This report must set out whether, in the opinion of the auditor, the authority has relied on information of sufficient quality in its assessment as well as whether its analysis is of sufficient quality.
Lord Snape (Lab)
My Lords, I will say just a few words about this group of amendments. I do not wish to repeat anything I said during the passage of the Bill. My scepticism about franchising without proper funding is on the record. I say in passing—contradicting myself—that if the rest of the country received the sort of money that London receives for its franchising, it might be worth while. Without that sort of financial backing, I do not think it would be.
I thought that the Minister was, for once, less than generous with his comments on Amendments 8 to 11. If it is sensible to ensure that the auditor is independent of the franchising authority—which it is, in my view, and I said so during the passage of the Bill—why did he oppose it at the time? I would like to think that it was my own wise words that swayed the other place to change the Minister’s mind for him, but I fear I would be deluding myself. The fact is that the Minister was against the amendment on independence, which I supported during the passage of the Bill. If I may say so, there have been some comments about his stature. His stature did not diminish—like me, he can ill afford for such a thing to happen. But I am surprised, given his customary fairness, that he did not refer to the fact that he had obviously changed his mind about the amendment.
Like other noble Lords from both sides, I hope the Bill does improve bus services. Again, consulting passengers is something that we do not often do. The latest independent survey of thousands of bus passengers throughout the country indicates that around 80% of them are satisfied with existing bus services. In my view, that does not reflect the sort of discontent with bus service standards that was mentioned during the passage of the Bill. But there was virtual unanimity among those passengers about the problems of congestion, which are countrywide. If the Government are not prepared either to tackle congestion themselves or to give local authorities the proper powers to tackle it, those fears widely expressed by bus passengers are not likely to be allayed. I talk about the war on motorists that this Government’s Ministers have sometimes waged. In my view, this is not helpful so far as improving bus services is concerned.
I repeat that I hope the Bill brings about the improvement in bus services that the Government so obviously desire, and that the amendments that were passed in the other place, as well as the debates that have taken place in your Lordships’ House, have helped improve the Bill from when it was first introduced.
Earl Attlee (Con)
My Lords, I too was uncomfortable with the idea that the appointment of the auditor should have rested with the franchising authority. This would have allowed the franchising authority to be judge and jury of its own proposals—to mark its own homework, if you will. Auditing a franchise assessment is perhaps one of the most critical steps on the road to franchising. If the auditor says that the franchise stacks up and meets all the other—let us face it—quite onerous requirements, there is little more to be said. For that reason, the person carrying out the audit should have no ties with the franchising authority and certainly no vested interest in seeing the franchise proceed, or otherwise. On something as important as this proposal, which could see bus operators lose their businesses, surely we must have something that is very transparent and democratic—and, perhaps just as importantly, is seen to be transparent and democratic. In my view, these amendments do just that.
However, I wonder whether I might push my noble friend the Minister a little further to ensure, perhaps through guidance, not only that the auditor is independent of the franchising authority but that he or she has no recent commercial relationship with the authority. That would really cement the concept of a truly independent auditing process.
Lord Kennedy of Southwark
My Lords, as this group of amendments refers to mayoral combined authorities I should probably remind the House of my declaration of interests. I am a locally elected councillor and a vice-president of the Local Government Association.
Generally, these are wider issues in respect of local authorities and combined authorities but we have now brought them into the Bill. I accept that it is through another department, but there is an obsession in government with mayors and it needs to be dealt with. I have never yet had it explained to me clearly why, to get these powers, you have to have such a mayor. I still do not understand why, although we keep asking. I am sure we will get something today, but I am not sure whether the Government are clear why they have to have this: you may be a combined authority, but unless you have a mayor, you cannot have these franchising powers. We are still not clear on that, and they will have to deal with their obsession with mayors at some point.
This makes a wider point about the question of the devolution of local government in England, which is, to say the least, now very confused. I remember that in an earlier debate the noble Lord, Lord Lansley, who is not in his place at the moment—I am sorry, he is in his place—explained that there would now be four tiers of local government in Cambridgeshire. That seems to me at least one or two tiers too many. I accept that that goes wider than the issue of mayors in these authorities today, but it will have to be dealt with.
Franchising is the way forward. It has been enormously successful in London. I am delighted that these authorities with mayors can get these franchising powers and I hope that other authorities, if they come together to apply for them, will be successful. But at some point the Government will have to look at the much wider issue of what bus services they want in England. I think they will have to go further down this route; equally, I accept that they have made a move in the right direction here.
Lord Ahmad of Wimbledon
My Lords, I once again thank all noble Lords for their contributions during this brief debate. Perhaps I may briefly pick up on a few points.
First, the noble Lord, Lord Snape, raised the specific issue of congestion and said that the Bill perhaps still does not address this. I disagree with him. The new types of partnership and franchising powers give authorities new ways to work with operators to improve journeys for passengers.
On the issue of the independent auditor, I accept the fact that the Government’s position differs from when we introduced the Bill—that point was made by the noble Baroness, Lady Scott, among others. As a Minister, I feel that it is sometimes odd—I am sure I am not alone in this, whether among Ministers from a previous Administration or the current one—first, that Ministers are told that they do not listen. Then, having listened and reflected, if we make a change which perhaps reflects the feelings of Members, as it did on this occasion in your Lordships’ House, we are told that we are taking a contrary position to what we had originally after we have listened. I suppose there is a lesson for all in that. It is important that what is said, discussed and debated in your Lordships’ House is reflected in the discussions we have in government, and I am pleased to say that the very discussions and debates we had in your Lordships’ House are reflected in the amendments that the Government have made in respect of the independent auditor.
I understand the point my noble friend Lord Attlee makes about the need for the auditor to be independent. As ever, we will fully consider his helpful advice as part of the guidance. I thank noble Lords for their broad agreement on this issue.
My final point is addressed to the noble Lord, Lord Kennedy. This is not an obsession with mayors or mayoral authorities. As I have said before during the passage of the Bill, the route to franchising is open to all authorities which can make a justifiable business case. We have previously detailed the criteria required, and that remains the case.
Lord Ahmad of Wimbledon
That this House agrees with the Commons in their Amendments 6 to 13.
“( ) A franchising authority or authorities may not prepare an assessment of a proposed franchising scheme under section 123B unless the Secretary of State consents to their doing so.
( ) The Secretary of State’s consent is not required if the proposed scheme relates only to—
(a) the area of a mayoral combined authority, or
(b) the combined area of two or more mayoral combined authorities.
( ) The Secretary of State must publish a notice of a consent given under this section.”
“( ) The Secretary of State must issue guidance as to the matters to be taken into account by a franchising authority when selecting a person to act as an auditor.
( ) Franchising authorities must have regard to any such guidance.
( ) The Secretary of State must issue guidance concerning the matters to be taken into account by an auditor when forming an opinion as to whether the information relied on, and the analysis of that information, by an authority is of sufficient quality for the purposes of subsection (2).
( ) Auditors must have regard to any such guidance.”
Lord Ahmad of Wimbledon
That this House agrees with the Commons in their Amendment 14.
Lord Ahmad of Wimbledon
My Lords, Amendments 14 and 20 reinstate the original provisions of the Bill which prohibit local authorities establishing companies for the purpose of operating local bus services. The role of municipal bus companies has received a good deal of debate in your Lordships’ House and the other place. There are a few fundamental points worth making. First, we all agree that there are some very good municipal bus companies, such as Reading Buses and Nottingham City Transport. They deliver a high standard of service, and I expect they will continue to do so. Let me assure noble Lords that their ability to operate will not be affected by this provision.
However, very few municipal bus companies remain, with many having been sold to some of our more successful private bus companies—for example, in February, Thamesdown Transport in Swindon was bought by the Go-Ahead Group after many years of making a loss—so I do not think this amendment is likely to impact on the plans of many, if any, local authorities. The Bill is all about improving services for passengers, and authorities should now start thinking about utilising the knowledge and skills of existing bus companies to get the best results. This amendment ensures that we get the balance right between local authority influence and private sector delivery in order to ensure both are incentivised to deliver the best services for the benefit of passengers.
I hope that noble Lords will understand that, because of the importance of this balance to the overall Bill, our view remains that passengers will see most benefit where the commissioning and provision of bus services are kept separate, and we do not think that authorities should be able to set up new bus companies. I hope that noble Lords will agree these amendments will enable the important business of the implementation of the measures contained in this Bill, which we all acknowledge to be important, to begin so benefits to bus services and, more importantly, bus passengers can start to be delivered on the ground. I beg to move.
Baroness Randerson
My Lords, although it is not the subject of the Bill, as it operates in Wales, I shall say a word about Cardiff Bus. It is a municipal bus company with a good record. I still do not understand how it is so important to the Government to remove this power, which has been in the local authority armoury for decades. As the Minister has just pointed out, it has not been used as a general issue at all.
I am also confused as to why these examples of really good bus companies run by local authorities at arm’s length are not a template for possible future development. It is blindingly clear at the moment that local authority finances in Britain are so poor that authorities are not going to be using this power in the near future in some kind of aggrandisement. There is not going to be a mass use of this power by local authorities wanting to build up vast transport empires. It is simply not on the cards.
Lord Kennedy of Southwark
My Lords, I very much agree that, as we have heard, the amendments in this group are just about party-political dogma, and it is a shame that the Government have reversed the decision we made in this House some time ago. I was disappointed but, again, maybe not surprised. There never was going to be a stampede of local authorities charging off to create municipal bus companies. It was never going to happen and I never really understood why the Government were so obsessed with this particular clause in what generally was, and is, a very good Bill—we welcome the Bill but I just never really understood that.
Like the noble Lord, Lord Ahmad, I agree that there are some very good municipal bus companies, such as Nottingham City Transport, Ipswich Buses and many others, and I accept that this amendment will not affect them in any way whatever. The noble Baroness, Lady Randerson, made the point about what a local authority maybe could do to deal with a problem, even if for a very short period of time, and it is disappointing that that will now not be possible. That is a great shame, particularly in rural areas. For that reason, I think the Government have made a terrible mistake here and I wish they were not going to do this, but clearly they will not listen on this occasion. It is most regrettable.
Lord Ahmad of Wimbledon
My Lords, first, I again thank both the noble Baroness and the noble Lord for their contributions. I accept of course that there was great strength of feeling on this issue as it passed through your Lordships’ House, but clearly, when you have a Bill with wide application, there will be areas of disagreement between government and opposition parties. On this issue, as I have already stated, the Government have acknowledged and indeed accepted the important role that existing municipal bus companies play, and that will continue to be the case. However, this Bill is designed to enable bus operators and authorities to work constructively together to deliver better services for passengers, and it is the Government’s belief that the creation of further municipal bus companies would actually significantly stifle competition, particularly in terms of private sector investment in buses. Although we accept noble Lords’ sentiments on this, the Government maintain their position.
Lord Ahmad of Wimbledon
That this House agrees with the Commons in their Amendments 15 to 23.
“( ) In this section “local transport authority” has the meaning given in section 108(4) of the Transport Act 2000.””
“Bus companies: limitation of powers of authorities in England
(1) A relevant authority may not, in exercise of any of its powers, form a company for the purpose of providing a local service.
(2) Subsection (1) applies whether the relevant authority is acting alone or with any other person.
(3) In this section—
“company” has the same meaning as in the Companies Acts (see sections 1(1) and 2(1) of the Companies Act 2006);
“form a company” is to be construed in accordance with section 7 of the Companies Act 2006;
“local service” has the same meaning as in the Transport Act 1985 (see section 2 of that Act);
“Passenger Transport Executive”, in relation to an integrated transport area in England or a combined authority area, means the body which is the Executive in relation to that area for the purposes of Part 2 of the Transport Act 1968;
“relevant authority” means—
(a) a county council in England;
(b) a district council in England;
(c) a combined authority established under section 103 of the Local Democracy, Economic Development and Construction Act 2009;
(d) an Integrated Transport Authority for an integrated transport area in England;
(e) a Passenger Transport Executive for—
(i) an integrated transport area in England, or
(ii) a combined authority area.”
Lord Ahmad of Wimbledon
My Lords, I take this opportunity once again to thank all noble Lords, including the noble Lord, Lord Kennedy, and the noble Baroness, Lady Randerson, alongside my noble friend Lord Younger for their support during the passage of the Bill. I thank other noble Lords too; while we may not have agreed on everything, I think we agree on the principle of the importance of getting the Bill through because it is important for improving bus services for passengers across the piece. I beg to move that this House do agree with the Commons in their Amendments 15 to 23.
Lord Kennedy of Southwark
My Lords, before we do, I would equally like to say that I have very much enjoyed working with the Minister on this Bill. Generally it is very good. I also thank the noble Lord, Lord Younger, the noble Baroness, Lady Randerson, and the Bill team. Generally we are happy. As I say, I have enjoyed working with the Minister; he has been very courteous at all times during the passage of the Bill.
Criminal Finances Bill
Tuesday 25th April 2017
(6 years, 11 months ago)
Lords ChamberRead Full debate Criminal Finances Act 2017 View all Criminal Finances Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 124-I Marshalled list for Report (PDF, 103KB) - (21 Apr 2017)
Lord Faulks
Lord Faulks (Con)
My Lords, the Bill, which has been welcomed across the House, has been the Government’s response to the undoubted need to give law enforcement agencies the necessary capabilities and powers to recover the proceeds of crime, tackle money laundering and corruption and counter terrorist financing. No one could doubt that these are very real problems, and we must ensure that we respond adequately to the threats posed by corruption in its many guises. Throughout the passage of the Bill through your Lordships’ House, the Minister and the Bill team have been very helpful in providing information and explanations in respect of this quite complex legislation. The Government have also tabled some useful amendments as the Bill has progressed.
I am particularly enthusiastic about the potential use that could be made of unexplained wealth orders, which are featured in Chapter 1. There has been precedent for this, provided principally by Ireland and Australia. By and large those orders have been useful, and they have the potential to provide the basis for investigating criminal offences and recovering the proceeds of criminal activity. My concern has always been to ensure that the provisions are as effective as they can be. The opportunities for further legislation in the next few years are going to be very limited, for reasons that the House is only too well aware of. I hope UWOs will be used much more than was suggested. The revised impact assessment indicated that only about 20 UWOs a year might be obtained. The Minister assured me that that was only an estimate, and I hope it was a very conservative one.
Until last Friday we had not seen the promised code of practice relating to UWOs and other provisions in the Bill. Somewhat at the 11th hour, after I had tabled a number of amendments, it arrived. I am grateful to the Minister for providing it, and I will of course factor its contents into my remarks on the amendments in my name and that of my noble friend Lord Hodgson.
We had a number of debates about the safeguards in the Bill. I feel confident that the House is satisfied that they are perfectly adequate, particularly now that there is even a provision for compensation for a respondent whose assets have been wrongly frozen. In addition, there are of course restrictions on the freezing orders that would normally accompany a UWO, and any orders can be varied and discharged.
My concern, however, remains how easy it will be for respondents to deal inadequately with a UWO and render ineffective the Bill’s provisions. It has to be accepted that UWO respondents who have invested the proceeds of tax evasion and/or bribery in specific property will be unlikely to want to be frank about their conduct if they can possibly avoid doing so. Why, then, can it not be appropriate for there to be a power to make an order to compel a respondent to give evidence on oath? It would be only a power, and in many circumstances I concede that a court might be satisfied with a statement, but if the statement is inadequate the very existence of the power, which could be exercised only by a High Court judge, would in my view be extremely salutary.
The Bill sets out the requirements that must be met before an unexplained wealth order is made, and allows a respondent a reasonable excuse for failing to comply with any order. I invite my noble friend to explain to the House why she still thinks it is inappropriate for this power to exist. Nothing in the code of practice gives any answer to that.
The remainder of the amendments with which I am concerned in this group—apart from that which relates to property, particularly in central London—are about provisions in respect of non-compliance. My no doubt simplistic view is that you either comply with an order or you do not. The references to purported compliance seem to leave open the possibility that a respondent could simply go through the motions of providing information and say that they have purported to comply with the order. I take the point that the Bill contains the proviso that a misleading or reckless statement can constitute an offence, but it is not so much the deliberately misleading statement that I am worried about; rather more I fear the short, uninformative, heavily lawyered response which will provide no useful information but may still technically be a purported compliance with the order.
I looked for assistance on this point on the recently provided code of practice. Paragraph 20 states that a respondent will be treated as having failed to comply with a UWO if, without reasonable excuse, he fails to comply with all the requirements imposed by the order. The paragraph continues by stating that it is important to note that where a response is provided to a particular requirement in the UWO but that response is considered unsatisfactory, this does not mean that the respondent has failed to comply with the order; this would amount to purported compliance. That was precisely the point that I was making in the original amendment. A footnote states that an example of this would be where an individual provides nothing more than the bare minimum of information necessary to address each requirement in the order and as a result the agency is not satisfied by his explanation as to the derivation of the property. The footnote goes on to state that, in those circumstances, the rebuttable presumption that the property is recoverable does not arise, but the enforcement agency may elect to take further civil recovery action against the property in the light of evidence or lack of evidence provided by the individual. I should be grateful if the Minister could set out why the Government think it so important, in a number of areas identified in the amendments, to have these provisions about purporting.
Amendment 2 in this group and Amendment 24, which we will debate in the next group, concern a substantial problem: in central London, property—often extremely valuable property—is being bought by overseas companies and then left either empty and dark or occupied for only short periods. Parts of central London are entirely dark at night and, although London is the most obvious example, there is plenty of evidence of buying-up of property in other major cities and in some rural areas. Apart from the fact that it cannot be desirable that property is owned by those whose money has often come from illegal activities, there is the knock-on effect that it is having on the property market in general. Noble Lords are only too well aware of the intense difficulty faced by young people in buying property anywhere remotely near where they work, particularly in London, or indeed buying property at all. There are a number of reasons for this, but the situation is hardly helped when, according to the Land Registry figures, 100,000 properties are registered in the name of overseas companies. Unlike some countries, there is no restriction on foreign ownership of real property, and at the moment there is no sign of any decrease in the enthusiasm with which foreign investors are approaching the possibility of buying property here. Because of our respect for the rule of law and the independence of our judiciary, among other reasons, we are an attractive country in which to invest—particularly, I am afraid, to those who have ill-gotten gains for which they want to find a safe haven.
Baroness Hamwee (LD)
My Lords, like the noble Lord, we want to see the Bill as strong as possible. I have a few questions on the noble Lord’s amendments but I am grateful to him for bringing these matters back to the House. Amendment 1 would require questions to be answered on oath. Like the noble Lord, I felt that the answer from the Dispatch Box at the previous stage did not take us a great deal further. The Minister said:
“It would already be a criminal offence for the respondent to knowingly or recklessly provide false or misleading information”.—[Official Report, 28/3/17; col. 496.]
Unexplained wealth orders are court orders, so my question—I am not sure whether it is to the noble Lord or the Minister—is: does contempt of court arise here? That is not to support the amendment or otherwise, but to flesh out understanding of the procedure.
On Amendment 2, has the noble Lord been more timid than necessary by referring to the respondent or others having taken the step of registration as a beneficial owner, rather than using the criterion that he is such an owner? I agree on compliance: one either complies or one does not. Surely purported compliance is not compliance. This is quite a difficult area in legislation and it should be clear, and not raise more questions about whether the criteria are fulfilled.
My final question is on government Amendment 6. Will the Minister explain why, unusually, “a person” does not include a body corporate? I was interested to see that it is apparently necessary to include a definition. The definition itself is interesting: if it is read literally, references include bodies corporate and so on, regardless of whether they hold or obtain property. Does that restrict which bodies corporate are the subject of this new provision? I gave the Minister notice of my question so I hope she will be in a position to assist the House. I reiterate our strong support for getting this Bill through. I have spoken as briefly as I can because I know the House wants to get on with it and do just that.
Lord Mackay of Clashfern (Con)
My Lords, I support these amendments. I first came across unexplained wealth orders in Inland Revenue fraud proceedings where people had been accused of not paying their income tax. One of the methods of revealing that is by demonstrating that they suddenly have more wealth than their Revenue account suggests. Therefore, there is a question about whether the assets came from taxable income. That was the presumption at that time. That was before the terrific expansion of other forms of unexplained wealth that could arise. The explanation that someone had done something unlawful would not be a particularly good answer to a tax inquiry but perhaps that was not thought of. Certainly, that was a very useful tool in the armoury of the Inland Revenue in days past and is still so today. It is a very valuable method of dealing with this trouble. I find it very hard, however, to understand what is meant by purported compliance. As has just been said, it seems to me that you either comply or you do not. I must say that the explanation given in the draft practice system does not enlighten me any further. It suggests, indeed, that purported compliance covers certain aspects of non-compliance. It is a difficult definition to put in. I would have thought the measure would be better without it.
I raise questions with regard to the register. It is required to be done within six months of the passing of the Act. However, the commencement provisions of the Act allow the Act to come into force in accordance with regulations or orders made by the Secretary of State. I assume that the passing of the Act in this amendment is intended to refer to its getting Royal Assent. Strictly speaking, however, the Act comes into force only in accordance with orders made by the Secretary of State under the commencement provisions except in relation to certain aspects of that.
Lord Judge (CB)
I wish to add a few words of my own on purported compliance. I am not quite sure what we are supposed to cover. Obviously, there will be the individual who is potentially made subject to this order who will try his or her best to produce the necessary information. That may not be good enough, in which case the court will allow an adjournment so that a genuine attempt to produce the information can be made. That will then be compliance. On the other hand, some people will obfuscate and deliberately make life difficult to avoid the true facts coming to light. They will say, “That is purported compliance”, but it will not be—it will be a failure. Therefore, the words “purported compliance” simply do not apply and will not help.
Lord Kennedy of Southwark (Lab)
My Lords, the noble Lord, Lord Faulks, has raised some very serious issues, expressing the concerns of a number of noble Lords, and he made some of those points at earlier stages. The Government have clearly not satisfied him or many others in the House, and we share their concerns. The noble Baroness, Lady Hamwee, made similar remarks.
The point about “purports to comply” was particularly well made by the noble Lord and others, including the noble and learned Lords, Lord Mackay of Clashfern and Lord Judge. I hope that, in responding, the noble Baroness, Lady Williams of Trafford, will be able to satisfy the noble Lords who have spoken, as well as the rest of the House, that we have got this issue right. We are all very keen to get this legislation on to the statute book as quickly as possible. We certainly support its general aims—it is a good Bill—but the worst thing to do would be to put something on to the statute book that is not very well drafted and would cause more problems or be an aid to people who do not want to comply properly with the orders. This is a very important point and, although we want the Bill to pass quickly, the noble Baroness needs to satisfy the House that we have this measure right.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, before I begin, I want to make a few comments. Following the decision last week to call a general election, this is likely to be the last opportunity for the House to scrutinise this legislation. As noble Lords have said, it has had cross-party support throughout its parliamentary passage and I am very grateful to noble Lords, through the usual channels, for enabling us to take both Report and Third Reading today. Time is very short, but we all agree that this Bill will deliver valuable powers to fight money laundering, prevent the financing of terrorism and combat corruption. I hope we can maintain consensus on the way forward and return the Bill swiftly to the Commons.
Perhaps I may also take a moment to thank the noble Lord, Lord Empey, who might have brought back an amendment today but, given the shortness of time, has decided not to do so. He would like it placed on the record that this in no way undermines his support for the victims groups that he has supported over many years.
As well as the amendments in the names of my noble friends, this first group is composed primarily of government amendments that seek to fine-tune the Proceeds of Crime Act 2002. These are consequential on matters already in the Bill and should not, I suggest, raise any particular concerns. However, I will address each of them for the benefit of noble Lords.
Amendments 6 and 7 make explicit that unexplained wealth orders can be used in cases where the property of interest is registered in the name of an overseas company. UWOs should be a significant tool to help probe the ownership of UK property with suspected links to illicit funds, and these amendments seek to address the helpful intervention in Committee of my noble friend Lord Faulks about the London property market. Although it is already implicit that UWOs can apply to cases where property is held in the UK but registered overseas, this explicit clarification is helpful. However, it should in no way cast doubt over the other provisions in POCA, or elsewhere in law, where such an explicit clarification is not included. For example, Sections 84 and 414 of POCA define property in respect of confiscation and investigation powers respectively. These have been applied to property registered in the names of overseas companies where persons in the UK hold this property in some way. Those provisions must continue to operate in that way and I fully expect them to do so.
Our amendments clarify that the UWO provisions apply to property held by foreign companies, and our existing provisions already require a respondent to set out,
“the nature and extent of his interest”,
in a property. It is clear from this that a beneficial interest in property will be captured where a UWO is served on a serious criminal or a non-EEA PEP.
Regarding the specific points about the bodies corporate regardless of whether they hold or obtain property, the amendments provide clarity and certainty that the UWO provisions apply in this circumstance. We introduced the amendment, after discussing the point with my noble friend Lord Faulks, to make absolutely clear that UWOs can apply in respect of overseas companies. I made the important point that this clarification does not cast doubt on the normal application of the term “person” elsewhere in POCA or the statute book. I hope that this will address the concerns of my noble friend Lord Faulks in Amendment 2, which goes to the heart of the category of individuals on whom a UWO can be served. We have already previously clarified the wide scope of what is meant by “holding property”, which includes a person who has effective control over the property.
We have carefully considered the categories of potential respondents to a UWO and I was pleased to have the opportunity to discuss this with my noble friend. The Government do not consider that it is appropriate, or indeed proportionate, to add a third category of potential respondents to a UWO, when inclusion in that category is dependent only on the way in which an individual holds property. Property could, of course, be held in this way perfectly legitimately.
I will now refer to other points that were made. My noble friend asked about the annual tax on enveloped dwellings, which we have homed in on before. The annual tax on enveloped dwellings does not enable corporate or foreign ownership of property; it is a reality of UK law. I sympathise with the concerns raised, but I assure my noble friend that there is no evidence that the tax encourages money laundering. Many legitimate companies own property in holding companies.
On the point about the London property market that we have also touched on previously, I assure both my noble friend and noble Lords generally that the UWO is an important addition to the tools that can be used here. We are doing more: BEIS has launched a consultation on a public register of overseas ownership of UK property. Such a register would help to highlight abuses of this sort and deter investments of this type. We have created a public register of beneficial ownership and the register makes publicly available details of those who have a 25% stake or greater in a company’s shares or voting rights. The forthcoming set of money laundering regulations currently out for consultation will require estate agents to conduct customer due diligence on those purchasing property as well as those selling property. This will likely lead to more suspicious activity reports linked to property purchases and create more opportunities to use UWOs.
A number of noble Lords asked about purported compliance. They made the point that either a person complies or they do not. The term exists to balance against the serious consequence of not complying with a UWO. If you do not comply with one, the property is presumed to be recoverable in any subsequent civil recovery proceedings. This is without the need for the enforcement authority to provide evidence that the property is the proceeds of crime. This is reversing the burden of proof, which is a significant and unusual approach in our law, so purported compliance is to recognise that if a person engages with the process by answering all the points of a UWO, they will be protected from the presumption that their property is automatically recoverable, and issues as to whether they have complied or not will fall away. The onus transfers back to the enforcement authority to prove that the property is a proceed of crime in the usual way, and the term provides certainty as to the circumstances in which the presumption of recoverability will arise—which will be important in respect of any further proceedings against the property.
In addition, when the UWO is obtained the applicant agency has a broad scope to tailor the requests for further information and documents required by the order, meaning that the likelihood of a poor-quality response is reduced. Also, if a person provides a response, the UWO has been successful in flushing out evidence. The enforcement authority can decide whether to further investigate on the basis of that evidence or to launch proceedings.
I turn now to Amendments 15, 16 and 50, which clarify our existing provisions to ensure that in Scotland the ability to obtain vacant possession of a property can be dealt with at the same hearing as civil recovery relating to that property. Related to these provisions, Amendments 25 to 31 correct an inconsistency in the Bill. They will allow Scottish Ministers and Northern Ireland Ministers to make consequential amendments to legislation, including UK legislation, that is within their legislative competence. To ensure that any changes do not create unforeseen issues, they would be required to consult the Secretary of State prior to doing so.
The Bill provides HMRC and the Financial Conduct Authority with the power to pursue civil recovery proceedings and with supporting investigation powers. On further analysis, it was unclear whether their existing information sharing gateway powers would allow them to receive information for the purposes of these new functions. Amendments 45 to 48 make that certain.
The remaining government amendments in this group are a series of minor and technical amendments to POCA, particularly in respect of “free property”—that is, property belonging to a defendant that can be liable for confiscation. They insert correct references, ensure consistency of language and remove ambiguity to ensure that relevant powers work as they should.
Finally, I will address the other amendments tabled by my noble friend. Amendment 1 seeks to introduce a possible requirement for an individual served with a UWO to answer questions “on oath”. As my noble friend will recall from our earlier discussions on the Bill, a UWO is a civil, investigative power, and it is already a criminal offence for a respondent to a UWO to knowingly or recklessly provide false or misleading information. If a person engages with the UWO process by answering all the points of a UWO, we believe that it is right that the presumption should not apply, even if it is arguable that the person has not fully complied. The onus transfers back to the enforcement authority to prove that the property is a proceed of crime and can be recovered.
In Committee, I committed to publishing the draft code of practice in relation to UWOs and disclosure orders. I am pleased to confirm, as my noble friend already has, that I have since written to noble Lords who spoke in Committee and enclosed the draft code for their review. When I wrote I also committed to publishing the code on the GOV.UK website. I regret that we have been overtaken by events and that doing so now would not be consistent with pre-election guidance. However, I have placed a copy in the Library of the House to ensure that noble Lords can scrutinise it ahead of the public consultation that will follow in due course.
We will be considering addressing issues such as statements of truth in giving evidence and purported compliance in the POCA investigation code of practice. It will then be open to noble Lords to make any representations relating to that code once a final draft, subject to the required public consultation, and the order bringing the code into force are subject to the affirmative resolution procedure. It will be debated in the House before being introduced.
Lord Faulks
My Lords, I am grateful to my noble and learned friend and all noble Lords who spoke in this debate, and to the Minister for her response. It is a pity that the Government did not respond to these amendments in Committee. They have received support today and the code of practice does not seem to me to deal with them. On the simple question of purporting to comply, a number of speakers have said that one either complies or does not, and I say with respect that I fail to understand the response to those points. I think it was said that, even if there were purported compliance and not much information was obtained, it would still be technically successful as a UWO. That sounds very much like saying that the operation was a great success but the patient died. However, my noble friend the Minister seems convinced that this is sufficient and I bear in mind the fact that the agencies have no doubt had input into the provisions contained in the Bill.
Likewise, I am disappointed that there is no provision for a requirement to give evidence on oath. The mere existence of that power is likely to inhibit those who might otherwise wish to mislead the court. Of course, if they then came to give evidence, quite apart from the question of contempt of court, they could be prosecuted for perjury. That might give some more teeth to these provisions. I am, however, reassured that it will still be possible to feed some of these ideas into an improved code of practice, and I hope that these debates may have affected the minds of those who seek to improve that code of practice.
On the question of the London property market, I am afraid that I am still in the dark about the envelope tax. The existence of that tax does not seem to be consistent with the overall thrust behind the Bill. Its continued existence is an embarrassment, frankly, to the Government—but there it is. As to the amendment in relation to London property, the noble Baroness, Lady Hamwee, suggested that I had been a little timid in respect of that amendment. In some ways she is right, but the attempt was to tie it specifically to the register that we were told was to come into existence. My noble and learned friend was quite right about the date of commencement—but, for reasons that will be apparent, I do not think that we need to trouble ourselves too much with that.
As my noble friend the Minister quite rightly said, the position is that we are against a time limit. It is important that the Bill becomes law, and any attempt to prevent that would not be helpful since there is all-party support for this. It is very much a step in the right direction and I do not wish to spoil the party. In those circumstances, I beg leave to withdraw the amendment.
“( ) References to a person who holds or obtains property include any body corporate, whether incorporated or formed under the law of a part of the United Kingdom or in a country or territory outside the United Kingdom.”
“( ) References to a person who holds or obtains property include any body corporate, whether incorporated or formed under the law of a part of the United Kingdom or in a country or territory outside the United Kingdom.”
“Co-operation: beneficial ownership information
In Part 11 of the Proceeds of Crime Act 2002 (co-operation), after section 445 insert—“445A Sharing of beneficial ownership information(1) The relevant Minister must prepare a report about the arrangements in place between—(a) the government of the United Kingdom, and (b) the government of each relevant territory,for the sharing of beneficial ownership information.(2) The report must include an assessment of the effectiveness of those arrangements, having regard to such international standards as appear to the relevant Minister to be relevant.(3) The report—(a) must be prepared before 1 July 2019, and(b) must relate to the arrangements in place during the period of 18 months from 1 July 2017 to 31 December 2018.(4) The relevant Minister must—(a) publish the report, and(b) lay a copy of it before Parliament.(5) The reference in subsection (1) to arrangements in place for the sharing of beneficial ownership information between the government of the United Kingdom and the government of a relevant territory is to such arrangements as are set out in an exchange of notes—(a) for the provision of beneficial ownership information about a person incorporated in a part of the United Kingdom to a law enforcement authority of the relevant territory at the request of the authority, and(b) for the provision of beneficial ownership information about a person incorporated in a relevant territory to a law enforcement authority of the United Kingdom at the request of the authority.(6) In this section—“beneficial ownership information” means information in relation to the beneficial ownership of persons incorporated in a part of the United Kingdom or (as the case may be) in a relevant territory;“exchange of notes” means written documentation signed on behalf of the government of the United Kingdom and the government of a relevant territory setting out details of the agreement reached in respect of the arrangements for the matters mentioned in subsection (5)(a) and (b);“relevant Minister” means the Secretary of State or the Minister for the Cabinet Office;“relevant territory” means any of the Channel Islands, the Isle of Man or any British overseas territory.””
Baroness Williams of Trafford
My Lords, I am again grateful to the noble Baroness, Lady Stern, and others for their amendment, which allows us to return to the important issue of company ownership transparency in the British Overseas Territories. As noble Lords will be aware, the Government have tabled their own amendment and I am pleased to have been able to discuss this with colleagues prior to today’s debate. The group also contains an amendment in the names of my noble friends Lord Faulks and Lord Hodgson of Astley Abbotts, no doubt prompted by concerns about the abuse of the London property market. I intend to address this in my closing remarks.
Before I turn to the government amendments, I hope I might be allowed to detain noble Lords for a few moments while I reiterate certain important points on company ownership transparency in the British Overseas Territories and Crown dependencies. As part of our international efforts to increase corporate transparency, the Government continue to work closely with our overseas territories with financial centres to tackle money laundering, terrorist financing, corruption and fraud. In Committee, I described the exchanges of notes the UK signed last year with overseas territories with financial centres and with the Crown dependencies, setting out new arrangements on law enforcement access to beneficial ownership data.
These arrangements are due to be implemented by June this year. They will put the UK and the wider “British family” of the OTs and CDs well ahead of most jurisdictions in terms of transparency, including many of our G20 partners and other major corporate and financial centres, including some states in the US, and demonstrate our continued leadership. I reiterate that we should be proud of this fact and of the progress achieved. These arrangements will bring significant benefits in the capacity and information that UK law enforcement authorities will have at their disposal to tackle criminal activity and to investigate bribery and corruption, money laundering and tax evasion. They will prevent criminals hiding behind anonymous shell companies incorporated in the overseas territories and Crown dependencies, ensuring that these jurisdictions are not open to exploitation by those seeking to hide the proceeds of their crimes.
The UK has continued to work closely with the overseas territories on implementing the arrangements. Indeed, we arranged for the London representatives to attend a meeting in the House this morning so that noble Lords could hear about their progress at first hand. I am very pleased to report there have been some further positive developments since I provided an update in Committee which I will briefly share with noble Lords.
The British Virgin Islands will shortly introduce the beneficial ownership secure search Bill, which will be known as the BOSS Act 2017, to its House of Assembly. This will reinforce the existing process for sharing information with UK law enforcement authorities.
The newly elected Premier of the Turks and Caicos Islands has confirmed that legislation will be introduced on an urgent basis to establish a central registry of beneficial ownership information in its existing companies registry, and to determine access to such information. She expects that the register can be established by the June 2017 deadline, albeit that it will take longer to populate the register fully with data on corporate and legal entities incorporated in the jurisdiction.
Montserrat had in fact committed in November 2015 to establish a public register of beneficial ownership. Although Montserrat is therefore not covered by the exchange of notes, we receive regular updates on its progress. Officials advise that a draft companies Bill will shortly be put to its Cabinet for approval.
The NCA has confirmed that it is already seeing enhanced co-operation from some overseas territories, with turnaround times for processing requests for information much shorter than previously. We expect to see this further improved to meet the agreed standards by June this year. This demonstrates what can be achieved by working consensually with the overseas territories and the Crown dependencies. It is reaping benefits and I believe that it will continue to do so.
Rather than imposing new requirements on the overseas territories, the Government believe that we should continue to work with them and to focus our efforts on the implementation of the existing arrangements, including the passage of new primary legislation in the territories and complex technological improvements. I know that noble Lords would like a timetable to be set for public registers. However, the Government respect the constitutional relationship with the overseas territories and the Crown dependencies. As previously noted, legislating for the overseas territories is something that we have done only very rarely, on issues such as abolition of the death penalty which raised issues of compliance with human rights obligations and thus areas for which the UK retains direct responsibility.
While tackling this kind of complex criminality and its consequences is extremely serious, there is a clear constitutional difference in that financial services is an area devolved to territory Governments. In the case of the Crown dependencies, the UK has never legislated for them without their consent. Doing so would be likely to lead to the territories withdrawing their current level of co-operation, jeopardising the progress made and the spirit of working in partnership that we have fostered with them. I hope that noble Lords will see that this is not a course of action we should take.
It is quite right that we should ensure that the territories’ existing commitments are effectively implemented and deliver real benefits for UK law enforcement—this point was emphasised by the noble Lord, Lord Rosser, in Committee. Following careful consideration, I have brought forward Amendments 8 and 32 to address the concerns raised by him and others. The amendments provide for a report to Parliament on the effectiveness of the bilateral arrangements in place between the UK and the Governments of the overseas territories with financial centres and the Crown dependencies on the exchange of beneficial ownership information.
As I noted in Committee, the Government are committed to following up on these arrangements to ensure that they deliver in practice. There is already provision in the exchange of notes agreements with the overseas territories and the Crown dependencies for reviews of the arrangements six months after they come into force—that is, on 31 December this year—and for further reviews annually thereafter. The arrangements also provide for continuous monitoring by both parties. However, placing a review of the first 18 months of operation of the arrangements on a statutory basis will provide further assurance that careful parliamentary scrutiny will be given to their effectiveness and demonstrate that they are being implemented properly, working effectively and meeting our law enforcement objectives.
As I have said previously, the UK is the only G20 country to have established a public register, and it is this Government’s long-term ambition that publicly accessible registers of beneficial ownership will in time become a global standard. At that point, we would expect the overseas territories and Crown dependencies to implement this standard. The government amendment includes provision that, in the review of the effectiveness of the arrangements, we can consider relevant international standards. This further demonstrates our intention to ensure that we and our overseas territories and Crown dependencies remain ahead of the curve on international standards and will continue to consider the bespoke arrangements set out in the exchange of notes in relation to those standards as they evolve.
Given that so many jurisdictions fail even to reach the standards set by the Financial Action Task Force for beneficial ownership transparency, it is right to focus our efforts on persuading others to up their game while ensuring that the overseas territories and the Crown dependencies deliver on what they have promised. We will of course continue to engage with partners through the key international groups such as the FATF and the OECD to increase levels of transparency worldwide.
I pay tribute to all noble Lords who campaigned on this issue. The fight against global corruption is a priority for the Government and we listened carefully to all those who made representations, not least the noble Lord, Lord Rosser, the noble Baronesses, Lady Stern, and the noble and learned Baroness, Lady Butler-Sloss. I hope that the House will recognise the strong rationale for the Government’s proposed approach and that noble Lords will be minded to accept the concessionary amendment we have proposed in light of our debates. I look forward to responding to noble Lords at the conclusion of the debate, when I will also seek to address the amendment in the name of my noble friends Lord Faulks and Lord Hodgson. I beg to move.
Baroness Stern (CB)
My Lords, I will speak to Amendment 14 in my name and those of the noble Baroness, Lady Kramer, and the noble Lords, Lord Rosser and Lord Kirkhope. This amendment has already been discussed in Committee and is unchanged. Since the debate in Committee, I have been fortunate to have had lengthy and very enlightening discussions with the representatives in the United Kingdom of the British Virgin Islands and Bermuda. I also thank the Chief Minister of the Isle of Man and his colleagues for meeting me. I am grateful to the House of Lords Library for its excellent briefings and to Christian Aid and Transparency International for the additional briefings they provided and the work they do in this area.
The background to this amendment is the growing public understanding of how the lack of transparency in offshore financial centres helps the corrupt to find a haven for their ill-gotten wealth and tax evaders to sleep easily in their beds. Those in poor countries feel the effects of this most because they do not have the resources to pursue the money that has been taken from them. The understanding of this need for transparency was considerably enhanced by the publication of the Panama papers in April 2016.
On 8 November, the Chancellor of the Exchequer made a Written Ministerial Statement to Parliament on the work to date of the cross-agency Panama Papers Taskforce, a group of law enforcers set up to pursue the information that related to the United Kingdom about the illegality revealed. He said in his Statement that since the publication of the papers the task force had: opened civil and criminal investigations into 22 individuals for suspected tax evasion; identified a number of leads relevant to a major insider-trading operation; identified nine potential professional enablers of economic crime, all with links to known criminals; placed 43 high net-worth individuals under special review while their links to Panama were further investigated; identified two new UK properties and a number of companies relevant to a National Crime Agency financial sanctions inquiry; established links to eight active Serious Fraud Office investigations; and identified 26 offshore companies whose beneficial ownership of UK property was previously concealed and whose financial activity had been identified to the National Crime Agency as potentially suspicious. In addition to pursuing those 74 individuals, 26 companies, links to eight Serious Fraud Office investigations and other leads on insider trading and sanctions, a number of individuals had come forward to settle their affairs before the task force partners took action against them.
All the law enforcement activity I list is the result in just six months of bringing transparency to the files of just one legal firm in just one country. It gives an indication of the huge extent of illicit activity and illuminates the rationale behind the measures in this very welcome Bill. In passing, with great respect, I ask those noble Lords who oppose public registers whether they feel it is not worth bringing that number of people to justice, or whether they have a proposal other than transparency for achieving that end.
Undoubtedly, government Amendment 8, to which the Minister just spoke so eloquently, is a step forward in trying to curb the criminal activity, tax evasion and laundering of corruptly gained wealth that is illustrated by the work of the Panama Papers Taskforce. It is very welcome and makes clear that the Government look to the overseas territories and Crown dependencies to keep good and accurate information. Let us remember that half the companies disclosed by the Panama papers—some 140,000 of them—were incorporated in the British Virgin Islands.
However, Amendment 14 goes further than the government amendment. In relation to the overseas territories, it aims to bring transparency to their financial operations by allowing public access to registers of beneficial ownership. I note that Montserrat has already agreed to establish such a public register. This amendment would put a timetable in place for the British Overseas Territories to have public registers. It would require the Government to give all reasonable assistance possible to the overseas territories to help with this. If registers have not been made public by the end of 2019, the amendment requires that public registers should be brought in by an Order in Council.
In Committee, the Minister made it clear that she could not accept the amendment. However, in doing so she did not use the argument raised so frequently in discussions on this matter, that requiring the overseas territories to have public registers while other offshore financial centres maintain their secrecy puts them at a competitive disadvantage so that, in the evocative words of the noble Lord, Lord Hodgson,
“the malfeasant … will drift away to still murkier regimes”.—[Official Report, 3/4/17; cols. 898-899.]
I welcome very much the noble Baroness’s rejection of that line of argument. She said:
“The overseas territories may face competitive disadvantage in the short term, but in the long term, the transparent and open way in which the territories intend to work, and we with them, will be to their advantage”.—[Official Report, 3/4/17; col. 911.]
In Committee, her main reason for rejecting the amendment was that there would be a constitutional problem in accepting it. She repeated that today. Yet since Committee, I have been sent many documents on this subject, which I studied carefully. They make it clear that ultimately the UK Parliament could legislate for the overseas territories if it so wished but I understand completely why the Government would prefer to proceed with consent. So would I and I am sure there is wide agreement on that.
I remind the Minister of what she said in Committee: for the purposes of international law, the overseas territories are British. That Britishness is significant. In my various discussions, it has become clear to me that the attraction of the financial services in the overseas territories is primarily related to British identity and language, access to a common-law legal system, final recourse to the Privy Council and the appeal, as it is seen, of the Union Jack. It is worth repeating the words of the noble Lord, Lord Kirkhope, in Committee. He said:
“It is fair to ask those jurisdictions that while their economy and defence depend on the stability and integrity of the UK, they should also be expected to follow the same rules of business and investment that we follow here”.—[Official Report, 3/4/17; col. 888.]
We in the United Kingdom have a public register. It might not be perfect—I am sure that the noble Lord, Lord Eatwell, would agree with me on that—but it is our policy. We have one because we believe it is right and that it helps to prevent serious crime. I hope that by tabling this amendment we have made it clear that we in the United Kingdom understand the huge impact that secret offshore financial services can have on the poor countries of the world, good governance, democracy and security. We understand that the overseas territories are a United Kingdom responsibility and we hope very much that transparency of their financial operations will come sooner rather than later.
Finally, I thank the Minister for the way she has carried this hugely important Bill through the House, and for her support and helpfulness at all times.
Lord Kirkhope of Harrogate (Con)
My Lords, as one of the signatories to Amendment 14—and its predecessor, which we looked at in Committee—I thank the noble Baroness, Lady Stern, and congratulate her on her amazing vigour and courage and, indeed, her intuition in pursuing this matter, which is so important.
When I spoke in Committee, I made it very clear from the beginning that, first of all—and this is important still—the Government deserve enormous praise for the work they have done both here in the UK and internationally to tackle corruption and tax evasion and avoidance. I credit that also to the previous Government because one of the reasons I have been interested in this matter is that I followed the right honourable David Cameron’s lead when he put this issue very much at the top of the agenda at the 2013 G8 summit and subsequently, as was referred to in an earlier discussion, at the anti-corruption summit in May last year.
Of course, Mr Cameron and others did not refer just to global standards. Indeed, one of my noble friend the Minister’s responses in Committee was to talk about awaiting global standards before any further pressure was placed on overseas territories to comply with the public register or the enhanced register. But the truth is, of course, that the former Prime Minister referred to the gold standard, which the United Kingdom itself was very much in the vanguard of. This was accepted and understood, and it left this country, as it is now, in an enormously advantageous position in dealing with other countries as we go forward.
For my sins, I was one of those involved in the drafting of the fourth anti-money laundering directive. My friends always introduce me as an expert on money laundering. I do not like that description but undoubtedly we are looking in this enormously important piece of legislation at how we respond to the requirements under that fourth money laundering directive as well.
I maintain that the amendment I have co-signed is the best way forward but I also pay tribute to the Minister for the way she has listened to the concerns of those who hold our views. She listened very carefully in Committee—and not just listened. Often I think our Ministers listen but that is about it. She has in fact acted. Therefore, I will refer quickly to government Amendment 8, which is an enormous stride forward. It also gives us the ability, which is so important, to review the situation actively in two years’ time, when we can have reports to see how the overseas territories are getting on with the introduction of public registers. She has also given us good news this evening about developments even since Committee. We should welcome that and thank the Government for their interest in proceeding in that manner.
I am still of the belief that we need a level playing field and we need an agreement with our overseas territories that is at least compatible with and equivalent to the requirements that we place in the domestic setting. It makes no sense not to have that. I recognise the Government’s position on this and I realise they wish to proceed by consent. Of course, we all agree that consent is always better than enforcement. I wish the Government great success with this. As we proceed, I hope we will be getting regular updates and then, in due course, when the reports come in, we will have the opportunity, if necessary, to return to this matter. But this is a very important Bill in so many other regards as well. I certainly wish us to pass the Bill and allow it to proceed from here.
Lord Judd (Lab)
My Lords, I declare an interest: I was Minister for Overseas Development, before moving on to the Foreign Office. I have served both professionally and voluntarily in the development sphere in various non-governmental organisations, including as director of VSO and subsequently Oxfam. To all of us involved in that work, the importance of the Bill, which I very much endorse, and of the amendment that has just been spoken to, cannot be overemphasised. Indeed, I noticed the other day that the Prime Minister, in saying in the Conservatives’ election campaign that they will stand by their commitment on overseas aid, emphasised that what was important was to make sure that the aid was being spent in the most effective way and not wasted.
It is terribly important to recognise that the people of too many developing countries are being robbed by their leaders, and that existing arrangements enable those leaders to get away with it. If we are going to talk about the effective use of aid, it seems to me that where we have the authority to take highly relevant and effective steps, we should do so. Yes, of course, we must put on record that Britain has taken great steps to provide world leadership in this sphere. It is leading the world already. That is why the remaining gaps are very ugly anomalies. I do not like to put it in these crude terms but it always seems to me that people either have some reason for not implementing immediately what is proposed or they do not, and if they do not, let us do it. If they are going to find ways of delaying—having still to work out arrangements and so on—this must raise suspicions that arrangements are going to be made in other respects as well.
From that standpoint, I say simply that, with all my experience in this sphere, this is a crucial matter. I congratulate the noble Baroness and her co-signatories on having stood by their guns. I hope the amendment will be taken seriously because I believe there could be a very important consensus in this House if we are prepared to put ourselves on record.
Lord Blencathra (Con)
My Lords, I wanted to intervene earlier in this debate following the speech of my noble friend Lord Kirkhope because I, too, wish to refer to Mr Cameron and the G8 summit.
First, I shall say that Amendment 8 is unnecessary but harmless, so I shall support it—but Amendment 14 is wrong and misguided for a number of reasons. First, we have no right, neither legal nor moral, to seek to impose our rules on law-abiding, self-governing British Overseas Territories. When I hear some of the NGOs outside this House talking about our overseas territories, I am appalled at their old-style colonial arrogance. One notorious campaigner against so-called tax havens has even suggested in his book that they should be closed down and the natives made to depend on overseas aid once again—and he calls himself moral. He is also one of the architects behind these proposals. I believe that we have no moral right because the United Kingdom creates more dodgy shell companies than some of the tightly regulated overseas territories and Crown dependencies. We need to come up to their standard, not the other way round.
Secondly, we should not impose these public register rules because the rules themselves are rubbish, as I shall attempt to explain. Not a single other country in the OECD is implementing this—and they have made clear that they never will. This public register wheeze was invented by my right honourable friend Mr Cameron in 2013. No other country will touch it with a barge-pole and the only reason that he was so keen then to foist this system on the overseas territories was so that he could point to others being in the same boat as himself and would not look isolated.
I was involved in the background at that time and had a meeting with prominent NGOs prior to the G8 in 2013. I asked them why they were not campaigning against the real tax havens of this world—Luxembourg, Delaware, Mauritius et cetera—but targeting the good guys such as our overseas territories. They responded that they had no chance of influencing policy in those tax havens, but that Mr Cameron was so desperate for a win at the G8 that he and the overseas territories were an easy, soft target.
I should make it clear for the record that at that point I was the director of the Cayman Islands office in London but that I have no connection whatever, either financial or otherwise, with the Cayman Islands Government now. However, I still deeply admire the way the territory is run and the exceptional level of integrity that it brings to financial services, which is greater than in the United Kingdom. I shall attempt to justify that.
Why do I say that our UK policy is farcical? Because it says that the way to get at dodgy persons setting up dodgy shell companies is to have a public register so that nosey parker NGOs can trawl through them and out those people. No—what you must do is stop them setting up dodgy shell companies in the first place. Jersey and Cayman are the top jurisdictions in the world, with by far the tightest regulations and checks on people setting up dodgy shell companies.
A few years ago an Australian professor at Griffith University, Professor Jason Sharman, did a huge experiment with his team on setting up shell companies. They created dozens of email and other addresses at different places around the world, from Islamabad, Nigeria and Moscow to London, New York and elsewhere. Many of the locations were highly reputable; others were places where you should hang on to your wallet if you get an e-mail saying you have £10 million to invest within them. The researchers sent messages to hundreds of corporate service providers around the world, which varied in credibility from, “We wish to establish an export base in your country for our long-established company” to messages from addresses in Pakistan saying, “We have a few million dollars and want to set up some companies in complete secrecy and want some fake bank accounts”. What was astonishing, according to Professor Jason Sharman’s research, is that while the majority of CSPs did not respond to the latter, highly suspicious messages—or told them to get lost—a very large number responded and were willing to help.
Professor Sharman’s team invented a rating system for the responses—and guess who came out top as the most difficult, indeed impossible, places in which to set up fake shell companies without supplying beneficial ownership information? Yes, it was little old Cayman and Jersey. I have Professor Sharman’s chart here, with them achieving 100%. Who was at the bottom of the heap, where you could almost walk in with a suitcase full of terrorist cash and set up a company with no questions asked? It was not Panama but individual states in the United States such as Delaware, Montana and Wyoming. They are way down at the bottom of the chart.
There are 2 million new companies created in the United States every single year. If you want to set up a dodgy shell company, you go to the United States—or rather, you go on to email and do it in under half an hour for less than $300. These states have said quite bluntly that they do not care what the President signs up to at federal level or at the OECD; they are in charge of company registrations in their state and will never in a million years go for public or central registers. They will not go for any more scrutiny before setting up companies.
Where does the United Kingdom come into this? Unfortunately, your Lordships can guess who was 13th from the bottom of the heap—below Vietnam, Panama and Ukraine. Yes, the United Kingdom was 13th from the bottom on creating dodgy shell companies, because we do it with insufficient verification of the beneficial owners. So clobbering Cayman, Bermuda and the BVI with rules which only they, not the other 19 countries of the OECD, would follow is misguided and foolish. I agree with my noble friend Lord Hodgson that we do not make the world a better or a more transparent place by hitting the good guys, encouraging the bad and letting all the Mugabes of this world go to the real tax havens to set up accounts.
Neither does the OECD ask for these public registers. The OECD merely wants all legitimate authorities to get speedy access to the relevant information so that the police, security services and financial regulators can check the legality of owners and their transactions. That is the point of access to beneficial information. I know that the Cayman Islands has been providing that information without any objection whatever for the last 10 years and has now implemented a system to give that information to legitimate authorities within 24 hours, seven days a week. That is a far better system than publishing registers.
It is perfectly legitimate for many individuals to create companies and seek to keep the ownership information private. There is no right for the public, nor for anti-capitalist NGOs, to know who owns private companies. But there is a need for legitimate law enforcement authorities to get speedy access to that information—and the overseas territories are in the forefront of providing it. What is more, I know that the information provided by the Cayman Islands, for example, will be verified by the authorities—as opposed to what will be supplied by Companies House, which does not verify the accuracy of anything. It is left to individuals to say to Companies House, “I promise that I’m telling the truth and I am who I say I am”. The overseas territories do not accept that.
So I ask this: will my noble friend the Minister give me an assurance that, in due course, the UK Government will make an attempt to get our beneficial ownership information in Companies House as up to scratch and as good as that in the best of the OTs? Our overseas territories should be lauded, not criticised, for their work on financial services. For these reasons, I oppose Amendment 14 and believe it should be rejected.
Lord Beith (LD)
My Lords, I declare a simple interest as a former chairman of the Justice Committee in the House of Commons, where we sought to clarify and underline the constitutional relationship. That probably explains why, while I generally support government Amendment 8, I have some doubts as to whether it is desirable to have included the Crown dependencies and overseas territories in the same amendment when their constitutional relationship has a very different history.
Of course, the amendment as framed does not claim to place any requirements on the jurisdictions to which it refers; it simply requires UK Ministers to report to the UK Parliament on how it is all going, which is obviously a good thing and something that we can very much welcome. Parliament needs to know about the effectiveness of information sharing, not only in respect of the overseas territories and the Crown dependencies but in respect of all the jurisdictions in which business is already carried out or to which it might transfer as a result of the steadily improving regulation in some of the territories that have been referred to in this debate.
A lot of the public concern arises from two things. One of them, which was mentioned by the noble Lord, Lord Judd, is the appalling record of corruption in many developing countries. The other is the revelation of much of that in the Panama papers. The noble Baroness, Lady Stern, deserves credit and tribute for her campaigning on this issue. She referred to the number of proceedings being considered or started. Many of them have arisen not from inadequate public registers but from the useful publication of a great deal of information from one law firm. As it happens, it was the biggest law firm in Panama, Mossack Fonseca, both of whose named partners are currently in detention in relation to matters in Brazil.
The Earl of Kinnoull (CB)
My Lords, I declare my interests as set out in the register of the House and, in particular, that I was chief executive of a class 1 major reinsurer in Bermuda for a number of years and have very wide experience of financial services in that country and generally.
I pay tribute to the Minister and also to the noble Baroness, Lady Stern, in their respective ways. I am afraid that I can pay tribute to the noble Baroness, Lady Stern, but I disagree with her fundamentally. While I feel that the appalling catalogue of problems that she read out is terrible, worrying, vile and awful, Amendment 14 is not a good way of addressing the issue. She challenged me to try to provide a better way, and I will in the course of my remarks.
People often do not understand how big a jurisdiction Bermuda is. Bermuda overtook London as a centre of reinsurance in 2004. London remains number two in the world. No major insurer in this country would be able to trade without the reinsurance that it purchases from Bermuda. The amount of money, capital and sophistication in Bermuda is enormous. The BMA—the chief regulator there, of which more in a second—is an extremely professional and very tough regulator. Bermuda was not responsible for even one of the revelations in the Panama papers and is a very clean jurisdiction, and it is particularly unfair that it is named in this amendment.
I have four particular points, on two of which I can be very quick. The first is a general point about interference by Westminster in the affairs of these self-governing regimes. I agree with the Minister, and I will say no more. The second is a general point about shifting the problem to another jurisdiction. I agree that shifting a bad thing is a good thing in many ways, but shifting a good company is a bad thing because you are simply damaging the jurisdiction. There are many good companies, and I will explain in a second why this amendment would have the effect of shifting good companies. It would be very wrong for us to impose damage on our loyal overseas territories and possessions.
My third point is about the three things that control and look at naughtiness in financial services, which are the tax authorities, the police authorities and the regulators. As a chief executive of a big company, of course one is worried by tax authorities and policemen, but the person who can walk into your office and stop you trading immediately is the regulator. He has the most power, and he is the toughest. I regret that in the many debates we have had the power of regulators has not really been discussed, nor has how sophisticated they are and how close they are to what is going on. It is not possible for one of these shell companies to be set up without a regulator being involved because that company will require a bank account. Banks are heavily regulated. If the shell company does not require a bank account, it will require a fund manager to look after its money. They are very heavily regulated. A person running the support business in a high-integrity environment such as Bermuda would not allow someone —one bad client—to come in and kill off their whole business. They would be very careful to make sure that that does not happen. You are scared of regulators. You are of course scared of tax and police authorities, and you are more than willing to give up any information that will protect your business because no one client is worth it. Your business is your business; your staff are your staff. That is how everyone feels—I hope noble Lords can hear a level of emotion in my voice.
A sub-point is that in our society we rely on the forces of law enforcement to deal with naughtiness on our behalf. We do not have vigilante posses running around trying to do things. I worry that if everything were publicly available people would suddenly see themselves as being promoted into some sort of enforcement environment. That is wrong. We should leave these things to the professionals—the tax authorities, the police authorities and the regulators—and trust. If they do not do a good enough job, we should bash them. We should not allow vigilante posses.
I move to my fourth point, which is the most worrying point for me. I have mentioned it to the noble Baroness, Lady Stern. For many years, Hiscox, the group I worked for for so long, looked after the possessions of well-off people all over the world. It is also the leading kidnap and ransom insurer throughout the world. During my time at Hiscox, we logged 40,000 man days of kidnap problems around the world. Hiscox’s market share was more than 50%, so it understood the issues. In this country, we are very lucky to live in an environment where we are safe and secure. I will walk home tonight and think nothing of it. I can get into a smart car and think nothing of it. That is not the case in countries such as Mexico. In Mexico, you cannot keep your company with a local bank or keep your money there. In quite a lot of countries, you need to go to offshore environments, and you are a good client because you have earned your money. Hiscox’s perfect client was someone who owned a beer factory in Mexico or something because it knew they were straight and honest and could see how they had made their money. People were very scared. Part of kidnap and ransom is advising clients. Hiscox advised them to keep quiet about it and to be discreet. That is the chief weapon that will stop nastiness going on. When the nastiness happens, it happens not to the guy running the beer factory but to his daughter. It happens in a nasty way. I worry that the effect of this sort of thinking, without a proper impact assessment being sorted out and thought about very carefully, could be that we would be sentencing some people who have made their money honestly to physical harm and the invasion of their homes.
I finish by saying that of course I do not want any of this naughtiness to go on, but I feel strongly that Amendment 14 is not the way to go about it. We should rely on the police, the tax authorities and the regulators to do it for us. We should look very carefully at their performance in all of these countries and carry on, as the Government have been doing so successfully, getting incremental improvement. This House should make sure we carry on pushing the Government to push the authorities to get that incremental improvement. But I plead with the House not to support Amendment 14.
Lord Eatwell (Non-Afl)
My Lords, first, I declare an interest as chairman of the Jersey Financial Services Commission and therefore the person responsible for the beneficial ownership register in Jersey. The question addressed in Amendment 14, of public access to registers of beneficial ownership, is not one for me, and I will not address the value or otherwise of making a register public—that is a political issue. The regulator in Jersey is independent, and I therefore have no role in those political decisions, but I am concerned about whether a register of beneficial ownership is accurate and therefore useful.
A number of speakers have referred to the public availability of the register of beneficial ownership here in the UK—essentially the Companies House register. As I pointed out in Committee, that register is not a useful one, since it is not verified and, because of that, the information in it can be seriously misleading. Indeed, because it is not verified, the people in developing countries and indeed civil society as a whole are on their own with respect to attempting to identify wrongdoing through the structure of the register. The register does not do the job. Regrettably, the UK is not a leader in providing verified, accurate information about beneficial ownership.
I want to address two issues with respect to the amendments. First, what I have just said will make clear why I regard Amendment 14 as seriously defective in not including the word “verified”. The characterisation of the information in proposed new subsection (4) is of a,
“publicly accessible register of beneficial ownership”,
with information “equivalent” to that under the Companies Act. The word “verified” does not appear. Therefore, the information can be inaccurate and misleading, with nobody required here to check it.
For the second point, I go back to the Minister’s amendment. Amendment 8, which has not been discussed very much up until now, says not only that “relevant” territories will provide information to the UK and we will have a report on how that information is provided but that the UK will provide “beneficial ownership information” to the relevant territories. I presume that includes my registry in Jersey. But I would like to know what information is going to be provided. If it is the Companies House information, we should really not bother; if it is some verified information, I will be very pleased to receive it. I would be grateful if the Minister, when she sums up, could tell us exactly what information is going to be provided by the UK, whether it is going to be verified and, if so, by what authority. Only if we have accurate information will the objective of those supporting Amendment 14—the revelation of wrongdoing —be achieved. If information is not verified, that goal is not achieved. Amendment 14 is defective in that respect, and I would be grateful if the Minister, when summing up, would tell me exactly what sort of information will be provided by the UK to my registry in Jersey and by whom it will be verified.
Lord Naseby (Con)
My Lords, the Minister rightly wishes the United Kingdom to be ahead of the curve. In relation to Amendment 8, which is the principal amendment that we are considering, she is absolutely right. If she is saying that the objective is co-operation on beneficial ownership information in order to deal with tax evasion and stamp out corruption, money laundering and terrorist finance, that is greatly to be welcomed and is welcomed, as far as I can see, by those in the overseas territories. I will come back to this in a minute, but the amendment will mean that the overseas territories have, as I understand it, committed themselves to provide real-time, 24-hour information in response to requests from the legal authorities in the United Kingdom. That is a massive step forward in this area of great difficulty and challenges and is to be welcomed.
However, I too am concerned about some of the detail of this new clause. It is unfortunate that a clause of this importance has appeared in the Marshalled List so late in the process. Of course, I recognise that my noble friend on the Front Bench is in some difficulty in that this is a major Bill and here we are at the 11th hour having to look at an absolutely vital amendment, and one has to make some allowance for that. But I share the view of the noble Lord, Lord Eatwell, about exactly what information is going to come from the UK and who on earth will verify that information. The overseas territories have every right to be told exactly what the information is and how it has been verified. In addition, there seems to be a great rush to have this work done in the next period so that it will all be based on one year’s experience. This is a major step forward and I wonder whether 12 months is enough. We have heard this evening from my noble friend that the Turks and Caicos Islands are hoping to get started soon, but one year is really asking an awful lot, and not many statisticians would work on the basis of one year’s information. Nevertheless, we are where we are.
I have one other concern. Proposed new subsection (2) states:
“The report must include an assessment of the effectiveness of those arrangements, having regard to such international standards as appear to the relevant Minister to be relevant”.
We do not know who the Minister may be in the next Government or what international standards are to be used. I do not blame my noble friend for this, but I suggest to her that when the report comes forward, we shall want to have great clarity about what international standards are being used and whether they are being consistently used in the analysis of implementation that flows from the new clause in Amendment 8. However, the basic point is that there must be great joy both in the overseas territories and in the law enforcement agencies of the United Kingdom that they are now going to get a first-class service which ought to have a major impact on the areas that I have described.
I have had the privilege of working overseas in Pakistan, India and Sri Lanka, and I spent part of my national service in Canada. Certainly when I was in commerce, with the Reckitt & Colman Overseas group, one of the bugbears about international trade—I am talking about several decades ago, but I am afraid it has not changed—is that it is not a level playing field. Here we are, approaching Brexit and hoping to trade internationally, but the tragedy of the situation is that somehow neither we in the United Kingdom nor other countries have ever managed to persuade the United States, Hong Kong and Singapore to have a central, non-public register. We have not even got that far. Even on the basis of what we are doing now, we have rivals. Make no mistake about it: most of our overseas territories are in the Caribbean, their main competitor is the United States and they do not even have a central beneficial ownership register. Not only will they lose business if we go too far but if the other parties, particularly the US, Singapore and Hong Kong, take business from our overseas territories, the net result will be that where we are getting information out of our overseas territories, if the business goes elsewhere then the co-operation that the UK gets from those territories—which is good and is going to be even better—will be totally undermined. Frankly, we will not get any information from the US, Hong Kong or Singapore.
On Amendment 14, which keeps reappearing, I certainly do not think that Her Majesty’s Government are committed to producing anything on a public register at the end of the review on beneficial ownership. The review should be solely on that subject, and there may well need to be further amendments or extensions to that situation. I remind noble Lords that neither the law enforcement agencies nor the tax authorities support public registers. UK intelligent law enforcement is a key part of our foreign policy, and we look for co-operation from friendly countries across the world. That will be jeopardised still further if there are these public registers.
So I say to my noble friend on the Front Bench that I support very much what she has done on the Bill and the way that she has pushed forward progress with the overseas territories. However, let us be quite clear: beneficial ownership is one thing, and it is very important, but in my view public registers are totally à décours.
Lord Luce (CB)
My Lords, I support government Amendment 8. I apologise to the House for the fact that I have not been here for the earlier proceedings because, among other things, I have been visiting one of the overseas territories, Gibraltar, as I am chancellor of the new university there. As a former Governor of Gibraltar I am probably the only person in the Chamber who has been a governor of an overseas territory, so I thought I ought to say something in this very important debate.
The noble Baroness, Lady Stern, and all those who have added their names to the amendment have done a service to the House in ensuring that we debate the vital issue of standards of regulation in overseas territories. After all, at the end of the day it is our Government who are ultimately accountable to Parliament for the performance in our overseas territories. Therefore the Government must satisfy themselves that the standards both in this country and in the overseas territories meet those required by the OECD and elsewhere, so I congratulate my noble friend on the leadership that she has shown in ensuring that we debate this issue.
However, there is a delicate balance to be struck—from listening to the debate, I think the House understands that—because we are now in a non-colonial era. I remember that after I became Governor of Gibraltar, the late Robin Cook became Foreign Secretary two or three months later and one of the first things he did, very sensibly, was to drop the term “colonial” from our overseas territories so that we have the title we use at present, “British Overseas Territories”. We have to approach these issues in a very non-paternalistic and non-colonial fashion. To my mind, that is essential. The danger with the devolved powers that we have in these overseas territories—quite rightly, in my view—is that if we try to impose in a paternalistic fashion our views and policies upon them, we will be doing them a great disservice. Above all, we want to avoid having to impose direct rule, which could be the implication of taking some of these measures. At the same time, we have to ensure that there is a level playing field, which includes us as well, and that in making progress on this we do not do so at the expense of the overseas territories.
The Government have shown tremendous initiative in responding to the amendment from the noble Baroness, Lady Stern, with their Amendment 8 because it provides a framework with which we can move forward in negotiation and dialogue with the overseas territories over the next two or three years to try to move the whole issue forward. Many of the overseas territories, as we have already heard today, have made good progress. I congratulate the Government on this and strongly support their amendment.
Baroness Butler-Sloss (CB)
My Lords, I support very much what the noble Lord, Lord Luce, has just said and respectfully associate myself with it. I strongly support Amendment 8. If I may put it this way, I think the Government, and particularly the Minister, have been extremely shrewd in taking the sting out of the points made by the noble Baroness, Lady Stern, who has very wisely brought these issues to this House. The Government have picked them up and produced what seems to me to be the right approach to dealing with the overseas territories. The amendment provides a useful nudge to the overseas territories that the Government are looking at what they are doing, without imposing what is unacceptable upon these independent countries with their own constitutions and parliaments.
I do not agree with Amendment 14. I was at the meeting this morning where representatives from a number of overseas territories explained to us what they were doing. We have already heard about Bermuda and the Cayman Islands, the British Virgin Islands, which are doing very good work, and from Anguilla and Montserrat about the efforts they are making. We have heard from the Minister about the Turks and Caicos Islands, which with their new Government are now working to get this through. So the areas contained within Amendment 14 are already on the way, if not ahead of us in some cases, and it is not necessary that they should be referred to specifically in it. I do not want to hold everyone up. I support Amendment 8 and I do not think Amendment 14 is really necessary now.
Lord Faulks
My Lords, I shall speak to Amendment 24 in my name and that of my noble friend Lord Hodgson of Astley Abbotts in this group. It concerns the setting up of a public register of beneficial ownership of UK property by companies and other legal entities registered outside the UK. Those are more or less the words that are the subject of a call for evidence issued by the Department for Business, Energy and Industrial Strategy in April this year. I do not know but I assume that the Home Office did a great deal to bring forward the publication of that report in the light of the debates which took place in Committee about the concern that was generally expressed about corruption and the acquisition of property in central London by overseas companies hiding behind anonymity.
The establishment of a public register was indeed a commitment made by the Government. Why do we need a register of this sort? I can do no better than quote briefly from the call for evidence, which says,
“the government is concerned about the potential for illegal activity to take place through overseas companies investing in the property sector. Some properties are owned through off-shore companies in order to obscure their true owners. This can make it difficult for regulators, legitimate businesses and the general public to know who the true owners are and can make it very difficult for law enforcement agencies to carry out effective investigations … Greater transparency of property ownership will make the job … easier and will discourage criminals and the corrupt from choosing the UK to hide or launder their money”.
It is made quite clear that the Government intend to introduce a register of beneficial owners of overseas companies but, as it is a call for evidence, it does not seek to prescribe the nature of that register but calls for advice and information to assist it in formulating the register. It may well be influenced by what the noble Lord, Lord Eatwell, said about verification to make any such register particularly useful.
The amendment in my name and that of my noble friend Lord Hodgson simply asks the Government to do that and make it a part of the Bill. If we do not, there is real feeling that there will not be legislative time even in the Parliament that may start in June. I ask the Minister to reassure us that the register will be set up in short order.
The Earl of Sandwich (CB)
My Lords, I was not here for Committee and I apologise for rising at this late hour. I thank the Minister for her attendance at our meeting this morning, which was very productive. I admitted then that I had not seen government Amendment 8. Now that I have read it—in fairness to the noble Baroness, Lady Stern, I know that people have said that it is very welcome—it is actually quite disappointing for the aid organisations that have been campaigning. That should be on the record. It is really a restatement of existing government policy, and is not a compromise in that sense. I prefer to support my noble friend and others on Amendment 14 because it is only common sense. If we look back to discussion in Committee, we see that all they are asking is for the Government to complete their own programme of persuading the OTs to adopt public registers. This was a worldwide campaign, which we admire the Government for leading. It is now intended to include the overseas territories, although I fully recognise that there has been a slow take-up and that Orders in Council may be required.
I have worked with Christian Aid and many other organisations, as has the noble Lord, Lord Judd, which support the proposed new clause in Amendment 14. They are, to my mind rightly, concerned that the need for transparency should apply to overseas territories and developing countries just as much as to us. I hope the Minister now recognises that and will see her way to further compromise in future. The aid agencies feel strongly about this—after all, they are thinking of the majority of people living in those countries, not those sitting on the money.
Finally, I quote one informed reaction from Christian Aid to the new amendment. It states:
“The Exchanges of Notes signed between the UK Government and Overseas Territories in April 2016 on sharing beneficial ownership information already provide for a joint review of the operation of the arrangements six months after their coming into force, and thereafter on an annual basis. The report envisaged by amendment 8 is therefore already committed to. All this amendment does is put an existing commitment into law”.
The amendment does not mention transparency; nor does it mention developing countries. I therefore see no reason why we cannot support Amendment 14 and Amendment 8.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I have added my name to Amendment 24, which is about the UK register of overseas property. Before I speak to it, as the noble Baroness was kind enough to refer to my remarks in Committee about drifting away to murkier regimes, I took it from the way that she quoted it that she did not approve of that. I was relieved that my noble friend Lord Blencathra quoted it with approval, which shows that you cannot please all the people all the time. However, I do not want my noble friend, or indeed the noble Baroness or the House, to think that that remark was made in isolation.
I said that the status quo was unsustainable and that at least three issues should be tackled as part of the new regime: first, there should be a register; secondly, our law enforcement agencies should have full-hearted access to it in a way that is prompt, helpful and consistent with a working relationship; and, thirdly, the Government should be satisfied with the probity and effectiveness of the register regime in the overseas territories and Crown dependencies. It seems to me that government Amendment 8 meets those tests, which is why I support it. Rather than talking about drifting away to murkier regimes, I should be saying that we must not let the best become the enemy of the good.
With that, I turn to Amendment 24. It is important not to see the issues raised by my noble friend Lord Faulks as a problem for only central London and the inner suburbs. There is a knock-on effect from what is going on in central London with continuing overseas investment in London properties. That makes the urgency to which my noble friend referred a moment ago all the more pressing. First, there is a ripple effect on properties in the south-east of the United Kingdom: as the settled population sell their properties closer to the middle of London, they have further money to buy properties elsewhere in the region. A very interesting article in the Financial Times on Monday 3 April pointed out that house prices have increased by 102% since 2002, compared to a 38% increase in earnings; that Londoners now need to pay 12.9 times their earnings, up from 6.9 times in 2002, to buy a London house; and that if you wish to buy a house in Kensington and Chelsea, the heartland of the area that my noble friend has in his gunsights, you now need 31 times the median salary to afford it. There is a real sense that we need to get a grip and some clarity on what is going on.
There is a second impact because, as London has become more expensive, foreign investors have begun to look at other cities. The Times of Friday 7 April pointed out that Number One Cambridge Street in Manchester, a development of 282 flats over 29 storeys, has investment purchasers from Azerbaijan, China, Japan and Zimbabwe—18 nationalities. Only two of the 282 flats are owned by Britons. The developer wrote:
“The generously proportioned apartments … appeal to owner-occupiers, investors and renters. In other words, the scheme is appealing several sectors of the market, including those looking to make the step towards getting on to the housing ladder and more established owner-occupiers”.
I must say that I think first-time buyers in Manchester might wonder whether 99.2% overseas investors and 0.8% local ownership is a fair reflection. Here I offer my noble friend Lady Stern some comfort: one investor based in the British Virgin Islands has purchased 125 flats. A company called OFY paid £25.7 million for those properties.
Although the amendment is no silver bullet, it sets out an important direction of travel, which is why I support it.
Lord Judge
My Lords, there have been many speeches and I, too, was unable to speak at an earlier stage, so I shall be brief. Amendment 8 is good, but Amendment 14 is better. The reason it is better is simply this: it adds greater certainty to the idea that we and the British Overseas Territories are doing our level best to destroy this scourge of corruption which infests so many countries and does so much damage throughout the whole world. It may be that we are at the start of this process—I think the Bill is the very beginning of a process—but we have to start somewhere, and this is where we should start.
Baroness Kramer (LD)
My Lords, I have the privilege of being a name added to the amendment moved by the noble Baroness, Lady Stern. I will use this opportunity to congratulate her not only on raising the issue but on pursuing it with so much energy. We can see from some of the results that the argument has moved; the profile of this issue has been very significantly raised and I think that government will struggle to ignore it going forward. We have had a small concession from the Government. I agree very much with the noble Earl, Lord Sandwich, that it would have been encouraging to have a stronger response, because this is indeed the encapsulation of existing government policy and existing notes of exchange into statute. It is better to have it in statute than not to have it in statute. There is a little bit of movement forward, but it is extremely small.
What has disappointed me in a lot of the debate today is the range of views expressed opposing transparency. I am very appreciative of those who have spoken out who recognise the importance of transparency. The Panama papers have been an extraordinary illustration of what transparency can do, and does, to engage regulators and enforcement agencies to pursue what is not just naughtiness—it runs far deeper than that. It is real misbehaviour that distorts economies, including our own. Amendment 24, from the noble Lords, Lord Faulks and Lord Hodgson, in many ways illustrates the distortions that have happened in property markets in the UK, with huge consequences for many of our young people and many of those on lower incomes. There is a very big knock-on beyond just the initial misuse of bank accounts and investments.
I made a much longer speech on the issue in Committee, which I shall not repeat, but we have to face the reality that many of the problems that we face across the globe, including civil war in Syria, hunger in Africa, the absence of democracy in countries such as Russia and the impact of withdrawn democracy in places such as Turkey, depend on the capacity of those who are politicians or Governments who abuse their people and who are corrupt—vast criminal networks that exploit in every way—to take advantage by moving illicitly obtained money into the legal financial sector. When we look at anywhere around the world that functions in any way as a haven or portal for that transition from the illicit world to the legal world, we are facing a situation where we have to try to close down the ability of those funds to move. The impact of that would be huge in so many ways across the globe, including for us.
I very much support—and I am sad that not everyone did—the work that the previous Prime Minister, David Cameron, did in this area, and the stand that he took, saying that, first, we have to make the kinds of changes that give us central registers. I am very glad that this Government continue to move to make sure that that extends right across all our overseas territories and Crown dependencies. Many of them are ahead of us, as has been said—but this will now be a universal description of the UK, with its overseas territories and Crown dependencies. But I am sad that the principle of public registers is now being so thoroughly challenged. We all know that if we wait for a global standard we will wait generations. Secrecy provides the kind of cover used extensively by all those whom we would wish to stop. They are the people who will be very pleased today that Amendment 14 is not going to be put to a vote and potentially carried. They will be absolutely delighted, because that is the cover that enables them to continue to make the transfer between the illicit world and the legal world.
This is a path down which I am sure that the noble Baroness, Lady Stern, who has been so vigorous on this issue, is going to continue. There will be many others around this House—we have heard from the noble and learned Lord, Lord Judge, and the noble Earl, Lord Sandwich—who will continue, and I hope that the noble Lord, Lord Rosser, will be in that group as well. We must achieve that transparency. If we do not take leadership, there is no way that we can turn around to the United States or any other location and insist that they carry out those same measures, when we say that we are not willing to do it ourselves or to use our relationship with the overseas territories and Crown dependencies to achieve that goal.
I wish that the Minister could tell us more about a timetable to achieve greater transparency. That would give us a great deal of comfort, but there does not seem to be one with much force or energy behind it, which I find exceedingly sad. But this is a day when we recognise the pressures and needs delivered by wash-up, so I very much accept the need to support government Amendment 8, and recognise with regret that we are very unlikely to have an opportunity to push on Amendment 14.
Lord Rosser (Lab)
First, I start by making a reference to the amendment in the name of the noble Lords, Lord Faulks and Lord Hodgson of Astley Abbotts. We certainly support the objectives of the amendment; it is a matter that we, as well as the two noble Lords, have raised in Committee, Unless I have misunderstood its intention, the amendment says that action should be taken within a certain period of time, which I think is described as within six months of the day on which the Bill is passed.
When the matter was discussed in Committee, the Minister referred to the fact that the Government had announced at the London anti-corruption summit last year that the Government’s intention was to create a register of overseas company beneficial ownership information where the company owned UK property. On behalf of the Government, the Minister also said that the Government intended to publish a call for evidence that would set out the policy proposals in full in the coming weeks, and would also introduce legislation to implement the register as soon as parliamentary time allowed.
As the noble Lord, Lord Faulks, said, the call for evidence on a register showing who owns and controls overseas legal entities that own UK property or participate in UK Government procurement has now been issued; it has come from the Department for Business, Energy and Industrial Strategy. But I imagine that the key concern, from what the noble Lord said, is about how long it may take for anything to happen with regard to setting up the register. I assume that the Minister will probably not be in a position to say very much about that. She could, of course, tell us what the intentions would have been of this Government—but they will not be around for very much longer. There will be a new Government after the election, and it will be an issue for that Government to decide what priority they are going to give to it.
Certainly, the omens do not necessarily seem very good, since there seems to be a general view that much of the legislative time that any Government have after the next election will be taken up with the issue of the implications of our withdrawal from Europe. I hope that the Minister will at least be able to say what the intentions would have been of this Government when she comes to respond to the specific point raised in the amendment spoken to by the noble Lord, Lord Faulks, about putting a time limit on when something is actually going to happen and not leaving it as something that may well drift well into the future.
I thank the Minister for moving government Amendment 8, which is clearly—at least in part—a response to Amendment 14, spoken to by the noble Baroness, Lady Stern, and to which my name is attached. I do not intend to reiterate the arguments and points made by the noble Baroness, with which I fully concur. I will concentrate my comments on government Amendment 8. As the noble Baroness, Lady Stern, has already said, this does not go as far as Amendment 14, since it contains no reference to the Government having to bring forward an Order in Council by the end of 2019—or, indeed, by any other time—and then taking all reasonable steps to ensure its implementation, requiring any overseas territories listed in Amendment 14 that have not introduced a publicly accessible register by the end of 2019 to do so. The government amendment provides for a report to be prepared before 1 July 2019 with an assessment of the effectiveness of the arrangements in place between the UK Government and the Government of any of the Channel Islands, the Isle of Man or any relevant overseas territory for the sharing of beneficial ownership information, having regard to such international standards as appear to the relevant Minister to be relevant.
Will the Minister give more information on the criteria against which the Government will assess the effectiveness of the current arrangements? I ask that in the context of what the view would have been of this Government on that issue. We are presumably all seeking to reduce the incidence of money laundering and corruption in particular, as well as the avoidance of paying tax, either by illegal means or through elaborate schemes that have not been cleared by the tax authorities. Will the level of such reduction achieved, or not achieved, in these areas be a key part of the assessment of the effectiveness of the arrangements in place, and will that be reported on in specific terms in the report to be placed before Parliament, to which reference is made in the government amendment?
Further, is it this Government’s intention that there should be a debate on the report in both Houses of Parliament in government time? What does the reference to,
“having regard to such international standards as appear to the relevant Minister to be relevant”,
actually mean? What do the Government consider the relevant international standards are at present, and how would those standards at the end of 2018 be determined? Are international standards internationally binding agreements, and is an international standard what is being achieved by the country with the best record of effectiveness and transparency in this area or by the one with the worst? I believe that the Minister said that the regard to international standards would be to the highest standards, but I would be grateful if she would confirm that when she responds.
A concern that has been expressed during the course of our discussions on this issue has been the potential or actual use of overseas territories and Crown dependencies by corrupt individuals, organisations or people in positions of real power in other countries to cream off money for themselves that was intended to be used for the benefit of a nation as a whole, or a significant part of a nation. An advantage of a publicly accessible register of beneficial ownership is that people and organisations in such countries would have access to such a register, which would help them identify where, and by whom, corruption and money laundering may be taking place and thus be better able to expose what is going on—the prospect of which would, in itself, also act as a potentially significant deterrent.
The Government’s amendment refers to an exchange of information between the Government of the UK and the Government of each relevant territory. How will this government amendment address the issue of the use of overseas territories and Crown dependencies for corruption and money laundering purposes by individuals, organisations or people in positions of real power in countries outside the United Kingdom? Does the amendment mean that the UK Government would seek information on beneficial ownership from a relevant Crown dependency or overseas territory in respect of individuals, organisations or people in positions of power in countries other than the United Kingdom? Where a credible request for such information comes from individuals, organisations or Governments within those other countries, is it the intention of this Government that the information on beneficial ownership obtained would be passed on unless there were overriding reasons why to do so would jeopardise life or security?
There is a basic difference between ourselves and the Government. The Government believe that a process of persuasion will lead to publicly accessible registers of beneficial ownership in line with what is to be UK practice—albeit I note the trenchant comments of the noble Lord, Lord Eatwell, about the lack of verification of the register in the UK. However, the Government do not want to set any time limit for when the voluntary approach has to have delivered, following which legislative action would be taken. We are not convinced that this approach will deliver the required outcome, particularly in light of the Government’s change of stance from the days of the previous Prime Minister, so the commitment now appears to be to expect overseas territories and Crown dependencies to follow suit only if publicly accessible registers of beneficial ownership become the international standard.
In other words, it appears as though the United Kingdom will not be taking the lead as far as the overseas territories and Crown dependencies are concerned. This Government expect them only to “follow suit”. Can the Minister at least indicate that, while there are no time limits in the government amendment within which the voluntary approach to the introduction of publicly accessible registers of beneficial ownership should be implemented, the Government will nevertheless not resile from taking legislative action to achieve that objective at some undefined point in the future if that were shown to be necessary?
We are now in a situation where this Parliament is about to end, pending the general election in June. As has been said, the Bill has received widespread support, in both this House and the Commons, where the areas of difference of view have been over what the Bill does not include rather than over what it does. In this situation, a judgment has to be made. The Government have been persuaded to move further with Amendment 8, providing for a report to Parliament to be prepared by the middle of 2019. This will enable the issue to be kept alive, and for the case for, and objective of, publicly accessible registers of beneficial ownership in both overseas territories and Crown dependencies to continue to be pursued. This is assuming that the Government of the day do not come to the conclusion themselves that firm action needs to be taken to deliver that objective in the light of the progress—or lack of it—being made by the voluntary approach and the effectiveness—or lack of it—of the arrangements in place for the sharing of beneficial ownership information. The amendment does represent progress, albeit not as much as we would have liked.
Nobody wants to see this Bill, or even significant parts of it, actually bite the dust. We do not believe that, an election having now been called, government MPs are going to do anything other than support their own Government’s Amendment 8 at the expense of Amendment 14—assuming that that amendment could still have been carried in this House in the light of the Government’s amendment. For the reasons I have given, we will support Amendment 8. It does not go as far as we would wish—that position is reflected in Amendment 14—but it does represent progress and we thank the Minister for her work in that regard.
Baroness Williams of Trafford
My Lords, I thank all noble Lords who have spoken so passionately on Amendments 8 and 14. I particularly thank the noble Baroness, Lady Stern, for all the work that she has done in promoting her Amendment 14. I also thank all noble Lords who attended the meeting with the overseas territory this morning. I hope they found it was useful and that they can see that progress is already being made.
I begin with Amendment 24 in the name of my noble friends Lord Faulks and Lord Hodgson of Astley Abbotts, which would provide for the creation of a public register of beneficial ownership of foreign companies that own property in the UK. I am pleased to have the opportunity to return to this issue. The clear abuse of the London property market and high-value properties across the country—I was particularly interested to hear about the properties in Manchester—to launder money, including the proceeds of corruption, has to be stopped. We must not allow this city to be a haven for kleptocrats hiding their ill-gotten gains. That is why the Government share the ambition of creating such a register. As my noble friend Lord Faulks told us, on 5 April, the Department for Business, Energy and Industrial Strategy published a call for evidence on our proposed register and how it will work. In the call for evidence, the Government sought views on the design of the register and how it will interact with the UK property market to ensure that it is effective.
This policy enshrines the UK’s position as world leader in corporate transparency policy. However, as this register is novel and ambitious, its development should not be rushed. The UK will be considered world leading in this agenda only if the register works. The Government have therefore taken time to develop effective proposals and ensure that they deliver full transparency without creating undue burdens on business or adversely impact commercial property transactions. Publishing the call for evidence earlier this month demonstrated the Government’s ongoing commitment to this agenda. Subject to the outcome of the general election, it remains our intention to introduce legislation to create the register as soon as parliamentary time allows. I hope this provides my noble friends with the reassurances that they seek.
Moving back to the overseas territories and Crown dependencies, I welcome noble Lords’ recognition of the value of the Government’s amendments. They will help us to ensure that the jurisdictions successfully implement their commitments and that the UK law enforcement agencies can pursue investigations into money laundering and corruption as a result. As I have previously noted, a key feature of the Government’s approach is that it creates a level playing field between all the overseas territories with financial centres and the Crown dependencies. By taking a different approach to the Crown dependencies and overseas territories, the noble Baroness’s Amendment 14 would risk disrupting this level playing field, creating weaknesses in certain jurisdictions that could be exploited and damaging the spirit of co-operation we have been able to create between them. The Government’s amendment has the merit of treating all relevant overseas territories and the Crown dependencies on an equal basis, ensuring that they are held to the same standard and are subject to a level playing field.
The noble Lord, Lord Rosser, asked whether the information provided to UK law enforcement agencies can then be shared with operational partners in other countries, including those where grand corruption is rife. The exchange of notes are bilateral agreements with the overseas territories and Crown dependencies to enable the exchange of accurate and timely beneficial ownership information. On an operational case-by-case basis, and subject to each agency’s legal position, the UK agencies may share this information with operational partners in other countries. If a subsequent UK law enforcement investigation recovers property that relates to criminal activity or corruption in another country, we may also seek to return it to such a country under the terms of existing agreements or memoranda of understanding.
Noble Lords should also note that, if we were to impose legislation in a field of activity that is devolved to the overseas territories, we would need to ask ourselves to what degree we could ensure that such legislation would be implemented successfully in practice. Although Westminster has the legal power to legislate, enforcing practical implementation of legislation in this case would be fraught with difficulty. We could, in fact, significantly undermine the progress that we are making in return for little or no real benefit.
The noble Lord, Lord Rosser, asked what the review will cover. It will take into account the impact on law enforcement outcomes such as the number of cases concluded, the quality of evidence received and the overall impact on combating economic crime. He also asked whether there would be a debate in both Houses. He will understand that I cannot commit the next Government to scheduling a debate on the report but this will, of course, be a matter for business managers in due course. However, I am sure that interest in this issue will remain in both Houses and there would be considerable support for such a debate at the relevant time. Of course, there is no bar to such a debate being held in your Lordships’ House.
The noble Lord, Lord Eatwell, asked about data being provided to overseas territories being verified, and another noble Lord talked about verification. The UK’s persons with significant control register is publicly accessible and is accessed more than 1.2 billion times a year. This enables information to be cross-checked with other data sources to improve accuracy and the quality of information on an ongoing basis. This is the information which will be shared with overseas territories and Crown dependencies under the exchange of notes. The legislation that underpins the UK register includes its own statutory review clause, which will require its effectiveness to be reviewed and a report to be provided to Parliament by 2019.
My noble friend Lord Naseby asked which international standards would be considered for the statutory review. As he stated, the statutory review provided for in Amendment 8 will take into account evolving international standards such as new FATF standards. The UK will be assessed against the new FATF standards over the next 12 months. Other jurisdictions such as the overseas territories will be assessed at a later stage. While the exchange of notes is focused on improving law enforcement outcomes rather than emerging assessments against international standards, our review will, of course, take into account the wider context.
The Government have listened and brought forward a concessionary amendment. I hope noble Lords will be satisfied that the issue of company ownership transparency will remain a high priority in the next Parliament, and that the statutory review, which will be laid in Parliament, will ensure that this is the case. On that basis, I hope that the noble Baroness and my noble friends will feel inclined not to press their amendments.
Baroness Vere of Norbiton
Baroness Vere of Norbiton (Con)
My Lords, we now come to a group of government amendments relating to improvements to the operation of Chapter 2 of Part 1 of the Bill. I hope the House will agree that these are technical and uncontroversial.
Clause 9 permits extensions to the moratorium period for suspicious activity reports, and Clause 11 allows the National Crime Agency to apply for a further information order. These powers will be available in all the UK jurisdictions. However, we have consulted the Scottish Government, who have confirmed that the wording in the Bill does not accurately reflect the common-law position in Scotland, which recognises the role of the Procurator Fiscal in directing criminal investigations. Amendments 9, 11 and 12 reflect that principle in Scotland so that the moratorium extension and further information orders should be applied for only by the Procurator Fiscal.
Clause 10 permits, on a voluntary basis, the sharing of information between regulated-sector entities for the purpose of tackling money laundering. This currently allows those entities up to 28 days to share information following an initial notification and to provide a report to the NCA. Following further discussions with the regulated sector, we have concluded that more time is needed to ensure more effective sharing in complex cases, where numerous banks, for example, may hold relevant information. Amendment 10 increases this time limit to 84 days, which will still maintain a proportionate limit on how long these companies have to share information.
Finally, Amendment 49 amends POCA to ensure that extensions to the moratorium period and further information orders that are issued in one jurisdiction in the UK, such as Scotland or Northern Ireland, will be recognised in the others. I beg to move.
Lord Mackay of Clashfern
My Lords, I am glad that the Government have taken account of the special situation in Scotland.
Lord Sharkey
“( ) After section 316 insert—“316A Duty of the Financial Conduct AuthorityWhere a financial penalty is awarded against a firm by the Financial Conduct Authority arising out of a Financial Conduct Authority investigation, the Financial Conduct Authority must withhold a proportion, to be determined at its sole discretion, of any discount to the penalty until it is satisfied that the firm which is a party to the settlement has completed any internal disciplinary actions agreed in the settlement.””
Lord Sharkey (LD)
My Lords, I should start by thanking the Minister and her officials for being so generous with their time over the last couple of days. I am extremely grateful for her courtesy and patience. I also want to acknowledge that this is not the ideal timing for debating an issue that has so many complex aspects. We had all expected to have more time to do this.
Amendment 13, which stands in my name and that of the noble Lord, Lord Mendelsohn, sets out to help the FCA. A key part of the FCA’s job is the detection and punishment of misconduct. Another key part of its job is instilling and incentivising a culture of fair treatment of clients and a respect for the regulations in both spirit and letter—in other words, trying to prevent cultures in which financial misconduct is winked at or incentivised. The amendment aims to help with both those tasks.
The FCA has certainly been very busy with the business of the detection and punishment of misconduct since it took on its current form and mandate in 2012. In the four years from 2013 to 2017, it has imposed penalties on 82 occasions. The fines on firms in this short period amounted to over £3 billion. The latest fine was £163 million, imposed in January on Deutsche Bank. In fact, the headline fine was £230 million, but the FCA awarded a discount of 30% for prompt settlement of its action against the bank, and that is an entirely typical arrangement. Sixty-six out of the 82 enforcement actions brought by the FCA were settled at the first stage of the enforcement process and received a 30% discount. Eight were settled at the second stage and received a 20% discount. Eight were contested and received no discount at all. In all, the FCA in four years has given firms early settlement discounts of almost £1 billion and the amendment simply proposes to put this gigantic sum of money to better, or at least additional, use.
When the FCA reaches a settlement, it will impose conditions, some of which may call for internal disciplinary proceedings to be taken against those responsible for the misconduct. The amendment would ensure that those disciplinary proceedings took place. It mandates the withholding of a proportion of the discount until the offending firm has demonstrated conclusively, and to the satisfaction of the FCA, that proper and proportionate disciplinary action has in fact taken place. The substantive burden here lies with the firms and not with the FCA. This mechanism will free the FCA from the cost and use of resource that any follow-up investigation of non-compliance would require. In any case, it is not clear whether substantive follow-up investigations are routinely undertaken.
The FCA mission statement, published last week, talks about revisiting cases. On page 15, under the heading “Evaluation”, it says that,
“post-implementation analysis is not cost free. Additionally, the dynamism and complexity of the market means it is often difficult to isolate the impact of our actions against other factors”.
It goes on to say:
“Where it is less cost-effective to conduct detailed analysis, we will monitor and publish key indicators that help to demonstrate the impact of our interventions”.
I entirely sympathise with that sensible and realistic approach. I have spoken in this Chamber before about my concerns that the FCA is underresourced, underpaid, undervalued and overburdened, and the amendment helps in that kind of situation. It effectively automates, or nearly automates, the process of compliance with settlement conditions. It removes the need for substantive reinvestigation by the FCA and, instead, places a burden on the offending firm to demonstrate compliance. It offers a powerful financial incentive for doing so at no additional cost to the FCA or to the taxpayer.
Lord Mendelsohn (Lab)
My Lords, I rise briefly to speak in support of Amendment 13, proposed by the noble Lord, Lord Sharkey, and to which I have added my name. He has raised a very important point in relation to how the discount is applied and we are all very grateful to him. He has made a compelling case, and I should like to make a couple of comments in this context.
Since the financial crisis, $321 billion has been paid out globally in fines, compensation and legal costs, and the UK has contributed some $60 billion of that. KPMG reported in 2015 that, between 2011 and 2015, 60% of bank profits had been paid in fines, compensation and legal costs. Since the financial crisis in general, payouts in legal fees, fines, compensation and bonuses are basically equivalent to the entire profits generated, with all the consequences for shareholders, corporate governance, the reputation of the financial sector and losses to the taxpayer. At its very core, the attempt to deal with culture, conduct and, in some cases, apparent contempt for customers has lacked one key element: accountability. Using the discount to emphasise this element of accountability is one of the compelling parts of this proposal.
We on this side do not agree with the argument that the FCA is not up to the job; nor do I believe that it has not used its powers or that its procedures are flawed. The noble Lord, Lord Sharkey, has found a very important gap, which needs to be plugged: there is an incentive that does not work because there has been no downside. Even the FCA has moved towards the senior management regime to support the noble Lord’s central argument.
I, too, am grateful to the Minister for her openness and engagement and for the provision of officials—a quite copious amount of officials—to try to help address these sorts of matters. We have enjoyed those discussions and are looking forward to them continuing. Further openness on the cases where the discount has been applied would be extremely beneficial. As the FCA moves towards pursuing less significant fines, and has limited resources to both police and investigate, the approach of the noble Lord, Lord Sharkey, is helpful in ensuring compliance, and places a sensible responsibility on the financial sector. It can mean that we can feel confident—and I hope that I am not tempting fate—that when the most egregious fines and compensation sums are probably now behind us, the lower aggregate level of cost does not allow us to believe that the industry is properly policed. Only the accountability and responsibility in this amendment will do so.
Baroness Williams of Trafford
My Lords, I start by thanking the noble Lords, Lord Mendelsohn and Lord Sharkey, for the time that they have taken in entering into discussions with me and officials and representatives of the FCA, both today and yesterday. The discussions were very helpful but, as the noble Lord said, we have more to go.
Amendment 13 basically requires the FCA, as the noble Lord has said, to withhold a proportion of the discount to a penalty applied to a financial firm until that firm has completed any internal disciplinary actions agreed in the settlement. I really welcome the noble Lord’s objective of improving compliance and the culture across the financial services sector. The Government share this objective and we have made significant progress in the area in recent years. We have, for example, introduced the senior managers and certification regime, to which the noble referred. This will, where appropriate, ensure that the FCA can take action against individuals where they are at fault. I know that the culture at firms is also a priority for the FCA, which has observed that it is both a key driver and a potential way of mitigating risk, and therefore plays a role in the achievement of its statutory objectives. The senior managers and certification regime is a key workstream in the FCA’s work programme on culture, as is the FCA’s focus on those aspects of remuneration policy that drive individual behaviour and culture.
Noble Lords spoke about disciplinary action to be taken against individuals working for firms. At the outset, I want to emphasise that if the FCA thinks that a disciplinary action should be taken against individuals, it can and does take action itself, as opposed to leaving it to the companies to do so. The FCA and other enforcement agencies have powers to fine individuals, or to take other action such as prohibiting them from continuing to operate in the financial services industry. This approach can be seen in a number of high-profile cases, including those involving LIBOR manipulation. The FCA settled eight cases with firms totalling £758 million. It is also conducting a number of separate enforcement actions against individuals. There have been seven completed actions against individuals in cases that involved settlements with firms in relation to LIBOR or Euribor, but others are still ongoing. More generally, the FCA issued fines against 64 individuals between 1 April 2013 and 24 March 2017 totalling £15.5 million. They might be the cases that the noble Lord was referring to. Many of these were connected to previously settled cases against firms, although I am afraid that I am unable to provide noble Lords with an exact number.
That said, the FCA also expects firms to consider what action they themselves should take. If a firm has not taken appropriate action by the time the FCA imposes a penalty on it, the FCA can increase the penalty as a result. We went through a lot of that today. I am saying that not for the benefit of the noble Lord, but mainly for the benefit of the House, because we have been through this. Of course, in appropriate circumstances, the FCA can impose a requirement that a firm consider further whether it needs to take any additional action to remedy the breaches identified.
The noble Lord asked me today whether it would be a better arrangement to have an automatic system of withholding a proportion of the discount, so as to make it directly in the interests of the firms to take the action that they are supposed to take, rather than the FCA having to make an assessment later of whether it ought to impose an additional penalty. I commend him on his ingenuity, but having consulted with operational partners and Treasury officials, the Government’s view is that the existing regime gives the FCA the flexibility to apply penalties and impose requirements on a case-by-case basis. It allows it to leverage those requirements wherever needed in order to ensure that the firm acts appropriately. While there might be options to enhance this approach and better achieve the outcomes that we all seek, we should be clear about the potential benefits before pursuing any such options. That is kind of where we left it today.
I trust that noble Lords will agree that we should not seek to reform or amend without exploring the implications, both the advantages and any unintended or undesirable consequences. For instance, we are concerned that this amendment would weaken the incentives for firms to settle early with the FCA, given that the settlement would not be final, subject to the full discount being granted. As a result, they might instead choose to engage the FCA in costly and protracted action rather than all being involved in focusing on remedying the underlying issues.
Moreover, further detailed consideration would need to be given as to how this amendment would interact with established principles of employment law. In particular, when a firm disciplines an individual, it needs to follow due process rather than agreeing in advance a predetermined course of action. For the amendment to work effectively, consideration would need to be given as to whether the FCA would need to be given a power to require firms to take such action against their employees; otherwise the amendment would put the FCA at risk of liability when undertaking the duty the amendment creates. Moreover, appropriate amendments would also need to be made to the Employment Rights Act 1996 to ensure that such action does not give rise to unfair dismissal claims by relevant employees against their firms. It is also not clear whether the proposed approach would be the best way of achieving the aim of improving the culture of firms.
In summary, we can all agree that this an extremely complex issue, which seemed to be made even more complex as discussions went on today. We share the same objectives of improving compliance and the culture in the banking sector. Ultimately, the FCA already has significant powers to address the issues underlying the noble Lords’ amendment, not least the power to sanction relevant employees in appropriate circumstances. I trust that the House will see that it is far from clear that the amendment would deliver the positive outcomes that have been described. That being said, I found the discussions today to be very interesting, as did the relevant officials, and hope this has been an equally insightful discussion to the two noble Lords. There might be ways of enhancing the existing regulatory system; the FCA is, in fact, conducting a review of its penalties policy at present, and I know that it would welcome the opportunity to continue this discussion with both noble Lords.
I can confirm that, subject to the outcome of the election, I expect that the Government will consider how best to facilitate further discussions on this issue, and, as I outlined to the noble Lord, Lord Sharkey, this would be my intention. I am very grateful to the noble Lords for their amendment. However, I ask them to withdraw it so that action not be taken in haste. I hope they feel comfortable to do so following some of the undertakings I have given.
Lord Sharkey
I am very grateful for the Minister’s response. She will not be surprised or, I hope, offended when I say that I am still not entirely convinced by some aspects of the situation. However, I acknowledge that the issues raised are very complex and that there is certainly a need for further in-depth discussions. I very much welcome the Minister’s proposal to facilitate a meeting for further discussions with her, myself, the noble Lord, Lord Mendelsohn, and her team. As was mentioned, the FCA and the Treasury have very generously expressed an interest in joining those discussions, and we would welcome the Treasury’s presence. Under those circumstances, I beg leave to withdraw the amendment.
“( ) After section 245 insert—“245ZA Notice to local authority: Scotland(1) This section applies if, in proceedings under this Chapter for a recovery order, the enforcement authority applies under section 266(8ZA) for decree of removing and warrant for ejection in relation to heritable property which consists of or includes a dwellinghouse.(2) The enforcement authority must give notice of the application to the local authority in whose area the dwellinghouse is situated.(3) Notice under subsection (2) must be given in the form and manner prescribed under section 11(3) of the Homelessness etc.(Scotland) Act 2003.(4) In this section—“dwellinghouse” has the meaning given by section 11(8) of the Homelessness etc.(Scotland) Act 2003;“local authority” means a council constituted under section 2 of the Local Government etc.(Scotland) Act 1994; and “area”, in relation to a local authority, means the local government area for which the authority is constituted.””
“( ) After section 269 insert— “269A Leases and occupancy rights: Scotland(1) This section applies where, in making a recovery order, the Court of Session also grants decree of removing and warrant for ejection under section 266(8ZA) in relation to any persons occupying the heritable property.(2) Any lease under which a person has the right to occupy the heritable property (or part of it) for residential or commercial purposes is terminated on the granting of decree of removing and warrant for ejection.(3) Any other right to occupy the heritable property (or part of it) which subsists immediately before the granting of decree of removing and warrant for ejection is extinguished on the granting of the decree and warrant.(4) Subsection (3) does not apply in relation to a right under a lease to occupy or use the property other than those mentioned in subsection (2). (5) Where the heritable property is vested in the trustee for civil recovery under the recovery order, the following enactments do not apply in relation to the heritable property—(a) sections 34 to 38A of the Sheriff Courts (Scotland) Act 1907 (removings, notice of termination of tenancy and notice of removal);(b) the Tenancy of Shops (Scotland) Act 1949;(c) the Matrimonial Homes (Family Protection) (Scotland) Act 1981;(d) Parts 2 and 3 of the Rent (Scotland) Act 1984 (security of tenure and protection against harassment and unlawful eviction);(e) sections 4 to 7 of the Law Reform (Miscellaneous Provisions)(Scotland) Act 1985 (termination of certain leases);(f) Part 2 of the Housing (Scotland) Act 1988 (rented accommodation: security of tenure etc.);(g) Chapter 3 of Part 3 of the Civil Partnership Act 2004 (occupancy rights and tenancies);(h) Part 5 of the Private Housing (Tenancies) (Scotland) Act 2016 (security of tenure, termination of tenancy and eviction).””
“(f) it is the forfeitable property in relation to an order under paragraph 10I(1) of that Schedule.””
“(f) it is the forfeitable property in relation to an order under paragraph 10I(1) of that Schedule.””
“(f) it is the forfeitable property in relation to an order under paragraph 10I(1) of that Schedule.””
“Office for Professional Body Anti-Money Laundering Supervision
(1) Within six months beginning with the day on which this Act is passed, the Secretary of State must by regulations made by statutory instrument create a body to be known as the Office for Professional Body Anti-Money Laundering Supervision, with responsibility for improving standards of supervision and law enforcement in respect of money laundering.(2) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”
Lord Hodgson of Astley Abbotts
My Lords, in moving Amendment 20, I will speak also to Amendments 21 and 22. With these amendments we return to an issue we discussed in Committee in a somewhat different format, but the underlying purpose this evening is the same: to increase the effectiveness and value for money of the current money laundering regime. Let me make it clear again, as I did in Committee, that this is not an attack on the utility of money laundering regulation in the fight against financial crime. However, I argue strongly that the present regime encourages mindless compliance, whereas it should be encouraging principled behaviour. As a consequence of this, the money laundering regime enjoys a very low level of public support and is too often regarded as a form-filling joke. That is a bad place for a regulatory regime to find itself. Its efficacy would be greatly improved if it were able to win over the hearts and minds of people, as opposed to earning their solemn acceptance.
Why do I think the present regime is ineffective? It is based very largely on the SAR regime—the suspicious activity report regime. Last year, just under 400,000 SARs were delivered. In the years since the present regulations were introduced in 2007, probably over 2 million SARs have been recorded. Consider the cost of their preparation and analysis. According to a freedom of information request, the outcome was that there were no convictions at all under the regulations in the first five years, from 2007 to 2012, and only four convictions and five more proceedings in the five years since. The National Crime Agency managed to recover assets totalling only £25 million last year, but claims that there are billions passing through London illegally all the time. If that represents success, I find it hard to think what failure would look like.
There is a Faustian pact between, first, the regulators, who are pressed to gather even little scraps of information, no matter how irrelevant; secondly, the compliance departments of the regulated firms, which are enjoying the opportunity for untrammelled growth in their activities and personnel; and thirdly, the professional firms that enjoy the fees earned from checking these ever-increasing compliance activities. No one ever steps back to get perspective and to see how this undoubtedly important activity could be done more effectively.
In Committee, I argued that to break into the cycle the National Crime Agency should be required to follow the principles of best regulatory practice, as laid out in Amendment 21, which we are discussing tonight. My noble friend would not, I am afraid, accept this line of argument, saying that:
“The NCA can and will act where there is criminal activity relating to money laundering. However, it does not have a regulatory remit, and to require it to have one would deflect it from its purpose of tackling serious and organised crime”.—[Official Report, 28/3/17; col. 532.]
I am not sure that I follow exactly that line of argument, but never mind—we have moved on from there. Now, we have the new body: the office for professional body anti-money laundering supervision, or OPBAS. It clearly should follow the principles of best regulatory practice. Amendment 20 requires the Government to set this body up within six months. This is an important body with an important role and therefore we need to get on with it, and to give Parliament sight of its structure and remit by means of requiring its establishment through an affirmative statutory instrument.
Amendment 22 lays down the principles that the body must follow. It must be proportionate, accountable, consistent, transparent and, most importantly, targeted at cases in which action is needed. Amendment 22 also lays down a series of processes by which the new body will ensure that the bodies it is responsible for regulating follow these principles. There is a series of ways of doing that, including publishing advice and guidance, and carrying out investigations to ensure that the operation is working effectively.
Before I conclude, to underline the seriousness of the situation we now find ourselves in, let me give the House a couple of examples of the mindlessness and the consequent drawbacks of the present regime. My most recent money laundering inquiry included a couple of dozen questions. Among them was the following: “We see you have links with a company called NS&I. Please explain these”. Since the inquirer had access to my bank account, they could see that it was an entry of £25 alongside NS&I. NS&I is, of course, National Savings & Investments. It was a premium bond winning; sadly, not £1 million, but never mind—every little helps. Does the NCA really think that the Government’s own saving authority is involved in money laundering?
A second question was: “We see that you worked in North America in the 1960s. What were your earnings?”. That was half a century ago. It is hard to think that I started money laundering the year after I left university and have so far carried on for more than 50 years, undetected. I was sufficiently irritated to answer this second question with the words, “I haven’t a clue”. Patently, that was an inadequate response, but comeback there was none. Perhaps the form was not read and just filed and the box ticked, or it was read and it was concluded that this was not an important or relevant question. Either way, it was an awful waste of the bank’s and my time. This is going on thousands and thousands of times around the country.
One can laugh about my case, but for many people triggering a money laundering inquiry catapults them into a Kafkaesque world where no one can discover who is accusing them or what they are being accused of. Since we last met in Committee, I have been sent various examples but will give only one this evening. A 43 year-old ex-soldier with a 16-year good-service record built up a capital sum of about £69,000 from his Army redundancy and other sources. On 14 February it was paid into his account at the bank where he had banked for 20 years. On 27 March, when he tried to withdraw part of the money to make his annual ISA subscription and to buy a car, he was told that the account had been frozen. Now, a month later, it still is. He has missed the opportunity to make his ISA investment because the tax year has ended. The bank will not—perhaps cannot because of the regulations—tell him what the problem is, and the Financial Ombudsman appears unable to intervene. He is also concerned that this incident will damage his future credit rating and he will have no way of obtaining redress. So there are very serious cases where this money laundering regime is not working effectively to catch the individuals it should really be aiming at.
In Committee, I referred to the increasing prevalence of de-risking by regulated entities. Under pressure from the money laundering authorities, they close down whole categories of accounts irrespective of their behaviour and performance because they might be risky from a money laundering point of view. I referred to a long-standing friend of mine who lives in Pakistan—a British citizen—who has had his account unilaterally closed. Since Committee, I have heard more examples of smaller charities about how they are finding it difficult to operate overseas because of money laundering regulations. Most recently, the Gurkha Welfare Trust is having difficulty obtaining banking facilities to transmit money to ex-Gurkha soldiers living in Nepal who have fallen on hard times. They live in Nepal and that is a red flag.
In the event that my noble friend cannot accept my amendments, although I am sure she is going to—
Baroness Butler-Sloss
I am extremely interested to hear—I fear that I did not hear it in Committee—about the proposal in Amendments 21 and 22. But how does the noble Lord see this office of professional body anti-money laundering supervision working, for instance in the case of the man whose money has been frozen? It is an interesting idea but I just wonder, as a former lawyer, how it would work in practice.
Lord Hodgson of Astley Abbotts
I am grateful to the noble and learned Baroness for that intervention, but I can glide this down to third man, if I may use a cricketing analogy, because this is a government proposal. The Government are proposing to set up this new body, so I am sure my noble friend, when she comes to wind up, will have all the detail of how this body will work. I merely wish to ensure that it is sent down the right channels. I know that my noble friend, with her usual aplomb and ability, will deal with that by stroking it effortlessly to the boundary, if I may continue the cricketing analogy.
It is important to do some serious re-engineering of the general approach to money laundering to increase its effectiveness and public confidence in it. That the National Crime Agency can, in its annual report, trumpet the fact that SARs went up by 7.82% over the last year as a badge of success without any reference to the impact it is having, shows that there is much to do. I beg to move.
Baroness Hamwee
My Lords, when the noble Lord responds to the debate, will he tell the House whether he thinks “I haven’t a clue” is purported compliance.
Lord Rosser
In light of the last comment from the noble Lord, Lord Hodgson of Astley Abbotts, one can only hope that the points he made will not leave the Minister stumped. I hope it gets better.
I thank the noble Lord and the noble Lord, Lord Faulks, for tabling these amendments, since they enable me to raise a concern that I expressed in Committee about the Government’s intention to create a new office for professional body anti-money laundering supervision through a statutory instrument, without any apparent reference to such a body in the Bill that we are currently discussing—which is why the noble and learned Baroness, Lady Butler-Sloss, had to raise her question. Nobody has a clue what the Government intend because they have not chosen to put anything in the Bill to enable us to have a discussion about it. It was only in a government document issued around the time of the Bill that the Government declared their intention to set up this body.
A briefing that no doubt we have all received from the Solicitors Regulation Authority refers to the amendment from the noble Lord, Lord Hodgson of Astley Abbotts, as “proposing” the creation of an office for professional body anti-money laundering supervision—which could, perhaps wrongly, be interpreted as meaning that the Solicitors Regulation Authority was unaware that that is what the Government were already proposing, albeit keeping rather quiet about it as far as proper parliamentary scrutiny is concerned.
Baroness Williams of Trafford
My Lords, I congratulate my noble friend Lord Hodgson of Astley Abbotts on neatly batting off the question asked by the noble and learned Baroness, Lady Butler-Sloss—I could not resist; we have all made cricket jokes. I thank noble Lords for their interest in the outcomes of the Government’s recent review of the anti-money laundering supervisory regime. As a result of this review, the FCA has agreed to create a new team—the office for professional body anti-money laundering supervision, otherwise known as OPBAS—to strengthen the regime and help to ensure that professional body AML supervisors, such as the Law Society and the Institute for Chartered Accountants in England and Wales, comply with their obligations in the money laundering regulations. It is important to note that OPBAS will be a new team hosted in the FCA and is not in itself a new regulatory body.
Amendment 22 would require that the FCA would have powers to directly monitor and advise all practitioners subject to criminal finances legislation. This would be a significant extension of the FCA’s responsibilities. Rather, our intention is that the FCA’s new objective will be carefully targeted to address weaknesses identified through last year’s call for information, while preserving the existing strengths of the regime by focusing on helping to ensure that professional body AML supervisors comply with their obligations in the money laundering regulations. The noble Lords’ proposals would duplicate the role that existing AML supervisors play in safeguarding the UK’s financial system and would increase unnecessary burdens on businesses.
Amendment 21 would also require the FCA to have regard to regulatory best practice principles in delivering its new objective. However, I assure the House that the FCA will comply with its existing governance and safeguards as it goes about delivering its objective. As such, this amendment would be redundant and duplicate existing requirements on the FCA.
Lastly, Amendment 20 would require the powers the Government will pass to the FCA to fulfil this objective to be subject to an affirmative statutory instrument. It is our intention that this will instead be achieved in line with existing precedent; previous regulations to grant similar powers to the FCA have been subject to the negative procedure. I hope colleagues agree that we should follow that precedent on this occasion. Subject to the outcome of the general election, the Government intend to publish draft regulations for consultation over the summer before laying the relevant secondary legislation to underpin OPBAS later in the year.
To pick up on some specific points noble Lords have raised, my noble friend Lord Hodgson talked about de-risking being excessive and impacting disproportionately on normal people, as he has previously. He gave some compelling examples. The Government encourage the financial sector to take a proportionate approach based on the risks faced. Guidance for the financial sector, which is written by industry, is being updated for the latest money laundering regulations and is open for consultation until the end of this week. It is of course open to my noble friend to make his views known through this process.
The noble Lord, Lord Rosser, asked why the Government are not splitting the supervisory and advocacy functions of professional body supervisors. I can advise him that the 2017 money laundering regulations, which transpose the fourth money laundering directive, will require all professional body anti-money laundering supervisors to ensure that their supervisory functions are exercised independently of the advocacy functions, including, for example, the Law Society and the Solicitors Regulation Authority.
The noble Lord also made the point that the Government are subverting scrutiny by using the negative procedure. As I have mentioned, providing the FCA with new powers via the negative procedure is not new. It is in line with the wider transposition of the fourth anti-money laundering directive. There are a number of other powers that have been conferred to the FCA by the negative procedure. For example, the Money Laundering Regulations 2007 and the Money Laundering (Amendment) Regulations 2012 provide the FCA with powers to oversee financial institutions’ compliance with the money laundering regulations. The current set of MLRs provide the FCA with supervisory powers to oversee financial institutions’ compliance with the money laundering regulations. These include enforcement powers and supervision powers.
I am very grateful to the noble Lords for allowing me to address their points, which I hope I have. I hope, on that note, they will feel happy not to press their amendments.
Lord Hodgson of Astley Abbotts
My Lords, I thank the noble and learned Baroness, Lady Butler-Sloss, for her helpful intervention and my noble friend for her very full response. There is a really serious issue here that needs to be tackled. It is not just about bureaucracy and cost, but about unnecessary interference with people’s lives. Increasingly, it is also about damage to this country’s reputation as a place where you can get clarity. The question will be whether the new body can bring focus. The proof of that pudding will be in the eating. We shall have to wait to see whether it happens. My noble friend encouraged me to make my views known to the review. She need not worry; I have not missed that opportunity. I have written a letter already, so it has my views. We will have to see how it develops, but it will require vigilance, focus and care by the FCA to improve the regime, which is currently not working as well as it should. With that, to continue the cricket analogy, I will return to the pavilion and withdraw the amendment.
Baroness Kramer
“Whistleblowing
(1) The Secretary of State must by regulations made by statutory instrument provide for the Financial Conduct Authority to undertake the administration of arrangements to facilitate whistleblowing in respect of corrupt or suspected corrupt practices in systematically important financial institutions including in particular with regard to fraud, tax evasion, money laundering or mis-selling.(2) The Authority shall have powers—(a) to give directions as to the records kept by each institution and to check compliance with its directions including by audit;(b) to award financial compensation to any person voluntarily providing information to—(i) the Authority;(ii) the Prudential Regulation Committee of the Bank of England;(iii) the Serious Fraud Office; or(iv) any other organisation designated by the Secretary of State;leading to enforcement action against the institution sanctioned by way of penalty of not less than £500,000; and(c) to set the level of compensation awarded in each case between 10% and 30% of the total collected.(3) The Secretary of State must by regulations made by statutory instrument make provision with regard to retaliatory action against whistleblowers.(4) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament. (5) For the purposes of this section, a “systematically important financial institution” is an institution designated by the Bank of England in consultation with the Financial Stability Board and the Basel Committee on Banking Supervision.”
Baroness Kramer
My Lords, I recognise that the hour is very late. I will try to be brief. Noble Lords will also be delighted that my knowledge of cricket is so limited that I shall have to abandon that theme.
This amendment is on whistleblowing. I tabled it in Committee. Essentially, this is a very similar amendment that does two things. It would provide for the regulator to give additional protection to whistleblowers in the financial services industry and require the regulator, as part of those powers, to provide mandatory compensation to whistleblowers who provide original information that leads to prosecution or sanction with financial consequences for the institution. This is very much modelled on Dodd–Frank and a much longer tradition of mandatory compensation for whistleblowers in the United States, which underpins its very successful culture of whistleblowing and tackling financial crime by financial institutions.
When I brought this amendment forward in Committee, the objection was to creating an office of the whistleblower, so under this revised version the powers would go to the FCA, which may decide how it would like to set up that arrangement. I recognise that this has no future in this Bill because we are in wash-up, but this is another of those issues that will carry over to future pieces of legislation, essentially for three reasons that I will touch on quickly.
First, the way we have dealt with whistleblowers in the financial industry is, frankly, an utter disgrace. Since I moved the amendment in Committee, I have been put in contact with more people in the industry who have been whistleblowers whose lives have been completely destroyed. People have lost all employment and had to rely on spending their savings and assets. They have faced serious attack from the highly skilled, very capable and aggressive lawyers of the financial institutions and have, frankly, been let down by the regulator. In many cases, I think no one would question that kind of description of the experience that whistleblowers have had to deal with in the industry.
Lord Rosser
I support what the noble Baroness, Lady Kramer, has said in setting out the case for her amendment. She has already made reference to recent further examples of serious concern over the approach to whistleblowing and whistleblowers—she referred specifically to the situation at Barclays Bank in the light of apparent actions by its chief executive in seeking to unmask a whistleblower. There are meant to be strict regulations in the financial services industry for encouraging and protecting whistleblowers, but it does not look as though they are very effective.
It is difficult to believe that the apparent attitude at the top of Barclays Bank is an exceptional one-off, as opposed to being indicative of a rather more widespread culture, to which the noble Baroness referred, in the financial services sector. The reality is that whistleblowers will not come forward if they think that the reaction of the people at the top will be to try to find out who they are rather than investigate the issue to which they have drawn attention. Neither will people come forward if they think that being identified as a whistleblower will jeopardise their future employment prospects in the financial services sector, which is alleged to be the reality in that sector in particular. I hope that the Government in response will be able to offer something more than claims that existing arrangements and procedures address the concerns raised by this amendment, when it is clear that it is not the case.
Baroness Williams of Trafford
My Lords, I thank the noble Baroness for bringing forward this amendment, which would introduce new regulations so that the FCA could undertake the administration of arrangements to facilitate whistleblowing in the financial sector.
The FCA is already a prescribed person in relation to the financial sector. It actively promotes the whistleblowing framework to employees and employers in the sector so that prospective whistleblowers know where to turn and firms have appropriate internal whistleblowing policies in place. Other prescribed persons related to financial services include the Bank of England, the Serious Fraud Office, the Financial Reporting Council and the Prudential Regulation Authority. To each of them, whistleblowers will be one of several sources of information and intelligence about potential malpractice in support of their regulatory activities.
The Government believe that the right body to investigate the concerns of a whistleblower is the body that regulates the issue about which concerns are raised—I know I have said that before. That body is in the best position to see the disclosure in context; for example, to judge the seriousness of the allegations, to make connections with any related investigations under way and to consider whether some regulatory action is appropriate to prevent occurrence.
The amendment that the noble Baroness proposes would introduce a power to award compensation to any worker voluntarily providing information on wrongdoing to organisations in the financial sector. As I set out in Committee, we do not think that money is the main motivator for genuine whistleblowers. I do not think the noble Baroness thinks so either, but she expressed views on how a financial incentive system to encourage whistleblowing works well in the US. I can advise noble Lords that the FCA and Prudential Regulation Authority whistleblowing management teams visited the US in late 2013. At the time, there was limited empirical evidence of incentives leading to an increase in the number or quality of disclosures received by regulators. Introducing incentives would require a complex and costly governance structure.
Incentives could also undermine effective internal whistleblowing mechanisms, a requirement the FCA introduced in September 2016 for banks, insurers and deposit takers. If the FCA were to incentivise whistleblowers to report to the regulator, it could discourage them from reporting internally within their firms. It would risk delivering mixed messages by encouraging firms to set up costly systems which it then undermines by incentivising whistleblowers to disclose directly to the FCA. However, the FCA is considering reviewing the case for incentivisation again in financial year 2017-18. I would be happy to provide an update following that review.
The amendment also contains a provision with regard to retaliatory action against whistleblowers. I reiterate and reassure noble Lords that such a provision is unnecessary. Workers who have evidence that their employer has provided a negative reference, have been unfairly dismissed or have otherwise suffered detriment for making a public interest disclosure already have a route to seek compensation against their employer through an employment tribunal.
Some concerns were raised that we have seen a decline in the number of whistleblowing cases for the second year in a row, from 1,340 in 2014-15, to 1,014 in 2015-16 and 900 in 2016-17. The FCA does not have a target for the numbers of whistleblowing reports. Its aim is simply to ensure that those who prefer to report to an independent body know about its role and that, if they need to take the often difficult step of reporting on an employer, they and their information will be treated sensitively and professionally. New rules came into force in September 2016 that require banks, building societies and insurers to have internal whistleblowing arrangements in place and to appoint an internal champion. We understand many firms began to implement these measures earlier than the commencement date, so we believe that this has affected the numbers going directly to the FCA. This is a positive message as many complaints are resolved earlier and without regulatory intervention, or lead to self-reports by firms themselves.
I want to address one point made by the noble Baroness: how we became aware of the issue regarding the investigation of the whistleblower’s identity by the CEO of Barclays and what action the FCA is taking. I recognise the concern that the noble Baroness raised about the Barclays example and I agree that behaviour of the kind she described does not serve the reputation of the industry nor the interests of the country. We must do all we can to prevent this type of behaviour. As the noble Baroness said, I realise that time is short but this issue is not going away. I ask whether she would be amenable to withdrawing her amendment, fully aware that I will hear more about the subject after the general election, should the outcome return a Conservative Government.
Baroness Kramer
I am delighted that the noble Baroness seems to take a personal interest in this issue. While 1,000 sounds a big number, the substantive cases have dropped to below 100. Given the size of the industry in the UK, that is a worryingly low number; I suspect that even the FCA is significantly worried about it. I am very glad that the noble Baroness said that the Government would look at this issue again. I hope to pursue that but it is good news that we did not have before, frankly. On that basis, and with thanks to the noble Lord, Lord Rosser, for his comments on this issue, I will obviously withdraw.
“( ) Regulations under subsection (2) or (3) may not include provision of the kind mentioned in subsection (5) unless the provision is within legislative competence.( ) For this purpose, a provision of regulations is within legislative competence if—(a) in the case of regulations made by the Scottish Ministers, it would fall within the legislative competence of the Scottish Parliament if included in an Act of that Parliament;(b) in the case of regulations made by the Department of Justice in Northern Ireland, it deals with a transferred matter.”
“( ) section (Sharing of beneficial ownership information);”
“(d) any property which is the forfeitable property in relation to an order under section 303Q(1).””
“(c) it is the forfeitable property in relation to an order under section 303Q(1).””
“(d) any property which is the forfeitable property in relation to an order under section 303Q(1).””
“(c) it is the forfeitable property in relation to an order under section 303Q(1).””
“(d) any property which is the forfeitable property in relation to an order under section 303Q(1).””
“(c) it is the forfeitable property in relation to an order under section 303Q(1).””
“76A(1) Section 435 (use of information by certain Directors) is amended as follows.(2) In the heading for “Directors” substitute “authorities”.(3) In subsection (1)—(a) for “the Director” substitute “a relevant authority”;(b) for “his”, in each place, substitute “the authority’s”;(c) for “him” substitute “the authority”.(4) In subsection (2)—(a) for “the Director” substitute “a relevant authority”;(b) for “his”, in each place, substitute “the authority’s”;(c) for “him” substitute “the authority”.(5) In subsection (4)—(a) in the words before paragraph (a), for ““the Director”” substitute ““relevant authority””;(b) omit “or” at the end of paragraph (b);(c) after paragraph (c) insert—“(d) Her Majesty’s Revenue and Customs; or(e) the Financial Conduct Authority.”(6) The amendments made by this paragraph apply to information obtained before, as well as to information obtained after, the coming into force of this paragraph.76B(1) Section 436 (disclosure of information to certain Directors) is amended as follows.(2) In the heading for “Directors” substitute “authorities”.(3) In subsection (1)—(a) for “the Director”, in the first place it occurs, substitute “a relevant authority”; (b) for “the Director”, in the second place it occurs, substitute “the authority”;(c) for “his” substitute “the authority’s”.(4) In subsection (5), after paragraph (h) insert—“(i) the Financial Conduct Authority.”(5) In subsection (10) for ““the Director”” substitute ““relevant authority””.(6) The amendments made by this paragraph apply to information obtained before, as well as to information obtained after, the coming into force of this paragraph.76C(1) Section 437 (further disclosure) is amended as follows.(2) In subsection (2), in paragraph (a) for “the Director’s” substitute “a relevant authority’s”.(3) In subsection (6)—(a) for “the Director”, in the first place it occurs, substitute “a relevant authority”;(b) for “the Director”, in the second place it occurs, substitute “the authority”.(4) In subsection (7) for ““the Director”” substitute ““relevant authority””.76D(1) Section 438 (disclosure of information by certain Directors) is amended as follows.(2) In the heading for “Directors” substitute “authorities”.(3) In subsection (1)—(a) in the words before paragraph (a)—(i) for “the Director” substitute “a relevant authority”;(ii) for “his” substitute “the authority’s”;(iii) for “him” substitute “the authority”;(b) in paragraph (c) for “Director’s” substitute “authority’s”;(c) in paragraph (e) after “Part 5” insert “or 8”;(d) in paragraph (f)—(i) for “or a constable” substitute “, a constable or an SFO officer”;(ii) after “Chapter 3” insert “, 3A or 3B”;(e) in paragraph (fa) for “Director” substitute “relevant authority”.(4) In subsection (5)—(a) for “the Director” substitute “a relevant authority”;(b) for “he”, in each place, substitute “the authority”.(5) In subsection (10) for ““the Director”” substitute ““relevant authority””.(6) The amendments made by this paragraph apply to information obtained before, as well as to information obtained after, the coming into force of this paragraph.76E(1) Section 439 (disclosure of information to Lord Advocate and to Scottish Ministers) is amended as follows.(2) In subsection (1), after “Part 5” insert “or 8”.(3) In subsection (5), after paragraph (h) insert—“(i) the Financial Conduct Authority.”(4) The amendments made by this paragraph apply to information obtained before, as well as to information obtained after, the coming into force of this paragraph.
“77(1) Section 441 (disclosure of information by Lord Advocate and by Scottish Ministers) is amended as follows.(2) In subsection (1), after “Chapter 3” insert “or 3A”. (3) In”
“( ) in paragraph (fa), for the words from “functions” to “Ireland” substitute “functions of a relevant authority, as defined by section 435(4),”;( ) in paragraph (g)—(i) omit “a customs officer or”;(ii) after “Chapter 3” insert “, 3A or 3B”.”
“79A_ In section 443 (enforcement in different parts of the United Kingdom), in subsection (1) after paragraph (c) insert—“(ca) for an order made by a court under Part 7 in one part of the United Kingdom to be enforced in another part;”.”
“Homelessness etc.(Scotland) Act 2003 (asp 10)
In section 11 of the Homelessness etc.(Scotland) Act 2003 (notice to local authority of proceedings for possession etc.), in subsection (5), after paragraph (f) insert—“(fa) section 245ZA(2) of the Proceeds of Crime Act 2002 (notice to local authority of application for decree of removing and warrant for ejection),”.Bankruptcy and Diligence etc.(Scotland) Act 2007 (asp 3)
The Bankruptcy and Diligence etc.(Scotland) Act 2007 is amended as follows._(1) Section 214 (expressions used in Part 15) is amended as follows.(2) In subsection (1)—(a) omit “and” after the definition of “a decree for removing from heritable property”, and(b) after the definition of “an action for removing from heritable property” insert—““defender”, in relation to a decree for removing from heritable property of the type mentioned in subsection (2)(l), means any person against whom the decree is enforceable.”(3) In subsection (2)—(a) omit “and” at the end of paragraph (j), and(b) after paragraph (k) insert “; and(l) a decree of removing and warrant for ejection granted under section 266(8ZA) of the Proceeds of Crime Act 2002.”In section 216 (service of charge before removing)—(a) in subsection (1), in paragraph (a), for “14 days” substitute “the appropriate period”, and(b) after that subsection insert—“(1A) In subsection (1)(a), “the appropriate period” means—(a) in the case of a decree for removing from heritable property of the type mentioned in paragraph (l) of section 214(2), 28 days,(b) in the case of a decree for removing from heritable property of the type mentioned in any other paragraph of that section, 14 days.”In section 218 (preservation of property left in premises), after subsection (2) insert—“(3) In the application of this section to the granting of a decree for removing from heritable property of the type mentioned in section 214(2)(l), “pursuer” means the trustee for civil recovery who is responsible by virtue of section 267(3)(ba) of the Proceeds of Crime Act 2002 for enforcing the decree.””
Lord Rosser
I am not sure whether I should come in now but I just take this opportunity to thank the Minister and her ministerial colleagues in the Bill team for their willingness to meet and engage in what have been constructive and helpful discussions on not only provisions that are in the Bill but also provisions that are not, since it is with the latter that most differences of view or approach have centred. I also thank my Front-Bench colleagues for their hard work, not least—although he is not in his place—my noble friend Lord Kennedy of Southwark, who has not been exactly short of commitments in respect of other Bills as well. Finally, I thank the staff in our own office, not least Grace Wright, for their help and advice in navigating our way through this Bill.
Baroness Hamwee
My Lords, I echo those thanks to the Minister and the Bill team. As several people have said—most frequently the noble Lord, Lord Rosser —it is what is not in the Bill that has exercised us most. I can see an enormous amount of material for Private Members’ Bill in the next Session if we do not have government Bills that we can tack our—“demands” would be the wrong word—concerns on to. But the Minister has done an absolutely sterling job and I hope she gets five minutes to have a bit of a rest before she sets out campaigning. We have the luxury of knowing that we will be back to pursue these interests.
Baroness Williams of Trafford
As always with Bills such as this, it is what is not in the Bill. Also, sometimes we should have gone further. But we have had a challenge in this Bill and in the main the challenge has been lack of time, not of consensus. I place on record my thanks to the Front Benches—the noble Lords, Lord Rosser and Lord Kennedy, and the noble Baronesses, Lady Kramer and Lady Hamwee—and my noble friends behind me, who have kept me on my toes. I thank noble Lords for being so accommodating about having so little time to get through the business of the past 24 hours.
Finance (No. 2) Bill
Tuesday 25th April 2017
(6 years, 11 months ago)
Lords ChamberRead Full debate Finance Act 2017 View all Finance Act 2017 Debates Read Hansard Text Amendment Paper: Committee of the whole House Amendments as at 25 April 2017 - (25 Apr 2017)
Steel Industry
(6 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Mendelsohn
To ask Her Majesty’s Government what steps they are taking to support the steel industry; and what role it will have in the Government’s industrial strategy.
Lord Mendelsohn (Lab)
My Lords, I am very grateful to those who are participating in this debate. We have a very distinguished group of speakers with tremendous experience and wisdom in these areas, and I look forward to hearing your Lordships’ contributions. My own detailed experience of the sector is only recent. Like so many issues brought to the attention of this House, one can get a rudimentary understanding, but it is rare to get the feel of an industry. I know that the Minister has such a feel for these issues and I am grateful that he has made himself available for this debate. He has always had a very open and thoughtful mind when it comes to matters relating to the steel industry, and his participation is appreciated.
When Greybull bought the long products division of Tata Steel, I was intrigued. I was interested in what a very capable turnaround team saw in this opportunity. What has become British Steel is the dream of Nathaniel and Marc Meyohas, the principals of Greybull, who are operators of the highest capability and have brought new life into the industry and the business. I was fortunate to visit their main plant in Scunthorpe last year, where I met the extraordinary team that they have assembled, steeped in expertise, who have transformed its prospects. Recruiting Roland Junck, the globally respected industry figure, as executive chairman was particularly inspired, but the whole top team, who have served the plant for many years, were deeply impressive.
I was struck by two things when I visited. The first was the extraordinary quality of the staff, not just in skill and capability but in motivation. I visited the blast furnaces. In the Scunthorpe plant they are known as the Four Queens. I met the blast furnace manager. With colossal pride, as the molten steel streamed out, he nudged me and said, “You see that? That is schools, hospitals, roads and bridges—all our country’s needs”. The second thing that struck me was the extraordinary technology that is applied there. There are hugely capable and trained staff dealing with all sorts of technologically sophisticated approaches in these very large sites, with large equipment and large sales. The facility has computers almost everywhere and it is able to produce products with the imperfections almost entirely removed and to ever-higher specifications. It is a highly technologically developed business.
British Steel has committed nearly £40 million in new investment and is now making regular quarterly profits. It reversed the pay cut that was taken by the workforce as a means of ensuring the survival of the plant, and it did it as early as it could.
We have witnessed many closures in recent years—some preventable, possibly—with the resulting impact on communities. We have not served them entirely well with their transition. Last year our domestic market share fell to its lowest level on record, with only 39% of the steel used in the UK being produced here. Since 1995 employment in steel has fallen by 59%. I am sure there has always been a debate about what sort of size the market share should be and I think there is a case for 50%, but it is important that that 50% is profitable.
The global production footprint of steel suggests that the UK will not become a global leader in production but it is certainly desirable and deliverable that steel as a strategic necessity for our economy can be achieved, with the right policy framework. It still acts as a vital foundation industry for our world-class automotive, defence and construction sectors, and many others. It is an important part of our innovation and research base and it remains a crucial provider of highly skilled, quality and fulfilling work for more than 30,000 people, with an estimated four times that number in the supply chain.
It is notable that while other European steel industries have also suffered in the face of global headwinds, the UK has fallen furthest and fastest. We have gone from the second-biggest European producer in the 1960s to the fifth-biggest now, behind Germany, Italy, France and Spain. There remains a range of domestic barriers holding back our industry. As the BIS Select Committee in the other place pointed out,
“other European countries have both better valued their domestic steel industry and have been able to withstand global competition more effectively than … the UK”.
Put simply, the cost of doing business here is higher than in most of the rest of the continent.
The UK steel industry has suffered from a series of pressures relating to overcapacity, unfair trade and a competitive disadvantage with European competitors. There is broad agreement among everyone that we have to do a number of things to help: we have to promote UK steel’s use by government and business; we have to tackle unfair trade to ensure free and fair trading practices; we have to provide funding mechanisms for energy-efficient projects; and we have to work on what investment and support is needed in the long term, including skills and education in local communities. Most importantly, and the industry has been right to frame the problem in this way, the unilateral costs that are a direct result of historic UK government policy around electricity costs and business rates are utterly crucial. I believe that the recent initiatives which the Government have undertaken to compensate producers for high energy costs and to encourage government departments to procure UK steel are welcome steps in addressing the fundamental barriers facing UK producers.
However, this is about the fundamental business model. UK steel makes money, but not enough. There is a return on capital gap which is required in order to sustain this industry. For the sort of investment required in new plant, we need to ensure that it has the right level of profitability. It is well established that energy prices and business rates are two areas where we have an uneven playing field. Even after the Energy Intensive Industries compensation package, a 2016 analysis by UK Steel showed that British producers pay an extra £50 million per year in energy costs when compared to their EU competitors. The differential between the UK and Germany has been calculated as an extra £17 per megawatt hour. According to UK Steel, if that differential was removed, British firms would have increased their EBITDA by 70% in the period 2012-14, protecting jobs and enabling crucial investment.
UK steel-makers face business rates of up to 10 times those in France and Germany. We should not be in a situation where building a new blast furnace attracts a six or seven figure hike in rates. The current regime acts as a tax on investment that is not borne by European competitors. For example, in 2010 France reformed its new equivalent of business rates to remove plant and machinery from calculations to deal with exactly this problem; it has worked very well.
I am sorry that it took the steel crisis of 2015-16 to act as a trigger to focus attention. The Government have made some progress but it is too limited at this stage. This is not particularly partial criticism of the Government. There are certainly some matters which are not easy and straightforward. This will take a lot of political will and some careful thought but there is a pressure on whoever comes into government after the election—we can guess who might or might not—to show some renewed effort. There was some previous criticism of the industry’s managers and owners, but since the crisis it is clear that that has changed. New entrants have emerged and the existing quality management has been liberated. The workers in the industry and its trade union have shown not just capability but adaptability and a willingness, as they always have, to be part of a team accepting sacrifices and giving of their labour nothing but sheer excellence.
The industry is in good shape but the policy and regulatory environment is not, and this is where we must focus. We are in times where we can make changes. There have been changes which show that we can take a different approach. It is not just about leaving Europe; there is the opportunity of the industrial strategy. It is not just about the adoption by the Conservative Party of a price cap on energy markets or about progress in energy demand measures. All of these things suggest why doing more on the supply-side measures can be doable and timely.
The steel industry is the epitome of a modern, technologically-driven industry. I would argue that there are more high-tech, highly paid jobs in steel than in the IT sector in general. In business, the achievement is more important than the announcement. In government, it sometimes feels that the announcement is more important than the achievement. We have to set the course straight for what we are going to do to help steel. Others deserve our gratitude for keeping the industry alive and fit for purpose. It is the role and duty of those who make policy decisions on the regulatory environment to take the next steps. I am sure that all Members of the House will work with the new Government to that end.
Lord Jones (Lab)
My Lords, I support my noble friend Lord Mendelsohn’s approach to the steel industry. He has put a coherent and positive challenge to the Government in a most committed manner. For Britain to retain her national greatness, we will always need a steel industry. A great nation must have the capability to defend itself in a time of war. The summation of that is the “defence of the realm”. It is hard to envisage a Britain without a steel industry being capable of defending itself from a hostile nation or nations.
I see that steel is a foundation industry. It is the basic industry and all else flows from steel, even in a digital age of global influences. For our armaments, our manufacturing and our services, steel must always be there. Last year, there was a serious question mark over the British steel industry’s future. Port Talbot, a mighty and productive steel plant, was at risk. Port Talbot has had a great steel record in modern times. It has met every challenge concerning productivity, including the challenges of demanning. Today, Port Talbot is a manufacturing linchpin in Wales, and it must remain so. It is a British manufacturing priority and it deserves to remain a respected steel producer worldwide for its workforce to have secure employment and decent pensions.
I pay tribute to my noble and learned friend Lord Morris of Aberavon, who has been a most successful, long-standing advocate for Port Talbot steel, and I see that my noble friend Lord Brookman is in his place. I humbly say that he was a fine leader of the steel workers’ union for many years. Indeed, he was the lion of the Ebbw Vale steel plant, and at the steel plant in north-east Wales he was highly regarded when a general secretary. He faced up to massive changes in Britain’s steel industry and to many tens of thousands of steel redundancies—a great cascade, almost all at once. He faced up to it, like the workforce he led, in a most noble way.
Britain has four nuclear-armed submarines at the heart of our defence strategy. The Ministry of Defence is currently considering the next nuclear-armed submarine defence strategy. For the life of me, I cannot see Britain backing this core defence strategy without a viable, confident, productive steel industry. Surely Her Majesty’s Government will confirm their commitment to a long-term British steel future, especially emphasising the centrality of Port Talbot in British and Welsh steel production. This is surely a strategic requirement.
In the time remaining, I must praise the north-east Wales steel plant of Shotton, which is my homeland. It is a hugely efficient and most profitable plant. The Shotton team is collaborative and co-operative and always delivers on time. It has won recent significant investment, even at a time of great insecurity for steel both in Wales and globally. It deserves its recent vote of confidence. As a finishing plant employing hundreds, it is, of its kind, the jewel in the British steel crown. Whatever the challenge, the Shotton steel team never falters. We remember when in a previous era it employed some 13,000 steel-workers. Historically, ours has been an industrial steel culture.
I see that the Minister, the noble Lord, Lord Prior of Brampton, is in his place. In another place, quite some time ago, I recollect a Cabinet Minister bearing the same name. The then Secretary of State James Prior was a good Minister in the early 1980s. I faced him across the Dispatch Box, and in those days he was facing the challenge of retraining and employing tens of thousands of redundant steelworkers. He did his best, always, but surely a viable steel industry is now a matter of national security and a priority.
Baroness Redfern (Con)
My Lords, I am grateful for the opportunity to take part in this debate in support of the future of our UK steel industry. I thank the noble Lord, Lord Mendelsohn, for initiating the debate and for his supportive words this evening and acknowledge the Government’s industrial strategy, which gives us cause for optimism—not having one would be a missed opportunity.
I declare that I am an elected councillor on North Lincolnshire Council and chair of the Scunthorpe task group overseeing the Government’s commitment of up to £9 million to support Scunthorpe steel-workers and the local economy through retraining and support for companies in the local area to grow and create new jobs.
Through the good times and the challenging times there is always a sense of spirit and community togetherness—I speak from personal knowledge, as my father worked all his life in the steel industry. Community spirit breeds a determination always to rise to the many challenges that have come along over the years, and I look forward to steel-making continuing in Scunthorpe for generations to come, creating many job opportunities and prosperity for the small and medium-sized enterprises in the supply chain.
Revitalising the steel industry is needed not simply to avert a crisis but because it also represents a great opportunity for steel, which is embedded at the heart of the UK’s high-tech future and is critical to the success of any modern manufacturing renaissance, which the UK requires to compete in a post-Brexit world.
Greybull Capital took over the Scunthorpe steel plant last year after many months of great uncertainty, and a new name emerged: British Steel. The business has developed rapidly, as the noble Lord, Lord Mendelsohn, alluded to earlier, employing hundreds of new people and securing a series of significant new contracts and capital investment of nearly £40 million.
The Business Secretary, Sajid Javid, visited British Steel for the launch on 1 June, and I am pleased to say that during the year there has been regular dialogue with government departments, including the Department for Business, Energy and Industrial Strategy and the Department for International Trade, with British Steel actively contributing to the Government’s industrial strategy.
A key strand of that transformation has seen the company placing great emphasis on engaging with stakeholders. The Scunthorpe plant employs more than 4,000 people in the UK, but it is estimated that more than 16,000 people are employed in the supply chain, working together for all to share the future successes.
Times are changing in the steel industry. Steel has been fundamental in creating iconic awe-inspiring structures around the world. Continuing that means planning for the future for our young men and women, so I am pleased to see the emphasis on training over the past year: already 140 trainees, including 57 apprentices, have been engaged. British Steel Scunthorpe has come a long way in a short space of time and has been buoyed by the pace of change. However, this is the beginning of that journey, and there are areas in which support could be looked at.
Steel is an energy-intensive industry. There is no doubt that energy is a key area and therefore continual dialogue is needed with the Government. Energy remains a major cost: the oft-quoted figure is that the industry pays £17 per megawatt hour more for electricity than some of our European counterparts, so I am pleased that North Lincolnshire Council has secured a government grant to explore ways for the steelworks to become more energy efficient. With new procurement rules, it is vital that we see regular transparent evidence that the public sector is following the new guidance.
New data published for the first time show how the Government plan to use 3 million tonnes of steel in infrastructure projects by 2020, with an emphasis on ensuring that social, environmental and economic factors are taken into account within the procurement procedure. Looking at the capacity and capability, given the fragmentation of the UK steel industry, we think it is also important that the benefits of a partnership approach, rather than having a sole supplier, are embraced. British Steel Scunthorpe wants to work together with its fellow manufacturers and thinks this should be encouraged.
As I have alluded to, times are changing in the steel industry. Steel has been fundamental not only in creating iconic awe-inspiring structures around the world but in research and development. Innovation is key to steel’s future. A great example is Zinoco, the first product of its kind to be manufactured in the world, which creates a premium coated rail product that is 108 metres in length—an excellent example of the ability of the steel plant in Scunthorpe to meet its customers’ needs. Some two-thirds of the steel produced in the UK is in forms that were not invented 20 years ago. However, more support is needed to ensure that British steel provides value to customers that imports cannot.
Business rates, too, have had a significant impact on capital-intensive industries, particularly as many of their competitors abroad pay little or no business rates, so I am pleased with the Government’s response of granting transitional relief to the Scunthorpe plant, which will save it circa £4.8 million over the next four years. Thankfully, measures have also been taken to reduce the dumping of steel.
With the implementation of a bold industrial strategy driving the UK economy forward, we must ensure that the opportunities arising in the next few years are captured as much as possible by our steel industry and that the barriers preventing a fair playing field are addressed and, importantly, resolved to bring further confidence to the business sector.
Steel-making began 127 years ago. British steel has a future. Not only that, it has to have a future. It is a strategic industry, a key foundation industry for construction, automotive, aerospace, defence, rail, oil and gas, renewables and nuclear. Steel is all around us and something we rely on every day and every hour. I wish to see “Made in Britain” stamped on steel used around the world. To those highly skilled, dedicated steel-workers I say: carry on doing what you do well for our strategic industry here in the UK—particularly in Scunthorpe, of course—now and for the future generations to come.
Lord Bhattacharyya (Lab)
My Lords, I declare my interest as chairman of WMG at the University of Warwick. When I started my engineering career back in the 1960s, British steel was respected around the globe. From Bessemer’s processes to Goodeve’s BISRA stainless steel, Britain was the home of global steel innovation.
However, no other nation has treated its steel industry the way that we have since. We did not just throw the baby out with the bath-water, we threw away the bath, the taps, the pipes and sewers. First, we had three decades of contradictory, inconsistent and underfinanced industrial strategies, then three decades of no strategy at all. That left us exposed so that the steel crisis hurt British producers more than our competitors. It is a global crisis. There are over 200 anti-dumping measures listed at the WTO against one country alone. We are at 30% global overcapacity and flat demand, yet steel capacity is increasing by more than 5% a year.
The world steel market is clearly distorted. So local action to ensure a level playing field for British producers is essential. I quote a former steel-worker on what must be done. He said that the Government needed to take “three tangible steps”: first,
“ensure low exchange and interest rates”;
secondly, reduce the “excess costs” that British steel faced versus its European competitors; and, thirdly, take,
“urgent, quick action to bring in anti-dumping measures”.—[Official Report, Commons, 21/10/1998; col. 1201.]
Perhaps President Trump has been listening. The insightful former steel-worker was the Minister, speaking in 2001.
More than 15 years later, we still need urgent action. Ministers described their own business rates policy as “bizarre” two whole years ago, but we still have not heard what will change. The Government said before the previous election that British steel-makers pay twice as much in energy costs as German firms, yet last month, we heard that action on the renewables obligation still needs European approval. In strategic industries, when times are tough, the Government need to offer fast relief. If European agreement is needed, why is steel a low priority in our Brexit negotiations?
I hope that I did not embarrass the Minister by citing his speech. I am delighted that he has been appointed to his job: we need Ministers with passion for their brief. Perhaps I may make amends by telling him that he has an ally in No. 10. The Prime Minister’s chief of staff wrote last year:
“We do not have to accept ‘dumping’”,
and has called our energy policy,
“a monstrous act of self-harm”.
He seems keen to deliver the urgent action that the Minister wanted.
If we are to do more than just slow steel’s decline, our industrial strategy must look well past the current crisis. Since the end of the war, British steel has suffered from underinvestment and instability. We have created a short-term, inward-looking industry. In the 1970s, we spent about the same on R&D as France and Germany, but we did not implement the results. By 1980, we had the lowest proportion of continuous casting of any major steel producer. Under Governments of all parties, steel was left exposed and uncompetitive.
Even now, producers struggle with that legacy, whether on pensions—although we hope that that is now sorted out—or on business rates, energy costs or weak infrastructure. Tata Steel invested more than £1.5 billion since buying Corus. I was heavily instrumental in that. Much of it has gone to correcting the errors of the past. When Tata felt that it had to close last year, it was because it was losing £1 million a day. It knew that much more investment was needed. All it was offered by the Treasury was tea and sympathy. However, there has been some change in attitude in the past year.
That is why our steel industry has declined to the point where Canada, Poland and Belgium all produced more than us last year. This is not a case of a productivity gap—British steel workers are productive and flexible. It is very seldom that they have gone on strike. It is a lack of long-termism, investment and innovation which fetters them.
To put that right, we need to do three things. First, we need to focus on future market requirements. Total steel demand is stagnant, but demand for specialised and advanced, lightweight, high-strength steel will only increase. Further, as a mature market, we can anticipate future trends in reuse, recycling and steel waste. Excellence here will encourage foreign investment as carbon emissions come under greater pressure.
Secondly, we need better infrastructure and procurement. Port Talbot’s lack of proper port facilities hampers its exports, but there is little help for steel producers on future procurement by the Government. Finally, we need to do more to make our innovations impactful. We are doing globally significant materials research in the UK, and we need it to reach the market. The promised steel sector strategy should support investment in steel recycling, advanced materials and improved production processes. The research being done now shows that there are opportunities.
At WMG last month, one of our PhD students won the American Association for Iron & Steel Technology prize for best metallurgy paper by a student, for a paper given on peritectic steel. I would explain what peritectic steel is, but I am sure there is no need. The Economist noted last month that WMG’s research on belt casting and advanced materials could reduce energy used in steel production by one-third. We rightly hear of the need for more diversity in British science and technology; both the research projects that I mention are by women. As the Economist says, this kind of innovation is why producers are considering a new steel plant in the UK.
We need immediate action on this crisis. We also need to support long-term investment, anticipate future needs, increase the commercial impact of our material innovation, and protect our steel market against dumping. That is a huge problem, not just here but anywhere in the world. That is why Trump has just introduced anti-dumping measures. We have had enough White Papers; perhaps it is time for a little bit of white heat. To put this right, we must look at the future market requirements: steel demand is stagnant, but demand for specialised and advanced, lightweight, high-strength steel will only increase. Further, as a mature market we can anticipate future trends in reuse, recycling and steel waste. Excellence here will encourage foreign investment as carbon emissions come under greater pressure. Furthermore, we need better infrastructure and procurement. Now that the problem at Port Talbot has been solved, with the unions and owners agreeing on a 10-year strategy, the lack of Port Talbot’s facilities hampers exports, while there is little help to steel producers on future procurement by government.
Finally, we have to do more to make our innovation impactful. We rightly hear of the need for more diversity in British science and technology, so it is worth saying that both research projects that I mentioned are by women. That is the kind of innovation that we need, and perhaps that is why the Government should spend more time not on talking but on white heat.
Lord Bilimoria (CB)
My Lords, when the Government published their steel pipeline and new procurement guidance, my university contemporary, the Business and Energy Secretary Greg Clark, said that the Government were,
“absolutely clear that we want to do all we can to support our world-class steel industry … This strategy will ensure we make the right investments in science, research, skills and infrastructure so that British industry wins contracts by producing the best goods and services”.
The Minister at the Cabinet Office, Ben Gummer, said:
“By updating our procurement approach on these major infrastructure projects we are creating a level playing field for UK steel”.
I thank the noble Lord, Lord Mendelsohn, for initiating this important debate. The history is there: employment in the steel industry was at 320,000 in 1971 and has now plummeted to 31,000. We export £4.7 billion-worth of steel from the UK and import £5 billion-worth—so there is a small trade deficit there—and 52% of UK steel exports are to the EU, while 69% of UK steel imports are from the EU. So the implications of Brexit for the industry are enormous, and there is uncertainty over future trade relationships with the EU, which will be absolutely crucial.
The All-Party Parliamentary Group for the Steel and Metal Related Industries produced a report this year in which it talked about an “existential crisis”, as the noble Lord, Lord Bhattacharyya, said. The APPG recognised,
“the vital role that the UK steel industry plays in the UK defence, aerospace, automotive industries, and supporting key infrastructure investments in the UK economy”.
It referred to an industrial strategy for steel and said:
“Our economy is unbalanced, tipped in favour of financial services and London and the South East. Essential to building an economy of purpose and resilience will be a renaissance for manufacturing, and for that steel is a key foundation industry”.
In the UK Steel Manifesto in 2016, it was noted again that there was a reduction of almost 60% in the number of people employed in steel since 1995, a 10% drop in UK steel production compared with 2014, and yet an increase of almost 400% in Chinese steel exports compared to 2009. It said:
“The result of the EU Referendum was a blow to the steel industry”,
in the UK. The disparity in energy costs, as mentioned by the noble Lords, Lord Mendelsohn and Lord Bhattacharyya, between the UK and our competitors is shackling the steel industry and preventing it being competitive. The Government must eliminate that price differential in the short term if we are to have a future. They must ensure that major procurement projects use British steel as much as possible, giving the industry confidence, and bring business rates for capital-intensive firms in line with their competitors by removing plant and machinery from the calculation. Does the Minister agree with that? There are barriers to this industry growing—cap ex, new investment and skills. Do we have the necessary skills and R&D, which I will come to later?
The British Government have been accused of disgraceful behaviour for labelling certain industries, including the struggling steel sector, as low-priority before detailed talks about leaving the EU. Can the Minister confirm that? I am a proud manufacturer of Cobra beer, with my joint venture partners, Molson Coors. We are one of the largest brewers in the world. We manufacture in Burton upon Trent in the largest brewery in Britain. Yet the 10 pillars of the Government’s industrial strategy make no mention of manufacturing. Manufacturing was 30% of our GDP in the 1970s; today it is 10%. India has a target to increase manufacturing from 16% to 25% of GDP. We have no such target. Will the Minister say why we do not?
As to the nature of the challenge, according to the Government’s industrial strategy:
“The UK has grown strongly in recent years—by over 14 per cent since 2010, second only to the United States”,
and yet the Government admit that,
“the UK needs to address the productivity gap with other leading countries”.
The Government proudly announce that they are increasing R&D investment by £2 billion a year. We invest 1.75% of our GDP in R&D and innovation, yet the United States and Germany invest 2.7% and 2.8%. If we were to just catch up with them we would have to invest £20 billion a year, not £2 billion. Does the Minister agree? The industrial strategy talks about the impact of universities. Once again, we underinvest in our universities as a proportion of GDP, compared to the OECD and EU average—forget America, which is way ahead of us—yet our universities are the best in the world. Just imagine if we invested the same amount. The industrial strategy mentions encouraging trade, yet the last Budget made no mention of the word “export”.
We know that the steel industry has halved and that China has quadrupled its production since 2000. Yet, as the noble Lord, Lord Bhattacharyya, said, there is a global capacity that exceeds demand by 600 million tonnes per year. The noble Lord, Lord Bhattacharyya, mentioned Tata Steel. Britain should be grateful to Tata for its billions of pounds of investment in British steel over the years. It is one of the largest manufacturers in Europe and has strong links with universities. It has endowed a chair at the University of Cambridge. I declare my interest as chair of the advisory board of the Cambridge Judge Business School. Some 60% of Tata Steel’s sales are to UK manufacturers and 25% are to the EU. The most important thing about the company is that it tries to be innovative. It has said that you must continue to drive innovation, but it pleads for a level playing field on energy costs, anti-dumping and business rates. Does the Minister agree with that? Tata Steel says that the success and future of the steel industry depend on innovation and skills and that the Government need to support periods of transition when the steel industry goes through ups and downs. In the past, the Government have said they would support this industry, yet when the Prime Minister went to India in November she did not even meet anyone from Tata.
The University of Cambridge produced a paper entitled A Bright Future for UK Steel. Once again, this talked about innovation but it also mentioned that half the steel used in this country is in construction. This sector, which has a plan for building lots more homes, employs 250,000 people from the European Union. What are we to do when Brexit happens? I am delighted by the recent news that:
“The UK steel industry has welcomed anti-dumping duties announced by the European Commission on some Chinese products”.
Can the Minister expand on that?
In conclusion, an article in the Financial Times asked:
“Is UK steel really a strategic industry”?
It said that it is to a town such as Port Talbot, but asked how strategic it is when it represents a small proportion of our economic output. Paul Forrest, head of economic research at the West Midlands Economic Forum—I am chancellor of the University of Birmingham—said that 260,000 jobs in his region are part of the steel supply chain. Local sources of steel production are helpful to the UK’s manufacturing ambitions. Nissan’s factory in Sunderland, which is the largest car plant in the UK, buys 45% of its sheet steel from Port Talbot.
Professor Andy Neely, a fellow of Sidney Sussex College and head of the Institute for Manufacturing at the University of Cambridge, said:
“Steel is undoubtedly foundational for so many products—but so is cement or plastics. You can … make the case that steel is a strategic material”.
But what if you can get the supplies from elsewhere? The reality is that the steel for Trident nuclear submarines is supplied from France and the latest generation of Ajax armoured vehicles will use Swedish steel. According to Philip Dunne, the Defence Procurement Minister at the time, no UK steel manufacturer could meet the requirements. There are some implications for sectors such as automotive, which require just-in-time availability, and, where it is available, UK steel plays a role in equipping our Armed Forces. Our latest Queen Elizabeth-class aircraft carriers are built by Tata Steel.
John Louth of RUSI said:
“The quality of British steel has made a big difference to the UK defence industry”,
including for our aircraft carriers. Close to 60% of steel used in the UK is imported, while two-thirds of UK output in the past couple of years has been exported.
I conclude with the words of Professor Andy Neely of the Institute for Manufacturing in Cambridge, who said that while steel may no longer be a vital input, it is part of the strategic argument over the shape of the UK economy. He said:
“If the UK says it cannot compete on steel, where does that process stop? The danger is that you end up saying the same in other sectors and we end up with a hollowing out of the British economy”.
Lord Brookman (Lab)
My Lords, I was a steel-worker from Ebbw Vale in south Wales. My first Member of Parliament was Aneurin Bevan. Growing up as a young kid, I listened to him in the Palace cinema. He was a wonderful man. The works is no longer there. Many people became unemployed, including many of my relatives, so I know a little bit about the difficulties that steel-workers have had in the United Kingdom. I thank the noble Lord, Lord Jones, for his comments about our relationship during my stewardship of the then named Iron and Steel Trades Confederation.
The Question in the name of the noble Lord, Lord Mendelsohn, is relevant. What will be the future of steel? What will be its role in relation to the industrial strategy that we will consider in due course, whoever forms the next Government? I recall a debate in this House on the future of the steel industry. That debate in June 2003 lasted three and a half hours. Therefore, it was much longer than today’s debate and many more noble Lords were present to listen to what was said. It was an interesting debate on the future of steel and manufacturing in general. Some people—not people I can name publicly—believe that we were, and are, living in a post-industrial society, and that steel is not a key issue for the British Government of the day. I am not reading from notes but saying what I feel about the future of steel and manufacturing in general.
The Steel 2020 report of the All-Party Parliamentary Group on Steel and Metal Related Industries has been referred to. I was impressed by that first-class report, which was researched and drawn up by Dr Ian Greenwood. It would be worth the while of everyone who is interested in the future of manufacturing and the steel industry to read it carefully. Dr Ian Greenwood’s work is first class and I am proud to be associated with the all-party group’s efforts to support the steel industry. A group of MPs associated with the APPG—Tom Blenkinsop from Middlesbrough, Jessica Morden, Tom Pursglove, Anna Turley, Angela Smith and Stephen Kinnock—are working night and day to try to ensure that we have a powerful, strong steel industry to support manufacturing.
The facts are pretty clear, and the previous speaker mentioned some of them. The UK steel industry directly employed 320,000 people in 1971, compared with 21,000 in 2015. The report that I referred to points out that the figure is now about 18,000. So let us be honest with ourselves. Are we, and have we been, fighting a losing battle? Are the British people concerned, as noble Lords this evening seem to have been, about the future of the steel industry and manufacturing? I have my reservations about the views of some people on the future of the steel industry, but I am very pleased with my own union. Roy Rickhuss, the current general secretary, has been very active and effective, as have his key officials such as John Paul McHugh, the union’s assistant general secretary. They are fighting tooth and nail to ensure that we in this country have a strong, workable steel industry for the future.
It is some years since I instigated a debate on this matter and I should be interested to hear the view on the position today. In that debate, strongly represented by people from this House, everybody said that we did not have a successful arrangement with the Government of the day for a powerful industrial base, including a strong steel industry. That is central to what we are talking about tonight and it will be in the future. That is why my noble friend’s opening remarks were so relevant. We need to understand clearly what the Government will do to support the very thing that many noble Lords have spoken about today—a strong, competitive steel industry that can hold its head up high in world business.
Lord Suri (Con)
My Lords, I welcome the opportunity to speak in this debate. As we look forward to another election, we should not let issues that do not dominate the agenda slip out of focus, and this is a particularly important issue. It is important, I think, not just for the industry that it concerns but for the wider issue of the industrial strategy. Unlike many in the other place, I think that most noble Lords here will have memories of the old days when the industrial strategy occupied a more central role in government and, indeed, had an entire department structured around it. If the former Members for Chingford and Henley were present, they would have more knowledge than me about that, having been the Ministers responsible. Trade tariffs and dumping were vexed and vexing questions then, and little seems to have changed.
Through the years, I have stuck to the uncompromising view that low tariffs and minimal impediments to trade are the most effective policies for improving growth, and they have the pleasing effect of helping those at both ends of a deal who, after all, are exchanging one thing for another of higher value. The steel industry is an interesting case in point. After we leave the EU, I hope that we will be subject to some sort of deal. It appears that customs union membership will not be part of that, and Ministers will be hassled by the Opposition and special interests to whack up steel tariffs in a post-Brexit round of reviews of industrial policy. However, I feel that to do so would be completely the wrong approach.
Before I make the substantive case, I will make one comment against certain jingoistic points that I have observed. You can indeed buy British steel to build roads and hospitals, but if British steel is consistently more expensive, you will have to build fewer roads and fewer hospitals with your limited budget.
An industrial strategy that works will need to be focused on the work of supporting winners, not picking them. In the post-war economy, which was far more heavily subsidised than now, productivity and efficiency rocketed as subsidies were withdrawn. Services are our real comparative advantage, and they are outgrowing almost all other sectors. They must be helped to grow and expand by our trade strategy. We should insist that all free trade deals on goods be accompanied by some agreement on mutual recognition of regulatory quality of services, or mutual recognition of degrees. Services must feature in the industrial approach to trade.
The primary benefit of this strategy, rather than subsidies, or trying to grow industries from scratch, is that it puts relatively little pressure on the Exchequer. A few guarantees like additional export finance may be put in place, but are tiny to heavily subsidised industry. If the market sees fit for an industry to survive, it will step in with the necessary investment, as ArcelorMittal is showing with Welsh steel plants. Supporting industries with large subsidies when they may not even be close to returning to profitability is an expensive folly. If other countries choose to pursue that policy and then let us benefit from cheap exports, that subsidy has been passed to us and need not be retaliated to. Inefficient industries supported well beyond their time create huge issues. It is not just that they soak up capital that could be used more efficiently, but that the planning is never put in place for their eventual demise.
We should take the lesson of the 1980s and make strong plans for industries in a declining phase. Workers must have strong support and meaningful alternative career options. In this post-Brexit world with lower immigration, there is plenty to do.
Lord Morris of Aberavon (Lab)
My Lords, I have given notice to the Minister that I intend to raise questions on the future of Port Talbot steel. I hope that the Minister will reply either tonight or in writing. I have no present interest to declare, but I was the Member of Parliament for the area for more than 41 years. My first job as a young Minister in 1964 was to supervise the drafting of the steel White Paper on bringing the industry into public ownership. One of the driving forces was the cyclical pattern of world markets and the need to protect the national interest. Have we not seen many cycles since then?
It was my privilege to look after the interests of my constituents working in that part of the steel industry. The lion’s share of my political life was dominated by it. I still maintain—although I am slightly removed—a close interest in their welfare and the future of the plant. I lived through the huge job losses of the 1980s when the labour force came down from 16,000 to under 4,000. The paramount interest of the labour force was to maintain confidence in continuing long-term investment in the plant. The unions, the works council and the management under Sir Brian Moffat saw off the temptation of industrial action and instead put the working conditions of the plant on a firm, workable and economic basis. They worked together to ensure their future.
I had the privilege of opening the huge investment in the continuous casting plant, which I had done a little to secure, as well as opening the reconstructed old harbour. I was a privileged Member of Parliament from the days of a previous Labour Government that built the new harbour at Port Talbot. Port Talbot had all going for it. From the published reports, I see that history is repeating itself and the trade unions have agreed to lower pensions in return for the promise of a long-term future for the plant. However, the pension liabilities of the firm remain—to the extent, we are told, of £15 billion for its 130,000 members.
It is reported that Tata Steel is trying to hive off its liabilities before merging its European steel operations with thyssenkrupp. The talks between Tata Steel, the Pensions Regulator and the Pension Protection Fund have dragged on for month after month. What are the views of the Government about the role of the Pensions Regulator? Is spinning off the pension scheme practicable or would the Government prefer for it to enter the Government-backed lifeboat? I surmise that the latter would be disadvantageous to pensions in the future, although it should not affect the existing workforce, as I understand it. Could the Minister confirm a report that Tata Steel has offered £520 million to the United Kingdom pension scheme in return for relinquishing a guarantee it holds over the company’s assets?
There are significant issues still to be resolved, and the workforce is entitled to know. I raised some of these issues in my remarks during the debate on the Queen’s Speech and the debate on the referendum on 6 July 2016. I criticised the processes of the European Union in its tardiness to take effective and timely action to counter the dumping of exports of steel from China. There are recent reports that President Trump has signed an executive order to assess the impact of steel imports on his military build-up in the United States. The state-owned Chinese steel industry represents half the world’s steel-making capacity. What is the view of the Government on dumping? I ask specifically: given that we are still in the European Union, what representations are they making or have they made in recent years to ensure that the European Union is as resolved as the United States in maintaining British steel in the face of the turbulence of dumped imports?
Lord Stoneham of Droxford (LD)
My Lords, it has been a very full debate and we have all appreciated particularly the personal experiences we have heard from the noble Lords, Lord Jones and Lord Brookman, the noble Baroness, Lady Redfern, and the noble and learned Lord, Lord Morris. There are a couple of themes that I would like to pick up in contributing to the debate. The noble Lord, Lord Bhattacharyya, said that we had wasted three decades for this industry through poor decision-making and a lack of long-term thinking. The noble Lord, Lord Bilimoria, spoke very much about the dangers of the distraction of Brexit and the impact it will have on this industry by damaging the whole sector. I would like to deal with both those points.
In the general election, the Government will promise the country strong government and stability. I would agree with that if it was being applied in the steel industry. The only problem is that the Government promised that at the last election and, within a year, we no longer had an economic plan and we have had all the uncertainty that followed the referendum, which will continue over the next couple of years. What we want in this debate—what everybody has spoken about—is a commitment to a modern, innovative manufacturing sector in which steel will play a full part and where we can genuinely compete with Germany. Steel should be an important component of that future. As we know, currently, our whole automotive industry depends on a huge output of steel from the Port Talbot works.
The other area where we have to look at our competitive advantage is that of specialised steels, which the noble Lord, Lord Bhattacharyya, mentioned. But that needs a long-term plan and long-term commitment. I give some credit to the Government for identifying the problems and raising the questions, but will they address those? They have looked at energy costs, but we know that there are huge problems with energy costs in the sector. They are looking at business rates. I do not know whether the Minister will say anything on that and what help they will provide for manufacturing. To be fair, the Government have also published various documents on improving procurement planning, which are all important. But as we go forward, like every other industrial sector in this country, improving R&D investment and getting a return from that, raising productivity and concentrating on skills development will see this sector prosper.
But what will we get in the next two to five years? We will get complete uncertainty. We have seen that just in the last year with the devaluation of the pound. That creates further uncertainty in the steel sector. Okay, it improves its competitiveness on pricing, but it also adds to its costs. We have no idea what will emerge from the single market free-trade negotiations. As we know, steel components cross borders repeatedly as they find their way into the final manufactured goods.
When the European Community was first set up, I thought that steel was at the heart of it, and so was coal. One of the reasons for that was overcapacity and unproductive resources in both those sectors. To actually get rationalisation was going to be difficult unless there was co-operation and partnership. We know in this sector particularly that if we do not have some form of international co-operation and understanding, the owners, who are huge international combines, will simply pick off individual Governments. Some 52% of steel exports go to Europe. What will happen when we start negotiations on our access to the single market in the Brexit negotiations? The Germans, Spanish, Italians and French will defend their interests. We will lose the co-operation that we have built up over the past few years in Europe trying to address some of these problems.
Those in favour of Brexit will argue that we can take action ourselves against uncompetitive practices and we can get involved in dealing with dumping. But the reality of that is a myth, frankly. If we look at Chinese dumping, China’s total exports exceed the total production of the top five European steel-producing countries. We know that the British Government themselves resisted supporting protection orders in the EU because they were worried about a future relationship for other trade with China. What will happen when everything is up for grabs? Will the steel industry be one of those that will be cast aside in the desperate interests of trying to improve exports to China in other sectors? Brexit is a major distraction for this industry at a vital time. It will encourage the continuation of short-term thinking when we need long-term thinking and it will provide a distraction from trying to deal with the issues that have been raised in this debate.
Greg Clark has done some good work on the industrial strategy, continuing the work done by the coalition, but unless we actually get involved in the detail and deliver the answers to some of the questions and problems that that work is raising, we will not make the progress industrially that this country and particularly the steel industry want. The major problem going forward will be that the Government themselves will be totally distracted by the Brexit negotiations when they should be dealing with some of the problems in this sector.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Prior of Brampton) (Con)
My Lords, I begin by thanking the noble Lord, Lord Mendelsohn, for bringing this debate to the House. It is extremely important. Steel is very close to many of our hearts in this Chamber. It is very good to have the chance to debate it.
I have not yet visited Scunthorpe under the new management of Greybull, but I very much look forward to doing so and meeting the team that the noble Lord met when he was there a few months ago—although I do not imagine he got his new suntan when he was in Scunthorpe. I also mention my noble friend Lady Redfern, who lives very close to Scunthorpe. She mentioned the community spirit and the importance of the supply chain. She mentioned that the jobs of 16,000 people were dependent on the supply chain of the Scunthorpe steelworks, so when we talk about steel we are talking about many other industries as well.
The noble Lord, Lord Jones, referred to steel as a foundation industry. He is absolutely right. He spoke about Shotton. I visited Shotton only a month ago. It is wonderful to see the coatings plant there, but it is pretty sad to see where once there was a great integrated steelworks.
The noble Lord, Lord Bhattacharyya, mentioned that when he was growing up as a young engineer in the 1960s Britain was seen as the home of steel. He said that for many years, really since the war, the British steel industry has suffered from underinvestment for all that time. I think he said that in 1980, despite having invented continuous casting in this country, which was a fundamental technological breakthrough for the steel industry, we had the lowest percentage of steel made through continuous casting—a pretty damning condemnation of our industry at the time. I think of how much investment went into two steel plants, Llanwern and Ravenscraig: both were undersized, in the wrong place and underinvested. However wonderful and flexible the labour force is, if the strategy is fundamentally wrong, as those two plants were, in the long run nothing can save them.
Listening to the noble Lord, Lord Brookman, I could almost see in my mind two people that I am sure he remembers from those days: Bill Sirs, who was general-secretary of the ISTC, and Hector Smith, who was general-secretary of the National Union of Blastfurnacemen at the time. He spoke with great passion about Ebbw Vale.
I did not agree with many of the words of the noble Lord, Lord Bilimoria. I did not recognise his characterisation of our industrial strategy Green Paper; I did not see where he was coming from. We are absolutely committed to a strong and competitive manufacturing sector in this country. I reassure the noble Lord, Lord Stoneham, that we are calling for a modern, competitive industrial sector in this country. It has to be long-term; there is no point having an industrial strategy for the length of just one Parliament. Whoever wins, I hope that after the next general election we can have some consensus over that. If we cannot have consensus over the long term, how is industry to have it?
The noble and learned Lord, Lord Morris, raised pensions. I have to declare an interest as a member of the British Steel pension scheme, so I cannot address his particular issues. If the officials can write to him after this debate, I will arrange for that to happen.
For me this is Groundhog Day. When I joined British Steel in 1980 we were producing 15 million tonnes of steel a year. We had five integrated sites. About 200,000 people worked in the industry. Since then, 30 years have passed. What makes it Groundhog Day is this: the problem in 1980 was fundamentally one of overcapacity, which led to low prices. In the trading year 1979, British Steel lost £309 million. I could not find the figure, but my recollection is that in 1980 it lost £700 million. In today’s money, that is £3 billion to £4 billion.
In those days, new capacity was coming on, largely from Japan, closely followed by South Korea. Japan installed 100 million tonnes of capacity. It was low-cost capacity; it was all on deep water. It was all highly productive; it was new technology. It was all continuous casting and of great quality. To our shame, most of the steel that went into the pipelines in the North Sea to bring ashore oil and gas was made in Japan and not by British mills. Much of the steel going into the Ford Motor Company at the time had to come from abroad because we could not meet the quality requirements.
Today, we have a similar problem but from a different country: it is of course China. Its steel production capacity is hard to measure, but it is probably around 1 billion tonnes. If we put that against our total UK production in 2016 of a little over 7 million tonnes, it sets our industry in some kind of context. Chinese steel production has increased sixfold since 2000.
As China has exported into other Asian markets so they, too, have exported in return into the western European markets. In a high fixed-cost industry such as steel, the temptation to marginally price is hard to resist, so we have had extremely low prices for a long time.
As has been pointed out by noble Lords this evening, particularly the noble Lord, Lord Bhattacharyya, we had an extraordinary inheritance. The Industrial Revolution started here. The iron and steel industry started here. There was the open hearth process and continuous casting. We invented stainless steel. British-made steel products are seen in iconic buildings and structures all over the world.
Despite that, since the war, with the uncertainties of nationalisation and denationalisation, we suffered from persistently low levels of investment. Where we did invest, I am afraid that the involvement of politicians was not a happy one. We would not have had Ravenscraig here and Llanwern there had it not been for, with hindsight, mad political interference. At Redcar, we had a one-blast-furnace operation. That is not a viable strategy for the long run. The whole concept of producing on Teesside low-value, semi-finished slabs from iron ore and coal coming in from Australia and Brazil, and then re-exporting those slabs back to Thailand, was hardly a strategic decision of great genius. Even today—if we are honest—although the configuration with two integrated sites is where we need to be, those two sites are not ideal. It is not ideal to have coating plants at Shotton and hot rolled coil being made at Port Talbot. It is not ideal to be making blooms and billets at Scunthorpe and to have the finishing section mills on Teesside. While those plants are not ideal, they can be competitive, but we must be realistic that they will not be as competitive as those fully integrated plants that we see on deep water, with modern equipment and modern investment, in other parts of the world.
Nevertheless, we have reached the point where we have two integrated plants in the UK and not five, which is a huge improvement. We also have a very important scrap-based electric arc business in Sheffield and south Wales. Again, given the right investment, these should be competitive given the availability of scrap. We export 7 million tonnes of scrap a year from this country. Surely we can do better by melting more of that in the UK.
The overall numbers for the UK are grounds for encouragement. UK steel demand is around 10 million tonnes a year, which is roughly in line with our capacity. If we add in the steel of imported manufactures, we see that we consume 22 million tonnes a year. If some of that manufacturing can be reshored to this country over the next five to 10 years, then that gives even bigger opportunities for our domestic producers.
Much has changed since this House was last formally updated in April 2016. As noble Lords mentioned, Greybull Capital acquired Tata’s long products business based in Scunthorpe. In September, the two Scottish plate mills, at Dalzell and Clydebridge, re-opened under Liberty Steel’s ownership, following their acquisition from Tata. More recently, Liberty Steel announced it had agreed a sale and purchase agreement with Tata for the speciality steel business in South Yorkshire. At the same time, Tata Steel Europe remains in negotiations with regard to a possible joint venture with thyssenkrupp. So much is going on in the ownership of the steel industry but in a sense having a clear separation of special steels, long products and strip mill products is no bad thing. They are three very different businesses with different markets and different manufacturing processes.
I also acknowledge the efficiency savings and productivity improvements realised at Port Talbot by the Tata workforce. The noble Lord, Lord Bhattacharyya, and others referred to the flexibility and spirit of the workforce both at Port Talbot and in Scunthorpe.
I then turn briefly to the actions the Government have taken. We are compensating energy-intensive manufacturers such as steel for the costs of renewables and climate change policy. To date, we have paid over £151 million to the steel sector. We secured flexibility over the implementation of EU emissions regulations. The Government introduced revised steel procurement guidance, as has already been noted, to ensure that UK steel producers have the best possible chances of competing for public sector work. We provided a procurement pipeline for steel to ensure that the UK sector has every opportunity to prepare to meet this future demand. We also successfully pressed for the introduction of trade defence instruments to protect UK steel producers from unfair steel dumping. There are now 41 in place in the EU. Yet in my experience of anti-dumping, it is always too little, too late—it always takes too long because the damage is done before the actions can take place.
I have not got much time and it is late in the evening. We are open to a sector deal for steel. Anyone who thinks that steel is a low priority has misread the runes. We put it to the UK steel industry that it is in its hands to come forward with a proposal for a sector deal. Of course, it is entirely up to the industry what is in that sector deal but I would certainly expect it to focus on: technology; investment, clearly; training; how we can go further up the value chain; how we can look at new products—the new rails at Scunthorpe were mentioned and that is exactly the kind of thing we should do—lower energy uses; and how we can make better use of the surplus scrap available in the UK.
There can never be a guarantee about the future of any industry at a time of such extraordinary technological disruption as is going on in our markets. However, this industry in the UK has been resized. I must believe that there is a long and profitable future for the UK steel industry. We are committed to a strong manufacturing base in this country and steel is a vital part of a long-term supply chain for many industries. You cannot build a manufacturing base buying on a spot basis from overseas. That is not a viable way of securing that. So I am optimistic about the future. It has been a long and traumatic journey and struggle for this industry. Many lives have been ruined along the way because of poor strategic decisions taken in the past. However, now the structure of the steel industry and the commitment of companies such as Tata to it give me great hope for the future.