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Mr Alister Jack (Dumfries and Galloway) (Con)
Mike Amesbury (Weaver Vale) (Lab)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
We are fully focused on making the UK’s exit from the EU and our new trading relationship with the world a success. We have set out proposals for an ambitious future relationship with the EU that minimises regulatory barriers for goods and services. Our partnership should be underpinned by high standards, a practical approach to regulation, trust in one another’s institutions and a shared spirit of co-operation.
Mr Walker
Regulatory equivalence is about pursuing the same objectives, and as the Prime Minister outlined in her Florence speech, that could mean achieving the same goals by the same means or achieving the same goals by different means. It does not mean that we have to harmonise our rules with those of the EU. It is not a binary choice; we are proposing a bespoke, bold and ambitious free trade agreement between the UK and the EU, and we want to secure trade with Europe and with the wider world.
Mike Amesbury
By more than 2:1, members of the Institute of Directors would prefer the UK to maintain regulatory alignment with the single market rules for goods and services, rather than actively seeking to diverge after Brexit. Is that the Government’s aim as well?
Mr Walker
The Government have been talking to a wide range of industry groups and representative bodies of business, and we recognise that there are benefits in some areas of maintaining regulatory alignment and ensuring that we have the most frictionless access to European markets. Of course we are entering the negotiations on the future partnership, and we want to take the best opportunities to trade with Europe and the wider world.
Mr Philip Hollobone (Kettering) (Con)
Is it true that Michel Barnier has basically offered us the Canada model, agreement on which could be reached this year, thus negating the need for any transition period?
Stephen Timms (East Ham) (Lab)
The European Union has clearly and firmly set out its views on the options for these negotiations. Ministers so far have signally failed to provide any coherent response because they cannot agree among one another, and the Minister’s answers today underline that—whether the answer is regulatory equivalence or something different, we just do not know. How long will it be before the British Government have a coherent position to set out in these negotiations?
Mr Walker
The Prime Minister has repeatedly set out a coherent position with regard to the future partnership we seek with the European Union. There was the Florence speech. My Secretary of State has been making speeches and the Chancellor has been making speeches, clearly setting out the UK’s objectives for these negotiations, and we look forward to achieving those objectives in the months to come.
Nigel Dodds (Belfast North) (DUP)
The Minister will know that legal text has now been looked at in terms of the progress report in December and that the issue of regulatory alignment came up with that document. Can we be assured that nothing will be put into legal text that prejudices our interpretation—the Government’s interpretation—in relation to regulatory alignment?
Mrs Emma Lewell-Buck (South Shields) (Lab)
The Parliamentary Under-Secretary of State for Exiting the European Union (Suella Fernandes)
The Government conduct an extremely broad range of work on EU exit issues and will continue to do so, which means that all decisions, including those on the EU customs union, are supported by many analyses. Leaving the customs union liberates the UK to establish new and fruitful trade deals with the rest of the world, as well as pursuing a new trading relationship with the EU that retains as frictionless a trade as possible in goods.
Mrs Emma Lewell-Buck
From that answer, it is clear that no assessment has been made. We have had it confirmed again this week that the north-east retail and manufacturing sector will be hardest hit in all scenarios. It is clear—is it not?—that nearly 200,000 workers in my region who work in these sectors are facing grim futures because of this Government’s inability to get their act together.
Suella Fernandes
One advantage—although there are many—of leaving the customs union is that Britain can be a champion for global free trade again for the first time in 40 years. Free trade through mutually beneficial partnerships has historically ushered in productivity, innovation, consumer choice, growth and prosperity—something I hope that the hon. Lady will encourage.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
I very warmly welcome my hon. Friend to her place. It is great to see a ray of sunshine, optimism and positivity from the Front Bench. What a shame that we do not see the same from the Opposition Benches. Is she surprised, as I am, that we are still discussing the customs union? The EU has ruled it out. The Prime Minister has ruled it out. The Leader of the Opposition—if not quite the shadow Secretary of State—has ruled it out. Why are we still talking about it?
Suella Fernandes
My hon. Friend raises a very prescient point. The British people voted to leave the EU in their historic decision in 2016. In doing so, they instructed this Parliament to take us out of the EU customs union. That is exactly what the Prime Minister and this Government are doing.
Nick Smith (Blaenau Gwent) (Lab)
Blaenau Gwent has just been boosted by the arrival of the car company, TVR. Does the Minister agree that we need a customs union with the European Union for such ventures to survive and thrive?
Suella Fernandes
The UK is the second largest market for cars in Europe, so it is clearly in both our interests to continue this partnership between our industries. Is it not encouraging that companies such as Jaguar Land Rover, Nissan, Toyota and McLaren have made significant investment decisions in the UK since the referendum? I am committed, with this Government, to ensuring as frictionless trade as possible, so that we can continue this fruitful arrangement and support this vital sector of our economy.
Tom Brake (Carshalton and Wallington) (LD)
It may be that the Minister is not aware that, in fact, car production went down for the first time since 2009 and that investment in the industry has also gone down by £500 million. When will the Government confirm exactly what their plans are in relation to the customs union, so that companies that manufacture here know that their components can get safely into the United Kingdom and not get stuck in a traffic jam at Calais?
Suella Fernandes
We are seeing a rise in manufacturing and in exports, and UK foreign direct investment is at a record high. The economy is doing very well, and there have been encouraging signs and votes of confidence in the UK economy since Brexit. As we enter the next phase of the negotiations, we want to ensure that the automotive sector benefits from any arrangement. That will be a priority for the Government.
Peter Grant (Glenrothes) (SNP)
We now know—no thanks to the Government—that all the analysis that the Government have done to date shows that Brexit is bad news. We know that the Prime Minister was shown that analysis a few days ago, and we know that the first thing she did was to jump on a plane to China. Will the Minister confirm the accuracy of the reports yesterday that the Government’s analysis also shows that their obsession with cutting EU migration will be seriously bad for the British economy?
Suella Fernandes
We are in the middle of the negotiations, but when it comes to migration, it is clear that the UK will be committed to designing its own immigration policy, which is determined by skills, talent and brains. That is what will drive our economy forward, and that is what will create jobs and growth.
Peter Grant
My question was whether yesterday’s report was correct. I take it from the Minister’s attempt to dodge the question that that report, like the previous ones, was entirely accurate. Given that the Government’s own analysis shows that leaving the European Union is bad news, leaving the customs union is bad news and leaving the single market is bad news—and now that we know that cutting immigration from the European Union is bad news—do the Government have any plans, at any time before Brexit day, to adopt a strategy that is based on facts and evidence, rather than on blind ideology?
Suella Fernandes
The document to which the hon. Gentleman refers is not Government policy. It comes with significant caveats and is limited in nature. It is clear that there are significant benefits from our departure from the EU and the customs union. First, we have the chance to pursue our independent global trade policy and foster growing economic ties with fast-growing economies for the first time in 40 years. Secondly, we will be free from the common external tariff, which could lead to a drop in consumer prices for British citizens. Lastly, we have the golden opportunity to build a new customs arrangement with the EU that is world-leading and enables prosperity, jobs and growth.
Antoinette Sandbach (Eddisbury) (Con)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Steve Baker)
Across the Government, we are planning for all outcomes, including the unlikely scenario in which no mutually satisfactory agreement can be reached. Given the success that we have had in securing an agreement in the first phase of negotiations, we are confident that we will go on to reach a swift agreement on an implementation period and a mutually beneficial future partnership with the EU. We approach the negotiations anticipating success and a good deal for both the UK and the EU.
Antoinette Sandbach
Given DExEU’s propensity to rubbish the Government’s own research, will the Minister commission the independent Office for Budget Responsibility to model the budgetary and economic impacts of the four departure options—World Trade Organisation rules, a Canada-style deal, the Government’s free trade agreement proposal and joining the European Free Trade Association—and then release this modelling to Parliament?
Mr Baker
As my hon. Friend knows, the OBR’s responsibilities are set out in legislation, and we do not have any plans to change them. I am glad that she mentions EFTA. A number of colleagues have raised EFTA with me. It would be important to have a further debate on EFTA if she would like to table one, because I would like to hear from colleagues what problems they believe that EFTA would solve in relation to our relations with the European Union, given that Swiss bilaterals have been ruled out and we are looking for our own bilateral relationships. We do not propose to join the European Economic Area, which would be a bad deal for the UK.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I know that the Secretary of State is an early riser, but did any of the other Ministers listen to the former Chancellor, George Osborne, on Radio 4 this morning? What are they going to say about what he says about the fact that this country, especially the manufacturing sector, is doomed outside the European Union?
Mr Baker
I do not accept the premise of the hon. Gentleman’s question. Unfortunately, I did not have the opportunity to listen to the former Chancellor on Radio 4 this morning. [Interruption.] The Secretary of State says that he did. I am grateful to the hon. Gentleman for reminding me fondly of the time that I did listen to the former Chancellor on Radio 4, before I went on after him at the height of the campaign.
Nigel Huddleston (Mid Worcestershire) (Con)
Does the Minister agree that it is important that we keep our skies as open as possible post Brexit? Can he provide any reassurance that he is engaging with the aviation sector to make sure that this industry can continue to thrive under any and all post-Brexit scenarios?
Jenny Chapman (Darlington) (Lab)
The BuzzFeed papers tell us that the regions most damaged by a no-deal Brexit would be the west midlands, Northern Ireland, and the north-east. The people of these regions deserve better. Will the Minister take the opportunity to make it clear to certain colleagues sitting behind him that they are wrong and irresponsible to be talking up or wishing for a no-deal outcome?
Mr Baker
To answer the hon. Lady very directly on her last point, as I said earlier, it is our policy to seek a mutually beneficial, deep and special partnership with the European Union, embracing an economic partnership, among other things, and we are optimistic about achieving that outcome.
Jenny Chapman
The Minister will not say it, but I will: they are wrong and they are irresponsible to be doing so.
As well as certain regions being hit hardest, certain sectors are threatened severely by a no-deal Brexit. For example, the food and drink industry exported £9.8 billion-worth of goods to the EU last year. Once and for all, will the Minister rule out a no-deal outcome, commit to a transition on current terms and give industry the certainty it needs?
Mr Baker
I find the hon. Lady’s question peculiar. She seems to be suggesting that I would adopt something other than Government policy. It is the Government’s policy to secure an implementation period on current terms; it is the Government’s policy to secure an economic partnership; and of course it is the Government’s policy to be responsible and prepare to exit the European Union under whatever circumstances may prove necessary.
Emma Dent Coad (Kensington) (Lab)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
As the Prime Minister made clear in her open letter to EU citizens, we highly value the contributions they make to the UK’s economic, social and cultural fabric. Safeguarding the rights of EU citizens living in the UK and UK nationals living in the EU was a first priority for negotiations. This is a commitment we have delivered on. The agreement reached in December in the joint report gives those covered certainty not only about residency but healthcare, pensions and other benefits.
Emma Dent Coad
The 2011 census stated that 20% of Kensington and Chelsea’s population were EU nationals. In Kensington, we have three schools for Spanish and for French students. Families are living in fear of the uncertainty. With the discussions on EU citizens’ rights opening next week, will the Minister reassure my existing EU constituents that they will retain all their rights once we leave the European Union?
Mr Walker
The hon. Lady should welcome the fact that we reached in the joint report agreement on the wide range of rights that I just described, and that does provide certainty. We want to work with colleagues at the Home Office to ensure there is a streamlined process for the new settled status that will come in under UK law, to secure those rights in the long term.
Kate Green (Stretford and Urmston) (Lab)
Is the Minister not concerned that the Prime Minister’s reported comments about the more limited access to rights that those arriving during transition will have may have a chilling effect on drawing the skills and talent to the UK that his colleague spoke of a minute ago, to meet the labour market gaps that we urgently need to fill in many sectors?
Mr Walker
We have been clear that during the implementation period, EU citizens should be able to continue to visit, live and work in the UK as they do now, and we will use that period to prepare for the future partnership. There will be a new registration scheme for EU nationals in preparation for our future immigration system. The citizens’ rights agreement reached in December, set out in the joint report, gives certainty about the rights of EU citizens already here going forward, but the agreement does not cover those arriving after we leave the EU.
Sir Christopher Chope
Can my hon. Friend confirm that during the implementation period, all foreigners, including those in the European Union, will be treated equally in having access to our country?
Mr Walker
We will remain an open and tolerant country that recognises the valuable contribution of those with the skills and expertise to make our society better, but we will also control the overall number of migrants who come to the UK. As we leave the EU, we are seeking to form new ambitious trade deals around the world with trading partners anew. We will have control of our borders, and free movement as it has worked during our EU membership will end when we leave the EU.
Chris Bryant (Rhondda) (Lab)
The Secretary of State for Exiting the European Union (Mr David Davis)
In Florence five months ago, the Prime Minister set out a proposal for the implementation period under current terms, utilising the existing structure of European Union rules and regulations, including the European Court, for that time-limited period. That is necessary so that there is only one set of changes for businesses and people and minimum disruption. We are also clear that our priority will be getting the right arrangements for Britain’s relationship with the EU in the long term, out of the single market, out of the customs union and without direct jurisdiction of the European Court.
Chris Bryant
So the European Court will be deciding on issues in this country, and if British businesses want to continue doing trade with the rest of Europe, they will have to abide by all the rules of the single market, and British citizens will have fewer rights in the rest of Europe than they have now. In essence, the Government are turning us from being a proud partner with European colleagues into a vassal state. Will the Secretary of State propose that we hand them over some Danegeld as well?
Mr David Jones (Clwyd West) (Con)
Mr Davis
As my right hon. Friend well knows, we are going into negotiation on this matter almost as we speak. During that period, my primary concern is any new laws coming into effect over which we have had no say, and we will aim to set up arrangements to ensure that they do not harm the United Kingdom.
Paul Blomfield (Sheffield Central) (Lab)
After the Prime Minister’s Florence speech, the Under-Secretary of State for Exiting the European Union, the hon. Member for Fareham (Suella Fernandes), who I welcome to the Front Bench, co-ordinated a letter from the European Research Group describing the Government’s policy on the transitional period as staying in the EU “by stealth”. She has not yet replied to my letter of 14 January, offering her the opportunity to retract that view. Does the Secretary of State agree that it is these divisions at the heart of the Government that jeopardise our negotiations? Will he confirm that all his Ministers support Government policy on the transition?
Mark Pawsey (Rugby) (Con)
The Parliamentary Under-Secretary of State for Exiting the European Union (Suella Fernandes)
Ministers from across the Government have carried out extensive engagement on EU exit, in both the UK and the EU, with businesses and industry bodies from all sectors of the economy. Those include international businesses with a footprint in the UK and British businesses with interests in the EU. The Prime Minister chairs a quarterly business advisory council to hear directly from senior business leaders on the key issues across EU exit and the wider economy.
Mark Pawsey
Coming from Coventry, which is the home of the UK motor industry, I have been delighted by the industry’s resurgence in recent years. Last year, however, it did see a fall in output of 3%, which was attributed by the Society of Motor Manufacturers and Traders to the need for clarity on Brexit transition. Given the importance of car manufacturing and its supply chain to the west midlands economy, what reassurance has the Minister been able to give the industry about the future relationship with our European partners?
Suella Fernandes
I, too, am delighted about the resurgence to which my hon. Friend refers. It is precisely because of such requests and the result of such engagement with businesses that the Government’s proposals for an implementation period—promising the clarity needed to plan ahead—have been welcomed by various sectors of our economy. We and the EU want to agree the detail of the implementation by the end of March, making good as swiftly as possible on our promise of certainty. We are seeking a bold and ambitious economic partnership with the EU, with the greatest possible tariff and barrier-free trade arrangement with our European neighbours.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Businesses that I speak to in the north-east tell me of international investments that have been put on hold while companies try to work out what kind of Brexit this Government are actually going for. They do not want to make that public, so will the Minister tell me how she is engaging with international business to assess the impact of that on our economy, and indeed—because I forget what the story is today—whether such an assessment is going on?
Suella Fernandes
I hope the hon. Lady listened to the Secretary of State’s very detailed presentation and speech on Friday in which he set out the terms of an implementation period and addressed exactly the issues that she raises now. The implementation period will provide a bridge and a platform for businesses to enable them to plan for the future, to give them the time that they need, and to enable them to plan on that basis for a prosperous future outside.
Vicky Ford (Chelmsford) (Con)
The services sector is of course the largest part of the British economy, and while the single market in services may not be complete, it is the deepest market in services anywhere on the globe. Will the Minister confirm that it is our intention that the full services sector will be included in our deep and special partnership?
Suella Fernandes
My hon. Friend brings to the House her experience of the European Parliament, which we all value. As 80% of the UK economy is services-based, it is absolutely vital that we incorporate provisions relating to services in any new arrangement with the EU.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
I was astonished to read in yesterday’s National Audit Office report on the equipment plan that the Ministry of Defence’s inability to hedge effectively against sterling fluctuations could cost up to £5 billion. Will the Minister advise us what DExEU is doing to support other Departments that are struggling with Brexit as they engage with the international community?
Suella Fernandes
As I have said, there is considerable engagement with the international business community. The Prime Minister herself chairs a business advisory council to hear directly from senior business leaders on key issues. On cross-departmental engagement, there is considerable work and engagement across all Whitehall Departments to prepare for all outcomes from these negotiations.
Colin Clark (Gordon) (Con)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Steve Baker)
We have been working closely with the Secretary of State for Environment, Food and Rural Affairs on support for farmers. The Government will provide the same cash total in funds for farm support until the end of the Parliament. We of course continue to work closely with a range of stakeholders across the farming industry and beyond, as well as with the devolved Administrations.
Colin Clark
EU rules on farming have been “one size fits all”. Does my hon. Friend agree that after Brexit we will be able to create farming policy, regulations and frameworks that work better for all parts of the United Kingdom?
Mr Baker
Yes. Once we have left the EU, we will be able to redesign our agriculture policy so that farmers are competitive, productive and profitable, and our environment is protected for future generations. My right hon. Friend the Environment Secretary eloquently sets out the flaws in the common agricultural policy and how the UK Government can do so much better outside the EU.
Jim Shannon (Strangford) (DUP)
Will the Minister further outline how he intends to secure subsidies for the average UK farm of 160 acres—such farms are classified as small farms—and how does he believe that small farmers will be able to survive post Brexit?
Derek Thomas (St Ives) (Con)
The Minister referred to us leaving the common agricultural policy. Can he clarify when farmers will no longer be subject to it, and when our fishing industry will no longer be subject to the common fisheries policy? Will it be when we leave the EU next March, or is it more likely to be at the end of a transition period?
Mr Baker
My hon. Friend raises an important point. I know from meeting fishermen and women that in some cases they are very impatient indeed to leave the common fisheries policy—rightly so. It is a matter for negotiations, and we hope and expect to achieve clarity very soon.
Ben Lake (Ceredigion) (PC)
Securing favourable trading conditions will be just as important for the future of our farmers, including those who reflect distinct characteristics of the industry across the UK. Will the Minister confirm what role the devolved Administrations will play in formulating our position?
Mr Baker
They will play an important role, and we will continue to engage with the hon. Gentleman. I am very conscious of agricultural tariffs—the common external tariff and tariffs around the world. It is in all our interests to ensure tariff-free access to and from European markets as we reach our deep and special partnership.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
Bob Blackman (Harrow East) (Con)
The Parliamentary Under-Secretary of State for Exiting the European Union (Suella Fernandes)
Remaining in the customs union would prevent the UK from striking new free trade deals and setting new tariffs on goods from countries outside the EU. By leaving the customs union and building a new customs arrangement with the EU, we will be able to forge new trade arrangements with our partners around the world while ensuring that trade in goods between the UK and the EU is as frictionless as possible.
Mr Clarke
One of the most exciting opportunities that will become available when we leave the customs union is that of establishing a free port at Teesport, as the Secretary of State and the Minister saw for themselves last week. Will the Minister confirm that the Government will give serious consideration to this excellent idea, which will put rocket boosters under my local economy?
Suella Fernandes
I thank my hon. Friend and the Mayor of Tees Valley for welcoming the Secretary of State and me to Teesport last Friday. My hon. Friend has been an indefatigable voice for his constituents since his election to Parliament last year. It was a pleasure to meet some of the 100 business representatives who were present when the Secretary of State made his speech last Friday. Teesport is an opportunity for global Britain, and a gateway to the world—an example of our forward-thinking, independent trade policy. When we leave the EU customs union, we will have the opportunity to create our own trading policy to benefit Teesport and other areas. I sincerely hope that the free port proposal on the table will be one of the options explored.
Bob Blackman
As my hon. Friend will know well, in Harrow, we have a thriving Indian diaspora, whose members are desperate to encourage trade between the UK and India. Will she ensure that, during the negotiations, they will not be held back from improving trade between India and the UK by artificial trade barriers between those countries?
Suella Fernandes
I pay tribute to my hon. Friend for his lifelong advocacy for the British Asian community, not least in the 1990s when he encouraged my mother to stand as a local councillor—you could say, Mr Speaker, that my hon. Friend is to blame for my being here today.
Leaving the EU offers us the opportunity to forge a new role for ourselves in the world. The Prime Minister’s first bilateral visit outside Europe was to India, which is very telling. It was encouraging that the Indian Finance Minister visited the UK for the year of culture launch in February last year. I am optimistic about the opportunities that leaving the customs union and the EU presents for UK-India relations.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Her Majesty’s Revenue and Customs is launching a new customs declaration service, which is due to go live in January 2019. Has it been designed to deal with the fourfold increase in customs declarations that will be required post Brexit?
Suella Fernandes
The customs infrastructure is going through the upgrade that the hon. Gentleman mentions, and that is on track and on target. I am looking forward to the opportunity to build on our customs regimes so that we have a customs and excise framework that sets the standard for the world.
Ged Killen (Rutherglen and Hamilton West) (Lab/Co-op)
The Secretary of State for Exiting the European Union (Mr David Davis)
It is not for the UK to accept or reject the European Union’s directives. This is its mandate for negotiations, and we have our own set of objectives. In my speech last Friday, I set out our position on what we would like to see in the implementation period, and we look forward to continuing the discussion with our European Union counterparts. Let me be clear: that work has not stopped. Following the declaration of insufficient progress in December, officials have continued technical discussions on separation issues, Northern Ireland and governance arrangements. I will shortly meet Mr Barnier to continue to the process.
Ged Killen
For workers who arrive during the transition period under existing freedom of movement rules, what arrangements will the Government make to ensure that workers who are crucial to industries in Scotland, such as fisheries, social care and hospitality, and who do not meet tier 2 visa requirements, are not simply sent home at the end of the transition period?
Mr Davis
We will be discussing in some detail with the European Union the treatment of people after our actual departure from the Union. The hon. Gentleman must take it as read, as I have said several times, that they will be treated properly, that we will not do anything to undermine our economy, and that we will do everything possible to ensure that the industries he talked about are supported.
Joanna Cherry (Edinburgh South West) (SNP)
The Secretary of State and his junior Ministers keep saying that they want a bespoke deal. When are they going to set out what that actually means? When are they going to tell us what the elements of that bespoke deal will be, and when will they cost the bespoke deal’s implications for the economies of these islands? When?
Mr Davis
There can be few policies that have been talked about more by Prime Ministers than this one. There have been two major speeches—Lancaster House and Florence—and two White Papers, and something like 15 Bills will be going through this House over the course of the Parliament, so the House will not be unaware of all aspects of the bespoke deal. We have also made very plain what we see as different in what we are seeking from other deals. For example, we are aiming for the free trade agreement to be comprehensive and tariff-free. On the customs agreement, we are aiming for the most frictionless one possible—we have a variety of proposals that we talked about in front of the Select Committee on that—and the House will be kept fully informed. On the costing, as we have said, I think on Monday, we will of course release all the information necessary once it is no longer sensitive to the negotiations, but before the House makes a decision.
Hannah Bardell (Livingston) (SNP)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
I have seen the report that the question refers to, and I know that the Secretary of State for Scotland discusses the Scottish Government’s priorities with them regularly at the Joint Ministerial Committee (EU Negotiations). There is considerable common ground between us on what we want to get out of the process, such as making sure that Scottish universities and business have access to the best of European talent, but it is disappointing that the report does not take the threat of a second independence referendum off the table, as doing so would be in the interests of Scotland.
Hannah Bardell
The Minister will be aware that the figures in “Scotland’s Place in Europe” very much mirror those that were leaked earlier this week. In Scotland, the difference is that the Scottish National party Government do proper analysis and publish it. The analysis says that there will be a hit to GDP of 8.5% and that £2,300 a year will be lost for each person in Scotland. How many jobs have to be lost or under threat before this Government realise that they must back membership of the single market and the customs union?
Luke Graham (Ochil and South Perthshire) (Con)
Last week, the Scotch Whisky Association expressed concerns at the SNP policy of keeping Scotland in the single market. What assurances can my hon. Friend give to companies and people in my constituency that we are trying to get access to the single market, but that we will also have the right to do deals elsewhere in the world so that we take forward Scotland’s economy, rather than holding it back like Opposition Members?
Mr Walker
My hon. Friend makes an excellent point in speaking up for his constituents and the businesses within it. I have met the Scotch Whisky Association on a number of occasions to discuss the global opportunities for Scotch whisky. We must ensure that we have the flexibility to take them.
Justin Madders (Ellesmere Port and Neston) (Lab)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Steve Baker)
The Government have been conducting a broad overall programme of work on EU exit issues and will continue to do so. That means that all decisions, including those relating to the customs union and the automotive sector, are supported by a range of analytical work. We want our deep and special partnership with the EU to include the automotive industry. We want to ensure that trade is as free and frictionless as possible, with minimum disruption to the industry. The UK remains the second-largest market for cars in Europe, so it is in both our interests to continue the partnership between our industries. I know that the Vauxhall car plant in the hon. Gentleman’s constituency is extremely important, and I look forward to visiting it soon.
Justin Madders
As the Minister knows, the Vauxhall plant in my constituency is fighting for its survival. Vauxhall’s parent company, PSA, has said that it is not prepared to make any long-term investment decisions until there is clarity about the final trading arrangements, and, having heard what Ministers have said this morning, I am not sure we will get that any time soon. Can the Minister at least guarantee that the trading arrangements for the automotive sector will be no less favourable than they are now?
Mr Baker
The Government understand that Vauxhall’s decision was a commercial one, taken as a result of challenging European market conditions. Vauxhall has made it clear that the decision was made to safeguard the competitiveness of the plant. The Government maintain close ongoing dialogue with Vauxhall and its parent group, PSA, as they make their joint plans for the future, including potential investments. Ministers have met senior management representatives of PSA and Vauxhall regularly throughout the process, and will continue to do so.
I hope and expect that as we progress through our negotiations, agree on an implementation period and then move on to our economic partnership, the hon. Gentleman will find that an accelerating degree of certainty emerges.
Martin Vickers (Cleethorpes) (Con)
The port of Immingham in my constituency is vital to the automotive sector. Further to the answer given by the Under-Secretary of State for Exiting the European Union, the hon. Member for Fareham (Suella Fernandes), about Teesport and free ports, may I ask whether the Minister is prepared to meet me to discuss the possibility of Immingham’s becoming a free port post Brexit?
Mr Baker
I am grateful to my hon. Friend for that suggestion. Of course I will meet him and other colleagues to discuss it, but I should add that as this conversation has proceeded, certain misgivings have been expressed about free ports. We must ensure that any free port proposal is capable of giving the country the security that it needs.
Afzal Khan (Manchester, Gorton) (Lab)
Paula Sherriff (Dewsbury) (Lab)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Steve Baker)
The “Right by Right” memorandum clarifies the way in which human rights will continue to be protected in domestic law after the UK has exited the EU. Under both the European Union (Withdrawal) Bill and existing domestic law, all substantive rights reaffirmed in the charter of fundamental rights will continue to be protected after exit. The Government’s assessment is that, in itself, not incorporating the charter in UK law should not affect the substantive rights from which people in the UK already benefit.
Afzal Khan
The paper leaked to BuzzFeed reportedly suggests that
“deregulating in areas such as the environment, product standards, and employment law”
could provide an opportunity for the UK. Is that part of the Government’s economic strategy?
Paula Sherriff
The Brexit Secretary has labelled employment regulations as “crippling”, the Foreign Secretary has described them as “back-breaking”, and the International Trade Secretary has said that rules on maximum working hours are a “burden”. Will the Minister tell us why the Government are so readily prepared to undermine the promise to enhance workers’ rights as we leave the EU?
Matthew Pennycook (Greenwich and Woolwich) (Lab)
During our consideration of the European Union (Withdrawal) Bill in Committee, concerns were repeatedly raised that critical environmental rights and protections could be cast aside as we exit the EU. If the Government are serious about raising, not lowering, those rights and protections after Brexit, why have they so far failed to introduce an ambitious new environment Bill, but are instead, as we now know from the leaked papers, commissioning analysis suggesting that Brexit could present an opportunity to deregulate in such areas?
Mr Baker
The purpose of the European Union (Withdrawal) Bill is to preserve the effect of EU law on the day after exit day, so far as that is possible. Its purpose is to provide certainty, continuity and control rather than policy changes. The Secretary of State for Environment, Food and Rural Affairs has laid out his policy clearly, and I look forward to his presenting a Bill in due course.
Sir Desmond Swayne (New Forest West) (Con)
The Secretary of State for Exiting the European Union (Mr David Davis)
As I have said before, the duration of the implementation period should be in the region of two years, and the Commission’s position indicates a period of similar length: so far it has talked about 21 months. The aim on both sides is to give individuals, businesses and Governments time to plan and initiate the changes that must be made to allow a smooth and orderly transition, and to secure the best possible outcome for the United Kingdom.
Mr Speaker
Unlike the question from the right hon. Member for New Forest West (Sir Desmond Swayne), which was commendably pithy—and again I exhort him to issue his textbook for the benefit of all colleagues.
Andy Slaughter (Hammersmith) (Lab)
I will do my best, Mr Speaker.
The EU has made it clear that EU citizens coming to the UK during the transition period should be eligible for settled status; the Prime Minister says they will not be eligible. Is that a red line, or are the Government willing to compromise on that? I thought nothing was agreed until everything was agreed.
Mr Davis
The hon. Gentleman is right that nothing is agreed until everything is agreed, but in the joint report that we concluded and got agreement on in December the EU agreed that the transition date, or end date for ongoing permanent residence rights—not possibilities, but rights—will be March 2019.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The Secretary of State for Exiting the European Union (Mr David Davis)
At the General Affairs Council on Monday the European Council agreed its negotiating directives on the implementation period. Now that the Commission has a clear negotiating mandate we hope to move quickly to begin detailed discussions on the implementation period. Given the alignment in our positions we are confident we can reach political agreement by March. There remain a number of areas that we now need to discuss with the EU to ensure the period operates smoothly. We look forward to progressing substantive discussions.
Mr McFadden
When it came to the divorce bill, after a lot of huffing and puffing and wasted time the Government simply signed on the dotted line. What will be different in the transition period we are negotiating compared with the EU guidelines issued this week?
Mr Davis
As to the right hon. Gentleman’s opening remark, as he is an intelligent and well-informed person it is amazing that he does not differentiate between a £100 billion demand and a £35 billion outcome; that seems to have been a somewhat useful exercise by the Government.
As for the next stage, there is a negotiation to be undertaken. There is a variety of important areas, but the primary area for me is the question of our right to sign trade deals during the implementation period so we can bring them into force immediately after we leave. That is a massive advantage for the United Kingdom to have.
Thangam Debbonaire (Bristol West) (Lab)
Businesses in my constituency tell me that continued membership of the single market and customs union during the transition period will help them safeguard jobs, yet the Prime Minister on 18 December ruled this out. What have the Prime Minister and Secretary of State got against the employment of people in Bristol West?
Mr Davis
With the greatest respect to the hon. Lady, the purpose of the implementation period, which was asked for by just about every business organisation, is to ensure they face stability in the couple of years in the run-up to the conclusion of the future relationship. That is what is going to happen, and that is why companies and the CBI and others welcomed it when we announced it.
Heidi Alexander (Lewisham East) (Lab)
The Secretary of State for Exiting the European Union (Mr David Davis)
As we accelerate the pace of our negotiations with the European Union, I gave a speech last Friday to lay out the terms of the implementation period for our new relationship. This period, a bridge to the future, will be strictly time-limited and see a continuation of existing structures and rules. We will no longer be a member of the EU, which is a legal requirement for signing a new trade treaty, while still ensuring the continuity of our businesses and their trading relationships. We will use this period to ensure we are best placed to grasp the opportunities of Brexit, and that will mean signing new free trade deals with countries around the world.
Heidi Alexander
Given reports today of a huge gap between the UK and the EU on how financial services will be able to be traded freely in a post-Brexit environment, can the Secretary of State set out exactly how he sees this trade operating successfully in future, and exactly how he plans to protect the jobs of the 1.1 million people in the UK who work in this sector?
Mr Davis
First, not only have we not yet engaged in the future relationship negotiation, but the EU has not yet decided its own negotiating guidelines. They will, we expect, be laid down by the March Council on 22 March, and to that end I am talking to every member state that I can in order to ensure that we are at the same place on this issue, rather than having, as the hon. Lady terms it, “a huge gap”. Indeed, at the end of these questions I am going to Luxembourg for specifically that issue.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Steve Baker)
The duration of the implementation period should be around two years. Only when the UK is no longer a member state can we take advantage of our status as an independent trading nation. As such, the UK will negotiate our own free trade agreements but not bring them into effect until after the implementation period has concluded. For this period, we will agree a process for discussing laws that might be brought in, on which we have not had our say. This will give us the means to remedy any issues through dialogue as soon as possible.
Keir Starmer (Holborn and St Pancras) (Lab)
There have been lots of questions this week about the leaked EU exit analysis Whitehall briefings, but this is the first chance I have had to ask the Secretary of State about it directly, so I will choose my words carefully. Can the Secretary of State confirm when he first knew that economic modelling work on Brexit scenarios was being undertaken across Whitehall?
Mr David Davis
Actually, the right hon. and learned Gentleman does not have to ask me; he should read the book. In addressing the Select Committee on 6 December last year, I said in terms:
“We will at some stage—and some of this has been initiated—do the best we can to quantify the effect of different negotiating outcomes as we come up to them. Bear in mind that we have not started phase 2 yet. In particular, we will try to assess, in bigger categories, the effect of various outcomes in financial services and in terms of the overarching manufacturing industry, agriculture and so on. We will do that a little closer to the negotiating timetable.”
I say that because I read with great interest in Hansard and elsewhere this morning various reports about my being traduced, so I thought that I should tell the House that actually I told the Select Committee that this work was under way last December.
Keir Starmer
I think it follows that in December the Secretary of State knew that this modelling was going on. Can he confirm when he was first talked through the economic modelling of the Brexit scenarios by his Department—not when he told others, but when he was talked through it?
Mr Davis
Let me say something on that as well. One of the things that the right hon. and learned Gentleman has been trying to pretend over the course of the last few days is that somehow my colleagues have been critical of the civil servants doing this job, because the outcome is as yet a work in progress—[Interruption.] That is what it is: a work in progress. I say that because we are trying to do something that is incredibly difficult. Every institution that has tried it has failed—[Hon. Members: “Answer the question!”] I am going to answer the question. Every forecast that has been made about the period post-referendum has been wrong. As I told the Select Committee, the Bank of England—the best forecasting organisation in the business—forecast for 2017 a reduction in exports, but there was growth of 8.3%. It also forecast a reduction of 2% in business investment, but it grew by 1.7%. It forecast a reduction in housing investment, flat employment growth, and growth of 0.5% versus 1.1% being the outcome. What has been going on is an attempt to find a way of getting a better outcome. In those terms, I talked to my own Department and the cross-departmental group in early January on this matter.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
This is an important issue. We need to ensure that Europe continues to protect its security and diversity of supply, and that is something on which we will continue to work with colleagues at the Foreign Office and at the Department for Business, Energy and Industrial Strategy.
Lilian Greenwood (Nottingham South) (Lab)
Mr Baker
As a chartered aerospace engineer, this subject is close to my heart. Aviation is crucial to the UK’s economy, and we are committed to getting the best deal possible for the UK. We are focused on securing the right arrangements for the future, so that our aviation and aerospace industries can continue to thrive, that passengers can have opportunity and choice, and that businesses can be profitable. We will seek the right customs arrangements between the UK and the EU to ensure that trade is free and frictionless and that businesses can succeed.
Edward Argar (Charnwood) (Con)
Mr David Davis
I am happy to reassure my hon. Friend on that point. The British people voted to leave the EU—17.5 million of them—in the biggest mandate in our history, and we are committed to respecting the result of the referendum. The Government have undertaken a wide range of ongoing analysis to ensure that we get the best deal for the British people in our EU exit negotiations, but whichever outcome we choose to negotiate for—most of that has been chosen—it will involve leaving the EU and respecting that democratic mandate.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
Mr Davis
No, I do not. As I explained earlier, one of the great difficulties with such forecasts is that they have proved to be entirely wrong at every turn so far, and that is not just the view of a politician. The smartest and most innovative economist in the country is probably the deputy Governor of the Bank of England, Andrew Haldane, who referred to the forecasts as having faced a “Michael Fish” moment—in other words, they must find out why they did not work. A forecast is not evidence to be relied upon. It may be an opinion, but it is not evidence.
Priti Patel (Witham) (Con)
Martyn Day (Linlithgow and East Falkirk) (SNP)
Mr Baker
We have met representatives of the chemicals industry on several occasions. At the most recent meeting, we had constructive conversations that ended positively. We will ensure that we carry through the positions that we have set out, particularly in relation to goods on the market, and we hope to preserve continued registration of chemicals under REACH. We will of course seek to ensure that our deep and special partnership covers the chemicals industry, so that it can flourish after we leave the EU.
Andrea Jenkyns (Morley and Outwood) (Con)
Will the Minister confirm that it is possible for non-EU countries to access only three of the single market’s four freedoms, specifically the free movement of goods, capital and services, without being required to accept freedom of movement, as can be seen with the association agreement countries? Is the Department currently looking at that type of arrangement?
Mr Baker
My hon. Friend makes an extremely good point. Trade continues all around the world on a free and fair basis, particularly under free trade agreements. It is our expectation and intention to secure a free trade agreement of unprecedented scope and ambition, which should meet just the criteria that she sets out.
Hilary Benn (Leeds Central) (Lab)
The Under-Secretary of State for Exiting the European Union, the hon. Member for Worcester (Mr Walker), told the House yesterday that the document that I hope will shortly be handed over to the Exiting the European Union Committee
“does not yet reflect this Government’s policy approaches”—[Official Report, 31 January 2018; Vol. 635, c. 834.]
Given that the Secretary of State has just claimed from the Dispatch Box that everybody knows what the Government’s position is, will the Minister explain why lots of analysis has been done of the options that the Government do not want when apparently no analysis has yet been done of the option that the Government do want?
Mr Baker
As I said when I answered the urgent question on Tuesday, the Government cannot control the timing of leaks. The preliminary analysis is a work in progress that does not yet reflect the Government’s policy. Once the analysis has been carried through, I am sure that it will do.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Poor old George Osborne, not mentioned at all.
Mr Speaker
Order. I was about to say that the hon. Gentleman chunters from a sedentary position, but he almost yells from a sedentary position his expression of sympathy for the former Chancellor of the Exchequer. I am sure the former Chancellor of the Exchequer will bear with stoicism and fortitude not being directly referenced by the representatives of the Treasury Bench.
Mr Jacob Rees-Mogg (North East Somerset) (Con)
Will the Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Wycombe (Mr Baker), confirm that he heard from Charles Grant of the Centre for European Research that officials in the Treasury have deliberately developed a model to show that all options other than staying in the customs union are bad, and that officials intend to use the model to influence policy? If that is correct, does he share my view that it goes against the spirit of the Northcote-Trevelyan reforms that underpin our independent civil service?
Mr Baker
I am sorry to say that my hon. Friend’s account is essentially correct. At the time I considered it implausible because my direct experience is that civil servants are extraordinarily careful to uphold the impartiality of the civil service. We must proceed with great caution in this matter, but I have heard him raise the issue. We need to be very careful not to take this forward in an inappropriate way, but he has reminded me of something that I heard. It would be quite extraordinary if it turned out that such a thing had happened.
Mr Baker
I did not say it was correct. I said that the account that it was put to me is correct. It was put to me, and I considered it an extraordinary allegation—I still consider it an extraordinary allegation. [Interruption.] To be absolutely clear, I said it was correct that the allegation was put to me. I did not in any way seek to confirm the truth of it. What I would say is that we need to proceed with great caution, because it is essential that we continue to uphold and support the impartiality of the civil service.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
Every day hundreds of trucks criss-cross the channel carrying vital components for the British car industry’s highly integrated supply chain. What assessment has the Minister made of the impact on that travel of customs delays, tariffs and extra bureaucracy if we come out of the customs union?
Mr Robin Walker
We are seeking frictionless access to the European market for our automotive industry. We want to make sure that we continue to maintain the benefits of the complex supply chain, which benefits businesses both in the UK and in the EU.
Julian Sturdy (York Outer) (Con)
Can the Minister reassure me that upcoming negotiations with the EU on future migration arrangements will prioritise the needs of UK science and research, allowing the two-way flow of talent that is vital for our top universities, such as York University in my constituency?
Mr Walker
I am happy to give my hon. Friend that reassurance. We have been having some very useful meetings with the science and universities sector to talk about its needs in that respect. We want to ensure that the UK continues to be able to attract the brightest and the best from around Europe and around the world.
Several hon. Members rose—
Mr Speaker
Order. I just want to hear from the two colleagues who have not contributed to these exchanges since 9.34 am, or thereabouts.
Karin Smyth (Bristol South) (Lab)
On 11 January Lord Callanan visited Bristol, and he made a promise to Hartcliffe residents in my constituency that there would be more jobs after Brexit. Had he been briefed by the Department on the true state of the modelling analysis when he made that promise to those people?
Mr David Davis
As I told the House earlier, every forecasting model of the post-referendum performance of the British economy by every major organisation—the banks, Government organisations and, indeed, international organisations—has proven wrong. One of the ways they have been proven wrong is because employment in this country has grown, despite all the forecasts, to record levels today. We will be seeking to do the best we can to ensure that that growth record is maintained.
Mr Speaker
Order. If the hon. Gentleman’s second inquiry is a single sentence of fewer than 20 words, I will hear it. If it isn’t, I won’t.
Bob Blackman
Will my right hon. Friend confirm that we will be able to implement decisions during the transition period and not wait until the end to implement everything that is agreed?
Nic Dakin (Scunthorpe) (Lab)
How are the Government working with the UK steel industry to make sure it prospers post-Brexit?
Mr Davis
We have had meetings. My Department alone has had meetings with 350 companies, not all in steel, but in all the user industries. We have a regular meeting between the Chancellor, the Business Secretary, myself and leading business representative organisations, and of course we talk directly to the individual companies.
Petition
(6 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Kate Green (Stretford and Urmston) (Lab)
I rise to present a petition on behalf of my constituents; it has 356 signatures from people seeking an end to the violence and persecution of the Rohingya Muslim community in Myanmar.
The petitioners request
that the House of Commons urges the UK Government to make representation to the government of Myanmar to cease all violence in Myanmar; further to call for immediate entry aid into Myanmar; further to call for the UK not to supply arms or military training to the military; and further to call on the UK government to do all within its powers to ensure the perpetrators are brought to the international court of justice to be tried for crimes against humanity.
Following is the full text of the petition:
[The petition of residents of Stretford and Urmston,
Declares that urgent action should be taken to stop the violence against Myanmar's Muslim ethnic minority, the Rohingya, including genocide, ethnic cleansing and crimes against humanity; further declares that the petitioners cannot continue to stand by and watch the displacement of hundreds and thousands as a genocide unfolds; further declares that the petitioners note that the Rohingya Muslims are not currently recognised as citizens in Myanmar; and further urges the implementation of the Rakhine commission recommendations chaired by Kofi Annan.
The petitioners therefore request that the House of Commons urges the UK Government to make representation to the government of Myanmar to cease all violence in Myanmar; further to call for immediate entry aid into Myanmar; further to call for the UK not to supply arms or military training to the military; and further to call on the UK government to do all within its powers to ensure the perpetrators are brought to the international court of justice to be tried for crimes against humanity.
And the petitioners remain, etc.]
[P002104]
Capita
(6 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Rachel Reeves (Leeds West) (Lab)
(Urgent Question): To ask the Minister for the Cabinet Office and the Chancellor of the Duchy of Lancaster to make a statement on the risk to public finances and public services as a result of the serious financial concerns at Capita, and on the Government’s contingency plans.
The Parliamentary Secretary, Cabinet Office (Oliver Dowden)
I have been asked to comment on the stock market update issued by Capita plc yesterday and its impact on the delivery of public services. I completely understand that this is a matter of significant interest to many in the House following the recent failure of Carillion, but I can assure Members that this company is in a very different situation. To be clear, this announcement was primarily a balance sheet strengthening exercise, not purely a profit warning. As has been widely reported, the company has significant cash reserves on its balance sheet. We do not believe that Capita is in any way in a comparable position to Carillion. Furthermore, Capita has a very different business model, and if the House will allow me, I will give an update on that.
The issues that led to the insolvency of Carillion will come out in due course, but our current assessment is that they primarily flowed from difficulties in construction contracts, including those overseas. By contrast, Capita is primarily a services business, and 92% of its revenues come from within the UK. As Members would expect, we regularly monitor the financial stability of all our strategic suppliers, including Capita. As I said, we do not believe any of them are in a comparable position to Carillion. The measures Capita has announced are designed to strengthen its balance sheet, reduce its pension deficit and invest in core elements of its business. Arguably, those are exactly the measures that could have prevented Carillion from getting into the difficulties it did. Of course, the impact of these measures has been to reduce dividends and shareholder returns in favour of others, so this is further evidence of shareholders and not the taxpayer taking the burden on this.
As I have said, my officials met senior Capita executives yesterday to discuss the impact of the announcement. We continue to work closely with the company to monitor the execution of its plan and to ensure the continued delivery of public services. We continue to engage with all our strategic suppliers and make continuing assessments of our contingency plans, where necessary. It would not be appropriate for me to comment in any further detail on the specifics of those contingency plans, given their commercial sensitivity. But let me reiterate that the priority of this Government, and the reason why we contract with these companies, is to deliver public services, and our priority is the continued delivery of those services. As Members will have seen in respect of the collapse of Carillion, whatever the shortcomings there public services continue to be delivered, and we are confident that public services will continue to be delivered as provided by Capita.
Rachel Reeves
I thank the Minister for his response, but I cannot help but conclude that the Government’s thinking on this is both muddled and complacent. He has told us that the situations at Capita and Carillion are completely different, but let us look in more detail at the circumstances of both companies: both have debts of more than £1 billion and pensions deficits in the hundreds of millions; both paid out dividends of more than £1 billion in the past five years; both rely on the public purse for half of their contracts; both were audited by KPMG; and both grew through acquisition and not through organic growth. It seems there are more similarities than differences between these two companies.
I join the Minister in welcoming the decision by the new Capita chief executive officer to face up to some of these problems with a rights issue and the suspension of dividends. But can the Minister honestly say that Capita could not come to the same fate that Carillion did just two weeks ago, that people working for Capita have nothing to fear, and that those saving prudently for a pension with Capita can rely on that pension paying out fully on retirement? Can he say to people who rely on Capita to carry out basic public services, such as the electronic tagging of offenders or the billion-pound contract with the NHS, that they can count on it to fulfil its contractual obligations for the life of those contracts?
I have some specific questions about what happens now. What is the contingency planning? Do the Government have representatives in the business, including a Crown representative? How long have the Government been aware of the problems at Capita, and how many contracts have been issued to it since then? What specific risk assessment have the Government made of other large outsourcing firms? Capita is currently bidding for the Defence Fire Risk Management Organisation contract. Will the Government now review that process and reconsider the decision to outsource that and other services they are currently looking to offload?
Will the Government commit to urgently reviewing what looks like a cosy and complicit relationship between the big accountancy firms, the Financial Reporting Council and the corporates they are supposed to be auditing? Is it not now time to split up the big accountancy firms and stop auditors being paid for other consultancy work at the firms they are supposed to be auditing? Capita has announced a fire sale of assets. Will the Minister confirm that Capita is in consultation with the trade unions and its workforce about redundancies and TUPE arrangements in the event that services are sold off?
Jobs, pensions, small businesses and vital public services now depend on these outsourcing companies, but it is time we rethought the whole strategy for public service provision. How many more warning signs do the Government need?
Oliver Dowden
I thank the hon. Lady for her questions. I know she takes a close interest in this important issue. She has raised a large number of questions, and I shall seek to address as many of them as I can. I am pleased that she has acknowledged that Capita is facing up to its problems. Indeed, that creates a contrast with Carillion. She talked about the financial situation of Carillion versus Capita. The chief executive of Capita has faced up to this and strengthened its balance sheet—it has been widely reported that Capita has more than £1 billion on its balance sheet—which shows that the situation is significantly different from that at Carillion and gives us confidence in its ability to continue to deliver services.
The hon. Lady talked about dividends. Again, as a result of this announcement, Capita will not be issuing dividends, which means that money can go back into the pension scheme, allowing £200 million extra to be spent on the company’s core services, rather than dividends. That is evidence that the chief executive has understood the position and is creating a different situation from that which pertained to Carillion. She raised an important point about the major accountancy firms, such as KPMG, involved in this market. The Financial Reporting Council is looking into this matter. We expect to hear from it in about six months, and we will, of course, respond as appropriate. On her question about a Crown representative, I can assure her that there is one in Capita.
I explained in my original answer the role of the Cabinet Office and the Government and the reason that we contract with private companies. The previous Labour Government and other Governments did the same. As has been reported many times, a third of Carillion’s live contracts were agreed by the last Labour Government, a third by the coalition and a third by the current Government. Governments do this to deliver public services. Our role, as a Government, is to ensure the continued delivery of those public services, and the test for me and my colleagues and officials in the Department is this: is the company capable of delivering those public services, and if there is a problem with the company, will those public services continue to be delivered? In respect of Carillion, Members will have seen that all those public services have continued to be delivered, and I am confident that they will continue to be delivered.
Sir Patrick McLoughlin (Derbyshire Dales) (Con)
Will my hon. Friend look at the total contempt that the Labour party has for the private sector today? Will he take the time to publish, in due course, a full list of all the contracts with the private sector that were entered into between 1997 and 2010? That will provide a fine example of how the Labour party of today is nothing like the Labour party of that period when they were in government.
Oliver Dowden
My right hon. Friend makes an important point. This Government, and the previous Government, have engaged with private sector companies for the delivery of public services. Gordon Brown, Labour’s last successful Prime Minister—[Interruption.] Well, he was the last Labour Member to hold the office. May I take the opportunity to correct the record on that, Mr Speaker? Gordon Brown said:
“It simply would not have been possible to build or refurbish such a number of schools and hospitals without using the PFI model.”—[Official Report, 14 November 2007; Vol. 467, c. 665.]
Why is it that we use these contractors? Because we know that they can deliver. Labour’s position is slightly confused. Is it honestly now Labour’s position that we should not use the private sector at all? Is the state going to start building roads again? Where does Labour draw the line? It is complete confusion.
Several hon. Members rose—
Mr Speaker
Order. I am keen to accommodate the substantial interest in this matter, but may I remind the House that there is the business question to follow, and thereafter two debates to take place under the auspices of the Backbench Business Committee? I am anxious that time for those debates should not be artificially truncated, so pithy questions and pithy answers, please, and we will make progress.
Jon Trickett (Hemsworth) (Lab)
I will take your advice, Mr Speaker.
Only two weeks ago, I warned that there was a danger that this whole outsourcing problem would become a set of dominoes, with one falling after another. I believe the House will conclude that the Government’s behaviour in response, and the Minister’s response today, has been marked by indifference to corporate mismanagement, incompetence in office and complacency in the face of a crisis.
The Minister will not tell the House, but I will: Capita was given 154 Government contracts last year. Only last week, Carillion contracts were being re-brokered to Capita, yet the company was clearly in trouble. Share values were plummeting and profit warnings were being issued. There was short selling on the stock market and allegations against Capita of fraud in the handling of public contracts. Yesterday, Capita’s total value on the exchange was barely much more than its total debt. The company is in serious trouble. It is a familiar tale of woe, with strong echoes of Carillion.
We want to know that the Government’s contingency plans in relation to Capita will assure jobs for current employees and protect the pensions of those employees and the pensions of the public sector workers that the company is managing. Will the Minister confirm that the public services that Capita manages will be protected in the event of a corporate disaster? Does the Government’s contingency plan allow for that? What will be the common impact of the problems at Carillion, and now Capita, on the spiralling costs of HS2? Does the Minister agree with the Opposition that not a single penny should be used to prop up badly managed outsourcing companies?
The Government are blind to the corporate greed of these outsourcing companies. Does the Minister agree that it is clear that, as the Under-Secretary of State for Justice, the hon. Member for Bracknell (Dr Lee), said only the other day, the Government should be driven by the “evidence, not dogma” on outsourcing?
Oliver Dowden
I thank the hon. Gentleman for his questions, the core of which was about support for outsourcing companies. He said we should not provide a penny more to prop up badly managed outsourcing companies. Indeed, that is exactly what we did in respect of Carillion. We took the decision that this was a private company and should bear the loss. That is why shareholders in Carillion are unlikely to get more than a few pennies in the pound back for their investment. The private sector has taken the risk, but the job of the Government is to ensure the continued delivery of those public services—to ensure that the dinner ladies get paid, that the hospitals get cleaned, and that the railways continue to be built. That is exactly what we did in respect of Carillion and it is exactly what our contingencies involve for all our strategic suppliers. That is the test for the Government: can we ensure the continued delivery of those public services, and can those public services continue to be delivered?
The hon. Gentleman made a point about pensions. The fact that Capita has embarked on this course of restructuring means that it is effectively choosing to switch resources away from the continued payment of dividends and towards pension funds. That should give pensioners confidence in respect of that pension fund. He also asked about jobs, and again, the restructuring can give confidence about the continuing delivery of those jobs.
I keep coming back to the same point. This is a private company and the interest of the Government is to ensure the continued delivery of those public services, and those public services continue to be delivered. That takes me back to Labour’s position. What Labour seems to be suggesting is that the private sector has no role in public life, and that the level of small and medium-sized businesses working for the Government should be zero. If that is not Labour Members’ position, are they going to tell us where they choose to draw the line? Labour has gone from pumping billions of pounds into private companies for the delivery of public services when Gordon Brown and Tony Blair were Prime Minister, to saying that they should not have a penny. Some clarity would be helpful, because otherwise people may draw the conclusion that there is more than an element of opportunism here.
Bim Afolami (Hitchin and Harpenden) (Con)
Does my hon. Friend agree that it would be irresponsible of this Government to cancel private companies’ contracts simply on the basis of a single profit update?
Oliver Dowden
I thank my hon. Friend for that question, and this is an important point about profit warnings. A profit warning does not mean that a company is imminently going to collapse. A profit warning is a warning to the markets that its results will not be in line with what it had previously thought. If every time that a company issued a profit warning, we as a Government said that we would cease to contract with them, there would be very few companies we could contract with. I will not name leading companies, because I do not want to influence their market value, but I could name a huge list of FTSE 100 companies that routinely issue profit warnings. That does not mean that they are about to disappear.
Deidre Brock (Edinburgh North and Leith) (SNP)
For the second time in two weeks, we are discussing a private firm, responsible for the delivery of vital services, that has caught us cold with a profit warning. Will the Minister now acknowledge that there is a role for a proper public sector? Will the Government now start to roll back on the privatisation agenda that they and the previous Labour Government obsessed about? Can we look forward to a proper plan for taking public services back into the public sector? And will he now acknowledge that public sector employees should deliver public services?
Oliver Dowden
Of course we acknowledge that there is a proper role for the public sector. That is why, for example, this Government committed at the last election to providing £8 billion more for the NHS and a further £6 billion more for the NHS. To go to the core of the hon. Lady’s argument, the reason that successive Governments of all political persuasions have chosen to engage with the private sector for the delivery of services is that those companies have a speciality in it. They have a speciality in delivering such services, so they can deliver them more efficiently. That means there are savings for the taxpayer. If the Scottish National party position is seriously that we should not have any outsourcing, they need to explain to taxpayers why, instead of ploughing those efficiency savings back into our schools and hospitals, they are choosing to use them to pay for less efficient ways of delivering public services.
Paul Masterton (East Renfrewshire) (Con)
Does the Minister agree that the biggest risk to jobs, the biggest risk to pensions and the biggest risk to the delivery of public services would be to withdraw support for Capita on the basis of a reactionary announcement to this profit warning?
Oliver Dowden
Yes, my hon. Friend is absolutely right. If we were to choose overnight, in the face of one profit warning, to stop contracting with that company, there would be a significant risk of the delivery of public services falling over. As I have said, the objective of the Government is the continued delivery of public services, and we have continued to pay the cleaners, continued to have the dinners served and continued to ensure that what the people out there in the country care about, which is that their public services are delivered, continues to be delivered.
Sir Vince Cable (Twickenham) (LD)
Yesterday, the chief executive of Capita said that his organisation was “far too complex”. If the chief executive finds it difficult to understand how his own organisation works, how do the Government monitor the stability and performance of these very large, complex outsourcing companies, such as Capita, Serco, Atos and G4S?
Oliver Dowden
The right hon. Gentleman is absolutely right about what the chief executive said, and that is the reason why that chief executive has embarked on this restructuring; it is precisely because of that complexity. I well remember working with the right hon. Gentleman when I was an adviser in Downing Street and he was Business Secretary in the coalition, so he will have knowledge of that. In fact, a third of the contracts from Carillion were agreed by the coalition. The process that we had then, and that we have continued to strengthen, is twofold. First, we look at the published results of these companies and use third parties to understand them properly and verify them. Secondly, we continue to engage on a one-on-one basis with each of those companies through the Cabinet Office, to understand their financial position in order to ensure that we deliver on what the public expect—the continued delivery of public services.
Rachel Maclean (Redditch) (Con)
The hon. Member for Leeds West (Rachel Reeves), in the Business, Energy and Industrial Strategy Committee, has rightly raised concerns about the failure of regulation from the Financial Reporting Council and KPMG. Does the Minister agree that the answer to this dilemma is not to nationalise those companies, but to make sure that those bodies do their job for the taxpayer and the public service user?
Oliver Dowden
Yes, my hon. Friend is absolutely correct. That is why I, and we as a Government, welcome the fact that the FRC is looking into the four major accountancy firms and seeing what lessons we need to learn. Of course we will respond to that and act appropriately.
John Spellar (Warley) (Lab)
May I bring the Minister back to the core issue, which is that there are two separate but linked problems: the business model and the performance of these companies? Like Carillion, Capita seems to be part of the over-concentrated, over-leveraged, dividend-and-bonus-exploiting culture that relies on the state to bail out failure. Capita incompetence is only too clear from its lamentable performance on the recruitment contract for the armed services. When will this Government finally get a grip?
Oliver Dowden
Behind the right hon. Gentleman’s question is an important point about the diversity of suppliers in this market. We do need to look to diversify further. That is why, for example, we have set a target that 33% of all our Government contracting should be with small and medium-sized enterprises—precisely to ensure that we have that greater diversity. On his point about state bail-out, we have done precisely the opposite of a state bail-out. Carillion went into liquidation, so its shareholders paid the price; because Capita has decided to stop paying dividends, its shareholders are paying the price. Therefore, it is not correct to say that the state is bailing them out in this situation.
Mark Pawsey (Rugby) (Con)
Is not the Government’s role to continue to act as a prudent customer and to continue to monitor their suppliers and the services provided? Right now, the best thing that the Government can do is to allow the company to get on with its plans to restructure its business.
Oliver Dowden
Yes, my hon. Friend is absolutely right. Capita and its executive and shareholders are responsible for Capita. Our responsibility as a Government is for the continued delivery of public services—to make sure that the services on which the public rely continue to be delivered. That is exactly what we did in respect of Carillion, and that is exactly what we are ensuring in relation to contingency plans for all our strategic suppliers, including Capita.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
The Minister said that Capita has a positive record of delivery, but it has been responsible for the £1 billion contract for the delivery of NHS England’s primary care support services since 2015. From the outset, both GPs and local medical committees identified serious issues with the service, including patient safety, GP workload and an effect on GP finances. Although some progress has been made, two and a half years on the service falls far short of what is acceptable, and there is still an urgent need to resolve these issues to give practices and GPs across the country confidence in it. What are the Minister and the Government doing to improve the quality of services provided by Capita?
Oliver Dowden
The Government contract with a company to deliver the individual services, and that is done through each Department. In respect of health services, that is done by the Department of Health, which has to ensure that Capita or any other contractor delivers on what it has promised. The function of the Cabinet Office in this respect is to ensure that overall public services continue to be delivered if there is a failure of the company.
Jeremy Quin (Horsham) (Con)
If I understand the Minister correctly, this company is raising funds from its shareholders in order to strengthen its balance sheet, enhance its pension fund and invest money in its core business. These corporate actions should be welcomed on both sides of the House. Does he share my frustration that the attitude of the Opposition towards the private sector seems to be, “You’re damned if you do and you’re damned if you don’t”?
Oliver Dowden
Yes, my hon. Friend is precisely right. As I said, it would have been helpful if Carillion had considered these actions; perhaps then it would not have got into this position. Members cannot say that somehow the Government are bankrolling these companies, while simultaneously saying that we are allowing the companies to go bust if things go wrong with them and shareholders pay the price. They cannot make those two propositions at once.
Thelma Walker (Colne Valley) (Lab)
Does the Minister agree that, with Carillion and now Capita, the outsourcing of our services has failed? Instead of expensive bail-outs, they should be brought back into public ownership.
Oliver Dowden
The Government have not bailed out a single supplier. It is the shareholders who have paid the price. It is the shareholders of Carillion who will not receive back the money they invested—or, at least, they will receive a very small proportion of the money, depending on the outcome of the liquidation. The hon. Lady’s characterisation of the situation is simply not correct.
Rebecca Pow (Taunton Deane) (Con)
Will the Minister assure the House that the combatant steps that the Government have taken to date regarding Carillion have protected services and ensured that there is minimal disruption to citizens? Will he also assure us that they are taking a similar combatant approach to the Capita situation so that we can protect services such as the NHS admin that is so important to us all?
Oliver Dowden
My hon. Friend is absolutely right. Our focus has been to ensure the continued delivery of public services. In respect of all the key strategic suppliers, we ensure that we are confident that public services will continue to be delivered if there is an interruption to those companies. That is what the House saw in respect of Carillion, and it is exactly what we prepare for all the time with regards to all our strategic suppliers.
Hywel Williams (Arfon) (PC)
This is a very worrying time for Carillion employees in Wales, including the hundreds employed at the call centre in Bangor in my constituency. It is also a very worrying time for disabled people, as all personal independence payment assessments in Wales are carried out by the company. Will the Minister give these people a cast-iron guarantee that their jobs are safe, and that their benefits assessments will be carried out properly and accurately?
Oliver Dowden
I believe that the hon. Gentleman is referring to Capita, not to Carillion.
Oliver Dowden
I assure the hon. Gentleman that it is the priority of the Government—this is what we are working on—to ensure that there will be no interruption to the very important public services that he outlined, no matter what happens to their delivery. That is what happened with Carillion. On the very day it was announced that Carillion was going into liquidation— the announcement was made at 7 o’clock in the morning—we ensured that the people delivering public services could continue to turn up to work and to be paid, and that the public services they delivered could continue to be delivered.
Mr Philip Hollobone (Kettering) (Con)
Before any new Government contracts are awarded to Capita, will the Government seek fresh assurances in respect of existing and future pension obligations to its employees?
Oliver Dowden
I can assure my hon. Friend that in fact officials from my Department met Capita only yesterday. This is an ongoing process of engagement with all the strategic suppliers, asking exactly those sorts of questions to ensure that we have public services delivered. Of course, we are very cognisant of things like the pension fund as well.
Tony Lloyd (Rochdale) (Lab)
One of the real issues that comes through with both Carillion and Capita is that the enormous growth of the conglomerate structure means that these corporations are vulnerable when any part begins to fail, and that of course puts at risk the whole. Where is the risk assessment that the Minister and his team have done that guarantees that we will not see failure in Capita and in other public service providers?
Oliver Dowden
As I said, there is a continuing process of engagement. Over the years, the Government Commercial Function has been beefed up. We have brought in people with expertise who understand these companies and are engaging with them on a day-to-day basis to understand their business models. The purpose of doing that is to understand those business models to ensure that we are confident that we can continue to deliver these public services.
Edward Argar (Charnwood) (Con)
Will my hon. Friend confirm that what matters to this Government is what delivers the best public service outcomes to our constituents in terms of quality and value for money—exactly the same considerations that motivated Labour when, in government, it let so many public service delivery contracts to private companies?
Oliver Dowden
Yes, Labour let lots of contracts to private companies, because it believed that they had the expertise to deliver them, and that is exactly what we are doing. Interestingly, since the surge in the use of PFIs that took place under the Labour Chancellor before last, Mr Gordon Brown, we have tightened up the terms of PFI. We are learning the lessons from some of the excessive PFI contracts that we saw, which had underneath them ludicrous service fees for some of the services provided.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Capita is a significant employer in Huddersfield in its shared transport business. It has a very important role in gas safety for the Health and Safety Executive. It is a very important company. Nobody on the Labour Benches wants to see it fail; like all businesses, we want to it to succeed. There is nothing wrong with a public-private partnership: what is important is getting the contract and the relationship right. What went wrong in many PFIs was rotten contracts that still bedevil local hospitals and local schools.
Oliver Dowden
The hon. Gentleman makes a very important point. He is precisely right. There is nothing wrong, per se, with engaging with the private sector for the delivery of services, but we must ensure that there is rigour in the contracts. Many contracts in the past have not been properly negotiated and have not delivered value for the public sector, and they will continue to burden us for many decades to come. However, that is not an invalidation of the model; it is about problems with specific contractual negotiations.
Bob Blackman (Harrow East) (Con)
It is clear that Capita is unique because it grew out of outsourcing from the public sector, but as it grew the structures outstripped its proper corporate responsibility. It is also clear that we need to argue the case for the benefits to the public sector of outsourcing. Will the Minister therefore set out the benefits of outsourcing and give one or two examples of where it has been a success and delivered better public service?
Oliver Dowden
I am very happy to do so. This is precisely why private sector companies use outsourcing. Every company engages in outsourcing because it recognises that there are some areas where there is greater expertise than can be delivered by that company. It is exactly the same for the public sector. We focus on what actually works—what delivers for the public sector and what delivers the best price and the best value. Over 4,500 projects have been delivered since 2010; over a quarter of a trillion pounds has been invested in infrastructure; and over 70% of our 175 long-term priority projects and programmes identified are now complete, under construction, or part of a programme being delivered. This is delivering the public services that people want.
Jenny Chapman (Darlington) (Lab)
Capita employs 450 people in my constituency, who are principally engaged in administering public sector pensions. When the Minister has met Capita, what discussions has he had about the pensions function and the Darlington site specifically? Will he meet me to discuss that?
Oliver Dowden
I would be very happy to meet the hon. Lady to discuss all those points.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Will the Minister tell the House the size of the pension deficit and what arrangements the Government are putting in place to cover that black hole?
Oliver Dowden
Capita is a private company, responsible for the running of its business. If the hon. Gentleman looks at the announcement made yesterday by Capita, he will see that it has chosen not to issue a dividend, which has released more cash and means that it can shore up its pension fund. It is a positive announcement in that respect.
Laura Pidcock (North West Durham) (Lab)
Will the Government review all major outsourced contracts as a matter of urgency, and in particular the contracts awarded to Capita for assessing personal independence payments for disabled people? It has been subject to justified heavy criticism for the way it treats disabled people during that process.
Oliver Dowden
The Government routinely publish all significant outsourcing contracts, and I would be happy to provide the hon. Lady with a link to the website so that she can get a full list of those. That is the process for doing it.
Liz McInnes (Heywood and Middleton) (Lab)
Is it not time that private companies providing public services were subject to the same rules of openness and transparency as the public sector, so that they can no longer hide behind the cloak of commercial confidentiality?
Oliver Dowden
Of course there are lessons to be learned from this. Indeed, that is exactly what bodies such as the Select Committee on Public Administration and Constitutional Affairs are looking into. However, there is a distinction between a private company and a public body. I do not think it would be appropriate to extend the full FOI provisions to all private companies.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
If the Minister is serious about getting the best value for the public, will he commit to learning from the Scottish Government? The Scottish Futures Trust’s latest independently audited benefits statement shows more than £1 billion in savings since it was established.
Oliver Dowden
I welcome the hon. Gentleman’s question. Of course we will learn those lessons, but it is worth noting that the Scottish Government gave a contract to Capita in 2015. Capita was appointed by the Scottish Public Pensions Agency to deliver its integrated pensions IT software solutions, which is another example of Governments choosing to use the expertise of the private sector.
Diana Johnson (Kingston upon Hull North) (Lab)
There are echoes of Corporal Jones from “Dad’s Army” in the Minister’s response this morning—“Don’t panic! It’s all okay.” Why does he think that Barnet Council—a flagship Tory council, known as “easy council” because of its extreme outsourcing—has put in place contingency plans based on the possible failure of this company?
Oliver Dowden
I can assure the hon. Lady that we are not in any way complacent. That is why we continue to ensure—I believe Barnet Council will be doing exactly the same—that there are contingency plans in place. Indeed, those contingency plans have worked in respect of the one collapse of a company we have seen: Carillion. Those public services continue to be delivered.
Melanie Onn (Great Grimsby) (Lab)
Capita has a £1 billion contract in the primary care sector of the NHS. The Minister has sought to minimise the necessity of declaring any kind of contingency plans to the House. Does he not think that the House and the general public deserve to know exactly what plans the Government have in the event that Capita is unable to provide those essential services to the public?
Oliver Dowden
I thank the hon. Lady for her question. I have given that reassurance, and I can reassure the House again that in respect of all our strategic suppliers, including Capita, we are understanding their financial position and taking appropriate contingency measures. I hope she will understand that lots of these things are commercially sensitive, and it would not be helpful to go into excessive detail on that.
Nick Smith (Blaenau Gwent) (Lab)
Capita’s stock has dropped 84% since its 2015 peak. Are there plans for a ministerial taskforce to grip this situation should it worsen?
Oliver Dowden
It is worth noting that a large chunk of the drop in the share price came yesterday in respect of the restructuring of the business—it was a consequence, for example, of the rights issue—but we are of course engaging in such a way. I and the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Burton (Andrew Griffiths), who has responsibility for small businesses, have established a taskforce for Carillion. We are ensuring that we provide all the support we can for the private sector side of Carillion’s delivery of services. For example, we are ensuring that HMRC is showing flexibility in relation to payments, and that banks are showing some flexibility. Should the need arise, we would do exactly the same for Capita.
Kate Green (Stretford and Urmston) (Lab)
Poor service delivery is often an early warning sign of future financial difficulties. GP practices in my constituency have been complaining for at least two years about the poor quality of service they are receiving. We know that the contract for assessments for personal independence payments has been failing, and this morning we have heard examples of many other service delivery failures. Rather than leaving this to individual Departments to manage, should not the Cabinet Office have a central overview of where service performance is failing as an early warning of future difficulties?
Oliver Dowden
Yes, we should, and we do exactly that. We of course take an overall view of the delivery of public services, the financial position and contingency. The specifics of public service delivery clearly have to be contracted by the relevant Department, because the relevant Department has a deeper understanding of the need. For example, for health and education, the Department of Health and Social Care and the Department for Education are in a better position to negotiate such contracts.
David Linden (Glasgow East) (SNP)
Last year, a Press Association investigation revealed that Capita received £200 million more than originally planned from the Department for Work and Pensions for PIP assessments, so there is a clear trail of the Government rewarding failed performance. Will the Minister assure me that the Government will not also be rewarding corporate recklessness?
Oliver Dowden
No, the Government certainly will not be rewarding corporate recklessness. Carillion shareholders paid the price for the failures of Carillion in that they will not receive back their initial investment, which is precisely correct. The role of the Government is to ensure that those public services continue to be delivered, and the private sector bears the risk.
Business of the House
(6 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Valerie Vaz (Walsall South) (Lab)
Will the Leader of the House update the House on the forthcoming business?
The Leader of the House of Commons (Andrea Leadsom)
The business for next week will include:
Monday 5 February—Motions relating to the draft Social Security Benefits Up-rating Order 2018 and the draft Guaranteed Minimum Pensions Increase Order 2018, followed by the remaining stages of the Smart Meters Bill.
Tuesday 6 February—Remaining stages of the Space Industry Bill [Lords], followed by a debate on housing, planning and the green belt. The subject for this debate was determined by the Backbench Business Committee.
Wednesday 7 February—Motions relating to the police grant and local government finance reports.
Thursday 8 February—Debate on a motion on community bank closures, followed by a debate on matters to be raised before the forthcoming Adjournment. The subjects for these debates were determined by the Backbench Business Committee.
Friday 9 February—The House will not be sitting.
The provisional business for the week commencing 19 February will include:
Monday 19 February—The House will not be sitting.
Tuesday 20 February—Second Reading of the Sanctions and Anti-Money Laundering Bill [Lords].
Yesterday evening, the House took an historic decision to choose action to restore and renew the Palace of Westminster, and I want to congratulate all right hon. and hon. Members across the House on their attention to this debate and their contributions to it. As the Leader of the House, I will now be taking forward the decision of this House, following a debate that is to take place in the other place as soon as one can be arranged.
Valerie Vaz
I thank the Leader of the House for setting out next week’s business.
A robin in the Chamber, a blue blood moon and Roger Federer winning the Australian open—but I will not mention the thing that you were not very happy about, Mr Speaker: Swansea beating Arsenal. Oh dear.
I thank the hon. Member for Gainsborough (Sir Edward Leigh), the Backbench Business Committee and other Members for suggesting that a debate on restoration and renewal take place today. If the Committee had not agreed to that debate, the Government would not have been pushed into having it yesterday. As the Leader of the House rightly said, a decision has been made. I, too, thank everyone who took part in and signed the amendments for such an excellent debate; it was well-tempered, and people made their points.
The Leader of the House mentioned the pre-recess Adjournment debate. I hope that she gets her deputy very soon, because she has her hands full with restoration and renewal. She has been assiduous in trying to engage Members, particularly on the northern estate programme. I know that she will do the same with restoration and renewal. May I press her, though, on the date for the summer recess? It is only one date, so I hope that she will be able to give it to us very soon.
The Leader of the House mentioned the Sanctions and Anti-Money Laundering Bill, which provisionally comes to the House for debate on 20 February. It started in the other place, so will she confirm whether there are plans for any Brexit Bills to start in the other place? The Bill was published on the same day that it had its First Reading. Will she reassure the House that that will not be the case for the other 15 Brexit Bills?
On Brexit, it is a year since the Lancaster House speech on the Government’s negotiating objectives for exiting the EU, but the Government appear to have abandoned the financial sector. They have shelved a position paper setting out their trade goals for financial services after Brexit. Is the Leader of the House aware that the policy chair at the City of London corporation says that the sector had been counting on the paper to clarify Government policy, and that
“the City is left in the dark”?
And so say all of us. When can we expect publication of the position paper on financial services, which will affect 1 million people?
It seems that the Government have annoyed the City; they have also annoyed the shadow Secretary of State for Exiting the European Union and all the Opposition. The Government have said that the “EU Exit Analysis—Cross Whitehall Briefing” will be published. Will the Leader of the House say exactly when it will be provided to the Select Committee on Exiting the European Union and to Members but not on a restricted basis?
The Under-Secretary of State for Exiting the European Union, the hon. Member for Wycombe (Mr Baker), said that civil servants who do their work are “always wrong”. He appears to have a bizarre understanding of what civil servants do. They are independent; they follow Government instructions and Government policy. Could we have an apology from the Minister to the civil service?
Next week, there will be debate on a motion on the police grant. Quarterly police figures show a 14% rise in recorded crime in England and Wales. Domestic burglary is up 32%. That is mirrored exactly in my constituency: a young couple who just got married had their wedding jewellery stolen, and another constituent gave me a video of a gang entering a home and marching people upstairs to rob them. There is only one police station in my constituency, in Darlaston, and that is closing, despite having been upgraded. It is not fair to say that the Government are protecting the police budget. May we have an urgent debate—perhaps a Minister could make a statement—on how much more money will be given to local councils to protect local services? When it comes to taxes, it is not right or fair for the Government to shift the burden on to local councils.
Mr Speaker, you allowed an urgent question on Capita earlier, but I want the Leader of the House’s reassurance that the Government’s jobseeker’s allowance helpline and the helpline that administers the teachers’ pension scheme will be protected. I would also like a statement on how much the Government have outsourced to Capita.
Finally, we are celebrating the centenary of the Representation of the People Act 1918, which gave 6 million women the right to vote. We still have to put up with men-only clubs. The test should be: would the Prime Minister be invited? Was she invited to the Presidents Club? The answer is no, but she has been invited to give a speech on Tuesday in Westminster Hall. I encourage all Members to celebrate this landmark in the UK’s history between 6.30 pm and 7.30 pm on that day. The event will launch Parliament’s Vote 100 programme for 2018. Women have moved from their place behind the grille at the back of the Chamber to its Floor. As we celebrate that, let us all think of those unseen men and women who speak out and fight every day for equality for all.
Andrea Leadsom
I share the hon. Lady’s excitement about the centenary of the Representation of the People Act next Tuesday. One hundred years later, our Head of State is a woman. We have our second female Prime Minister. The First Minister in Scotland is a woman, as is our Home Secretary. The Leaders and shadow Leaders of the House of Commons and the House of Lords are women, and the Metropolitan Police Commissioner is a woman—I could go on. There have been some changes for the better, but there is so much more to do to make sure that women play an equal part in every aspect of our society, both in the United Kingdom and around the world. I share the hon. Lady’s commitment to doing whatever we can to make sure that comes to pass.
The hon. Lady asks for a summer recess date. That will be provided as soon as we can. I absolutely accept that hon. Members want to get on and think about what else they might like to do with their lives other than sit here, and I share that enthusiasm.
The hon. Lady asks about Brexit Bills being introduced in the other place. As she will appreciate, in my role as chairman of the Parliamentary Business and Legislation Committee, I have to ensure that Bills are ready to be introduced. We then have to look at the parliamentary timetable to see what else is going on in either House and make decisions based on the volume of business that is available to go. It is not possible to say with certainty at any one time, “It’ll be this one; it’ll be that one,” but in due course, through the usual channels, we will always give as much notice as possible.
The hon. Lady talks specifically about the financial sector. In fact, there are not 1 million people, but 2 million, if we include all the professional services around the financial services sector—ranging from Edinburgh to Bournemouth, to Birmingham, to Manchester, and of course, to the City of London. It is a vast and very successful sector for this country, and we were recently declared to have extended our pre-eminence over all the other financial services sectors in the world. It is absolutely vital to the United Kingdom. Positional work will be going on and it will be announced in due course, when the moment is right.
The hon. Lady asks me to confirm that the Government will comply with the terms of the Humble Address, and I am happy to do so. She asked about economic forecasts. All I can say is that if hon. Members want to ask the Bank of England how many times its economic forecasts are right, that will demonstrate that forecasting is not an exact science. It is an art, and it is not a criticism of the civil service to say that economic forecasts are rarely correct. Indeed, pre-referendum, certain forecasts presumed that our economy would be around 6% smaller than it is today, so those forecasts were also wrong.
The hon. Lady asks about the police grant. Real-terms overall police spending has increased since 2015-16 by over £475 million, including increased investment in transformation and technology. In this settlement, we propose to increase the total investment in the police system by a further £450 million year on year in 2018-19, if police and crime commissioners maximise their local precepts. She is absolutely right, however, to point out the very concerning rise in particularly high-impact crimes, such as knife crime. I hope that she welcomes Operation Sceptre, which many police forces are joining to try to tackle this appalling crime, which has such a terrible impact on victims and their families.
Finally, the hon. Lady asks for reassurance about Capita. There has just been an urgent question, in which the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Hertsmere (Oliver Dowden) answered a number of points about Capita and Carillion. A web page has been set up by the Insolvency Service for those who are affected and seeking advice about the failure of Carillion. In the context of Carillion, there is a dedicated website set up by the special managers, PricewaterhouseCoopers, as well as a dedicated helpline. Jobcentre Plus, through its rapid response service, is available for advice and support for those whose jobs may be affected. In the case of Capita, however, as my hon. Friend pointed out, the Government closely monitor all the firms to which they outsource contracts, and they do not believe that Capita is in anything like a similar situation to Carillion.
Mrs Maria Miller (Basingstoke) (Con)
In this centenary year of some women gaining the right to vote, does my right hon. Friend agree that there should be a debate in Government time to mark International Women’s Day on 8 March, perhaps to demonstrate the respect that the Government have for the immense contribution that women have made to this place over the past 100 years?
Andrea Leadsom
I commend my right hon. Friend for all that she does to advance the cause of women and equality. She is a real champion of women’s rights, and I agree with her that the centenary of women’s suffrage should ensure that we mark International Women’s Day. As she knows, time for such debates is traditionally provided by the Backbench Business Committee, but I have raised with the Chief Whip the view expressed on both sides of the House that it would be good to have an appropriate opportunity to mark that important day, and I am optimistic.
Pete Wishart (Perth and North Perthshire) (SNP)
I thank the Leader of this crumbling House for announcing the business for next week—and what a week! There may or may not be enough Conservative Back Benchers to trigger a leadership challenge, and the party civil war that is now raging in the Conservative ranks would put the cavaliers and roundheads to shame. Could we perhaps have a debate on peace, love and understanding, so that the rest of us could wish all the best to our Conservative friends in their current difficulties?
Having secured yet another Humble Address defeat, the Government will once again go through the whole business of trying to defy the will of the House by revealing as little as possible about the latest disastrous Brexit papers. After debasing our Opposition day debates and refusing to be held to account, they are now making a mockery of Humble Addresses.
If we cannot get the Government to vote on Humble Addresses, how about getting them to try to change Standing Orders? One issue that unites the House against the Government is opposition to the procedure known as “English votes for English laws”, which is as useless as it is divisive. No other party in the House will support it, and Scottish Conservative Members would look singularly stupid if they voted for a procedure that continues to emasculate them in the House. We may not be able to secure time for a debate, but the Labour party has loads of time available. Why do not Labour Members join us and help us to defeat the Government and get rid of this divisive procedure?
Lastly, is it not delicious watching all the Brexiteers rage about the unelected House of Lords as it chews up their precious hard Brexit? People who would have no second thoughts about donning the ermine if it were offered and who have ignored all our calls for the House of Lords to be abolished are now starting to rail against it. You couldn’t make it up.
Andrea Leadsom
It is just as well that I genuinely like the hon. Gentleman, because I have to suspend my disbelief when it comes to some of the remarks that he makes. Let me gently correct him: the House is not crumbling. The infrastructure within it is the problem. The House, as he will see, is beautiful, and it is not crumbling. As for his recommendation for lessons on peace, love and understanding, I am sure that you, Mr Speaker, would like to see more of that in this place. I entirely share the hon. Gentleman’s desire for us all to work together, and as Leader of the House, I do all that I can to ensure that we show each other that love and understanding.
The hon. Gentleman talks about Opposition day debates. We issued a clear proposal that when an Opposition motion was approved by the House, a Minister would make a statement within 12 weeks to inform the House of exactly what steps had been taken to address the issues raised, and that continues to be the case.
The hon. Gentleman talks about EVEL—English votes for English laws—which is indeed designed to stop Scottish votes for English laws. It is important for Members on both sides of the House to recognise that it is a consequence of devolution, when a number of the nations that make up the United Kingdom were rightly keen to be able to manage their own affairs more closely. It is right that Members who come to this place from those nations should not be able to vote on laws that affect only England, or England and Wales.
The hon. Gentleman laughs at those who are frustrated by the House of Lords, but surely he recognises its role as a revising House with very useful expertise that often improves legislation and makes a genuine contribution to the work of the House of Commons.
Sir Edward Leigh (Gainsborough) (Con)
If there is to be a decant, it is vital for it to be as short as possible. On that, we are all agreed. I personally believe that the builders should work triple shifts and not do what builders traditionally do, which is to stay as long as possible. Is it my right hon. Friend’s opinion that, when we set up the legislation, only the MPs and peers on the sponsor body should vote, so that we can get a grip on this?
Andrea Leadsom
I pay tribute to my hon. Friend, because he has been a passionate advocate for the restoration and renewal of this place, and I am sorry, as he will no doubt be disappointed by yesterday’s decision. While that decision confirms action, it is not action along the lines that he would wish to see, and I am very sympathetic to his personal view that in staying in this place we could do the job more efficiently and effectively. In direct response to his question about how the sponsor body will be set up, it will have a majority of parliamentarians, and their role will be to reflect the range of views across both Houses on precisely what the delivery authority should be tasked with delivering.
Ian Mearns (Gateshead) (Lab)
I thank the Leader of the House for the business statement and for announcing that the business for 6 February will include a debate on housing, planning and the green belt, which is sponsored by the Backbench Business Committee. We know that proceedings on the Space Industry Bill are unlikely to go the distance, but we do not yet know how many Government statements or urgent questions may be granted by Mr Speaker, so may we ask for protected time for that debate so that it may last for 90 minutes or until 7 o’clock, whichever is the later, so that we are guaranteed that it will get a good airing?
Secondly, may I bring all Members’ attention to page 15 of today’s Order Paper under the heading “Applications for Backbench Business Committee debates on the estimates”. Members will have to submit applications by Friday 16 February, which is during the recess. I draw Members’ attention to that so they will be able to debate in full the estimates debates of their choosing.
Lastly, I have another plea. The Backbench Business Committee is effectively now down to five members. We have one member out on a Bill Committee, and we have lost two other members due to promotions to the Government. We are effectively down to five members, but we have a quorum of four, so it is getting very tight. I therefore ask for a relaxation of the quorum, or quick appointments to replace those who have been promoted.
Andrea Leadsom
I hear that, and the hon. Gentleman and I will certainly take that up to see how we can support what sounds like a very real practical problem. I urge all colleagues to look at page 15 of today’s Order Paper. It is important that all colleagues set out their applications for Backbench Business Committee debates on the estimates. The hon. Gentleman is right that the deadline is during the recess, so it would be helpful for all colleagues to look at that. I will also take away his request for protected time for the Backbench Business Committee debate that he mentioned.
Robert Halfon (Harlow) (Con)
My right hon. Friend will have seen early-day motion 783 on scrapping hospital car parking charges.
[That this House is disappointed that following the publication of Government guidance on hospital car parking in August 2014, 47 per cent of hospitals have increased their parking charges for a one hour stay; notes that there continues to be discrepancies in parking charges across England, with three hospitals in London charging almost £400 per week to park; believes that these charges have serious implications, not only for patients and those visiting their loved ones, but specifically for parents of premature babies, cancer patients, dialysis patients and those receiving treatment for tumours; considers these charges a stealth tax on drivers using NHS services; and therefore asks the Government to consider ending car parking charges at hospitals in England.]
My right hon. Friend will also know about the motion that stands in my name and that of other Members. If the House passes that motion, which will be debated this afternoon, will my right hon. Friend arrange for a Minister to make a statement to the House about how the Government will scrap hospital car parking charges?
Andrea Leadsom
My hon. Friend has been a strong champion for resolving the issue of hospital car parking charges for a long time. I wish him well with his debate this afternoon, and I assure him that I will write to the Secretary of State for Health and Social Care to put forward his request.
Mrs Madeleine Moon (Bridgend) (Lab)
The all-party group on suicide and self-harm prevention heard a harrowing presentation this week from Professors Nav Kapur and Keith Hawton from the multicentre study of self-harm in England. We learned that there are 200,000 hospital presentations a year in England for self-harm and almost the same number to community health facilities, particularly of 12 to 17-year-olds. One in 100 of those will die by suicide a year after their presentation, and 50% of those dying by suicide have been involved in self-harm. This is an epidemic that is hitting this country. May we have a statement from the Government expressing how they intend to deal with the major risk of self-harm presentation in our hospitals?
Andrea Leadsom
The hon. Lady sets out harrowing evidence about the extent of self-harming, and the Government are incredibly concerned about this, particularly about the need for more support for those with mental health issues. We are investing a record £1.4 billion into children’s and young people’s mental health, and there are now a record 1,440 children’s mental health beds. Also, importantly, by this time next year, we will have trained 2,000 secondary school staff in mental health first aid to try to provide support to young people, and by 2021, 70,000 additional children and young people each year will be accessing NHS specialist mental health services.
Alec Shelbrooke (Elmet and Rothwell) (Con)
In the village of Oulton in my constituency, a company that owns 70 rented homes has put in for planning permission to demolish them and replace them with private dwellings. On Friday, I met some of my constituents who could soon be receiving eviction notices and would therefore require new homes. May we have a statement from the Housing Minister on the power that Leeds City Council may or may not have to purchase those homes, instead of—I kid you not, Mr Speaker—wanting to build a lighthouse in the middle of the landlocked city of Leeds?
Andrea Leadsom
That is an extraordinary tale. Whether the council is planning for floods is anyone’s guess. My hon. Friend is a strong champion for his community, and he raises an important issue. I recommend that he seeks an Adjournment debate so that a Minister can answer his specific concerns.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Thank you so much, Mr Speaker. You took me by surprise. In the old and less enlightened days when I was at primary school, we could have a good old pinch and a punch for the first day of the month—
Mr Sheerman
No, it was not in Queen Victoria’s time.
May we have an early debate so that many of us can give a good pinch and a punch to the private sector partnerships that benight so many hospitals in our land? So many of us want a new deal for our hospitals and health sector, but we are being dragged down by private finance initiatives that were badly negotiated many years ago. Let’s have a debate on this, please!
Andrea Leadsom
I encourage the hon. Gentleman to seek a debate on that. When I was on the Treasury Committee about five years ago, my hon. Friend the Member for—Jesse Norman—
Andrea Leadsom
I am grateful to you, Mr Speaker. I had a momentary mental blank there.
My hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) and the Treasury Committee held an inquiry into PFI, and it was quite clear that in many of those deals the private sector saw the public sector coming, and that those deals have not been in the best interests of the taxpayer or the patient. Of course, the hon. Gentleman must reflect that those PFI deals were signed under Labour Governments. Labour agreed to them—[Interruption.] Well, John Major did a few of them, but the vast majority were done under Labour. Now, under private finance 2, there is a much better track record of ensuring that the interests of the taxpayer are better cared for. However, I agree with the hon. Gentleman that a debate would be a good way to raise this issue again.
Rebecca Pow (Taunton Deane) (Con)
Mr Speaker, I would like to share some good news with you and the good people of Taunton Deane. We have just heard this morning that the bid to the housing infrastructure fund for £7.2 million to build the spine road in Staplegrove in Taunton has been successful. That will make the building of 1,600 houses in that area viable. Will the Leader of the House join me in welcoming this announcement, which demonstrates the fact that this Government realise that if we are to make the delivery of much-needed housing viable, we must have the right infrastructure?
Andrea Leadsom
My hon. Friend is a fantastic champion for her constituency, and it is good news that houses are being built. We are committed to building homes so that everyone can afford a safe, decent place to live, and today an extra £866 million has been confirmed for local housing projects to unlock the potential of 200,000 new homes. I am delighted that the Staplegrove spine road in her constituency will be one of the beneficiaries.
Mrs Emma Lewell-Buck (South Shields) (Lab)
Seventy-seven per cent. of the public, 98 MPs on both sides of the House, and more than 20 national charities back my Bill to measure food insecurity. Figures released this week show that one in eight adults has gone a whole day without food, and the UN estimate of UK food insecurity stands at a staggering 8 million people. Will the Government make a statement to explain why their position on this heartbreaking reality is for so many one of total silence?
Andrea Leadsom
The hon. Lady raises an issue that is of concern right across the House. Food insecurity is a major challenge, but the Government have ensured that more people get to keep more of their hard-earned cash, raising the personal allowance so that a basic rate taxpayer is £1,000 better off and raising the national living wage to ensure that people are thousands of pounds better off than they were in 2010. It is vital that the Government do everything we can to ensure that people can afford to live well.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
I want to bring something that affects my constituency to the attention of the Leader of the House. In Taunton Deane, about which we have just heard, the borough council has borrowed a fortune to do up its headquarters. Not only has it not signed a contract, which I think is illegal and pretty silly, but the headquarters will be valued at only half of what was borrowed. It is not a good council, so may we please have a debate on borough councils in the United Kingdom?
Mr Speaker
Order. Did the hon. Gentleman consult his hon. Friend the Member for Taunton Deane (Rebecca Pow) in advance of asking this question? If he did, so be it, but if he did not, it is rather unseemly.
Mr Speaker
Yes. I am not sure that that is very collegiate, but I will have to leave Members on the same side of the House to try to sort out such matters. I gently say to the hon. Gentleman, who is quite an experienced Member of the House, that there is a genuine unseemliness about continued references to another Member’s constituency. In the politest possible way, I exhort the hon. Gentleman, who I am sure has a fertile mind and wide range of potential political interests, to focus perhaps on other interests, rather than on those that might affect his constituency—I do not dispute that and do not have authoritative knowledge of the matter—but which most certainly affect that of his hon. Friend.
Andrea Leadsom
Thank you, Mr Speaker. I encourage my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) to take the matter up with the Housing, Communities and Local Government Ministers.
Helen Goodman (Bishop Auckland) (Lab)
My constituent “S” was trafficked to the UK as a child and forced to work in a cannabis factory, but the Home Office wants to send him back to Vietnam. May we please have a debate on the interaction between the protection of victims of modern slavery, and the asylum and immigration system?
Andrea Leadsom
The hon. Lady raises what sounds like a concerning case. As constituency MPs, we all raise particular cases with the Home Office, and I am sure that it will be happy to look again at this one. If she emails me about it, I can take it up with the Home Office on her behalf.
Bob Blackman (Harrow East) (Con)
The Community Security Trust’s annual report shows a growth in anti-Semitic attacks in this country amidst a pernicious increase in anti-Semitism more generally. At the same time, the chief inspector of schools is making a speech today about the growth of religious extremism in our schools. May we have a debate in the Chamber in Government time on how to combat religious extremism and pernicious attacks on people’s religions?
Andrea Leadsom
My hon. Friend raises a worrying story. All of us will have read in the press about the rise in anti-Semitic attacks and the use of words that can be extremely hurtful. He is right to suggest a debate, and I encourage him to talk to the Backbench Business Committee about securing such a debate so that all Members can share their views.
Julie Cooper (Burnley) (Lab)
The Government have expressed their support for women’s refuges, and their funding is currently being reviewed. I fear, though, that time is running out for many refuges, including Jane’s Place in my constituency. Will the Leader of the House please allow some Government time so that we can assess what urgent steps can be taken to avoid any closures?
Andrea Leadsom
We have committed £40 million until 2020, and we have delivered support to 80 domestic abuse projects across England. The hon. Lady raises an issue that is absolutely at the heart of Government priorities, which is why we have committed to introducing a draft domestic violence and abuse Bill. We have created two new stalking offences and we will introduce a new stalking protection order. It is important that the Government are taking action, and we will continue to do so.
Mark Pawsey (Rugby) (Con)
Next Tuesday is Safer Internet Day, and on Monday I will be visiting Eastlands Primary School in my constituency to meet its eCadets and to find out more about their role in promoting safe internet use among their fellow pupils. There is real concern about what is happening online, so could we have a debate to consider what measures we can take to keep our young people safe?
Andrea Leadsom
I congratulate my hon. Friend on raising such an important issue. I hope that he enjoys his school visit. The Government fully support Safer Internet Day. This year, nearly 700 schools will take part, and they will be joined by charities, Government officials, businesses, football clubs and police forces. Safer Internet Day is marked in 100 countries worldwide to help children everywhere to remain safe online.
Mr Jim Cunningham (Coventry South) (Lab)
I am sure that the Leader of the House will be aware of the hearings on equal pay for women working at the BBC. Will she now take a lead on equal pensions for women, especially women born in the early 1950s who have been denied them? She could certainly make a name for herself—she would be up there with Emmeline Pankhurst if she did something about it.
Andrea Leadsom
The hon. Gentleman raises an issue that has been discussed in this House many, many times. Conservatives in government have committed more than £1 billion to supporting those affected so that no one will see their pension age change by more than 18 months. The new state pension will be much more generous for many women. By 2030, more than 3 million women stand to gain, on average, £550 extra a year.
Rachel Maclean (Redditch) (Con)
I am sure my right hon. Friend will share my concern about yesterday’s sad news in Redditch that our local Marks & Spencer is closing. I am delighted that the employees will find alternative jobs, but nevertheless it is sad because Marks & Spencer is the last food shop in our town centre, and it is sadly needed. Can we have a debate on how we can work together with our local council colleagues to create vibrant town centres that are communities for everyone to enjoy, and in which to live and work?
Andrea Leadsom
My hon. Friend is a huge champion for her constituency, and she has her own vision for a sustainable and thriving town centre in Redditch. I share her concern, and it is always a great shame when a much loved and much used shop closes in a town centre. I encourage her to do all she can to revitalise the town.
Alex Norris (Nottingham North) (Lab/Co-op)
Unfortunately, Nottingham was not selected as one of Sport England’s pilot cities for new models of physical activity. The House will know, however, that Nottingham people have developed lots of good ideas and, with our typical fortitude, will be making those ideas happen anyway in any way we can. Will the Leader of the House support us in that venture by accommodating a discussion in Government time?
Andrea Leadsom
I congratulate the hon. Gentleman on the innovative efforts to increase sporting activity in Nottingham and on his desire for a debate in Government time. I encourage him to seek an Adjournment debate, in which a sports Minister might be able to give him some specific tips.
Laura Pidcock (North West Durham) (Lab)
Consideration was given in Westminster Hall yesterday to the terrible situation facing disabled people in North West Durham and across the UK when being assessed for their personal independence payment. Many Members were not called to speak in that debate because demand was so high. They had important issues that they needed to press, so will the Leader of the House advise us on how we can have the urgent situation facing disabled people debated in Government time?
Andrea Leadsom
I understood there was a very well-attended debate yesterday, and it is right that there was. The hon. Lady should welcome the fact that almost 600,000 more disabled people have been able to come into the workforce over the past four years, with 3.5 million disabled people now in work. That is good news, and the PIP benefit is designed to give people more power over how they use their benefits to support their lifestyle and their ability to make the most of all the opportunities they have.
David Linden (Glasgow East) (SNP)
May we have a debate in Government time on banning the use of plastic straws? Last week, I visited Sunnyside Primary School in the Craigend area of my constituency and met its ocean defenders, who are doing sterling work among local authorities to ban the use of plastic straws. These people will be here a lot longer than we will, so will the Government take action on this issue?
Andrea Leadsom
I share the hon. Gentleman’s enthusiasm for doing more to reduce plastics in all the things we use, whether we are talking about recyclable cups or any form of plastics. The Government have taken strong action in banning microbeads in certain cosmetics and body wash products. There is a lot more to do in protecting our marine areas, where 80% of our plastics end up, so this Government will be committed to doing everything we can to defend our environment.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Nairn, Grantown and Aviemore in my constituency are just three of the highland towns that will be negatively affected by the Royal Bank of Scotland’s planned branch closures. Given that the UK Government are the major shareholder, in addition to the planned debate may we have a statement on the range of responsibilities the Government have for holding shares on behalf of the public?
Andrea Leadsom
The hon. Gentleman will be aware that the Secretary of State for Scotland has raised the House’s concerns in his recent meeting with RBS. He will also be aware that, as has been mentioned in this House many times, we have established the Access to Banking standard to make sure there is proper consultation before the closure of any branch. He will also be aware that the Government have invested significantly in the post office network and that about 99% of personal customers will be able to carry out their day-to-day banking at a post office as a result of new agreements facilitated by Government.
Justin Madders (Ellesmere Port and Neston) (Lab)
We know it is Government policy to replace sold council houses on a one-for-one basis, but a three-bed semi in my constituency was recently sold for just £27,000 and the council cannot possibly replace a house for that much money—unless, perhaps, it is made of LEGO. We know that across the country only one in five of the council houses that are sold are getting replaced, so may we have a statement from the relevant Minister about how this policy can actually be put in practice?
Andrea Leadsom
It is important that any money raised goes back into social housing and affordable housing. I can reassure the hon. Gentleman that the Government’s own investment in social, council and low-cost homes is now more than £9 billion. We have delivered about 350,000 new affordable homes. That number needs to continue to rise, but the Government are committed to ensuring that everybody has a secure and decent home to live in.
Nick Smith (Blaenau Gwent) (Lab)
Rent-to-own companies such as BrightHouse charge eye-watering interest rates for essential goods. The Financial Conduct Authority has just revealed that the average debt for rent-to-own customers has doubled. May we therefore have a statement and real action from the Government and FCA to keep this sector in check?
Andrea Leadsom
The hon. Gentleman raises a very concerning point about the debts people get into by using these high-cost lenders to facilitate the purchase of essential white goods, furniture and so on. I know from my time as City Minister that the FCA takes this incredibly seriously. It has capped the interest rates that such companies are allowed to charge, and it is doing further work to ensure that we protect consumers from the practices of some of those companies.[Official Report, 6 February 2018, Vol. 635, c. 6MC.]
Chris Bryant (Rhondda) (Lab)
Now that the House has made the in-principle decision on what we are going to do about restoration and renewal, may I urge the Leader of the House to get together her ministerial colleagues in the Department for Business, Energy and Industrial Strategy and the Department for Work and Pensions to put together a parliamentary skills strategy? We are going to need thousands of people working on this building, with high-tech engineering skills and craft trade skills that currently are not available in this country. This is an opportunity for every constituency in the land to have apprenticeships, with apprentices working here on the building.
Andrea Leadsom
I congratulate the hon. Gentleman on his tenacity and his hon. Friend the hon. Member for Hackney South and Shoreditch (Meg Hillier), the Chair of the Public Accounts Committee, on succeeding in her amendment yesterday. I am delighted that the House voted to take action. As he rightly points out, there are huge opportunities, and in some cases those are already being fulfilled. For example, as he will know, the repairs to the cast-iron roofs are being carried out in the UK. There will be lots of opportunities for new apprenticeships, however, and I can absolutely assure him that as Leader of the House I will be taking every opportunity to create jobs for young people in the UK.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Can we have a statement on the unfair distribution of the tampon tax fund? With £15 million available in year 1, Scottish organisations were given just two weeks’ notice before the fund closed. In addition, Sport Relief invited 45 organisations to a funding meeting, but only three of those organisations delivered services in Scotland. With the year 3 criteria making it virtually impossible for Scottish organisations to apply, is it not time for this fund, while it exists, to be devolved?
Andrea Leadsom
The hon. Gentleman raises an important point. If he would like to email me with details, I shall certainly write to the Department on his behalf.
Cat Smith (Lancaster and Fleetwood) (Lab)
Almost three months ago, on 3 November, I wrote to the Secretary of State for Housing, Communities and Local Government about the Preesall gas storage facility plans in my constituency. I am still waiting on a reply. Will the Leader of the House look into this on my behalf?
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Today, BT Openreach announced plans to roll out fibre broadband to 3 million homes by 2020. Far too often, however, new announcements are followed by slow action. This is an issue of growing urgency, and not just outside London; pockets of my constituency, including Cranford, suffer from very slow broadband speeds. I would like to thank Mohammad Chaudhry and residents of my constituency for raising this issue, which is having a huge impact on businesses and students and pupils wanting to study at home. Could we have an urgent debate in Government time on how to move from announcements to outcomes that will hugely impact on the prosperity, wellbeing and quality of life of all our constituents?
Andrea Leadsom
I certainly share the hon. Lady’s concern about pockets with no broadband. It is devastating for people who work or study from home. It is extremely difficult. I must say, however, that superfast broadband is now available to over 95% of UK homes and businesses, which is up from 45% coverage in 2010, so it is not a case of announcements with no action; there is real action behind it. There is more to do, however, and there is a plan. That said, I share her frustration. She may wish to seek an Adjournment debate to hear at first hand the prospects for her constituents.
Susan Elan Jones (Clwyd South) (Lab)
Residents of the town of Llangollen in my constituency are concerned that there is no Department for Work and Pensions or Careers Wales presence in that town. This means that residents must travel some considerable distance. This is not just a problem for Llangollen; it is a problem for many of our rural communities and small towns across the UK. Will the Leader of the House provide time for a debate in which we might seek to persuade the Minister of our case?
Andrea Leadsom
The hon. Lady raises an important point for her constituents. In my constituency, there are often online opportunities, in libraries and town councils, to gain support from the DWP, but if she wants to write to me with her specific concerns, I can take it up with the Department, or she might want to seek an Adjournment debate.
Diana Johnson (Kingston upon Hull North) (Lab)
On 19 January, the Under-Secretary of State for Education, the hon. Member for Stratford-on-Avon (Nadhim Zahawi), told the House that the Government were launching local pilot schemes to combat holiday hunger among our poorest children. As proposed by my right hon. Friend the Member for Birkenhead (Frank Field), using a small fraction of the £520 million that the Treasury expects to raise from April from the sugary drinks levy would be an excellent use of this money in places such as my constituency. Given the obvious merits of getting pilots under way as quickly as possible for this summer’s long holidays, may we please have a statement from the Department on how to apply for these pilots?
Andrea Leadsom
Members from all parties will be delighted to hear of those pilot schemes. I pay tribute to the right hon. Member for Birkenhead (Frank Field) for his commitment to making progress in that policy area. I will certainly ask the Department for Education the hon. Lady’s question and see whether it can provide a further update to the House.
Darren Jones (Bristol North West) (Lab)
A case has arisen in Bristol of restaurant owners charging their waiters and waitresses to work by demanding that those staff pay a percentage of the total price of the orders they sell to customers, regardless of tips received. This employer’s tax on working is then being used to pay staff wages. Remarkably, I am told that this is legal. May we have a debate to decide whether that needs to change?
Andrea Leadsom
That sounds quite extraordinary. I encourage the hon. Gentleman to take up that issue with the Home Office to find out whether it is actually legal. It seems to me to be extraordinary.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
It is a great privilege for me to represent one of Britain’s great cities in this House, as many Members do, but I was alarmed to read in a recent report on the New Statesman’s CityMetric site that Britain’s great regional cities, such as Manchester, Glasgow, Birmingham and Leeds, are lagging significantly behind our European peers in respect of productivity, which is in some cases half the rate of that of equivalent European cities such as Munich, Seville or Barcelona. Will the Leader of the House consider scheduling a debate on what the Government are doing to address the major problem of unbalanced economic growth and to ensure that our great regional cities are competing effectively with their European peers?
Andrea Leadsom
The hon. Gentleman raises an important issue. He will no doubt be pleased that at the Budget we announced a £1.7 billion investment in the Transforming Cities fund, specifically to build transport infrastructure, which is so strongly linked to productivity. He may be aware that since 2010 the north-east and Scotland have both seen faster productivity growth than London. There is a long way to go, but it is clear that through initiatives such as the northern powerhouse, we are committed to ensuring that we see growth and a reduction in the imbalances between all regions of the United Kingdom.
UK Diplomacy in Europe
(6 years, 9 months ago)
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Madam Deputy Speaker (Mrs Eleanor Laing)
We now come to the Select Committee statement. The hon. Member for Tonbridge and Malling (Tom Tugendhat) will speak on his subject for up to 10 minutes, during which no interventions may be taken. At the conclusion of his statement, I will call Members to put questions on the subject of the statement and call Mr Tugendhat to respond to them in turn. Members can expect to be called only once. Interventions should be questions and should be brief. Front Benchers may take part in questioning.
Tom Tugendhat (Tonbridge and Malling) (Con)
Thank you very much, Madam Deputy Speaker, for this, my second opportunity to report back on the work that the House has charged the Foreign Affairs Committee to do. I am pleased that in this report the Committee has begun to tackle one of the most important questions facing us today: our bilateral relations following our departure from the European Union. The House will know that 1,000 years of history and, indeed, simple geography make clear the importance of these connections in our diplomatic outreach.
As part of the Government’s stated policy of pursuing a global agenda, the Committee believes that relations with European states are an important node in the network of our international future. In some areas, that may mean connections to and co-operation with the European Union, as the member states have decided to work together through that structure. On other occasions, it may mean direct bilateral conversations or, indeed, new structures. That poses a question for Her Majesty’s Government: how should we aim to shape this relationship to the benefit of the United Kingdom, our allies and others to achieve the deep and special partnership we hear spoken of so often?
The first answer was reinforced yesterday at a meeting I attended with Baltic partners. I was asked specifically whether the United Kingdom is still intending to invest in defence and play an international role as a nuclear power and a UN Security Council member state. The Committee members present were able to reassure our important allies in Estonia, Latvia and Lithuania that, on the 100th anniversary of those countries’ foundation as modern states, our commitment to the defence of Europe and, indeed, to the defence of the Baltic states was undimmed. Nevertheless, their question reflected an uncertainty that the Committee calls on Her Majesty’s Government to do their utmost to dispel. To achieve that, the Committee feels that a vision for our European policy needs to be set out. As one of Europe’s leading foreign policy actors, whatever the precise contours of our future relationship with the European Union it will always be in the interests of the United Kingdom to co-operate with the European Union and its member states on foreign policy, defence and security.
Working together will help us to protect and project our shared values of democracy, human rights and the rule of law, and will underpin the international rules-based order. Indeed, the Foreign Secretary has told us that he intends to do that, but he has not yet decided what level of access to ask for as regards co-operation with the European Union on foreign, security and defence policy making, and he has not clarified the intent of the United Kingdom to work bilaterally with other member states. The Committee believes that this requires clarification soon, as Lord Bridges warned only the other day in the other place.
The Committee discussed many options and, I am glad to say, unanimously agreed that the ultimate goal should be to secure automatic and institutionalised collaboration that respects the decision-making autonomy of the United Kingdom, the member states and other European nations as they work together. This should include, as Lord Hague suggested, a status on the European Union’s Political and Security Committee that allows the United Kingdom to have a representative in meetings with speaking—if obviously not voting—rights, and a UK-EU strategic partnership to facilitate enhanced dialogue on foreign, defence and security policy. The importance of being, as Lord Hague and Lord Ricketts put it, “in the room” should not be undervalued in order to secure our interests in our nearest neighbourhood.
Now that we are leaving the European Union and surrendering our veto on closer defence integration among the other 27, we must also find a way to support European capability development and ensure that it complements the work of NATO and does not undermine it. To achieve this, the Committee calls on the Government to consider the possibility of participation in some EU defence integration measures, as the United Kingdom already does with the United States and other nations around the world, on the understanding that national sovereignty over force deployment is preserved and that the UK’s ability to co-operate with non-European Union states is unconstrained. The UK would, of course, participate only in programmes as an equal partner with other nations.
The Committee was given mixed messages about the FCO’s role in the Brexit process and beyond and, to clarify the position, the Committee calls on the FCO to publish a paper outlining the overall goals and the specific priorities of UK foreign policy in Europe after Brexit. This would allow the House to debate the priorities set out and to discuss the resources available to meet the objective.
Although we welcome the Minister for Europe’s success in securing additional resources, the Committee is concerned that they are being drawn from the wider network, possibly weakening the Government’s stated policy that we are to become a genuinely global Britain. That would be a grave mistake. Since Lord Hague, the Foreign Office has been opening missions around the world to extend the influence that the UK seeks in foreign affairs. As a permanent member of the UN Security Council, and now with a vital national interest in extending our diplomatic influence, it would be an error to reduce the resources available to achieve that. If leaving the EU meant that the UK were to reduce its international outreach, that would be a reversal of the aim stated by Ministers in recent months and would cause great concern to the whole Committee, and no doubt to the whole House.
The Committee remains concerned that the Foreign Office is not adequately resourced, and relations with Ireland are one example. The Republic of Ireland is the United Kingdom’s closest foreign partner. It is vital to the United Kingdom’s national interest that the relationship between Westminster and Dublin is as close as possible. Indeed, it is essential to the prosperity of both. That is why our first overseas visit as a Committee was to Dublin and to Cavan, on the border with Northern Ireland. We were hugely grateful for the warm welcome we received, particularly from my honourable friend the Member for Cavan-Monaghan and the Chair of our sister Committee in the Oireachtas, Brendan Smith. We saw first-hand the complications at the border, the importance of the bilateral relationship and the importance of strengthening it throughout this Parliament. We therefore welcome the Government’s commitment to preserving the progress that has been made in UK-Ireland relations in recent years, and regret that recent tensions appear to endanger the hard-won positive momentum.
We welcome the progress made thus far in negotiations, but also recognise that much more needs to be done. That is why the Committee calls on the Foreign Office to increase its diplomatic presence in Ireland and to produce an analysis of the UK-Ireland bilateral relationship, containing recommendations to improve it and options to revitalise existing, or indeed create new, bilateral institutions.
The opportunity for the United Kingdom is in an internationally engaged, networked world. We are uniquely placed to achieve this due to history, alliances and geography, but in order to do so we need both investment and energy, and the Foreign Office, most of all, must set out its vision, its strategy for achieving that, and the resources required to make it possible. The Committee remains concerned by the silence on many areas and the confusion in others.
Mike Gapes (Ilford South) (Lab/Co-op)
I obviously declare an interest as a member of the Committee that produced this unanimous report. If we leave the European Union, we inevitably lose influence. Does my friend the Chairman of the Committee believe that the Government have confronted the issue sufficiently and made proposals to remedy and ameliorate the loss of influence that will inevitably arise within Europe and European institutions?
Tom Tugendhat
The hon. Gentleman is more than aware of the debates we have had behind closed doors on this. I will start by saying that when we leave the European Union the nature of Britain’s influence will change, and does not need to diminish as long as Britain takes the opportunity to invest properly in global power. That is why the Committee was so concerned about the possibility that we are stripping off resources from parts of the world such as Asia and South America to reinforce where we will no longer be in the room in Brussels among the EU27. As my dear and honourable Friend knows very well, that is why we need more resources for the Foreign Office in order to make this possible. We need extra commitment, extra drive and extra energy and, to bind it together, we need the vision that, sadly, have not yet seen.
Robert Halfon (Harlow) (Con)
I congratulate my hon. Friend on this very important report. Does he not agree that, given that we are leaving the European Union, we should redouble our diplomatic, economic and educational links with countries such as Serbia, Poland, Hungary and other countries in eastern Europe that are great friends of the United Kingdom, and that, given the significant number of Polish residents here, we should teach children the positive contribution that Polish people have made to Britain and the world?
Tom Tugendhat
I absolutely welcome my hon. Friend’s comments. Britain’s relationship with eastern Europe, particularly the Visegrad Four, was summed up in my conversation with our Baltic partners only yesterday. Britain’s role in assisting at the liberation of those countries from communism and in defending them at other points in history is one that many of them look at with fondness and affection. We should absolutely recognise and invest in that, and I pay huge tribute to our missions and embassies in those countries and the efforts they are making with the resources they have available. All I would add is: imagine what they could do with more resources. Imagine how many more people they could help to persuade of the benefits of thinking along those lines.
Alex Norris (Nottingham North) (Lab/Co-op)
I congratulate the Committee on the report. Disrupting modern slavery supply chains across Europe requires high-quality diplomatic skill on our part. What assessment has the Foreign Affairs Committee made of our future diplomatic capacity in this area to disrupt this blight?
Tom Tugendhat
The hon. Gentleman asks a fair question, and this is one area where we need to consider not just bilateral relations but relations with the European Union as an organisation. We must recognise that if that is how 27 member states choose to work, our option for working with them is through the organisation that they choose. That is simply a fact. Seeing how we can plug into that organisation is essential, which is why we call on the Foreign Office to consider very hard the bilateral nature of that relationship, and perhaps to look at it in a different way. When we look at the mission in Washington, for example, and the way that the British embassy there plugs across an entire network, that may be a model for how we look into the European Union. Some of us—I speak personally here, not for the Committee—are attracted by the idea of having a Minister resident in Europe, not only to promote Britain’s interests, but to make sure that our European partners and friends see the importance that we place on that relationship.
Sir Peter Bottomley (Worthing West) (Con)
My hon. and gallant Friend reminds me that, when I was first elected, half the Whips Office were colonels.
The Committee has done well. There is a reference to the British-Irish Council and to the British-Irish Parliamentary Assembly. I hope that the Government will be asked by this House and by the Committee to make sure that our membership of the Council of Europe, the NATO Parliamentary Assembly and the Parliamentary Assembly of the Organisation for Security and Co-operation in Europe get more attention than perhaps they have had in the past, and that there are regular meetings between their members and Government, and debates in this House.
The question for us is how we can all contribute and gain, because that is the best way to maintain Britain’s interests as the status of our relationship with the European Union changes. As a last point, may I say that, as normal, most of these reports have three blank pages? It might be helpful for those who do not want to read the whole report to have a glossary somewhere, so that the alphabet soup can be understood by those to whom some of these things are strange.
Tom Tugendhat
Perhaps I can pick up on the last point first. I have just smiled at my excellent Committee Clerk, who was so essential to producing this report, and I am sure that she has noted that.
On the other bodies that my hon. Friend mentioned, I am absolutely in agreement with him that the investment that we must make now in different forms of bilateralism and different forms of multinationalism is absolutely essential to achieving the aims of the United Kingdom. This island is not moving anywhere. We are still going to remain 20 miles or so off the coast of France, and we are still going to have our closest relationships, in many ways, with European nations. How we engage in them is essential, and that will require resourcing and time.
Paul Masterton (East Renfrewshire) (Con)
Unquestionably, leaving the European Union means that we must redouble our efforts with our European partners, but surely that cannot come at the expense of manpower or money being siphoned away from other parts of the world. Does the Chair of the Select Committee share my concerns that the Foreign Office does not have enough resources to put the investment that we will need into Europe?
Tom Tugendhat
I absolutely share my hon. Friend’s concerns. He will be aware that the recent sale of an embassy in Thailand, which admittedly raised an awful lot of money to address some of the holes in the capital spending of the Foreign Office, will inherently have diminished our presence in some way. These symbolic buildings, these iconic places, are essential to getting people through the door—and, of course, what is the purpose of a diplomatic mission but to get people in to talk to us? Although these palaces may look glorious, and none more so than our embassy in Paris, the work that our ambassador, the right hon. Lord Llewellyn, is putting into that building—not into the bricks and mortar, but into it as a living body, as an embodiment of Britain in Paris—is essential to ensuring that our network is increased, that our reach is augmented, and indeed that our economy is promoted. That is only possible when we resource it correctly, which is why I absolutely agree with my hon. Friend that we do need to increase the resources available for the Foreign Office in order to promote the United Kingdom and to get better return for this country on the investment that we are making.
Mr Philip Hollobone (Kettering) (Con)
On page 26, my hon. Friend’s Committee looks at the issue of NATO and the new EU defence pillar. He encourages participation in some EU defence integration measures. On behalf of my constituents in Kettering, may I caution his Committee against that as a slippery slope, because NATO is the main pillar of western defence and will always remain as such? The EU is in great danger of undermining that, and we should not go down that slippery slope, because it would not be in our national interest.
Tom Tugendhat
I thank my hon. Friend, whose points on this area have been important and well made over many years, and I welcome his intervention now. This report was passed unanimously, despite such points, because of the evidence that we heard. The reality is that non-NATO EU states—countries like Sweden—are looking to integrate more closely now that we have gone with other European nations on defence. We have a choice. If we wish to work with northern allies like Sweden in defence of the high north and in projecting Britain’s influence in the Arctic, we need to think, what is the most appropriate organisation, and what is the most appropriate structure through which to operate? I am entirely in agreement with him that the EU would not be the best structure and that NATO is, but the problem is that we have lost our veto in the European Union, the other 27 are pursuing that, and we therefore have a choice either to work with them at some level or not to be part of it at all. Given Scotland’s position and given our position as a nation with interests in the high north, I would urge us to work with others who have interests there and, on occasion and cautiously and carefully, to work with some EU defence structures.
Peter Grant (Glenrothes) (SNP)
I commend the hon. Gentleman and the members of his Committee for a sobering but very, very useful report. Given the number of quite serious concerns that it raises—for example, the fact that it appears that three different witnesses for the Foreign and Commonwealth Office gave three different understandings as to what their role in the Brexit process was—can he advise the House on what arrangements the Committee intends to make to ensure that Foreign Office Ministers are held to account for the recommendations? In particular, would it be appropriate to ask the Foreign Secretary to make a statement to the House at an early date, so that the House can scrutinise in more detail some of the concerns that the report has raised?
Tom Tugendhat
The hon. Gentleman makes a very good point. One thing that we are finding, as the Minister, my right hon. Friend the Member for North East Bedfordshire (Alistair Burt), who is in his place today will know, is that at times there is a little resistance in the Foreign Office to answering some questions. Indeed, I had to write to the Foreign Secretary about it yesterday. The Minister is one of the most open and helpful people in his Department, so there is absolutely no criticism either of him or his area of responsibility, but there are other areas in which we are finding it hard to get answers.
For example, we have asked how the Foreign Office envisions the meaning of global Britain. So far, it has declined to answer. I find it somewhat unusual that a Government Department should refuse or decline to answer questions from the assembled people in this Parliament; I find that an unusual position to take. Therefore, we are asking the Foreign Office to think again. The hon. Gentleman is absolutely right that we need to hold the various Ministers to account. The Foreign Secretary will be answering Foreign Office questions here in this House, and we have asked all Ministers to appear twice a year before the Committee, because we feel that six months is a reasonable time lag between visits. The hon. Gentleman is well within his rights to call for a more urgent response if there is something that he sees as more urgently requiring it.
Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)
I commend the Chairman and the members of the Committee for producing this excellent report. Will he confirm that, in relation to intelligence and security, a permanent official should be appointed to ensure that the relationship that we have with Europe at the moment continues?
Tom Tugendhat
Madam Deputy Speaker, if you will forgive me wearing another hat as the member of the Joint Committee on the National Security Strategy, I will tell the hon. Gentleman that I was privileged to hear from two of our former chiefs of intelligence and two other senior diplomatic officials recently about the sharing of intelligence and the importance placed on it by all nations in the European continent. I am not concerned about it not continuing. The one concern is that we must have influence over data sharing and data holding regulations, because European decisions on that could well affect United Kingdom companies and interests.
The Minister for the Middle East (Alistair Burt)
It is my role simply to say thank you to the Chair of the Foreign Affairs Committee for his presentation and to thank colleagues for their contributions. I have obviously listened very carefully to all the exchanges and will draw them to the attention of both the Foreign Secretary and the Minister for Europe. There will be a formal Foreign Office response in due course, but it is also an opportunity to thank the Committee for its work. I certainly look forward to appearing before it again in the future. Finally, happy birthday, Madam Deputy Speaker.
Madam Deputy Speaker (Mrs Eleanor Laing)
Thank you very much, Minister. No numbers are to be mentioned.
Point of Order
(6 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Barbara Keeley (Worsley and Eccles South) (Lab)
On a point of order, Madam Deputy Speaker. May I also wish you a happy birthday?
In an oral statement on social care on 7 December 2017, the then Care Minister, the hon. Member for Thurrock (Jackie Doyle-Price), replied to a question I asked about the Government abandoning the carers strategy that had been due to be published in summer 2017—a strategy that has been dragging on for so long, in fact, that the right hon. Member for North East Bedfordshire (Alistair Burt) was associated with that piece of work when he was in his former role. The then Minister said, about the thousands of carers who had responded to a consultation and then been left waiting:
“We have listened to them, and we will consider what they have said in bringing forward the Green Paper. In the meantime, it is very important to pull together exactly what support there is at present and then respond to that, and we will publish our action plan in January.”—[Official Report, 7 December 2017; Vol. 632, c. 1238-1239.]
It is now February. Not only have we no longer any prospect of a carers strategy from the Government, but they have not met their own target to publish an action plan. This is a shabby way to treat carers. Madam Deputy Speaker, do you have any indication that the new Care Minister plans to come to this House to update us on what, if anything, the Government propose to do to support carers?
Madam Deputy Speaker (Mrs Eleanor Laing)
I thank the hon. Lady, first for her good wishes and secondly for drawing the attention of the House to a matter about which she has concern. As she knows, I have no power or authority to require the Minister to come to the House, but there are other methods that the hon. Lady can use to attempt to require the Minister to come to the Dispatch Box and answer her questions. Mr Speaker has made it very clear in the past—of course, I agree with him—that when a Minister has given an undertaking that something will be done, it ought to be done. I am quite sure that the hon. Lady’s point will have been noted by those on the Treasury Bench.
Backbench Business
(6 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Baby Leave for Members of Parliament
(6 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ms Harriet Harman (Camberwell and Peckham) (Lab)
I beg to move,
That this House believes that it would be to the benefit of the functioning of parliamentary democracy that honourable Members who have had a baby or adopted a child should for a period of time be entitled, but not required, to discharge their responsibilities to vote in this House by proxy.
May I join others, Madam Deputy Speaker, in wishing you a happy birthday? You honestly do not need to worry about numbers. I am 67 and I have discovered, as I get older, that I know a lot more things that I did not know when I was younger. There is nothing wrong with getting older.
I thank my hon. Friend the Member for Gateshead (Ian Mearns) and the other members of the Backbench Business Committee, which he chairs, for agreeing to the subject of the motion. As the Backbench Business Committee was introduced when I was Leader of the House, I was very glad that its members did not turn me down when I went before them to ask for this debate.
The right hon. Member for Basingstoke (Mrs Miller) is in her place. I thank her for all her work on this issue. This has very much been a joint enterprise between her and me. I really cannot speak highly enough of her work as the Chair of the excellent Women and Equalities Committee. I do not usually say good things about people who have been in the Cabinet in Tory Governments, but she is really very important to us all in her role.
I thank the 52 hon. Members from all parties who supported the application for this motion, including right hon. and hon. Friends in the Labour party, so many of whom are here today; I thank them so much for attending. Members of the Scottish National party have been active and supportive co-workers on this issue, as have the Liberal Democrats and many hon. Members on the Tory Benches. This is very much a cross-party issue.
I am pleased to see that the Leader of the House is in her place and that, in a week that has not been unbusy for her, she will be responding to this debate personally. She has been prepared to give me her time and talk about the issue, and she is here to respond to the motion. That is testament to her commitment to the issue, along with the shadow Leader of the House, who is also present. Mr Speaker’s Reference Group on Representation and Inclusion has also looked at this subject.
This motion asks the House for its in-principle agreement to make arrangements for when a Member has a baby or adopts a child. At the moment, we have no such arrangements. In this House, we set the rules for parents outside the House having babies or adopting a child, and we do so because we think that it is important for the child and for the parents. We do it because we want new parents not to have to ask for favours, but to be clear about where they stand. But there is no such system for Members of this House.
Thelma Walker (Colne Valley) (Lab)
I thank my right hon. and learned Friend for bringing forward this important debate. Does she agree that, as we set the rules for people outside the House to take maternity, paternity and shared parental leave, we ourselves have a system that makes this place less family-friendly than most workplaces in the UK?
Helen Hayes (Dulwich and West Norwood) (Lab)
Will my right hon. and learned Friend give way?
Helen Hayes
I pay tribute to my right hon. and learned Friend and constituency neighbour for tabling this motion, and for her work over more than 30 years to advance equality for women in this place and in the wider world. Last week, I visited a girls’ secondary school in my constituency, where students asked me what it is like being a woman in the House of Commons. There were gasps in the room when I mentioned that there is no maternity leave for women Members. Does she agree that we owe it to a generation of young women who are now thinking about their future to make this place somewhere where they feel welcome and have the same rights as every other woman in workplaces across the country?
Ms Harman
Absolutely; my hon. Friend is spot on.
“Erskine May”, our parliamentary rules bible, says absolutely nothing about pregnancy, which is no surprise at all. It used to be the case that the overwhelming majority of Members were men. It was not that those men were not parents; it was just that they regarded a baby as the sole responsibility of their wives. There were hardly any women in this House then, and those who were here were mostly older women whose children had grown up or who had no children. That was certainly the case when I had my three children as a young Member of this House. I was the only woman in the House having babies at that time. Things have now changed, and the sight of growing pregnant bumps in our Division Lobby is commonplace and celebrated on both sides of the House.
Cat Smith (Lancaster and Fleetwood) (Lab)
On that point, will my right hon. and learned Friend give way?
Cat Smith
I thank my right hon. and learned Friend for making an excellent speech, and declare my interest as one of those Members with a growing bump. Does she agree that that highlights the urgency with which we have to address the issue? I am not the only Member of the House who is currently pregnant. Does she agree that we are working to a deadline? Babies do not wait; it is not going to stay in there forever.
Ms Harman
I certainly do agree and I congratulate my hon. Friend. I am looking forward to meeting the new arrival.
The reason we are proposing this change now is that the House has changed profoundly in its attitudes and its membership. Now, many men want and expect to play their part with a new baby.
Mike Gapes (Ilford South) (Lab/Co-op)
In 1993, when I informed the Chief Whip that my wife was going into hospital and that I intended to be at the birth, I was told, “That’s alright, as long as you’re here on Monday night to vote on Maastricht matters.” As it turned out, my daughter was born on the Sunday, and I was able to leave the hospital, come in and stay until 2.30 am. The dilemma applies to men as well as to women.
Emma Reynolds (Wolverhampton North East) (Lab)
Does my right hon. and learned Friend agree that it is a crying shame that, even though the last Labour Government introduced shared parental leave, only around 5% of fathers take it? I do not think there is really any provision in this House for new dads to do that.
Ms Harman
Absolutely. Having talked to colleagues in all parts of the House, I know that fathers feel as strongly as mothers about this issue. That is a real change. It is really gratifying to me to see younger men who are determined to be not only excellent Members of this House but sharing parents and responsible fathers who do not see their baby just as their wife’s business. Most wives now work, and their husbands in this House want to support them in that.
Sir Peter Bottomley (Worthing West) (Con)
I am sorry not to be able to stay for long, partly because of the problem with my leg. I congratulate the right hon. and learned Lady on a motion that mentions not men or women but Members—that is a plus. When my wife was elected, our youngest child was two, so we did not actually have a birth when we were both Members. We have talked about slippery slopes, but we should also talk about a staircase. At some stage, if this goes through, we ought to consider what happens to people who are hospitalised, or have to take time off to care for an elderly parent or another member of their family in some extreme emergency.
Ms Harman
That might well be the case in future, but for the moment we are talking about maternity, paternity and adoption, and we should focus on that.
I never thought I would see the day when the sons of the women’s movement arrived in this House—but they are here. They want and expect that they should play their part with a new baby. All credit to them, and let us change the rules to recognise that. The hon. Member for North East Fife (Stephen Gethins) told me:
“My wife and I had our son Patrick just 2 weeks before the General Election last year who was a welcome addition to our family and a loved brother for our daughter Mhairi who is 3. My wife is and remains a star who, like other MPs’ partners, has to put up with so much because of this job, its challenging hours and need to be away from home. I wish I could have had some paternity leave when Patrick arrived so at least just after he was born I could have been a greater help than I have been. My wife has never complained and like others got on with it but she deserved more support than I was able to give her and I hope that we can fix this for other MPs.”
I hope that that is what we will do.
There are more women Members than ever before, in all parts of the House—over 200—and younger women as well. It is a democratic imperative that we have women in this House as well as men to make the House representative of this country, and it is a biological inevitability that young women will have babies. There have already been 17 babies born to women Members since 2010.
Hannah Bardell (Livingston) (SNP)
I congratulate the right hon. and learned Lady on the amazing work that she has done on this issue, and on her speech. Does she agree that given that we are apparently by definition the gayest Parliament in the world and have many LGBT Members, there will be many young gay male Members and female Members, like me, who may at some point want to have children, and it is important that this motion supports them as well, whether in adoption or biological birth?
Ms Harman
I thank the hon. Lady, who has been unstinting in her support. We have worked together on this. She is absolutely right. That is why I called it baby leave rather than maternity and paternity leave, and why I refer to parents and their children.
As I say, there have been 17 babies born to women—and countless born to male Members of Parliament but which we do not know about. In the absence of any official recognition of these babies being born to Members, the way things work currently is that women MPs who are giving birth, or men MPs who want time with their baby, ask the Whips for a pair, and their Whips then make an arrangement with the Whips on the other side of the House. The situation in relation to the Whips is nothing like it was when I was having the first of our three children 34 years ago and I had to ask for a few weeks off from the Whips Office when most of them thought that a woman, let alone a pregnant woman, should not be in the House of Commons. I know that attitudes in the Whips Office are now completely different, but each Member still has to make a request. We would not agree to that happening in any other workplace. Furthermore, it is in the discretion of not just one Whips Office but two, because both Whips Offices have to agree.
David Linden (Glasgow East) (SNP)
I speak as an SNP Whip. Our party does not take part in pairing. I very much commend this proposal because I am really uncomfortable with the fact that we would have to go for a pairing arrangement, as is currently the case. I very much support what the right hon. and learned Lady is saying, particularly in the context of those of us who do not do pairing.
Ms Harman
That is a really important point. I hope that we can think of some arrangements that can be made to deal with the issue of SNP Members until such time as we zoom this process through.
Granting or withholding a pair is an important role for the Opposition Whips Office. No one can accuse me of not knowing the importance of fighting in opposition, because, tragically, that is what I have been doing for 20 years of my parliamentary life, but a woman giving birth should not be a matter of wrangling between Whips Offices or an opportunity to take advantage of the Government, however much they may deserve it.
Margaret Greenwood (Wirral West) (Lab)
I congratulate my right hon. and learned Friend on securing this really important debate. Does she agree that Professor Childs was absolutely right to argue in her “The Good Parliament” report of 2016 that
“to become a truly inclusive institution the House of Commons must accommodate and facilitate both the pregnant woman Member and co-parenting and caring MP”;
that the current informal arrangements lead to misunderstandings about the effectiveness of MPs, particularly women; and that the change that is being sought is long overdue?
Ms Harman
My hon. Friend makes a very good point. “The Good Parliament” report also reports on all the other Parliaments around the world that have sought, in their own way, to deal with this.
This is not just a matter of the wishes of parents. It is also about the rights of our constituents, because when an MP is paired, Hansard simply records that they have not voted—that the vote to which their constituency is entitled is not cast.
Laura Pidcock (North West Durham) (Lab)
The negotiation between Whips is important in other circumstances. However, I am sure that many women in this House who take time off to be with their baby in the first few weeks want to practise the act of democracy that is voting so that they are representing their constituents while being a new mother, and it should not be suggested that they simply have not voted.
Ms Harman
My hon. Friend is absolutely right. Why should a constituency lose the right for a vote to be cast in its name because its MP is having a baby? You cannot be voting when you are in a birthing pool, Madam Deputy Speaker, but your constituency has a right to have its voice heard.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I thank my right hon. and learned Friend for her excellent speech. She is making an important point about mothers—and fathers—who are not able to be here when they are looking after their infants. The website TheyWorkForYou.com currently registers the fact that I have voted in just 16.51% of votes in the past year. I have, though, been in Parliament, but have just gone home to look after my child at the end of the day. Does she concur that this should be rectified not only in Hansard but on that website to reflect the fact that parents who are not here are looking after their children?
Ms Harman
My hon. Friend makes a very important point. We need to do this for defensive reasons, because women who are off having babies or men who are off with a newborn baby are criticised, and that is wrong. But it is even more important than that—our constituents should have the right to have their voice heard, and we want to protect that right even though their MP is off at certain times with babies.
Rachel Reeves (Leeds West) (Lab)
I thank my right hon. and learned Friend for her powerful speech and for all the work that she has done over the years on these important issues. I am responsible for two of the 17 babies who have been born since 2010. When my first child was born almost five years ago, one of the campaigning organisations that email constituents about votes emailed my constituents to say that I had not bothered to turn up to a vote. I would very much have liked to turn up to vote on all the issues, but with a very young baby it simply was not possible. That needs to be rectified as well, because in the minds of constituents we are not here and not representing them, but we are doing very important work at home.
Ms Harman
My hon. Friend is absolutely right. That chimes very much with what my hon. Friend the Member for Sunderland Central (Julie Elliott) says. As a mother of four, she thinks that
“just because women having babies are based in their constituencies in the weeks and months following giving birth that should not mean that their constituents are not represented by their MP casting their vote.”
My hon. Friend the Member for Bury North (James Frith) had a new son, Bobby James, who was only 35 years old when we had a crucial vote on Brexit—[Hon. Members: “Days!”] Sorry. He was only 35 hours old when we had the crucial Brexit vote. My hon. Friend’s wife, Nikki, had an early induction because her pregnancy was high-risk. He says that with the fixed vote coming up, and his wife in labour, his fundamental role as an MP was pitted against his fundamental role as a man, dad and husband in support of who he describes as his amazing wife. He says it brought an edge to the delivery room that was frankly unhealthy, and that it is surely
“easier to move Parliament than hold back the majestic and existential forces of the arrival of new life.”
Let us show that we can manage to move Parliament.
As my hon. Friend the Member for Leeds West (Rachel Reeves) said, the trouble is that, even when an MP is paired, people outside the House do not understand pairing. They just see that their MP has not voted. Social media campaigns, which my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) mentioned, criticise MPs who have not voted on important issues, unaware that they are paired because of childbirth. They get criticised in newspapers that run voting league tables. My hon. Friend the Member for Manchester Central (Lucy Powell), who we all know is one of the most hyperactive MPs in the House, featured at number two in The Sun’s list of Britain’s laziest MPs. We cannot go on like this.
Emma Reynolds
I apologise for intervening again, but I think I am responsible for the latest addition to the 17 babies. He was born on Good Friday last year. I was criticised by a Sunday newspaper. I will not name it, because although I should not have had to ask, when I got in touch with the political editor, he kindly took my name off a story that rated me as the second worst MP in this Parliament, without mentioning that I had been on maternity leave since the election.
Ms Harman
My hon. Friend needs to be able to cast her constituents’ vote by proxy while being in her constituency, with the lovely Theo. That is what the proposal before the House would enable.
The proposal puts to the House that we should agree in principle that Members should be allowed to choose another Member to vote by proxy for them in the Division Lobby when they have had a new baby or adopted a child. If there is agreement to that in principle, many issues of implementation would have to be considered further by the Select Committee on Procedure. As “The Good Parliament” report made clear, other Parliaments have made arrangements for baby leave, but we would need to do it in a way that fits with our culture and our processes.
I know Members are always rightly concerned that any change might have unintended consequences or be the thin end of a wedge. We rightly jealously guard the rules of our democracy. I want to reassure Members on a number of matters. The resolution before the House is not that a Member would be required to apply for a proxy vote, but that they would be able to do so if they chose. Those who want to take no leave or to ask for a pair would be perfectly free to do so, as they are now.
It would not affect pay, which is a matter for the Independent Parliamentary Standards Authority. IPSA has assured me in writing that how we vote in the House is a matter for us, not for it, and it would not regard any change in voting as a matter that would affect pay in any way, so that is just not an issue. It would not be open to abuse because whether someone has had a baby or adopted a child is not a subjective judgment; it is a matter of fact.
It will be evident to hon. Members that I am not moving this motion out of self-interest. It is too late for that—30 years too late. My children are already grown up, but I want this for the younger Members and future parents in the House.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
I am grateful to my right hon. and learned Friend for giving way, and I wish you a happy birthday, Madam Deputy Speaker—I will not give you the bumps.
My right hon. and learned Friend talked about her own experiences, and she was very fortunate to have our hon. Friend the Member for Birmingham, Erdington (Jack Dromey) by her side. She also talked about pairing. In personal life, not everyone is paired. I speak as chair of the new all-party parliamentary group on single-parent families. Is she aware of the figures from Gingerbread that point out that single-parent families are an increasingly common family form? The figure is 51% in some London constituencies, and there are 3,649 in mine. These problems are exacerbated for single parents. Will she encourage people to join my APPG, which was registered only this week?
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Before the right hon. and learned Lady responds to the intervention, I should add that I have no wish whatsoever to curtail this excellent debate on a very important subject. However, I draw to her attention that while she is absolutely correct to take lots of interventions, because there is much to be said about this, I have a note of a great many people who wish to speak, and we do not have a huge amount of time.
Ms Harman
I will draw my comments to a close.
In this centenary year, 100 years after women first won the right to stand for Parliament, I hope that we will agree to the motion and that the Procedure Committee will look at the matter expeditiously. We do not have all the time in the world. At least two more parliamentary babies are in the pipeline. The hon. Member for East Dunbartonshire (Jo Swinson) is awaiting her second baby, and my hon. Friend the Member for Lancaster and Fleetwood (Cat Smith) is also expecting. While we talk, nature is taking its course, so let us agree this and get on with it.
Mrs Maria Miller (Basingstoke) (Con)
May I echo Members’ good wishes to you on your birthday, Madam Deputy Speaker? Of course, you have a great deal of first-hand knowledge of this issue. Although I know that you are not able to participate in the debate, I am sure you are sitting there thinking fondly of your own experiences of being a pregnant Member of Parliament and your wonderful son, who I have had the pleasure of meeting on a number of occasions.
It is a great pleasure to follow the right hon. and learned Member for Camberwell and Peckham (Ms Harman). She characterised this as a joint enterprise. I am not sure whether it is the sort of joint enterprise that we have talked about in the Chamber in a legal sense, because that is a crime in which more than one person is involved, but I understand the point she makes, because this has to be a joint enterprise if it is going to be successful. I sense from the good will we have heard today that that joint enterprise will be a very positive thing. I pay tribute to her as Mother of the House. She has done so much to set the tone on these issues over many years.
I also pay tribute to those who have rolled the pitch for this and made it easier for us to bring the debate forward. Professor Sarah Childs has been mentioned. Her work has been a foundation of much of the modernisation we are talking about. I would thank Mr Speaker as well, if he were here, because he has helped to set the tone.
I pay tribute to my right hon. Friend the Leader of the House, who is doing a sterling job of ensuring that this is a modern place for us all to work in. That is important for not only our staff, but Members. The Commons Reference Group on Representation and Inclusion, the Select Committee on Women and Equalities, which I have the pleasure of chairing, and others have been instrumental in slowly sowing the seeds of change.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Speaking as another member of the Speaker’s Commons Reference Group, I want to say how important this debate is. It is rooted in real and new evidence about Members’ experiences. By bringing the House into line with the policies of other workplaces, we will set the right tone and precedent for the future, particularly in this week, when we will be celebrating 100 years since women got the vote.
Mrs Miller
The hon. Lady is absolutely right. Through the Commons Reference Group, we are not only uncovering some important ways in which this place is changing, but identifying ways in which it needs to change. It is a great pleasure to work alongside her on that group.
Being a Member of Parliament is a unique position, a unique honour and a unique responsibility that requires complete commitment, but that cannot mean that only those without caring responsibilities can apply. Indeed, the experience we have as carers can make us much better Members of Parliament, and that is why I wholeheartedly support the motion.
Dame Margaret Hodge (Barking) (Lab)
I congratulate my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) on securing the debate.
The right hon. Member for Basingstoke (Mrs Miller) is talking about this place, but I want to raise another issue. I chaired the Fawcett Society’s inquiry on the representation of women in local government, and it was shocking to discover that only 2% of local authorities have maternity leave policies, and that a number of women councillors who had babies were then sacked from their jobs as cabinet members. Does she agree that while what we are debating is hugely important, all of us as politicians from political parties ought to engage with our colleagues in local government to secure the necessary changes there that will ensure the proper representation of women?
Mrs Miller
The right hon. Lady is absolutely right: we need more women at every level of our democratic process. I must say that I have a phenomenal team of women in my Basingstoke constituency. Nine of the 14 councillors are women, and that is even more astonishing given that a number of them are young women with very young children. Others should look at what is happening in councils such as mine to encourage more young women to come forward, and to prevent doing so being seen as incompatible with having a young family.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Will the right hon. Lady give way?
Ruth Cadbury
I thank my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) and the right hon. Lady for securing this debate. The right hon. Lady makes an important point about local government. I gave birth 23 and 25 years ago, while I was a senior councillor in Hounslow. Although that was difficult, there are two fundamental differences between being in this place and being in local government. In local government, people are near to home, and the times they have to vote, and to be recorded as voting, are measured and occasional. This place is very different for both those reasons.
Mrs Miller
The hon. Lady used to be a member of my Committee, and I have worked with her and know her well. She makes a point to which I will return, because although the motion is really important, we need to think about other aspects of this place if we are to make it work for everybody, regardless of their caring responsibilities. I will now try to make a great deal of progress, Madam Deputy Speaker, so that you do not have to remind me that we are short of time.
1 wholeheartedly support the motion in its own right, because a new addition to the family—a new baby or a newly adopted child—is a wonderful thing, but a huge change as well. When the rules and conventions of this place were established, women had no place here and men had little or no role in their children’s lives. The rules and conventions were not established on the basis of any research or facts, but reflected the way in which men lived their lives many years ago. Men’s lives have changed, and women’s lives have changed. Women can now become MPs and our lives have changed, but the demands of having a child have not changed. Allowing MPs to decide to take some time away from this place, without disenfranchising their electorate in the process, is an important step in its own right, and one that I fully support.
The proposal is, however, just one small step. I speak as the mum of three kids. When I entered the House, my youngest was three, and for me the transition was very easy. I had worked full time before, and I had the best childcare in the world—grandparents, who were there to look after my children—but not every Member of Parliament has that built in and not every Member of Parliament is as lucky as I was. That is why I believe this is just one small step.
This is one small step in a change to Parliament’s workplace culture that is long overdue. We recognise the importance of workplace culture for the people we represent, whether it is the culture at the BBC that has allowed women to be underpaid, or the culture in Hollywood and the entertainment industry that has allowed the likes of Harvey Weinstein to thrive and to abuse the people around them. When we scrutinise the effectiveness of laws, we often conclude that culture needs to change so that those laws work better. We have heard about the example of shared parental leave, which was introduced by the coalition Government, and about the right to request flexible working. They are all things that people want, but when we do the research, we find that the uptake is low, because the culture in the workplace has not changed to reflect changes in the law.
We have a duty not only to pass laws, but to influence culture. That is why it is so important that my right hon. Friend the Leader of the House is bringing forward a new disciplinary process on sexual harassment, and it is why we also need to show that culture change in relation to families is also important. This should apply not only to MPs with new children, but to MPs with a wide range of caring responsibilities, such as for older children, for older family members—I have such responsibilities—or, indeed, for disabled family members.
As we consider the motion—I hope we will agree it—I hope not only that we will take this small step, but that other steps will follow. I want to give the particular example of the importance of predictability in working life. Before I entered this place, I was a director of an advertising agency. It was a very difficult and challenging job, but I could do it, because I could determine how to make my working life work for me. It is very difficult to have such a level of predictability here, particularly in relation to votes. Following the motion, I advocate our looking at a voting hour to create more predictability in how this place works so that people with caring responsibilities can better work them around their overwhelmingly important responsibilities here.
To those who say that introducing baby leave is the thin end of the wedge, I have to say that they are right if that will mean that we can show compassion to a colleague who is fighting cancer, or to a colleague who has to attend the funeral of a close relative, rather than disenfranchising their constituents while they are being human beings. We need to make this change so that we can allow people to get the balance in their lives that, sadly, is so lacking at some points in the parliamentary calendar at the moment.
Dr Sarah Wollaston (Totnes) (Con)
My right hon. Friend is making a very powerful speech and I absolutely support the motion. I agree with her in very much hoping that this is the thin end of the wedge, because on the centenary of the Representation of the People Act 1918, we must do more to fix the pipeline problem here so that we encourage more women at a younger age to think about putting themselves forward to become Members of Parliament.
Mrs Miller
I thank my hon. Friend for that intervention because, 100 years since the first woman sat in this place, it still feels for many of us as though we are operating in an 18th-century model of work, and that really needs to change.
Tom Tugendhat (Tonbridge and Malling) (Con)
I cannot be alone in being a man in this House whose partner has an extremely important job of her own. She sits as a supreme court judge in France, and that takes her away from home, so I have childcare responsibilities, too. Indeed, I have a one-year-old baby—funnily enough, she does not look after herself. When we are talking about equality, I absolutely understand the emphasis on women’s rights—of course I do—but this is actually a human right. It is about not men or women, but about anybody who has responsibility for caring for a child—or, indeed, for caring for an adult. If we are thinking about equality, we could be talking about someone with religious obligations that might keep them away for various reasons.
Mrs Miller
My hon. Friend makes a very powerful point. It is important to recognise the way in which many family lives have changed over the years, and that was why it was important to frame the motion in terms of MPs or parents, not men and women. Any of us may have caring responsibilities; they are not now the sole preserve of one gender.
It would be remiss of me not to acknowledge the extraordinary way in which the Whips department has evolved during my time in this place. When I remember some of my conversations with the Whips when I first arrived in 2005, I shudder a little, because they did not reflect my previous 20-year working life. As I look in particular at my hon. Friend and constituency neighbour the Member for Eastleigh (Mims Davies), who is sitting on the Front Bench, and my hon. Friend the Member for Bury St Edmunds (Jo Churchill), both of whom were members of my Select Committee, I know that the Whips Office is in extraordinarily good hands.
We cannot leave this to chance. We need better rules to give people certainty about what they can expect. MPs have a duty to keep our democracy healthy. I do not believe that MPs can ever be treated as employees. Our role means that we will never really be subject to an Independent Parliamentary Standards Authority contract; our contract is with the people whom we represent, and they demonstrate their views each time there is an election.
We can modernise the culture of this place—for our employees, of course, for Members today, and for those who will come after us—so that it reflects the 21st century, not the 18th century, and to make it an attractive place for a more diverse range of people who will want to become Members of Parliament. Today is one small step to allow new parents some time away from this place so that they can cope with the demands of a new family member. The change is long overdue, but following this debate, we will need to press forward further with modernisation, particularly around scheduling in this place. The lack of consistency and certainty has been raised with me, because that makes us less productive and less able to balance our family life.
I respectfully disagree with people who think this change is wrong. The health of our democracy depends on the strength of the House of Commons, and we are strengthened if we are truly representative of the communities that make up this United Kingdom. Introducing baby leave for Members of Parliament who need and want it is just one small step in opening up membership of this place to more people, and in ensuring that fewer people choose to leave before their time because their life as an MP is incompatible with the responsibility of being a parent. I hope that the motion gets the full agreement of the House today and, above all, that the Procedure Committee looks at the matter swiftly so that Members with imminent arrivals can look forward to their births without a question as to how they will deal with their Whips.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The debate has to finish just before 3 o’clock, so we will have a time limit of about eight minutes. Sorry, not “about”; the debate has to finish at about 3 o’clock, and the time limit is exactly eight minutes. I had in my mind the terror that I felt the day I told the Chief Whip that I was going to have a baby—something that had happened only once before in the Conservative party. It was causing palpitations again. I call Emma Reynolds.
Emma Reynolds (Wolverhampton North East) (Lab)
Thank you, Madam Deputy Speaker. I will keep to exactly eight minutes. I thank the right hon. Member for Basingstoke (Mrs Miller) for her contribution, which I found incredibly thoughtful; I agreed with every word she said. I pay particular, special tribute to my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), not only for bringing forward these proposals and doing so much work on the issue, but for all the work she has done since joining the House many years ago—I do not know how many, but she is the Mother of the House—to ensure greater gender equality in our country and our Parliament. We have made huge progress in the time that she has been an MP, thanks to her work, but as the motion demonstrates, we still have quite a way to go.
I want to recount what happened in 2017. My husband and I were expecting a baby in April, and we were hoping for a quiet year on the work front. We thought, “This is great. Theo—” well, he was “the bump” at the time—“will be around three at the next election,” because the Prime Minister seemed absolutely determined to stay in place and respect the Fixed-term Parliaments Act 2011. I gave birth at 2 o’clock in the morning on Good Friday. As those hon. Members who have been there will know, it is a very physically demanding and tiring process. Four days later, I was lying on my bed at home in the morning, breastfeeding baby Theo, when my mother used a few expletives while looking at her phone. I asked, “What’s happened?”. She said, “The Prime Minister has called an election.” I said, “No, that can’t be right. She was adamant that she wasn’t going to do that.” Some hon. Members had noticed that there was no writing on the podium, but I had not even known that she was making a statement.
My husband came in, and my mum said, “Richard, there’s going to be an election.” He said, “Emma, you have to check this straight away. I don’t believe it.” We were in a state of disbelief for quite some hours, days and weeks. We wondered how on earth we were going to cope with a newborn—this brand new little person we had in our lives, who we were already struggling to cope with during the night, because he was up most of it. We had to do that and organise an election campaign. It was a busy time. I thank the vast majority of my constituents, who were so supportive. I lost count of the number of messages and cards, and the number of people who, when we were on the doorstep, asked how I was, and how baby Theo was getting on.
A small handful of people said to me that once the election was called, they assumed that I would not stand again. I politely said to them, “Would you ask the same question if my husband was the MP?”. No answer came back, because it was obvious: of course they would not.
New mums and new dads in this place should have the same rights that we have legislated to give men and women across our country. In a way, I cannot believe that we are dragging our feet on this, given that we have legislated for such marked improvements in the past few years.
David Evennett (Bexleyheath and Crayford) (Con)
I have really enjoyed listening to the hon. Lady’s experiences. I have just joined the Procedure Committee, and attended it yesterday for the first time. It is on our agenda to have an investigation and report on this very important issue. I thought I would put that on record.
Emma Reynolds
I thank the right hon. Gentleman, and I urge him to do that quickly, because as we have discussed, various colleagues have a very tight deadline, which the Committee should work to.
I want to put on record my thanks to my husband’s employer. As Members of this House will know, new dads have a right to shared parental leave, but they have to give several weeks’ notice of their intention to take it. It happens to be eight weeks’ notice, which is about the same time as an election campaign. Thankfully, his employer agreed to bring his parental leave forward. I am not sure that we would have been able to cope if he had been working full time while I was running the campaign, so I am grateful to his employer for doing that. I encourage new dads to take up this right, because it is a crying shame, as I said in an intervention, that only 5% do.
We got through the election campaign. A week after I gave birth, Richard Angell, whom some hon. Members will know, brought a whole group of people to come and help. The local paper sent a snapper, and one of the Sunday papers also sent a photographer. They came to my office. I had given birth literally a week before. Baby Theo was there; he peed everywhere. One of my party members said, “Yeah, that’s called the hosepipe trick,” and I said, “Oh right, I hadn’t heard of that before,” but now I am experienced in it. I was having this meeting to gee up my members. The photographers got a photo of me and baby Theo. I was feeling pretty exhausted, but they insisted on joining me on the campaign trail. Little did they know that I did not really want to go on the campaign trail, because I was still pretty tired. If I did it again, I would now have the experience to say, “No. I came to do the members’ meeting and gee everybody up, and I’m going home,” but I did not, and I went out campaigning seven days after giving birth—and I suffered for it physically. Then I had a rest.
We had all these deadlines; people will know that even before the short campaign—and this was such a short campaign—there are deadlines for letters, leaflets and as much stuff as we can get out.
Liz McInnes (Heywood and Middleton) (Lab)
What my hon. Friend has said makes me feel so uncomfortable, because it is actually illegal to work for two weeks after giving birth. The situation that she describes is intolerable. We really have to do something about this.
Emma Reynolds
I admit that I broke the law, and I should not have. The motion before us today would not have helped me, and other Members present were in the same situation—three of us, in fact, were new mums when the election was called. I suspect that nothing can be done when that happens. We were very unlucky with the timing, but something can be done afterwards, which is what I will come to next.
We had the election and I managed to retain my seat, but in the weeks after polling day, I was required to come in to swear in—otherwise, I would not be paid—and to vote on the Queen’s Speech. I was also asked to come in to vote on the Select Committee Chairs and I really wanted to, because they usually endure for five years—let us see what happens—but I did not have a say on that. In fact, I emailed Mr Speaker, who was very sympathetic, but there was not much he could do, because none of these provisions are in place.
As so many hon. Members have said in this debate, it is only right that our constituents are represented in this place. We should have the choice as to whether to appoint a colleague to vote on our behalf. I know that some colleagues are uncomfortable with that, because they would want to be the ones voting. That is why it should be a choice and an option, and my right hon. and learned Friend the Member for Camberwell and Peckham has taken that on board. If someone becomes a new mum or dad, they should be able to appoint a proxy for the time that they are on leave.
I am hugely grateful to the Whips Offices, and particularly my hon. Friend the Member for Alyn and Deeside (Mark Tami). He has been so brilliantly flexible, not only after the election, when I had given birth, but when I was pregnant. I say this to colleagues: bobbing in this place is very tiring when you are really big. It was a great pleasure to come back in January and be able to bob without the bump. In all seriousness, a huge amount of progress has been made in the Whips Offices. I have spoken to many colleagues who had babies 10 or 20 years ago—as you did, Madam Deputy Speaker, when you did not really have the kind of leave that we have been granted. However, as my right hon. and learned Friend said, we should not have to ask for it. This should be our right and in other workplaces, people do not have to ask; they have the right to it. We are dragging our feet.
I echo what my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) said earlier about the website, TheyWorkForYou. I emailed them just before going on maternity leave to see whether the website would reflect that I would be on leave. They fobbed me off, frankly, saying that they would have a look at it. We pestered them but nothing came back. They should consider qualifying it on their website, because many of us have been criticised by national newspapers, and that is not right. It is reputationally damaging. Whether they publish an apology later on or not, it is damaging to someone’s reputation and we should not be put in that position.
In conclusion, I pay tribute to all the right hon. and hon. Members who have gone before me, and I want to single out a few people, as well as you, Madam Deputy Speaker, and my right hon. and learned Friend the Member for Camberwell and Peckham. I pay tribute to and thank my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), who was the first Minister to give birth in office. I have since been inspired by many other colleagues, such as my hon. Friend the Member for Leeds West (Rachel Reeves), who had two babies while she was in the shadow Cabinet.
Juggling family life and being an MP is really tough, but I love both of them. I say to young women out there: do not be deterred. Come in and do it.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I warmly welcome this debate, which my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) secured. She famously fought a by-election back in 1982 while expecting a child and served as one of the first MPs in this House with young children—a real example to us all. I congratulate her on her work to secure this debate and on her marvellous speech.
We have made steady, but glacially slow, progress towards becoming a child-friendly workplace. We now have an on-site nursery—I was working in that building when it was created—on a site where a bar once existed. It is a much improved replacement. However, as we have heard in many eloquent speeches in this debate, so many further, modernising reforms are desperately needed. We need more baby-friendly spaces, more facilities for buggies, nappy bins, and places for women to breastfeed and express. We also need to recognise not only that Members may also be mums and dads, with all the joys and pressures that that entails, but the opportunity that this presents for the diversity of this Chamber and for us to set an example to the rest of the country.
It is fitting to discuss this issue today because, as some Members will know, it is Time to Talk Day. Since the last Time to Talk Day, I have had a baby, and as a new mum, I have been acutely aware of the need for pregnant women and new mums to keep a close watch on their mental health. Like my hon. Friend the Member for Wolverhampton North East (Emma Reynolds), my baby was—if not a few days old—just four weeks old when the election was called. I had had a C-section, and as she said, it was an incredibly stressful period.
During pregnancy and the year after birth, many women will experience common mental health problems, including anxiety disorders and depression, and dads will too. Further, the risk of developing a severe mental health condition, such as postpartum psychosis, schizophrenia, severe depression or bipolar disorder, increases after childbirth. For women, it is the time that we are most likely to experience those conditions.
One trigger for mental ill health is stress and anxiety in the workplace. That is especially true when a mum or dad returns to work after the birth of their child. These issues affect parents not just inside, but outside this House, and that is why this debate is so important. Like many new parents here, I face two very strong priorities: the desire to be there for my child and the desire to do everything I can to speak up and stand up for my constituents, with the privilege and responsibility that I have as the Member of Parliament for Liverpool, Wavertree.
Although I could keep on top of constituency casework from my home in Liverpool, last June I had to leave my constituency and travel the 200-plus miles down to London, to Parliament. First, I had to swear in, and although I am also very grateful to the Whips, I was then asked to vote on a couple of occasions—back in June, when my baby was just three months old, and again in September, when there were some important votes when she was five months old. In September, I was in the Tea Room with my baby until after 10 o’clock at night. I can see Members bobbing their heads—arguably, that was not the right place for her at that time of night. As a breastfeeding mum, on all those occasions my baby came into the House with me.
As colleagues will know, looking after a tiny human is a massive responsibility. I share with the House that I was a slummy mummy. As any parent out there with a newborn will know, it is a challenge on some days just to take a shower—let alone to be able to get out of the house, get to the station, change the baby on a Pendolino train moving at 125 miles an hour, apologise to passengers for the projectile vomit and the crying, get on a tube, often using the escalators and stairs because there is no lift, and to ensure that no piece of important kit is forgotten for an important overnight trip. For some babies, that will be the first time they are outside the homes and places that they are used to. It can be quite traumatic for them.
Proxy voting, the specific measure in today’s votable motion, is a simple means to count a Member’s vote without them having to physically pass through the Division Lobby. It will mean that the representative role of any MP can continue without disruption. This is an issue of fairness not only for new parents, but for our constituents. As with all the representations that we make in this House, our work on campaigns, and the contributions that we make for the country—on improving the first 1,001 days of a child’s life, on giving children the best start in life, on highlighting the importance of attachment, on addressing the woeful breastfeeding rates in this country, on promoting parenting, and on doing everything possible to reduce adverse childhood experience —we need to lead by example and give the children of MPs the best start, too.
Some might say that this is a dangerous leap into modernity—unfortunately, I have heard people say that—but we should be grateful to the Clerk of the House for reminding us in his very helpful memorandum that in past centuries, proxy voting was known in Westminster. We have heard about what “Erskine May” does not say, but it records that until 1868, Lords who were not present could vote by proxy. Since then, no attempt has been made to suspend House of Lords Standing Order No. 60 to allow the revival of
“the ancient practice of calling for proxies”.
In the House of Commons, proxies were allowed in the medieval Parliament. So this is not a leap in the dark, but the unearthing of a fine old parliamentary tradition.
To deny our constituents a voice because of the House’s inability to modernise is an affront to those who put us here. Enabling new parents to register a vote via a proxy would ensure that our constituents could still be heard. We know that the physical arrangements of our parliamentary democracy are about to undergo huge changes, but no matter how and where we assemble as a Parliament, our work continues and our democracy endures. I hope that as we contemplate those changes following yesterday’s votes on the refurbishment of the Palace of Westminster, we will focus on the ways in which we can become even more child-friendly and more welcoming.
Today we are discussing small but significant changes, and people in every workplace should do the same. In every factory, office or other place of work, there are practical ways of helping when parents return to work after having a baby or adopting a child. I think that through these small changes many stressful situations could be averted, and if we are serious about improving our nation’s mental health, they would be an important factor in that.
For more than 35 years my right hon. and learned Friend the Member for Camberwell and Peckham has fought for equality and fairness, both here at Westminster and in the country as a whole. I think that proxy voting would be another valuable way of honouring the continuing contribution of the Mother of our Parliament to our public life. I sincerely hope that the House will approve this measure, and that Mr Speaker will move towards adopting a system of proxy voting without delay.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I must reduce the speaking time limit to seven minutes.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
Some years ago, Madam Deputy Speaker, you and I had to work out how to handle pregnancy in Parliament at similar times. It is lovely to see you in the Chair.
Let me begin by paying tribute to the brilliant speeches made by my hon. Friends the Members for Liverpool, Wavertree (Luciana Berger) and for Wolverhampton North East (Emma Reynolds). Their speeches alone ought to persuade everyone that the motion should be not only passed, but dealt with very swiftly by the Procedure Committee. It is surely a no-brainer. It is embarrassing that, 100 years after women were given the vote, Parliament does not have the system for maternity and paternity leave that was described by my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman).
If other organisations can do this, why can we not do it as well? Shops do it, factories do it, businesses do it, doctors’ surgeries do it, police forces do it, schools do it: every other organisation manages to find a way of doing it. Why on earth can we not do it, especially given that ours is the organisation that has supposedly told so many of those other organisations that they must do it? We tell them that they must have arrangements for leave, but somehow we cannot sort that out for ourselves.
I personally think that this country’s maternity and paternity arrangements are not strong enough. I think that there is not enough provision. I think that culture changes are still needed. I think that too many unnecessary obstacles are put in people’s way. I also think that maternity discrimination is a serious problem. The law is not enforced, and arguably is not strong enough, to ensure that women do not find themselves being made redundant, being demoted or losing responsibilities when they take maternity leave. Similarly, men feel that they cannot take paternity leave, for fear that any of those things will happen. How can we, as Members of Parliament, challenge errant employers who say, “It is too difficult,” or, “We are too special in our particular workplace: we cannot possibly provide for people having babies,” if we do not sort this out ourselves?
I pay tribute to my right hon. and learned Friend the Member for Camberwell and Peckham, who has pioneered so many of these debates and has led the way for so many of us to follow. It was certainly much easier for me to take maternity leave—both as an MP and as a Minister—because of not just the leadership but the personal support of my right hon. and learned Friend, and it is hugely important that she is still doing the same for each generation of women and, indeed, each generation of men. I also pay tribute to the right hon. Member for Basingstoke (Mrs Miller) and the work that she has done on the Women and Equalities Committee to support and promote this reform. I agree with her, too, that there should be wider reforms, not just in Parliament but throughout the country. I know that other parties support that as well.
Having a baby is normal. It is so normal that it is why we are all here. Parliament ought to be able to cope with what is normal, and Parliament ought to show leadership by making it possible. Of course it will always be a challenge, and there will always be chaos. For me, much of that chaos involved travelling to and fro with small children, and not just with a baby. I was a dab hand at changing nappies on a fast-moving train, but the potty training was a little bit more challenging. We had a few sticky moments with a portable potty with a lid on it when I put it on a shelf on one of those fast-moving trains.
Having small children and being a Member of Parliament will always involve some complexities. It is an honour to be a Member of Parliament and to represent our constituents, but it ought to be made possible to manage both, as all too often it is not. A former hon. Friend of ours, who has since left the House, was asked to come in for votes when her baby was very small. At that time, we were not even allowed to take babies through the voting Lobbies. We ended up in a mad “baby relay”: we took it in turns to vote and to carry the baby while she went to vote. That was great for us, because we had the chance to cuddle a tiny little baby, but the truth is that neither she nor the baby should have been here. They were here because it was a tight vote, and there was pressure on Members to come in.
As many Members have said, this should not depend on favours. It should not depend on special deals and arrangements. It should not depend on the Whips. It should just be a very sensible, practical arrangement. Given that we come up with practical arrangements for all sorts of other organisations throughout the country, it should not be beyond the wit of the House to come up with one that works here.
The truth is that for any working mum—and often for working parents—there is always a sense of guilt and conflicting responsibilities. MPs who are mothers feel guilt towards the newborn because they are trying to do their constituency casework at the same time, and a sense of guilt towards their constituents because they should actually be in Parliament or at a meeting. They have a sense of responsibility towards Parliament, towards constituents, towards the baby, towards the family, but also towards so many other women who might be finding it hard to take maternity leave. We feel that we have a responsibility to show that it is possible—that we do not have to pretend to be superwomen and to be able to do it all at once because otherwise it means that we are not doing our job properly. We want people in all walks of life to be able to combine parenthood and employment, because that is normal. It is what we do. We should end the muddling through and put the proper arrangements in place.
Finally, I ask Ministers to have another look at the arrangements for ministerial maternity leave. I first took ministerial maternity leave 16 years ago. We were muddling through then as well; we later attempted to introduce more formal arrangements, but they then disappeared. They need to be brought back, but they also need to be revised.
It is the 100th anniversary of women getting the vote. What better time could there be not just to get this sorted, but to get it sorted really, really fast? That would be our next step, not just towards equality for people in this House, but to enable us to continue to be confident pioneers for equality throughout the country.
Jess Phillips (Birmingham, Yardley) (Lab)
It is a massive honour to follow all those who have spoken so far, and I feel that we are hon. Friends across the House today. I suppose that I should register not an interest, but a total disinterest in ever having another child, so this measure would not benefit me in the slightest. I could not be more disinterested.
I found the testimony of my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) incredibly moving. It put me right back at that moment when I was 22 and a new mum, and I was terrified that I was going to break that little thing. I will not put you through it, Mr Deputy Speaker, but some of the things that happen to a woman’s body immediately after she has had a baby are terrifying, and you do not expect them. I thought my internal organs were falling out. [Interruption.] The thought that I would have had to get up and go to a meeting—
Mr Deputy Speaker (Sir Lindsay Hoyle)
May I just say that it is not me that is worried, but I am very worried about the hon. Member for Lancaster and Fleetwood (Cat Smith)?
Jess Phillips
Forewarned is forearmed is what I think in these situations: “You’re not dying,” is what I would say to my hon. Friend the Member for Lancaster and Fleetwood (Cat Smith), but we all thought that we were.
The idea that I would have had to get up at that moment, terrified, suffering real fear for the first time, and go to a constituency party members’ meeting is absolutely horrifying. The thought of my hon. Friend the Member for Wolverhampton North East doing that is absolutely terrifying to me—so massive, massive credit to all the women who have had babies while they were MPs.
Because I quite like a row, I want to head off at the pass some of the things I have heard in this place about why what is proposed in the motion cannot happen. I think we are pretty much all here to support it today, but I have heard quite a lot of mutterings—and they are mutterings, because they sound like this: “Mutter, mutter, mutter, amazing idea, mutter”—and I want to address them. Some of them have been from women in this House; I have heard squeamishness about asking for a right, because we as MPs are criticised for talking about ourselves and accused of being insular. We all know about the fake news on the internet when sites show a busy Chamber when we are supposedly talking about our salary and an empty Chamber when we are talking about something else—which are, I say just for the public outside, all a total lie. The idea that we should be asking for a right for ourselves is totally and utterly acceptable.
I am chair of the women’s parliamentary Labour party and I have had to talk to women and say that I will not feel afraid about asking for rights for the people in this building. When I worked at Women’s Aid, I fought for the rights of the women at Women’s Aid to better parental leave. No matter where I worked, I would be fighting for the women there to have better rights, and we should not be embarrassed about fighting for them here, either. So I want to put to bed the idea that this is somehow selfish. It is not; it is a right that we should be entitled to.
The other chuntering I have heard is about the proposals being the thin end of the wedge: “Where will this lead?” It will lead to being exactly like every other employer in the country. As the right hon. Member for Basingstoke (Mrs Miller) said, the big end of the wedge is that we are kind and nice employers; the big end of the wedge is decency and humanity. I am all right with the proposals being the thin end of the wedge, but the reality in this situation is that we are asking for something for a very specific reason.
Some people say to me, “You can’t have other people voting for you!” as if we have the divine right of kings when we come into this place and our vote is handed to us by God and is so special that nobody else could say how we might feel about, say, fisheries industries. That is, frankly, ridiculous. The idea that people feel they are so special that nobody could ever cast their vote for them, because they have never followed the Whip and are always deciding exactly what they will vote for all by their little selves, I find highly unlikely. The hon. Member for Brighton, Pavilion (Caroline Lucas) might be the only person who could say that.
Seema Malhotra
My hon. Friend is making a powerful speech. Does she agree that the thin end of the wedge is not a thin end of erosion of our democracy, but a thin end of how we balance work and family life when circumstances might be unpredictable? Two months ago my mother had a stroke. While she is a lot better now, I was in a position of having to put in place, with my sisters and brother, 24-hour care for someone we were used to having caring for us. While I know and understand the issues there will be with parents, for those in that position to have to struggle for the flexibility to manage that alongside being a Member of Parliament is something I would want to see us change, and have the courage to change.
Jess Phillips
I could not agree more. As someone who cared for my own mother when she was dying, I know how much pressure gets put on, and it is largely the women in society who are in the middle, and are caring for children and for dying or very sick relatives. As a nation, we have got to get better at dealing with that. Why not start here?
I went for lunch with a gentleman yesterday—my husband is listening; it was not him. That gentleman told me that he had intended to take the shared parental leave that other colleagues have spoken about. He said, “As soon as I had said, ‘Okay, I am going to take three months off,’ it started to creep in: what if my clients get given to somebody else, and what if people judge me for leaving?” I thought, “Oh, really! My heart bleeds for you, here’s my tiny violin, because that is what we have all had to put up with forever.” I do feel total sympathy with what he was saying, because I have lived that life.
The truth of the matter is that we have got to make sure that when we make these changes, it is not only the women in this building who take this leave, and that the men in this building take it, too. Frankly, given some of the backtalk I have heard when I have talked about this, I think some of the men in this building should be ashamed of bragging about being here at the moment when their babies were born, and of standing up and saying in Committees, “Point of order: my wife just had a baby.” I say in response, “Point of order: I would divorce you if you were my husband.” There is one place a man should be when their baby is born, and that is by the side of their partner.
This is not about the women in this place getting something better; it is about the parents getting something better. We have got to lead by example. I know, not just from my hon. Friend the Member for Wolverhampton North East but from the opposite side of the Chamber, that there are husbands in this building who are starting to take that leave, and we have got to stand as an example of that. So, basically, I say to the men in this House, “When this comes in, I am coming for you, to make sure that you take it.”
Tulip Siddiq (Hampstead and Kilburn) (Lab)
I thank my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) for calling this important debate. It is important for me to be here, because I had a baby a year and a half ago as a sitting MP. I will not go into details about what happened to my insides, but I will talk a little about the impact of pregnancy and birth.
I will not go into the exact details, but I will say that I had a 40-hour long labour which resulted in an emergency C-section, after which I caught an infection and so did the baby. The Royal Free Hospital in my constituency, which is amazing, looked after us for nine days, but even in those nine days while I was in the hospital bed I had to handle emails and sign things off from my office simply because there was no one else to do it and I could not nominate someone to take care of crucial matters—and certain crucial matters did come up, which I will elaborate on in a minute.
I am not describing these details because I want sympathy; I am describing them because before I had a child I had never quite realised the physical impact pregnancy has on the body. I was quite old when my younger sister was born, so I had been around babies and children, but I still did not realise quite what would happen to my body going through a 40-hour ordeal and an emergency C-section. I could not move from the bed and had to ask everyone for help, which was definitely not easy, as I am used to doing things for myself.
I represent a marginal seat—the lady I took over from had won the seat by only 42 votes, and I had won by only just over 1,000 votes—and did not feel that I could neglect my constituents, so I came back to work very quickly. As a result, because my body had not recovered, I developed a serious case of mastitis. Anyone who has had that will know what it does to their body. When I went to the GP, they made it very clear that I had got it because I was overworked and exhausted and because I had gone back to work very early.
During that time, in my sleep-deprived state, I knew that I had to do something, so I tabled an early-day motion asking whether we could change the way the voting system worked. I was getting emails saying, “Why didn’t you turned up for this vote?” even during the six weeks that I had taken off following my emergency C-section. I was being asked why I had not voted in a certain way or why I had not turned up for a certain meeting. Anyone who knows the constituents of Hampstead and Kilburn will know that they look up their Member’s voting record to see whether they have turned up to vote or not. In tabling the early-day motion, I wanted to make it clear that we have to change the voting system, and this is the time to do it, now that more women Members of Parliament are having children than ever before.
I also want to point out how our position here in Parliament lags behind that of other countries in the world. In Sweden, Denmark and Slovenia, Members of Parliament may be granted leave of up to 12 months in the case of pregnancy, childbirth or adoption. The situation is the same in Estonia, Finland and Latvia. In Belgium, Portugal, Croatia and the Netherlands, there is no formal maternity leave, but a Member of the House of Representatives who is on maternity leave can be replaced by another Member from the same political group, so that they are not penalised for their absence.
The fact that our attitude to parental leave lags behind those countries is compounded by our attitude to our parliamentary voting system. Scotland, India, Ireland, Israel and the European Union—to name but a few—all have electronic voting, which is not only time efficient but accommodating for members.
Rachel Reeves
My hon. Friend is making an incredibly powerful speech. Does she agree that, by the time we are done with this, we should match if not better the best Parliaments in the world? Also, may I just say that, physically, having the second child is harder?
Tulip Siddiq
I thank my hon. Friend for that note of confidence. I absolutely agree with what she says: we have to do even better if we want to make Parliament a more welcoming place for female representatives and if we want to act in the way that my constituency Labour party did when I stood for election. One after another, its members stated categorically that they wanted more women in Parliament and wanted an all-women shortlist. The constituency had had a female MP for 23 years in the form of Glenda Jackson, and they wanted another one. That is what we should all be encouraging in the House of Commons.
Hannah Bardell
The hon. Lady is making an excellent speech. She mentioned Scotland, and I did not want to miss the opportunity to jump in. We have debated these matters before, and she mentioned electronic voting. In the Scottish Parliament, we have a seat for every Member. She will know that one of the arguments against proxy and electronic voting is that Members need to be here in the Chamber to listen to the debate. The irony is that we cannot fit even half the Members of this House into this Chamber. We all have modern technology, and we can all watch the debates at home, so does she agree that there is no reason not to introduce such voting methods?
Tulip Siddiq
Absolutely. The hon. Lady and I have had discussions about this matter, and we agree that Parliament needs to become more modern and that we need to encourage e-voting. Perhaps that will be next on the agenda.
As I have mentioned, I had a lot of support from my constituency Labour party when I ran to be an MP. As I was a young woman, they thought that there was a chance I would have children. Questions were raised about that, but the chairman—David Queen, who sadly died a few weeks ago—was a real feminist. He said, “What is the problem if we have MPs who have children? It is good for the constituency.” He said that politicians with children apparently got more votes, although I do not know if that is true.
I also want to take this opportunity to mention the support I have received in Parliament. The staff in the nursery here were really fantastic when I first took my child in, and I want to pay tribute to them. My right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer), who was in the Chamber earlier, is my neighbouring MP. Right at the beginning, when I had morning sickness, he was the first to ring and say that he was happy to cover any meetings that I needed him to cover, because his wife had gone through the same thing.
On a trip to Paris, my hon. Friend the Member for Ilford North (Wes Streeting) carried my suitcase up and down the stairs at the Gare du Nord and St Pancras International because I physically could not lift it. On that same trip to Paris to explore how we tackle anti-Semitism, the former MP for Brentwood and Ongar, Eric Pickles, told me that he would be happy to be godfather to my child and asked whether I wanted to name my daughter Erica, after him. I declined his offer. The hon. Member for Chatham and Aylesford (Tracey Crouch) gave me a wristband to monitor the number of times my baby kicked. I developed a real spirit with Members on the other side—including the hon. Member for Norwich North (Chloe Smith)—who I would often talk to about what it was like for us to be young women with children who also wanted to be good MPs for their constituencies. The Speaker and the Deputy Speaker both noticed my ever-growing bump—when you are 4 foot 11, your bump really stands out—and told me that I did not need to bob up and down, and that I could just wave my Order Paper if I wanted to be selected to speak. That was a real privilege at the time; I wish I could still do it.
Perhaps the memory that stands out most is when I received an urgent call from my office right after I had had the baby. A constituent, Richard Ratcliffe, had called my office because his wife had been in Iran and she and their small child had been detained by the Iranian authorities. I had just had my baby, but obviously I had to meet him because there was no one I could delegate that responsibility to. When I spoke to Richard on the phone, he said, “Why don’t I pop over to your house?” I said, “That’s a good idea. Let’s have a meeting.” He then said, “Is there any chance that the leader of the Labour party could meet me as well?” I rang my right hon. Friend the Member for Islington North (Jeremy Corbyn) and told him, “I’ve just had a baby, but I have a really urgent case. Is there anything we can do about this? He will have to meet me at my flat because I am breastfeeding.” My right hon. Friend said, “Why don’t I come over to your flat and we’ll all have the meeting there?”
So I had the meeting—with a tiny baby in my arms—with Richard Ratcliffe, whose wife had just been detained in Iran, and with the leader of the Labour party in the room. While I breastfed the baby, we discussed the Iranian authorities and the revolutionary guards, and talked about how we could get my constituent back into the country. At one point, my baby was very unsettled but I had to take some important notes, so I said to my right hon. Friend, “Could you hold the baby for a bit while I write these notes?” The baby had been quite unsettled, but for some reason, as soon as I handed her to him, she settled down and went to sleep. Perhaps there might be a kinder, gentler cuddling, which she preferred; I do not know what it was.
That was a defining moment for me and my motherhood. Both the men in that room demonstrated a serious comradely spirit to me. They took the time to come to my house because I did not feel that I could leave it, and they did not bat an eyelid while I breastfed. That is the kind of ethos that we need to bring into this House, to show people that a female MP who has an urgent case involving a woman being detained in Iran can still fulfil her duties. There are ways to make provisions. If it can be done in my flat in north London, it can be done in this place. I sit on the Women and Equalities Committee. We scrutinise legislation on other people’s maternity and paternity leave. If we cannot lead by example, we should not be sitting here. I commend the motion to the House.
Christine Jardine (Edinburgh West) (LD)
I am not sure how to follow that entertaining speech from the hon. Member for Hampstead and Kilburn (Tulip Siddiq). It is an honour to take part in this debate. I pay tribute to the right hon. and learned Member for Camberwell and Peckham (Ms Harman) and the right hon. Member for Basingstoke (Mrs Miller) for securing it. For me, this is what we at home like to call a wee treat. About 20 years ago, I interviewed the right hon. and learned Member for Camberwell and Peckham, who had just become a member of the new Labour Government. I asked her how she planned to change the working landscape for families in this country. I had just finished my maternity leave at the BBC, and I have to say that the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) is right: even back in those dark distant days of the past, the BBC was still able to put out news bulletins even though I was no longer there. Employers will find a way.
The working landscape for families has changed remarkably since 1997. Children who were born then and who are now becoming parents can benefit from a whole raft of legislation that makes it easier for them to be with their partner and their child and to bond as a family immediately after the child is born—except of course if they are a Member of Parliament. It seems ridiculous that we in this place should be so far behind the very people that we are here to represent and to help. I have to say that, like the hon. Member for Birmingham, Yardley (Jess Phillips), I have no intention of having another child. I have found this debate moving and entertaining at times, but it is also been frankly horrifying, and if I was in any doubt before, I am now certain that I will be not be having another.
The gender balance in this House has changed completely and, as we have heard, there are now 200 women MPs. Many of them are young enough to be starting or expanding their family, and many of our male colleagues are doing the same. For the many of us who have constituencies many hundreds of miles away, we must bear in mind that that will not mean being at home for an hour or two late at night or travelling by high-speed train with a small child, although that must be difficult; it will mean being away for a week at a time and being separated from a child at the most important time of their life. We cannot be there to help our partners through the sort of ordeals that we have heard about today, which some of the younger male Members have already been through. We should not be asking parents to choose between voting and providing that support when an alternative is already there. In fact, as we have heard, it was there in the 19th century. It is there every time we go to the ballot box in the form of a proxy vote—someone can go to exercise our democratic right for us—and we should not exclude ourselves from that possibility.
All the changes that have come about in the past 20 to 30 years—the Maternity and Parental Leave etc. Regulations 1999, the Work and Families Act 2006, the Children and Families Act 2014, the Equality Act 2010—had the aim of creating a level playing field, so that young women are not judged when going for a job on whether they might be going on maternity leave, and young men, who would not present the same problem, can also take baby leave. However, we do not seem to have taken it into account that local parties might face the same dilemma when selecting candidates for this House. If local party members choose the young women, who is perhaps married and about to start a family, they will lose her from the House. If they choose the young man, they may think that they would not. We are making it difficult for ourselves to pursue the stated goal of making this place more representative of the country.
We need more young women and young men. We need more people from every section of society. By making a simple change, we can make it easier to encourage young people who are about to start families to think that becoming an MP might just be possible and that they will be able to continue to represent the people whom they want to represent. They will be able to say, “When I have my child, I can have someone else vote for me,” or, “When my partner has a child or when we adopt a child, someone else can vote for me.” It is the simplest thing, and yet we have not done it.
If we are to be truly representative, we have to represent all our constituents, but we are falling short of that. We have the opportunity to put that last piece of the jigsaw in place and make it possible to vote by proxy. It seems ridiculous that that could be done in the 19th century and that, in the 21st century, we are even asking the question.
Darren Jones (Bristol North West) (Lab)
I congratulate my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) on securing this important debate, and I thank other right hon. and hon. Members for their contributions. I also thank Mr Speaker, who I understand has made quite good progress over the past few years on this matter.
As a new Member, I had no idea that the day nursery used to be a wine bar, so the position of the nursery seems perfectly normal to me, which is good progress in itself. I declare an interest as the father of eight-week-old Ophelia and husband to my wife, Lucy. Ophelia was able to join me here for the first time to vote against the Third Reading of the European Union (Withdrawal) Bill. Although there are those who have concerns about Members taking babies through a voting Lobby, I pay tribute to the Clerks, who astutely did not count Ophelia’s vote when I walked through—quite rightly so, given that I have no idea of her views on the Government’s Brexit strategy.
I support this important motion. When I went on paternity leave—a little earlier than expected—in the run-up to Christmas, as a Back-Bench MP, I was able to clear my diary fairly easily, and my constituents were supportive, but of course I needed to be here to vote, and there were some important matters that I wanted to vote on. We should consider the use of proxy voting. I see that the Clerks use iPads when we vote, so—dare I say it—perhaps we could use an app. If we could vote without having to nod through the Lobby, that would be welcome progress. In those early days, as my hon. Friends have said, my duty as a husband and a father was to be at home to help in any way that I can, but I had to leave for many hours to come and vote here, so it would have been helpful if I had been able to vote from home or via a proxy. Formalising the process would also be helpful, because while the Whips were accommodating, the presumption was that I would be here for all votes apart from those that I had negotiated not to attend. I would rather that that was the other way around. When there are crunch votes, such as the Brexit ones, when I am sure that Ophelia would have said that I should be here if she could, I would come to vote, but the presumption needs switching.
It is important that we set the tone in this place. We should be doing the same thing that we have legislated for in the country, which seems perfectly sensible, but we also need to set the tone. Parenting is not a gender issue—at least it should not be—and I am of the firm view that a family friendly and gender-balanced economy not just is the right thing to seek, but would be good for economic growth and wellbeing.
The House may not be surprised to hear that I think that my wife is a remarkable and talented woman—
Darren Jones
Thank you. I say that about my wife not least because during the snap election, when we were two months pregnant, I made it clear that I stood no chance of winning and that I would be able to apply for shared parental leave in my previous job as a lawyer. To make things worse, having actually won the election when I said that I was not going to—I am honoured to be here, of course—the local BBC news team had noticed a slight bump and announced our pregnancy to 1.3 million people in the region without checking first. When we received all these text messages saying, “Congratulations!”, we thought that they were about the election, but we suddenly realised that they were about Ophelia. We had not yet had the three-month scan, so we wondered how on earth everybody knew. My wife therefore had a bit of a bumpy road on the way to becoming a mum involved with a parliamentarian.
My wife is also my constituent, and she has said that it is okay for me to share her experiences over the past year, which have been quite distressing. It has been quite difficult for me to support her. She was the director of public policy at an energy company called Open Energi, which receives Government funding, and doing very well in that senior role. After the announcement of her pregnancy, she was told that her role was no longer needed and that she was being made redundant. Having worked so hard to achieve what she had, that was very distressing for her, but she is a formidable woman, so she decided to take her employer to a tribunal.
As a litigant in person, while pregnant, she cross-examined her former employers in front of a judge, who said that since the Supreme Court had decided that fees were illegal for employment tribunals, his time was increasingly being taken up by “these type” of cases. Can Members imagine the environment and the atmosphere? As one of only two women among 10 people in the tribunal room—there is no gender balance in employment tribunal hearings or sexual discrimination cases—the experience was clearly distressing, and I have now taken up that matter with the president of the employment tribunals. My wife sadly lost that case, so perhaps we need a debate about the application of burden of proof rules in this country, because it is down to women to establish a burden of proof that discrimination could have taken place, but employers can bring forward witnesses and documents to show that it did not take place—at the time, it was said that documents did not exist—and that makes it difficult for women to bring such claims.
As a father and a husband, it is perfectly sensible for me to want to lean in. It is normal for dads to want to lean in. I want my wife to achieve her aspirations as much as possible, and we want to give our children the best upbringing together. I support the motion not just because Parliament should be in line with what is happening in the rest of the country, but because it gives us the opportunity to set the tone for what we expect in a modern Britain. We should look at reforms for companies that receive Government money and at the judiciary—perhaps at even having a gender balance—and then we could achieve change in the wider economy, too. I commend the motion to the House and look forward to supporting in any way that I can.
Mr Gavin Shuker (Luton South) (Lab/Co-op)
If you do not mind my saying so, Mr Deputy Speaker, I am glad to see you in the Chair for this debate. I guess that might be bittersweet on some levels, but it reminds us very strongly that there are some fantastic parents here in Parliament. There are those of us who have grappled with the experience of being the custodian of a child and being a parent. In all honesty, I have met few finer examples of such people than those I work alongside here in Westminster, and we have already heard some of those stories today.
I will not rehearse the points that have already been made, but I pay tribute to my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) and the right hon. Member for Basingstoke (Mrs Miller) for securing this debate. We have been discussing this issue for some time, and it is one small change that might make life a little easier in what is an incredibly hard and difficult job.
I do not believe that we should be exempt, or that we should not acknowledge the freedoms and flexibilities of a job for which we are well paid and which we love. It should be hard and it should cost us something, but if we can make small, incremental improvements that improve the lives of people here, not only us but the whole of our society will benefit.
Last night we discussed the renewal of Parliament, and today we are discussing our own arrangements. It can perhaps seem a little indulgent for parliamentarians to spend their time talking about themselves, but we are the only ones who can have this conversation. We are the ones who determine our working practices here, and rightly so.
My hon. Friend the Member for Birmingham, Yardley (Jess Phillips) referred to the famous internet meme in which MPs are packed into the Chamber to talk about their own conditions, but absolutely absent when a serious issue comes along, and she rightly pointed out that the meme is untrue. It would be nice to see people using the image of us talking about our conditions today. It is not a criticism to say that the attendance today is relatively sparse and that everyone is taking one position. I have spoken to many young fathers who have told me that they really want this change.
Mrs Miller
The hon. Gentleman, who is a colleague on the Women and Equalities Committee, says that we are voicing one view. He is right, but surely if anyone had a differing view, they would be here.
Mr Shuker
I could not agree more, which is why I feel confident that the motion will be approved. We should take confidence from that and encourage the Procedure Committee to consider the matter swiftly. I know that the Committee has already done some preliminary work on how such a system could work.
The model of care for a child in the first year of life is split between two parents, and that sets the pattern for child rearing all the way through the child’s life. All the studies seem to show that. If we want people to live up to the expectation of being present for their children, we should try to reflect that in our practice, too.
I have a four-year-old daughter, and I have always juggled life in Parliament with making the most of the flexibility that is offered on votes so that I can try to be present in her life. We all make it work, whatever our way of life, whether it means using some time on a Monday, getting back for the school run on a Thursday, or shifting days around at the weekend. We might take a day out in the middle of the week, but turn up for the votes later.
I have never had a formal conversation with my Whips Office about the implications of my having a child. I have never sat down and said, “Here are my working patterns.” Until now, I have never really broadcast what that looks like, and that is because of two fears, which probably play on the minds of young fathers as well as of young mothers.
The first fear is whether I might be open to criticism for not being hard at work. When I added up my time over my first year in Parliament, excluding the commuting, I was working a 70 or 80-hour week. That has eased off as I have got better at the job, but that fear should not be a legitimate concern. There is no shortage of work, and we are all doing it—it is fairly obvious when we are not.
Nigel Huddleston (Mid Worcestershire) (Con)
I apologise for not being here for the full debate and for intervening now. I thank the hon. Gentleman for enabling me to spend a lot more time with my children after he won Luton South in 2010, which left me with another five years before I got into Parliament.
The hon. Gentleman makes an important point. Our constituents should expect us to work very hard but, at the same time, we have to put processes in place so that things are not unnecessarily difficult, as is the case at the moment. We have some ridiculous processes that make things unnecessarily difficult, whereas the rest of the country has moved on.
Mr Shuker
The hon. Gentleman was generous to me in 2010, and he is generous to me now.
The second reason why I have never had a formal conversation with the Whips Office is because of the worry that this might look like a lack of professionalism or a lack of hunger. It is true that, having made the choice to support my family, it is much harder to have sharp elbows and to force my way to the front. I have been fortunate in being able to structure my work time so that I can be present for my daughter, but most people’s experience of having children while being in this place is of being completely frazzled all the time, and of trying to find a way to make it work.
Very sadly, my relationship with my daughter’s mum broke down during this Parliament. I take full responsibility for that but, equally, we need to be honest about the working practices of this place and their implications. The hon. Member for South West Bedfordshire (Andrew Selous) told me that among my intake, a quarter of marriages broke down in the 2010 to 2015 Parliament. We have to be honest about the implications of this place and its effects.
There are real issues with the current informal arrangements. For example, it is not just difficult but impossible to exercise shared parental leave, because we do not have a formal employment relationship. We make reasonable accommodations in all sorts of ways for Members with other issues. I do not believe we should dial down our parenthood to be representatives in this place; I think we should amplify it. By talking about it and normalising it, we might be able to get to a fairer society in which we close the gender pay gap, in which women’s roles in society are properly recognised and in which we approach all sorts of other issues through the lens of saying that normal life happens and it is an anomaly that we exist in this way.
Finally, there are currently procedures whereby we informally work with our Whips Offices to enable, in my case, two weeks off after the birth of my daughter, or longer periods, given the physical constraints, for many women who have had children. Again, however, there is pressure to come in, to be present and to vote.
From the other side, our pairing arrangements start from the basis that we know that certain Members will just not be around for long periods of time. That has a direct effect on those of us who need to pair so that work can proceed. For example, a Select Committee visit might not go ahead because we have already paired out what we can to cover illness or childcare. This is not a brag, but I have never requested to be let off the Whip for personal circumstances. I have never missed a vote because I have been ill—I have certainly been ill, but I have been present to vote—and I do not think people abuse the system, but there are restrictions.
Making these arrangements would not take power away from or give power to the Whips Offices. Whatever our standpoint on what would be a good outcome, this change would professionalise the House and make it much easier to plan for such eventualities. As a member of the parliamentary Labour party, I foresee no problems or restrictions in my party’s standing orders if I were to sign over my proxy vote to the Chief Whip so that I could take paternity leave or baby care leave. I am comfortable with that. There are ways around this situation, and it should not be something that is hung on a straw man.
Overall, this change is required, and it will have a profound impact on the way we work. It is the thin end of the wedge, although we should be clear that today we are just talking about the principle. We need to become better at looking after ourselves and looking after each other, because we do not want to cause unnecessary strain.
This job should be hard. Public leadership and public sacrifice should be just that—they should be sacrificial—but putting in place artificial barriers not only holds back women in this place, but holds back men, too.
Hannah Bardell (Livingston) (SNP)
It is a pleasure to speak in this debate. I was a co-signatory of the motion, but by a quirk of parliamentary procedure the fact I am leading in the debate for the Scottish National party means my name had to come off. I pay a huge tribute to the right hon. and learned Member for Camberwell and Peckham (Ms Harman) and the right hon. Member for Basingstoke (Mrs Miller), two women in this place I hold in the highest regard. Today’s debate has been completely consensual, as it should be on this issue, not just in this place, but across society. I am moved to quote the words of Emmeline Pankhurst, who said:
“We are here, not because we are law-breakers; we are here in our efforts to become law-makers.”
So getting to speak today and be part of bringing about new regulations and legislation in this place is very important, because, as one London Member said—I have forgotten her constituency—we have to reflect society but we also have to lead it. One hundred years on from women getting the vote, that is hugely important.
When I was thinking about standing for election, I thought carefully about whether I could do this, and there were two reasons for that. First, I knew I needed to come out and deal with my sexuality. Secondly, I wanted to have children. Those two things were somewhat interlinked, and there are some technical challenges that I have as a gay women that my straight counterparts do not. Regardless of that, being able to know that there are Members from across this place who support this process means that, we hope, the next generation of parliamentarians, be they male, female, from the black, Asian and minority ethnic community, and whatever their disability or ability, and whatever their sexuality, will look at this place and other Parliaments across the UK and think, “That is something I can and want to be part of.” This has therefore been an incredible debate.
As we look across the world, we see the Prime Minister in New Zealand, Jacinda Ardern, is about to have a baby with her partner, and she is very open about that. We are taking steps forward. Testimonies have been read out, including by the right hon. and learned Member for Camberwell and Peckham, who mentioned my hon. Friend the Member for North East Fife (Stephen Gethins). I wish also to refer to my hon. Friend the Member for Glasgow Central (Alison Thewliss), who received an interesting email during the 2015 election. I am just going to read out the question and the answer she gave, because this typifies the debate and her excellent response shows how far we still have to go. The email to her read:
“Dear Alison
I am in favour of many of the SNP’s policies but am a little worried to find that you are mother of a (very) young family.
I can see how this could work with a seat at Holyrood but Westminster membership must pose a harder challenge.
It would help to know your solution before polling day.”
I emphasise the words “your solution”. It is incredible that anybody would write to a potential candidate and see the fact that they have children as a problem. An excellent “Channel 4 News” programme recently had the rapper Professor Green on it, and he spoke about why we need more people in politics who have been the subject of Government policy and are from different backgrounds and have different experiences.
My hon. Friend’s response to the email was as follows:
“Thank you very much for your email. I apologise for the delay in replying, but I wanted to give you a more considered response to your enquiry and give you some background as to why I’m standing.
I am certainly not alone among male and female candidates across the country in this election in being lucky enough to have a family; indeed the male Labour incumbent in this seat also has a young family.
The outgoing House of Commons was 22% female, and the average age of an MP was 50. More than 400 MPs, 62% of the total, are white men aged over 40. I think that Westminster ought to be a good deal more representative of the people it serves, and that can’t be achieved without more women.”
Inequality affects policy and it affects governance. I firmly believe that, with its poor gender balance, Westminster has made deficient policies in areas which affect families such as cuts in areas of child and maternity benefits. By contrast, with a slightly better gender balance Holyrood has taken on a great deal of issues in its remit which disproportionately affect women, such as free personal care, expansion of nursery education, and making law the right to breastfeed in public.”
She then went on to talk about how she had been a councillor over the previous five years and the challenges she had faced. My hon. Friend the Member for Aberdeen North (Kirsty Blackman) was also a councillor in Aberdeen when she had small children. My hon. Friend the Member for Glasgow Central finishes her email by saying:
“I will cross whatever other bridges require to be crossed after the votes are cast and counted on the 7th of May.”
That is an excellent response.
Luciana Berger
I welcome the strong contribution the hon. Lady is making. She makes a point about the opposition candidates may face at the time of an election if they are a new parent, and I reflect on the abuse I got as a candidate from someone from a different political party who stood against me. He took to Twitter to criticise me for not attending an evening debate during that election period, accusing me of being timid for my refusal to attend. I told him that I had not refused to do any debates, but that with a newborn baby evening events are near impossible, and that I would gladly take him on any day. He responded by saying that he did not realise we were still in the 1950s, when only a woman could look after a child, and that he thought the Labour party believed in shared paternity. Let me take this opportunity to tell him strongly that the Labour party most certainly believes in shared paternity and champions it. My final response was to remind him that we had not been expecting a general election; that he did not know my personal circumstances; and that, as far as I was aware, men still could not breastfeed. I also suggested he might want to stop digging, but I left it at that. The point I am seeking to share with the House in telling that little anecdote is that the issue we are discussing today pertains to what happens in this House, but the point the hon. Lady is making about what happens at election time and how candidates treat other candidates, particularly on this issue, is still relevant. It shows that in 2018 we still have an issue to address.
Hannah Bardell
I thank the hon. Lady for that and completely agree with the point she makes. This vote on this issue is not just about the technicality of how we cast our votes, although that is very important. The hon. Member for Birmingham, Yardley (Jess Phillips) mentioned the thin end of the wedge and I agree with what she said on that. My hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) has highlighted to me the issue of proximity and how he sometimes faces significant challenges with weather and geography. This is also about the discourse and narrative we have in politics with each other, and that the press have with us. Members have spoken about TheyWorkForYou and the digital environment, how our votes are recorded, and how all the systems and processes around politics and how we do it need to be more transparent and reflective. If we have a system whereby the vote is recorded for our constituency, it will be much, much more positive.
I wish briefly to pay tribute to my MSP colleagues, Angela Constance and Fiona Hyslop, both of whom are Cabinet Secretaries in a gender-balanced Cabinet and both of whom have had children while in office, as Ministers and as MSPs. They have paved the way and inspired me to stand. The Scottish Parliament made clear from the outset its commitment to inclusive and family-friendly workplace practices. As I have said, there is a seat for everyone; voting takes but a few seconds; and in its planning phase best practices from Parliaments across Europe were drawn up to ensure that in establishing the new legislature we could learn from some of the mistakes and successes from Parliaments across the world. We have a crèche in the Scottish Parliament, and not the stricter nursery system that is in place here. I pay tribute to the work the Speaker has done on that, but my hon. Friend the Member for Airdrie and Shotts (Neil Gray) has highlighted to me some of the challenges he has faced. His wife has had a child very recently and he has faced challenges in bringing children to this place, as the family room is sometimes misused by other Members or is used for meetings. He has had a great deal of support on that, but we need to look at such aspects of this as well. The Corporate Body in the Scottish Parliament has set out many inclusive practices, which include how business is done—finishing at five o’clock.
I do not want to talk too much about the place. Instead, I wish to focus on some of the other experiences here. My hon. Friend the Member for Aberdeen North talks about how she travels to Westminster by plane. Most airlines do not let women who are more than 36 weeks pregnant fly; for Flybe, it is 34 weeks. After having a baby, women cannot fly for at least a week and probably for more like a fortnight. As other hon. Members have mentioned, a woman who has had a C-section may not be able to fly for six weeks. So what happens if my hon. Friend has another baby? She has said she had no intentions of having any further children, so although we might not have put women off standing for election, we might have perhaps put them off having children, although I remain undeterred—I declare an interest as someone who aspires to be a parent. My hon. Friend says that being away from Westminster purely because she cannot travel here would be very unfair to her constituents and mean they would be unrepresented. My hon. Friend the Member for Airdrie and Shotts said his wife was lucky to have their son during a recess, and that he had fantastic staff who assisted and ensured that everything was covered in the constituency, but that these matters needed to be formalised.
It seems incredible that 100 years after women got the vote we are debating the fact that they cannot take part fully on behalf of their constituents and in debates. We know that parliamentary work is not just about walking through the Lobbies and voting; it is about being in the constituency. Having an open and accessible Parliament, in whatever part of the UK, will ensure that people, from whatever walk of life, but particularly women, parents and aspiring parents, feel able to take part in democracy by standing for election, and it will make the life of those women, particularly those parliamentarians due to have children very soon, significantly easier. I hope that the House and the public are listening carefully to the testimonies today.
Valerie Vaz (Walsall South) (Lab)
I associate myself with the remarks made by my hon. Friend the Member for Luton South (Mr Shuker), Mr Deputy Speaker. It is good to see you in your place. I say to my hon. Friend: that is what a feminist looks like. I also thank my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) for co-sponsoring this debate, along with the right hon. Member for Basingstoke (Mrs Miller). My right hon. and learned Friend was a formidable role model when she was pregnant—with Harry, I think—and stood for election. It is fitting that, as Mother of the House, she should bring forward this debate. It is right for Members to debate this subject and for the Backbench Business Committee to have given time for it.
The right hon. Member for Basingstoke is always raising important equalities issues on her Committee, and I am sure that she, together with other members of the Committee, including my hon. Friend the Member for Luton South, will monitor what the Procedure Committee comes up with. Hon. Members will remember that the former Prime Minister and Deputy Prime Minister, when they took paternity, were actually celebrated, whereas my hon. Friends the Members for Liverpool, Wavertree (Luciana Berger) and for Wolverhampton North East (Emma Reynolds), when they took maternity leave, suffered abuse. My right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) was a Minister surrounded by gurgles and red boxes. They are all formidable campaigners.
The fact that women have suffered abuse and accusations of being lazy is unacceptable. Constituents want Parliament to be representative of society, as the hon. Member for Edinburgh West (Christine Jardine) pointed out. There are no implications for pay, as women are not away from work; they just want to cast their vote on behalf of their constituents, but sometimes they cannot physically be here, and it is right that we should consider this proposal, in addition to the process of nodding through in certain circumstances. I say also to my hon. Friend the Member for Bristol North West (Darren Jones) that Ophelia is lucky to have a hands-on dad.
I want to raise a few points that have been raised with me. It would not be compulsory to request this provision, but in my view there is a compelling case. Proxy voting will obviously have to be in line with party policy, and it does not equate to a free vote. The motion does not ask to widen proxy voting to other circumstances; only that it apply where a Member cannot attend a vote owing to caring responsibilities. All the motion does is enable women MPs to balance giving birth and looking after a baby with their work as an MP. All my hon. Friends who have given birth while MPs have carried on with their work in their constituencies and the House. As my hon. Friend the Member for Hampstead and Kilburn (Tulip Siddiq) and other hon. Members have pointed out, they know that in the 21st century they have to respond to emails—and they do so all the time.
My hon. Friend the Member for Birmingham, Yardley (Jess Phillips) says she does not want to have any more children, but I have to break it to her: she is going to be a mum forever, even when they are older and have children of their own.
In October 2017, the Clerk of the House resubmitted to the Procedure Committee a memorandum on proxy voting in the House of Commons. The Clerk identified Members with caring responsibilities—limited to mothers of infants—as a category of Member that might qualify for a proxy vote. My right hon. and learned Friend the Member for Camberwell and Peckham is right that this should be considered by the appropriate Committee, and more work should be done, following the motion, together with the work of Professor Sarah Childs and her report, “The Good Parliament”. This is going to be more of an issue as women MPs take their place and we move towards parity.
Debating this issue, as we women take our rightful place in the House, is a lovely way to celebrate the Representation of the People Act 1918, which gave 6 million women over the age of 30 the right to vote. My right hon. and learned Friend and the right hon. Member for Basingstoke, the co-sponsors, and all the Members who have spoken in this debate are wonderful role models. The parents of Ophelia, Azalea, Amélie, Theo and Ruby—all the wonderful little babies born to Members during my time in the House—have today, along with other Members, pushed the boundaries towards a good and more equal Parliament.
The Leader of the House of Commons (Andrea Leadsom)
It is a huge pleasure to see you in your place, Mr Deputy Speaker.
We have heard some excellent, personal and informative speeches today—they certainly took me back to the horrors of those early days. I opened yesterday’s debate by describing it as a debate that should have taken place 40 years ago. I say again: this is a debate that should have taken place 40 years ago. I pay tribute to my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) for the way she opened the debate. She has been a consistent champion of these issues throughout her career, and it is certainly fitting that she, as Mother of the House, should have secured this debate today. I also want to recognise the total commitment of my right hon. Friend the Member for Basingstoke (Mrs Miller), the Chair of the Women and Equalities Committee, who has supported and promoted so many issues that affect women and equalities in this House. I absolutely agree with all Members here that it is essential that we address the issue of baby leave.
The motion before the House presents two issues for consideration. The first is the need for Members of Parliament to take baby leave. I think we can all agree that new parents must spend time with their babies and be enabled to do that. The second issue concerns how we reconcile that with the question of how and whether Members should be able to vote in the House of Commons during any such leave. I thank the all-party group on women in Parliament, until recently chaired by my hon. Friend the Member for Eastleigh (Mims Davies), now by my hon. Friend the Member for Redditch (Rachel Maclean), for its hard work in this place promoting equality for women, and also the Commons Reference Group on Representation and Inclusion, chaired by Mr Speaker, which is tasked with following and implementing, where possible, the recommendations made in Professor Sarah Childs’ “The Good Parliament” report. I want to put on the record my thanks for the important work that those groups have been taking forward.
As the House might be aware, I have championed secure early attachment for many years and have worked with charities on this vital issue. I was for nine years chairman and trustee of OxPIP—the Oxford Parent Infant Project—a charity that helps parents struggling to form a secure bond with their babies, and when I became MP for South Northamptonshire, I set up NorPIP —the Northamptonshire Parent Infant Partnership—to provide help to all those new parents struggling across the county. I even persuaded my hon. Friend the Member for Banbury (Victoria Prentis) to become a founding trustee.
Now, through the national charity I set up, PIPUK, five further parent infant partnerships have been set up around the country. I am delighted that more families can seek support for the earliest and probably the most important relationship we ever have—because a baby’s lifelong emotional health is profoundly impacted by his or her earliest experiences in the 1,001 critical days of the perinatal period. I was proud to hear the hon. Member for Liverpool, Wavertree (Luciana Berger) mention the cross-party 1001 Critical Days campaign that I set up in 2011, and which commands support from across the House.
The mental health White Paper published just before Christmas states that there is a need to commission research into interventions that support better attachment and improve the understanding among professionals of the importance of low-stress, healthy pregnancies and secure attachment.
Like the right hon. and learned Member for Camberwell and Peckham and my right hon. Friend the Member for Basingstoke, my children are now a bit older than babies—my eldest is 22—but the excellent speeches today did take me back to my early experiences, when I was not in this place. I had, I think, a 46-hour delivery. I had just been promoted to senior executive at the bank for which I worked and was required to be back after 11 weeks. Following that, I also had a good dose of postnatal depression to deal with. So, I totally empathise with all those Members who have spoken about their experiences here. I am very committed to ensuring that those who come after us do not have to suffer those same problems.
My hon. Friend the Member for Worcester (Mr Walker) sat next to me during the first part of this debate. He was telling me that his brother, who works for the civil service, is looking forward to six months’ shared parental leave. My hon. Friend is himself expecting a baby with his wife; he is asking nicely for two weeks’ leave. To his brother I say: how’s that?
Mrs Miller
I do not know whether my right hon. Friend remembers, but she was pregnant the first time we met. That is a few years ago now. I think we were on the selection trail together as well. Does she agree that, as important as it is, this debate is a first step in our efforts to make this place a much easier place not only to be a parent but to be somebody who cares for their broader family?
Andrea Leadsom
My right hon. Friend is exactly right. There is a lot more to life than this place. That may seem extraordinary to all of us, but we are all human beings. We are parents, we are daughters and sons, and we have responsibilities. This debate is timely as we seek to support these matters in this House and continue to break down the barriers that could discourage women and men from pursuing a career in Parliament.
The motion suggests that the way to resolve the issue of baby leave is through the introduction of proxy voting. Although I absolutely support the need to make the House more accessible for new parents, it is also important that we recognise the possible consequences of any reforms. With that in mind, in November last year I wrote to the Chair of the Procedure Committee, my hon. Friend the Member for Broxbourne (Mr Walker), copying in the Chair of the Women and Equalities Committee, my right hon. Friend the Member for Basingstoke. I asked the Procedure Committee to consider the matter of baby leave and proxy voting, and for the Committee to set out its views to the House.
I also wrote to every member of the Cabinet, and I can tell Members that my right hon. Friend the Prime Minister replied to me and agrees that this is an important matter. She wrote:
“Being a member of Parliament is a demanding job, and it is important that we give due consideration to the impact that this can have on work-life balance, childcare and baby leave”.
So she has made clear her support.
Following my letter to the Procedure Committee, my hon. Friend the Member for Broxbourne said to me that, should the motion be agreed today, the Committee will undertake an inquiry into proxy voting. I welcome that, as it is clear from the debate that a number of important questions need to be considered, some of which I shall now set out briefly.
Giving Members of Parliament the right to baby leave raises a number of potential questions about the duties of Members and the rules by which they are regulated. As colleagues will know, Members of Parliament are appointed representatives of their constituencies and are not regulated by the same employment rules that apply to other members of the workforce. Introducing baby leave might lead some to suggest that MPs should be treated as employees, which could of course have wider implications.
The introduction of proxy voting would also mark a departure from conventional voting practices in the House in several ways. For example, when Members vote in a Division, it is expected that they do so having had the opportunity to attend the Chamber. I think we can all agree that television and 24-hour reporting—let alone Skype, Twitter and everything else—gives Members the opportunity to follow business from further afield, but any change will need to be carefully considered, and we would need to decide who would act as a proxy and how the system would be regulated.
It is important to note that Members of Parliament are elected by their constituencies as individuals, so it is implied upon their election that their votes cannot be transferred to another MP. The appointment of a proxy voter could be perceived as a reduction of personal accountability. Any changes will therefore need to ensure that personal accountability is maintained.
In addition to those questions, and as I said in my letter to the Procedure Committee, a number of alternative suggestions have been made, aimed at addressing the needs of new parents who are undertaking the duties of an MP, while also making sure that their constituents have adequate representation in Parliament. One such example is that all political parties represented in the House could agree a memorandum of understanding and agree to the same terms, which would allow their MPs to take parental leave and formalise “pairing” arrangements across all parties.
Mr Shuker
I appreciate the thoughtful way in which the Leader of the House is approaching this matter from first principles and setting out some of the issues mentioned by Members. Will she go slightly further and acknowledge that there is a reputational issue around Members of Parliament not being present to vote and thereby being reported as absent, when actually they are taking up the responsibilities that she has said are vital?
Andrea Leadsom
I am certainly not advocating one route over another; I am merely pointing out to the House that these issues need careful consideration, which is why I wrote to the Procedure Committee and why I am delighted that it will hold an inquiry.
The Clerk of the House has prepared a helpful memorandum on proxy voting, which is available on the Procedure Committee’s website and which I encourage Members to read. It explores some important issues, including by looking at the approach in other Parliaments and, as has been alluded to, our own medieval tradition of allowing voting by proxy. I am sure that not many pregnant women were involved in those days, but still, they found a way. Should the Procedure Committee launch an inquiry—I am told that it will—I would encourage all colleagues to submit their views. I have no doubt that the many insightful contributions today will be of great value to the Committee.
This is an important debate, which has really caught the attention of Parliament in recent months. As Leader of the House, I want to make it absolutely clear that if we can agree the way forward on baby leave, I will drive it forward with my total commitment.
Ms Harman
I warmly welcome you back to the Chair, Mr Deputy Speaker; it is great to see you here with us.
This has been a really important debate and I thank all Government and Opposition Members who have contributed. People have spoken in deeply personal terms about profoundly constitutional issues. They have shown passion for their families and for their constituents. Nobody has spoken against the motion, so this has been an important debate to shape the Procedure Committee’s proceedings. The Committee needs to take the matter forward with focus, clarity and expedition. After a debate such as today’s, we do not want this issue to go rustling off into the long grass. That will not be acceptable.
I thank all Members who spoke in the debate. We must all be an alliance for progress on this issue. All of us who are in the Chamber must make sure that this actually happens, and that the issue does not disappear for decades more. I am sure that we can have that purpose and intent. I would like to apologise for the fact that I had not thought about the situation of SNP Members, who do not even have pairing. I feel embarrassed about that and, even for the very short time before the Procedure Committee comes forward with a rule to shape how we do proxy voting, we must make some arrangements that reflect the situation for the SNP right away.
Question put and agreed to.
Resolved,
That this House believes that it would be to the benefit of the functioning of parliamentary democracy that honourable Members who have had a baby or adopted a child should for a period of time be entitled, but not required, to discharge their responsibilities to vote in this House by proxy.
Hospital Car Parking Charges
(6 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Robert Halfon (Harlow) (Con)
I beg to move,
That this House calls on the Government to undertake a consultation to identify the most efficient means of abolishing car parking charges at NHS hospitals in England for patients, staff and visitors and to provide the timescale for its implementation.
I thank the Backbench Business Committee for accepting the application for this vital debate. I especially thank my colleagues who have supported me in securing it, particularly my hon. Friend the Member for Telford (Lucy Allan), the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy), my hon. Friend the Member for Cleethorpes (Martin Vickers), my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) and the hon. Member for Colne Valley (Thelma Walker). I also thank the various charities and organisations that have actively supported the campaign through their own research and on social media, such as CLIC Sargent, Bliss and Scope, and organisations representing drivers, such as FairFuelUK and the RAC. Those are just a few of the bodies offering their help and support to bring an end to the extortionate car parking charges found at many hospitals in England.
We all know that being a patient or visitor can be a stressful time. The last thing that anyone should be worried about is whether they have change for a car park or whether they can afford the rates that are charged. I started this campaign for free hospital car parking in 2014, after finding out that hospitals in England were charging staff and visitors up to £500 a week to use on-site parking facilities. As a result, in the same year, the Government published guidance urging hospitals to cut their parking fees. They said:
“Concessions, including free or reduced charges or caps should be available for staff working unsociable shifts, blue badge holders and visitors of gravely ill relatives.”
Although some weekly charges have fallen since 2014, I was shocked to discover last year when we carried out further research that 47% of hospitals have increased the hourly parking charges and nearly half of hospitals charge blue badge holders to park. The average cost to park for a week at a hospital in England is £53.41 and people pay on average £1.98 for one hour stay.
Sir Edward Davey (Kingston and Surbiton) (LD)
The right hon. Gentleman is a fantastic campaigner on such issues and I congratulate him on bringing the issue to the House of Commons. In my constituency, Kingston Hospital just announced with no consultation that it will impose parking charges on blue badge holders, citing that people are doing it everywhere else in the NHS and that it is an NHS-wide issue. Does he therefore not agree with me that it is up to the Government to give a clear lead and, at the very least, get rid of parking charges for blue badge holders?
Robert Halfon
The right hon. Gentleman is exactly right. Too often, these charges are imposed without any consultation, or without fair consultation, and they hit the most vulnerable. He will hear later in my remarks that I completely agree with him.
Mr Jim Cunningham (Coventry South) (Lab)
Will the right hon. Gentleman give way?
Robert Halfon
I will not take too many interventions, but I would be honoured to take one from the hon. Gentleman.
Mr Cunningham
I agree with the right hon. Member for Kingston and Surbiton (Sir Edward Davey). A lot of the hospital charges are part of private finance initiatives, and he is right that the Secretary of State or the Minister responsible should now be looking at eliminating those charges. We could argue that they are a tax on illness.
Robert Halfon
That is the sad thing. Many private companies are making profits from the taxpayer and the most vulnerable people in our society. That must stop. The PFI things that have happened under Governments of both main parties have caused huge amounts of problems to many people, particularly when they park at hospitals up and down the country.
There is still a postcode lottery on car parking charges; different hospital trusts set wildly different fees. The core principle of the NHS is to provide free healthcare for all at the point of access but the charges are a stealth tax on drivers using the health service. The parking charges are the bane of people’s lives. No one goes to hospital out of choice; they go because they have to. No one chooses to be ill, and we rely on our doctors and nurses to look after us. I urge the Health Secretary and the Minister to take urgent action to end this social injustice once and for all, and to introduce substantive legislation to ensure hospitals scrap their parking charges.
Robert Halfon
Mindful of the advice from the Chair, I shall give way one last time.
Julian Knight
My right hon. Friend is being most generous. I should declare that I am the joint chair of the all-party parliamentary group for fair fuel for UK motorists and UK hauliers. I have tremendous sympathy with my right hon. Friend in this respect and have campaigned hard on hospital parking charges in my own constituency. However, one difficulty I have in squaring the circle is the fact that my hospital is located right in the town centre and, if it is free, people use it as a base to go off shopping. That has happened in the past. Does my right hon. Friend have any solutions or ideas to deal with that?
Robert Halfon
I am very proud to have worked with my hon. Friend on the FairFuelUK campaign to keep fuel duty low. The point he has just made is very broad, so if he could wait a few minutes, I hope to be able to address the concerns that he has expressed.
I mentioned earlier that, in 2014, the Government had offered guidelines on concessions for patients and visitors. I welcomed that, as it was a sign that the Government were aware of the extortionate costs facing hospital users, but the problem with the guidance is that none of it is mandatory. In fact, the guidance encourages the postcode lottery. The guidelines state that charges should be reasonable for the area. Trusts are free to set their own fees, which means that patients and staff living in London and the south-east are charged the most. I have asked the Government on a number of occasions what constitutes a reasonable charge, and I consistently receive responses along the following lines: first, that hospital car parking charges are a matter for individual NHS trusts; secondly, that local NHS trusts are expected to follow the published guidance; and thirdly, that the Department of Health and Social Care has not discussed car parking charges with local NHS trusts.
Robert Halfon
I will give way one last time, as I want to be fair to Mr Deputy Speaker who spoke to me before the debate started.
Sandy Martin
Does the right hon. Gentleman accept that the national health service is not best placed for administering car parks, and that if we take car parking charges away from it we should also take away the whole provision of car parking from it and ensure that it does not lose out financially as a result?
Robert Halfon
The hon. Gentleman raises an important point. The crucial thing is that the NHS does not lose out financially. I think that that is the substance of what he is saying.
Sadly, the guidance is superficial. I have been unable to work out what constitutes a reasonable charge. The Government are not able or willing to keep local trusts in check. Since 2013, the campaign to scrap hospital car parking charges has gained speed, with more and more leading UK charities and associations representing drivers carrying out research into the negative effects of the charges on different groups of patients and drivers.
The sick and vulnerable are disproportionately hit by the charges, particularly those with long-term or severe illnesses who require repeated or lengthy stays in hospital. Research has shown that cancer patients and parents of premature babies face the greatest financial consequences. CLIC Sargent, a wonderful charity supporting young people with cancer, found that families were paying an average of £37 in car parking charges every month, with some families paying up to £10 per day. It also says that more than one in four parents of a child with cancer—29%—are not offered a reduction in parking costs by their NHS trust.
Macmillan Cancer Support mirrors that sentiment, saying that cancer patients in England are paying extortionate hospital car parking charges. Bliss is another very special charity for families with premature babies. Although some babies stay in the neonatal unit only for a few days, some parents will have to pay more than £250 if their baby stays in the neonatal unit for eight weeks. The charity says that many parents cannot even afford to go to see their premature baby because of the cost of hospital car parking.
I have a quote from the charity, Headway, which really sums up the whole debate. Headway does an incredible amount of work with brain injury. This is what it said:
“Recently, we supported a family who had spent more than £1,500 in parking charges in only 15 weeks. They needed to be at the bedside of their son who was fighting for his life after sustaining brain injury. What parent wouldn’t want to be there, day and night? Yet they were faced with a huge bill. These charges are driving families into debt and despair at a time when they already have more than enough to cope with.”
Kidney Care, another charity, told me that dialysis patients have to go to hospital three times a week, and each appointment takes four hours, with the average cost of four hours of parking estimated to be £3.28. Members can imagine how the costs stack up. The right hon. Member for Kingston and Surbiton (Sir Edward Davey) mentioned disabled car parking. It is extraordinary that, despite the Government guidance, almost half of hospitals inexplicably charge disabled drivers. They do not go to hospital out of choice. It is harder for them to use public transport, yet they have to pay significant charges. Even the hospitals that allow free parking attach a lot of conditions to that provision. Scope, the charity supporting disabled people, shares the sentiment, widely noting that disabled people
“have on average £108,000 fewer savings and assets than non-disabled people”.
It is not just charities that do valuable work. The RAC and FairFuelUK have also supported the campaign to scrap hospital car parking charges. I have worked with Howard Cox at FairFuelUK for a number of years in order to freeze fuel duty. The organisation held a poll last year with almost 9,000 respondents, 95.5% of whom wanted hospital parking scrapped or set at a maximum of £1. The RAC carried out a serious survey of more than 1,000 motorists. Two thirds of them named hospitals as the location where they most disliked having to pay for parking, and 41% said that the Government should scrap hospital parking charges immediately. It is clear that support is growing for the campaign to scrap hospital car parking charges, not only from the charities representing the most vulnerable—often with long-term and life-threatening illnesses—but from the two major organisations representing millions of motorists in the United Kingdom.
The support for an end to hospital car parking for patients and their visitors is clear, but we must not forget our incredibly hard-working NHS staff, some of whom are charged to go to work. Other public sector workers such as police officers and teachers are, for the most part, rightly able to park for free on their work premises, whether at a police station or a school. The Government guidance suggests that concessions should be available to all hospital staff—nurses, porters, cleaners, occupational therapists and doctors—working shifts that make public transport use difficult, but so much of the hospital workforce cannot rely on public transport to get to work.
Let us take the example of a hospital worker living in Pocklington in Yorkshire. He or she would either have to make the 15-mile drive to work at York Hospital and pay £2 to park during the shift, or spend more than an hour on two buses to get to work. If staff are working shifts at unsociable hours—as, of course, many do in the health service—they have no choice but to use hospital car parks.
Although all hospitals seem to offer a discounted parking scheme based on pay band or salary, or by allocating a limited number of discounted staff spaces, NHS staff are charged to work unsociable hours. The hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) was told by hospital staff that they cannot afford the charges at hospital car parks, so they have to park on unlit nearby streets, which leaves them vulnerable when leaving the workplace at night.
Interestingly, staff car parking charges are a nuisance not just for hard-working NHS staff, but for residents too. I was recently contacted by a resident of Scarborough. This person was delighted to hear of the campaign, but came from a rather different angle. Staff park in the residential roads around Scarborough General Hospital to avoid being charged to go to work. The influx of cars every day means that driveways are blocked, there is more traffic on the road and residents are unable to go about their daily business.
I realise that hospital parking charges can be a source of income for hospitals. They are certainly a goldmine for some private companies, but the Government have previously stated:
“Providing free car parking at NHS hospitals would result in some £200 million per year being taken from clinical care budgets to make up the shortfall.”
I have a number of things to say about that. When considered in the content of the £120 billion-plus to be spent on running the NHS, the figure of £200 million is put into perspective. Going on the assumption that free hospital car parking would cost £200 million a year, I think that there are a number of funding options that would not leave hospitals out of pocket or affect clinical care budgets. The Government themselves have published a report saying that better procurement in national health service hospitals would bring in more than £1 billion a year. I am just asking for £200 million to scrap hospital car parking charges.
The Department of Health financial accounts for 2016-17 suggest that the Department underspent its revenue budget by £563 million, which is about 0.5% of the total budget. Could some of this money not go towards covering the parking costs of patients and hospital staff? It might also be time to look at other areas of government where we spend a significant amount of money and look at reallocating the very small amount of that money—£200 million—that it would take to scrap hospital car parking charges.
Another concern, raised by my hon. Friend the Member for Solihull (Julian Knight), is that free parking at hospitals would be exploited by shoppers. However, this could easily be solved by using parking tokens validated by ward staff. Some NHS hospitals in England do the right thing and provide free parking, including Northamptonshire Healthcare NHS Foundation Trust and Leicestershire Partnership NHS Trust. That shows that it is possible to deliver free parking for patients, visitors and staff while discouraging abuse of the system with tokens or barriers. Having contacted hospitals in Scotland and Wales directly, I know that there are numerous parking solutions to ensure that free parking is not exploited. Alongside the abolition of hospital car parking charges, a system could be introduced whereby a ticket or token is presented to ward staff at the beginning of the visit and validated at the end.
It is time to end the hospital car parking rip-off once and for all. The NHS is supposed to be free at point of access. It was never envisaged that people with cars would have to pay on top of their taxation for the national health service, yet patients and visitors are charged for access to vital services. That causes a huge amount of stress to many. It affects the most vulnerable: parents with sick children, patients suffering from long- term illnesses, and staff without access to public transport. These charges are a cause of major social injustice. Clearly, the Government guidance is not working. I urge the Government to look into the most efficient way to scrap hospital car parking charges and bring an end to this stealth tax on drivers once and for all.
Several hon. Members rose—
Mr Deputy Speaker (Sir Lindsay Hoyle)
Order. I am bringing in an eight-minute limit. I call Melanie Onn to continue the debate.
Melanie Onn (Great Grimsby) (Lab)
I am very grateful to be able to take part in this important debate. I congratulate the right hon. Member for Harlow (Robert Halfon), my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy), and my neighbour, the hon. Member for Cleethorpes (Martin Vickers), on securing it.
Diana, Princess of Wales Hospital in my constituency provides a range of helpful wellbeing services. The site has an A&E, a dialysis unit, a child development unit, a nursery, an eating disorder unit, and health education spaces. It covers a huge range of services that deliver to a very wide community. There are two main areas that I want to address: first, the difficulties and challenges for patients caused by ever-increasing parking tariffs; and, secondly, car parking issues for staff, which have been raised with me on a number of occasions when I have been at Grimsby’s hospital.
In Grimsby, I can go and park in the Iceland car park, in the centre of our town, for £1 an hour. If I need to park for more than two hours, I might go to the Abbey Walk multi-storey, again in the centre of town, and pay £3.50 for the privilege of four hours’ parking. Having worked in places like York, I know that I should be very grateful for the seemingly small amounts that it costs to park in the centre of our town, so I count my blessings. When those smaller amounts are set against what people are expected to pay in hospital parking charges, it feels very much to my constituents as though the NHS is over-inflating the expense and putting an unnecessary burden on patients and families.
The charge for an hour’s parking at Diana, Princess of Wales Hospital has recently increased to £2.10— £1.10 more than in the centre of our town. If I go to the hospital to pick up a prescription, it might take—on a good day, admittedly—just a few minutes to collect the prescription, but on top of the prescription cost, I am paying another £2.10 to do so. Last week, I went for a blood test. I walked in, got my ticket, checked on the screen, and saw that there was a wait of about 68 minutes. It took me a matter of minutes to get the blood test, but the sitting in the waiting room lasted about 68 minutes. The cost of that visit was therefore £3.50. I am not bemoaning the cost to my personal pocket. I can afford it, but many in my constituency cannot, and the cost is prohibitive.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Does my hon. Friend agree that, as well as the issues that have been raised powerfully so far, the example she gives shows the opportunity for greater flexibility? In Hounslow, for example, free half-hour parking has been introduced to support local businesses. It is the same for leisure centres. We need to be proportionate as we consider the overall issue, and that is what was can do today.
Melanie Onn
My hon. Friend raises an important point. There is room for flexibility, and all trusts should be looking at what they can do to make parking less prohibitive so that people are not put off.
It is galling for my constituents to know that parking charges are much lower in other areas of the town. Local authority car parks, shops and private parking companies all have the same issues of maintenance, lighting and security, albeit to different degrees, but they are not charging that high rate. It feels very much like profiteering off the back of people who have no choice but to be at hospital, whether that is for themselves, their friends or their relatives. The trust offers concessions through lower costs for blue badge holders, although they are not exempt from charges, as well as for parents who are staying overnight with poorly children and those having cancer treatment. That is, of course, incredibly welcome. However, when the justification for the charges is that they pay for the maintenance of the site, it really does not stack up, given the costs of other paid parking sites in the town.
An automatic number plate recognition system was recently installed at the Diana, Princess of Wales Hospital, which led to even more frustration and concern for constituents. While that fantastic new automated system was supposed to make the process a lot quicker and easier for people, all it did was to cause additional delays and costs. After spending time in the waiting room, as I had to, people had to come out to try to pay for their parking with the new machines. It caused absolute havoc, and there were queues going around the block, and people ended up tripping over into the next pay band and paying even more. The process caused an extraordinary amount of frustration and reflected very poorly on the trust, which is a real shame.
The knock-on effect of the charges is that surrounding streets, such as Second Avenue, Edge Avenue and Limetree Avenue, which are all residential streets with limited on-street parking, get filled with the cars of patients, staff and people attending the hospital. I know that there is nothing illegal about that. There is nothing wrong with people parking in those residential streets, but it really irritates residents if a parked car crosses a dropped kerb or impinges on people’s driveways. That is not only incredibly frustrating, but it gives rise to increased concerns about road safety, especially in school hours.
The right hon. Member for Harlow addressed very well the broader point that people with disabilities or long-term illnesses are generally financially worse off than the rest of the population. The additional cost represents a significant inconvenience and potential hardship for people who can least afford it.
Hospital staff have increasingly been talking to me about this issue. There have been discussions with staff about increasing the amount that they already pay to go to work. An increase has been postponed for now, but the opportunity for it to be brought back next year is, I understand, very much on the table, and the increase will be significant. As the right hon. Gentleman indicated, the people affected will be not just consultants or senior executives who might be earning a very good wage. We are also talking about porters, healthcare assistants and medical secretaries—all the people behind the scenes who keep the hospital going—being expected to pay even more.
The frustrations for staff are immense. They say that they already struggle to get a parking space, not least because some shifts overrun. The likelihood that someone might do an eight-hour shift in the NHS at the moment is frankly negligible. Most people, through their own good will, are giving more to the NHS and working beyond their shift. They do not want to leave their patients in the middle of an incident. The number of parking spaces available is therefore reduced, and people are leaving home an awful lot earlier—an hour to an hour and a half earlier—than their shift starts, which increases their working day immensely.
Most of this is not just about travel time. I know that the roads are congested around the Diana, Princess of Wales Hospital, but that is not the only issue. There is also the problem that people are driving around car parks trying to find a space. It is incredibly frustrating that people are paying for a space at work and cannot get one, and sometimes that is even making them late for work.
Royston Smith (Southampton, Itchen) (Con)
The hon. Lady makes a very good point about congestion, with people trying to find parking spaces and there not being enough. Would a compromise be for hospitals to charge a reasonable flat rate, rather than abolishing charges completely, which would exacerbate the very situation she is describing?
Melanie Onn
That is certainly worth looking at. We need a system that does not put people off attending their appointments, and that certainly does not prohibit people going to work or cause them to arrive late. Any suggestions that would allow us to reach a sensible solution would be very welcome.
Finally, I will conclude by saying that all car parking charges should be set in the context of a long-term transportation plan that includes park and ride systems, as well as increasing people’s ability to use public transport, cycles and everything else. The reality is that not enough has been done on any of those things to enable people to use alternative methods of transport that will get them to work at the time they need to be there, or to appointments at the time they need them, so it has all been for nothing. The charges are incredibly prohibitive because no other methods of easy, regular transport suit the patients and the staff.
Lucy Allan (Telford) (Con)
It is a great pleasure to follow the hon. Member for Great Grimsby (Melanie Onn), who made a very thoughtful and engaging speech on this important issue. I am very glad that so many Members are in the Chamber to take part in the debate.
I particularly congratulate my right hon. Friend the Member for Harlow (Robert Halfon) on steadfastly championing this issue in Parliament for many years. He is much admired across the House for taking up issues that not everybody chooses to champion, but his work on such issues so often makes the lives of the people he and I represent much better, so I thank him for it. Indeed, I was inspired by his efforts in this area when, before I became an MP, I campaigned in my constituency of Telford on the whole issue of parking charges after they went up by 75% at our Princess Royal Hospital, creating a great deal of local upset.
My constituents, like my right hon. Friend’s, raise their concerns about this issue frequently. During the time I have campaigned on it, I have received over 5,000 letters —letters, not emails—on this specific issue. In Telford, we really care about this, and that is why I am here today. I was supposed to giving a speech at Thomas Telford School’s ethical debating society but, unfortunately, I have had to cancel at short notice so that I can be here, because this matters so much. I apologise to the students at Thomas Telford School.
I was told by my hospital trust in 2014 that it was not possible to change the existing arrangement because of the long-term nature of the trust’s legally binding contract with CP Plus, a parking contractor. Even poorly negotiated long-term contracts eventually expire, so we must look forward to what we will put in place when they do. It is not acceptable for those who can effect change simply to stand back and wait for onerous contracts with parking contractors to be renewed.
Mike Wood (Dudley South) (Con)
As my hon. Friend says, part of the problem is that so many hospital trusts are locked into long-term PFI contracts. Many of them were negotiated in the late 1990s or early 2000s and will shortly be coming up for renewal or expiry. Does she agree that now is the time to look at what provisions we can put in place to ensure that, as the contracts are renewed, they do not contain exploitative provisions that allow hospital trusts to take patients, as well as their families and visitors, for mugs by overcharging them for parking?
Lucy Allan
My hon. Friend eloquently makes a very important point, and I am very glad that he has raised it. The debate is timely, and it is important for us to be here to make this case.
Sadly, my local hospital trust has continued to increase hospital parking charges in a way that some feel thoughtless and has been described to me as cavalier. Following the rises in 2017, it is cheaper to park in Southwater shopping centre in Telford than to go to hospital to visit a sick relative. There is clearly something wrong with a model that operates in that way, because, as many hon. Members have said, no one chooses to go to hospital.
Telford is a new town, much like the constituency of my right hon. Friend the Member for Harlow. There are problems to do with the way in which many new towns were designed because, rightly or wrongly, they are all about road users. Major roads and roundabout systems are much loved in Telford. Everything is focused on the car, and it was never intended that the pedestrian should be able to walk from A to B. That is one of the problems that makes this such an important issue locally.
We do not have good public transport. We cannot just hop on a bus, jump on a tube or walk to the local hospital, as people might in other areas; instead, we have to take buses, changing a few times. Many people are therefore driven, or drive, to hospital, and they have to pay. My trust gave several reasons why its charges increased, one of which was that they were lower than those elsewhere in the country. That argument does not have a lot of teeth to it, because London is very different from Telford, in terms of income and accessibility of transport. Trusts need to consider local factors when setting charges.
It is good if concessions are offered, and there are concessions at the Princess Royal in Telford, but they are complicated to administer and operate. People have to prove that they are on benefits, that they have had an appointment and that they have paid their charges. Healthcare staff have to administer that system. They have to cancel charges and give out refunds and concessions, but that is not what they are there for. It is no good saying that if there was more money for hospitals, they would not need to charge for parking, because we all know what happens in many cases. In my local hospital, 50% of the revenue goes to CP Plus, the parking contractor, which has to be wrong.
Another argument that we have heard today is that if there were no parking charges, there would be nowhere for people to park, because anyone who wished to could use the hospital car park. It is argued that charges are a disincentive to parking. My local hospital trust says that without charges, people might stay all day in the hospital cafés, having refreshments, rather than leaving the site. Clearly that is complete nonsense, because even with incredibly high charges, there is nowhere to park. All the spaces—and the grass and concrete—are filled. The argument that everyone is sitting in a café is simply beyond my comprehension. This issue needs to be addressed with careful thought, rather than charges being seen as an instant panacea to a problem, when they clearly are not.
Bizarrely, my hospital trust tried to justify the increase by talking to residents about the number of nurses whom the parking revenue has paid for. I do not like that argument, because nurses are paid for by taxpayers through Government funding, not by parking charges. The increase that it implemented was in the contractual agreement, and nothing whatever to do with the number of nurses whom it employed.
I worry when hospital managers think that the charge is not that big a deal because parking is cheaper than somewhere else; that transport is not really their problem; and that if people are spending too long in cafés, managers need to move them on by putting up the charges. That shows that they probably do not understand the people whom they serve as well as they should.
If we dig a little deeper, we see the reason why it is not possible to park at the Princess Royal is that there has been a huge increase in the number of staff working on the site and therefore parking in the car park. We need to look at ways of helping staff to reduce car park use, as that would free up many spaces for patients to use throughout the day. We need to think imaginatively about how that might be done. Perhaps park and ride schemes specifically tailored to shift times might help. It is a surprise to find that hospitals are not looking at that.
We have heard today that this is a tax on the sick. Most taxes take account of people’s ability to pay, as is absolutely right, yet hospital managers and porters pay the same to park at work. It is always the least well-off who are hit the hardest. If the aim is to tax people and then give half the tax revenue to a car parking company—that is a bit senseless in any event—do it through pay-as-you-earn, and do not get nurses and other healthcare staff involved in the enforcement. It is completely inefficient to operate the system in this way.
Others have touched on the rigmarole that goes with paying for parking. Whether that means people paying with coins, typing in their number plate, or being videoed as they go in or come out, there is a punitive element. When a person is rushing to see someone who is extremely ill, or if they are waiting for an appointment and the consultant is running over time, it all adds to the anxiety, and in this context, it is completely inappropriate.
No one really wants to own this issue, so we all end up accepting it rather than solving it. Too many people say, “It is not our problem, it is too difficult to fix and actually, it is not really that important, because it is only £8 a day.” Too often, people in power look at the world through their own eyes and not through the eyes of those whom they serve.
There is little appetite among hospital management to deal with this. It is not a big-ticket issue. It is not exciting. It is not a shiny new hospital. It does not cost £300 million—in Telford, we spend a lot of time talking about our new emergency unit—so that is why I am here today. I want the Government and hospital managers to sit up and take notice. Do not brush this off as a non-issue—it is not. Try to see it through the eyes of others and tackle the issue that is facing everyday users of our hospitals. It can be fixed and it will make a difference to the lives of those who most need hospital services. For that reason, we should all care about it.
My right hon. Friend the Member for Harlow does a great service to his constituents. I thank him for securing this debate and I support him entirely.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
It is a pleasure to follow the hon. Member for Telford (Lucy Allan). We all know that our NHS is underfunded. The hospital trust in my constituency, the Hull and East Yorkshire Hospitals NHS Trust, received more than £1.5 million in car parking charges in 2016-17, according to data released under a freedom of information request, so it might seem unusual for me to be calling for the abolition of car parking charges. We know that they can provide an income for hospitals, but I agree with the hon. Lady: much of the money does not go to the hospital, but often to the private operator of the car park.
It is the Government’s responsibility to ensure that our NHS has the money it needs and not that of patients, staff or visitors. We should not expect vulnerable people to pay a sickness tax through car parking charges. I also agree with my hon. Friend the Member for Great Grimsby (Melanie Onn) about the impact on residents living in the local area. In Walker Street opposite my hospital, resident permits have had to be introduced to try to stop other people parking on those streets. In effect, the residents who live there have to pay to park their cars, because staff cannot afford to use the car park and park their cars on those streets. The whole system is complete nonsense.
I am incredibly proud that our Labour manifesto pledged to scrap car parking charges. Our suggestion was that any loss in income could come from a hike in the tax on private healthcare insurance. That would meet the £162 million cost of free parking at all NHS hospitals across England.
The unfairness of the sickness tax, from having car parking charges, must be felt in context. Let me tell the Chamber about a dear friend of mine—a man called Dermot—who has been in hospital for well over 28 days. I am not sure whether hon. Members are aware of this, but a particularly cruel and unfair consequence of him being in hospital for more than 28 days is the ending of his payments for disability living allowance and attendance allowance. If he had been receiving personal independence payment instead of DLA, that would have been stopped as well. His wife’s income has also been affected because she is his carer; she has stopped receiving her carer’s allowance, because Dermot has lost his DLA.
The nice bit to this story is that friends have rallied round and organised a fundraising concert for Dermot called—I have to make sure I pronounce this carefully—“Folk the 28 Day Rule” to raise money to support him. However, friends should not have to arrange folk night fundraisers to compensate for the welfare system’s failure to support people. The dramatic fall in his family’s income makes the added travel and car parking costs particularly cruel. They are not the only family facing this situation, but their story highlights the unfairness that many families face in having to park every day to visit loved ones at a time when their income may have dramatically fallen.
We all hate to think what would happen if one of our loved ones ended up staying in hospital for a long time. One of the saddest examples of the sickness tax, as mentioned by the right hon. Member for Harlow (Robert Halfon), is the effect on parents of premature and sick babies. We know that if premature and sick babies are to have the best possible outcomes, they need hands-on care every day. The daily costs of travelling to hospital can present a barrier that prevents parents from being with their babies. Parents surveyed by the charity Bliss said that they spent an average of £32 a week on car parking charges when visiting their babies. That is an unacceptable cost. All new, precious babies have the right to be with their parents—and not just the parents who can afford to pay to park their cars.
Bob Stewart (Beckenham) (Con)
I think that this is grossly unacceptable, in the case of people visiting sick babies and, indeed, in the case of men who are waiting for their wives or partners to give birth. How often do people who have paid for three hours find that they require much longer? Then they are stuck. The man is required to stay with the lady—the woman—who is giving birth, but he is worried about paying the flipping parking charge. That is wrong. There must be a way around this one.
Emma Hardy
I completely agree. I have accompanied my parents to hospital appointments. My mum sits there and sets the alarm on her phone, and then starts panicking: “We have to go back to the car park. Have we enough change?” That is not what people want to be thinking about when they are visiting a hospital.
The unfair cost is felt not just by visitors and patients, but by staff. It was during my local “big conversation” event that I became aware of the difficulties experienced by nurses and other NHS professionals in my local hospital. The financial squeeze faced by NHS professionals has been well documented. For example, midwives have lost an average of £6,000 a year in real terms since 2010, and the additional cost to them of parking their cars seems particularly unfair. An investigation by Unison found that some nurses were having to rush out between appointments to move their cars and avoid fines. That is a ridiculous situation.
Our hospitals are open 24 hours a day, 365 days a year, and staff finish their working shifts at different times. We have a duty to keep them safe. When they have just spent a shift caring for us, they should not have to return to cars that are parked in dark and isolated streets because they cannot afford to pay to use the hospital car park.
I urge the Minister to adopt this motion and to take action. As has been clear today, it has cross-party support, and it would make a real, positive difference to so many people’s lives.
Martin Vickers (Cleethorpes) (Con)
It is a pleasure to follow the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy), who represents the other side of the Humber bridge, and it is a particular pleasure to support my right hon. Friend the Member for Harlow (Robert Halfon). He was an asset to the Front Bench, but he has also shown his campaigning skills when dealing with issues such as this on the Back Benches. We are very pleased that he is once more among us. Let us hope that we can be as successful with this campaign as we have been with one or two in the past. It is also a pleasure to follow the hon. Member for Great Grimsby (Melanie Onn), whom I will call my hon. Friend. On this occasion, I agree with every word that my Member of Parliament has said. That does not always happen.
As with so many financial matters, it is a question of getting the balance right. Should we place an additional burden on patients and their families, especially at a time when they are particularly stressed and perhaps in great distress, or should we place the burden on the very limited NHS resources that our hospital trusts are having to manage? As has already been pointed out, some patients and their families can afford to pay, but if they are visiting, for instance, a parent who is coming to the end of his or her life, they will suffer just as much distress regardless of their financial circumstances.
In 2017, the trust that serves Diana, Princess of Wales Hospital in my constituency had an income of £2.28 million from car parking charges. It tells me that there was a surplus of three quarters of a million pounds which was spent on patient care. That is good news in the sense that that is three quarters of a million pounds that it desperately needs, but it has come out of the pockets of people who are visiting the hospital or patients at particularly difficult times. As the hon. Member for Great Grimsby mentioned, we live in an area with many low-paid jobs and this is a real burden on many hard-working families.
I am not going to detain the House for too long, but I would detain it for a great deal of time if I were to read the 64-page guidance the local trust produces for parking on its hospital sites. It is an appalling burden that we place on organisations, be they in the public or private sector, when they have to go to such trouble as to produce guidance of that length on how they operate their car park. It is complete madness.
I also draw attention to the fact that patients in my constituency and the neighbouring areas in many cases have to travel much further than others for their treatment, specifically across the river to Hull. That is an additional cost; they have the burden of the petrol or of bus fares, although public transport is almost non-existent for many of the rural villages in my constituency and the wider area served by Grimsby’s hospital.
Sir Greg Knight (East Yorkshire) (Con)
My hon. Friend is making a good point: the cost falls disproportionately on those who live in rural areas.
Martin Vickers
I thank my right hon. Friend for emphasising the point I am making. Many patients have to travel for perhaps 15 or 20 miles to get to the hospital, and that is an additional burden that they can well do without.
The hon. Member for Great Grimsby mentioned the fact that there is a problem with management, and she mentioned parking in neighbouring streets. I will add the names of a few more of them: Cragston Avenue, St Helens Avenue, Charles Avenue. We know them very well; when I was a councillor for that area people used to complain about cars blocking their streets, and I am sure they complain to their Member of Parliament today.
That is a problem I recognise, and there is also a problem with commuter parking, which has to be dealt with. Tokens have been mentioned, and simple time limits of two or three hours before charges kick in might be another alternative, as well as the flat charge that my hon. Friend the Member for Southampton, Itchen (Royston Smith) mentioned.
I urge the Government to tackle this; it needs Government action to resolve it. It is unreasonable to expect trusts—particularly those like Northern Lincolnshire and Goole, which are in special measures and have major challenges of their own—to do so. An extra burden such as this is something they could well do without. As has been said, savings can be made through better procurement procedures, and that is one possible route. I am sure every Member in the House today could identify one particular saving to meet the £200 million-plus the NHS would have to find. But this is a major problem and a burden on our constituents and it could easily be resolved, and I urge the Government to get on with resolving it quickly.
Thelma Walker (Colne Valley) (Lab)
I thank the right hon. Member for Harlow (Robert Halfon) for securing this important debate on one of the many issues facing carers, families and staff who visit our hospitals.
If I parked at the hospital car park in my constituency of Colne Valley, it would cost me a third more than if I parked in a council-owned car park. How is that acceptable? Is this not NHS trusts profiteering from the sick and vulnerable? When people are in a rush taking a sick friend or relative to the hospital, they will not necessarily consider where is cheaper to park; they will park in the closest car park and then sort it out later. Even people who have to attend hospital regularly will not get free parking. At the Huddersfield Royal Infirmary, a two-and-a-half-hour stay, three times a week, 52 weeks a year will cost £780. That is £780 to support someone who is receiving medical treatment. Even some who are disabled blue badge holders have to pay this.
Bob Stewart
I think I speak on behalf of all of us when I say that I find it iniquitous that anyone with a blue badge should have to pay a penny when they go to a hospital.
Thelma Walker
I completely agree with the hon. Gentleman.
How are my constituents meant to afford these excessive costs? Hard-working nurses, doctors, porters, cleaners and receptionists go to work to help people. Those hard-working staff are paying £1,680 a year to support families whose loved ones are dying. They are paying £1,680 a year to work a 12-hour shift caring for people. They are paying £1,680 a year to save lives. How is that acceptable by anyone’s standards? How can anyone think it is right that those hard-working professionals are paying nearly £2,000 a year to help and care for people? I can tell the House that it is not.
I appreciate that trusts, including the Calderdale Huddersfield NHS Foundation Trust, are following national guidelines, but patients and staff feel as though they are treating them as cash cows. In 2016-17, my local trust remained nearly £15 million in deficit. In the CHFT annual reports for 2014-15, the trust recorded £1.4 million income from car parking. In 2016-17, that figure rose to £2.7 million. Yes, the extra money that the trust makes helps to plug the hole left by Government underfunding, but it should not have to. Our NHS should be fully funded; it should not have to depend on car parking fees. I urge the Government to consider the comments being made today by Members across the House, and to act swiftly to resolve this issue.
Sir Mike Penning (Hemel Hempstead) (Con)
Thank you for calling me to speak, Madam Deputy Speaker. This takes me back a long way, to 2006, when you were a Health Minister and I shadowed you for some four years. The issue of car parking charges was around at that time, and successive Governments have talked about addressing it. This is a regressive tax. It is a tax on everybody, because everybody needs the NHS—that is why it is there. It is even more regressive for NHS staff, who are taxed even more just to go to work their difficult shift patterns. That is completely unacceptable.
I have raised this issue many times before. Members might remember that I used to be a firefighter. Firefighters do not pay to park in the yard at the fire station. Our excellent police do not pay to park their cars. The ambulance service is part of the NHS in my constituency, and its staff do not pay, either. They drive to work and they go to the pound to pick up their ambulance. So why should other emergency workers be charged in this way? It is fundamentally wrong.
This issue has gone back and forth across the Floor of the House, no matter which colour Government we have. Contracts have been signed, by previous Governments and by ours, that have locked us into hugely expensive agreements, particularly the private finance initiatives. We need to do something about that, and I will say more about it in a moment.
Bob Stewart
It seems to me that there should be staff car parks. There should be a set-up in which staff have separate parking arrangements so that they do not block public parking spaces. They should also have guaranteed slots, so that they are not late for their shifts.
Sir Mike Penning
That happens in some parts of the world. For example, that is what they do at the Luton and Dunstable University Hospital NHS Foundation Trust, which looks after part of my constituency. I went there the other day to visit someone who was in palliative care. I did not know how long I was going to be seeing them, or whether I would see them again. The fantastic news is that they are now at home, being looked after by the hospice movement, of which I have been a member for 40 years. That is what the hospice movement is very much for.
Interestingly, I parked and paid in what I thought was a public car park, but I was in the staff car park. So, when I went to try to get out, the barrier would not go up. I pressed the button to talk to someone, and they said, “You’ve parked illegally.” I said, “How have I parked illegally? I’ve got a ticket.” Fortunately, they had no idea who I was, because they probably would have just lifted the barrier to get the MP out of there as fast as possible, which is normally what happens when we visit our hospitals, isn’t it—everything is brilliant, rosy and shiny and everything is great. I said to the person, “No. If you’re going to fine me, fine me. I’ll see you in court, because I have paid in an NHS public car park that you have designated.” They eventually just said, “Oh, go away.” I have been waiting for the fine to come through—it probably will now—and I will see them in court, but the charging is morally wrong.
The situation is even more difficult for patients. The previous debate was about babies and parenting. Babies come out when they want to, usually, not when we want them to, and not based on how much time is left on a car parking ticket. That is what happens, and yet people are getting fined every day because they have outstayed their time in the car park. How can that be right?
A Member who could not be in the Chamber today because they had to attend another meeting, asked me to mention volunteer drivers. What would we do without them? They are fantastic, but they have to pay to park in some hospital car parks before they take patients home, which they do as volunteers because the patient ambulance service is struggling so much. In some parts of the country—I know that it is happening in my area—people are actually asking for patient transport because the car parking facilities are so bad. They are putting more of a burden on patient transport because they cannot find a parking space and they are petrified of being late for their appointment. If they are late for their appointment owing to patient transport, that is okay, but if they cannot find a parking space, they hear, “Oh, you’re a bad person.” We have heard that people are parking outside hospital car parks. Blue badge holders are being charged to park in a car park when they can park for free on the road, so that is what they do. We know that is happening, and it is really very wrong.
I know that the Minister is a good man, and an honourable man, but when he stands up to reply he will almost certainly say that parking is devolved to NHS trusts, and that it is for them to decide how they run their facilities. But for those of us who are Members of Parliament, NHS trusts are completely unaccountable. We can moan about this, but they will not listen in the slightest. They will be looking at whether they can get away with it and how much they can raise.
This is not just about money; it is about space. We have heard that if car parks do not charge, they will be full of people from the town centre. When the acute facility at the excellent Hemel Hempstead Hospital was closed, it was moved to the middle of Watford town centre, next to a football stadium. Apparently Watford play there, and a lot of my constituents will be very upset when they hear about me being derogatory about Watford, but they have a huge number of fans. I went to Watford General Hospital on a Saturday morning to visit a constituent, a good friend of mine, and I parked and paid. When I came out, there was a group of parking people around who clearly wanted to give me a ticket. I had paid in the football bit that is designated for use by Watford football club when they are playing at home. What has that got to do with going to see and look after someone at an NHS hospital, or go to that hospital?
Unfortunately, the parking attendants did recognise me, and they were very apologetic, but I do not think that is right. What would have happened if they had not known who I was? The ticket was coming. How on earth can we have a full acute hospital in the middle of a town as big as Watford, next to a football stadium, and then call that a modern NHS hospital? The parking facilities there for staff and patients are frankly almost non-existent, not least because tons of it has been carved off for the football club. I want Watford to be very successful, but what I want in our part of the world is a brand-new hospital, with proper parking facilities, on a greenfield site away from the town centre, so that we do not have any concerns about whether people will park there all day in order to go shopping. At the moment, though, I do not have that.
There is the acute hospital in Watford, which struggles—it has just come out of special measures and I wish it well—and Hemel Hempstead Hospital, which is basically a clinic these days. We have out-patients; we have a few intermediate wards. They charge the staff, and patients with out-patient appointments, to park there. The car park is empty. Hardly anybody parks there because there is nothing on the site any more, but the hospital still insists on charging. That pushes the patients outside, so there is restricted parking outside, which is also an issue. It is cheaper to park in the council car park in the town centre and walk 400 yards up the hill than to park in a car park that is empty because there are so few facilities at the hospital.
This problem has to be sorted out from central Government, and the central Government guidelines have to be enforceable. I was a Minister for many years: Departments can issue as many notices as they like, but nothing will happen if they do not come out with the stick. Could the money be raised in other ways? Could there be savings in the NHS? As we have heard, the amount of money being raised, compared with the overall pot, is peanuts. One of the more recent chief executives of my very small acute trust was on a package of over £300,000 a year. If we want to save money instantly, let us take a look at the salaries of the really top people in the NHS and let us look after the people at the bottom—we certainly should not charge them to park when they go to work.
Liz McInnes (Heywood and Middleton) (Lab)
It is a pleasure to speak in this debate and to follow the right hon. Member for Hemel Hempstead (Sir Mike Penning). Much of what he said echoes the complaints that have come to my constituency office.
I thank the right hon. Member for Harlow (Robert Halfon) for securing this debate. This subject is close to my heart because I used to work for the NHS. I well remember when car parking charges were introduced for patients, carers, visitors and staff. I remember the controversy it caused at the time, and it still causes controversy now. This issue has not gone away.
I worked for the NHS as a clinical scientist, but I was also a workplace rep for Unite, the trade union. I remember the resistance that all the health unions put up against the introduction of car parking charges, which we saw then, and still see now, as a tax on staff coming to work and on patients, visitors and carers.
The practice of charging for car parking in my area was started by Central Manchester University Hospitals NHS Foundation Trust, and the issue of people using the free parking at the hospital and then going elsewhere was the reason for introducing those charges, but once Central Manchester University Hospitals did that, all the other hospitals in Greater Manchester followed suit.
The only reason anyone would go to North Manchester General Hospital, where I worked, is because they work there, because they are getting treatment there or because they are visiting as a friend, a relative or a carer. There is no other reason for someone to visit that hospital, so there was no real reason to start charging people to park there.
The trust claimed that the moneys taken would be put towards improving the car parking facilities, which I admit were absolutely dire. We used to park on unsurfaced, potholed areas, which were eventually improved once the charging system became embedded—that is one positive thing that came out of it.
The trust initially purchased some wheel clamps and threatened to clamp the car of those who did not pay. I worked with some interesting people in the NHS, and one colleague decided to buy his own personal wheel clamp, which he attached to his car when he parked in the morning. The hospital is not in the most salubrious of areas, so the clamp served two purposes: it immobilised his car and kept it secure; and it gave the impression that he had been penalised for not paying to park. Within a few weeks his wheel clamp had paid for itself.
Not everyone was that inventive, however, and gradually the idea of paying to park at the hospital became commonplace, if not accepted, although the trade unions always strongly opposed the practice. The wheel clamps were quickly phased out—rumour had it that the trust had been successfully sued, although we never found out the full facts—and the trust began to impose fines on those deemed to have breached the rules.
The whole issue of car parking fees and fines generated a huge amount of controversy, discussion and debate, not to mention a huge number of visits, phone calls and emails to the trade union office. Anyone who might question the need to give trade union reps facility time to do their job might like to reflect on the massive pressure put upon them by issues such as this. When I left the trust, having been elected to this place, I was paying £20 per month in car parking charges, which was taken directly out of my salary. That staff fee is now £22.10, which might not sound a lot, but represents an increase of more than 10% over the past three years. That pays scant regard to the fact that NHS staff have had their pay either frozen or capped to a maximum of just 1%—this is completely disproportionate.
As an MP, I have helped many constituents who were sent demands for car parking fines by a company called Civil Enforcement Ltd, which is contracted by my local Pennine Acute Hospitals NHS Trust to pursue those deemed to have breached car parking regulations. I have had constituents aggressively chased for payment when they have parked in a staff parking space by mistake, and the practices of this company do seem to lack the human touch. Most people attending hospital usually have more important matters on their mind and could be forgiven for being slightly distracted while trying to work the myriad instructions posted in a hospital car park prior to visiting sick relatives or going for treatment themselves.
The charges can be prohibitive: £1 for one hour, £4 for 8 hours and £8 for up to 24 hours. As many Members have pointed out, most of the time the patient or visitor does not know how long they will be in the hospital for, so most will err on the side of caution and pay more than they should. The ticket machines also do not take banknotes. When I worked at the hospital, I was regularly asked for change by patients and visitors struggling to feed the machines. I am sure that all those people had more important things to deal with and could have done without that additional stress. I accept that my local trust will provide a weekly ticket for £15 and will make arrangements for those with long-term illness, but that is not immediately clear to patients and visitors, and it requires action on their part at an already stressful time.
The motion calls on the Government to provide a means whereby car parking charges may be abolished and I fully support that, but hand in hand with that has to go an improved public transport system, so that staff, patients, carers and visitors are not as reliant on private cars. Sadly, in my constituency, we have just had a bus service between Rochdale, Middleton and North Manchester General Hospital withdrawn. Retrograde steps such as that do nothing to reduce the demand on hospital car parks, and we absolutely need a comprehensive public transport policy to support the abolition of hospital car parking charges.
The other step we need to take is to reduce NHS trusts’ dependence on income from car parking. Department of Health guidelines used to stipulate that income earned from car parking should be spent only on the maintenance and running of car parks, but those guidelines now appear to have been relaxed, and cash-strapped trusts are now using that income for patient care. In fact, when I visited North Manchester General Hospital recently I was disappointed to see that a staff car park that had been in a very poor state when I worked there many years ago had been allowed to deteriorate even further. Clearly, no income had been spent there on improving conditions for staff. The Pennine Acute Hospitals NHS Trust alone made £3 million from car parking charges last year. The NHS underfunding issue must be addressed in any consideration of the abolition of car parking charges.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
First, I wish to thank the right hon. Member for Harlow (Robert Halfon) for having secured and initiated such an important debate, which affects so many in my constituency and across our country. For many, attending a hospital is a vulnerable time, whether we are seeking treatment for ourselves or for a loved one. Our hospitals are indeed underfunded and overstretched, but it is not for sick patients, anxious relatives and already hard-pressed NHS staff to be filling the funding gaps.
We have heard that hospital car parking charges raise funds, but many hospital trusts up and down our country have increased their charges without consulting the public—the very people they are there for. Some trusts allow private contractors to manage car parking sites, which is leading to penalties and fines for patients and visitors, as we have heard in this important debate. At a time when the cost of living is increasing and those who work in the public sector have had their pay capped, the rising cost of hospital car parking only increases the financial burden on many in our constituencies.
It is not just the patients who are deterred by higher charges; families and friends might be discouraged from visiting patients at their bedside, which must surely have a negative impact on the mental wellbeing of patients and lead to increased pressure on nursing staff. From personal experience, I know that many patients rely on relatives and friends to act as interpreters or advocates. Such elements are seemingly overlooked when surveys and reports are undertaken, but patient care can be impacted where higher charges deter people from providing such crucial assistance.
Andrew Lewer (Northampton South) (Con)
We have heard a lot about staff and patients and families. My right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) mentioned volunteers earlier, and the hon. Gentleman is talking about the importance of patient support. Does he agree that it is particularly short-sighted of any hospital trust to seek to charge volunteers, who give of their time, for parking?
Mr Dhesi
I thank the hon. Gentleman for his excellent intervention, and I could not agree more. We have heard previously about volunteer drivers. It is just not fair. It is nonsensical to ask them to dig further into their pockets. It also places an unfair and unnecessary burden on hard-working staff who have gone for years without a decent pay rise. While some hospitals offer free or discounted parking for specific kinds of treatment or for people in receipt of specific benefits, there are significant variations in fees across trusts in the same region. Wexham Park Hospital in my constituency has some of the highest parking charges in the region: £3.30 after the first 15 minutes and an increase, in stages, to £8 over five hours. That is the situation in my constituency, but that trust is only doing what all other trusts are no doubt doing and it is within Government guidelines. I do not want older and vulnerable patients to be deterred from attending hospital. They should be able to get to their appointments in a comfortable, dignified, affordable manner and within a reasonable time.
Most NHS car parking charges have been abolished in Scotland and Wales, and I know that the Government have issued guidance to NHS trusts on the implementation of car parking charges, including the provision of discounted or free parking. These guidelines are not based in legislation and appear to have had little effect. The Labour Government in 2010 left fully costed plans to phase out charges for in-patients and their visitors, and in 2015 a private Member’s Bill on this subject gained cross-party support but was talked out. Clearly, many across the country and the House want an end to hospital car parking charges. Let us send a clear message today that there is another way forward and that this unfair stealth tax on the vulnerable must end.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
It is a pleasure to follow my hon. Friend the Member for Slough (Mr Dhesi), and I congratulate the right hon. Member for Harlow (Robert Halfon) on his extremely powerful speech and on raising this important issue.
I want to start with an experience that our family recently went through. My daughter started to show signs of acute appendicitis. As any family could imagine, we quickly bundled our daughter, who was in agony, into the car and drove to the hospital—it was not a very calm journey. I am sure that many Members will have had a similar experience. We were panicking and scrambling around for change so that we could park the car, then taking turns to pop out every few hours to move the car or top up the ticket. That was obviously a one-off and bearable, but for many a trip to the hospital is sadly not a one-off experience, and they are forced to take several trips a week because of chronic illness. They are people going through the worst of times, and the cynical approach of charging them to park is unacceptable. It is not anyone’s choice to be ill, and they should not be exploited.
New figures show that the money raked in from NHS car parks in England run by private firms has increased to £500,000 every day. The £175 million that was made from hospital car parking charges in 2016-17 is equivalent to only 0.001% of the total health spend, but still, ruthless private car parking firms pocket most of it. It cannot be fair that worried family members who visit their loved ones can end up with eye-watering fines if they arrive late back to their cars. As my hon. Friend the Member for Heywood and Middleton (Liz McInnes) said, it cannot be fair that NHS staff who have parking charges deducted from their wages are fined for parking in the wrong bay when they cannot find a space in the correct bay.
Some may recommend that regular hospital visitors use public transport, but in my constituency, Batley and Spen, the bus that used to connect Birstall with our local hospital has been cancelled, as have local bus services in many smaller communities. That has forced more people to use a car and thereby incur parking costs. My local hospital, Dewsbury and District Hospital, charges after 20 minutes, so people get 20 minutes for free. There is a reduction for blue badge holders, but they still have to pay. There is a stress-inducing pay-on-exit system, and it is quite complicated to get car parking concessions approved by hospital staff on the day. It is not an ideal situation.
Sir Mike Penning
Does the hon. Lady agree that in the 21st century, means-testing at the point of delivery, which is what we are talking about here, is morally unacceptable in an NHS of which we should be and are proud?
Tracy Brabin
I am so glad that the right hon. Gentleman raised that issue, because the concession that I was talking about is available only to the patient, not to the low-paid person who may have driven the patient to hospital. The poorly person has to go and get the car parking concession. It is absolutely unfair.
A freedom of information request by Unison revealed that some hospitals charge nurses and health professionals who regularly visit hospitals up to £100 a month. As other Members have said, the cost of parking also has wider effects on the surrounding streets. I have been contacted by many constituents living around Dewsbury and District Hospital who complain that those who cannot afford car parking charges, or who think they might have to stay for several hours, park on residential streets, blocking people’s drives and making it difficult for people to park outside their own homes. Free hospital parking would end that.
We know that trusts are struggling to balance the books after years of being underfunded by the Government, but we must ensure that they are not forced to fill the funding gap by charging sick and poorly patients, their visitors and anxious relatives, and already hard-pressed NHS staff.
Car parking charges are a tax on serious illness. Labour would scrap car parking charges at all hospitals. We would fund that by raising insurance tax on private healthcare to 20%, to meet the £162 million cost of providing free parking at all NHS hospitals in England. Charities, trade unions, the British Medical Association, the Society for Acute Medicine and the public are all calling out for the Government to listen. In Scotland and Wales, car parking charges have been abolished in all but a handful of hospitals. We should show some humanity and do the same. I support the motion.
Bambos Charalambous (Enfield, Southgate) (Lab)
I congratulate the right hon. Member for Harlow (Robert Halfon) on securing this important debate.
It is clear from hon. Members’ speeches that the scandal of hospital parking charges must come to an end. Gravely ill people and people visiting relatives while in a state of distress should not be treated as cash cows by hospital car park operators. It is shocking that half of all trusts last year charged disabled people to park in some or all of their disabled parking spaces. We need to address the ridiculous inconsistency whereby hospital parking is mainly free in Wales and Scotland while trusts charge for parking in Northern Ireland and England. It is time that all hospitals abolished parking fees. Drivers must not be punished for being sick, visiting loved ones or attending medical appointments. People do not choose to be ill and should not be asked to pay for a no-choice hospital visit.
Many of my Enfield, Southgate constituents have approached me about this issue. A mother contacted me to say that after her husband took their son to the North Middlesex University Hospital accident and emergency unit with breathing difficulties in the middle of the night, he was later presented with a parking charge notice. I do not believe that people rushing to hospital with gravely ill children should be put into the position of having to worry about such matters. Imagine if my constituent had spent extra precious moments scrambling for change for parking while his son struggled to breathe. Would that have been a sensible and responsible thing for the parent of a seriously ill child to do? Of course not. That is exactly why we must get rid of these charges.
I have also been contacted by a father who had to take his young daughter to the emergency department. Throughout the evening and into the night, my constituent had to leave his daughter to feed more money into the car park meter because she was being kept in for such a long period of time—it ended up being overnight. My constituent kept paying into the machines, which failed to give him receipts when requested, leaving him unsure how much time he had left. My constituent reported seeing other people in various states of distress walking around the car park and seeming unsure of what to do. Two weeks later, my constituent received a notice telling him that he had not paid for all the time that he had been in the car park. Again, we must ask whether this is an appropriate way to treat the parents of very ill children.
We have all heard in the press about desperately ill patients who have been forced to quit work and left with bills for hundreds of pounds due to their frequent visits to hospitals. Then there are hugely unfair cases of NHS staff who have had parking charges deducted from their wages, but then have been unable to get a space and have been fined for parking in the wrong bay. Several elderly constituents have contacted me to say that they face relatively high parking charges for their regular hospital attendances.
This Sunday, 4 February, is World Cancer Day, and many of us know people who have had treatment for cancer. Anyone who knows the effects of chemotherapy will be aware of how debilitating the treatment can be. People often need a carer to help them to make the journey home. Considering the frequency of treatments for cancer and other illnesses, surely car parking charges are nothing more than a tax on the sick. As the hon. Member for Telford (Lucy Allan) pointed out, many people have no choice but to drive to their local hospital due to the infrequency of public transport.
Liz Twist (Blaydon) (Lab)
My hon. Friend talks about travel difficulties. Does he agree that reductions in the number of bus services in many areas mean that there is no alternative to parking in hospital car parks? In constituencies such as mine, which has no hospital, that means frequent journeys for people who require treatment.
Bambos Charalambous
My hon. Friend makes an excellent point. People in rural areas or who live far away from their local hospitals are unfairly affected by having poor transport networks to ferry them to hospitals, so they have no choice but to travel by car.
The right hon. Member for Hemel Hempstead (Sir Mike Penning) made the excellent point that other emergency workers are not being required to pay to park at their police or fire stations. In addition, hospital staff, by taking up parking spaces, are reducing the number of spaces for patients and visitors. NHS staff should be able to park for free, but they should also be able to afford to live nearer the hospital. It is therefore ironic that we are in a situation in which NHS trusts are forced to sell land that could have been used to house NHS staff locally.
Another pressure on North Middlesex Hospital has been the fact that the closure of the accident and emergency unit at Chase Farm has resulted in far more visitors to its A&E unit. Those additional visits meant that, between Christmas and new year, the hospital ran out of acute beds. One can only imagine how busy the hospital car park was during that period.
Many hon. Members have made excellent contributions about the need for the Government to abolish car parking charges. It is time that those unfair charges were scrapped and the NHS properly funded. For the sake of NHS staff, parents and visitors, I ask the Minister to bring forward measures to scrap car parking charges as soon as possible.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
It is an honour to speak in this debate, and indeed in any debate in which the NHS is at the heart of what is being discussed. I particularly thank the right hon. Member for Harlow (Robert Halfon) for bringing the debate to the House. As has been discussed, the matter is extremely important to patients, charities, emergency workers, volunteers, carers and NHS staff, so it is a credit to him that he secured this debate. He set out his case most eloquently and comprehensively.
The SNP Scottish Government scrapped hospital car parking charges approximately 10 years ago in all car parks that are owned by the NHS. I urge the UK Government to follow both this principle and policy.
As an NHS employee for more than 20 years, I must declare an interest. I was part of the campaign, all those many years ago, as a Unite rep, to scrap NHS parking charges. I was so pleased when we succeeded, because that has made a great difference to many people, and has saved some of the most vulnerable who are already facing so many financial difficulties from spending money on parking.
Robert Halfon
The hon. Lady has been very generous in giving way, and I thank her for her kind remarks. Given that, for the most part, hospital parking charges have been scrapped in Scotland, she must have heard about how the problem of people perhaps misusing the car parks to go shopping or whatever was dealt with.
Dr Cameron
Indeed. Where there is a will there is a way. It can happen; it can be done. Basically, it is a matter of prioritisation and making things happen. That issue can be raised with the Minister today.
Hospital car parking charges hit the most vulnerable people in our society: disabled people; those who are chronically and even terminally ill; families caring for terminally ill children; and those who require repeat appointments and lengthy hospital stays. Before the change in Scotland, I heard about families and couples who had had their cars impounded because their partner was giving birth in the maternity unit and things did not go quite to time, as happens so often in these cases, and they were unable to feed their meter. At a time of utmost importance for the family, that is one of the last things that we would want to have on our mind.
NHS staff, particularly those on community-based shifts, are also penalised. They often have no choice but to use their cars to travel from the hospital to make community visits, so they cannot travel by public transport to their hospital base. There is something fundamentally wrong with charging our valued NHS staff to get to their work of saving lives when their pay has already been affected for so many years by caps.
The SNP is clear that the founding principle of the NHS is services that are free for everyone—services that are not out for profit. We have heard today from hon. Members that it is sometimes cheaper to park in town centres than to park at hospitals. That just cannot be right. By 2015, getting rid of hospital car parking charges had saved patients and staff in Scotland more than £25 million. Parking charges are basically a tax on NHS treatment, and that cannot be allowed to go on. As chair of the all-party group for disability, I am particularly concerned that people with disabilities, who we know are more likely to experience poverty, are being doubly financially penalised if they require medical treatment, as in England they have to pay for hospital parking—should they have retained their Motability vehicles of course.
The right hon. Member for Harlow is right that there are pragmatic ways to address the issue. The things that are said to prevent change from coming about can be overcome. He discussed tokens and other pragmatic ideas that can be put in place and that can work. We have made this work—we made it a success—so it can happen. With the will, there is the way.
I will take a brief moment to extend the issue from hospital parking charges by addressing parking for NHS staff in health centres. I believe that all health centres in my constituency have free parking, aside from the new Hunter Community Health Centre multi-storey car park. I have been in a somewhat intransigent negotiation with NHS Lanarkshire for more than a year, as only a limited amount of permit parking has been made available for staff. This has unfortunately meant that some staff—often those in lower pay bands, such as admin staff—face extortionate weekly charges for getting to work. That is unprincipled and unfair. Why should we penalise only staff who work in a particular health centre?
On Fridays, I have taken to monitoring the free spaces in the car park. I can assure the House that it is half empty every single Friday, which is usually an extremely busy day for car parks elsewhere, so there are enough spaces for the staff. I once again urge NHS Lanarkshire’s chief executive, Calum Campbell, to reverse this decision and ensure that permits for staff, as requested, are restored and that this principled step is taken. I will be writing to him after the debate, which I am sure he will look forward to, as he always does. I will let him know that he has been mentioned in the House of Commons once again.
I thank hon. Members from all parties who have taken part in this debate: the hon. Members for Great Grimsby (Melanie Onn), for Telford (Lucy Allan), for Kingston upon Hull West and Hessle (Emma Hardy), for Colne Valley (Thelma Walker), for Slough (Mr Dhesi), for Batley and Spen (Tracy Brabin) and for Enfield, Southgate (Bambos Charalambous); the hon. Member for Cleethorpes (Martin Vickers), who raised an important point about people in rural areas being badly affected; the right hon. Member for Hemel Hempstead (Sir Mike Penning), who made an extremely pertinent point about volunteer drivers; and the hon. Member for Heywood and Middleton (Liz McInnes), who worked for the NHS as fellow Unite rep in my time, and who has done great work for the NHS.
Everyone who has spoken has urged the Government to act. We do not need any superficial rhetoric, but we do need action. I ask the Minister and the Government to act by putting NHS patients, staff, carers, relatives, volunteers, emergency workers and those who care about the NHS first. We are all requesting change. This request must be taken forward, and I trust that the Minister will do so.
Julie Cooper (Burnley) (Lab)
I am pleased to have the opportunity to respond to this debate on a very important subject. I am grateful to the right hon. Member for Harlow (Robert Halfon) for bringing this subject forward. He and I agree on most aspects of the issue, and he has campaigned passionately on it for so many years.
Julie Cooper
I thank the right hon. Gentleman for that comment.
I am grateful to Members on both sides of the House because it seems that there is much agreement on the matter. It is heartening to hear Members mentioning—and fully understanding—its impact on patients, visitors, carers and NHS staff. My hon. Friend the Member for Great Grimsby (Melanie Onn) mentioned the effect on the greater transportation system.
The hon. Members for Telford (Lucy Allan) and for Cleethorpes (Martin Vickers), and my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) made powerful speeches, as did my hon. Friend the Member for Colne Valley (Thelma Walker), who accused the system of profiteering. My hon. Friend the Member for Heywood and Middleton (Liz McInnes) made an important point on behalf of staff. The right hon. Member for Hemel Hempstead (Sir Mike Penning) referred to the burden of having to pay to go to work. My hon. Friends the Members for Batley and Spen (Tracy Brabin) and for Enfield, Southgate (Bambos Charalambous) mentioned personal family issues when people are taken away from a sick family member’s bed to replenish parking meters.
No one likes to pay to park, but to pay to park at a hospital really does add insult to injury. We are not talking about a luxury experience, a shopping trip or a fun night out; we are talking about paying to visit a hospital. People are not queuing up to go to the hospital café, as the hon. Member for Telford pointed out. No one goes to hospital because they want to. People go because they are sick. They go for treatment, for surgery, for chemotherapy and for kidney dialysis, and they go to visit loved ones. In short, hospitals are not destinations of choice: people go because they must. I am quite shocked that it is free to park at Trafford shopping centre yet I must pay to park at my local hospital.
During the past three years, I have spent hours and hours visiting my mother in hospital. I have often gone backwards and forwards two or three times a day, juggling hospital visiting around work and other commitments. I have to say that it has all been very distressing. As I leave the hospital each night worried, wondering what tomorrow will bring, the last thing I want to do is to stand outside in the cold queuing to pay for my parking. This burden is, of course, in addition to the actual cost.
Some hospital car parks demand payment in advance, as we have heard. This brings its own set of problems, because patients and visitors have to judge how long each hospital visit will last, and then often have to leave the ward or treatment room to feed the ever-hungry parking machine. Of course, running to and fro between the car park and the hospital is impossible for someone hooked up to a dialysis machine. Many dialysis patients suffer with multiple conditions and are unable to work, so paying to park three times a week for dialysis sessions that each last four to five hours is a real financial burden for them and their carers.
Paula in my constituency relies on the weekly £62.70 carer’s allowance she has received since she was forced to give up work to provide round-the-clock care for her husband, who suffered a severe stroke. He has been in hospital for the past month. She has visited every day, often staying for two to three hours to support and comfort him. This costs her more than £20 a week. By the time she has paid for her petrol, half her carer’s allowance is gone.
We have a national health service that was set up to be free at the point of delivery. It was established in 1948 to make healthcare a right for all, but that is not what is happening. Even though hospital car parking is free in Scotland and Wales, here in England, hospital users are forced to pay often extortionate rates, with charges varying from £1.50 an hour to £4 an hour. We are charging the chronically ill, the terminally ill, and their carers and visitors. More than half of all people over 76 have conditions that require regular hospital appointments, and hospital car parking charges are an extra burden for them and their families. The Alzheimer’s Society reports that patients with dementia stay five to seven times longer in hospital than other patients aged over 65. Hospitals can be frightening places for people with that condition. They rely on family and carers visiting them to give support. Parking charges are an extra burden that these families could well do without.
The Patients Association has commented:
“For patients, parking charges amount to an extra charge for being ill…Hospital appointments are often delayed or last longer than expected, so even if you pay for parking you could end up being fined if your ticket runs out. Visiting a hospital can be stressful enough without the added concern of whether you need to top up the parking.”
Macmillan Cancer Support says:
“The core principle of the NHS is to provide free healthcare for all at the point of access. But sadly some cancer patients in England are paying extortionate hospital car parking charges in order to access treatment for a life-threatening illness.”
Bliss, the charity for babies born prematurely or sick, says in its “It’s not a game: the very real costs of having a premature or sick baby” report that these charges can contribute to the financial burden that many families face when their babies need neonatal care.
In the midst of all this misery, the average hospital trust is making £1 million of profit from car parking charges, and several hospitals the length and breadth of the country report profits of over £3 million. Last year, NHS hospitals made a record £174 million from charging patients, visitors and staff. In addition, 40 trusts report additional income from parking fines.
Some people point out that public transport is an option that avoids parking charges. Public transport provision has been reduced in response to funding cuts, but even where it exists, there are many for whom it is not an option. Some patients are too unwell or too frail to travel on a bus. Others, including cancer patients attending for chemotherapy, have reduced immunity and must avoid contact with the general public.
Sir Mike Penning
The hon. Lady is making a compelling case, as have most Members. Public transport has its place for out-patients and so on, where it is available, but imagine someone going into labour and saying, “Can I wait for the No. 2 bus, please?” This is farcical. We need car parks to be there for people when they need them, rather than being a cash cow.
Julie Cooper
I entirely agree and thank the right hon. Gentleman for his intervention.
Patients and carers are often balancing work and other commitments, and have tight time schedules that preclude public transport. I have spoken to the parents of a terminally ill child who left their child’s bedside only to tend to the needs of their other children. They do not have time to wait for a bus.
No discussion of hospital car parking charges would be complete without a consideration of their impact on NHS staff, which Members have spoken about eloquently. These staff pay to go to work and are still not even guaranteed a space. That can lead to them being late for the beginning of their shift. Some hospital staff whose shift overruns because they are tending to patients’ needs face fines for overstaying their parking time. That is clearly no way to treat our health professionals. It is no wonder we face a crisis in recruitment and retention.
Government action to date has been limited to a series of recommendations on hospital car parking. Currently the Government recommend that hospital car parking charges should not be applied to blue badge holders, carers, visitors of relatives who are gravely ill, and patients who have frequent out-patient appointments. In reality, those recommendations count for very little. In fact, the trend is to increase car parking charges and to reduce the number of those who are exempt. Many hospital trusts have even begun to charge blue badge holders.
It is not good enough for the Government to abdicate responsibility. This is a matter of principle. Scandalously, Conservative Members have previously argued in the Chamber that the NHS needs the income from parking charges. I have no doubt that the NHS needs this revenue, as it is common knowledge that the service has been starved of funding since 2010, but is it right that we fund our health service by taxing the sick?
Labour Members will have none of this. I am proud that the next Labour Government will ensure that our NHS is properly funded and will abolish car parking charges at all hospitals. To pay for that, we will increase the premium tax on all private health insurance policies. Crucially, no hospital will lose funding as a result of our policy.
In 2015, I asked the Government via a private Member’s Bill to exempt carers from hospital car parking charges. At the time, that relatively modest proposal was met with derision from Government Members. My attempt to remove this financial burden was dismissed as a worthy aim, but not worthy enough for the Government to support. Indeed, Conservative Members went to great lengths to talk the Bill out.
Times, I hope, have changed. Today I am asking, along with the right hon. Member for Harlow, that the Government remove all car parking charges at NHS hospitals. Today we ask the Government to do the decent thing by removing this tax on the sick and taking action to ensure that we truly have an NHS that is free at the point of access.
The Minister of State, Department of Health and Social Care (Stephen Barclay)
May I begin by commending my right hon. Friend the Member for Harlow (Robert Halfon) for securing the debate? Members across the House recognise that he has campaigned assiduously on this issue for some time, as he has on many campaigns, and he has already had some success, as reflected in the Government guidelines issued in 2014. However, it is right, in the light of the concerns raised across the House, that the issue is revisited. This has been a very constructive debate, granted by the Backbench Business Committee, and I commend all Members who have contributed and informed the House of what is happening in their constituencies.
I do not think anyone in the House has any issue with the desirability of scrapping car parking charges. As English Members of Parliament—it is different for our Scottish National party colleagues—we all pay these charges, as the hon. Member for Great Grimsby (Melanie Onn) said in a constructive way. We all know that they are unpopular with our constituents and are a concern for staff working hard within the NHS.
As my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) highlighted, the charges predate this Government. This issue has long been debated in the House, by parties on both sides. The issue is not the desirability of what is sought by my right hon. Friend the Member for Harlow. The issue is the execution and how it would be done in a way that does not have unintended consequences, and how those might be mitigated. I think we got a flavour of some of those unintended consequences in the constructive contributions made by Members on both sides of the House.
Implicit in the motion is the suggestion that car parking charges apply in all NHS hospitals. It is not in the specific wording, but the impression from the debate has been that they apply across the NHS as a whole. However, as hon. Members will be well aware, 67% of NHS sites do not charge at all at present. We are talking about a subset of the NHS where charges apply, albeit that the subset is particularly concentrated in the acute sector, from which many of the examples we have heard come. For example, mental health patients, who are often among the most vulnerable of our constituents seeking the support of the NHS, do not on the whole face charges because those parking facilities are not charged for. This tends to be an issue in the acute sector.
Robert Halfon
I thank my hon. Friend for his kind words, but I must say that I disagree with what he has said. Hospital car parking charges in England are widespread, and we just have to go from one hospital to another to see that. As I said, nearly 50% of hospitals are charging the disabled, for example.
Stephen Barclay
With respect to my right hon. Friend, it is a statement of fact, as confirmed by my officials—I am very happy to correspond with him further about it—that 67% of NHS sites do not charge. If one wants to get into the definition of a hospital, it actually covers more than acute services. I do not want to get distracted by that point. The one I was seeking to make is to recognise that this issue is particularly concentrated on acute hospitals, and that is the issue before us.
The hon. Member for Great Grimsby recognised that there is considerable room for flexibility within trusts. One of the key issues in this debate is the distinction between charges covering the maintenance of car parks, and how a reduction in charges may lead to a reduction in the number of spaces and the quality of the facilities—we heard, for example, about the state of the car parks in north Manchester—and those involving profiteering, with charges going beyond of the cost of maintenance. The hon. Lady is concerned about that, and the interplay with the current guidance. The hon. Member for Colne Valley (Thelma Walker) also mentioned that when she highlighted the distinction between the charges at her hospital and those of the local authority, and raised the issue of transparency.
The right hon. Member for Kingston and Surbiton (Sir Edward Davey) expressed concerns about transparency in relation to blue badge holders. They are not means-tested, so an affluent blue badge holder could be spared a charge while a less affluent visitor to a hospital is charged. Transparency about how the guidance is applied is therefore a factor, as has been recognised.
Sir Mike Penning
May I push the Minister a little bit on blue badge holders? Quite rightly, blue badge holders are not means-tested. The key is their ability to access services. It does not matter how much they have in the bank. If they need to go to a hospital and they have a blue badge, surely spaces should be free and as close to the point of entry as possible.
Stephen Barclay
Absolutely. As my right hon. Friend will be aware, the guidance speaks to that. My hon. Friend the Member for Cleethorpes (Martin Vickers) mentioned the 64 pages of guidance. I am very happy to take away and look at why there are 64 pages of it. Blue badges are part of the conversation that my right hon. Friend the Member for Harlow began in 2014.
Robert Halfon
I have huge respect for my hon. Friend, but the fact is that the guidelines in relation to blue badges are not working. According to the FOI request—this is backed by charities such as CLIC Sargent—up to 50% of hospitals are still charging disabled people to park. There is no point talking about the guidelines if people with disabilities are still being forced to pay to park at hospitals in England.
Stephen Barclay
I am very happy to look at such cases and to speak to those trusts to understand this better, but I was making a point about the complexity of the issue and how to manage reducing the charges. For example, as the hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) will no doubt be aware, there were local media reports over the summer about a hospital car park in Inverness being used by those going to the airport; there was displacement there. We do not want a solution that constrains capacity for those using the hospital and makes access more difficult.
Some of these issues have a very local flavour. That was recognised in the debate: the hon. Member for Heywood and Middleton (Liz McInnes) said that shoppers do not seek to use the car park at the north Manchester site, whereas my hon. Friend the Member for Solihull (Julian Knight) was concerned that simply removing charges would cause displacement at his hospital. The point is that there are local factors, just as there are with legacy PFI contracts, including in Scotland and Wales, where charges are still made under contracts going back to 2008.
Julie Cooper
Would the Minister accept, though, that people being ill and suffering distress at hospitals is not a local issue? It is a national issue. The burden of hospital car parking charges, wherever they occur, ought to be a concern of the Government.
Stephen Barclay
Of course, but equally the hon. Lady must recognise that the fact that charges are still being applied under PFI agreements put in place by a previous Government in 2008 signals that there are often complexities, in terms of what can be done when different factors apply. As my hon. Friend the Member for Solihull highlighted, there are factors relating to displacement. That is why trusts have local discretion, but as the House has discussed today, we need to understand the transparency around that and how it is applied.
Stephen Barclay
I will, but then I will press on, because I want to give my right hon. Friend the Member for Harlow some time.
Sir Mike Penning
I am sure we have time, on this important issue. The Minister raised the issue of complexity. Clearly, as has been shown by Members across the House today, some cases would be easier to address than others. I fully accept, as I said in my speech, that some ludicrous PFIs were put in place, both before the present Administration came to power and since. Do the easy ones first; that is the answer. That is what Scotland did. Then come to the more difficult ones. Ruling out any change at all because there are some difficult issues is surely not the way forward.
Stephen Barclay
A point was raised about whether free parking could be addressed through tokens and barriers, but colleagues in the NHS raised concerns about how that would apply, in terms of any burden on staff. We heard examples of frequent users of a hospital being able to access concessionary schemes, but staff have raised concerns about the impact on them, and how they might be expected to assist in the administration of the scheme in regard to those visiting hospitals as a one-off.
The pertinent point about the impact on staff was raised by Members from across the Chamber. Many Members have been visited recently by representatives from the Royal College of Nursing, regarding the wider discussions between NHS employers and the RCN on pay. It was helpful to hear in the debate contributions about the RCN’s understanding of the benefits, pressures and issues.
Across the House, there is no question, as was reflected by my right hon. Friend the Member for Harlow, about the desirability of addressing iniquities and variance, and about the scope to ensure compliance with the guidance, but we need to be mindful of unintended consequences, and particularly about constraining the car parking available for those who need it. I am happy to continue my discussions with my right hon. Friend on this policy. I commend him and colleagues on a very constructive debate.
Robert Halfon
I thank the hon. Members who have spoken from both sides of the House. The Minister has heard about the madness of the guidelines not working, the problems with public transport, parking being given over to football club supporters, as my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) said, and the moving stories of families and the problems that people with severe illness have had to face.
I have to say, I am incredibly disappointed with the Minister’s response. I gave him my speech in advance because I wanted him to look at this seriously, but a lot of what he read is very much what we might think would come from officials. It is a great disappointment. He opened his speech by saying that he believes in the desirability of this, but then gave no indication of how. Many hospitals have hospital car parking charges, as figures show. It is not beyond the wit of man to develop a number plate recognition system to deal with the problems of people misusing hospital car parking.
The Minister said that we will just try to make sure the guidelines work. Well, even if the guidelines were working, they would still mean that many hospitals charge millions of patients and visitors. On both sides of the House, we constantly talk about the billions being spent on the NHS and whether they should be. Most members of the public find that hard to understand, but this is real and it affects millions of people who go to hospital regularly—as has been said again and again today, not out of choice, but because they have to. This is real and substantive, and a solution would not cost a huge amount of money in terms of the overall NHS budget. There are different solutions to pay for it, so that the NHS is not harmed.
I strongly urge the Minister to look again at this issue and realise that there is cross-party consensus in the House. Many Government Members want the situation changed. When this issue comes up again, I urge him to come back with a more substantive solution to scrap hospital parking charges. That is why I moved the motion today.
Question put and agreed to.
Resolved,
That this House calls on the Government to undertake a consultation to identify the most efficient means of abolishing car parking charges at NHS hospitals in England for patients, staff and visitors and to provide the timescale for its implementation.
Myanmar’s Muslim Ethnic Minority
(6 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Kate Green (Stretford and Urmston) (Lab)
I rise to present a petition on behalf of my constituents; it has 356 signatures from people seeking an end to the violence and persecution of the Rohingya Muslim community in Myanmar.
The petitioners request
that the House of Commons urges the UK Government to make representation to the government of Myanmar to cease all violence in Myanmar; further to call for immediate entry aid into Myanmar; further to call for the UK not to supply arms or military training to the military; and further to call on the UK government to do all within its powers to ensure the perpetrators are brought to the international court of justice to be tried for crimes against humanity.
Following is the full text of the petition:
[The petition of residents of Stretford and Urmston,
Declares that urgent action should be taken to stop the violence against Myanmar's Muslim ethnic minority, the Rohingya, including genocide, ethnic cleansing and crimes against humanity; further declares that the petitioners cannot continue to stand by and watch the displacement of hundreds and thousands as a genocide unfolds; further declares that the petitioners note that the Rohingya Muslims are not currently recognised as citizens in Myanmar; and further urges the implementation of the Rakhine commission recommendations chaired by Kofi Annan.
The petitioners therefore request that the House of Commons urges the UK Government to make representation to the government of Myanmar to cease all violence in Myanmar; further to call for immediate entry aid into Myanmar; further to call for the UK not to supply arms or military training to the military; and further to call on the UK government to do all within its powers to ensure the perpetrators are brought to the international court of justice to be tried for crimes against humanity.
And the petitioners remain, etc.]
[P002104]
Housing, Planning and Infrastructure: Essex
(6 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Priti Patel (Witham) (Con)
I am grateful to Mr Speaker for granting this debate. I welcome my hon. Friend the Minister to his role, and the opportunity to hear about my constituency.
My constituency covers three lower tiers of local planning authorities while Essex County Council has responsibility for waste and minerals, which partly explains why the Ministry of Housing, Communities and Local Government holds such a high volume of correspondence from me on behalf of my constituents. If the Minister visits Witham, which he is very welcome to do, he will see at first hand the boundless economic potential of this part of Essex and of the entire county. He will also note the appetite among our local communities to take a positive, proactive approach to housing, planning and infrastructure. Many parishes are working on neighbourhood development plans and want to deliver on the localism agenda advocated by our Government. They want to exercise the powers at their disposal to allocate preferred sites for housing and business uses, and for protection.
We want to deliver ambitious plans to support economic growth and bring more local homes to our communities. We want and need new infrastructure to support growth, including the widening of the A12, the upgrading of the A120, and investment in the Great Eastern main line. I welcome today’s announcement of more than £7 million for the Heybridge flood alleviation and regeneration scheme, in the district of Maldon just outside my constituency, and I hope for more investment rounds to support planning and development.
We recognise that development brings with it employment opportunities, investment in infrastructure and new public services, including schools and GP services, but that should not mean housing at any cost and in any location. I want to draw the Minister’s attention to some issues and causes of concern in which localism is being undermined and opportunities to deliver locally led planning are being missed. I appreciate and respect the fact that the Minister cannot give detailed responses on specific planning cases that are live and under consideration, but I hope that he and his Department will reflect on them.
First, the Minister will be aware of the Secretary of State’s decision to call in planning applications for up to 260 new dwellings on two sites in Hatfield Peverel, at Stonepath Meadow and Gleneagles Way. A hearing took place in December, and I pay tribute to the residents in Hatfield Peverel and members of our parish council who came together to oppose those unwelcome developments. Their dedication to their local community has been outstanding. Both developments are outside the settlement boundary in the current and emerging local plans and the emerging neighbourhood plan, because they would be detrimental to the countryside. They would also place unacceptable pressures on an already full general practice, with no guarantees of any financial contributions to enhance the service.
Our local schools are also full, but no contributions are being sought because of the community infrastructure levy pooling restrictions. The applicants seem to think it acceptable for primary school pupils—children—to be forced to walk more than two miles along the busy A12 to a school in Witham. As for secondary school pupils, First Bus is axing the 72 bus route, which connects Hatfield Peverel with Maltings Academy and New Rickstones Academy in Witham, so there will be no direct bus service for pupils in the village to use.
We are not opposed to housing in Hatfield Peverel—quite the reverse. That wonderful village is already set to accommodate new housing in an emerging local plan focused elsewhere in the village in the comprehensive redevelopment area covering land between the A12 and the Great Eastern main line. Some 250 new dwellings are already—and rightly—going through the planning process. However, the village is taking its fair share of new housing and cannot take any more.
There are many other reasons why the two applications are totally unsuitable for development. I trust that the Secretary of State will consider those points, and the strong objections that have been made, when the inspector hands him the report of his findings.
Although the Minister cannot comment on the specifics of the two applications, I would welcome his clarification of some wider issues that have arisen. First, councils such as Braintree, and parish councils such as Hatfield Peverel, which are in the process of putting together local and neighbourhood plans that embrace the principles of localism, are being undermined by planning applications many of which pre-empt and undermine those democratic processes. Other villages, such as Kelvedon and Feering, have been similarly bombarded with applications. Those communities need to be protected, and they need the Government to allow them time to put their plans in place.
Secondly, the issue of the five-year land supply of deliverable sites has arisen. Speculative, predatory developers are seeking to exploit the council’s claim that it does not have a five-year land supply. The main reason for Braintree’s identified supply shortfall is the failure of the last Labour Government’s regional spatial strategies, whose housing targets were lower than those in the most recent objectively assessed housing need research. I hope that the Minister can assure communities in the district that they will not be punished because of the last Labour Government’s failures, and that decision makers can exercise discretion over the housing supply figures. Councils need flexibility on this issue, and that includes the ability to use the Liverpool method when it best suits them, in respect of, for instance, sites in draft allocations. I hope that the Minister will be able to give some assurances about that as well.
My third point is on the effectiveness of pre-application consultation. In Hatfield Peverel, one applicant issued a so-called consultation that contained false information about education and health provision—which the applicant had not bothered to check—and sought to frighten residents. It also submitted a planning application within a few weeks of securing rights from landowners to promote the site and less than two working days after holding a pre-application discussion with council officers; that is not nearly enough time to take account of local comments. Then, when the council and local community were taking time to resolve issues that had been raised as a result of the applicant’s failures—such as the impact on schools, the NHS and landscapes—the applicant had the audacity to threaten to take the application to the Planning Inspectorate for non-determination.
For other sites in the district, such referrals to the Planning Inspectorate to deliberately bypass local decision making have been made. This abuse of the planning system must stop, and I hope the Ministry will consider how to address these problems. There are some good examples of positive developer engagement with local communities and we need to make sure that more of that happens. Those who fiddle consultations and circumvent pre-application engagement should be sanctioned for doing so.
Another major development issue affecting my constituency is the proposed garden settlement for the Colchester Borough Council/Braintree District Council border. That proposal has the potential to deliver thousands of new homes and bring in urgently needed infrastructure upgrades and public services. The Government have recognised this and provided over £1.3 million to Colchester Borough Council to work on this project.
However, a number of questions and concerns have been raised about the proposals. Primarily, these relate to infrastructure and public services. Residents want to be assured that if this project gets the green light, significant new infrastructure and public services will be put in place and phased in to meet future demand. It is pointless to put in the infrastructure and services once the developments are being occupied; they must be put in in advance, and to a clear timetable. That means that the Ministry, the Department for Transport, the Treasury, local councils and the private sector will need to come together to ensure that the funding is in place to upgrade the A120, widen the A12 and increase capacity on the Great Eastern main line with a passing loop, as well as providing for new GP surgeries and schools.
Questions have also been raised about the delivery vehicle, local engagement, availability of employment opportunities and how the councils have spent the moneys provided to them by the Government. The garden settlement proposals are in the process of being examined as part of the local plan process, but I urge the Minster and Secretary of State to look carefully at these matters. Some residents are opposed to this project; others are in favour. However, it is essential that if this major project goes ahead, it is done correctly and done in the right way.
One of the other reasons why there are concerns about garden settlements is the appalling record of Colchester Borough Council. On planning matters, this Lib Dem and Labour-run council is rotten to the core. The Minister has the background on this and will know that last year, the Secretary of State granted planning permission for a new leisure and retail development known as Tollgate Village in Stanway. The development was supported by an overwhelming majority of local people and transforms a derelict site into a development creating hundreds of new local jobs and tens of millions of pounds of inward investment.
However, Colchester Borough Council tried everything possible to block it. It claimed it would be a loss of employment land, even though there was no interest in using the site in that way. It tried to pit Tollgate Village against Colchester town centre, and it even tried to smear me by making up a false claim that my representations in writing were somehow improper, and leaked that to the local media. It behaved disgracefully and yet not a single senior officer or senior political figure has taken responsibility. They blocked the creation of jobs, prevented investment and wasted public money.
Close to that site, the council acted in a similar way on the Stane Park scheme, another private investment project which it blocked but which was granted consent on appeal. Also in Stanway, on the Lakelands housing development, the council completely neglected and ignored residents in causing the loss of a green space at Churchfields Avenue and Partridge Way, in an area of land known as parcel SR6.
That area of land should have been landscaped; it was not, as the council failed to enforce a planning condition. It was then designated for protection as open space in the council’s local plan. However, behind closed doors and without any consultation, the council allowed a new masterplan to be approved that designated the site for intensive housing. Residents were made aware of this only when the reserved matters application was made in 2015. Despite complaints and concerns about the process, the council approved the construction of 27 new dwellings and the loss of that space in autumn 2016. The matter has been with the local government ombudsman for over a year due to the complexities of the issues involved. This shows once again how Colchester Borough Council is problematic and not fit for purpose. It allowed an area that should have been green open space to be lost without any consultation, and kept residents in the dark for years.
Priti Patel
I shall move on to another planning area outside Colchester borough. Thousands of my constituents and residents across Essex and beyond are deeply concerned about the prospect of the Rivenhall incinerator receiving further planning consents and becoming operational. The incinerator was originally granted planning permission by the last Labour Government in March 2010, just weeks before the general election. Since then, however, the applicants have made a number of changes to the site. It has been described as an integrated waste management facility, but the recycling capacity has been reduced and the waste incineration capacity increased by 65% from 360,000 to 595,000 tonnes.
Another planning application is being considered by Essex County Council to increase the stack height to help the site meet Environment Agency requirements. However, given the concerns with the incinerator, the impact on the environment and the new proposals on waste put forward by the Government, the incinerator is not only unwelcome but out of date. It has no energy recovery mechanisms, which makes it all the more damaging to the environment. My constituents would like the latest planning application to be refused, and called in by the Secretary of State to ensure its refusal if necessary. I trust that the Minister will convey that message to the Secretary of State and look at all the submissions that will be coming his way.
My constituent, John Patrick, has had a long chain of correspondence and representations with my hon. Friend’s Department. He is well known to the Department. He runs a rural nursery business growing plants. When he moved in, there was live-in accommodation on site. A long and protracted planning dispute involving numerous applications, appeals and enforcement notices has taken place with the local planning authority. He feels that planning policies justify his being able to operate his business and live on site. I ask the Minister to review the case and, importantly, to learn the lessons from it and respond to the most recent representations that have been made.
The last case I want to highlight involves a development outside my constituency, but the medium-sized developer is based in the Witham constituency. Wickford Developments is involved in the development of a site in the Uttlesford District Council area. What appears to be a restrictive planning policy requiring a development to include a lift could prevent the company from providing much-needed social housing. I would welcome the Ministry looking into the case and assisting the company to resolve this issue, if that cannot be done directly with the council.
As the Minister can see, my constituency has a wide range of planning and development issues, and there are many more that time has prevented me from raising. I want to leave him with this message from my constituency: we need the new Ministry of Housing, Communities and Local Government to ensure that local communities can embrace localism in order to deliver sustainable developments and the housing that we need, to prevent unwelcome development and abuses in the planning system, to ensure that intervention takes place in the cases listed, and to guarantee that as new developments take place, local communities can benefit from them with the provision of new infrastructure and key public services.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
I congratulate my right hon. Friend the Member for Witham (Priti Patel) on securing this debate on housing, planning and infrastructure in Essex. It is great to see her being supported in the Chamber tonight by her county colleagues, my hon. Friends the Members for Harwich and North Essex (Mr Jenkin) and for Colchester (Will Quince) and my right hon. Friend the Member for Harlow (Robert Halfon). She is a strong campaigner for her constituency. The sheer volume of cases and correspondence from her held by the Ministry is a testament to the diligent way in which she pursues these issues. I thank her for the opportunity to debate these extremely important topics.
In her speech, my right hon. Friend referred to a number of planning cases. As she kindly acknowledged, I am not in a position to comment in detail on the merits of the planning applications or appeals that are ongoing. The cases that she referred to that affect sites in the village of Hatfield Peverel are being considered by a planning inspector, who will provide the Secretary of State with a report to consider in due course. All material matters associated with the proposals will be considered as part of the process, and my right hon. Friend can be assured that her comments will no doubt be noted.
In respect of the applications relating to the waste management facility on the former Rivenhall airfield, my right hon. Friend has provided some of the background. The current planning applications that have been submitted are a matter for Essex County Council, as the relevant planning authority, to consider. However, the Ministry is aware of the requests for the applications to be called in, and they will be considered in the appropriate way.
Turning to John Patrick and my right hon. Friend’s points about his case, I can assure her that we will carefully consider and reply to Mr Patrick’s correspondence. As an aside, representing as I do a highly rural constituency, I fully recognise the importance of rural enterprise in driving prosperity. I was interested to hear about the case involving Uttlesford District Council. Once again, I am of course not in a position to comment on a current planning application but, on her general points about the provision of affordable housing, we are keen to see approaches taken to deliver more affordable housing. As set out in the housing White Paper, the Government are keen to promote more opportunities for small and medium-sized developers to deliver that housing.
My right hon. Friend made reference to her concerns about Colchester Borough Council. The case of the Lakeland site is currently with the local government ombudsman, and we will take note of the outcome of its inquiries, but we cannot intervene directly in that process. In relation to the Tollgate Village project, an inspector conducting the appeal inquiry produced a report that my right hon. Friend the Secretary of State carefully considered before accepting the recommendation to grant planning permission. We are aware of the council’s position and of the concerns of my right hon. Friend the Member for Witham about the council’s approach to the application. More broadly, as for every single local authority, ultimate accountability comes through the ballot box, and I know from first-hand experience that my right hon. Friend is a top-rate campaigner.
My right hon. Friend also touched on North Essex Garden Communities, which is one of 24 new locally-led garden cities, towns and villages that the Government are currently supporting. Together, they have the potential to deliver 220,000 new homes across England. In general terms, the Government believe that garden communities offer the potential to secure considerable new housing, employment opportunities, modern physical infrastructure and new public services. That is why the Government provide some funding to support local authorities, such as those in Essex, to develop these proposals.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
My right hon. Friend the Member for Witham (Priti Patel) gave me permission to intervene, and I congratulate her on securing this debate. We are all here because we are concerned about the effects of these garden communities. They must produce quality communities. I know the Department is concerned that it is about not just housing numbers but the creation of quality communities with the necessary infrastructure. The A120 and the A12 are vital pieces of infrastructure that must be upgraded in advance of the creation of the new homes. Will my hon. Friend include that in his consideration of these matters?
Rishi Sunak
My hon. Friend and my right hon. Friend the Member for Witham are absolutely right to raise their constituents’ concerns that the additional housing must be supported by the right infrastructure and public services, at the right time. The Government and I wholeheartedly agree with that, which is why in the autumn Budget the Government more than doubled the housing infrastructure fund, dedicating an additional £2.7 billion to bring the total fund to £5 billion.
Robert Halfon (Harlow) (Con)
I congratulate my right hon. Friend the Member for Witham (Priti Patel), who is also my constituency neighbour, being an Essex champion and initiating this debate. The loss to the Government is certainly a win for Essex. Given what my hon. Friend the Minister has said, does he agree that new housing and infrastructure in Essex should be accompanied by support for substantial regeneration in towns that have real problems, such as Harlow, where the town centre is decaying because everything was built almost at the same time? Many good things are happening, but we need desperate help with the regeneration of our town centre, for example.
Rishi Sunak
My right hon. Friend makes an excellent point. Economic regeneration and, indeed, the boundless economic optimism that my right hon. Friend the Member for Witham talked about are something the Government are keen to see and should actively support through these proposals and through the infrastructure investment in places, like Harlow, where it can make a difference.
The housing infrastructure fund is designed to provide exactly the kinds of projects that both my right hon. Friend and my hon. Friend the Member for Harwich and North Essex talked about—key infrastructure that unlocks housing growth. Just today, the Government announced 133 successful HIF projects, which will help to unlock a potential 200,000 new homes. As my right hon. Friend the Member for Witham mentioned, that includes £7.3 million for a flood relief scheme next to her constituency in Maldon and £5.5 million of funding to unlock more than 500 homes in Colchester by accelerating the delivery of 22 acres for housing development—I am sure my hon. Friend the Member for Colchester will welcome that investment.
A forward fund element of the HIF will also be available to the uppermost tier of local authorities in England for a small number of strategic and high-impact infrastructure projects for bids of up to £250 million. Expressions of interest for that funding are being assessed, and I am delighted to tell the House and my right hon. Friend the Member for Witham that the county of Essex has applied to the fund, including for infrastructure specifically to support the North Essex garden communities. The best proposals from across the country will be shortlisted to go through to co-development in the coming weeks. Local authorities will then submit final business cases, with successful bids being announced as early as this autumn.
More generally, my right hon. Friend is right to highlight that garden settlement community proposals are still subject to examination as part of the local plan process. The hearings with respect to the examination of the local plans were concluded last month, as she will know, but I can reassure her that any formal responses made by her constituents either to the Planning Inspectorate or to the council as part of the draft plan consultation will be considered by the inspector in his determination. Further, I understand that the Planning Inspectorate has sought reassurance that all matters raised by consultees on the draft plan have been provided and will hold further hearings if procedurally necessary.
My right hon. Friend spoke in detail about local plans. New homes need to be provided through up-to-date local plans, which are produced in consultation with local people. I welcome the progress that Braintree, Tendring and Colchester Councils have made on their local plan preparations. Up-to-date plans that are produced in consultation with local communities are a vital element of the planning system. They are the starting point for planning decisions by local planning authorities and planning inspectors.
As my right hon. Friend mentioned, local authorities are required to identify a five-year land supply of deliverable housing sites. Identifying a five-year supply of housing sites provides clarity to local communities and developers on where homes should be built so that development is planned, rather than a result of speculative application. Where there is insufficient available land on which housing can realistically be delivered, however, there are measures in place that help to identify suitable sites.
As my right hon. Friend acknowledged, Government guidance states that local authorities should aim to deal with undersupply within five years, where possible. However, decision makers have the flexibility to consider each case on its merits, and it is for local authorities to present their particular case to the relevant decision makers.
Our housing White Paper acknowledges that the current policy on five-year land supply has been effective in delivering homes, but has had some negative effects, including an increased number of appeals. Through our White Paper, the Government proposed reforms to how land supply is calculated to give more certainty. The proposal offers local authorities the opportunity to have their five-year housing land supply agreed on an annual basis and fixed for a one-year period. It is intended that this ability to fix will reduce the number and complexity of appeals by providing greater certainty to all parties.
The White Paper also indicated that clearer, more transparent guidance will set out how the five-year land supply should be calculated. The responses to this consultation are currently being considered, and I can tell my right hon. Friend that revised national planning guidance will be published for comment alongside the consultation on the national planning policy framework, before Easter this year.
My right hon. Friend next referred to the production of neighbourhood plans and the role that they play in empowering local communities. I note with delight that neighbourhood planning is being embraced in her constituency, with at least 10 neighbourhood planning groups being active and, as she said, doing their best to support the Government’s localism agenda. The Government want to support such groups, and we have made £23 million available from 2018 to 2022 through a neighbourhood planning support programme. She highlighted her concerns about whether neighbourhood plans in development get the status they deserve in the planning process, especially if communities are, to use her words, “bombarded” with applications. The NPPF is clear that weight may be given to emerging neighbourhood plans. We have also laid out guidance to set out where circumstances may justify the refusal of planning permission on grounds that an application would be premature in relation to an emerging neighbourhood plan.
On the points that my right hon. Friend made about pre-application consultation, the Government believe effective consultation is an important part of the planning process. We have clear and detailed expectations, both statutory and in guidance, regarding the consultation of parties affected by planning applications. It is for the local planning authority to ensure that this consultation takes place properly and in accordance with these guidelines. If there are points of concern, they should be raised with the authority as soon as possible.
In conclusion, we have covered an extensive range of topics in this short debate this evening. It seems to me that the Business Secretary and Chancellor should take note: my right hon. Friend the Member for Witham is single-handedly doing her bit to drive up Britain’s productivity. In seriousness, this is a testament to the energy and passion with which she cares about her constituents, and wants their concerned aired and listened to by Government. I commend her for achieving exactly that this evening.
Question put and agreed to.
Proposal for Designation of Age-verification Regulator
(6 years, 9 months ago)
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The Minister of State, Department for Digital, Culture, Media and Sport (Margot James)
I beg to move,
That the Committee has considered the Proposal for Designation of Age-verification Regulator.
It is a pleasure to serve under your chairmanship, Mr Sharma. The Digital Economy Act 2017 introduced a requirement for commercial providers of online pornography to have robust age-verification controls in place to prevent children and young people under the age of 18 from accessing pornographic material. Section 16 of the Act states that the Secretary of State may designate by notice the age-verification regulator and may specify which functions under the Act the age-verification regulator should hold. The debate will focus on two issues. I am seeking Parliament’s approval to designate the British Board of Film Classification as the age-verification regulator and approval for the BBFC to hold in this role specific functions under the Act.
Sir Greg Knight (East Yorkshire) (Con)
For the purpose of this measure, where is pornography defined? For example, would the measure prevent a student from downloading a film, say, of “Salome” or “Lady Chatterley’s Lover”?
Margot James
The measure before us today deals exclusively with the designation of the BBFC as age-verification regulator and the powers that it will enjoy by exercising that function. It does not deal with the definition of pornography. Although the measure contains a definition within it, it does not deal with that matter. I can come back to that later if my right hon. Friend requires it.
Before considering the specific points related to the debate, I remind the Committee why we introduced the requirement. In the offline world there are strict rules to prevent children accessing adult content, but the same is not true online. A large amount of pornography is available on the internet in the UK, often for free, with little or no protection to ensure that those accessing it are old enough to do so. That is changing the way in which young people understand healthy relationships, sex and consent.
A 2016 report commissioned by the Children’s Commissioner and the National Society for the Prevention of Cruelty to Children makes this clear. More than half of the children sampled had been exposed to online pornography by the age of 15. Nearly half of boys thought pornography was realistic and just under half wished to emulate what they had seen. The introduction of a requirement for age-verification controls is a necessary step towards tackling the issues and contributes to our commitment to making the United Kingdom the safest place in the world to be online.
The BBFC is best placed to carry out the important role of age-verification regulator because it has unparalleled expertise in the area. The BBFC has been classifying films for cinema release since 1912 and video content since 1984. It has established a trusted reputation for making difficult editorial judgments and giving consumers, particularly parents and children, clear information about age-appropriate content. Importantly, the BBFC is currently responsible for classifying adult material for sale online, including judging when content should be rated 18 years and therefore be available for sale only in licensed sex shops. Moreover, the BBFC understands how new technology is changing the way in which people access content. It has been crucial to the development and implementation of the filtering of adult content on mobile networks. It is clear that the BBFC has the breadth of experience and expertise required to undertake the role of age-verification regulator.
In this role, the BBFC will be responsible for identifying non-compliant websites and giving notice to the appropriate persons. Draft regulations setting out the circumstances in which the regulator should consider that pornography has been made available on a commercial basis were published alongside the Act. We expect to lay an updated draft before the House shortly.
The particulars of the proposed designation set out the powers that the BBFC will be designated to carry out the role, namely: the power to request information that it requires to exercise its powers; the power to issue civil proceedings against non-compliant persons; the power to give notice to payment service providers or ancillary service providers to non-compliant persons; the power to direct internet service providers to block access to non-compliant material; and the freedom to exercise its powers proportionately, and in a manner that prioritises child safety online.
In addition, there is an obligation on the BBFC to issue guidance on the age-verification arrangements that it will treat as compliant, and the approach that it will take to ancillary service providers. Following designation, that guidance will be laid before the House for approval. We are confident that, taken together, this approach gives the BBFC a range of powers that will provide a real incentive for pornography providers to comply with the age-verification requirement under the Digital Economy Act.
I am pleased to report that the BBFC has engaged openly and constructively with the Department for Digital, Culture, Media and Sport from the beginning of the process, and has made extensive preparations for the role, including developing the technical expertise and processes that will be necessary. It has undertaken engagement with relevant organisations, including representatives of the adult industry and the age-verification industry. In particular, it has established a charity working group to ensure that its approach is in line with child online safety goals.
In conclusion, we believe that the BBFC has the right attributes and experience to carry out the role of age-verification regulator. It is a highly respected organisation that has unparalleled expertise in classifying content. I have confidence in recommending it to the House as age-verification regulator for online pornography.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
It is a privilege to serve under your chairmanship, Mr Sharma— I think it is the first time I have had that honour. I congratulate the Minister on her new role. This is the first time we have faced each other in such a debate, and I am very much looking forward to spending an awful lot more time with her in Committee Rooms as the Data Protection Bill weaves its way through the House of Commons.
At this stage, I would normally preface my remarks with a lacerating attack on how the Government are acquiescing in our place in the world as a cyber also-ran, and I would attack them for their rather desultory position and attitude to delivering a world-class digital trust regime. However, I am very fortunate that this morning the Secretary of State has made the arguments for me. This morning, before the Minister arrived, the Secretary of State launched his new app, “Matt Hancock MP”. It does not require email verification, so people are already posting hardcore pornography on it. When the Minister winds up, she might just tell us whether the age-verification regulator that she has proposed, and that we will approve this morning, will oversee the app of the Secretary of State as well.
I noticed that the main contributors to the app are journalists, although it looks as though Ed Balls has also been on, because someone has posted “Ed Balls”. Those are the only words that have been posted, but it is the second-most favourited comment on the app this morning. For reasons that are not quite clear, when someone signs up to the “Matt Hancock MP” app, the app asks whether it can access that person’s photos. It is not quite clear whether that is an unintended breach of users’ privacy, but perhaps the Minister can tell us her attitude to that when she winds up as well. If people are posting pornography on it, as I am told they are, perhaps she could raise that with the Secretary of State when she returns. In her wind-up remarks, we expect her to tell us whether her regulator will include in its purview the app launched by the Secretary of State for Digital, Culture, Media and Sport this morning.
The second substantive point I wanted to make is a plea to the Minister. This morning she has contributed to the complete mish-mash and muddle that is digital regulation in this country. We already have Ofcom responsible for content regulation, unless it is on a platform such as Facebook or Twitter. We have the Information Commissioner, which is responsible for data protection. We have the Advertising Standards Authority, which is responsible for regulating adverts, but not political adverts. If the Republic of Russia paid for attack ads attacking Brexit mutineers, such as some of the hon. and right hon. Members sat on the Conservative Benches, that is not covered by the ASA. Now we have a fourth regulator to add to the mix: the BBFC. The challenge the Minister has is that so much is now falling through the cracks that she is in no way able to rehearse an argument that we have a digital regulation regime that is fit for the 21st century.
Let me give the Minister advance notice of some of the arguments we need to have during the consideration of the Data Protection Bill. This is a mess, and the Government have to bring forward substantive proposals to clear it up. The challenge she has got this morning is that she is proposing as an age-verification regulator an organisation that is hopelessly underfunded with no sense of what its scope should be. According to the BBFC’s annual report for 2016, it has £5.4 million in turnover. It has a grand total of 52 employees, and that is not up but down on the number for 2015. It receives no subsidy or budget from the Government. The Minister needs to tell us how much money she will ask for in Commons votes to fund the BBFC to fulfil this important new regulatory role.
Secondly, the question of mission creep is an important one for the Minister to answer. The BBFC said this month at the Free Speech Coalition leadership conference that it sees the powers under the Digital Economy Act as meaning that even social media sites such as Reddit, Twitter and Tumblr would have to eliminate adult content or block all under-18s from using them. If the BBFC’s attitude to Reddit, Twitter and Tumblr is that they need to block content for all under-18s, then “Matt Hancock MP” the app should be included in the purview of the regulator. I know the Minister will set our minds at rest. The question for her is how on earth this regulator with 52 people will ensure that Reddit, Tumblr and Twitter are taking down all adult content or blocking under-18s. We need to hear a concrete plan and some substantive reassurance from her this morning.
We are told that the enforcement of age verification will be undertaken not on a proactive basis, but by people reporting in complaints, yet the whole regime for collective redress has been shot through by the Government in the other place. Parents on their own cannot even get together with consumer organisations such as Which? to bring substantive redress under the terms of the Digital Economy Act.
The BBFC has given some reassurances that it will be able to distinguish between pornography and sex education, but it has not told us how. It claims to have a system for mobile devices that blocks websites with inappropriate content, but in evidence to the Public Bill Committee, the Open Rights Group said that the system is inaccurate, people have to actively choose the websites that are blocked, the websites are not automatically blocked, the websites are often blocked incorrectly and harmful websites are slipping through. We need to have substantial reassurances that the Minister is absolutely confident that the BBFC has the powers, resources, methodology, people and a strategy for fulfilling the terms of the statutory instrument. I would like some reassurance on those points, but crucially we all want to hear whether “Matt Hancock MP” the app will be included under the terms of the regulator.
Sir Nicholas Soames (Mid Sussex) (Con)
The Minister has been an inspiration to me for all her time in Parliament, not least because she persuaded me how pathetic I was not to get on Twitter in the first place. To pick up the point of the right hon. Member for Birmingham, Hodge Hill, which is a very fair one, I saw the Secretary of State’s new app this morning and it aroused envy in me.
In answering the well-made point of the right hon. Gentleman, I want the Minister to make clear that the Nicholas Soames app, which will go live imminently, will be subject to the same strictures that he wants and that I will not be besieged with unsuitable posts.
Brendan O'Hara (Argyll and Bute) (SNP)
I welcome the Minister to her place. If nothing else, to be the person remembered for persuading the right hon. Member for Mid Sussex to get on Twitter puts her in the pantheon of the greats of this House. Unlike the right hon. Member for Birmingham, Hodge Hill, I have not had the delight of visiting the “Matt Hancock MP” app, but I certainly have my weekend’s relaxation sorted out. I look forward to the experience.
I share many of the concerns that the right hon. Gentleman expressed around the BBFC’s funding, resources and ability to do the job that it will be charged with doing. Broadly, the Scottish National party supports this age-verification measure, but we are aware that it is not a silver bullet. It has to be part of a much wider package around education and broader internet child safety. We have concerns, which we have expressed in the past, about data protection and individual privacy issues. Privacy, anonymity and proportionality at all times are very important.
We would like to know more about the software that is intended to be used. Are there mechanisms for the Government to report on improvements to the age-verification software as it progresses? How confident are they that the software is robust enough to deter a moderately tech-savvy teenager from getting round its security portals? What safeguards are there to ensure that the security is sufficiently stringent that the software cannot be hacked, leaked and subsequently exploited?
We are broadly supportive but we have questions about the software and about whether the BBFC has the wherewithal to deliver what the Government seek it to deliver.
Margot James
I thank hon. Members for their contributions, and I thank the hon. Member for Argyll and Bute and the right hon. Member for Birmingham, Hodge Hill for their warm welcome. I, too, look forward to many more hours of debating with them and their colleagues.
With regard to the app of my right hon. Friend the Secretary of State, I am afraid that I have been too busy working this morning to have been on it. Since it has just been launched, I have no doubt that he will have time to refine it in forthcoming days.
Margot James
Just before I give way, I will deal with the substantive point raised by the right hon. Member for Birmingham, Hodge Hill about whether such apps will come under the purview of the regulation. Hon. Members should bear in mind the important point that the regulation seeks to regulate age verification with regard to pornography that is made available for commercial use.
Sir Nicholas Soames
I want to help the Minister in that I have been on the app and, contrary to what the right hon. Gentleman said, it is truly magnificent. It is a road down which we must all go.
Margot James
I thank my right hon. Friend for confirming what I suspected. My right hon. Friend the Secretary of State is extremely able in the digital world, and I am sure that what he has put out is of very high quality.
I wish to respond to some of the criticisms and questions from the debate. First and foremost, over the choice of the BBFC—
Liam Byrne
Tom Bateman, a political editor with BBC politics, tells us he denied the app access to his photos and yet it uploaded pictures anyway, so it is not clear to me how the Secretary of State has been able to produce this app in a way that is violating the country’s privacy laws.
Margot James
Thank you, Mr Sharma, I shall certainly keep to the point of the debate.
The right hon. Member for Birmingham, Hodge Hill asked earlier about the choice of the BBFC, whether it is best placed to carry out this role and whether we were adding to the plethora of agencies to which he referred. Not that this is the subject of the debate, but the roles of Ofcom and the Information Commissioner are distinct and clear. His criticism that we are adding yet another I fear is misplaced, because the BBFC has been in existence for 100 years. We are not adding anything. We are merely going to the organisation with the most expertise to do the job required. It has been responsible for classifying adult material for sale offline for many years, it has a trusted reputation in defining age-appropriate content, and it has played a key role in the development and implementation of the filtering of adult content on mobile networks. Indeed, its core mission is child protection.
The right hon. Gentleman also asked about resources, as did I when I took on this brief—it is an important question. One of the benefits is that we are adding a responsibility to an organisation that is already well placed to inherit the task. We are enabling a budget of just under £1 million for the set-up costs of the BBFC engaging in the age verification task. During the first year it will be given approximately £800,000 in addition for its running costs. This is a new policy and we will certainly keep it under review, and that goes for the resources we allocate it as well as the progress of the implementation.
On powers and responsibilities, the regulator is required to publish guidance on the age verification arrangements that it will treat as compliant. Hon. Members will be able to see that guidance shortly. The right hon. Gentleman asked about specific social media powers, but with the powers across all online pornographic content the BBFC will be able to issue civil proceedings against non-compliant persons. Importantly, it will be able to give notice to payment service providers. The BBFC has already had discussions with Visa and Mastercard, which were very concerned for their brands not to be associated with any non-compliant sites. That is a good sign. Finally, the BBFC is able to direct internet service providers wherever they are in the world to block access to non-compliant websites. Those powers are strong but, as with resources, we will keep the new legislation under review.
I thank the members of the Committee for their contributions to this important debate. Age verification for online pornography is an important new regime. I agree with the hon. Member for Argyll and Bute that it is one aspect of what we need to do about education and child safety online, but it is nevertheless important. As has been clearly set out today, the new policy is complex and requires expertise and judgment. The BBFC’s track record in classifying films and content offline demonstrates that it has the attributes required to undertake the work online. It is clearly best placed to take on the role, and the powers that we propose to give it will allow it to carry out the role effectively and, in doing so, to make the internet a safer place for children. I thank the Committee for its time this morning.
Question put and agreed to.
Financial Guidance and Claims Bill [ Lords ] (First sitting)
Thursday 1st February 2018
(6 years, 9 months ago)
Public Bill CommitteesRead Full debate Financial Guidance and Claims Act 2018 View all Financial Guidance and Claims Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 1 February 2018 - (1 Feb 2018)
The Committee divided: - Ayes: 1 / Noes: 9 - Question accordingly negatived.
The Chair
Good morning. Before we begin line-by-line consideration, I have a few preliminary housekeeping announcements. Will Members please switch all electronic devices to silent? I notice some tea and coffee on the tables. I would be grateful if Members could please remove them and not bring them into the room. I will first call the Minister to move the programme motion agreed by the Programming Sub-Committee.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 11.30 am on Thursday 1 February) meet—
(a) at 2.00 pm on Thursday 1 February;
(b) at 9.25 am and 2.00 pm on Tuesday 6 February;
(2) the proceedings shall be taken in the following order: Clause 1; Schedules 1 and 2; Clauses 2 to 20; Schedule 3; Clauses 21 to 24; Schedules 4 and 5; Clauses 25 to 31; new Clauses; new Schedules; remaining proceedings on the Bill;
(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 6 February.—(Guy Opperman.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Guy Opperman.)
The Chair
Mr Speaker has asked that we explain the procedure in more detail than used to be the case before we start our main proceedings.
We now begin line-by-line consideration of the Bill. The selection list for today is available in the room and on the Bill website. It shows how the selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or a similar issue. The Member who has put their name to the lead amendment in a group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments in the group. A Member may speak more than once in a single debate.
At the end of the debate on a group of amendments, I shall call the Member who moved the lead amendment again. Before they sit down, they will need to indicate whether they wish to withdraw the amendment or seek a decision. If any Member wishes to press any amendment or new clause in a group to a vote, they need to let me know. I shall work on the assumption that the Minister wishes to reach a decision on all Government amendments when we reach them.
Please note that decisions on amendments take place not in the order they are debated, but in the order they appear on the amendment paper. In other words, debate occurs according to the selection and grouping list; decisions are taken when we come to the clause that the amendment affects. Decisions on adding new clauses or schedules are taken towards the end of proceedings, but may be discussed earlier if grouped with other amendments.
I shall use my discretion to decide whether to allow separate stand part debates on individual clauses and schedules following the debates on relevant amendments. I hope that explanation is helpful to members of the Committee.
Clause 1
The single financial guidance body
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
I beg to move amendment 1, in clause 1, page 2, line 6, at end insert ‘and the devolved authorities.’
This amendment, together with amendment 18, will enable transfer schemes under Schedule 2 to transfer staff, property, rights and liabilities from the consumer financial education body to the devolved authorities. This may be necessary in view of the fact that the devolved authorities will be responsible for the provision of debt advice in their areas (see clause 15).
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
Government amendment 18.
Guy Opperman
It is a pleasure to work under your chairmanship, Mr Stringer, and I welcome all colleagues to the Committee. I am grateful to those Members of the House of Lords who contributed to the Bill—it started in the other place—expanding and improving it in a significant and important way.
The Bill builds on a Government commitment to ensure that members of the public can access good-quality, free-to-clients and impartial financial guidance and debt advice. Those services are currently provided by a number of different organisations, including financial services firms, utilities and those in the charity sector. Government-sponsored pensions guidance, money guidance and debt advice is provided by the Money Advice Service, the Pensions Advisory Service and the Department for Work and Pensions under the Pension Wise banner.
There have been a multitude of reviews, Select Committee assessments, consultations and calls for evidence since 2015, by which we reached the state in 2017 when the Bill was introduced in this Parliament. Consequently, clause 1 establishes a new non-departmental public body, to be referred to in legislation as the single financial guidance body. The clause introduces schedule 1, which provides details of the proposed governance and accountability of the new body. The provisions within the schedule deal with, for example, the appointment of the chair, non-executive members, executive members and staff, the delegation of duties within the body, the constitution of the committees, and the statutory reporting and accounting procedures.
Clause 1 allows the Secretary of State to make regulations to replace the phrase “single financial guidance body” in legislation with the actual name of the body—the body will be named nearer to the time it becomes operational. The regulations that name the body will be created through a statutory instrument under the negative procedure, which is subject to annulment by either House of Parliament.
Clause 1 dissolves the consumer financial education body now known as the Money Advice Service. Schedule 2 allows the transfer of staff, property, rights and liabilities from the Pensions Advisory Service and Pension Wise—in effect from the Secretary of State to the new body. The schedule allows similar transfers from the Money Advice Service to the new body. I have met all three organisations and discussed the proposed merger with them. I can assure the House that all three are keen to merge, which is rare in Government mergers and should be applauded.
Amendments 1 and 18 are technical in nature and extend the power to make transfer schemes under schedule 2 to the devolved authority. Schedule 2 already allows the Secretary of State to transfer staff, property, rights and liabilities from the Money Advice Service to the new single financial guidance body. This is required to ensure continuity of provision, including on contracts held, and avoid disruption to services in the creation of the body. The devolved authorities will have responsibility for the provision of debt advice in their areas once the new body is established. Devolved authorities have been consulted on this and are very much in agreement. Amendment 1 therefore helps to avoid similar disruption to debt advice provision in the devolved authorities when the new body is established.
Jack Dromey (Birmingham, Erdington) (Lab)
It is an honour to serve under your chairmanship, Mr Stringer. Let me start by paying tribute to the three organisations that are being merged into one—the Money Advice Service, the Pensions Advisory Service and Pension Wise—for the work they have done over many years. The Minister is right that all three agree about the good sense of bringing them together into one body. Why? Because all three know from experience, and have advocated, that high-quality advice—independent, trustworthy and there when it is needed—is of the highest importance, particularly in circumstances of redundancy, death or divorce, when the financial consequences for the citizen can be very serious.
I will give some examples. In Port Talbot, the staff supervisor told Michelle Cracknell, the chief executive of the Pensions Advisory Service, that he was distraught that he had been badly advised on pensions and that the 20 others on his shift had followed his lead. He burst into tears when he said, “It’s not just the mistake that I’ve made; it’s the mistake that others have made following my example.” I remember a victim of domestic violence in my constituency saying, “I borrow to pay the debt, because I borrow to pay the debt, because I borrow to pay the debt.” That is the downward spiral into which citizens all too often fall at a time of crisis in their lives. A Kingstanding dustman said to me, “I’m an agency worker on a zero-hours contract and I would love to buy a house, because my wife is pregnant and we’re paying a fortune in rent.” He went on to say, “It’s not just that: because I’m on a zero-hours contract, I can’t plan. I keep getting into debt. I’ve had bad advice.”—he used stronger words than those—“Where do I turn?”
That is why we made it clear on Second Reading that this is a welcome Bill and a strong step in the right direction, and it has been strengthened by constructive debate in the other place. Our intention is to make a good Bill better still and to inject a sense of urgency into some of its proposals, because the dignity and financial wellbeing of our citizens, in opportunity or adversity, is of the highest importance.
We agree to the concept of the new organisation and support the direction of travel. We will seek to amend the Bill in certain key areas in order to strengthen it further, so that it delivers, particularly for those in desperate need and in circumstances in which there are still too many rogues taking advantage of the vulnerable. There is a joint determination across the House to ensure that nothing but the best is provided in the future for the British people. I am talking about high-quality advice that they can count on in all circumstances.
Mhairi Black (Paisley and Renfrewshire South) (SNP)
I echo much of what the hon. Member for Birmingham, Erdington has just said. I am very grateful, on a Thursday morning, that the Bill is not contentious—I do not know about anyone else here, but I am not in the mood for arguing. We have proper concerns about only three areas of the Bill. The first relates to how young people are involved and educated through it. The second question is whether we can clear up some of the difficulties between guidance and advice. The third and most important issue is dealing with clause 5, because what we have from the Government now is wholly inadequate. With that said, I look forward to having genuine discussions in Committee.
Guy Opperman
I am grateful to colleagues for their comments, which I endorse. I look forward to responding to the specific points. I accept and anticipate that there will be a legitimate discussion as to the appropriate way forward in respect of default pensions guidance, on which I know both Opposition Front Benchers wish to address the Committee. I thank them for their comments.
Amendment 1 agreed to.
Clause 1, as amended, ordered to stand part of the Bill.
The Chair
We now come to amendment 23 to schedule 1, with which we will consider the question that schedule 1 be the First schedule to the Bill.
Guy Opperman
No, it is your amendment 23, to schedule 1, in relation to the independence of the single financial guidance body.
Schedule 1
The single financial guidance body
Jack Dromey
I beg to move amendment 23, in schedule 1, page 27, line 9, at end insert—
“(3) The Secretary of State shall have regard to the desirability of ensuring that the single financial guidance body is as independent from Government as reasonably possible in determining its activities.”
This amendment will ensure that the single financial guidance body has the autonomy to fulfil its functions.
The Chair
With this it will be convenient to discuss the following:
That schedule 1 be the First schedule to the Bill.
Jack Dromey
My apologies, Mr Stringer, for getting things in the wrong order—having been dealing this week with the issue of Carillion, the problems at Jaguar Land Rover, and GKN, I have to say that it has been a rather hectic few days.
The purpose of the amendment is to ensure that the single financial guidance body has the autonomy to fulfil its functions. The new body will be a publicly funded, non-departmental public body, answerable to the Secretary of State. As such, it is imperative that it have the correct amount of autonomy from Government to ensure that it can fulfil all its functions effectively. The new body will be tasked with carrying out a number of very important and critical functions, including starting a new era of enhanced financial guidance and education. Those will best be fulfilled by an independent, autonomous body, free from Government interference. It should be free to make decisions that let it do the job for which Parliament has voted. It should not be subject to the whims of whichever Government are in power, and the political winds those whims can bring. It should be free, as is often said, to speak truth unto power, and all too often the uncomfortable needs to be said and done. The new body should not feel constrained in so doing.
The new body’s important functions include providing guidance to those who are making important financial decisions. The take-up of the services offered by Pension Wise, for instance, is extremely low. Of the 772,000 people who transferred some or all of their pension in 2017, only 66,000 had an appointment with Pension Wise, and an FCA survey found that only one in eight 55 to 64-year-olds who planned to retire in the next two years and who have a defined-contribution pension had used the Pension Wise service in a 12-month period.
The intention of all parties in the House is to have a new and effective organisation that ensures that in future we do not have that kind of problem of take-up by the citizen. We want to ensure that it is widely known that Pension Wise exists; that Pension Wise is vigorously advertising its purpose and function; and that, because we insist on independent advice being given, it is truly independent from Government.
I will just make one final point, which arises out of constructive discussions with the Minister. I am the first to recognise that there needs to be oversight and accountability. There must be oversight by, and accountability to, Parliament. Crucially, however, it would be inappropriate for the Government to interfere in the day-to-day conduct of the new organisation. It should be free to do its job and to do its job well, and therefore I hope that the Government will give the necessary assurances about it.
Yvonne Fovargue (Makerfield) (Lab)
Has my hon. Friend read Peter Wyman’s recent independent report on the debt advice landscape? He advocates that there should be somebody in charge of the whole debt landscape—almost a debt Tsar. That seems to be a really good idea, to maintain the independence of the debt landscape. Does my hon. Friend agree?
Jack Dromey
My hon. Friend, who is part of an honourable tradition of giving high-quality advice to people in times of need, particularly through citizens advice bureaux, is absolutely right. The evidence is damning; the need is apparent. It is now a question of how best that need is met. The new body is a step in the right direction, but it should not be the last word; it is the first “next step,” but it is an important step in the right direction.
Guy Opperman
I am grateful to colleagues for their comments. The Bill sets out absolutely clearly that the single financial guidance body will be at arm’s length from Government. That distance from Government means that the day-to-day decisions the new body makes will be independent, as they will be removed from Ministers and civil servants. Nevertheless, there is a sponsoring Minister, who remains answerable to Parliament for the activities of the new body, its effectiveness and its efficiency, including any failures, especially in the case of a body that receives public funds. It is important that there is a balance—I think all of us recognise that—between enabling the Department to fulfil its responsibilities to Parliament and to be accountable, and giving the new body the desired degree of independence.
Conferring functions on the new body involves a recognition that operational independence from Ministers in carrying out its functions is appropriate, and the new body will support delivery of the objectives of both the Treasury and the Department for Work and Pensions, to create a more effective system of publicly funded financial guidance and to give savers the confidence to save and access money in the future. The new body’s activities will be funded by a levy on the financial services industry and on pension schemes.
On Second Reading the hon. Member for Makerfield addressed one of the criticisms levelled at the Money Advice Service. All of us support what MAS is trying to do, its broad objective and the efforts it is making. However, one of the strong criticisms of it in its early years, which came from both the independent Farnish review and the Treasury Committee, which obviously operates on a cross-party basis, was that MAS lacked accountability and that the activities it delivered, and the money it was spending, could not be held to account by Parliament and the respective Minister.
The Farnish review, which is one of the reasons we are creating this body in the way we are, suggested that the Money Advice Service accountability regime was weak, and recommended that it be strengthened. The Treasury Committee expressed concerns that the Money Advice Service had moved its service away from its intended focus. I am certain that the hon. Member for Makerfield will be directing it to have a “laser-like focus”—the expression she used on Second Reading—on commissioning services, towards direct delivery and building up its brand name.
Lord knows, all Governments like to be held to account by Oppositions, and quite rightly too, but let us imagine that the single financial guidance body chose to do something that any Member of the Opposition or of the Government felt was inappropriate. The inability to hold that body to account and to hold a Minister to account would not be something the House would want. In the circumstances, it is appropriate that the responsible Minister is able to make representations, but it is very much a partnership system that needs to work well between the body and the Government, and there must be clarity about expectations and the approaches to accountability.
The correct way forward is to have a framework document setting out that particular method of working. That framework document approach, setting out the partnership so that there is due accountability to Parliament, while at the same time allowing the body to get on with the job that we all agree it should be doing, is well established and has been under successive Governments. In the circumstances, I believe that placing the requirement in legislation, as set out in amendment 23, is both unnecessary and undesirable, and I urge the hon. Gentleman to withdraw his amendment.
Jack Dromey
The Minister has said some helpful things, and he is absolutely right that it is about getting the right balance between accountability and operational independence. The proposal for a framework document is welcome. I simply ask that there is consultation on the nature of that framework document, including with stakeholders, at the appropriate stage.
On the establishment of the new body, the governance of it and precisely how that will be structured, we have heard what has been said thus far, but it will be important that we have high-quality and independent individuals engaged in the governance, including on a day-to-day basis.
On the basis of what I and the Minister have said, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 2
Transfer schemes under section 1
Amendment made: 18, in schedule 2, page 32, line 3, at end insert “and the devolved authorities.”—(Guy Opperman.)
See explanatory statement for amendment 1.
Schedule 2, as amended, agreed to.
Clause 2
Objectives
Mhairi Black
I beg to move amendment 37, in clause 2, page 2, line 19, leave out from “accordingly” to end of line 20 and insert—
“(da) to ensure the needs of people in vulnerable circumstances, including but not exclusively—
(i) those who suffer long-term sickness or disability,
(ii) carers,
(iii) those on low incomes, and
(iv) recipients of benefits,
are met and that resources are allocated in such a way as to allow specially trained advisers
and guidance to be made available to them.”
This amendment would require that specially trained advisers and guidance are made available to people in vulnerable circumstances and would provide an indicative list of what vulnerable circumstances might include.
The amendment came about because we were chuffed, when reading the Bill, to see that there was a mention of vulnerable people, especially given the nature of pensions and how much is at stake with them, but to be honest we felt that the wording was a little weak. I would like the wording tightened up to ensure that it is clear and means what I think it does. That is why we have suggested what we consider “vulnerable people” to mean, and it will be good to see whether the Government are happy to accept that.
We want to make sure that the new body is as accessible as possible for all people, regardless of their circumstances. Specially trained advisers and resources should make up part of that new body, so that people can have confidence and the ability to make the right decisions. I do not think that the amendment is that contentious; it just tidies up the Government’s wording.
Jack Dromey
I rise to support the proposition. We will deal with the issues of vulnerability and disability later in the Bill, but although it is true that not everyone who needs urgent and independent advice is necessarily in circumstances of vulnerability, the nature of the world of work and of the economy means that a lot of people’s backs are against the wall, especially after the high-profile collapses of late. We should make explicit what is implicit: the new body should proceed in the right way. I hope the Minister will give the assurance that everyone who turns to it will receive high-quality independent advice. A specific focus on support for the vulnerable is a legitimate objective.
Guy Opperman
I am keen to give assurance on that specific point. If the hon. Member for Paisley and Renfrewshire South will allow me, I will walk her through how we got to the situation where the Government chose to amend the Bill to add in the vulnerable circumstances clause that is the basis for her amendment. The Government take the view that the amendment is not necessary in the circumstances, and I will explain why.
The body’s activity towards the people who are most in need and in vulnerable circumstances has been the priority of all parties since the creation of the Bill. Vulnerable circumstances were not originally spelt out, but they were certainly spelt out on Second Reading in the House of Lords. There was extensive debate in the House of Lords on a cross-party basis with representations by Baroness Finlay, Baroness Coussins, Baroness Hollins and the Labour Lord, Lord McKenzie, about the need for clarity on access to financial guidance and awareness of financial services for people who find themselves in vulnerable circumstances.
The Government decided in the other place to state explicitly in clause 2(1)(d) that the body’s objectives include the need to support people in “vulnerable circumstances” when exercising its functions. An amendment was introduced to strengthen the objectives to ensure that the body’s
“information, guidance and advice is available to those most in need…bearing in mind in particular the needs of people in vulnerable circumstances”.
The Government’s amendment has created a statutory framework that will give clear direction to the new body to support people in those circumstances. That means that the body will be required to focus its efforts and resources on that area, and will look at the best ways to provide guidance to vulnerable people in different places.
A general principle of the Bill, which I will expand on in relation to this and other points, is that there is a danger of being overly prescriptive to a body that one is setting up with the specific purpose that it has the latitude to exercise the appropriate commissioning and employment of charities and organisations in particular places. Asking the body to have a generality of specially trained advisers and guidance risks being too prescriptive in the Bill. We want to ensure that the body has the latitude to take advantage of its expertise to find the best interventions and the best channels to address the needs of people in vulnerable circumstances now and in the future. That is not to say that the body itself may not choose to do exactly what the hon. Member for Paisley and Renfrewshire South has fairly set out, but that is for the body to do under the circumstances that it sees fit.
The risk outlined on Second Reading—I can see that I will have to refer to the hon. Member for Makerfield on several occasions—was the danger of duplication. Whether or not one feels that the Government or individual local authorities are providing appropriate services, other services are being provided, whether that is universal support or the visiting service, that support claimants with a face-to-face service and by offering to manage their claims. There is a duplication risk, which was the specific problem of the Money Advice Service in the past.
The general point is that we believe that it is wrong to be too prescriptive and to predefine a whole series of obligations, functions and capabilities of this organisation. That does not mean that we will not have a discussion going forward, nor that the body will not address these specific points, but I do not want to predefine and subdivide every single part. It should be left to the body to make those decisions as it goes forward. That does not in any way diminish the need for these things to be addressed, but I would not want that in the Bill. It is for the body, when it is fully formed, to address those points. In the circumstances, I invite the hon. Member for Paisley and Renfrewshire South to withdraw the amendment, having taken due note of the assurances that I have given.
Mhairi Black
I appreciate what the Minister says, but it is strange to say that the amendment is too prescriptive after talking about how important it is that the Bill has cross-party support and saying that it is about trying to bring about genuine change. I do not see what is contentious about fleshing out what vulnerable people means. The only downside that I can see to having the amendment in the Bill is the possibility of helping too many people. I appreciate that the Minister says that it is up to the body to decide, but that is where we will have to disagree, because I think that the purpose of the Bill is to ensure that people do not fall through the cracks anymore, so I would not be comfortable withdrawing the amendment.
Question put, That the amendment be made.
Jack Dromey
I beg to move amendment 24, in clause 2, page 2, line 32, at end insert—
“(4) In the case of members of the public who are self-employed “information, guidance and advice” also includes information and advice on business-related debt, in addition to personal debt.”
This amendment would extend the single financial guidance body’s remit to advise the self-employed on business finances and debts.
The Chair
With this it will be convenient to discuss amendment 25, in clause 2, page 2, line 32, at end insert—
“(4) In the case of members of the public who are self-employed—
(a) “financial matters” also includes information and advice on business-related debt, in addition to personal debt”, and
(b) “financial affairs” includes business-related financial affairs, in addition to personal financial affairs.”
This amendment would extend the single financial guidance body’s remit to advise the self-employed on business finances and debts.
Jack Dromey
Although self-employed people will be able to access the help of the new body for their personal finances, they will not be able to use it for their business finances. We have listened very carefully to the voice of the self-employed—on one hand organisations such as the Federation of Small Businesses, and on the other hand people I have spoken to in my own constituency, including taxi drivers and construction workers who are self-employed and, indeed, an individual who ran a fruit and veg shop in Erdington High Street and got into financial difficulties.
I have seen how self-employed people badly need advice and guidance, and there is all too often an overlap between their personal advice and guidance and that for the business in which they are engaged. That is why we say that evidence shows that, for the self-employed, the line between personal and business finances is usually blurred and can be very difficult to manage, particularly for those just setting out as self-employed people. The number of self-employed people is higher than ever before in our economy, so they need to be able to rely on the new body for advice and guidance when they need it.
Figures released last year suggest that the number of self-employed workers in the United Kingdom rose by 23%—from 3.8 million to 4.7 million—between 2007 and 2017. That represents a shift in the nature of the world of work and the way the British economy is working. Self-employed people now represent about 15% of the workforce, and 91% of businesses say they hire contractors. The majority of self-employed people are sole traders, and there is no legal distinction between them as individuals and as businesses. There were 3.4 million sole traders in 2017. The biggest increase in self-employed people was among women.
Although self-employment is a positive choice for most, there is a real problem with the conscription of some into reluctant self-employment. Either way, the average earnings of the self-employed are significantly lower than those of the employed. The figures vary—I would be the first to acknowledge that—but there has been growth in self-employment in higher-skilled, higher-paying areas, such as advertising, public administration and banking. Although some workers enjoy greater flexibility and control over their working patterns, self-employment can nevertheless have a negative impact on their access to finance.
As self-employment has increased, so has demand for advice about business-related debts. Last year, 36,421 people were helped by the business debt line run by the national charity the Money Advice Trust, which does outstanding work and gave us very good advice and guidance about the Bill. Demand for the debt line has increased from 24,000 in 2016 to 36,421. The Money Advice Trust says, and I think it is right, that it expects the rise in demand to continue.
The amendments would ensure that the SFGB provided self-employed people with information, advice and guidance about their business-related, not just their personal, debt and finances, with a focus on those who are most in need, in line with the body’s wider objectives. The amendments would apply to its debt advice and money guidance functions. As Lord Haskel said in the other place,
“the work of the SFGB should include the self-employed and micro-businesses, particularly at a time when the line between company employment and self-employment is becoming very blurred.”—[Official Report, House of Lords, 5 July 2017; Vol. 783, c. 933.]
Personal and business finances are closely intertwined for many self-employed people. Some 48% of self-employed people use a only personal current account for their business, and a further 17% use both a personal and a business account, according to the Financial Conduct Authority’s “Financial Lives” survey in 2017. The Money Advice Trust report, “The cost of doing business”, which is based on extended interviews with business debt line clients, found that almost seven in 10 of those who had taken out a personal loan were using it to prop up their business. Research by the University of Bristol’s personal finance research centre identified two key areas of overlap between business and personal finances: first, general living expenses, especially for those who live on their business premises; and, secondly, the use of personal credit to manage cash flow where necessary. Given the intertwining of business and personal finances for many self-employed people, if the SFGB does not offer information, advice and guidance on both, it will not be able to provide that growing section of the population with the support it needs.
I very much hope that the Minister will respond constructively to what we are saying and look at what might happen if the Government choose not to amend the Bill. I reserve my right to come back on that after hearing the Minister’s response.
Yvonne Fovargue
I want to make a short contribution about how the finances of the self-employed are muddied with their personal finances. I had a meeting recently with Amigo Loans, a guarantor loan provider. It said that an increasing part of its business is loaning to people in a personal capacity, although they know it is for business purposes. Is that a business debt or a personal one? The fact that it does not look at the business plan might make it a personal debt, although I do think it ought to be looking at the business plan. Is it a personal debt or a business debt for the guarantor who guarantees the debt? In a lot of cases, it is fairly unclear where the line lies. To have a firm demarcation line where no business debts are dealt with is probably detrimental.
Guy Opperman
I am grateful to colleagues for making this point, and I recognise that it is not a simple issue. To pretend that the dividing line is absolutely precise and clear would be naive and wrong. The hon. Member for Birmingham, Erdington and I discussed this issue yesterday. I will go away and consider the matter prior to Report and Third Reading. However, today I will oppose the amendment and I shall try to explain why. I will also explain why the Money Advice Service does not seek the change and answer some of the questions asked by the hon. Member for Makerfield.
The Money Advice Service provides a range of information and guidance, via webchat, telephone and online, specifically for the self-employed. That includes information and guidance on matters such as tax, national insurance, personal and business insurance, and guidance on the steps to consider when starting a new business. It also signposts to other free, impartial and expert services for self-employed people in respect of their business, including the Department for Business, Energy and Industrial Strategy’s business support helpline, the Money Advice Trust, which is funded and supported by the Government, and the comprehensive information on gov.uk.
Recognising the complex nature of a self-employed person’s finances, MAS also supports the provision of debt advice to self-employed people. This is a service that provides debt advice specifically for people who are self-employed. In relation to the Pensions Advisory Service and Pension Wise, pensions guidance is offered to everyone; those services are available to all, regardless of whether someone is self-employed.
When the single financial guidance body takes over the services, I see no reason why those services would not continue. There should be ongoing provision of that degree of support. We want the new body to continue the research and work that is already done by existing organisations, identify where there are gaps in financial guidance and debt advice provision, and look for ways to fill those gaps.
Through its strategic function, the body must develop a national strategy to improve the financial capability of members of the public and their ability to manage debt. To do that, it will work with a range of industry, charity, public sector and voluntary sector organisations to develop a strategy where they work together to address this problem and others in respect of people’s financial guidance and debt advice needs.
The single financial guidance body will not operate in a vacuum. As I alluded to earlier, there is online business advice, whether provided by Her Majesty’s Revenue and Customs or BEIS, and I would go further than that and give an example. The Start Up Loans Company helps people to get started in business. Self-evidently, it is funded by BEIS, and it works in partnership with the British Business Bank. It is a requirement of Start Up Loans Company finance partners to ensure that, as part of their service to the self-employed, they consider how someone could service any debts they have in respect of their business. They also do further signposting.
Craig Mackinlay (South Thanet) (Con)
On the question of what is a personal debt and what is a self-employment or business-type debt, if a self-employed person who is a sole trader—that is, unincorporated—takes on a loan for a van or something else, that by its very nature becomes a personal debt. That is the nature of being a sole trader. Complications may arise where that person, who to all other intents is self-employed, trades as a micro limited company. If, because of difficulties accessing credit through the limited company, that person decided to take a personal loan and then provide it as a director’s loan account to his or her own limited company, what status would that loan have? I imagine in law—
The Chair
Order. I remind the hon. Gentleman that interventions should be brief and to the point. I am happy to call him if he wants to make a speech, but he must keep his interventions a good deal shorter than that.
Craig Mackinlay
Thank you for that advice, Mr Stringer. This is of course a complicated area, which requires a little extra explanation. In that instance, the bank or credit provider would recognise that as a personal loan. I wonder whether that would be covered by the advice that may be available.
Guy Opperman
I recognise my hon. Friend’s expertise in such matters, and I thank him for his intervention. Support for self-employed people is covered by the Bill, because the self-employed are members of the public, in the way he outlined. Any personal business debt of a self-employed person is covered in respect of them being an individual member of the public.
I take my hon. Friend’s point about loans. I am delighted to say that I am not able to answer it right now, but I will definitely get back to him. In seriousness, we need to consider that point and work out whether there is any way of changing it and taking on board the views of the organisations that have practised in this area for some considerable time. I will certainly write to him with a specific answer and circulate that answer to all Committee members.
Jack Dromey
The hon. Member for South Thanet is absolutely right, and his examples about the complexity we face are fascinating. The Minister’s response has been helpful. The new service is welcome; there is a degree of confusion about exactly what it can do for the self-employed, but that has already been substantially clarified. We recognise the complexity the hon. Gentleman summed up so well, so if the issue of business advice—if I can use that as a shorthand term—is not addressed effectively at this stage of the Bill, it will have to be addressed at another stage. Even if we cannot make progress in Committee, the Minister’s undertaking to engage in discussions will be warmly welcomed by organisations such as the Money Advice Trust and the Federation of Small Businesses.
Guy Opperman
May I briefly clarify a point that I should have addressed in my response? I applaud the Money Advice Trust’s work, but in the briefing that it submitted to our Committee, it seeks broader business support, arguing that the single financial guidance body should address a host of other things and be available to small businesses more broadly—a mission creep that I would oppose. The MAT is a laudable charity and I respect entirely its good work, but that is a classic example of the mission creep that we want to avoid. Both the hon. Gentleman and I support the charity and its good works, but I believe that there is a limit to the assistance that the FSGB should give to that charity and its objectives.
Jack Dromey
It is legitimate mission creep. What is good about our exchange is that we recognise that making progress with the issues identified by the MAT and the hon. Member for South Thanet may be difficult in Committee, but we can move forward at a later stage. The Minister’s point is absolutely right, but no one is suggesting that we should duplicate the functions of other bodies. If we can move forward at a later stage, jointly engaging with the organisations that represent the self-employed and those who advise them, it will be welcomed both by the organisations concerned and by the self-employed who need that advice and guidance. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mhairi Black
I beg to move amendment 38, in clause 2, page 2, line 32, at end insert—
“(4) The single financial guidance body must, within three months of being established, define the following terms within the context of its objectives and functions—
(a) “information”,
(b) “guidance” and
(c) “advice”.”
This amendment would require the new body to define “information”, “guidance” and “advice” so that consumers are better able to understand which of the three would be most helpful to them.
Mhairi Black
The amendment is pretty straightforward and sensible. It would clarify the important differences between information, guidance and advice, which we know have a major impact on people’s decisions and how reliable they are if things go wrong. It is not often that parliamentarians admit ignorance, but before I became pensions spokesperson, I did not realise that there was any official difference between the three terms. I am a Member of Parliament and I have only recently found that out, so the Committee can imagine what it must be like for the general public. As long as the Government clarify the definitions of the three terms, I will be happy to withdraw the amendment.
Yvonne Fovargue
I support the hon. Lady’s request for definition of the terms, although I recognise that it is difficult not to stray into other areas. A further concern is that the information, guidance and advice need to be free and impartial. There are too many pensions providers that spend a lot of money—I heard of one spending £15 million—on ensuring their advice is compliant with all the FCA impartiality rules. As somebody said, if pension providers are spending £15 million on making their advice impartial, they must be expecting some return on their investment. That worries me—that people are gently steered towards a particular product if they go to a particular service.
I believe that some of the comparison websites that people use are not always impartial. If they take money for the top rankings, they are not providing a properly impartial service. People do not understand the differences between those comparison website that have paid-for rankings at the top and those that are completely impartial, based on objective criteria. Guidance on the types of investment can be different when it leads to a product sale, unlike when it is just helping a consumer through their options, completely free of any sales pitch.
Craig Tracey (North Warwickshire) (Con)
I declare an interest as chairman of the all-party parliamentary group on insurance and financial services. I welcome the Bill in general, and from my conversations with the insurance industry I know that it is very supportive of the Bill and of the establishment of the single financial guidance body as great step forward to having access to guidance at relevant points in life. Because of the welcome pension freedoms, that guidance has become more essential than ever before.
There is good practice in the industry already—for example, Aviva insurance is running its MOT at 50 scheme, on which the preliminary feedback has been very positive. The results show that getting advice made people far more engaged with their finances and more likely to plan for their retirement, and many went on to seek regulated advice. The crucial point that Aviva made was that by delivering the MOT at 50, people had time to change their plans, think realistically about the future to meet their retirement objectives.
I want the Minister to give clarification on three points. First, what will the Bill provide for consumers? From the APPG’s and my perspective, it should look at providing financial resilience, promoting early intervention to prepare for life events, and raising awareness of the benefits of protection products, which are particularly helpful for the self-employed—things such as income protection, critical illness and life insurance. In my experience as a broker, people generally only took those when it was too late and when they had had a bad experience. If we can help to advise people ahead of incidents, that would be really useful.
Secondly, could we have clarification on the timeline for implementing the SFGB and assurances that transitional agreements will provide certainty of access to guidance for consumers, and certainty for providers in relation to signposting arrangements? Thirdly, will the Minister set out how the new body will set standards to be approved by the FCA? The Bill says that that should happen, but it does not specify how it should be approached or how it intends to set out the strategy. Could the Minister provide some guidance on that? I appreciate that the answer to the third point might be quite detailed and I will be happy if we wants to write to me with the information. I look forward to his response.
Guy Opperman
To echo what the hon. Member for Birmingham, Erdington said, it has been a long week and I think we will all have situations where we start addressing particular clauses at the wrong time.
Guy Opperman
I hope not, too, but I have done so well thus far and it cannot last. I will try to address in their entirety the three specific points raised by the hon. Members for Paisley and Renfrewshire South and for Makerfield and by my hon. Friend the Member for North Warwickshire.
The first point is about whether the body itself will provide free and impartial advice and services. The shake of the head betrays the hon. Member for Makerfield. I draw her attention to clause 3, which I suggest she clearly has not read as much as she should have, because the House of Lords made sure that the provision was in the Bill. I accept that I am slightly straying off the subject of clause 2, but she will see that subsections (4), (5) and (6) of clause 3 set out that the function is to provide to members of the public free—
Mhairi Black
I understand the reference that the Minister makes to the functions described in clause 3, but the functions are meaningless so long as people do not understand what the difference is between information, guidance and advice.
Guy Opperman
I will come to the comprehension point in a second, if the hon. Lady will permit. I will deal with all three points.
After the legislation was suitably amended, debated, discussed and agreed with their lordships, it was specifically written into the Bill that the information, guidance and advice should be free and impartial. I take the point that the hon. Member for Makerfield raises, but I hope that she is reassured that that has been specifically written into the Bill, and is addressed there.
On the definition of terms, may I address the points made by the hon. Member for Paisley and Renfrewshire South that go to the fundamentals of her amendment? One of the key recommendations of the financial advice market review—sometimes known as FAMR—was to clarify the regulatory definition of financial advice. The Government consulted on revising the definition of regulated advice in the existing Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, so that regulated advice was based on a personal recommendation. That definition is in line with the EU definition set out in the markets in financial instruments directive 2004, catchily known as MFID. The Government agreed that revision, which came into force in early January 2018. We therefore suggest that introducing a new definition of advice in the Bill is unnecessary and potentially duplicative. It would cut across existing regulatory architecture, not just in respect of what the Bill is trying to do and the clients it covers, but across other aspects of the Treasury and dealings with the Financial Conduct Authority and industry and consumer groups. In addition, using legislation to establish definitions for those terms would not provide the flexibility in the future to adapt the definitions appropriately, if and when that needed to take place.
I also take issue with a number of points regarding the amendment. First, the three organisations that we are merging to form the single body do not seek the definitions that the hon. Member for Paisley and Renfrewshire South is seeking to persuade us of. Those organisations are a pretty good guide to what the Government are doing, because we have consulted at length, asked them what they want us to do, and they most definitely have not said, “Go away and define those individual points.” They want the degree of latitude to continue.
Secondly, the hon. Lady asked the body to do this within three months. To answer my hon. Friend the Member for North Warwickshire on timings, we hope that the body will be created—subject to the good will of the House and Her Majesty signing on the dotted line—between the end of October and the beginning of December. Asking the body to make, within three months of its creation, having merged three organisations, a definition that would probably apply across all financial sectors is, with respect, putting quite a big burden on the body. Also, it is not the appropriate organisation to do that. That should be done by the independent Financial Conduct Authority, suitably engaged in consultation with wider parties. We have done that in relation to advice; that is why we had the FAMR review. To be fair to the FCA, it took two years of long, hard struggle to come up with the specific definition that all parties were content with. I go back to the point that while those particular points are not sought by the individuals, I believe that it is not appropriate to give the definitions.
My hon. Friend the Member for North Warwickshire asked about timings. We will be up and running, with a fair wind, in winter 2018—but beware of Ministers who say when things will happen, and of course winter in parliamentary terms can stretch a long time. The standards by which the single financial guidance body will be judged are set out in clause 10, on which I am delighted to be addressing the Committee this afternoon, so I will not go into detail about the standards now but will ensure I set out a bit of detail in answer to that question when we debate clause 10, so bear with me. He also made a point about resilience and life events, which I will address briefly.
A simple point is made about resilience, as set out in clause 2 through the various objectives described, whether the consumer protection or the strategic function. It is also fundamentally set out in clause 3(9), which mentions
“financial capability of members of the public”.
One may use “resilience” or “capability”, but the words—without getting too much into definitions—are all but interchangeable and, in the circumstances, we believe that those provisions address capability and the points made by my hon. Friend.
Regarding preparation for life events, my hon. Friend is a passionate supporter, as am I, of the concept of the mid-life MOT, which has been pioneered by certain companies, including Aviva. As a Government, in particular the Department for Work and Pensions, we are looking at the idea of people, at different critical points of their life, the middle point in particular, assessing where they are in terms of finances, pensions, guidance and everything. That seems eminently sensible to us, and we encourage all private sector organisations to do it. We are formulating plans.
Yvonne Fovargue
But does the Minister agree that it is not only major life events that can cause a problem? In connection with financial resilience, we all know that it might be the broken washing machine that can cause a bump for people who do not have that amount of savings. On financial capability, does the Bill look at addressing the need for people to build up a small pot of savings?
Guy Opperman
The answer is yes. Capability is about the ability to deal with life events, whether the traditional ones such as marriage, birth of a child, retirement or the middle of one’s life generally, or—the hon. Lady is dead right—the washing machine or the car breaking down. There is formulated, as I am sure she is aware, things such as the sidecar proposal that is attached to auto-enrolment specifically to provide a savings pot to deal with life events, so that people are not affected by the sudden events involving £100 or £200 and so on. The Department is definitely working on such things, as we will seek to work with the single financial guidance body to ensure that it formulates those strategies. As the BBC puts it, there are other providers, such as Moneybox, Plum or—the name of the third one that I am particularly impressed by—Chip, which allow people to make small savings through day-to-day earnings and usage, giving them a pocket of savings to deal with things. We very much support all such organisations, and I utterly endorse the points made.
Mhairi Black
The logic behind the amendment is that right now we have hit a fork in the pensions road, because we are recognising that we might not be able to sustain a lot of the things in place now into the future. People are making decisions about their pensions when, to be frank, they do not have a clue about what they are doing, and they are ending up in horrendous situations because of a lack of understanding and of clarity. To me it seems perfectly reasonable to point out that those three terms, which may be used interchangeably in general conversation, in reality can have a massive impact on an individual.
The Government are promoting an ethos of educating and informing people, to ensure they make the right decision, and I do not see how the amendment waters that down in any sense. I know the Minister is saying that the body needs freedom, and so we cannot define terms as precisely as we would like, but that sounds like the Government are saying that we just have to trust the body’s good will. This is a Government Bill, so why not strengthen it where we can? In that spirit, I am happy to withdraw the amendment on the basis that my later amendments are given due consideration, and that the Minister takes on board what I said. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 ordered to stand part of the Bill.
Clause 3
Functions
Jack Dromey
I beg to move amendment 26, in clause 3, page 3, line 5, at end insert
“including by means of provision to the public of a pensions dashboard within the meaning of subsection (11).”
This amendment would require the single financial guidance body to provide for the public a pensions dashboard as part of its pension guidance function.
The Chair
With this it will be convenient to discuss the following:
Amendment 31, in clause 3, page 3, line 34, at end insert—
‘(11) In this section and section 5, “pensions dashboard” means a publicly available service where members of the public can securely view details of their state and other pensions savings.”
This amendment defines “pensions dashboard” for the purposes of Amendment 26 and 32.
Amendment 32, in clause 5, page 4, line 12, at end insert
“including by means of provision to the public of a pensions dashboard within the meaning of section 3(11).”
This amendment would require the single financial guidance body to provide for the public a pensions dashboard as part of its pension guidance function.
Jack Dromey
The lead amendment defines a pensions dashboard. It would require the single financial guidance body to provide for the public a pensions dashboard as part of its pension guidance function.
The idea of a pensions dashboard as a one-stop shop, enabling people to look at their pension scheme assets in one place, has been considered for a long time. We should have introduced one years ago. Many people across the country have very little idea of the value of their pension schemes—they may be in multiple schemes, and as a result they may have no idea what the returns might be. Pensions are a grey area for millions of people who believe they do not need to worry about it in the here and now, and that they will be able to deal with it when the time comes, but that is simply not the best or the most productive approach.
If someone has a solid awareness of the state their pension schemes, they have a much better insight into their future earnings after they retire, and they know whether they should put more—or perhaps, on occasion, less—money into their pension pot now. Crucially, this is about getting people to look forward and save for the future. A person moving jobs may have up to 11 small pension pots—that was the case for somebody I encountered recently—but perhaps only one provider has up-to-date details about them.
Government policy needs to be clear about whether and how the use of the dashboard can measurably reduce the small pots problem, and improve the position of savers whose funds are sitting in legacy products that offer poor value. We should introduce a pensions dashboard as a single public service dashboard overseen and hosted by the new single financial guidance body. It should be a safe viewing place, where an individual can see all the necessary information on their state and other pensions savings.
Although we did not press the amendment to a vote on Second Reading—indeed, depending on the Minister’s response, we may not do so today—we raised this issue because we urge the Government to look at making it a statutory duty, including for pension providers, to engage with the publicly owned dashboard, and thus to ensure that everyone has a complete picture of their pension situation when using it. The data should only be visible one way. Pension providers should not be able to see an individual’s pension dashboard. They must, however, be obliged to provide data towards it. If the direction of travel is in favour of a pensions dashboard—if that is common ground—the issue of what I describe as a duty to co-operate with the new mechanism is of the highest importance. If the dashboard is to be successful, all providers must release their data into it, although there still are some big, significant questions to be answered about governance, implementation and consumer protection —I would be the first to accept that—before the Government can move to compel all providers to provide the data that the industry is calling for.
Within the dashboard, there should be a pension finder service—an engine that sends out messages to search the records of all providers and schemes to see whether there is a match for the customer’s details. The engine would then collect that data to populate the consumer’s front-end viewing space.
The data of millions would be accessible through the dashboard, so I stress again: high standards, tough regulation and sound governance will be required to ensure that there is no abuse of a mechanism that is absolutely crucial to help people plan for the future. There are problems to be overcome, but a dashboard can make pensions guidance more effective. Individuals would have greater knowledge, which would improve the guidance conversation, with less time spent on working out what people have and more on giving the quality guidance that they need.
The direction of travel is common ground. We ask the Minister to brief the Committee on where the Government’s plans have reached, and I will respond accordingly.
Guy Opperman
I am delighted to have the opportunity to update the Committee on the pensions dashboard, which is a project I have very much taken to heart in the seven months I have had this job. I am massively committed to it. I endorse utterly the broad thrust of what the hon. Member for Birmingham, Erdington says. It is a groundbreaking project that will provide the holy grail of access to the variety of pension pots we have, in various shapes and forms, as we get older in life—state pension, private pensions or other types of pensions—on one accessible portal.
However, the proposal to launch the dashboard was taken only in autumn last year. The Department for Work and Pensions is undertaking a feasibility study, which will be finished in March. I propose to report to the House of Commons by written or oral statement before the end of this term. The objective, which is very ambitious, is to launch the dashboard in some shape or form by May 2019.
I resist the amendment on the simple basis that, although it is very possible that the single financial guidance body will ultimately run the dashboard, that simply cannot be said at the present stage. There are a considerable number of complexities with the dashboard: the retention of a huge amount of different types of data, whether from state pension data or private pensions; who has access to that data; who controls it; and whether that is something that should be done by the Government, as ultimately the most trusted provider—regardless of whether one trusts or does not trust any particular Government—or by a relatively independent quango such as the single financial guidance body. There is an issue about what body would take it forward and hold the data, and the extent to which the data is accessible, to whom and in what way. There is a lot of devil in the detail, but the objective is utterly clear.
The amendment seeks to put in the Bill that the single financial guidance body will be in charge of the pensions dashboard and will take it forward. This slightly goes to the earlier point from the hon. Member for Paisley and Renfrewshire South about three months. I would be nervous of saying to the single financial guidance body, which has a big job ahead of it, that it is being set up to merge these organisations, provide all these services, do all of the things we want it to do, and then say, “By the way, on top of that, you have to do the single most complex piece of administration of all aspects of all pensions straightaway within six months of your creation.” In my view, that would be a significant burden on that body at a very early stage. If it was a business, we would be asking, “Why deviate from the core purpose right now?”
It is possible that once the dashboard is up and running, the logical organisation to take it forward and run it would be the single financial guidance body, but I would be reluctant to commit to that in the Bill. I certainly do not want it to take that on right at the very start. I am happy to work with the hon. Member for Birmingham, Erdington and colleagues across the House as we go forward. I do not think there is a single naysayer to the project, but one should not underestimate its size or complexity.
For present purposes, I will resist the three amendments. I am happy to sit down with the hon. Gentleman and other Committee members and explain the issue in more detail, as I did when I appeared before my hon. Friend the Member for Brentwood and Ongar and his colleagues on the Work and Pensions Committee. The Chair of that Committee was very dubious about the likelihood of a dashboard coming into existence. He said that it would not happen during his lifetime, but I robustly assured him that it would. I hope that it will be up and running by May 2019, and that the body will advise it. I therefore respectfully resist the amendments.
Jack Dromey
I agree that this is a groundbreaking proposal. We have believed for some years that a pensions dashboard is essential, and there is common ground across the House that one should be introduced. We will not press the amendment to a vote, but we argue that such a dashboard should be part of the core purpose of the new SFGB.
What the Minister said is helpful. It is right that there is a feasibility study that includes investigation of the complexities, not least because, as I mentioned, on the one hand we want individuals to have access to high-quality advice and guidance, but on the other we have to protect data and ensure that individuals are not put at risk as a consequence of data leaks of one kind or another. I would be the first to recognise the complexity of that, and I welcome the fact that there will be a report in March.
Let me make two concluding points. We strongly believe that the SFGB is the best mechanism, but let us have that discussion at the next stage. I welcome what the Minister said about being prepared to sit down and talk that through at the next stage, including with the industry and stakeholders. All that is already happening, but it needs to be done in respect of the construction and final shape of the dashboard and precisely where it is located. I look forward to those discussions at the next stage and, on that basis, I beg to ask leave to withdraw the amendment.
Guy Opperman
With respect, Mr Stringer, I think you mean “amendments”. We are dealing with amendments 26, 31 and 32.
The Chair
I apologise for not using the plural. The Minister is absolutely right.
Amendment, by leave, withdrawn.
Jack Dromey
I beg to move amendment 27, in clause 3, page 3, line 27, after “develop” insert “deliver”.
This amendment would strengthen the SFGBs strategic function to support and co-ordinate a national strategy to a “develop and deliver” function.
The Chair
With this it will be convenient to discuss the following:
Amendment 29, in clause 3, page 3, line 31, at end insert—
“(d) financial guidance relevant to the modern labour market.”
This amendment creates a duty for the single financial guidance body to develop and co-ordinate a national strategy to improve financial guidance relevant to the modern labour market.
Amendment 39, in clause 3, page 3, line 31, at end insert—
“(d) the uptake of financial advice from the single financial guidance body by members of the public, and
(e) the understanding of pensions amongst those between the ages of 18 and 55.”
This amendment would add improving uptake of financial advice from the single financial guidance body, and improve understanding of pensions amongst people aged 18 to 55 to the requirements under the body’s strategic function.
Jack Dromey
These amendments deal with developing and delivering the function of the SFGB and with the notion of a national strategy to improve financial guidance relevant to the modern labour market.
Amendment 27 would strengthen the SFGB’s strategic function to support and co-ordinate a national strategy to what we call a “develop and deliver” function. We propose that the new body should not only play a part in developing and devising the national strategy for increased financial education and inclusion, but be tasked with delivering that function. As the primary body for advice and guidance on financial services, it will be best placed to deliver a scheme that seems to target a specific area of need—financial illiteracy—for many people in the United Kingdom.
As we have stated from the start, this is a two-topic Bill. The first concerns the establishment of a new arm’s length entity to replace the three existing publicly funded consumer bodies. The SFGB will have a strategic function to support and co-ordinate the development of a national strategy. The Bill’s stated aim, which we support, is to increase financial capability, reduce problem debt and improve public understanding of occupational and personal pensions. Especially given the appointment of a Minister for Financial Inclusion, the SFGB’s strategic function could be strengthened to a “develop and deliver” function, despite the fact that the body may have limited leverage in certain areas.
As stated in the Lords Committee on Financial Exclusion, a real strength of the Money Advice Service is its focus on what works and on gathering together an evidence hub. We do not want to see momentum lost—[Interruption.] I am confident, given Government Members’ reaction, that no one wants to see that work slip through our fingers; that would be a missed opportunity. The Committee concluded that
“it is important for the Government and service providers to continue to develop a greater knowledge of ‘what works’ when seeking to deliver increased financial capability.”
Sadly, there are many recent examples of vulnerable individuals who have been preyed upon by so-called introducers at a time when the state of their pension scheme has been in question—in particular, British Steel workers in Port Talbot and, more recently, Carillion workers. Earlier, I told hon. Members about a shift supervisor breaking down in tears because he made a wrong decision after receiving bad advice, and because 20 others on his shift had followed his bad advice. He said that he would never forgive himself. Introducers—vultures—pounce upon workers at a time when they are unsure about their future financial situation, and persuade them to transfer their pension savings to a different scheme that will lose them money and often attracts high fees. Such examples illustrate the need for a national strategy to improve the financial education available to the British public.
The admirable Michelle Cracknell, chief executive of the Pensions Advisory Service, makes the point that we have the green cross code—I am sure all hon. Members have seen it—to encourage the safe crossing of streets. It is inculcated in people’s minds and has been very effectively promoted. I went through it with my own kids. She says that, likewise—although not perhaps in the same way—we should encourage people to pause, think and get it right, particularly in circumstances of adversity. We should also help people plan for the future. Either way, that “Where do I turn?” is absolutely crucial. The new body will be a welcome step in the right direction, but we need to deliver a dynamic new body that works hard to create awareness.
The amendment would create a duty for the single financial guidance body to develop and co-ordinate a national strategy to improve financial guidance relevant to the modern labour market. Due to the increasingly fragmented and insecure nature of the contemporary labour market, many people are sadly perpetually in a precarious financial situation. I have seen that at first hand time and again in my constituency and in my former role at Unite the union. That group, now commonly known as the precariat, includes self-employed people, workers on zero-hours contracts, part-time workers, workers in the gig economy and those who are conscripted into bogus self-employment. I stress once again that I always draw a distinction between the admirable people—there are many—who want to work on a self-employed basis, and those who are given no alternative, including by employers such as Uber.
Due to the nature of their work and their hours, those people often find it difficult to access basic financial services. It can be hard for them to rent a home, to get a mortgage, to find home or contents insurance, and to access credit. That has contributed to record low levels of disposable income, alongside the longest wage stagnation in 150 years. Figures released last year suggest that the number of self-employed workers in the UK rose by 23% between 2007 and 2017, from 3.8 million to 4.7 million. Many of them are desperately in need of high-quality advice and guidance. What we are seeing is a shift in the nature of the world of work and the way that the British economy is working. The self-employed now represent 15% of the workforce and 91% of businesses. Although that can mean many enjoying greater flexibility and control over their working lives, it can have a negative impact on their access to finance.
A 2017 FCA report showed that consumers with no permanent address or who move regularly, which is often a characteristic of insecure employment, can regularly have problems opening bank accounts and accessing insurance and credit. That is a common situation for many people in the current labour market, particularly young people in metropolitan areas. Due to short-term tenancies and insecure working patterns, many people move on a regular basis. That can leave them open to problems accessing basic financial services and they may need guidance on the best way to go about that. The amendment proposes that the new body would need to devise its strategy and financial guidance taking into account the contemporary labour market and the challenges it delivers.
There is no question but that we have a rapidly changing labour market, with many badly in need of advice and support, as a consequence of patterns of employment. The Government have recognised the need for a focus on the issues about the modern labour market through the Matthew Taylor report. The amendment sits comfortably in the context of the overall scrutiny by the Government and Parliament on how we respond on what is permissible in the future in terms of patterns of employment, and how to, in the here and now, give support to people in insecure employment that time and again they so badly need.
The Chair
Just before I call the Government Whip, let me clarify my previous remarks about amendments being withdrawn. I was a little too eager to agree with the Minister. The question before us then was whether the amendment should be made. We were discussing two other amendments with that, but they were not for decision, so it was singular and not plural—I am just trying to be helpful, Minister.
Ordered, That the debate be now adjourned.—(Amanda Milling.)
Financial Guidance and Claims Bill [ Lords ] (Second sitting)
(6 years, 9 months ago)
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The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
The Chair
Welcome to the afternoon sitting. I must first inform the Committee that the question that schedule 1 be the First schedule to the Bill was not put at the appropriate point this morning. To rectify this error, I must now put the question.
Schedule 1 agreed to.
Clause 3
Functions
Amendment proposed (this day): 27, in clause 3, page 3, line 27, after “develop” insert “deliver”.—(Jack Dromey.)
This amendment would strengthen the SFGB’s strategic function to support and co-ordinate a national strategy to a “develop and deliver” function.
Question again proposed, That the amendment be made.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 29, in clause 3, page 3, line 31, at end insert—
“(d) financial guidance relevant to the modern labour market.”
This amendment creates a duty for the single financial guidance body to develop and co-ordinate a national strategy to improve financial guidance relevant to the modern labour market.
Amendment 39, in clause 3, page 3, line 31, at end insert—
“(d) the uptake of financial advice from the single financial guidance body by members of the public, and
(e) the understanding of pensions amongst those between the ages of 18 and 55.”
This amendment would add improving uptake of financial advice from the single financial guidance body, and improve understanding of pensions amongst people aged 18 to 55 to the requirements under the body’s strategic function.
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
I had anticipated that we would deal with amendments 27, 29 and 39 together. I thought that they would have been grouped, but I will address amendment 27 to start, and take your guidance from there, Mr Rosindell.
The hon. Member for Birmingham, Erdington proposes in amendment 27 to amend the Bill by a single word. The strategic function of the Bill as drafted and its three elements have been carefully designed, and I believe that the amendment should not be made. Through its strategic function, the guidance body will bring together interested partners in the sector, various services, the public and voluntary sectors and the devolved administrations with the aim of improving the ability of members of the public to manage their finances effectively. To that end, the body will develop and co-ordinate a national strategy.
The Money Advice Service has been undertaking that vital role to date, and key stakeholders agree that that important work should continue and be expanded. The national strategy will succeed only if the new body works effectively with its many partner organisations in the financial services and other sectors in a collective effort with shared ownership and accountability. Indeed, the premise of the national strategy is that one organisation working independently has little chance of making a great impact, but many working together have more. The role of the new body will be to drive the process forward and oversee its implementation, but not to be solely responsible for the delivery of the strategy in its entirety. For those good reasons, I urge the hon. Member for Birmingham, Erdington to withdraw the amendment.
Jack Dromey (Birmingham, Erdington) (Lab)
It is a pleasure to serve under your chairmanship, Mr Rosindell. Briefly, in the words of the Minister, a national strategy will be pursued at the next stages, including a range of stakeholders and, I suspect, other enforcement bodies. Flowing from what the Minister said, the question is who will drive that at the next stages. The single financial guidance body will clearly and undoubtedly have a pivotal and central function.
Jack Dromey
I see the Minister nodding his head in agreement. In those circumstances, we look for a dynamic body to do precisely that: drive the national strategy. On that basis, I am content not to press the amendment.
Guy Opperman
Amendment 29 seeks to add another strand to the three existing areas of the strategy set out in the Bill. The Government agree with the hon. Gentleman on the overall principle that the strategy of the new body needs to be future-proof and flexible, to meet the challenges that an evolving modern economy might bring. Clearly the Taylor review is relevant to all those factors, but we do not believe that the amendment is necessary. It lacks a specific focus and would risk diverting focus and resources from the areas that we believe the body should prioritise through its strategic function. As I understand it, the amendment is not sought by existing providers. In the circumstances, I ask the hon. Gentleman not to press the amendment.
Jack Dromey
It is not for one moment our intention to divert focus from the body’s core and strategic function. All I would say is that the changes taking place in the modern labour market are immense, complex and often profoundly disturbing. To give one example from my personal history, in 2003-04, alongside Gillian Shephard, I chaired the coalition of support that resulted in the Gangmasters (Licensing) Act 2004. From plough to plate— from the National Farmers Union to the supermarkets—it sought to tackle some of the worst abuses of workers and the undercutting of reputable providers by rogues. My experience—like that of all Committee members, I suspect—is that there is much in the modern workplace and the world of work that is profoundly disturbing and needs to be tackled. Having said that, the Minister said himself that the body would take account of the demands in the modern labour market.
As far as the Taylor process is concerned, I know Matthew very well and his report contains some valuable proposals, although I do not agree with them all. It is helpful that on the Government’s part there has been a focus on the modern labour market, including the gig economy. In those circumstances, particularly in the light of what the Minister said about the context of the Taylor review and the demands of the modern labour market, I shall not press the amendment.
The Chair
To clarify, amendments 27, 29 and 39 are part of a single group, so any Member who wishes to speak to any of the three amendments must do so now.
Jack Dromey
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Jack Dromey
I beg to move amendment 28, in clause 3, page 3, line 31, at end insert—
“(9A) In seeking to improve the provision of financial education to children and young people, the single financial guidance body may advise the Secretary of State that—
(a) Ofsted should take into account the financial education provided by schools when carrying out inspections, and
(b) financial education should be added to the primary school education curriculum.”
This amendment allows the single financial guidance body to, as part of its function to improve the provision of financial education to children and young people, advise the Secretary of State that Ofsted should take account of financial education when carrying out inspections, and that financial education should be added to the primary school curriculum.
Some hon. Members may be surprised by the amendment, but I will explain why it is important. We believe that the provision of financial education to young adults in further and higher education—let alone to primary school children—needs to be improved. Young adults are an important age group not particularly well served under current arrangements. We believe that, where appropriate, education providers should incorporate financial education modules into programmes of study.
Thousands of young people throughout the country leave school without the necessary financial knowledge to approach critical situations such as applying for credit and mortgages. Research shows that 37% of 18 to 24-year-olds hold one or more credit cards, an overdraft or another form of borrowing, with average combined debts of £2,989, not including student loans or mortgages. The House of Lords Select Committee on Financial Exclusion heard that 51% of 18 to 24-year-olds regularly worry about money. Generally, half of all UK adults modestly rate themselves as having some understanding of financial products and services, while 15% say that they have a very good understanding and a minority of just 5% admit to having no understanding. Just 54% of the C2, D and E social classes say that they have some understanding or a very good understanding of financial products and services.
In September 2014, in a welcome move by the then coalition Government, financial education was added to the statutory national curriculum for secondary schools in England. Since then, schools have been required to include financial education as part of mathematics and citizenship teaching at key stages 3 and 4. However, there is still no requirement for English primary schools to include financial education as part of their teaching. In addition, as only 35% of state-funded secondary schools are now maintained schools, the obligation to teach financial education does not apply to nearly two thirds of all state secondary schools.
As the hon. Member for North Swindon (Justin Tomlinson) said on Second Reading:
“We live in a very complex society, with direct debits, standing orders and complicated marketing messages coming forward. Making sure that we equip all people of all ages to make informed decisions is an absolute priority.”––[Official Report, Financial Guidance and Claims Public Bill Committee, 22 January 2018; c. 62.]
The hon. Member for Solihull (Julian Knight) said:
“The development of key skills and knowledge about money matters helps pupils and, indeed, their parents to make wise choices in later life, when innovations in financial technology and online consumer tools—not to mention the march towards a cashless society—will make previous experience and the advice of their elders an unreliable guide.” ––[Official Report, Financial Guidance and Claims Public Bill Committee, 22 January 2018; c. 95.]
In a world in which credit and financial services are more readily available than ever, it is vital that Britain’s young people are given the financial education they need to approach those challenges when they leave education. In the view of the Opposition, it is only through mandatory financial education in both primary and secondary schools that we can be confident that young people will be equipped both to achieve the best possible start in life, and to avoid being exploited by the ruthless.
Returning to my first point, some may ask whether financial education should be taught in primary schools. My experience is that it is crucial that children at young age—primary school age—are involved in crucial discussions that help them to understand the future and the challenges they will face. I will give two examples.
First, Jaguar Land Rover—an excellent company; the Jaguar plant is in my constituency—has a highly developed programme of operating in primary schools. That is because it is the kind of company that looks ahead two to five years, five to 10 years and 10 to 20 years. It always has a particular problem in the recruitment of skilled labour, and it wants, through its work in primary schools, to open up the horizons of primary school children more generally. That is very important in a constituency such as mine, which is rich in talent but is one of the poorest in the country and has high unemployment. In particular, JLR wants to encourage young girls to see themselves as having a future in engineering and car manufacturing. Its strong view is that, without starting that work at that age, by the time people get to secondary school and beyond, preconceptions are formed about what is appropriate for a young girl, and ultimately a woman, to do.
My second example is controversial, although it has cross-party support. I have worked very closely with the admirable Dot Com Children’s Foundation, which collaborates with the police and local authorities. I have seen it at first hand its programme in primary schools that uses a comic book format to teach children to spot risk and harm, to reject any obscene approaches and to know with whom they should talk if they feel themselves threatened. When we embarked down this path in Birmingham, where more than 100 primary schools have now used the programme, I remember some parents saying, “What? At primary school age?” Actually, in a non-threatening way, we absolutely want to make a start in helping children to understand the difference between family and friends on the one hand and those who would seek to exploit them on the other.
I am giving examples of important areas in which primary school children are equipped to deal with the modern world. And coming back to the issue of financial guidance, I suspect that not many primary school children have credit cards. Having said that, however, as they grow up they will need to know how to manage their finances, how to avoid exploitation by those who would seek to exploit their vulnerability and how to get the best possible start in life.
Yvonne Fovargue (Makerfield) (Lab)
I rise to recount some of my own experience. I was fortunate enough to employ a financial capability adviser from 2000 to 2010, when I left, although I have to say that every time we applied for funding he changed his job title. That adviser went into primary schools as well.
I am wary about adding things to the curriculum, because I understand that teachers are hard-pressed, but it does not have to be teachers who do this work. We sent in the adviser; he did a recognised course with a teacher, which gave the teacher confidence to carry on his work later. The primary school children were really engaged in the lesson, because somebody from outside had come in, and we also went in with the credit unions, to encourage the children to start an early habit of saving, as well.
That is when children are really keen. It is competitive—who can save the most in their little account out of their pocket money and so on? It was really successful. The schools liked it. I would love to get the funding to go back now, to see how those “adults” are coping after having had that education at primary school level, but unfortunately that was not possible. However, I believe that that work helped.
Guy Opperman
The hon. Lady will be very pleased to know that Her Majesty’s Treasury, present in the form of the Economic Secretary to the Treasury, provides the LifeSavers programme, which I am lucky to have bid for on behalf of my constituency, and which does exactly what she has just described. Her speech might be seen as a bid to continue the LifeSavers programme—it obviously has a life span—and then she would be able to bid for her community to be part of the programme in partnership with the Church of England and whichever credit union she wishes to support.
Yvonne Fovargue
I shall make sure that Unify, my local credit union, gets a copy of that information.
One of the side effects of sending the adviser into schools, badged as the citizens advice bureau adviser, was that we encountered an upsurge in parents coming to us who were prepared to discuss their debts. It was as if having someone there who was talking to the children made them examine their finances; the children were going home and saying, “Look! We’ve been looking at this!” prompting their parents to examine their own finances, and then they already knew where to go to talk about their debt. So the work had that unintended consequence, which I must admit we found hard to deal with, given the resources we had. Nevertheless, it was really beneficial, so I would encourage the Minister to consider that as a proposal.
Guy Opperman
I should have said before that it is a pleasure to serve under your chairmanship for the first time, Mr Rosindell, and I welcome you to the Committee.
The hon. Member for Makerfield is right that a significant number of organisations provide, in a primary school setting, particular aspects of financial education in various shapes and forms, whether it is the Association for Citizenship Teaching, MyBnk, the Personal Finance Education Group or a variety of other organisations, and I would happily talk for some considerable period of time and overindulge the Committee on LifeSavers. As she knows, I set up a community bank in my constituency with Archbishop John Sentamu on 5 November 2015, and that community bank has bid for the LifeSavers project in Northumberland, and provides six schools with that financial education. We run six different banks in six different schools in my community. That work is extraordinarily successful. The original pioneer is in Lewisham, which I know the Opposition Whip, the hon. Member for Lewisham, Deptford, will be interested to hear, and the success rate has been wonderful.
The proposal is that the single financial guidance body should have a look at, and then come up with a strategic assessment of, what the provision of financial education of children and young people should be. I take issue with the Opposition on whether Ofsted should judge schools on the basis of financial education. I say, with respect, that it most definitely should not. Ofsted itself does not seek that, so I definitely disagree with paragraph (a) of the amendment. Ofsted, which has been consulted in broad terms, thinks that it would be inappropriate to inspect financial education specifically, since it usually inspects not individual subjects but the curriculum as a whole.
On the broader points raised by the hon. Member for Birmingham, Erdington, the curriculum is ultimately a matter for the Department for Education. He is right that financial education was brought into the secondary context under the coalition Government. Successive Governments have drilled down on the importance of maths, which is an absolute prerequisite and is fundamental to the education of our young people. The maths curriculum has been strengthened to give pupils from five to 16 the necessary maths skills, and I am sure he has seen in his own constituency the success of mental maths and advanced maths in primary schools. We responded to the House of Lords Committee’s report on financial exclusion in a similar way—I make the same case here.
It will be for the single financial guidance body to target specific areas of need, and to match individual funders and providers of education projects and initiatives aimed at children. The amendment is very broad brush. I would prefer the guidance body to be able to zero in on particular areas. That is the purpose of making overall assessment one of its strategic functions. That means that it will be better able to deliver what we all want: enhanced financial education for our children.
We agree about objectives, but I am not sure that we agree about the way forward for delivery. With respect, I invite the hon. Gentleman to withdraw his amendment.
Jack Dromey
My hon. Friend the Member for Makerfield made a powerful point about the importance of primary schools as places of contact—sometimes the only place of contact—with people who are struggling in their lives. My experience from a number of projects is that what is done in primary school reads across to a child’s parents, so her point is very valuable indeed.
We can question how this should be done, but it is now public policy that children should be involved in financial education. A valuable start has been made with secondary schools, and we will seek at subsequent stages of the Bill to engage with the Government about how that might be extended further. There are questions about the context for that, including the overall maths context, but that can be teased out at the next stage.
Finally, if there is a coalition of support in the Committee for lobbying the Treasury on LifeSavers, I say: “Yes please, but don’t stop at LifeSavers.” On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Jack Dromey
I beg to move amendment 30, in clause 3, page 3, line 32, at end insert—
“(d) the understanding members of the public have on how the duties placed on financial service providers under the Equality Act 2010, including the requirements on service providers to make reasonable adjustments, can enhance their ability to manage their financial affairs.”
This amendment would ensure members of the public are informed about what financial services companies need to do to comply with the Equality Act, in particular the duty to put in place reasonable adjustments for disabled customers.
The purpose of the amendment is to ensure that members of the public are informed about what financial services companies need to do to comply with the Equality Act 2010—in particular, but not exclusively, the duty to put in place reasonable adjustments for disabled customers. We are rightly proud of that landmark Act in this country, and I am particularly proud that it was introduced by a Labour Government. There have been subsequent problems with its implementation and, dare I say, without wishing to divert into areas where we would disagree, the implementation of clause 1 of the Equality Act is yet to take place. Having said that, on disability matters, there would certainly be consensus around ensuring that people who have problems with their health and who have disabilities of different kinds get the support that they need and are not taken advantage of.
Under the Act, a person is disabled if they have a “physical or mental impairment” that has
“a substantial and long-term adverse effect”
on their ability
“to carry out normal day-to-day activities”.
In that case, a duty to provide goods, facilities or services falls on providers, employers and a range of other parties. People automatically meet the disability definition under the Act from the day that they are diagnosed with a condition such as cancer, multiple sclerosis or HIV infection.
If an organisation that provides goods, facilities or services to the public finds that there are barriers to disabled people in the way it operates, it has an obligation to act, including to consider making reasonable adjustments. If those adjustments are reasonable for that organisation to make, it must make them. That duty is sometimes described as anticipatory, which means that an organisation cannot wait until a disabled person wants to use its goods, facilities or services, but must think in advance and on an ongoing basis about what disabled people with a range of impairments might reasonably need.
An organisation is not required to do more than is reasonable for it to do—I stress that again—but that depends, among other factors, on its size and nature, and on the nature of the goods, facilities and services it provides. Making disabled customers and their advocates aware of that duty means that they will be able to ask their financial service provider to potentially adjust the GFS it offers and to remove any barriers.
Although I would be the first to accept that there is good practice in the sector when it comes to making adjustments for visual and hearing impairments, that is rarely done in the context of the legal framework. In certain circumstances, where that is not done and where conditions such as a cancer diagnosis or neuro-diverse disabilities such as autism, brain injuries and dementia are not considered, that means that people are let down and there is a failure to comply with the terms of the law. For example, the Alzheimer’s Society reports that 66% of people with dementia need some assistance when using a bank and 80% of carers said that banks need a greater understanding of lasting powers of attorney. On the one hand, there is the legal obligation, and on the other, there is an undoubted need for it to be complied with.
There is no reference to the duty to make reasonable adjustments in the Financial Conduct Authority’s handbook. Frankly, I am surprised at that. The handbook contains provisions set out in legislation that are relevant to the FCA and other provisions made by way of instruments by the FCA. It contains a mixture of rules, which are binding obligations that can result in enforcement action if not adhered to, as well as guidance. The amendment will ensure that disabled people or their advocates are informed about the duty to make reasonable adjustments and that they can use that information to ask financial service providers to make adjustments to the goods, facilities and services they provide, which could include removing physical barriers or making services dementia-friendly.
Guy Opperman
It is a pleasure to respond to the hon. Gentleman’s speech. I will make three key points: I will discuss whether the Equality Act applies to this body in future; I want to give some assurances to the House on an ongoing basis, because that really matters; and I will briefly deal with the point about the duty of care.
Jack Dromey
I actually met Jacci and did a conference with her, and I thought what the hon. Member for Mid Derbyshire said on Second Reading was very powerful and moving, telling the story of a wonderful person and using it as proof positive of why we need to ensure—
Mrs Pauline Latham (Mid Derbyshire) (Con)
Is it not true that other financial institutions could do what Santander did and voluntarily sign up to her “Dying to Work” campaign, which would help everybody that they deal with?
Jack Dromey
I strongly agree with the hon. Lady, and that is something we might pursue, including on a joint basis, at the next stages. The “Dying to Work” campaign’s objectives are right. To make the obvious point, she will have seen at first hand what a battle it is for people like Jacci, and I am sure that all of us have come across some very powerful cases in our constituencies. The banks and the financial institutions should absolutely, without hesitation, follow Santander’s lead. Santander is to be congratulated for what it did. Do we have a marketplace where everyone conducts themselves in the same way? No, we do not, so the hon. Lady raises a very valuable point.
In terms of the Minister’s response, it is welcome that, following Second Reading, the situation with regard to the Bill is unambiguous. I want to make two additional points. First, we will return to duty of care later. Secondly, the issue of enforcement is very important. The Equality and Human Rights Commission will have a watchdog role to play, but it is important that, from the start, the single financial guidance body is obliged in law to build into the culture of its operation, as we have argued, oversight of how financial institutions conduct themselves in terms of services, goods and facilities for the disabled.
Guy Opperman
I assure the hon. Gentleman that the whole reason we introduced the vulnerable circumstances provision in the Bill was to address that exact point. I cannot stress enough, and I have made the point repeatedly today, that the objective specifically enshrined in the Bill is that the particular needs of people in vulnerable circumstances need to be borne in mind.
Jack Dromey
That is welcome. All I will say is that, in our experience, there can be a law or a set of legal obligations, but are they necessarily carried out in practice? In fact, to take the Santander example once again, it took a view that it should do the right thing and that it was obliged by law to do so, but not every provider necessarily takes the same view. The issue of enforcement is key. I stress again that the Equality and Human Rights Commission has a role to play, but at the heart of the SFGB’s operation should be action to ensure that the disabled are not disadvantaged. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 3 ordered to stand part of the Bill.
Clause 4 ordered to stand part of the Bill.
Clause 5
Specific requirements as to the pensions guidance function
Jack Dromey
I beg to move amendment 33, in clause 5, page 4, line 13, leave out subsection (2) and insert—
“(2) In section 137FB of the Financial Services and Markets Act 2000 (FCA general rules: disclosure of information about the availability of pensions guidance) after subsection (3) insert—
‘(3A) In determining what provision to include in the rules, the FCA must include a requirement for members of a scheme, or survivors of members of a scheme, to indicate before gaining access to or arranging individual transfer of their pension assets either—
(a) that they have received information and guidance made available under section 5 of the Financial Guidance and Claims Act 2017 (specific requirements as to the pensions guidance function), or
(b) that they understand the nature and purpose of that information and guidance and have chosen not to receive it.
(3B) The rules—
(a) must impose an obligation on the trustees or managers of a relevant pension scheme to satisfy themselves that the requirement under subsection (3A) has been complied with,
(b) may make provision about what is to be, or not to be, treated as a sufficient indication under subsection (3A) (which may, in particular, require indication on more than one occasion in specified cases or circumstances),
(c) must specify that accessing a website or receiving published information does not alone amount to receiving information and guidance for the purposes of the requirement under subsection (3A), and
(d) may include exceptions for specified cases (which may include cases of assets below a specified value, cases where information, guidance or advice has already been received, cases of transfers by way of consolidation and any other cases specified in the rules).’”
This amendment would strengthen the provision in the Bill for requiring members of pension schemes to be given access to guidance in specified circumstances, so as to ensure that guidance was actually received or expressly refused.
The Chair
With this it will be convenient to discuss the following:
Government amendment 2.
Amendment 40, in clause 5, page 4, line 24, leave out “may” and insert “must”.
This amendment paves the way for Amendment 41.
Amendment 41, in clause 5, page 4, line 25, leave out from “manager” to end of line 26 and insert “to ensure that, either—
(a) the members of the scheme or survivors of members of the scheme receive information and guidance made available under section 5 of the Financial Guidance and Claims Act 2017 (specific requirements as to the pensions guidance function), or
(b) they understand the nature and purpose of that information and have chosen not to receive it,
before proceeding.”
This amendment would require guidance to be provided to members of a relevant pension scheme or their survivors unless they chose to opt out.
Clause stand part.
Government amendment 19.
Government new clause 1—Personal pension schemes: requirements to recommend guidance etc.
Government new clause 2—Occupational pension schemes: requirements to recommend guidance etc.
Jack Dromey
Amendment 33 would strengthen the Bill’s provision for requiring members of pension schemes to be given access to guidance in specified circumstances, so as to ensure that the guidance was actually received or expressly refused. As I will come to argue later, that is an absolutely key point. I underline once again that the term “expressly” is crucial and should lie at the heart of the Bill and what happens during the next stages.
Our proposed default guidance would strengthen the Bill and ensure that more people were protected when transferring their pension assets. Currently, the system of checks and balances for those looking to move their pension assets from a defined benefit scheme are very strong. Members are offered guidance at the time and those moving more than £30,000 must undertake mandatory guidance. However, at a time when more and more defined-benefit schemes are closing than ever before, there is no such safety net for those on defined-contribution schemes. In our very strong view, default guidance would provide such checks and balances for those transferring assets with more value than they may have ever seen before in their lives.
Although the guidance offered by Pension Wise to those seeking to transfer their pension is of great value to many people, the take-up is relatively low and many enter into transactions without proper prior knowledge of their options and the consequences. Once again I refer to the story I told earlier today about the Port Talbot steelworker weeping because of the consequences of his actions and the 20 people he was responsible for who followed his lead.
The lack of a provision for default guidance has resulted in many members of schemes suffering detriment through scams or through making the wrong choice. The current system of signposting advice by pension providers to members of schemes who want to transfer or withdraw their pension pot is not working as it should. The providers, particularly the rogues, have no business interest in making sure that their members receive the appropriate advice and, as such, it is not made as clear as it should be. The right kind of default guidance—strong default guidance—would promote shopping around, better informed decision making and protection against scams.
The amendment would mean that members of a scheme, or survivors of members of a scheme, must either indicate that they have received the appropriate guidance before accessing the pension assets, or explicitly state that they do not wish to receive it. They must state explicitly and beyond any doubt that that is their choice
The service given by Pension Wise is highly respected and is appreciated when it is given. Between February 2016 and January 2017, 94% of people who completed an appointment were satisfied and 93% felt informed about their pension options, compared with 56% of a control group who had not used the service. However, as Pension Wise would be the first to acknowledge, the take-up of the service is extremely low. The number of appointments made with Pension Wise is rising—there were 66,000 in 2016-17—but that is still extremely low compared with the number of pension scheme members exercising pension freedoms.
Latest figures from HM Revenue and Customs show that some 772,000 people withdrew more than £6.5 billion from their pension pots in 2017. An FCA survey found that only one in eight 55 to 64-year-olds who plan to retire in the next two years and who have a defined-contribution pension had used the Pension Wise service in a 12-month period. Although traffic to Pension Wise’s website is quite high, it is not a sufficient substitute for access to tailored and personalised advice. As Baroness Altmann said in the Work and Pensions Committee,
“When you introduce pension freedom into a marketplace that has never really been encouraged to engage with pensions and mostly does not understand much about them, obviously you need an expert to help you.”
The National Employment Savings Trust has said that it was concerned
“that people appear to be making decisions based solely on a read of the Pension Wise website”,
and from what we have been told about the experience of others, that is absolutely right. The main means of promoting Pension Wise advice is through signposting by pension providers and through advertising.
Guy Opperman
May I be clear, Mr Rosindell, that I should speak to amendment 33 and the Government new clauses in the round?
Guy Opperman
I am grateful. I will therefore attempt to answer the points made by the hon. Member for Paisley and Renfrewshire South as well. I will take her points first, because there is a sequential approach.
Effectively, we are all dealing with three drafts. The House of Lords, in its wisdom, produced clause 5(2). Subsequently, the Work and Pensions Committee, of which my hon. Friend the Member for Brentwood and Ongar is a member, assessed that and produced what is in reality Labour’s amendment 33—the amendment is a straightforward lift from that Select Committee. The Government then went away and produced new clauses 1 and 2 to see if we could improve on it.
I take on board everything that the hon. Member for Birmingham, Erdington said. It is manifestly the case that we all want to see the full guidance. We are about to have a precise discussion as to which is the best way to get to the objective we all seek. The Work and Pensions Committee was sure, as are the Government, that clause 5(2) is not good enough and we can improve it massively. Therefore, with no disrespect to the hon. Lady, we will reject her amendments because they are to clause 5(2).
The principle is the same: how can we best improve the drafting from the House of Lords? There are a variety of points, and I hope the Committee will bear with me as I set out a little detail. The Government amendments are specifically in keeping with the intent of the Work and Pensions Committee, and go further. They make provision for all schemes providing flexible benefits, including all defined-contribution schemes regardless of whether they are personal, stakeholder or occupational pension schemes, including in Northern Ireland.
I will make two points at the outset. First, the Work and Pensions Committee’s recommendation does not include occupational pensions, so in any event it is fundamentally deficient, because one would definitely want that. Secondly, Northern Ireland is not included. While there is no representative from Northern Ireland on the Committee—the hon. Member for Strangford (Jim Shannon) has not intervened like he normally does—we are in a situation where I have due respect to our good brethren from Northern Ireland, and we are including Northern Ireland in the provisions, which neither of the other provisions had done.
The Government amendments will ensure that there is what we consider proper consideration and co-operation between the Financial Conduct Authority, the Secretary of State and the single financial guidance body so that the FCA rules and regulations are effective, workable and consistent. This is a discrete, important point. The Work and Pensions Committee amendment would require the FCA to impose rules on pension scheme members, but the FCA’s general rules do not entitle that, so the amendment is defective in that way. It also sets out delivery channel exclusions, which would not be appropriate for primary legislation.
The proposal is that there regulations should be informed by consultation. I think all parties agree on that but suggest different mechanisms to get there. Before the hon. Member for Birmingham, Erdington jumps to his feet, I get that such a consultation needs to be speedy—this is not something for the long grass. The regulations will then reflect informed consultation, with all bodies working together to create the right integrated form, allowing for updates and changes in technology, current user needs, best practice and research on existing rules and regulations as well as taking into account potential exceptions.
It is a brave Minister who starts to give exceptions to the rule, but I will give an example that may assist the Committee. If an individual has very, very small pots, as many people do—perhaps of £10 or £12—and wishes to transfer them or consolidate them, the nature of the advice, guidance and default in relation to that person will possibly be very different to the British steel worker we are dealing with in south Wales or Scunthorpe.
On the specific amendments, we with the broad consensus that we can do more. I have set out new clause 1, which is the effective replacement of clause 5(2). The specifics are that we believe that there are greater criteria and tests in the Government amendments than there are in the Work and Pensions Committee amendment.
Alex Burghart (Brentwood and Ongar) (Con)
I speak as a member of the Work and Pensions Committee. As we set out, clause 5(2) is an improvement on the original legislation. I believe that the amendment made by the Opposition—it is very flattering to see the wording from the Work and Pensions Committee report—was an improvement on that, but new clause 1 and 2 are an improvement on that amendment for the reasons the Minister has set out. All schemes are involved, and the Opposition amendment places the onus on the individual, whereas the Government’s amendments place the onus on trustees or management, which is a preferable way of proceeding. Does the Minister agree?
Guy Opperman
My hon. Friend is right to make that point. The provider will be required to ask members and other beneficiaries looking to access or transfer their pension benefits if they have received either pensions guidance or independent financial advice. If the member indicates that they have not received guidance or advice, the provider will have to recommend that they seek it. The provider will also have to ask the member whether they want to wait while they access guidance or advice, or, crucially, to confirm that they want to proceed without receiving it.
That will do two things from a behavioural nudge perspective—I suspect we will talk about behavioural nudges at great length. First, asking the scheme member if they would like to wait before accessing their pensions benefits so that they can receive guidance will give a clear steer that receiving guidance is the default option. Secondly, asking people to confirm that they want to access their pension without first receiving guidance ensures that the scheme member has to take an active decision to opt out. We believe that that strikes the right balance. It ensures that people are encouraged to take guidance without removing the element of personal choice. It also does not inconvenience those who have already accessed appropriate guidance or independent financial advice.
I could give a number of different quotes, but I will cite Tom Selby, the senior analyst at AJ Bell, who described the original auto guidance idea as weak and said that our proposal represents an improvement. He said:
“Automatically enrolling members into guidance for each transfer or every time they took money from their own pension pot—when they have already decided what they want to do—would have caused massive delayed and huge complaints.”
It was by no means clear, previously, that
“it would have a material impact on the take-up of guidance. It therefore risked being…ineffective.”
He added:
“The new amendment is a vast improvement and, in the short term, should help increase awareness of the importance and value of advice and guidance. It also gives the Financial Conduct Authority breathing room to consult on alternative nudges towards guidance that have been shown by research to be effective.”
The amendments also ensure that the occupational pension schemes that provide flexible benefit are covered—they are not covered by the Work and Pensions Committee’s suggestion—including those in Northern Ireland. Our proposals seek to ensure consistency of approach between personal and stakeholder pension schemes, which are regulated by the FCA, and occupational pension schemes.
Mike Amesbury (Weaver Vale) (Lab)
It is a pleasure to serve under your chairmanship, Mr Rosindell. I have a point of clarity. Surely a move from recommended guidance to default guidance would result in a higher up-take of independent advice and guidance.
Guy Opperman
We are into behavioural economics and nudge theory. In broad terms, imposing greater barriers to force people to do things should in principle get a greater take-up. However, there is a fine line. If we place too many hurdles in the way of the individual, they will not move anything even if it is in their interest, and they simply will not engage with the process. While one may agree or disagree with the concept of pension freedoms and having the ability to choose whether to consolidate pots or access them to do with them whatever one wishes, that freedom is available. One therefore has to be careful because, if there are too many barriers in the way, people simply will not engage with that policy.
Yvonne Fovargue
With respect, I think the Minister probably underestimates the public’s disengagement with pensions. I sat through many pensions discussions when I worked with Citizens Advice, and also discussions on my own pension, and I stared out the window and wondered when I could stick nails under my fingernails—and I was vaguely interested in the subject.
I praise the work of the Behavioural Insights Team, of which I am a big fan. It is about time we made policy based on what people actually do, rather than what we think they should logically do. It has some interesting analysis. The extent of consumer distrust and disengagement was evident from the trials of the Behavioural Insights Team’s pre-retirement “wake-up” packs last year. Those trials were run in collaboration with Pension Wise, the free pension guidance provider. The packs had a limited impact on the number of customers who subsequently used guidance. The strongest performing wake-up pack increased customers’ likelihood of calling Pension Wise by only 3.5%. Nothing indicates better the impact of disengagement and distrust and the low capability. It is unrealistic to expect customers to absorb the level of information required from provider communications or online contact. The FCA’s retirement outcomes review found that only 10% of customers had even read the pre-retirement wake-up guides, which also indicates why provider signposting is likely to have a limited impact.
Pension providers have exploited that inertia. Three previous investigations into the old annuity market identified low levels of shopping around and poor awareness of the available product options. That is still evident today on a timeline that has been produced, showing attempts since 2001 to make an impact on people’s awareness of pensions.
The FCA retirement outcomes review interim report said:
“We are concerned that consumers motivated by mistrust in pensions”—
I do not think that trust has been increased by such matters as Carillion, the state pension scheme or women of state pension age. It brings distrust of the whole pensions system, whether state pensions, occupational pensions or cash purchase pensions, which make it extremely difficult to understand what will be paid at retirement age.
The report goes on to say that such people
“may be making uninformed decisions that result in paying more tax than they would have paid otherwise…or missing out on the benefits of staying invested”
and that they
“do not always take advantage of the help and guidance”.
People need to take advantage of that before making a decision. It is not like switching bank accounts. People cannot switch pensions for a year and then think, “Actually, I’m not very happy and I want to go back.” It is a long-term decision, and an important one.
Let us stop pretending that the wake-up packs are a legitimate source of information, and not build on them. I am pleased that we will consider measures further, but they need to be strengthened now. New clause 1 does not strengthen anything; it weakens it. Relying on looking at it later is not good enough for something as important as a pension.
Mhairi Black (Paisley and Renfrewshire South) (SNP)
I apologise for my lateness, Chair; there were travel disruptions outwith my control. No discourteousness was intended. I appreciate the Minister saying that he would get in touch with me about my amendment.
Guy Opperman
On the hon. Lady’s previous amendment, which we did not get to, I will write to her before Report or Third Reading with a detailed answer.
Mhairi Black
I also appreciate the Minister’s honesty in getting straight to the point and saying that he will reject amendments 40 to 41. To return to my point, I think that if we do not strengthen clause 5, it will be a real missed opportunity. The Lords amendment was a welcome move in the right direction—that is why I was quite looking forward to building on it—so it is a disappointment to hear him say that the Government will carry on with this watered-down version.
It seems totally counter-productive if we are now at a stage where we acknowledge as we write policy that people do not understand pensions and they do not have a clue about them, on the whole. That is the gist. People want someone to hold their hand through the process, not ask them, “Have you had advice?” “No, I haven’t.” “Right. Okay, we’ll move on.” The Minister said that the onus would be put on the individual. To me, what the Government are suggesting does put the onus on the individual rather than on an independent body to hold people’s hands and guide them through the process. It seems like a missed opportunity. Forgive me if this is the wrong time, but I will press amendments 40 and 41 to a vote at the appropriate time.
Craig Mackinlay (South Thanet) (Con)
It is always a pleasure to serve under your chairmanship, Mr Rosindell. I declare a couple of interests: I am a member of the Institute of Chartered Accountants in England and Wales and of the Chartered Institute of Taxation. Part of the Chartered Institute of Taxation has a low-income tax reform group, which includes a couple of charities that play a leading role in helping those who are on low pay: TaxAid and Tax Help for Older People. Before my time in Parliament, I was the north Kent volunteer, as a member of the Chartered Institute of Taxation, for Tax Help for Older People. Often there would be a widow or widower facing consequences that they did not quite know how to deal with, and that would be where the charity came in to help. Obviously, a lot of that work now happens through our surgeries on a weekly basis.
We live in a different world now, with auto-enrolment accumulating very nicely among millions of people across the country. If we are having difficulty today, we will have some very serious money in the future that needs to be dealt with, and people will need appropriate advice. I mentioned on Second Reading that the amounts involved across the country over the next 10, 15 or 20 years could amount to literally hundreds of billions of pounds.
Even without auto-enrolment, there are a number of choices that people need to take on board. Someone may be lucky enough to have a defined-benefits scheme. They are in the descendancy, for many reasons, but I have heard of instances of people who work for banks, in particular, having a defined-benefits scheme. They could be cashing that in, and thinking about a change to a different scheme of up to 50 times the annuity rate. Again, we are talking about very big figures.
People need to make a number of choices at various stages when approaching retirement: whether they should have a defined-contribution pot; whether an annuity is right for them—probably not a decision that many people are making, given the current low interest rates—and whether to change provider. I can see there being hundreds of thousands, if not millions, of people in a few years’ time who have been using NEST, for instance—the easy provider that many small employers are using—reaching the age of 55 or above and asking themselves, “Well, what now? Would changing to a different provider be better for me? Would a draw-down facility on my pension by best? Should I consider the inheritance tax benefits?” We are now in a new world where pensions are a very generous potential inheritance tax-saving product. They might also ask, “What are the factors of my health?” Health might play a very big part in whether someone wants to take all their income now as a full draw-down, or eek it out into the future. There will be a multitude of choices that people should make. People’s personal tax position should also never be forgotten, so that they take their pension in the most efficient way possible.
I would call this group of amendments, very simply, “the scam blockage and advice enlightenment measures.” They are very welcome and, from what I have seen of the Government’s proposals, I am fully supportive of them. I think they take on board the suggestions of the Work and Pensions Committee. However, I have spoken many times, and remain concerned, about what constitutes advice. I note in new clause 1(1)(d) that the FCA will be entitled to put together rules about what constitutes advice.
I remain concerned that somebody with a smaller pot—perhaps a pot of £30,000, which will be a very common position for many people to be in under auto-enrolment in the future—may get involved with SFGB and take the full advice. They will be told, “These options are available to you.” However, I do not think that the legislation provides for advising people what the best provider and tax situation is for them. It is still hoped in new clause 1, as good as it is, that people go and get advice. That advice is simply not available in the market because independent financial advisers will look at a small pot and say, “Well, for the fees involved, I don’t really want to take you on.”
I have spent considerable time pushing for flexibility under FCA rules to allow people to see an IFA on almost a no-liability basis. Instead of the IFA having to do a full “know your client” assessment, which takes a long time and costs a lot of money, I propose an appointment with no liability on the IFA’s part. That would at least give people some help and guidance, which is infinitely better than none.
Jack Dromey
This has been a good debate, with some powerful contributions. I absolutely agree with the hon. Member for South Thanet on the scale of some of the problems. Those include some welcome problems with auto-enrolment, but also situations in which people with their backs against the wall are being taken advantage of. The sheer scale is immense, so it is hugely important to get this right. As the hon. Gentleman said so compellingly, it is crucial that we should be confident that the mechanism for default guidance is robust and will work.
My hon. Friend the Member for Makerfield made a typically powerful and well informed contribution. A provider recently spoke to me about “pension ignorance”—I am not sure that I would quite use those words, because they sound a wee bit insulting, but I know what he meant. There is a lack of knowledge about pension entitlements, because pensions are very often seen as being in the distance. My hon. Friend was absolutely right to raise that point. As I argued earlier, neither the take-up of currently available advice nor the trials to improve take-up inspire us to believe that the Government have got it right yet.
The Minister described our amendment as the Labour amendment, which of course it is—we tabled it. However, I dare to say that it was the product of the Work and Pensions Committee, working on a cross-party basis—a collective wisdom with which we agree. The Minister’s point about the importance of looking at pensions in the round is correct, because we are looking at the totality of pension arrangements for the future. He said, with good intent, that there would be a speedy process to consider regulations at a future stage. The problem is that we have to get it right when we specify in the Bill what the expectations of Parliament are.
Let us compare the Government’s proposals with the status quo. Interesting work has been done to compare the FCA’s conduct of business sourcebook—COBS—with Government new clause 1. It would seem that the Government have not moved as far as they should have, so it is important that we get this crucial issue right in the Bill. Of course the Minister is right when he says that circumstances vary enormously, but we strongly believe that there is an absolute principle that must be enshrined in law. Crucially, it is not about erecting barriers. On the contrary, we want to help people to make their decision and ensure that they have access to the advice and guidance necessary when they come to make that decision.
The wording proposed is not yet good enough. Ultimately, we seek an outcome in the Bill that puts it beyond any doubt that the individual can be shown to have made a conscious decision and to have decided not to access that guidance. The Minister has referred to a nudge, which has its place but, frankly, a nudge alone, in the traditional sense of the word, is not enough at this stage. We need a strong statutory obligation and entitlement. I stress again that the consequences of what happens if things go badly wrong are heartbreaking. We have all seen it. That is why there is a determination across the House to ensure that some of the abuses of the past are not carried forward. For that to be the case, we need strong and unambiguous law.
The Minister has said that the Bill is a skeleton that we can put flesh on the bones of. The hon. Member for South Thanet made the point, which I understand, that this will be a significant issue on Report. To be frank, there is no flesh on these bones to show what needs to be done at the next stage. I hope that the Minister will listen not only to us and to the Work and Pensions Committee, but to the widespread expressions of people who are reputable in a vast industry—of course, there are people to the contrary, but they are not particularly fazed by what we propose—who recognise the importance of what we are arguing. I hope that the Minister will hear their voices as well as ours.
Question put, That the amendment be made.
Guy Opperman
In the circumstances, I am delighted to say that I do not believe this clause is controversial.
Question put and agreed to.
Clause 6 accordingly ordered to stand part of the Bill.
Clause 7
Debt respite scheme: advice to the Secretary of State
Jack Dromey
I beg to move amendment 34, in clause 7, page 5, line 24, leave out subsection (1) and insert—
“(1) The Secretary of State must, within the period of six months beginning with the day on which this Act comes into force, introduce a debt respite scheme.”
This amendment will require the Secretary of State to set up a debt respite scheme within 6 months of this Act coming into force.
The Chair
With this it will be convenient to consider the following:
Amendment 35, in clause 7, page 5, line 35, leave out subsections (3) to (5).
This amendment is consequential to Amendment 34.
Clauses 7 and 8 stand part.
Jack Dromey
The amendment would require the Secretary of State to set up a debt respite scheme within six months of the Bill coming into force.
A “breathing space” is a scheme that stops debts from increasing by freezing interest and charges, and halting enforcement action, allowing families the time and space they need to get back on their feet. This morning I told the story of a victim of domestic violence who fled and then got herself into a downward spiral of debt. She said: “I borrowed to pay my debts. I then had to borrow to pay my debts. I then had to borrow to pay my debts.” What she would have greatly enjoyed, if it had been in operation at the time, is a breathing space to halt the downward spiral and allow her to sort out her finances, and indeed her life and the lives of her children.
While we welcome the fact that the Government have committed to a debt respite scheme with the introduction of the new body, those vulnerable people who are stuck in a cycle of problem debt cannot afford to wait. A debt respite scheme gives people who are suffering from debt problems the breathing space to stabilise their financial situation and get on a more stable footing.
One survey showed that 60% of people said that their financial situation had stabilised once all of their creditors agreed to freeze further interest charges and enforcement action. In a world where credit is easier to access than ever before, it is all the more likely that some will fall into problems with debt. Therefore, it is incumbent on the Government to ensure that these people are not left to suffer alone, and that they receive the support and guidance they need to climb back out of the downward spiral of debt.
StepChange, a debt charity, has estimated the wider social costs of current debt problems to be £8.3 billion. Currently, 2.9 million households are at crisis point with severe, unmanageable debt problems. Some 21 million people are struggling with their bills; 18 million people are worried about making their income last until payday; and research by the Money Advice Service found that, for nearly 9 million people, financial difficulty had progressed to more serious and persistent arrears, with bills and debts described as an ever more heavy burden.
Debt has wider social effects. StepChange polled its clients. Seventy-four per cent. said that debt had affected their sleep patterns; 43% said that debt worries left them unable to concentrate at work; 6% said it caused changes to work attendance, such as arriving late or taking more time off; and 2% said that it led to them losing their job. If that evidence was scaled up, it would point to 2.9 million people with severe debt problems, which potentially means nearly 60,000 people out of work as a result of problem debt.
In addition, 57% of indebted parents said debt put their current or most recent relationship under strain. Some 7% said their relationship actually broke up because of debt, and children in households experiencing debt problems were more than twice as likely to say they had been bullied at school.
Michelle Donelan (Chippenham) (Con)
Does the hon. Gentleman agree that rushing a scheme could impact the effectiveness of debt respite? Although I completely agree with everything he said about the problems that can be incurred via debt, it is important to get this crucial element of the Bill correct and to liaise with organisations such as StepChange and the others he mentioned.
Jack Dromey
The hon. Lady is absolutely right. It is important that we get this right at the next stages of the Bill. I do not disagree for one moment. Having said that, let me distinguish between two things. Making substantial changes to the machinery of government to deliver a new function willed by Parliament can take a long time, so the SFGB probably will not be operational until May 2019. I understand that. However, it is not beyond the wit of man or woman to send an unambiguous message now, on the face of the Bill, to those who are responsible for unreasonable pressure being put on people in debt that they are not allowed to do so. Introducing that within six months of the Bill becoming law is eminently achievable.
I stress again that I am the first to recognise that great change sometimes takes time to implement, but to be frank, given the times we are living through, I do not want people who could get respite to spend another six months not getting it. There is no good reason not to give them respite. As I said when we started this morning, we want to strengthen a good Bill, and inject into it a greater sense of urgency as appropriate.
Yvonne Fovargue
I thank the Minister for his letter about breathing space and the other issues, but it gave me another question for him. He mentioned a six-week breathing space period. I have said this many times: please, please talk to debt advisers. Six weeks is really not enough time.
Alex Burghart
I appreciate the point the hon. Lady is about to make, because I heard her make it in the Chamber the other day, but does she acknowledge that the six-week breathing space in Scotland has been effective? That is an interesting example of effective legislation coming out of the Scottish Parliament. Although a longer breathing space may be preferable, six weeks has been shown to be effective up there.
Yvonne Fovargue
It may have been shown to be effective, but it has not been shown to be the right amount of time. The average debt in Scotland takes four months to handle, so six weeks is not the right amount of time. People have regularly asked for extensions to the six weeks.
Alex Burghart
To re-emphasise the point—I promise not to come back on it again—that the six-week breathing space in Scotland has led to a reduction in bankruptcies. It has been successful in that respect. It is wrong to suggest that six weeks is wholly inadequate.
Yvonne Fovargue
The number of bankruptcies is not the issue; they are actually quite rare. A very small proportion of the people who go to debt organisations are made bankrupt. It takes most people with the average amount of consumer debt four to six months to deal with it. Those are not people who would ever have looked at bankruptcy. Bankruptcy is not appropriate for them and would not even be considered.
The average number of consumer debts is rising, and creditors are slow at responding. People often forget to bring in a debt, and so they have to write to all the creditors and redo the statements. Six weeks is just about better than nothing, but I would say, from my long experience of dealing with debts, that four months is probably the minimum. We want to prevent creditors from delaying it until the six weeks is over and people have to go for extensions, which may or may not be granted. Some creditors—I have to be honest—delay it simply so they are not part of the solution.
Although I still think the length of time is inadequate, I welcome the proposal for a breathing space. Another issue with the length of time is that it is very difficult for people who suffer from depression or low-level mental health problems to make regular appointments, and they are often asked to come in all the time to deal with their debt. That needs to be taken into account. I welcome the move, but please do not be wedded to six weeks.
The Economic Secretary to the Treasury (John Glen)
It is a pleasure to serve under your chairmanship, Mr Rosindell, and to participate in this stage of the process. I feel a bit like poacher turned gamekeeper, given that I was a member of the Work and Pensions Committee a few years ago when many of these matters were discussed. I remember having long discussions with my hon. Friend the Member for South Thanet and the hon. Member for Paisley and Renfrewshire South. It is still a matter of great sadness that I have not been to Paisley.
Amendments 34 and 35 would require the Government to implement a breathing space scheme within six months of the Bill’s receiving Royal Assent. It is legitimate to press that point, because everybody on this Committee—this was striking on Second Reading—is concerned and feels a sense of urgency. Before I became a Minister, I spent time working with Members of other parties on the all-party group on hunger and food poverty. I visited South Shields and saw at first hand, in a community that is very different from mine in Salisbury, the distress that debt can cause. Now that I am a Minister and in a position to do something, I am extremely focused on ensuring that this happens.
Members of all parties agree that creating a breathing space scheme will have significant benefits for thousands of the most vulnerable families. However, it will need to be designed properly and implemented in partnership with the debt advice sector and creditors. Creating a scheme will ensure that vulnerable consumers have time to assess their financial situation and begin to deal with their debts. The Government are committed to establishing a scheme as quickly and effectively as possible, including through the passage of the Bill. I am pleased that clauses 7 and 8 provide for the scheme’s introduction, but it is worth acknowledging how complex some of these situations are and how complex the scheme may need to be. It includes both a breathing space and a statutory debt management plan. It involves significant co-operation among creditors, debt advisers and those accessing a breathing space, who in many cases could be leading chaotic lives.
I listened carefully to the hon. Member for Makerfield on Second Reading. I always have great respect for her when she speaks in the House. Today she talked about needing four months, and on Second Reading she talked about needing six months. She cited an example of somebody who may think they have all their debts lined up, and then another materialises later on. Those are the sort of complex situations that we need to come to terms with in the design of the scheme. There are significant questions about how debtors can access the scheme, which debts are included, how flexible the scheme can be, and how it ties in with existing statutory debt solutions.
Mike Amesbury
What does the Minister mean by “as quickly and as effectively as possible”? Would he give us a timeframe?
John Glen
I will come to that point and will be as explicit as I can, giving an indicative timeframe.
The scheme needs to be properly designed with consultation with experts in the debt advice and creditor sectors. That is key to ensuring that it works in practice and properly benefits the lives of the vulnerable people that we all want it to support.
The Government are clear that it will not be possible to conclude that process within six months of Royal Assent, which is what the amendment would require. However, I agree with the hon. Member for Makerfield that we must work quickly to establish the scheme, given the benefits it could bring to indebted individuals. To that extent, the Government have set out a clear timeline for the implementation of breathing space.
My officials are currently working hard to analyse responses to the Government’s call for evidence on the scheme, which closed on 16 January. Following that process, we will consult on a single policy design proposal this summer. In tandem, we will ask the new body for advice on specific aspects of the scheme that it is well placed to advise on, to ensure the scheme is rolled out smoothly and embedded in the practices of the debt advice and creditor sectors. We will seek that advice immediately after the body is established, and it will be very tightly framed to ensure that the process does not delay the scheme’s introduction.
Throughout the period, my officials will be drafting regulations to introduce the scheme and I can confirm that they will be laid as soon as possible in 2019. I feel the frustration of Members on, I suspect, both sides of the Committee. All I can say is that I will be doing everything I can and will be working very closely with the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham, to make sure that we do this as quickly as possible.
Yvonne Fovargue
As one of those people who are feeling the frustration with the 2019 date, why do we have to wait for the establishment of this body when all the debt charities and most of the creditors have been pressing for a breathing space under the old system? Why do we have to wait for the new body to do that?
John Glen
I acknowledge the problem, but having taken the trouble to move three entities into one single body and to make it an authoritative place for people to go to for reliable advice across different elements, it would be appropriate, given how central the debt problem is, for it to have a meaningful contribution to establishing the parameters of the scheme. That seems consistent with the objectives that we have set out and discussed, although I acknowledge the wide—although not complete —consensus.
I will reflect on the point made by my hon. Friend the Member for Brentwood and Ongar about the Scottish experience. It is interesting and instructive that that has iterated quite significantly over time over many years, albeit with a significantly smaller cohort of just 2,000 people. That tells us that lessons have to be learned through experience of work on the ground. I am extremely anxious that we get the best possible scheme designed by the time the process is concluded. This process balances speed with getting the policy right.
Yvonne Fovargue
I would also mention the independent review of the debt advice provision. It concluded very speedily. It was a very short process, and concluded over the Christmas period, in January. Will the recommendations in that have to wait to 2019 to be implemented? Some of them seem extremely sensible.
John Glen
I am grateful to the hon. Lady for making that point. I am aware of that report, which came through on 25 January. I have seen a summary of its recommendations. Officials are looking at it and I will be dealing with it as quickly as I can. I was assisted with typical helpfulness from colleagues on the House of Lords stipulation. The House of Lords was very keen that the new body should have input into the formulation of the scheme and the respite period—that is worthy of consideration.
Jack Dromey
The Minister speaks with obvious sincerity, which is welcome. As has repeatedly come up in our proceedings today, whether our experience is from our constituency or otherwise, we have all seen the price that people pay as they sink ever more deeply into debt. I do not mind admitting that there was one particular case—it is not appropriate to go into the details—where, when my constituent walked out the room, I was in tears because of what had happened to her. Her life was in a downward spiral. There is common ground and obvious sincerity, so the Government should act.
We will not push the amendment to a vote, but I suggest that the Government reflect further and come back on Report with the best possible timescale for implementation. I agree with my hon. Friend the Member for Makerfield: we should not necessarily have to await the formation of the new body. The scheme is a related matter to the function of the body—of that there is no doubt—but we have seen experiences such as the arrangements in Scotland. We also have the collective wisdom of the discussions in the sector and in the House of Lords. Everyone is determined to get it right. We just do not think that the scheme should be introduced a year beyond the Bill coming into effect in three or four months’ time. We would be talking about it being a year and a half before we ultimately see this welcome mechanism introduced.
In not pushing the amendment to a vote at this stage, I ask the Government to reflect further and come back on Report on two things. First, we want clarity on what the Government think is necessary. The Minister has gone a long way towards that. We want clarity about how one goes about arriving at the default scheme. That relates to the mechanisms and who should be engaged. The Minister has referred to that already. Secondly, we want the quickest possible timescale to get the scheme introduced. If the Minister will respond accordingly on Report, I am prepared to withdraw the amendment.
John Glen
I am grateful for the hon. Gentleman indicating that he will withdraw the amendment. I observed closely what he said on clarity on the default scheme and having the quickest mechanism possible to bring it forward. I will reflect with my colleague the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham and provide an update on Report.
Jack Dromey
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 ordered to stand part of the Bill.
Clause 8 ordered to stand part of the Bill.
Clause 9
Guidance and directions from the Secretary of State
Question proposed, That the clause stand part of the Bill.
Guy Opperman
The clause gives the power to give guidance to the single financial guidance body and directions specifically on the way it exercises its functions. I do not believe that it is contentions.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Clause 10
Setting standards
Question proposed, That the clause stand part of the Bill.
Guy Opperman
I will briefly address the matter of the standards, which the clause will require the single financial guidance body to set out, and their enforcement and monitoring. The clause will require the FCA to review those standards and how the body is monitoring and enforcing those standards. We believe that is appropriate in the circumstances, and that we are creating this body with a degree of scrutiny in the right and proper way.
Jack Dromey
We rehearsed this morning the importance of the independence of the body, in terms of its operational role, on the one hand. On the other hand, there is common ground that there should be proper accountability and oversight. We are content with the proposed arrangements.
Question put and agreed to.
Clause 10 accordingly ordered to stand part of the Bill.
Clause 11 ordered to stand part of the Bill.
Clause 12
Financial assistance from the Secretary of State
Jack Dromey
I beg to move amendment 36, in clause 12, page 8, line 10, leave out from “State” to “financial” and insert “must provide”.
This amendment proposes to adjust Clause 12(2) to strengthen the provisions on financial assistance from the Secretary of State related to the operation of the SFGB
Jack Dromey
The amendment proposes to adjust clause 12 to strengthen the provisions on financial assistance from the Secretary of State related to the operation of the single financial guidance body. The intention of the new body is to increase the number of people who receive financial guidance and advice—indeed, the ambition is to greatly increase it. This function is key to increasing financial awareness, education and inclusion across the country.
While the current services provided by the three bodies to be merged are greatly valued and appreciated by those who use them, I think there is common ground that they are not used enough. A primary function of the new body needs to be to increase take-up of the services it offers. For example, take-up of the services offered by Pension Wise is extremely low. The latest figures from HM Revenue and Customs show that some 772,000 people withdrew more than £6.5 billion from their pension pots in 2017. However, only 66,000 appointments were made with Pension Wise in 2016-17—approximately 8.5% of people.
An FCA survey found that one in eight 55 to 64-year-olds who planned to retire in the next two years and who have a defined contribution pension had used the Pension Wise service in a 12-month period. The FCA also found that 25% of pension transfers are withdrawing all, or virtually all, of the pension, with 19% withdrawing virtually all and 6% withdrawing all. What plan do the Government have for those who have withdrawn all their pension and may end up with nothing later in life? They may end up falling into the arms of the taxpayer, and the Government need to prepare for that.
While traffic to Pension Wise’s website is quite high, it is not a sufficient substitute for access to tailored and personal advice. Also, many of those looking for advice may not be completely digitally aware. As Baroness Altmann said in the other place,
“When you introduce pension freedom into a marketplace that has never really been encouraged to engage with pensions and mostly does not understand much about them, obviously you need an expert to help you.”
NEST has said that it is concerned
“that people appear to be making decisions based solely on a read of the Pension Wise website”.
If those looking to transfer their pension are only accessing the Pension Wise website, it means that they will not get the tailored specialist advice that they need at such a time. We must therefore ensure that as many as possible of the 772,000 people who take advantage of their pension freedoms every year receive the guidance that they need to make informed and reasoned decisions about what are usually large sums of money.
For this reason, having set out why this body matters and the scale of likely demand at the next stages, we are surprised that the Government, from some of the things that they have said, appear to expect to make a financial saving from the formation of the new body. The Government’s impact assessment states:
“One structure replacing three will reduce cost of guidance provision, releasing funds through these efficiencies…savings could be used to reduce the levies that industry pay to finance the government’s guidance provision.”
With the greatest respect, that is the last thing that should happen. We do not believe that the Government should use the formation of the new body to make savings and pass them on as reductions in the amount paid by the industry to finance the body. The industry has a responsibility to finance the body adequately through the levy system. The industry and the Government should use the efficiencies created by the new structure, as well as additional money in grants and levies, as appropriate, to drastically increase the services provided. In our view, that is essential to the success of the SFGB if it is to deliver the complete guidance service that people need.
I had a fascinating discussion earlier this week with the chief executive of the Pensions Advisory Service, and she referred to the extraordinary statistics on TPAS’s work and the take-up of it. She made the point, absolutely rightly, that more could be done with existing resources and economies of scale from bringing together the three organisations, but she went on to make the compelling point that so great is the likely demand at the next stages that much more will need to be done to finance the new body. Inescapably, unless it is properly resourced, the new body will not be able to discharge the functions that will fall upon it.
The chief executive gave some examples. She made the point again about not duplicating work done by other areas of Government such as research, and said that, in TPAS’s experience, some things that are key to the services that it provides include, of course, the dashboard and the website, but also face-to-face guidance, which is crucial time and again. She talked about the specialisms necessary to help and inform decisions about options, saying that we should not dumb things down by having people give guidance by just reading off a list. She said that an advertising programme ought to be part of what the Government do, and that it could be done in a number of different ways. She also spoke about what I call the Carillion capacity—the capacity to respond at a time of crisis—as well the promotion of financial public awareness, which we debated earlier.
In conclusion, we hope for a statement from the Government that makes the point that the purpose of the new body is not to save money but to provide the kind of service that all people in all circumstances ought to be able to count on. The industry must play its part, but Government must be unambiguous that the body will be properly and fully resourced.
Guy Opperman
Can I answer the point raised directly? It is absolutely the case that merging three bodies and having one building rather than three will create some degree of potential cost efficiencies, but we are absolutely of the view that those efficiencies should then be directed into frontline services. I can unequivocally give that assurance to the Committee.
The hon. Gentleman referred to the original response to the consultation. It is true that there is an expectation that rationalising the provision will create some operational efficiencies. One would expect that. However, that same response made it very clear that the intention was for any savings to be channelled to frontline delivery of debt advice, and money and pensions guidance. I could not be any clearer on that in any way whatsoever.
I manifestly want to make that point, but I also disagree that there will be an insufficiency of funding, and the reason for that, it seems to me, is threefold. First, this is effectively not taxpayer-funded; it is done by a levy. The levy is a moveable feast, depending upon the need identified by the individual organisation, and it is something that can be assessed and increased on an ongoing basis, to provide the service that, it seems to me, we all wish to ensure is there. Secondly, there is capacity to top up the levy, should the Secretary of State wish to do so, and the financial guidance body on an ongoing basis, and that additional funding can be provided.
The proposed amendment has the bizarre, counter- intuitive effect of removing the discretionary nature of the financial assistance that the Secretary of State can provide. I simply make the point that while we are keen to ensure that this body is run more efficiently, in terms of amalgamating most probably into the High Holborn offices of the Money Advice Service, we certainly believe that this is something the levy will be able to fund, and if it is the case that this expands the provision—the House of Lords seems to have done so and this House may do so as well—then the levy may go up to accommodate the need as has been described. With those assurances, I respectfully ask the hon. Gentleman to withdraw his amendment.
Jack Dromey
The assurance that this is not a cost-saving measure is very welcome, but I stress again: is there an economy of scale? Are there possibilities, for example, of freeing up, by locating in one location, which is very likely to be the case? All of that is absolutely true, but right at the start, as we go down this path, to see a welcome mechanism created, we need to be confident, and to send a message to the people out there that they can be confident, that the new organisation will be effective, dynamic and properly resourced. Therefore, on the basis of the assurances given, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 12 ordered to stand part of the Bill.
Clauses 13 to 20 ordered to stand part of the Bill.
Schedule 3
Minor and consequential amendments relating to Part 1
Amendment made: 19, in schedule 3, page 34, line 22, leave out paragraph 13—(Guy Opperman.)
This amendment removes the amendment to s.137FB of the Financial Services and Markets Act 2000 in the Schedule 3 which was needed in consequence of the Bill, because this is now dealt with in the new clause inserted by NC1.
Schedule 3, as amended, agreed to.
Clauses 21 to 23 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Amanda Milling.)
Trade Bill (Eighth sitting)
Thursday 1st February 2018
(6 years, 9 months ago)
Public Bill CommitteesRead Full debate Trade Bill 2017-19 View all Trade Bill 2017-19 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 1 February 2018 - (1 Feb 2018)
The Committee divided: - Ayes: 8 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 9 - Question accordingly negatived.
The Chair
We resume line-by-line consideration of the Bill. Proceedings must finish by 2 pm. The selection list for the sitting is available in the room.
New Clause 10
HMRC: impact
“No later than 12 months after this Act has come into force, the Secretary of State shall lay a report before Parliament on the impact of the provisions of sections 7 and 8 of this Act on the expenditure and staffing of HMRC.”—(Alan Brown.)
This new clause would require the Secretary of State to lay a report before Parliament on the impact of Part 3 of this Act on the expenditure and staffing of HMRC.
Brought up, and read the First time.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I beg to move, That the clause be read a Second time.
It is a pleasure to serve under your chairmanship, Mr Davies. I will try to assist the Committee with concluding proceedings before 2 pm.
The new clause is all about the Bill’s impact on Her Majesty’s Revenue and Customs. The history so far is that, instead of taking back control, the Brexit process appears to be an interdepartmental bun fight for resources, both cash and human. Right now, there is a Brexit gravy train for consultants, and experts are suddenly back in demand. That was confirmed by the Chancellor, when in the autumn Budget he allocated a further £3 billion over the next two years to Brexit preparations.
Brexit will cause an unprecedented rise in workload for HMRC, whatever customs and tariff arrangements are made. In addition, goods traded with the EU will need to be accounted for as international exports. That is all happening at a time when, as all Members know, the Tory Government are slashing staff and closing HMRC offices across the nations of the UK.
At the same time, HMRC is launching a new customs declaration service, starting in August 2018, with the intention that it will be implemented in full by January 2019. That will replace the customs handling of import and export freight system, which is nearly 25 years old and cannot be easily adapted to new requirements. I think everyone on the Committee will be cynical about that—who has ever heard of a massive IT project that goes live on time and is easily adaptable to suit future processes?
There are serious concerns about whether the system can be put in place properly just a few months before Brexit, given that customs declarations are expected to more than triple once the UK leaves the EU. The National Audit Office has said that the number of customs declarations could increase from 55 million to 255 million if tax and duties must be collected on trade between the UK and EU.
Hannah Bardell (Livingston) (SNP)
My hon. Friend is making an excellent speech. Does he agree that what we have seen across the UK, including from the National Audit Office and the Public Accounts Committee, is huge criticism of the UK Government’s change programme? In my constituency, they want to centralise the Livingston HMRC office to Edinburgh. There will be a devastating impact on communities and the continuity of services will be impacted just a moment before these other plans take place. The Government should rethink the process wholesale.
Alan Brown
It will come as no surprise that I completely agree with my hon. Friend. The closing of HMRC offices is yet another example of the left hand not knowing what the right hand is doing and of a complete lack of strategic thinking.
Jon Thompson, the chief executive of HMRC, has warned that border and tax checks post-Brexit could require an additional 5,000 staff, with new customs checks costing the taxpayer up to £800 million. Given the uncertainty about future customs arrangements, the fact that HMRC is already undertaking a system overhaul, that the number of declarations could increase fourfold and that transitional arrangements are still unknown, it makes complete sense to assess the impact on HMRC, which is responsible for the taxing and checking of trade that will arise from the Bill.
The new clause would allow for greater parliamentary scrutiny and force an internal departmental impact assessment. This week alone has shown that it takes much effort to force the Government’s hand on impact assessments and for them to be up front about what the impact of Brexit will be. That is why I move the new clause.
Bill Esterson (Sefton Central) (Lab)
Welcome back to the Chair, Mr Davies.
May I say how much I agree with the comments of the hon. Member for Kilmarnock and Loudoun? The impact of HMRC closures, which the hon. Member for Livingston mentioned, on communities and on those losing their jobs was well stated. The same is true of my constituency, with the closures in Bootle and Liverpool.
The Minister advised the Committee in an earlier sitting that
“the resources given to HMRC post Brexit to deal with Brexit are already there.”
He also said that
“the power has been assessed and its likely cost looked at. It has been deemed to be relatively inexpensive and overall will not add a cost burden on HMRC.”––[Official Report, Trade Public Bill Committee, 30 January 2018; c. 261.]
I therefore trust that Government Members will support the new clause, as the hon. Member for Kilmarnock and Loudoun said. The Opposition will support it.
Of course, the Minister may well see fit to release the cost analysis he referred to in order to allay not only our concerns but those of the business community about the impact of additional duties on HMRC, given the significant task it faces in preparing for Brexit and in the light of the up to 40% cuts in staffing levels it has faced over recent years. The Minister referred to funding that has been made available to HMRC to support its preparedness to be Brexit ready. Will he tell us what that funding is, or confirm that it is the £250 million that the Government have made available to the cross-departmental and inter-agency border planning group?
Faisal Rashid (Warrington South) (Lab)
Does my hon. Friend share my concern that HMRC is already significantly understaffed? There have been widespread complaints over the last two years about poor customer service and the closure of hundreds of offices across the country.
Bill Esterson
Absolutely. I know that many of my hon. Friend’s constituents in Warrington are affected by those closures. We clearly cannot on the one hand see cutbacks, and on the other hand expect an expansion of HMRC’s work commitments.
The Public Accounts Committee recently published its report, following an inquiry into our Brexit readiness, in respect of the border planning group. It raised concerns that
“HM Treasury’s usual business model is inadequate for allocating Brexit funding to departments who are forced to operate together, at pace, to a hard deadline.”
That seems pretty clear to me. When giving evidence to that Committee, representatives of the relevant bodies on the border planning group explained that funding was released on a case-by-case basis, and demonstrated that much of the funding had yet to be drawn down.
HMRC is still wrangling with HM Treasury over a £7.3 million drawdown to cover upgrades to the CHIEF customs system—I think that is what the hon. Member for Kilmarnock and Loudoun was referring to—in order to level up functionality. HMRC also told the Committee that it was not expecting any shift in the risk profile of goods coming into the UK from the EU, and that it had “no evidence to suggest” that there would be increased trade flows with non-EU countries after Brexit. Will the Minister confirm whether his Department’s assessment matches that of HMRC, and that our standards and regulations will match entirely those of the EU, such that the risk profile of goods in or out remains the same?
HMRC has planned operating resources for no change after we leave the EU, per the evidence it gave to the PAC. Will the Minister confirm that it is Government policy for there to be no change in the regulations? Will he also confirm whether HMRC was right to say that there is “no evidence to suggest” that there will be increased trade flows with non-EU countries after Brexit? He is looking at me with a puzzled look, as he often does.
Bill Esterson
I was not taking it personally. I have seen him with that puzzled look on many occasions, not just when I am speaking—often it is in response to comments from those his own side.
If the Department for International Trade has any purpose, it is surely to absolutely change the volume of trade after Brexit. That, in turn, suggests that HMRC was not right to say that there would be no changes in trade flows. It also suggests that HMRC is significantly under-resourced, which is more to the point, if it is operating on a no-change assumption. HMRC’s new customs declarations service is geared up for a fivefold increase in customs processing once we leave the EU. Surely the Minister accepts that that is likely to put severe strain on HMRC’s capacity and significant strain on its resourcing.
What the Government and HMRC have said appears to be at odds when it comes to standards and regulations, and whether they will match—especially the comment about there being “no evidence” of increased trade flows. [Interruption.] I thought that the hon. Member for Livingston was trying to intervene, but she is not.
Faisal Rashid
I will give my hon. Friend a rest. Does he share my concern that if HMRC is not adequately resourced to collect and disseminate data in relation to our exports, placing any additional burdens on businesses to furnish that information is entirely unhelpful?
Bill Esterson
Absolutely. We made that point earlier in our proceedings and my hon. Friend makes it extremely well.
Coming back to what the hon. Member for Kilmarnock and Loudoun said, HMRC has suggested to the Public Accounts Committee that it will need 3,000 to 5,000 extra staff to perform effectively post-Brexit, but that will depend on the level of risk that Ministers are willing to take. The Public Accounts Committee received written evidence suggesting:
“There are very few International Trade businesses, both importers and exporters, who take Customs compliance seriously”
and that businesses need more support from HMRC to deal with post-Brexit requirements.
If that is the case, clearly a voluntary information disclosure, which the Minister has assured us the Trade Bill makes provision for, would be entirely futile as a means of gathering the information his Department requires. I note, as I did on an earlier occasion, that the Bill does not suggest that it is voluntary, and we are not aware of any business that would ever consider a request from HMRC to be voluntary in nature. The second point—that businesses require more support from HMRC to deal with post-Brexit requirements—is more telling; it further suggests that there will be a significant strain on HMRC’s resources if it is to carry out its existing functions, let alone carry out new ones.
If those new functions are subject to voluntary application, will they also be subject to voluntary roll-out from HMRC? In that case, perhaps there will be nothing to report in 12 months’ time. The additional burdens being placed on civil servants to prepare for Brexit are significant, and with limited resources being made available to support those endeavours, we are right to be concerned about the ongoing operability of HMRC, and indeed other public bodies. That is why we shall support the new clause.
Barry Gardiner (Brent North) (Lab)
Very briefly, I commend the hon. Member for Kilmarnock and Loudoun for tabling the new clause.
We have seen in recent days that the Government are usually reluctant to release any impact assessments or reports of any substance, for fear that they will prejudice negotiations and put the Government in the most awkward position. However, I am sure that the hon. Gentleman will take heart from the fact that it is now usual for the Government, 24 hours after saying that they will not publish a report, to decide that they will do so anyway. I confidently expect the Minister to stand up and say that those on the Government Benches cannot support the new clause—we will support it, as my hon. Friend the Member for Sefton Central said—but the hon. Member for Kilmarnock and Loudoun should not worry or be discouraged, because I have no doubt that within 24 hours, the Government will see sense.
Greg Hands
Welcome back to the Chair, Mr Davies; it is a pleasure to serve under you, as ever.
Clause 7, as we know because we debated it at length on Tuesday, sets out the powers that are needed for the Government to collect data to establish the number and identity of UK businesses exporting goods and services. Clause 8, in turn, sets out the powers that are needed for HMRC to share data with the Department for International Trade and other Departments and organisations in order for those bodies to carry out their public functions in relation to trade. Any trade information collected or shared by the Government under clauses 7 and 8 will come at minimal cost to business and the taxpayer—I will go into a bit more detail in a moment—and will be below the threshold needed for an impact assessment and review.
To deal with some of the points raised in the debate, the hon. Member for Kilmarnock and Loudoun asked about the impact on HMRC. I can confirm that HMRC will not require additional staff or resources for this function as a result of the data provision in the Trade Bill. From what the hon. Members for Sefton Central and for Brent North said, it sounded as if they are going to vote for the new clause. The different Opposition parties seem to be attacking the issue from different angles. Although the hon. Member for Kilmarnock and Loudoun said that too much resource is going to some places—I think that he called it the “Brexit gravy train”—the hon. Member for Sefton Central seemed to say that resources were too limited. However, I think that they are both coalescing around voting for the new clause.
Alan Brown
To clarify, I was talking about the Brexit process as a whole. It is certainly a gravy train for consultants, because the Government do not have the expertise in house.
Greg Hands
Well, I guess we will leave it at that. I accept the hon. Gentleman’s intervention to clarify precisely what he meant by the “Brexit gravy train”, but let us look at the truth.
The truth is that collecting the data will involve minimal cost to Government and business. The cost will certainly be below the level at which an impact assessment must be published, which is £1 million. I do not know what the cost of the hon. Gentleman’s assessment might be, by contrast, but the cost of the provision in the Bill will be less than £1 million. The Regulatory Policy Committee confirmed to my Department during the course of our analysis that no impact assessment was therefore needed, due to the low costs associated with the provision.
Matt Western (Warwick and Leamington) (Lab)
Does the Minister accept the interpretation that businesses will need additional support and that that is what is being proposed? HMRC will need additional capacity to help small businesses. Given that the Government and the Secretary of State are determined that businesses will look for new markets to diversify, those businesses will have a lot to do, so we need to give them as much assistance as possible.
Greg Hands
I agree, which is why we have made additional resources available for HMRC. We recognise that it will require additional staff, and that is being discussed. However, that does not relate to this Bill and this power. That is the most important thing to realise. The hon. Gentleman’s points about the generic nature of HMRC are well made, but my point is that this power will be introduced at minimal cost and will not affect the overall equation. The point that he raised about additional resources being needed for HMRC overall is not in dispute.
Matt Western
The Minister is being most generous. My point was that the report that we are requesting would help us to better understand the implications for HMRC.
Greg Hands
I do not think that that is necessary. The work that has been done shows that the cost would be less than £1 million. The new clause is all about trying to work out the cost of this particular measure, not about the wider implications for HMRC.
The hon. Member for Sefton Central asked whether this is a futile exercise. I say to him that we will be able to target support directly and ensure that UK business is at the forefront of post-Brexit opportunities, thanks to the data that this provision may well realise.
Finally, I remind the Committee that the Government currently do not collect any export data at all from about 4 million UK businesses. Our analysis elsewhere suggests that about 300,000 businesses in the UK could and should export but do not. We need this limited data collection and sharing power to be able to find and help them. I therefore urge the hon. Member for Kilmarnock and Loudoun to withdraw the new clause.
Alan Brown
I listened to what the Minister said. Clearly, if we stick to the existing trade agreements, nothing will change and everything will be much the same. Although there may be a logic to that, I will press the new clause to a vote because it would allow the Government to print an impact assessment that shows that nothing will change, that everything will be okay and that there will be no impact on HMRC. I would have thought that the Government would be happy to do that, and that it would not take too long.
Question put, That the clause be read a Second time.
Barry Gardiner
I beg to move, That the clause be read a Second time.
I made brief reference to this new clause during our discussion of new clause 3, but let me set out in a little more detail why we believe it is required. We have heard from the Minister about the Government’s intention to engage with the devolved authorities in respect of matters that may fall within devolved competences. However, if the Government are to demonstrate that they are serious in this regard, they must ensure that such a consultation framework is established in the Bill.
Modern trade agreements are increasingly broad and comprehensive, and extend into all aspects of governance, public policy and commerce. Inevitably and invariably, trade agreements will impact on matters that have long been, and rightly are, considered to be matters of devolved competence, albeit that our obligations to date have been determined at European level. The Government need to give clarity in the Bill about when an obligation ceases to be a trade matter that is within the exclusive competence of the UK and becomes a matter that is within the competence of the respective devolved Administrations.
We have heard that this matter is not unique to the United Kingdom. It is an emerging issue around the world, so we must consider it from an international perspective and ask ourselves not just what satisfies immediate domestic policy objectives but what we would demand from would-be trade partners who face similar issues and, perhaps more importantly, what they would expect from us.
I again refer the Committee to Nick Ashton-Hart’s evidence:
“the political economy demands that you have the backing, as a negotiator, at home when you are sitting across the table from your counterparties and that they know that you have that. They can watch your processes of consent and agreement and evaluate where your weaknesses are—where there are buttons they can push, but also where you are likely to need support.”—[Official Report, Trade Public Bill Committee, 23 January 2018; c. 10, Q12.]
We would be nothing short of foolish to allow our trade negotiators to commence talks without first having consulted and engaged with our constituent interests, which absolutely must include the devolved authorities. Trade negotiations can be brutal. The Americans have no qualms in telling us that they refer to counterparties to such talks not as “partners” but as “adversaries”. Any weakness in position or failure to come prepared can be extremely costly and damaging—especially so if complications are presented later when the Government seek to ensure implementation and compliance with the obligations stemming from the concluded trade agreement. A whole-of-Government approach is required, not only to avoid later difficulties but to ensure the democratic will is represented fully in the determination of our international outlook and the relationships we will form with other states.
Other countries have sought to create a consultation framework to mitigate any such complications at the earliest possible stage of the process. The US has its Trade Promotion Authority, born of the fast-track scheme. There are problems and complications with it, but it is there. The Government of Canada have given a much greater role to the country’s provinces in setting mandates and consulting in negotiations, as a result of the EU’s refusal even to begin trade talks unless it had confidence that the provincial governments would ultimately agree to implementation. Will the Minister tell us whether any of the trade working groups and dialogues that the Government have established with would-be trade partners have yet covered that issue, or whether the issue has been raised in the provisional soundings taken of the third countries with which we seek a trade agreement that corresponds with one they might have with the EU?
It is rumoured that the Government’s preference is to mirror as much as possible the Australian trade policy model. In Australia, no such formal consultation exists with state governments. They have the same rights as any other lobbyist: they can submit responses to open consultation in advance of the conclusion of trade agreements. Of course, that approach presents entirely different problems, and it would be foolhardy to believe otherwise. We have seen the Queensland state government implement policy that ignores obligations under Australia’s trade agreement with New Zealand in order to deliver on Queensland’s public interest and economic performance duties.
Will the Minister tell us what discussions his Department has had with each of those countries in this respect? Have concerns been raised about consultation with our devolved authorities? Conversely, have we asked about theirs? Perhaps the Government have given assurances that they intend not to consult with the devolved authorities and will use the powers in the Bill to override devolved competence. Perhaps it is a case of “put up and shut up”.
Faisal Rashid
On that point, is my hon. Friend aware that the Institute for Government found that in other countries, such as Canada, buy-in from provinces is crucial to make trade agreements such as the comprehensive economic and trade agreement work? The institute states that, otherwise, it is “political hell”. Does he agree that, similarly, the political buy-in of the devolved Administrations in the UK is necessary to implement trade agreements, and that early consultation and involvement is necessary to avoid political hell?
Barry Gardiner
Absolutely. My hon. Friend uses language that I would not wish to use in the Committee, but it is certainly a political mess. I think we can see that other countries have taken their responsibilities to their trading partners seriously, as well as their responsibilities to their constituent states, provinces and members. That is what we are seeking to do through the new clause.
Matt Western
It is a privilege to serve under your chairmanship, Mr Davies. I was particularly struck by what Elspeth Macdonald, the deputy chief executive of Food Standards Scotland, said. Perhaps my hon. Friend agrees with her. In giving evidence, she said:
“The principal issue with the Bill that causes us great difficulties is the way in which it constrains the ability of the Scottish Parliament and Scottish Ministers, and consequently our ability, to act and regulate in ways that are considered appropriate for businesses and the public in Scotland.”—[Official Report, Trade Public Bill Committee, 25 January 2018; c. 95, Q172.]
Barry Gardiner
I thank my hon. Friend, because that evidence is absolutely apposite to the new clause. All we are seeking to do is assist the Government in any future negotiations they may have as they seek to roll over agreements to corresponding agreements. We want to make it easier for them to persuade a trading partner that there will be no problems in implementing the agreements.
The Joint Ministerial Committee has already been the vehicle for similar engagement in respect of EU negotiations on the withdrawal deal, by way of sub-committee, establishing a clear precedent for a similar sub-committee in respect of trade agreements. That would be extremely helpful. It is therefore entirely appropriate that the Bill ensures that a similar forum is legislated for to ensure that the democratic will of the entire population of the country is represented fully throughout the trade agreement process and without threatening the devolved competencies.
I take this opportunity to remind the Government that they must not allow the Bill to afford Ministers of the Crown powers that would undermine the competence of the devolved authorities and the devolution settlements. While instituting a formal consultation framework through the JMC would go some way to protecting the rights of the devolved Administrations, it would not and cannot be considered as addressing the other concerns presented by the Bill, which I have previously adverted to in our proceedings. If the Government fail to address those concerns, the Labour party will return with further amendments.
Anna McMorrin (Cardiff North) (Lab)
The Trade Bill fails to set out a suitable framework for future trade agreements. The arrangements included in the Bill are insufficient and leave a lot to be desired on several important issues that I and many MPs raised in the debates on the European Union (Withdrawal) Bill. Just like that Bill, the Trade Bill puts restrictions on the Executive capacity of the Scottish and Welsh Governments, while placing no restrictions on the capacity of the UK Government. Essentially, under the Bill, Ministers of the UK Government will be able to legislate in devolved areas.
Wales is an outward-facing, globally trading nation and remains open for business.
Greg Hands
Could the hon. Lady outline to the Committee why she did not vote last week for the Welsh Government’s sponsored amendment in this area?
Anna McMorrin
I thank the Minister for asking that question. As he will recall, I spoke widely in support of that amendment. We will discuss that at a later stage.
In Wales, our economy offers great opportunities for both trade and investment. The Bill must not put that at risk. As I just mentioned, I spoke last week on the principles of devolution. Today, I want to reiterate that the Bill seriously lacks consideration of the principle of devolution and the appropriate frameworks to make it work. It is unacceptable that the Government expect the Welsh and Scottish Administrations to be content with handing over power on devolved areas to Whitehall.
The Bill in its current state hands over an unnecessary amount of power to the Government of the day, whoever they may be, and in no way does it safeguard the principles of devolution that people in Wales and Scotland have fought so hard for. I want to stress, once again, that my reservations with the Bill’s lack of consideration for devolution have nothing to do with extending the powers of devolution.
Faisal Rashid
Mr Southworth of the International Chamber of Commerce said that the devolved Administrations have cause for concern due to
“vulnerabilities on a whole range on different industries.”—[Official Report, Trade Public Bill Committee, 23 January 2018; c. 35, Q80.]
Does my hon. Friend therefore agree that there is greater need for consultation with the devolved Administrations?
Anna McMorrin
That is exactly what I am saying. I absolutely agree that we need that consultation and agreement with the devolved Administrations, in order that we do not jeopardise future trade agreements on an international level.
Our concern is that devolution is being rolled back because UK Ministers would be allowed to use Henry VIII powers to reach across into legislation within devolved competence and make changes. The Joint Ministerial Committee was created with the purpose of giving the devolved Administrations the chance to give their input. So far, it has been used sparingly: there have been few meaningful discussions, it has met rarely and little has come out of it. That needs to change.
Good governance requires co-operation between the UK Government and the devolved Administrations, as my hon. Friend the Member for Warrington South just set out. That was also set out in the devolution settlements. The Bill as written is unacceptable. It must contain appropriate frameworks that respect the devolution settlement. We will not agree to the rolling back of devolution and to seriously risking damaging our future trading agreements. Unfortunately, that is what the Government seem to want to do.
Alan Brown
I welcome the spirit of the new clause, but from my perspective, we should have something stronger than just consultation; we would be looking for the consent of the devolved Administrations. That is in line with some of our amendments that have been defeated. I certainly welcome the hon. Member for Brent North’s saying that the official Opposition will revisit some of the amendments on Report. We will certainly look to co-operate on this matter.
Barry Gardiner
I hope that that will all be unnecessary, because I trust that the Government will see the error of their ways and introduce those amendments themselves. If they do not, I reiterate my assurance to the hon. Gentleman that the Opposition will.
Alan Brown
Far be it from me to suggest that the hon. Gentleman may be a tad naive, but he is certainly optimistic if he thinks the Government have seen the light on this. I have made this point several times, but the devolved Administrations have said that they will withhold legislative consent motions if the Bill is not amended, so realistically, the Government will need to consider further amendments.
Greg Hands
The Government have made it clear that we seek to maintain the effects of the UK’s existing trade agreements. We make that commitment in relation to all parts of the United Kingdom, which means that we do not intend Scotland, Wales, Northern Ireland or, indeed, England to be disproportionately impacted by the transitioning of those agreements. Given that we have committed to seeking continuity in the effects of existing agreements, the impact of the transition should be neutral on all parts of the UK.
Hannah Bardell
While I take what the right hon. Gentleman says with the greatest of respect—I want to believe him—can he not see that, from the perspective of those of us from the devolved nations, the written and oral evidence given to the Committee paints a very different picture from that which he paints here today? Our concerns are legitimate, yet we have nothing. The Government have supported none of our amendments, despite promises made on the Floor of the House.
Greg Hands
I will come on to outline the engagement that we have had with the devolved Administrations and to talk about what that engagement might look like in the future. I stress to the hon. Lady that the Bill is about transitioning agreements that, in most cases, are already in place.
Matt Western
Gordon MacIntyre-Kemp, the chief executive of Business for Scotland, put it very simply. He said that the Bill
“puts the power to act almost unilaterally in the hands of a single Minister… At worst, it looks like a deliberate attempt to delay the transfer of EU-held powers…until after the UK Government has had free rein to agree deals that you could say run roughshod over the devolution agreements”.––[Official Report, Trade Public Bill Committee, 25 January 2018; c. 99, Q184.]
Greg Hands
Again, if I recall correctly, the evidence was almost all about future trade agreements that the UK may wish to enter into. To reiterate, the Bill talks about our existing trading arrangements.
Matt Western
Does the Minister not accept that they will technically be new agreements?
Greg Hands
As I have laid out frequently, the substance of the agreements will be the same. That is what we are looking to transition; that is the continuity factor of these agreements. There will of course be the opportunity in the future to come to new trade agreements with the same countries, but we are talking about the continuity of our existing trading arrangements—the 40-plus agreements with 70-plus nations.
On consultation with the devolved Administrations, the Department for International Trade ensures that its Ministers, as well as its directors and other senior officials, visit the devolved Administrations regularly and continually looks for further opportunities to engage with a range of stakeholders across the UK. Indeed, the hon. Member for Livingston knows that, because on a previous visit to Edinburgh I actually went to her constituency. The Secretary of State has engaged with the Scottish and Welsh Governments and with the Northern Ireland Executive.
Hannah Bardell
We were very glad to welcome the Minister to Livingston and I have been glad to engage with him on issues in my constituency. However, does he not recognise that engagement and consultation are very different from consent? The importance of consent and the devolution settlement being rowed back on are very different issues.
Greg Hands
I do not mean for us to keep throwing questions at each other, but I again stress that the Bill is about the existing trading arrangements of the United Kingdom as a whole. We will engage extensively with the devolved Administrations about what the future arrangements might be. We are being clear that we will continue to engage with the devolved Administrations as we transition these agreements as well. The devolved Administrations will, of course, have a role in implementing transitioned trade agreements in devolved areas, including, where appropriate, by amending retained EU law.
We have committed to consulting the devolved Administrations on the most appropriate way to implement the transitioned trade agreements and the agreement on government procurement in areas of retained direct EU law that have effect in otherwise devolved areas. We will welcome their input on the best way to do that so that the agreements are implemented effectively for the whole of the UK. We will also work closely with the devolved Administrations on the role they will play in shaping the UK’s future trade negotiations. It is right that we should have the opportunity to take these discussions forward and to engage the devolved Administrations to understand their views.
Alan Brown
I welcome the fact that the Minister is outlining the engagement he has had with the devolved Administrations, but can he confirm what the views of the devolved Administrations are on the provisions of the Bill?
Greg Hands
I do not think the hon. Gentleman needs me to confirm that. He has said himself what the position of the devolved Administrations is, including on the legislative consent motion. We have listened to them and will continue to listen to them very closely. He has put his point of view on the record as to the perspective of the Scottish Government.
I will come back to some of the points raised in the debate. The hon. Member for Brent North wanted to put devolved Administration engagement on the face of the Bill. I stress again that these agreements are about continuity, not future trade agreements. We have been clear in the White Paper that we will engage. We therefore do not require statutory engagement structures in the Bill.
Barry Gardiner
One of the trade agreements that we have repeatedly come back to, which makes it quite clear that this is not the simple roll-over of the existing trading arrangements that the Minister is talking about, is the treaty we currently have with Norway. Fisheries are an important part of Norway’s economy. It is almost inconceivable that in the roll-over of that agreement, there will not need to be some provision in that regard. Surely the Minister must address those points, because they are pertinent to the Bill and to the Government’s capacity to do what they seek to do, which in large measure the Opposition believe to be right and proper: to try to make the transition as seamless as possible. However, there will be areas where it is not, and Norway is one of them. We must address that and not simply gloss over it by saying, “Well, we’ll have to deal with that once we know what we’re doing with the EU final deal.”
Greg Hands
Of course we value our trade relations with Norway very strongly and closely. By geography alone, let alone the amount of oil and gas coming from Norway, we have incredibly strong trade relations. For the record, I met the Norwegian Trade Minister last autumn. I am perhaps going to sound like déjà vu all over again, but I repeat that the future trading relations with Norway will be very dependent on the future UK negotiations with the European Union. That is not a matter for this Bill; it is a matter that is being scrutinised on frequent occasions in this House and elsewhere.
The hon. Member for Brent North said that we need an engagement structure for future trade agreements. The Government agree that we need to engage the devolved Administrations in our future trade agreements for the benefit of the whole of the UK, as was made clear in the White Paper. We are talking to the devolved Administrations about what that will look like. The new clause would pre-decide that discussion.
The hon. Gentleman talked about international examples for consultation models with the devolved Administrations and gave us a quite interesting exposition of the position in Australia and other parts of the world. It was fascinating stuff, but our constitutional arrangement is very different from any of the international examples raised. As was made clear in our White Paper, we therefore need to design our own engagement structures, in consultation, that work for the benefit of the whole of the UK.
The hon. Members for Warwick and Leamington and for Cardiff North claimed that we were putting a constraint on the devolved legislatures. To be clear, the Bill will allow the devolved Administrations to make regulations that they consider appropriate for the purpose of implementing trade agreements in devolved areas, including in areas of retained EU law.
The hon. Member for Cardiff North said that devolution is being undermined. That is not at all the case. The Bill introduces new powers for the devolved Administrations to work collaboratively with the UK Government to secure continuity in our current trading relationships. Under the Bill, the devolved Administrations will be able to make every decision after exit that they can make before exit. We therefore do not need to commit to such a review or role for the Joint Ministerial Committee in legislation.
The official Opposition’s tabling at a late stage of this emergency extra new clause, which emerged earlier this week, seems to be more about Labour members of the Committee messing it up last week by controversially not supporting the Welsh Labour Government’s amendments, when everyone expected them to do so. When the hon. Member for Warrington South talked about a “political hell”, he might have been referring to the political hell we see all day, every day in the official Opposition in this House and elsewhere. On that basis, I urge the hon. Member for Brent North not to press the new clause.
Barry Gardiner
Had I been disposed not to press the new clause, the Minister’s final remarks would have made me all the more determined to do so. However, I was not so disposed, and we will press the new clause to a vote.
Question put, That the clause be read a Second time.
Barry Gardiner
I beg to move, That the clause be read a Second time.
This is the last new clause we will deal with in Committee, and it is our last attempt in Committee to introduce a high-level principle into the Bill. We have tried to establish the legal framework for an ethical trading policy that respects human rights, labour standards, environmental integrity and the needs of countries and communities poorer than our own. The Government turned down every single amendment and new clause that tried to enshrine those principles in law. None the less, we will have one final push. We are trying to establish the principle of animal welfare and sentience at the heart of our trade policy. Perhaps the Government will agree to stand up for those species that share our planet with us, but that have no representatives of their own to speak for them.
My hon. Friend the Member for Bradford South spoke persuasively—though not persuasively enough to get Government Members to agree—about the importance of maintaining high food standards in all our trade agreements. She referred to the connection between high food standards and the call for animal welfare, whether in respect of the general requirement for food hygiene or the specific target set by the Veterinary Medicines Directorate for a reduction of antibiotic use in agriculture. We also argued for animal welfare to be included in any impact assessment of the UK’s trade agreements, whether it is carried out ex ante or ex post. That call stands, and we will continue to press the point until we are satisfied.
I am pleased that the Minister saw fit to agree with us about the importance of this issue. I quote from the Hansard report of our sitting a couple of days ago:
“The Government have always been clear that we will maintain our very high standards on food and animal welfare, and for protection in that space. There will be no race to the bottom. Nothing in free trade agreements precludes a Government from regulating in the domestic environment. I hope that that is enough reassurance for the hon. Gentleman.”––[Official Report, Trade Public Bill Committee, 30 January 2018; c. 196.]
Greg Hands
The hon. Gentleman was a Minister in the Department for Environment, Food and Rural Affairs under Tony Blair. Can he point to specific occasions when he raised concerns about animal sentience with respect to trade agreements that were going through at that time?
Barry Gardiner
That is one on which I will probably write to the right hon. Gentleman. I am convinced that there were a number of occasions when I did exactly that. I will try to dig them out from my records and send them to him. I am delighted that he did not stand up to repudiate the remarks recorded in Hansard, as he did the other day. Given that, I take it that he stands by them.
Sadly, the Minister’s reassurance on this matter is not enough. The right of parties to regulate in favour of animal life and animal health is regularly mentioned in the text of international trade agreements, yet that same right is typically circumscribed by requirements that any measures to protect animal health must be undertaken while facilitating trade. Governments may take any measure they like to protect animal health so long as it does not create an “unjustified barrier to trade”. It is left to a tribunal of trade lawyers, who examine the justification of the measure in relation to international trade law, to decide whether it is justified or unjustified.
There is sometimes a clause in the general exceptions chapter of a free trade agreement that affirms that a state may introduce whatever measures are necessary to protect animal life or health, but the meaning of “necessary” is left up to another tribunal of trade lawyers to decide. They may rule that an alternative measure is available that would be less burdensome on trade and therefore conclude, even if the alternative would be less effective, that the measure that was taken does not qualify as necessary after all.
This is familiar territory to anyone who has looked into the history of international trade disputes, both before and since the founding of the World Trade Organisation. There is an entire sub-discipline of trade lawyers and academics who have written about what they call the “necessity test” that is employed to ascertain whether a measure is necessary and thus allowed under international trade law, or unnecessary and thus prohibited.
Let me take as a specific example a free trade agreement that was mentioned in written evidence by the RSPCA, because it contains a fleeting reference to animal welfare. The Government are keen to replace the EU-Korea free trade agreement with a new UK-Korea agreement, which would be implemented using the powers afforded to the Government by the Bill. The chapter of the EU-Korea agreement devoted to sanitary and phytosanitary measures includes specific clauses about enhanced co-operation between EU and Korean authorities on animal welfare issues—anyone who wishes to look them up will find them in article 5.9—yet those fine sentiments are thoroughly undermined by the clause at the outset of the chapter, which states that the objective of the chapter as a whole is
“to minimise the…effects of sanitary and phytosanitary measures on trade”.
The health and welfare of animals—and of humans, for that matter—is already subordinated to commercial interests. That is precisely the problem.
Mrs Kemi Badenoch (Saffron Walden) (Con)
I will be brief. We all believe in maintaining the very highest standards in animal welfare and food production; I do not think that is in dispute. The Government have done quite a lot in the last few months—we know about the ban on microbeads, to protect marine wildlife—but this is one of the areas in which we are able to go further and do better than we ever could while we were in the EU.
There is much to agree with in the statements from the hon. Member for Brent North; I, too, am against the export of live animals. However, we must remember the Bill’s purpose: ensuring the smooth roll-over of existing trade agreements. It is not about future trade agreements, so I do not believe that the Bill is the appropriate place for the new clause. In fact, if I were being cynical, I would say that this looks like a mischievous attempt to reignite the debate on new clause 30 that was proposed to the European Union (Withdrawal) Bill, in order to generate press releases.
Our job is to make good law. The draft Animal Welfare (Sentencing and Recognition of Sentience) Bill was published on 12 December. It sets out to do exactly what the new clause would do, but even better. If Labour Members were serious about raising animal welfare standards, rather than virtue signalling, they would focus on the draft Bill. We should not tack on to the Trade Bill a new clause that is outside its scope.
As it happens, the Environment, Food and Rural Affairs Committee yesterday released its report on the draft Bill. It made several recommendations for improving it, including bringing forward a new and completely separate Bill on animal sentience. The Government have to reflect on that report and its recommendations, and it would be inappropriate for us to pre-empt the Select Committee’s report and the Government’s reaction.
Alan Brown
As the hon. Lady said, nobody can argue against the new clause’s intentions: maintaining animal welfare and food production standards when entering into international trade agreements. I am sure that the Minister will say that the new clause is not needed, because existing agreements will roll over and they comply with all the legislation, but as we heard from witnesses, in the roll-over process everything is up for grabs, so there is an argument for protecting animal welfare and food production standards in the Bill, and I understand why the proposal has been made.
One concern that I have about the new clause is that it refers to UK law and does not recognise that law is devolved; animal sentience should also be a devolved matter once we withdraw from the EU. From my perspective, the new clause does not take cognisance of the Scottish Government and the devolved Administrations, so that causes me concern about how it is written.
The hon. Member for Saffron Walden said that the Tory Government are bringing in good law, but then admitted that the Environment, Food and Rural Affairs Committee has made recommendations against the draft Animal Welfare (Sentencing and Recognition of Sentience) Bill. As a member of that Committee, I can say that witnesses have basically said that the current proposal as regards recognising animal sentience is not good law and not fit for purpose, and the Committee is recommending that the Government think again on that Bill in terms of sentience, so they are a long way from making good law.
I support the principles of the new clause, but as stated, I have concerns about it not recognising the devolved Administrations.
Faisal Rashid
I commend my hon. Friend the Member for Brent North for his excellent opening remarks in support of a very important new clause. I hope that the Government will agree with me and my hon. Friends that it is vital that we protect animal welfare and food production standards when building our trade policy. We must prioritise a sustainable, long-term future for our farming, fishing and food industries. We cannot allow Brexit to be used as an excuse to reduce food standards or to allow cheap and inferior produce to flood the UK market. We have a moral duty to protect animals and their welfare, and that should go hand in hand with the protections that we must afford to our farming and production industry and to British consumers.
Anna McMorrin
Does my hon. Friend agree that this is not a partisan issue, but a question of the kind of society we want to live in?
Faisal Rashid
Absolutely. That is a crucial point, which I hope Government Members will take into account.
Mr Mark Prisk (Hertford and Stortford) (Con)
Is it not actually the case that good law is not made on the rush? The very nature of the new clause that we are debating is on the rush, and that is why we should reject it.
Alan Brown
I completely agree with the previous intervention: good law is not made in a rush. But that is exactly what the Government did in reaction to voting down amendments to the European Union (Withdrawal) Bill: they rushed out legislation that is really poor.
Faisal Rashid
I thank the hon. Gentleman for that intervention. I ask the hon. Member for Hertford and Stortford how the new clause would prevent the easy roll-over of EU trade agreements. This issue is controversial, but I will move on.
There are real concerns that if we produce trade agreements that allow the UK market to be flooded with cheap and poor-quality food, we will be forcing our farming and food production industries to make an impossible decision. Either they face becoming uncompetitive and being undercut by cheap and poor-quality imports, thus risking the jobs of the 3.9 million people employed in the industry, or they are pressured to cut corners and their own standards, putting at risk the welfare of the animals and potentially of consumers.
Many health risks are associated with poor-quality produce, and often such produce is consumed without knowledge, especially given the mass catering in schools, hospitals and takeaways. British people deserve to feel confident that they will be eating high-quality produce, wherever it has come from, following our departure from the European Union.
Nick Dearden of Global Justice Now told the Committee that
“we probably all now know more than we would like about chlorinated chickens”––[Official Report, Trade Public Bill Committee, 23 January 2018; c. 6, Q3.]
That is true, but it is important that we are aware of the potential negative impacts of failing to build a strong and sustainable future trade policy. Have the Government considered the negative impact on animals, on the farming and production industries, and on consumers of not supporting this new clause?
UK farmers have made great strides in recent years to improve animal welfare, and we are proud to have some of the highest animal welfare and food standards in the world. We have heard many times that our departure from the European Union is an opportunity for the UK to return to being a world leader in international trade. That prompts the question of why the Government are not committed to legislating for animal welfare protections to ensure that the rug is not pulled out from under the food and farming markets and to help the British farming industry to continue to lead the way in animal welfare and international trade.
There has already been much controversy surrounding the Government’s approach to animal welfare and sentience. It is no secret that the Prime Minister has faced difficulties in getting the Cabinet to agree on much in recent weeks, but she claims that it remains unified. The Secretary of State for Environment, Food and Rural Affairs said that there will be
“no diminution in our environmental or animal welfare standards in pursuit of trade deals.”
In that case, I am hopeful that we can expect Government support for this new clause, which would legislate for the protection of animal welfare standards—or is the Cabinet no longer unified on that position?
Matt Western
I rise to speak to new clause 12, and I thank my hon. Friend the Member for Brent North for proposing it. It would ensure that we provide important safeguards for not just livestock but our farming communities and our consumers by specifying animal welfare and sentience in the legislation.
In November, as we have heard, the Secretary of State for Environment, Food and Rural Affairs promised to make “any necessary changes” to UK law to ensure that it recognises that animals can feel pain. That came after proposals to accept that they are sentient beings were voted down. Now the Government are apparently looking at making UK law that specifically recognises animal sentience. I remind the Committee that the first sentence of the Bill says that it will
“Make provision about the implementation of international trade agreements”.
That is why—when we have spoken at previous sittings about ensuring that it is a comprehensive Trade Bill—we have said that this issue should be included.
According to the written evidence from the RSPCA, the EU has 19 farm animal welfare laws that the UK has implemented, giving a high degree of consistency on standards and a level playing field for trade in farm products. That will not be the case when the UK starts to negotiate FTAs with other countries. Thankfully, the UK has some of the highest farm animal welfare standards in the world, although it is well documented that Canadian and American farm welfare standards tend to be based on corporate standards rather than federal law, as we heard in the International Trade Committee yesterday.
Likewise, an FTA may include sectoral chapters on cosmetics, pharmaceuticals, chemicals and pesticides. The UK needs to be careful that it does not compromise any existing UK laws, such as cosmetics regulation, or risk that those laws are as sensitive to change as the farm animal ones that I have mentioned.
Greg Hands
The hon. Gentleman is making a good speech. One of the points he raises surely gets to the nub of the matter. When he says that we should not do anything contrary to domestic law in trade agreements, he rather makes the point for me that the Government and the country will have a right to regulate most of these matters domestically, which is the important thing. We can introduce protections domestically in our laws that would not be subject to the trade agreement.
Matt Western
I thank the Minister for his intervention. There is the law that goes through this place, and there is the role and power of the Minister, and very much at the nub of this debate over the Bill is the control the Minister has, as opposed to the controls we and other bodies will have, in influencing any trade agreements.
Anna McMorrin
It is imperative that animal welfare rights are protected after we leave the EU and that animals keep their status as sentient beings under UK law, which is why this new clause is absolutely vital.
I wrote to the Secretary of State for Environment, Food and Rural Affairs after the defeat in the House of Commons on this very issue. That letter was signed by over 100 MPs. It is disappointing that the Trade Bill neglected to make it clear that the UK will not enter any trade deals in the future that will require us to water down animal welfare standards. It is clear from the reaction of the public, and from the campaigns and letters that I am sure all MPs have received from constituents and organisations, that people have no interest in seeing chlorinated chicken in our supermarkets, are not happy to see live animal exports and are not willing to compromise in any way on animal rights to please the likes of the current US President or any other leader of a country that does not share the same concerns and views as us on animal welfare and animal sentience. Any trade negotiation or deal will impact on UK animal welfare standards.
Under article 13 of the Lisbon treaty, the UK recognises animals as sentient beings—that they are not just goods but have the capacity to feel pain, hunger, heat and cold—and that the Government must pay full regard to their welfare requirements. Recognising animals as sentient beings is accepted across animal welfare science and means that we acknowledge that animals are capable of feelings such as pain and are deserving of our respect. It is appalling that this Government could not vote in favour of maintaining—let alone progressing—existing animal welfare standards during the European Union (Withdrawal) Bill.
Greg Hands
I am not accusing the hon. Lady of spreading misinformation, of course, but a lot of the reactions to that vote spread a lot of misinformation. Various otherwise reputable news outlets such as The Independent and Evening Standard had to retract and withdraw and to print clarifications and apologies for putting out misinformation about the Government’s view on animal sentience. The Government strongly believe in animal sentience, and the European Union (Withdrawal) Bill vote was not contrary to that.
Anna McMorrin
I thank the Minister for his intervention, but the fact remains that this Government did not vote for that amendment, so are we to keep that trust that this UK Government will introduce those welfare standards post-Brexit? I for one do not find that trust. I struggle to understand this decision by the Government, which is a massive blow for the welfare of wildlife, pets and livestock alike.
Mrs Badenoch
There is a draft Bill on sentencing and animal sentience coming in. Why does the hon. Lady feel that there will be no commitments in that Bill, given what it is called? What are her concerns about that Bill?
Anna McMorrin
I thank the hon. Lady for her intervention, but does she not realise that this Bill is about the rules and regulations during trade? That is why we need the new clause in the Bill.
Only domestic animals are covered by the Animal Welfare Act 2006; animals in the wild and laboratory animals are expressly exempt. As we seek new deals in our negotiations with countries that perhaps have much lower animal welfare standards, we are particularly concerned that there will be the temptation to lower our standards. The Bill needs strengthening to better protect UK animal welfare standards. I hope the Government will see some sense and support the new clause to ensure that we do not water down those standards.
Greg Hands
The Government have made clear that we intend not only to retain our existing standards of animal welfare once we have left the European Union but, indeed, to enhance them. We are proud to have some of the highest animal welfare standards anywhere in the world, and they will not be watered down when we leave the EU.
Our food is held in high repute thanks to our animal welfare standards. The withdrawal Bill will transfer on to the UK statute book all EU animal welfare standards— it is very important to understand that in the context of the withdrawal Bill, which was raised by the hon. Member for Cardiff North. Our current high standards, including import requirements, will apply when we leave the EU.
Similarly, the Government are committed to retaining the EU’s recognition of animal sentience. That is why, as has been referred to quite a few times in this helpful debate, at the end of last year the Government published the draft Animal Welfare (Sentencing and Recognition of Sentience) Bill, which sets out how we can go even further and better enshrine in domestic law the recognition of animals as sentient beings. That point was capably made by my hon. Friend the Member for Saffron Walden and others.
Barry Gardiner
Does the Minister understand that the new clause’s intention is not to run counter to or prevent what we hope the Government will bring forward in that Bill? It seeks to establish the hierarchy of principles in international trade so that a necessity test or any other precursor in the clauses and paragraphs that deal with such issues cannot mean that animal welfare is of a lower order in that hierarchy.
Greg Hands
Let us try to separate out those two issues. We will deal with animal sentience in the draft Animal Welfare (Sentencing and Recognition of Sentience) Bill. What we are talking about here is transitioning existing trade agreements. I will return to the intervention I made on the hon. Gentleman in relation to existing trade agreements, but let me first point out a few more things in the draft animal welfare Bill. It proposes a new obligation on Ministers of the Crown to have regard to the welfare needs of animals as sentient beings when formulating and implementing Government policy. A public consultation on the draft Bill has recently closed and DEFRA is considering all the responses received.
We are absolutely clear that all existing commitments relating to animal welfare will remain when these agreements are transitioned—I cannot be any more definitive than that. That is in line with our clearly articulated principle that it is our intent to transition solely the existing effects of the current agreements.
On current agreements, Mr Davies, you and I were elected in 2005, and in a couple of those early years we shared in Parliament I distinctly remember the hon. Gentleman being a DEFRA Minister. I was intrigued when he was seemingly unable to offer any single occasion when, as a Minister in DEFRA—the Department with primary responsibility in this area—he had raised any objection to EU trade agreements going through the House in relation to animal welfare or animal sentience.
I look forward to receiving the hon. Gentleman’s letter, in which he will explain in detail those occasions he was unable to remember today—he may have time to dig through his filing cabinet from 12 or 13 years ago to find them. I remember well that it was very rare for any Government Minister in Tony Blair’s regime to go against the word of Mr Blair, and very rare for any Government Minister to go against the word of the European Union, so I am interested to see if the hon. Member for Brent North managed to do both at the same time. I very much look forward to getting this letter. May I suggest that he shares it with the whole Committee, because I do not think that it is something I should abuse by keeping it private to myself? I look forward to that letter.
Barry Gardiner
May I just point out to the Minister that I voted for the ban on hunting mammals with dogs? I believe that most of the Conservative party voted to retain hunting mammals with dogs. I also voted to secure an end to cosmetic testing on animals, to ban fur farming and to introduce the Animal Welfare Act 2006. So there were a number of occasions on which my voting record on animal welfare and animal sentience stands up very strongly. I suspect that it would it be in marked contrast to many Members on the Government side of the House.
Greg Hands
I thank the hon. Gentleman for that intervention, because I now find it even more illuminating. He has now been able to remember all these other occasions when he stuck up for animal welfare, but he still cannot remember a single occasion when, in relation to EU trade agreements, which is what the Bill is all about—
Greg Hands
Perhaps the hon. Gentleman has now remembered the single occasion. I will give him another opportunity to tell us all about this disagreement he had with Tony Blair or the European Union.
Barry Gardiner
It is not about a disagreement with Tony Blair or the European Union, because actually we did vote to ban the export of animals on the hoof in that Government. That was precisely about trade—it was banning live exports. The Minister has to accept that I have a very clear record on animal welfare in terms of not only domestic legislation in this country but international trade.
Greg Hands
I am still looking forward to the letter. The hon. Gentleman has still not remembered a single occasion when he raised this in relation to a European Union trade agreement. He has an opportunity. I am sure he will take a little bit of time to prepare the letter, and I am sure that all members of the Committee will look forward to receiving it.
The hon. Gentleman did mention live animal exports, which is an interesting subject. He says that he was concerned about live animal exports, but you and I know, Mr Davies, that while we remain an EU member we are unable to ban live animal exports. I do not know whether, at that point, he was taking an early Eurosceptic turn. Perhaps he mentioned to Tony Blair that he had this fundamental problem with the European Union. It was just after Tony Blair had promised a vote on the EU constitution, which was not delivered, so it may have been an interesting time to have made these Eurosceptic points that he now says that he has.
Matt Western
Far be it from me to talk about what happened five or 10 years ago and under a different ministerial dispensation, but my recollection was that in the 2000s there was a huge issue about veal being transported in crates, and it was EU legislation that was introduced that actually put an end to that. I would like to think that the UK Government were in support of that, but I do not know—I will defer to either the Minister or my hon. Friend the Member for Brent North.
Greg Hands
If the hon. Gentleman is a strong believer in EU law, surely he should be voting, and have voted, for the European Union (Withdrawal) Bill, which seeks to take all of this retained EU law into the UK domestic environment.
To return to the issue, we have a manifesto commitment to take early steps to control live animal exports as we leave the European Union. The hon. Member for Brent North claimed that FTAs contain provisions stating that animal health measures must
“not be unjustifiable barriers to trade”.
Again, that returns to the point I made in my intervention on the hon. Member for Warwick and Leamington, that it importantly does not prevent states from imposing their own high animal welfare standards, which is what we currently do and will expect to enhance in the future.
My hon. Friend the Member for Saffron Walden made an excellent and succinct speech, outlining why the Bill is about existing trade agreements and why the Government have separate proposed legislation relating to animal sentience. I can tell her that the consultation closed yesterday and we will consider the 9,000 responses, as well as the report by the Environment, Food and Rural Affairs Committee, in due course.
The hon. Member for Kilmarnock and Loudoun raised a relevant point when he said that the issue of animal sentience is devolved. I can tell him that the Department for Environment, Food and Rural Affairs is speaking to the devolved Administrations regarding animal sentience. The clause in the draft Animal Welfare (Sentencing and Recognition of Sentience) Bill refers only to UK Ministers and the role they play, but I would be interested to see what proposals the Scottish and Welsh Governments might bring forward in this space as well.
I hope that is sufficient reassurance to the hon. Member for Brent North. I very much look forward to his letter, but on that basis I ask him to withdraw the new clause.
Barry Gardiner
The Minister can ask, but he will not be successful. We will press it to a vote.
Question put, That the clause be read a Second time.
Greg Hands
Mr Davies, I thank you and everybody concerned with this Bill. I am delighted that we have so thoroughly scrutinised this short yet important Bill over the last five Committee sessions. I thank Committee members for the constructive way in which they have engaged in the debate. I am pleased that we have completed proceedings within the allotted time. In fact, we have a little time to spare.
This has been an unusual Bill Committee. The Bill, in my view, is relatively uncontroversial and certainly quite short. Indeed, on Second Reading, I think a little unfairly, the hon. Member for Brent North called it a
“hollowed out little embarrassment of a Bill, which extends to just six pages and four schedules.”—[Official Report, 9 January 2018; Vol. 634, c. 223.]
I think he was calling it small and unimportant; I am interpreting the words “hollowed out little embarrassment” in that way. Therefore, I find it all the more remarkable that the Opposition have called some 37 votes on the Bill so far. I am not trying to make a wider political point—or maybe I am—but it was clear on Second Reading and now that they are against the UK having its own trade remedies, against the UK being able to benefit from the more than 40-plus EU trade agreements, and against UK companies participating in the £1.3 trillion global procurement market. I hope they will change their minds on Third Reading.
I also thank the Government Whip and the Opposition Whip, who have ensured that the Committee has run smoothly and effectively. We have had a helpful and constructive consideration of the Bill, and the debate has been superbly conducted by you, Mr Davies, and by Mrs Ryan and Mr Gray, in the Chair. I am very grateful for your and their guidance during our deliberations.
Further, I would like to pay tribute to the usual channels, who I know quite well from previous experiences in this House, for their help and guidance throughout. I also recognise in particular the hard work of Hansard in recording everything. I thank the Clerk for his advice, the Doorkeepers for keeping good order, and my excellent team of officials for their support. This is the Department for International Trade’s first ever piece of legislation, and the officials have done the Department very proud indeed.
Barry Gardiner
I, too, would like to express, on behalf of all my team, my thanks to you, Mr Davies, to Ms Ryan and Mr Gray, and to all the officials who so ably supported the Minister. We tried to throw as many difficult questions at him as possible, and they tried to field them and provide him with answers as quickly as possible. I have to say we were not always convinced by the answers he came up with, but we recognise the work that went into them and hope that we did not cause the officials too much trouble.
I pay particular tribute to Kenneth Fox, the Clerk of the Committee. He is an exemplary Clerk, and he aided us in ensuring that our amendments were substantive and all in good order. It was extremely helpful to us to be assisted by someone of his experience and wisdom—and calm. I say that because, as you know, Mr Davies, amendments are worked on until the last moment to ensure that they are tabled in good time, and Mr Fox did so with the greatest humour.
I am grateful to all my team: my hon. Friends the Members for Bradford South, for Sefton Central, for Cardiff North, for Warrington South, for Blaenau Gwent and for Warwick and Leamington. It has been an excellent team effort. I am delighted that they were all able to contribute to debate in a most positive way. I also thank the Government Members. I thank the Minister, who I think took every intervention he was offered, for his courtesy. I know that serving on such Committees is often a thankless task for Government Back Benchers, who are told by the Government Whip to sit quietly and not to take up too much of the proceedings, but when they did intervene, they did so with courtesy.
We have scrutinised the Bill in great detail. We have not come to an agreement—that much is clear. There are lacunae in the Bill that need to be remedied, and we will return to it on Report and subsequently. I thank everyone associated with the Committee and in particular you, Mr Davies, for conducting proceedings with absolute fairness and impeccable order.
The Chair
I am very grateful to the Minister and the shadow Minister for their kind words. I thank the House authorities, including the Doorkeepers, who have been very busy with Divisions, and the Clerks. I reiterate the thanks to Kenneth Fox, the principal Clerk, who has guided me throughout these proceedings with his normal efficiency and courtesy. I thank all Members for making it so easy to chair the Committee. You have all been a credit to your respective parties.
Question put and agreed to.
Bill accordingly to be reported, without amendment.
Taxation (Cross-border Trade) Bill (Seventh sitting)
(6 years, 9 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Kirsty Blackman (Aberdeen North) (SNP)
I beg to move amendment 117, in clause 25, page 17, line 2, leave out “1998” and insert “2018”.
This amendment seeks to provide that the powers of disclosure cannot be exercised in breach of the updated data protection framework to be enshrined in the Data Protection Bill as enacted.
It is a pleasure to serve under your chairmanship, Ms Buck. Amendment 117 is a tidying-up amendment. The Scottish Law Commission raised the point that the relevant data protection legislation for the purposes of the Bill will be the Data Protection Act 2018, not the Data Protection Act 1998. The amendment would simply make a technical change to ensure that the correct legislation is used.
The Financial Secretary to the Treasury (Mel Stride)
It is a pleasure to serve under your chairmanship, Ms Buck. Clause 25 permits disclosures for customs duty purposes, but makes it clear that disclosures that would contravene the Data Protection Act 1998 are not permitted. Amendment 117 would provide instead that disclosures that would contravene the Data Protection Act 2018—currently the Data Protection Bill—were not permitted.
The Government intend that data protection safeguards will need to be complied with when powers under the Bill are exercised. Given that the Data Protection Bill is not yet in law, it would be inappropriate to refer to it in this Bill, but I am happy to assure the Committee that the Government are committed to ensuring appropriate data protection safeguards and will therefore seek to make the appropriate amendments at the appropriate time. In the meantime, I ask the hon. Lady to withdraw her amendment.
Kirsty Blackman
If the Government amended the Bill to specify “appropriate data protection legislation”, rather than “the Data Protection Act 1998”, that would fix the problem and ensure that the correct legislation is used. I am sure that the Minister has listened, so I will not press the amendment to the vote, but I hope the Government will make reasonable changes on Report or at another stage. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 25 ordered to stand part of the Bill.
Clauses 26 to 29 ordered to stand part of the Bill.
Schedule 7 agreed to.
Clause 30
General provision for the purposes of import duty
Anneliese Dodds (Oxford East) (Lab/Co-op)
I beg to move amendment 81, in clause 30, page 18, line 9, at end insert—
“(2) No regulations may be made under this section after the end of the period of two years beginning with exit day.
(3) In this section, “exit day” has the meaning given by section 14(1) (interpretation) of the European Union (Withdrawal) Act 2018 and subsections (2) to (5) of that section apply to the term under this section as they apply to the term in that Act.”.
This amendment limits the duration of the delegated power under Clause 30 to the period ending two years after the United Kingdom leaves the European Union.
The Chair
With this it will be convenient to discuss the following:
Amendment 131, in clause 30, page 18, line 9, at end insert—
“(2) No regulations may be made under this section unless a draft has been laid before, and approved by a resolution of, the House of Commons.”.
This amendment requires regulations under Clause 30 to be subject to the affirmative procedure.
Clause stand part.
Amendment 132, in clause 32, page 19, line 32, after “regulations” insert “under section 30 and”.
This amendment is consequential on Amendment 131.
Anneliese Dodds
It is a pleasure to see you in the Chair, Ms Buck, and a pleasure to see the rest of the Committee.
Our amendments would qualify the powers in clause 30 that enable the Treasury to make, by regulation, a wide range of provisions relating to the imposition of import duty. In particular, amendment 81 advocates the inclusion of a sunset clause, whereby no regulations can be made under clause 30 after the end of the two-year period, beginning with exit day, when the UK is set to leave the EU.
The Government suggested on Tuesday that the Opposition’s contributions had been on the theme of greater parliamentary accountability, for which I suspect many of our constituents would thank rather than criticise us. Today, one of our themes will be the use of sunset clauses where appropriate. I hope the Minister will listen to our arguments with an open mind.
It is not just the Opposition who have argued for the use of sunset clauses in the Bill and more generally. The House of Lords Committee that examined the subject also recommended their greater use. My hon. Friends will elaborate on that point later. I will point out the Government’s inconsistent approach to this Bill compared with the use of sunset clauses in other areas.
The European Union (Withdrawal) Bill commits to ensure that delegated powers in many of the areas it covers will not be available in perpetuity but only for the period necessitated by leaving the EU, and yet even that approach is not adopted here. The Enterprise and Regulatory Reform Act 2013—not necessarily an Act that I would otherwise support, because of its negative impact on health and safety regulation—appropriately suggested that sunset clauses could be a helpful mechanism to ensure that provisions are kept up to date. That commitment was placed into guidance on the conduct of impact assessments, which advocates that
“opportunities to use sunset clauses should be explored where appropriate.”
The use of sunset clauses was a core element of the better regulation agenda. In theory, the Government are still committed to that, although I was pleased to hear from the Prime Minister that she will remove some elements of it, such as the one in, two out rule.
There are many other historical parallels. Sunset clauses applied to legislation used during the first and second world wars, and to legislation dealing with a heightened terrorist threat. The lack of a time limit on some temporary legislation passed in the second world war exposed Governments to legal action in the late 1970s, when they tried to implement new control orders on the export of goods using the temporary legislation that had never been repealed.
I am not saying that sunset clauses are never abused. Arguably, in the US, President Bush sprayed them around routinely and inserted them into tax-cutting measures to try to hide the magnitude of revenue that the US Government would lose over time. However, they can play an important role when they are used appropriately, especially in trade and customs policy. The OECD’s policy framework for investment explicitly mentions the need to consider including sunset clauses in trade facilitation measures.
Antonios Kouroutakis published an interesting book a couple of years ago on sunset clauses. He shows that they have been used for centuries as a means of balancing the powers of the Executive with those of the legislature, especially when there is a need to develop parliamentary consensus and accelerate decision making when time is tight.
I am not sure about other Committee members, but I cannot imagine an epoch that fits those characteristics more fully than this one. The Government should aim to build trust across Parliament, not diminish it, and to achieve parliamentary consensus. I hope they will heed our call for a sunset clause in clause 30 and take it as the constructive suggestion that we intend it to be.
Mel Stride
Clause 30 allows the Treasury to make regulations for the purposes of import duty, which will prove necessary to ensure that the UK’s import duty regime operates effectively. As the Committee will be aware by now, the Bill contains several new powers to make regulations. As I have explained, although the Bill sets out the requirements for import duty, the need for more detailed rules will likely arise once the new regime is implemented. That is what the power in the clause allows for.
The clause permits regulations to be made to deal with administrative matters, the needs of which cannot be identified at this time because, for example, of unforeseeable changes in business practice. It is worth noting that the Union customs code, which establishes the current customs regime, provided powers to the Commission to make implementing and delegated Acts to supplement the rules set out in that code.
Amendment 81 seeks to limit the period in which the power to make regulations under clause 30 can be exercised to two years after exit day, as the hon. Lady outlined. The power will ensure that the UK can make the regulations necessary to deliver an effective import regime into the future. It allows the Treasury to respond as necessary to any future developments that might have a bearing on import duty.
The power will play an important part in ensuring we have the ability to address any circumstances that arise in the future that might require modification in the UK’s import duty regime, conceivably beyond the term of the period that the hon. Lady has suggested. It is for that reason that the power in the clause is not subject to a time limit. Amendment 81 seeks to impose just such a time limit of two years following exit day. If it were accepted, there would be a risk of limiting the Treasury’s capacity to make or require changes to the UK’s import duty regime in the future.
To pick up on a specific point raised by the hon. Lady about the Lords Committee and its assessments around sunsetting, it should be noted that the aims of this Bill are somewhat different from some of the other Brexit Bills that were referred to in that report. For example, while the European Union (Withdrawal) Bill makes provision for day one, with the understanding that further primary legislation will be made to supplement it, this Bill will be required in order to maintain a functioning customs regime and effective VAT and excise regimes on an ongoing basis. That is a key point. For those reasons, I urge the hon. Lady to withdraw the amendment.
Amendments 131 and 132 seek to apply the draft affirmative procedure to regulations under clause 30. As I set out to the Committee previously, the Bill ensures that the scrutiny procedures that apply to the exercise of each power are appropriate and proportionate, taking into account what could be covered by the regulations and the frequency and speed at which changes may need to be made. The Government believe that the negative procedure for regulations made under clause 30 provides an appropriate level of parliamentary scrutiny. The Government need to be able to administer the tax system effectively, for example to collect the right amount of tax from the right person at the right time. That clearly applies to the collection of real-time taxes such as import duties. Changes in circumstances, for example the emergence of a new category of goods or the proliferation of one means of importing goods, may need to be addressed in real time. Therefore, application of the draft affirmative procedure to regulations made under clause 30 is inappropriate. Unlike the negative procedure, the draft affirmative procedure will not be capable of implementing those essential policy changes immediately. Before the UK joined the EU, none of the provisions that could be made in secondary legislation in relation to import duty were subject to the draft affirmative procedure. For those reasons, the Government do not support the amendments.
Anneliese Dodds
I am grateful to the Minister for that explanation. However, I wonder if I could probe a little further. First, will it be possible for the Government to legislate in order to extend some of the provisions if necessary? Is that a theoretical or actual possibility? It is my understanding that it would be both. Therefore, it is not clear to me why he does not accept the sunset clause.
Secondly, the Minister referred to the need to insure that the Government can respond to calls for frequency and speed in processing new measures. He appeared to imply that that need might go beyond two years after the Government’s planned exit day. I wonder how many years exactly he envisages that we might need the last-minute decision-making proposed in the Bill. Will it continue indefinitely? If that is the plan, it might concern many constituents.
Mel Stride
The hon. Lady knows the answer to her theoretical question—whether in theory Parliament could, in the absence or with the existence of a sunset clause, none the less extend the provisions in the Bill—as well as I do. It is, of course, yes: Parliament can decide to do broadly that which it wishes to do in the legislative sphere.
How long we expect to rely on the provisions in the Bill and whether that will be beyond two years depends on a wide variety of circumstances, some of which will almost certainly necessarily be completely unknown at the current time. We do not actually know for certain whether there will be an implementation or transition period with the European Union and what the length of that would be, for example. That situation and the fact that, on an ongoing basis, we will need to make adjustments to regulations, potentially into the future, justify the measure.
The final point is that the clause and its powers do not amend primary legislation. They introduce new secondary legislation and the scope is restricted solely to those matters in relation to import duty. I hope that, on that basis, the hon. Lady might consider withdrawing her amendment.
Anneliese Dodds
We are willing not to have a vote on the amendment, but we hope that the Government have listened to our concerns, particularly on the need to ensure that there is appropriate review. The intention behind much of the push for greater use of sunset measures is the concern that these provisions could be extended to cover other areas potentially not directly connected to the UK leaving the EU, as the Government have said they wish to do. I hope the Government continue to be mindful that there are concerns that the measure is part of a wider attempt to allocate more power to the Executive, but I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 30 ordered to stand part of the Bill.
Peter Dowd (Bootle) (Lab)
I beg to move amendment 6, in clause 31, page 18, line 31, at end insert—
“(3A) Before laying a draft of an Order in Council before the House of Commons in accordance with section 32(10)(a), a Minister of the Crown must lay before the House of Commons a statement about—
(a) the arrangements entered into; and
(b) the Minister’s assessment of the effect of the arrangements on trade relations with other countries and territories.”
This amendment requires a statement to precede a draft of an Order in Council giving effect for the purposes of import duty to a Customs Union with another country or territory.
The Chair
With this it will be convenient to discuss the following:
Amendment 82, in clause 31, page 19, line 10, at end insert—
“(8) No regulations may be made under this section after the end of the period of five years beginning with exit day.
(9) Any Order in Council made under subsection (4) and any regulations made by HMRC Commissioners under subsection (5) shall cease to have effect after the end of the period of six years beginning with exit day.
(10) In this section, ‘exit day’ has the meaning given by section 14(1) (interpretation) of the European Union (Withdrawal) Act 2018 and subsections (2) to (5) of that section apply to the term under this section as they apply to the term in that Act.”
This amendment limits the duration of the delegated power under Clause 31 to the period ending five years after the United Kingdom leaves the European Union and limits the duration of any delegated instruments under the Clause to six years, so that a permanent customs union would require primary legislation.
Clause stand part.
Peter Dowd
It is a pleasure as always to see you in the chair, Ms Buck. I want to speak to Opposition amendments 6 and 82, which seek to amend clause 31. Clause 31 in its current form gives Ministers the powers to create a customs union between the UK and another country, overseas territory or multilateral body, including, for example, the European Union.
There has been much debate in this Committee of the possibility of the UK forming a customs union with the European Union after we leave. It is stating a fact that when the UK leaves the European Union it will also leave the European customs union. However, we have been consistent in our belief that it would be wrong to take the option of the UK forming a customs union with the EU off the table at this early stage of UK negotiations. Therefore, we welcome the Government making specific provision for the option of a customs union in the Bill.
There are a variety of customs unions, and an internal customs union between the UK and its overseas territories and Crown dependencies is far different from a customs union with a single country or a multinational organisation such as the EU. It is a welcome sign that the Government have considered that and ensured that clause 31 is drafted in a way to fit the scenario.
Although the Opposition accept the principle of what the Government are attempting to do, we once again take issue with the concealed manner in which they plan to do it. Under the measures in clause 31, the formation of a customs union would be made through the declaration of an Order in Council, completely cutting out Parliament, in effect, as I understand it—the Minister may wish to clarify that.
We have heard from Ministers on a number of occasions that their action is related to delegated legislation, for example, and that it is always commensurate and proportionate. Setting up a customs union, of whatever construction, without commensurate and proportionate parliamentary involvement is not consistent with the approach that the Government have taken thus far in relation to that commensurate and proportionate principle. It is simply a matter of the Government changing the goalposts capriciously. I completely acknowledge that the Minister may put me right on that.
This appears a rather strange way for the Government to uphold the central theme espoused by those advocating leaving the European Union—of “taking back control.” It confirms one of the central objections that we have made time and time again, and stated throughout this Bill and others, concerning Executive overreach and the centralisation of power. That issue will not go away any time soon. Conservative Members also have concerns about that.
Opposition amendment 6 would instead require a Minister to make a statement to the House of Commons on the establishment of a customs union, outlining the specific details of the customs union and how they were reached, as well as the effects of the new customs arrangements on trade with other countries and territories. I consider that—I think that most people will—to be the minimum level of parliamentary oversight that we should expect, and one that would ensure the Government are accountable to this House.
Several customs unions exist in the world, including the EU customs union, Mercosur and the Caribbean Community. There are more in the pipeline, with negotiations on potential customs unions taking place in the middle east, parts of Africa and between New Zealand and Australia. Under amendment 6 the House will be able to give proper scrutiny to what kind of customs union the Government have in mind. Is that a detail that Parliament need not bother about? Our view is that it is an important fact.
If the Government intend to keep the option of forming a future customs union with the European Union on the table, as clause 31 makes possible, they must consider the variety of needs of UK businesses, manufacturers and stakeholders. Customs unions are ordinarily designed to address trade in goods. However, the new UK-EU relationship will also need to deliver trade in services, cross-border Government procurement and, possibly, regulatory equivalence, as well as a host of other issues that others may want to comment on. I have made that point previously.
The debate on the UK’s future trading relationship remains controversial. The Secretary of State continues to shroud the progress of future deals in a veil of secrecy, under issues to do with commercial sensitivity, except when, as today, we are told there will be £9 billion of trade with China. The Government pick and choose what to tell us. We have consistently opposed such a level of secrecy, and we believe that Parliament should have the right to give proper scrutiny to future trade agreements and customs arrangements.
Amendment 6 would therefore ensure an open process, and a level of transparency around the negotiation and establishment of a customs union; it would ensure that the negotiation and implementation would be subject to parliamentary scrutiny. The amendment would also allow Members of the House, who bring diverse experience— a vast range of experience in many situations—and who represent a variety of key sectors and stakeholders, to debate an issue that is very important.
The Government would also be required under the amendment to consider the impact of the establishment of a customs union on trade with other territories and countries. That is an important factor, particularly given that, currently, the UK’s membership of the EU customs union means it is unable to enter into trade agreements outside the EU. Part of the issue is that we have seen what happens when Governments do not consider the impact of entering a customs union on trade with other countries.
We need only go back to the time when we first entered what was then the European Economic Community. We failed to take account of the impact on trade with Commonwealth countries, which then accounted for 20% of all imports and exports. The result was unhappy and damaging, with Commonwealth countries losing out. The Labour Prime Minister had to renegotiate better terms that ensured that trade with Commonwealth countries could continue. There is a history, and we need to make sure we get things right, as best we can. Parliament’s role is to tease those issues out, especially given the seriousness of this.
Amendment 6 is intended to prevent a scenario such as I have outlined by requiring Ministers to make clear to the House and other trading nations the possible impact of forming a customs union—internally or with another country or a multinational organisation—on trade.
Amendment 82 would limit the period for which a customs union agreed by the Government through delegated legislation could be in force. It would set the period at six years, after which the Government would have to introduce primary legislation if they wanted to extend the customs union. The amendment would be an important part of guaranteeing that Parliament, not the Executive, would have the final say in any customs union that was established. It would constrain and limit Ministers’ power and ensure that the long-term establishment of a customs union would receive the proper parliamentary scrutiny that such a move deserves.
Under clause 31, delegated powers could be used to bring the UK into a permanent customs union without a vote in the House of Commons. In that scenario, Members would not be able to assess the benefits of that customs union before the Government entered into it. There would also be no recourse to a reversal of the decision if it proved costly to the UK—other than through primary legislation, presumably, so let us do that first. Just as the Opposition have forced and required the Government to concede a vote to the House on the final deal reached in the negotiations between the UK and the European Union, amendment 82 would require the Government to put the formation of a future customs union to a vote.
There is of course a difference between a temporary customs union and a permanent one, and amendment 82 makes that distinction. While we accept that the Government may need the powers in clause 31 to put in place temporary measures as part of a transitional process, more permanent changes should receive proper parliamentary oversight and sanctions. We believe six years to be time enough for the House to consider the net benefits or costs of a customs union, be that an internal customs union with overseas territories and Crown dependencies, or a customs union with another country or a large, multinational organisation such as the EU. Six years would prove enough time for Members to assess whether that customs union protects UK manufacturers, supports UK businesses and works in the interest of the country.
As the Minister has stated many times, the Bill is a framework Bill. Clause 31 sets out framework powers that will give Ministers the ability to introduce regulations for the creation of a customs union. Our opposition to this matter is clear: while we welcome the Government including these powers in the Bill, as I said earlier, amendments 6 and 82 would guarantee that Parliament has the final say.
Mel Stride
Clause 31 caters for a situation in the future in which the UK has made an agreement with an overseas country or territory to enter into an arrangement to establish a customs union. The clause allows such a customs union to have effect for the purposes of import duty. It also allows HMRC to make regulations that might prove necessary to ensure that a customs union functions effectively.
As I previously set out, the Bill caters for a range of possible outcomes after the UK has left the EU. There are various circumstances in which the Government might wish to establish a customs union with a country or territory overseas, and to have that union apply for import duty purposes. One instance might be to establish a customs union with a Crown dependency—namely Jersey, Guernsey and the Isle of Man.
The clause caters for any international arrangements such as this that establishes a new customs union. The clause does not provide the power to enter into an international agreement; such an agreement does not require a specific statutory basis. Instead, it simply allows the UK’s customs regime to reflect such an agreement by providing the means necessary to implement it. Once an agreement has been reached, an Order in Council will be required before it can take effect for import duty. That order can itself be made—this is a critical response to the remarks of the hon. Member for Bootle—only if it has first been approved, in draft, by the House of Commons under the draft affirmative resolution procedure. I am sure the Committee agrees that that will afford a high level of parliamentary scrutiny for each stage of the process.
It is likely that further provisions will be needed to make an international agreement effective for import duty purposes. The most obvious instance would be to ensure that import duty is not charged on the movement of goods between the UK and the overseas country or territory. For that reason, the clause allows HMRC to make any necessary changes in regulations.
Amendment 82 seeks to add a restriction to that process in two ways. First, it would limit the ability of HMRC to make regulations to five years from exit day. Secondly, it would make any Order in Council cease to have effect six years after exit day. Both of those positions are misguided. I am sure that I do not need to remind the Committee that establishing a new customs union with an overseas territory or country is likely to be a long-term process, not least because of the need to ensure that it reflects the UK’s new international trading relationship once we have left the European Union. It would therefore be wrong to limit the ability to adapt the UK’s legislation to a period of five years following exit.
More importantly, it would be rather perverse to make any customs union simply cease to have an effect on domestic law after a six-year period. As I explained, the level of parliamentary scrutiny that would apply to such a union is very high, requiring both an Order in Council and the draft affirmative procedure in Parliament, as well as all the potential debates and votes that may occur around the negotiations that led to that customs union arrangement in the first place.
There is therefore no case for time-limiting an agreement in the way proposed by the amendment. Indeed, it could make it far more difficult, if not impossible, to reach any agreement if our overseas partners were aware that such an agreement would no longer function effectively at a future point because of limitations on powers in our domestic legislation. I therefore urge the Committee to reject amendment 82.
Peter Dowd
We will not press amendment 6 to a vote, but we will no doubt tease the issue out a little more in due course. Again, I am not completely reassured by the Minister’s statement in relation to affirmative resolutions. I do not accept that the process is as rigorous as he has implied throughout.
The other aspect is that, if Parliament will have to do huge amounts of work, we had better make sure that we get everything right and get the ducks set up in a row. The idea that the Government’s proposal and mechanism for authorising are commensurate and proportionate is, in my opinion, far off the mark. It is a very important area, and Parliament should have significantly more of a say in it.
This issue will clearly not be resolved today, any more than many other things will be, but it is really important. We will not push the amendment to a vote today, but there is no doubt that we will, in due course, come back to this issue and the whole question of parliamentary scrutiny, particularly in relation to this sort of matter. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 31 ordered to stand part of the Bill.
Clause 32
Regulations etc
Kirsty Blackman
I beg to move amendment 89, in clause 32, page 19, line 18, at end insert—
“(c) regulations under paragraph 4(2), 9(3) or 14(4) of Schedule 4.”
This amendment provides for regulations made under certain provisions of Schedule 4 (regarding dumping of goods or foreign subsidies causing injury to UK industry) to be subject to the made affirmative procedure rather than the negative procedure.
The Chair
With this it will be convenient to discuss the following:
Amendment 90, in clause 32, page 19, line 18, at end insert—
“(c) regulations under paragraph 1(2), 3(2), 4(2) or 5 of Schedule 5.”
This amendment provides for regulations made under certain provisions of Schedule 5 (regarding an increase in imports causing serious injury to UK producers) to be subject to the made affirmative procedure rather than the negative procedure.
Amendment 91, in clause 32, page 19, line 21, at end insert—
“(2A) Section (super-affirmative resolution procedure) applies to regulations under paragraph 1(3), 3(5), 5(2), or 6(2) of Schedule 4.”
This amendment provides for regulations made under certain provisions of Schedule 4 (regarding dumping of goods or foreign subsidies causing injury to UK industry) to be subject to the super-affirmative resolution procedure, as defined in NC12.
Amendment 92, in clause 32, page 19, line 21, at end insert—
“(2A) Section (super-affirmative resolution procedure) applies to regulations under paragraph 2(2) or 2(3) of Schedule 5.”
This amendment provides for regulations made under certain provisions of Schedule 5 (regarding an increase in imports causing serious injury to UK producers) to be subject to the super-affirmative resolution procedure, as defined in NC12.
Amendment 93, in clause 32, page 19, line 32, after “(2)” insert “or (2A)”.
This amendment is consequential to Amendment 92.
Amendment 94, in clause 42, page 29, line 23, leave out subsection (1).
The effect of this amendment would be to remove from the Bill the proviso that retained EU law on VAT should not have effect, despite forming part of UK law as a result of Clause 3 of the European Union (Withdrawal) Bill. This would mean that EU legislation affecting VAT and the operation of the common VAT area would continue to have effect as retained EU law for the transitional period.
Amendment 95, in clause 42, page 29, line 44, leave out from “regulation” to end of line 45.
The effect of this amendment would be to ensure that the UK Government does not exclude aspects of the EU’s principal VAT Directive that remain relevant by delegated legislation.
Amendment 96, in clause 42, page 30, line 1, leave out subsection (6) and insert—
“(6) Section (super-affirmative resolution procedure) applies to regulations made under this section.”
This amendment applies the super-affirmative resolution procedure, described in NC12. to regulations made under this section.
New clause 12—Super-affirmative resolution procedure—
“(1) For the purposes of this Act, the ‘super-affirmative resolution procedure’ in relation to the making of regulations to which this section applies is as follows.
(2) If a Minister considers it necessary to proceed with the making of regulations to which this section applies, the Minister shall lay before the House of Commons—
(a) draft regulations,
(b) an explanatory document under subsection (3), and
(c) a declaration under subsection (4).
(3) The explanatory document must—
(a) introduce and explain any amendments made to retained EU law by each proposed regulation, and
(b) set out the reason why each such amendment is necessary (or, in the case where the Minister is unable to make a statement of necessity under subsection (4)(a), the reason why each such amendment is nevertheless considered appropriate).
(4) The declaration under subsection (2)(c) must either—
(a) state that, in the Minister’s view, the provisions of the draft regulations do not exceed what is necessary to prevent, remedy or mitigate any deficiency in retained EU law arising from the withdrawal of the United Kingdom from the EU (a ‘statement of necessity’), or
(b) include a statement to the effect that although the Minister is unable to make a statement of necessity the Government nevertheless proposes to exercise the power to make the regulations in the form of the draft.
(5) Subject as follows, if after the expiry of the 21-day period a committee of the House of Commons appointed to consider draft regulations under this section has not reported to the House of Commons a resolution in respect of the draft regulations laid under section 32(2A) or 42(6), the Minister may proceed to make a statutory instrument in the form of the draft regulations.
(6) A statutory instrument containing regulations under subsection (5) shall be subject to annulment in pursuance of a resolution of the House of Commons.
(7) The procedure in subsection (8) to (15) shall apply to the proposal for the draft regulations instead of the procedure in subsection (5) if—
(a) the House of Commons so resolves within the 21-day period,
(b) the committee appointed to consider draft regulations under this section so recommends within the 21-day period and the House of Commons does not by resolution reject the recommendation within that period, or
(c) the draft regulations contain provision to—
(i) establish a public authority in the United Kingdom,
(ii) provide for any function of an EU entity or public authority in a member State to be exercisable instead by a public authority in the United Kingdom established by regulations under sections 42, 43 or schedule 8,
(iii) provides for any function of an EU entity or public authority in a member State of making an instrument of a legislative character to be exercisable instead by a public authority in the United Kingdom,
(iv) imposes, or otherwise relates to, a fee in respect of a function exercisable by a public authority in the United Kingdom,
(v) creates, or widens the scope of, a criminal offence, or
(vi) creates or amends a power to legislate.
(8) The Minister must have regard to—
(a) any representations,
(b) any resolution of the House of Commons, and
(c) any recommendations of a committee of the House of Commons charged with reporting on the draft regulations,
made during the 60-day period with regard to the draft regulations.
(9) If, after the expiry of the 60-day period, the Minister wishes to make regulations in the terms of the draft, the Minister must lay before the House of Commons a statement—
(a) stating whether any representations were made under subsection (8)(a), and
(b) if any representations were so made, giving details of them.
(10) The Minister may after the laying of such a statement make regulations in the terms of the draft if it is approved by a resolution of the House of Commons.
(11) However, a committee of the House of Commons charged with reporting on the draft regulations may, at any time after the laying of a statement under subsection (9) and before the draft regulations are approved by that House under subsection (10), recommend under this subsection that no further proceedings be taken in relation to the draft regulations.
(12) Where a recommendation is made by a committee of the House of Commons under subsection (11) in relation to draft regulations, no proceedings may be taken in relation to the draft regulations in the House of Commons under subsection (10) unless the recommendation is, in the same Session, rejected by resolution of the House of Commons.
(13) If, after the expiry of the 60-day period, the Minister wishes to make regulations consisting of a version of the draft regulations with material changes, the Minister must lay before Parliament—
(a) revised draft regulations, and
(b) a statement giving details of—
(i) any representations made under subsection (8)(a); and
(ii) the revisions proposed.
(14) The Minister may after laying revised draft regulations and a statement under subsection (9) make regulations in the terms of the revised draft if it is approved by a resolution of the House of Commons.
(15) However, a committee of the House of Commons charged with reporting on the revised draft regulations may, at any time after the revised draft regulations are laid under subsection (12) and before it is approved by the House of Commons under subsection (13), recommend under this subsection that no further proceedings be taken in relation to the revised draft regulations.
(16) Where a recommendation is made by a committee of the House of Commons under subsection (14) in relation to revised draft regulations, no proceedings may be taken in relation to the revised draft regulations in the House of Commons under subsection (13) unless the recommendation is, in the same Session, rejected by resolution of the House of Commons.
(17) In this section, references to the ‘21-day’ and ‘60-day’periods in relation to any draft regulations are to the periods of 21 and 60 days beginning with the day on which the draft regulations were laid before Parliament.”
This new clause applies an amended version of the super-affirmative resolution procedure to certain powers to make regulations under Schedule 4 and 5, and Clause 42.
Kirsty Blackman
Amendments 89 to 96 would have a number of different effects. If the Committee will allow me, I will talk through all of them, and all the surrounding details.
Amendment 89 would subject regulations made under certain provisions of schedule 4 to the made affirmative procedure, rather than the negative procedure, and would ensure a higher level of parliamentary scrutiny. Particularly in schedules 4 and 5, which amendment 90 relates to, the Government have left an awful lot to regulation. I understand that the Bill is a framework Bill, but we could really do with a bit more information around it. If there had been more information, we would not need to make these calls to move things up the agenda, in terms of requesting more scrutiny.
We have concerns about how the Trade Remedies Authority will operate, and how it will decide things such as the amount of injury that has been sustained. The Government have not yet provided enough information on that. It is not reasonable for the Government to do such things by the negative procedure, rather than either the made affirmative procedure or the super-affirmative procedure. Amendments 91 and 92 would subject certain regulations to the super-affirmative procedure, instead of leaving them subject to the negative procedure.
We heard concerns during the evidence sessions about how trade remedies would work. As I have said previously, the Government are asking us to trust them an awful lot on this, but because they have not been responsible for this area in recent years, as the UK has been part of what the EU has done, they do not have a track record. We cannot just take it on trust that they will do the right thing; in fact, we have already criticised their choice to have the lesser duty rule, for example. Clearly, the UK Government are already making decisions that we would not like them to make.
The Government are asking us to trust them, and to accept negative procedure, which makes it very difficult for parliamentarians to be involved in the scrutiny of legislation. That is a real concern. Amendments 89 to 92 would therefore subject regulations under schedules 4 and 5 to a higher level of scrutiny. I do not consider that an unreasonable ask in the light of the importance of this issue, particularly to industries such as steel and chemicals that rely on trade remedies to continue producing, selling and competing in the domestic market. Amendment 93 is consequential on amendment 92.
Amendment 94 would delete clause 42(1) and thus remove from the Bill the proviso that direct EU legislation on VAT would no longer have effect in the UK. It would ensure that EU legislation affecting VAT and the operation of the common VAT area would continue to have effect in the UK for the transitional period. The amendment is important because it would address concerns raised by the British Retail Consortium about replacing acquisition VAT with import VAT.
Losing membership of the EU VAT area in just over a year’s time would cause major problems for businesses, including with cash flow, because they would end up having to pay VAT on goods before they were released. Businesses planning for the future are having to make projections now without having all the information about what the VAT position will be. If the Minister makes it clear that the Government will continue with their apparent intention to replace acquisition VAT with import VAT, significant changes will be required, either in how businesses operate or in how HMRC ensures businesses pay VAT.
We do not suggest in any way that businesses should not be liable for VAT. Our concern relates to cash flow. We suggest that businesses should not have to pay VAT on goods the second they hit UK shores. Perhaps they should be able to roll it up and pay it quarterly or in some other way that makes cash flow easier.
The UK Government have not been as clear as they could be on this. If the Minister is unequivocal in his desire for us to move to import VAT, and if he states unequivocally that there will be no scheme for VAT deferral, businesses will be incredibly unhappy, but at least we will have more clarity. It would be pretty devastating for businesses in a number of ways, but at least they will able to factor it into their projections. It would be useful to have more clarity on whether we are leaving the EU VAT area and whether, if we move from acquisition VAT to import VAT, there will be more opportunities for deferral.
It would be better for the Government to keep open the possibility of remaining in the EU VAT area, which clause 32 seems to rule out. If we leave the EU VAT area, we will lose the triangulation simplification exemption—I am glad to have my teeth in this morning so that I can say that. The exemption currently provides a simplification mechanism that means that UK-based businesses do not have to register for VAT in various EU countries. If we leave the EU VAT area, not only will they have to contend with cash flow issues and moving from acquisition VAT to import VAT; they will also have to register for VAT in those other European countries, as well as in the UK. It seems to me that that issue has not been adequately discussed.
We do not have enough clarity about the Government’s intentions. I have made this case before, but it would be useful to know the Government’s desired direction of travel, even if the eventual outcome of negotiations is different. Do the Government intend to leave the EU VAT area but retain some elements of triangulation simplification?
Anneliese Dodds
It might be useful to mention the enormous problems faced by microbusinesses when they had to comply with the reduction in the threshold for VAT applied to digital services within the EU. Even without having to register in those different countries, but simply paying the VAT, that was a huge adjustment that many firms had to make. Would it not be much more of a problem if we had the approach that the hon. Lady describes?
Kirsty Blackman
Absolutely. For a number of businesses, particularly those that are quite small and do a lot of exporting and importing, VAT is a major part of their costs and they have to deal with that on a regular basis. There would be a disproportionate impact particularly on smaller businesses were there to be changes without sufficient notice.
The effect of amendment 95 would be to ensure that the UK Government do not exclude aspects of the UK’s participating in the EU VAT area or in the EU’s principal VAT directive by delegated legislation. The amendment would ensure that there is more parliamentary scrutiny around any changes. We have been clear that we want more parliamentary scrutiny. The evidence sessions that we had were useful because we had people here talking about actual impacts on actual businesses and not just the impacts that the policy makers might think will take place. It was useful to learn about some of the technicalities.
We might have legislation and changes made in future by delegated legislation with no ability for us to have written and oral evidence and all of those people coming together to ensure that those of us in Parliament who make the laws are as well briefed as possible and able to make the best possible decisions. That is one of the most important things specifically in the area of VAT. I do not think many people in the House of Commons are expert in VAT. I am sure there are some, but not a huge number. We would have to be incredibly lucky to have all of them on a delegated legislation Committee and to have enough knowledge in the room to make reasonable decisions.
Kirsty Blackman
VAT is incredibly interesting and such a Committee would be an absolute hoot. The point is that there are not enough people in the House with enough knowledge on this subject, and there would be a massive benefit from not legislating in delegated legislation but in a situation in which we could properly take evidence and make the right decisions so that businesses were not disproportionately affected.
Amendment 96 and new clause 12 would apply a super-affirmative procedure in relation to the VAT issues that I have discussed. As I have said, we would benefit from having more parliamentary scrutiny of these issues. Any changes of any sort, as mentioned by the hon. Member for Oxford East, have a significant impact on businesses. They are a significant proportion of costs and other matters that businesses have to think about. A super-affirmative procedure would mean more scrutiny and that better law is made.
This is not about the Opposition wanting to have a go at the Government. It is about making sure we have the most workable possible laws in place and making sure that with all the stuff that is happening around Brexit, with the possibilities of leaving the customs union and the single market, and with all the possible changes that are coming through, having better scrutiny over what is happening in relation to VAT would be incredibly helpful. Businesses would have more comfort that better rules would be made and that they would not be hit with massive negative changes in how they have to deal with VAT, as well as having to contend with leaving the single market and the customs union and all of the other things that they currently have to contend with.
The two different areas that I have talked about relate to the Trade Remedies Authority, subsidies and countervailing measures, dumping, all the trade remedies and VAT. I think we should have more parliamentary scrutiny of those things. The amendments all attempt to make sure we have better law that means businesses can cope better with whatever the future throws at them.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
It is lovely to see you in the chair, Ms Buck. I would like to say a brief few words in support of amendments 89, 90 to 96 and new clause 12 tabled by colleagues from the Scottish National party.
There is no doubt that the most consistent area of discussion in this Committee has been the constitutional implications of the Bill and the concentration of too much power in the hands of the Executive as a result. We have discussed ways to try to make the Trade Remedies Authority more available to scrutiny, how to improve the scrutiny of secondary legislation and how to adjust the public notice procedure—all of which were intended to provide some basic safeguards against the abuse of power and, as the hon. Member for Aberdeen North said, are an attempt to make better laws. We therefore support this package of amendments, which seek to achieve the same, and point out to the Government that it is not only opposition political parties that are concerned about the precedent being set here.
As the hon. Member for Aberdeen North said, the amendment would simply add an important layer of parliamentary scrutiny, by enforcing the super-affirmative resolution procedure where regulations have been created with regard to trade remedies. That would help to address some of the shortfalls of the secondary legislative process.
As the Committee well knows, statutory instruments when carried out under the negative procedure only permit Parliament to raise objections. We support the extensive stipulations in the amendments on presenting draft regulations to the House, which the Minister would be mandated to carry out. We believe that will prompt greater accountability and a better legislative process.
Mel Stride
New clause 12 and its consequential amendments propose a process by which Parliament scrutinises and approves secondary legislation. The hon. Member for Aberdeen North referred to the process as the super-affirmative resolution procedure. I commend her on her creativity, but I must urge the Committee to reject what has been proposed.
As I understand the super-affirmative resolution procedure, it would initially require the laying in draft of any regulations, alongside an explanatory document and a declaration to which the new procedure would apply. It would also entail the appointment of a House of Commons Committee, which would initially have the power to recommend that more onerous procedures should apply to the draft regulations than those currently provided by the Bill. At the same time, those more onerous procedures would apply automatically to certain regulations, as set out in the amendments. The Committee would have the power to recommend that any draft regulations were rejected before they could be approved by the Commons under the affirmative procedure.
The powers of that Committee would be fairly wide, but at the same time, its remit would be relatively modest, only relating to the trade remedies provisions and regulations under clause 42 which deals with amendments regarding how EU law applies to VAT. I have already explained why it is entirely right that regulations for the trade remedies framework should be subject to the negative procedure. Clause 42, along with other provisions in the Bill, is necessary to ensure that the UK has a fully functioning VAT system once we leave the European Union. As there is limited direct EU legislation relating to VAT, the power in clause 42 is therefore equally limited. Given that limited scope, it is only right that its exercise should be subject to the negative procedure.
No case has been made that the existing and well-understood parliamentary procedures for making regulations are inadequate. To establish an entirely new procedure would mark a major precedent in Parliament and I cannot see any reason for doing so. That is particularly true in the case of limited regulation-making powers, which are the subject of the amendments.
Peter Dowd
Does the Minister not accept that this might be unprecedented, but so is leaving the European Union and all the institutions associated with it and all the mechanisms that go with it? That is unprecedented, so we need to have unprecedented parliamentary scrutiny of that unprecedented move.
Mel Stride
The word “unprecedented” could be applied to almost everything that happens in the future; it is always different to that which occurred in the past. I think it might be stretching Parliament’s patience if on every occasion we came across something unprecedented, we conjured up some unprecedented way of dealing with it. I really do not want to re-rehearse all my arguments on the relative merits, proportionality, appropriateness and so on of the various approaches that we take on those matters. To conclude, we believe that the various new parliamentary processes proposed would hamper the UK’s ability to respond swiftly to future developments and to provide an important but proportionate safety net to UK industry in a timely fashion.
Amendments 94 and 95 seek to retain the effect of direct EU legislation. Amendment 94 would do that by retaining EU regulations on VAT that will be brought into UK law as a result of the European Union (Withdrawal) Bill. According to the explanatory statement accompanying the amendment, that is so the EU legislation in the area will continue to have effect during the implementation period. Amendment 95 seeks to limit the power to exclude certain provisions of the VAT-implementing regulations.
The Bill enables the Government to respond to a range of outcomes. By way of background, the Value Added Tax Act 1994 and subordinate legislation already implements the majority of EU law on VAT, including the VAT directive. The 1994 Act as amended by the Bill will continue to apply post-EU exit. Few EU regulations apply to VAT and in the main those relate to single market reciprocal arrangements such as exchange of information. In the absence of an agreement, those will simply have no application—we would not want them to be incorporated into UK law for obvious reasons—which is why they are disapplied by clause 42(1). Removal of EU legislation that is no longer required or otherwise deficient is anticipated in the withdrawal Bill.
At this stage I will deal with the specific point made by the hon. Member for Aberdeen North about VAT, and how it operates now and might operate once we have left the European Union. She has raised issues that will certainly be very important—it is not the first time that she has raised such issues—to how businesses interact with what will then be the remaining EU27. I made it clear on Second Reading that we will look sympathetically and appropriately at the particular issue of the change from acquisition VAT to import VAT, including the change in timing of VAT payments with its effect on a large number of businesses as they trade with the European Union in future.
The note to amendment 94 refers to ensuring that EU legislation continues to have effect during an implementation period, but it may not be necessary to switch our provision on until after a transitional period or at all. Alternatively, EU regulations disapplied under clause 42(1) could be reinstated by the power in clause 51, which we will come to. What is ultimately required will depend on the outcome of the negotiations. However, we anticipate that the rules in an implementation period will be broadly reflective of the existing ones.
Amendments 89 and 90 seek to change the parliamentary process for some of the regulation-making powers provided in parts 1 and 3 of the Bill and their related schedules. For indirect taxation measures, it is common to have a framework in primary legislation supplemented by secondary legislation. The Bill establishes a comprehensive framework for a new standalone customs regime that will be underpinned by detailed and technical secondary legislation.
The trade remedies framework contains a great deal of such technical detail and the secondary legislation made under the Bill will comply with WTO rules, which is why we propose that the regulations are subject to the negative procedure. With that I ask Opposition Members to consider withdrawing their amendment, or at least the Committee to resist them.
Kirsty Blackman
I will begin by arguing slightly with the Minister and then I will go on to be a bit nicer to him—so it may start off badly, but it will get better.
The Minister said that the case had not been made for the operation of delegated legislation being inadequate. I believe that the case has been made that how delegated legislation in this House operates is inadequate, in particular by the gentleman from the Hansard Society who gave evidence in Committee. He was pretty scathing about the negative procedure in particular, but also about the other delegated legislation methods. Most of us around the House see the shortcomings in how delegated legislation operates, especially given the lack of scrutiny and amendability, whether by the Opposition or Back-Bench Government Members. There are major shortcomings in how delegated legislation works. I think that few people outwith Government would say that it is all working fine, because the Government have an interest in ensuring that measures have little scrutiny.
On the movement from acquisition VAT to import VAT, I appreciate that the Minister will consider it sympathetically. I am not sure whether HMRC would make any sympathetic changes as part of a public notice process or in some other way, or whether legislation would be needed to include VAT deferral methods or something similar. Whatever it is, it would be useful for it to happen sooner rather than later, and for the Government also to set out their intentions for how any scheme would work sooner rather than later, so business can have a level of certainty.
I was pleased by what the Minister said about increasing head count in HMRC to ensure that customs will work more smoothly. That is welcome, but the information that we have had thus far about the resourcing of HMRC has not been particularly in-depth; it has just been that head count will increase. There is no clarity about how those people will be deployed or what level of support businesses will receive from HMRC, for example, when they make both the change in relation to VAT and any customs changes that they need to make.
We expect that 132,000 firms will be caught by VAT on imports for the first time. That is a significant number of firms currently wondering how it is going to work. The sooner they can have that information, the better. We do not want negative impacts on our economy, although it is just the case that Brexit will have negative impacts on our economy, because the single market is better for our economy than any possible trade deal, even if it includes services. Although our preferred position is to remain in the EU and second best would be remaining in the single market and the customs union, whatever we can do to mitigate the impacts on businesses and on people who live in our constituencies—in towns, cities and rural areas—we will push the Government to do. We are trying to mitigate the worst possible excesses of the most extreme Brexit. We are driving off a cliff with a huge amount of spikes at the bottom. We are just trying to have fewer spikes at the bottom of the cliff. That is what we are asking for, particularly in relation to VAT.
I would like to return to these amendments and to new clause 12 on Report, so I do not intend to press them to a vote at this point, but I appreciate the Minister’s time and attention, as well as his comments.
Mel Stride
That was a thoughtful contribution, and I would like to respond to one or two of the points raised by the hon. Lady.
First, on delegated legislation, I am aware that there is a difference of opinion between the sides of this Committee generally about how rigorous oversight is relative to the measures to which the powers relate. The hon. Lady prayed in aid the Hansard Society’s evidence during the witness session, and I think that I am right in saying that the Hansard Society representatives stated that there was no circumstance in which the enhanced level of scrutiny proposed by Her Majesty’s Opposition throughout the various debates that we have had—that is not quite what the hon. Lady is putting forward—would appropriately apply to measures in the Bill, so I am not sure that this heavy version of scrutiny would necessarily be supported by the Hansard Society, although it would be interesting to know.
Secondly, I would like to address the point about Government not having an interest in scrutiny. We most certainly do, because it makes for better law. Even from a narrow perspective, there is always a Government interest in ensuring that there are no problems further down the line and that we do not need to revisit legislation to deal with the dissatisfaction of Parliament or, indeed, of Members of Parliament from our own party.
Anneliese Dodds
I will respond briefly, if I may, to the Minister’s comments. I do not want to get into a semantic discussion about precisely what the speaker from the Hansard Society did or did not say. Ultimately, he was trying to preserve the independence of the Hansard Society. Therefore, when he was being pushed about the Bill more globally, he resisted. I can understand that, because he wished to protect the independence of the Hansard Society, but to my memory, he did not comment directly on the proposals that have been put forward by the Opposition. I do remember him commenting directly, for example, on the cumbersome and difficult nature of the negative procedure and the fact that it operates through early-day motions and all those kinds of things. I cannot remember him specifically saying that he felt that the suggestions being put forward by the Opposition were incorrect. He resisted being pulled towards a global assessment of the Bill, but I can understand why he did that, given his need to retain independence.
Peter Dowd
I can remind my hon. Friend of what Mr Blackwell said. In relation to the 150 delegated powers, he said:
“Some of the justifications I am struggling with, particularly as regards the use of urgency and non-urgency. I think time is an issue here, particularly if you do not have the backstop of further scrutiny by a Chamber—the second House—that is usually very good at looking at delegated legislation”.—[Official Report, Taxation (Cross-border Trade) Public Bill Committee, 23 January 2018; c. 53, Q77.]
He was absolutely clear and unambiguous that this really was not a way to do matters of this nature.
Kirsty Blackman
It has been an interesting debate, and I am glad to have had the opportunity to start it. I really do appreciate some of the clarification that has been given by the Minister, particularly around moving from acquisition to import VAT. As I said earlier, I do not want to press any of these amendments, because I would like to return to them at Report stage. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Anneliese Dodds
I beg to move amendment 121, in clause 32, page 19, line 33, at end insert—
‘(5A) Subsections (2) and (5) are subject to section (Affirmative procedure: further provisions).’
This amendment, together with New Clause 14, provides that the made affirmative procedure under Clause 32 is only used in specified circumstances and that, in other circumstances, the draft affirmative procedure is used.
The Chair
With this it will be convenient to discuss the following:
Amendment 122, in clause 40, page 28, line 8, at end insert—
“(5A) Subsections (2) and (5) are subject to section (Affirmative procedure: further provisions).”
This amendment, together with New Clause 14, provides that the made affirmative procedure under Clause 40 is only used in specified circumstances and that, in other circumstances, the draft affirmative procedure is used.
Amendment 123, in clause 48, page 33, line 32, at end insert—
“(6A) Subsections (2) and (6) are subject to section (Affirmative procedure: further provisions).”
This amendment, together with New Clause 14, provides that the made affirmative procedure under Clause 48 is only used in specified circumstances and that, in other circumstances, the draft affirmative procedure is used.
Amendment 124, in clause 51, page 35, line 26, at end insert—
“(7A) Subsections (4) and (7) are subject to section (Affirmative procedure: further provisions).”
This amendment, together with New Clause 14, provides that the made affirmative procedure under Clause 51 is only used in specified circumstances and that, in other circumstances, the draft affirmative procedure is used.
Amendment 125, in clause 54, page 37, line 44, at end insert—
“(11A) Subsections (8) and (11) are subject to section (Affirmative procedure: further provisions).”
This amendment, together with NC14 , provides that the made affirmative procedure under Clause 54 is only used in specified circumstances and that, in other circumstances, the draft affirmative procedure is used.
New clause 14—Affirmative procedure: further provisions—
“(1) The appropriate Minister may only make regulations under the powers specified in subsection (2) if the condition in subsection (3) or the condition in subsection (4) is met.
(2) The powers specified in this subsection are those under—
(a) section 32(2),
(b) section 40(2),
(c) section 48(2),
(d) section 51(4), and
(e) section 54(8).
(3) The condition in this subsection is that the instrument contains a declaration that the appropriate Minister concerned is of the opinion that, by reason of urgency, it is necessary to make the regulations without a draft of the instrument being laid before, and approved by a resolution of, the House of Commons.
(4) The condition in this subsection is that the instrument contains a declaration that the appropriate Minister concerned is of the opinion that it is necessary to make the regulations without a draft of the instrument being laid before, and approved by a resolution of, the House of Commons in order to secure—
(a) the protection of the public revenue, or
(b) continuity in the administration of the tax system.
(5) In any case where neither the condition in subsection (3) nor the condition in subsection (4) is satisfied, no regulations may be made in exercise of the powers specified in subsection (2) unless a draft has been laid before, and approved by a resolution of, the House of Commons.”
This new clause provides that the made affirmative procedure is only used in specified circumstances and that, in other circumstances, the draft affirmative procedure is used.
Anneliese Dodds
These amendments and the new clause focus specifically on the made affirmative procedure. We have tabled them because we want to ensure that the made affirmative procedure provided under clause 32 is used only in specified circumstances and that, in other circumstances, the draft affirmative procedure is used.
There have been consistent calls, even before the Government’s current enthusiasm for the made affirmative procedure, for it to be used judiciously. This is not a partisan point. In 2009 the Lords Constitution Committee maintained:
“Whilst accepting that in a very limited number of circumstances there may be grounds for seeking to fast-track parliamentary procedure of draft affirmative instruments, we take this opportunity to remind the Government of the importance of executive self-restraint.”
When made affirmative procedures have been used in the past, there appears to have been a strong commitment by the Government of the day to restrict their use as much as possible. That is certainly my impression having looked at some of the commitments made by the then Government in relation to the Banking Act 2009. Similarly, with the new approach to financial regulation that came in in 2011, the then Government stated that the made affirmative procedure would be used as a last resort. They said it would
“rarely—if ever—need to be used”.
Hon. Members will surely agree that the financial crisis required action just as rapid as is currently necessitated by the Government’s approach to leaving the EU. However, in the former case, there seems to have been a commitment to be sparing in the use of the made affirmative procedure that we do not have in this case. Because of that, this approach has received significant criticism in the House of Lords. We have already referred to the Lords’ general criticisms, and I hope that the Government will heed our concerns.
I do not want to repeat the debate that we had previously on whether we are in an unprecedented period, but there have been situations in the past when Government have had to speedily enact different types of policy making. However, as I said, in those situations, Government appear to have been more restrained in their use of these kinds of procedure, particularly in their use of the made affirmative procedure. We cannot understand why the Government are so wedded to this procedure, without further qualifications, that enables the Executive to make law that is binding from the moment it is laid down, without any parliamentary engagement whatever.
Mel Stride
New clause 14 and amendments 121 to 125 seek to add further parliamentary scrutiny of the way that certain powers in the Bill to make secondary legislation can be exercised. The Bill allows the powers in question to be exercised under the made affirmative procedure; the amendments would change that in certain circumstances to the draft affirmative procedure.
The Committee is aware that the Bill contains a range of powers to make regulations on a number of different aspects of VAT, customs and the excise regime, which will come into effect after the UK leaves the EU. New clause 14 is concentrated on a small subset of these powers, namely those that apply with respect to setting or increasing tariff rates, charging export and excise duty, some of the general rules for excise duty, and provisions under clauses 51 and 54, to the extent that they amend or repeal primary legislation. All those powers are subject to the made affirmative procedure.
In each case, the amendment would require a Minister who wished to exercise a power using the made affirmative procedure to make, on each occasion, a declaration that such a procedure is warranted, either for reasons of urgency, revenue protection or security continuity in the administration of the tax system. When a Minister does not make such a declaration, the regulation in question would default to the draft affirmative procedure.
I fully understand concerns about the inappropriate use of parliamentary procedures, but there is a compelling case for using the made affirmative procedure for the powers referred to in the amendments. We must not lose sight of the fact that the Bill is primarily concerned with the charging of tax and duty. Usual procedure when giving effect to changes in tax policy is the made affirmative procedure—that is a very important point in the context of the other examples I appreciate the hon. Lady making in this regard. The reasons for that are that any changes need to come into effect quickly—in some cases immediately. The made affirmative procedure is the standard mechanism for achieving that aim.
It is generally accepted that change in tax policy—such as when the Government change a rate of tax—should come into effect immediately. The use of the made affirmative procedure allows the Government to give effect to such changes immediately, in order to avoid a gap in UK legislation. The same principle will apply for matters covered by the Bill. At some point in the future, the Government might wish to amend the customs tariff quickly to reflect a change in international trade. That is vital for tax matters, and the reason why the made affirmative procedure is the norm for tax legislation. Because tax entails financial consequences for both taxpayers and the Exchequer, clarity and certainty are essential.
Although the intention of the amendments may be to improve parliamentary scrutiny, if they were adopted, they would create uncertainty for businesses, and that uncertainty would be in nobody’s interest. On that basis, I hope that the hon. Lady will not press new clause 14 and amendments 121 to 125. If not, I urge the Committee to resist them.
Anneliese Dodds
I am grateful to the Minister for his explanation. I question, however, whether the circumstances he just described as appropriate for the use of the made affirmative procedure do not fall precisely within the circumstances we ask the Government to demonstrate are in place within the declaration we are asking for. We say that it is possible for the made affirmative procedure to be used, provided the Government make clear that these measures are necessary for the protection of the public revenue or continuity in the administration of the tax system. Those are exactly the kinds of circumstances that the Minister has referred to, so it is not clear to us why he would not accept our amendment. We are saying that we do accept the use of the procedure in such circumstances as he just described: it is when things go beyond them into other areas that we are not satisfied with the use of the procedure.
Mel Stride
I understand the hon. Lady’s argument, but the matter comes down ultimately to the relevant level of scrutiny. The argument is strong that the circumstances that we are discussing, of a quick response and the ability immediately to set the tariff or change duties—things of that kind—lend themselves to the approach in question. If the central argument is about scrutiny, the question is whether the made affirmative procedure provides sufficient scrutiny. I maintain that it does. It requires in-depth scrutiny by the House, which would be subject to a Division if there were differences of opinion on the matter in hand.
Perhaps I may briefly pray in aid Joel Blackwell, the witness from the Hansard Society, who is getting a lengthy outing in our discussions today. I take on board the Opposition points about its being important, from his perspective, to maintain impartiality in the deliberations of the Hansard Society; we all respect it, which is why we were pleased to have him in particular as a witness. However, he did state that
“the Brexit Bills are going to have to be framework Bills—based on the fact that the legislation for Brexit is going to need some speed and flexibility”—[Official Report, Taxation (Cross-Border Trade) Public Bill Committee, 23 January 2018; c. 47, Q63.]
That is at the heart of our arguments that we are putting on these matters in general.
Anneliese Dodds
I shall not return to what the witness did or did not say. I think there may be a difference of opinion there. I am afraid I do not agree with the Minister’s description of the made affirmative procedure. In practice, of course, that procedure means that measures are in place from the moment they are laid, so they are immediately enacted. There need be no effective scrutiny by way of discussion by the House or other bodies, to allow them to stay in place over time. We are talking about a mechanism very different from what would usually be applied.
I shall not push the point. I appreciate the Minister’s comments. I just hope that the Government will heed our call for them to restrict the use of the measure to exactly the kinds of areas that the Minister just described—only those where the procedure is necessary to protect public revenue, or for continuity in the administration of the tax system. If its use goes beyond that, we fear we shall be in tricky waters. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Jonathan Reynolds
I beg to move amendment 140, in clause 32, page 20, line 8, leave out subsection (9).
This amendment limits the powers with respect to public notices.
The Chair
With this it will be convenient to discuss amendment 141, in clause 37, page 24, line 36, leave out “that provision” and insert
“ensuring that public notice is available in an accessible form to all people who are likely to be affected by or interested in the notice”.
This amendment makes specific provision about the accessibility of public notices.
Jonathan Reynolds
The amendments deal with public notices—one relates to powers and the other to accessibility. The Opposition have already raised concerns, by way of amendment 139, about the alarming concentration of power in the hands of the Executive that would come about if the conversion of public notices into regulations were to be allowed. It is a deeply troubling constitutional overstep, which must be challenged at every stage.
The amendments focus on limiting the powers of the Executive with regard to public notices, which the Opposition believe would be a fundamental over-reach of the Executive’s powers. We are not the only ones to argue that case. The House of Lords Delegated Powers and Regulatory Reform Committee published its report after Second Reading in the Commons. That flagged up the constitutional difficulties that would arise from making law by public notice. It was scathing in its assessment of the provision.
Amendment 141 also addresses a pressing issue that arises from using the method in question as a tool for creating regulations. At no point does the Bill indicate what constitutes a public notice. As the House of Lords Committee highlighted, under clause 37(5), the only qualification at present is purely that the person issuing it has selected a channel that they consider appropriate. A definition of “appropriate” is absent from the Bill. We are told that that could even include a tweet or a message on Facebook. We can all agree that policy made by Twitter is not a good idea.
Kirsty Blackman
I rise to support the amendments. I said in a previous sitting—one is encouraged to repeat oneself here—that one of the first things I said when I saw the clause was, “What constitutes a public notice? What does that even mean?” I am no more happy about it now that I have found out what the definition is. I am concerned that there are no rules about how such notices need to be shared. The Government probably need to look at putting into all laws that come forward what constitutes a public notice and what constitutes the public having enough notice of something.
With regard to this clause, it would be sensible for HMRC, whatever changes it makes, to ensure that everyone knows what those changes are and that all affected people are aware of them. Otherwise, we will have a situation where HMRC chases people for doing the wrong thing when they did not know they were doing the wrong thing, because the change was tweeted on the Prime Minister’s Twitter feed rather than put out in an accessible format. I do not imagine that the Government would be daft enough to put a public notice in a place where no one would see it, but it would be useful to have clearer rules about public notices. I therefore support what my honourable colleagues on the Labour Front Bench seek to do with the amendments.
Mel Stride
Amendment 140 seeks to limit the powers in the Bill to use public notices. However, a notable effect of the amendment would be to remove the ability to use regulations to cover matters that are dealt with in a public notice, which may limit the Government’s ability to package delegated legislation in the most effective way.
The circumstances in which provision can be made by public notice are well defined in the Bill. There is no power in the Bill to allow for provision that may be made by regulations to be made alternatively by public notice. I reassure the Committee that it is not unusual for public notices to be used to make provision in relation to the administration of tax regimes. They are typically used, for example, to make provision that is purely technical or administrative in nature; that may be subject to regular updating, including to take account of external factors; that may need to be changed swiftly; that is based on external sources; or that is not otherwise required to be set out in secondary legislation, but is included to improve transparency. An example in the Bill is the provision enabling the form and content of a customs declaration to be set out in a public notice.
Another effect of the amendment would be to disapply subsections (6) to (8) of clause 32 in respect of public notices, although they would continue to apply in respect of regulations. Let me reassure the Committee that those subsections do not widen the subject matter that public notices can be used to address. As I have stated, that subject matter is set out clearly by the relevant clauses and schedules. On that basis, I urge the Opposition to withdraw amendment 140.
Amendment 141 aims to require public notices published under the Bill to be made in a form that is accessible to
“all people who are likely to be affected by or interested in”
them. I sympathise with the amendment’s general thrust. It is, of course, vital that any public notice published by HMRC is made available in an accessible format to everyone affected. However, I assure the Committee that including such an obligation in the Bill is unnecessary. HMRC has extensive experience of producing public notices to communicate changes in tax policy to affected parties, whether individuals or businesses, as part of its wider engagement with bodies that represent customers. That includes ensuring that any information set out in a public notice is clear and accessible. Indeed, the Government already make everything we publish on gov.uk accessible and available in a variety of formats. The public notices published under the Bill will be no different.
HMRC also has good working relationships with a range of business representative groups and uses those channels to reach the wider business community. For example, it is normal practice to share advance drafts with business groups to seek their views. HMRC will continue to follow the same approach with its public notices on the changes introduced by the Bill. I therefore ask the hon. Gentleman to withdraw his amendments.
Jonathan Reynolds
I have listened intently to the Minister’s reassurance, particularly about the modesty of public notices and the undesirability of making more specific recommendations about their accessibility. I also listened to his point that public notices cannot replace regulation. However, the Bill states that regulations can replace public notices, which suggests that the burden of what is being considered is wider than the Government have declared.
Even in my relatively short time as a shadow Treasury Minister, I have seen relatively arcane bits of our regulatory constitutional apparatus used on several occasions, for instance to limit the scope of debate on amendments to a Finance Bill. Once powers are in place, they can be used for ends for which they were not intended when they were put on the statute book.
I do not intend to press the amendment to a vote, but I think that we may have to return to the issue on Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 32 ordered to stand part of the Bill.
Clauses 33 to 38 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(David Rutley.)
Taxation (Cross-border Trade) Bill (Eighth sitting)
(6 years, 9 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I beg to move amendment 13, in clause 39, page 27, line 12, at end insert—
“(aa) the interests of manufacturers in the United Kingdom,”.
This amendment requires the Treasury to have regard to the interests of manufacturers in considering the rate of export duty.
The Chair
With this it will be convenient to discuss the following:
Amendment 79, in clause 39, page 27, line 17, at end insert
“and
(e) the impacts on sustainable development.”
This amendment requires the Treasury to have regard to the impacts on sustainable development in considering the rate of export duty.
Amendment 119, in clause 39, page 27, line 17, at end insert
“and
(e) the public interest.”
This amendment requires the Treasury to have regard to the public interest in considering the rate of the export tariff.
Amendment 142, in clause 39, page 27, line 17, at end insert—
“(e) the interests of producers in the United Kingdom.”
This amendment requires the Treasury to have regard to the interests of producers in the United Kingdom in considering the rate of export duty.
Amendment 143, in clause 39, page 27, line 17, at end insert—
“(e) the desirability of maintaining United Kingdom standards of food safety.”
This amendment requires the Treasury to have regard to the desirability of maintaining United Kingdom standards of food safety in considering the rate of export duty.
Amendment 144, in clause 39, page 27, line 17, at end insert—
“(e) environmental protection.”
This amendment requires the Treasury to have regard to environmental protection in considering the rate of export duty.
Amendment 145, in clause 39, page 27, line 17, at end insert—
“(e) the welfare requirements of animals as sentient beings.”
This amendment requires the Treasury to have regard to the welfare requirements of animals as sentient beings in considering the rate of export duty.
Jonathan Reynolds
Welcome to the Chair for the final sitting of the Committee, Mrs Main.
As is explained in the explanatory notes, the Bill does not establish the rate of export duty, but the power to do so is contained in it so that it can be introduced subsequently through regulations made by the Treasury. As we discussed when considering amendment 1 to clause 8 during my first speech in Committee, it is vital to pay careful attention to the needs of manufacturers for the future of our economy. The Committee will be pleased to hear that I will not repeat that speech in its entirety, although I am sure colleagues would like to hear parts of it.
The representatives of the manufacturing industry to whom we spoke in our helpful evidence sessions on Tuesday 23 January amply illustrated why such a consultative approach is important, by raising many legitimate considerations to which answers are required. Given the amount of detail in the Bill that is left to secondary legislation, all manufacturers seek is minimal reassurance that their interests will be taken into account. They are not asking for special measures, but pointing out that we are on the cusp of a complex post-Brexit world and that clarity is needed as soon as possible. It has been the Government’s choice not to include that in the Bill, as we have discussed, but we need some middle ground to address the resulting lack of certainty, given how it has inhibited the ability of UK industry to prepare for that future landscape.
As we draw towards the end of the Committee, I am only too aware that we are becoming increasingly committed to the process of adding detail by secondary legislation. That makes it even more important for the vital consultation with manufacturers to be enshrined in the Bill. We will not necessarily seek to press the amendment, but I hope that the Minister, through his comments, can provide reassurance for manufacturers at this stage.
The Financial Secretary to the Treasury (Mel Stride)
It is a pleasure to serve under your chairmanship again, Mrs Main.
The amendment would add the interests of manufacturers to the list of factors the Secretary of State and the Treasury respectively must have regard to when recommending or imposing a rate of export duty. The Government acknowledge the wide-ranging impact that any future imposition of export duty could have on the UK economy and that of our trading partners. We would consider imposing an export duty only in wholly exceptional circumstances. Of course, in practice the Secretary of State and the Treasury would have regard to many factors. The provision requiring the Secretary of State and the Treasury to have regard to productivity, trade, consumer interests and competition is sufficient and broad enough to encapsulate the economic and strategic interests of the whole of the United Kingdom.
Taking into account the interests of manufacturers will often form part of the Secretary of State and Treasury’s duty to consider how export duty will maintain and promote productivity in the UK, but it would be inappropriate to specify an exhaustive list of factors in the Bill. The Government believe that the scrutiny and procedure set out in the Bill are proportionate and enable us to respond quickly to exceptional circumstances to implement an export duty.
Amendment 79 would add the impacts on sustainable development to the list of factors the Secretary of State and Treasury must have regard to when respectively recommending a rate of export duty or considering whether to impose export duty, and the rate of duty applicable. Where relevant and possible, the Government will take into account the impact of export duty on sustainable development. However, it would be inappropriate to specify an exhaustive list in the Bill. Certain factors will be relevant in certain cases, and their importance may change over time.
Amendment 119 would add the public interest to the list of factors the Secretary of State and the Treasury must have regard to when respectively recommending a rate of export duty or considering whether to impose export duty, and the rate that should apply. The provision requiring the Treasury and the Secretary of State to have regard to productivity, trade, consumer interests and competition is sufficient to encapsulate the public interest by considering the economic and strategic interests of the whole of the UK.
Amendments 142 to 145 provide additional factors that the Treasury and Secretary of State must have regard to respectively when considering whether to impose export duty and the rate that should be applied. Clause 39(4) is broad enough to cover the economic and strategic interests of the UK. In particular, I question the necessity of considering food standards, environmental protection and the welfare of animals when setting a tax on goods leaving the United Kingdom. The amendments would not achieve the presumed aim of preserving standards in the UK. Lastly, the interests of producers are intrinsically linked with competition, productivity and the promotion of trade, which are already included in the Bill. I therefore urge hon. Members not to press the amendments.
Kirsty Blackman (Aberdeen North) (SNP)
Thank you for chairing the Committee this afternoon, Mrs Main. I appreciate having the opportunity to speak, and want to speak in favour of all seven amendments in this group.
Amendment 13 is about the Government giving consideration to the interests of manufacturers, which we spoke about at length in relation to import duty. I have previously made the case about the disproportionate or differentiated geographical implications of some of the changes the Government are making and some of the rules that they will have. That is particularly important in relation to manufacturing interests, given that those are mainly in the north of England and in Scotland, rather than further south. I therefore feel that it is relevant to take this consideration into account.
We have received written evidence from organisations about sustainable development. They say that it is important for the Government to consider sustainable development when making decisions about import or export duty—we are obviously talking about export duty in this case—and the Government should do that.
Amendment 119, which appears in my name and that of my hon. Friend the Member for Dunfermline and West Fife, relates to the public interest. I am not sure that I agree with the Minister when he says that consumer interest and the interests of promoting external trade, productivity and competition adequately cover the entirety of public interest. I think that consumer interest is different from public interest in this regard, and a number of our constituents would agree if they came to discuss this issue with us.
Amendment 142 relates to producers. Again, there is a geographical bias towards the north and the more rural parts of the four nations of the United Kingdom. Producers are generally in places that are a bit further away from London, and they have a significant positive benefit on the areas that they are in. People tend to be employed in agricultural produce, for example, in areas where there are few other types of employment, so having regard to the interests of producers is important.
I take the Minister’s point that the clause is about export duty rather than import duty, where food safety regulation may be more relevant. However, it is still relevant that the Government ensure that food safety is high up the agenda, given our conversations about trade deals, chlorinated chicken and the possible erosion of food safety now that the United Kingdom is planning to leave the EU and the food standards that come with it.
Amendment 144 is about environmental protection. Again, it would be a good statement of direction if the Government explicitly included environmental protection in anything that they do, given that America is not looking at implementing the Paris agreement. It is making negative changes that will impact on the future of the world for us, our children and our children’s children. I would not want to see the United Kingdom go down a similar route in the erosion of environmental protection standards, so it is really important that this proposal is included.
Amendment 145 relates to the welfare of animals as sentient beings. Given that we have had discussions in the House about the sentience or otherwise of animals, and it seems that a number of Members across the House are less keen to stress that animals are sentient beings, it is important that we have this written into the Bill.
Although the Minister’s comments were a bit helpful, they could have been more so. It would have been more helpful for the Minister to say, if he were so minded, that those factors will be considered when making the decision. In fact, we have a list of four factors that will be considered, and there is no opportunity for that to be wider. If the Bill said “any other relevant factor”, for example, that would encapsulate them all and the Minister could stand up and say, “We will of course consider the public interest and the interests of food safety and of environmental protections when we are making these decisions.” We would have a level of reassurance that those things will be taken into account.
All the amendments are important. I accept that they are specific to export duty, which is relatively unusual and pretty niche, but to have those things explicitly stated by the Minister in Committee or in the Bill would be incredibly useful, rather than the short list of four factors that does not allow for a wider consideration of the issues.
Mel Stride
I will respond because, as ever, the hon. Lady made some helpful comments.
On taking into account sustainable development and the interests of producers, I refer the hon. Lady to the point that she made herself, which is that the clause does not prohibit any of those matters being taken into account. The point I made earlier was that the Government certainly do not see the need to specifically reference those matters—or, indeed, the many other matters that the Committee and individual parliamentarians may feel are important in this context—in order that we do not have an exhaustive list, but rely on the common sense and good public policy making of the people who make such decisions.
Duties, whether they are import duties or export duties, which are potential though unlikely, are a slightly strange instrument to use in the food safety context. It would be much more appropriate for the Department for Environment, Food and Rural Affairs to look at those issues and use its powers to take action where clear breaches of food safety have occurred or are likely to occur.
Anneliese Dodds (Oxford East) (Lab/Co-op)
It is a pleasure to see you in the chair, Mrs Main. I am grateful to the Minister for those remarks. I want to focus on amendment 79 and press him a bit on sustainable development.
There is an important consideration here, which relates to our discussion earlier about what will happen if the UK leaves the EU without a deal and falls back on World Trade Organisation provisions—something I hope will not happen, but that the Government have not ruled out. The hon. Member for Aberdeen North asked the Under-Secretary of State for International Trade exactly where the powers are to create WTO schedules. I do not know if the Minister has the answer yet—perhaps we will find out later. There is a pertinent issue when it comes to laying those schedules if we have to accede to the WTO as a new member—that is, if we do not conclude a customs and trade arrangement that means we do not need to join separately. A number of the countries that have joined the WTO recently have found it difficult to apply the provisions of the general agreement on tariffs and trade that enable sustainable development, environmental considerations, human health and so on to outweigh having low or non-existent tariffs. When that has been offered to one country, it should therefore be offered to all.
China’s recent dispute about raw materials is a pertinent example. As with all the most recent accessions to the WTO, when China acceded, it was required to submit commitments on export duty that bound it to keep export duty at its current rate or to reduce it in relation to different product lines. If that had been part of the general agreement on tariffs and trade, China would have been able to invoke the WTO’s GATT provisions that say that human health can trump those other considerations, but because there were separate agreements, it was not allowed to invoke environmental considerations.
Kirsty Blackman
I want to follow up on the point about the WTO schedule. I appreciate that the Minister wrote to the Committee about it, but he did not answer the question that was asked, which was: where do the Government have the power to lodge schedules with the WTO? The question was not: where do the Government have the power to implement such schedules? That is the question that he answered; I appreciate that he answered it fully, but it was the wrong question.
As far as I am aware, the UK Government have not legislated to give themselves the power to lodge schedules with the WTO in this Bill, the Trade Bill or the European Union (Withdrawal) Bill. It is not about the implementation of them; it is about the lodging of them. As my colleague on the Labour Front Bench, the hon. Member for Oxford East, mentioned, there are concerns about the impact on sustainable development and such matters. It would be useful if the Minister were to follow up his letter with a further one that answers that question.
Mel Stride
I thank the hon. Members for Aberdeen North and for Oxford East for their contributions. On the issue of sustainable development, I can provide the Committee with reassurance that the Government take that area of policy extremely seriously. As the Committee will know, the UK Government have stated their commitments to the UN sustainable development goals that were agreed in September 2015. A publication released on 14 December 2017 outlined the Government’s response to the UN SDGs and their relevance to individual departmental plans. Trade policy is explicitly referenced in five of those 17 goals.
The hon. Member for Oxford East asked me about the letter regarding WTO scheduling, upon which I believe she may still be waiting.
Mel Stride
Oh, it has been received. I was going to say that if it had not been, she would receive it imminently. I am pleased that my desire has already been put into effect. I would also be very happy to write to the hon. Member for Aberdeen North about the various issues she raised regarding WTO accession.
Jonathan Reynolds
All the amendments relate, as ever, to the lack of detail in the Bill. The Minister has provided some words of reassurance, which are appreciated, but in the end it comes back to the point that very important details, which industry needs to plan, are missing from the Bill. However, I think that that point has been made, and for that reason I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Anneliese Dodds
I beg to move amendment 14, in clause 39, page 27, line 20, at end insert—
“() by a relevant select committee of the House of Commons, or
() contained in a resolution of the House of Commons.”
This amendment requires the Treasury to have regard to recommendations of any relevant select committee of the House of Commons or contained in a resolution of the House of Commons in considering whether to exercise the power to impose export duty.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
Amendment 15, in clause 40, page 27, line 35, leave out subsections (2) to (4).
This amendment is consequential on NC8.
Amendment 16, in clause 40, page 28, line 6, leave out
“other than regulations to which subsection (2) applies”.
This amendment is consequential on NC8.
Clause 40 stand part.
New clause 8—Setting export duty: enhanced parliamentary procedure—
“(1) This section applies to—
(a) the first regulations to be made under section 39, and
(b) any other regulations to be made under that section the effect of which is an increase in the amount of export duty payable.
(2) No regulations to which this section applies may be made by the Treasury in exercise of the power in section 39(1) except in accordance with the steps set out in this section.
(3) The first step is that a Minister of the Crown must lay before the House of Commons a draft of the regulations that it is proposed be made.
(4) The second step is that a Minister of the Crown must make a motion for a resolution in the House of Commons setting out, in respect of proposed regulations of which a draft has been laid in accordance with subsection (3)—
(a) the rate of export duty applicable to goods specified in the resolution;
(b) any proposed export tariff (within the meaning given in section 39(3)(a)); and
(c) any measure of quantity or size by reference to which it is proposed that the duty be charged.
(5) The third step is that the House of Commons passes a resolution arising from the motion made in the form specified in subsection (4) (whether in the form of that motion or as amended).
(6) The fourth step is that the regulations that may then be made must, in respect of any matters specified in subsection (4)(a) to (c), give effect to the terms of the resolution referred to in subsection (5).”
This new clause establishes a system of enhanced parliamentary procedure for regulations setting export duty, with a requirement for the House of Commons to pass an amendable resolution authorising the rate of export duty on particular goods and related matters.
Anneliese Dodds
I am sorry about the complexity of all the different amendments, but they reflect the Members’ concerns about the Bill as it stands in these particular clauses. I will not speak at length, because many of the issues have already been covered in our previous discussions.
In relation to amendment 14, my hon. Friend the Member for Stalybridge and Hyde has already detailed why we think it would be appropriate to use the expertise and the opportunities for consensus building provided by the Select Committee system in the Bill. I will not go over those arguments again; suffice to say, I hope the Government will consider the arguments that my hon. Friend made, take the opportunity afforded by the Select Committee system and apply it here when it comes to setting export duty and scrutinising the setting of it.
We have covered many of the principles underlying amendments 15 and 16 and new clause 8. Again, we are asking for greater parliamentary scrutiny—this time in the area of export duties. I was thinking about how else I could try to persuade the Government of our arguments, and one issue I decided to focus on was that we have often heard the word “technical” applied to many of these measures. Of course, they are technical when they are about minimal changes to rates, or just alignments between different measures, but we need to appreciate that they can have a significant impact on our constituents, because there are winners and losers when we change the parameters of trade.
Capital is largely mobile, but workers often are not. Academic evidence shows that there can be considerable dislocation when there are changes to trade rules. It may well be the case that, in the past, those matters were often seen as technical, but they have had real-world implications. That is particularly important in our country, where the kind of active labour market measures that might have enabled labour to be more mobile when there are changes to duties that affect working patterns do not exist to the same extent that they do in many countries. Recent research by the Resolution Foundation suggests that people have become less mobile in their jobs, potentially because they do not have that help to alter jobs. It is important to consider these issues carefully when there are not those compensatory measures there for people who might be negatively affected by trade measures that alter the pattern of economic activity in our country.
It is absolutely right and proper that we seek appropriate parliamentary scrutiny of measures that could have a significant impact on the availability of manufacturing jobs, especially in our constituencies. I hope that the Government will bear that in mind. Yes, some of the measures could be described as technical, but they will certainly have impacts on our constituents, and we should all be aware of that while we discuss them.
Mel Stride
Clause 39 enables the UK to establish an export duty if it is considered appropriate to do so. Clause 40 sets the parliamentary procedure for doing so. An export duty is, as the name suggests, a tax on goods leaving the country. I used the term “considered appropriate to do so” quite deliberately. The EU has no standing export duty. Indeed, I believe the last time the EU imposed an export duty was in the late 1990s, in respect of wheat.
However, the revised Union customs code, which came into force only in 2016, maintained the EU’s ability to impose an export duty. The EU decided it still needed to maintain the option to impose one in the future. Therefore, in an implementation period, where the UK may be following the EU’s common external tariff for a limited period of time, we may need to retain the ability to impose an export duty in case the EU chooses to apply one. In the longer term, it is right to maintain at least the option to establish one if the circumstances demand, just as the EU retained that flexibility when it overhauled its customs code. In allowing for an export duty, but not introducing one, these clauses reflect the status quo, except with a stronger role for Parliament in approving any future export duty.
Clause 39 allows for the imposition of a new export duty tax and for replication of any part of the customs regime in part 1 as may be necessary to administer it. In recognition of the exceptional nature of export duties, clause 40 specifies that the first regulations made under clause 39, imposing an export duty, are subject to the affirmative resolution procedure.
Amendment 14 would require the Treasury to consider recommendations about the imposition and rate of export duty made by a relevant Select Committee or contained in a resolution of the House of Commons when considering whether to impose export duty. The Treasury will listen closely to recommendations from a range of interested parties, including relevant Select Committees and Members of the House. In addition, Select Committees already have the power to question Ministers on the policy within their departmental remit. The Treasury will answer any questions from the relevant Select Committees.
The Bill will ensure that the Government can respond quickly to exceptional circumstances and impose an export duty, while still giving the House a vote through the made affirmative procedure. Therefore, the Government believe that it is not necessary to include this additional requirement in the Bill.
New clause 8 and consequential amendments 15 and 16 seek to put in place additional parliamentary processes for the introduction of, and any increase to, the rate of export duty. For indirect tax matters, it is common to have a framework in primary legislation supplemented by secondary legislation. The Bill introduces a comprehensive framework for a new stand-alone customs regime, which will be underpinned by the detailed and technical secondary legislation.
The Bill ensures that the scrutiny procedures applied to the exercise of each power are appropriate and proportionate, taking into account the technicality of the regulations and the frequency with which they are likely to be made. As currently drafted, the House of Commons would have a vote on regulations introducing export duty under the made affirmative procedure. The Government believe that to be appropriate and proportionate.
To sum up, although an export duty should be applied only in exceptional circumstances, it is right that the UK has the ability to impose one if it becomes necessary, including if the EU decides to impose one for a limited period while we may be aligned with the common external tariff.
Anneliese Dodds
I am grateful to the Minister for his commitment to respond to any questions that are levelled by Select Committees in this area. That is a positive commitment. It is an area that we will keep an eye on, but after the discussion we have just had, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 39 ordered to stand part of the Bill.
Peter Dowd (Bootle) (Lab)
On a point of order, Mrs Main. I indicated earlier that I wanted to speak on amendments 142 to 145 to clause 39, on animal welfare and sentience. I have tried to get in, but if the opportunity has passed, so be it. We may therefore have to pursue it on Report. I want the Committee to recognise that I did wish to speak and did indicate that.
The Chair
I am sorry, but we have moved on.
Clause 40 ordered to stand part of the Bill.
Clause 41
Abolition of acquisition VAT and extension of import VAT
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 133, in clause 42, page 30, line 1, leave out subsection (6) and insert—
“(6) No regulations may be made under this section unless a draft has been laid before, and approved by a resolution of, the House of Commons.”
This amendment requires regulations under Clause 42 to be subject to the affirmative procedure.
Amendment 83, in clause 42, page 30, line 7, at end insert—
“(7A) No regulations may be made under this section after the end of the period of two years beginning with exit day.”
This amendment, together with amendment 84, limits the duration of the delegated power under Clause 42 to the period ending two years after the United Kingdom leaves the European Union.
Amendment 84, in clause 42, page 30, line 8, at end insert—
“‘exit day’ has the meaning given by section 14(1) (interpretation) of the European Union (Withdrawal) Act 2018 and subsections (2) to (5) of that section apply to the term under this section as they apply to the term in that Act,”
See explanatory statement for amendment 83.
Clause 42 stand part.
Clause 43 stand part.
That schedule 8 be the Eighth schedule to the Bill.
Mel Stride
Clause 41 will amend sections 1 and 15 of the Value Added Tax Act 1994 so that, on withdrawal from the EU single market, all goods entering the UK will be classified as imports. The clause will also maintain the existing link between the VAT and customs duty on imports.
VAT raised approximately £120 billion last year via 2.2 million VAT-registered traders—about 20% of the Exchequer’s entire tax yield. It is therefore vital that our VAT system continues to operate effectively after EU exit, whatever the outcome. Part 3 of the Bill covers value added tax and consists of three clauses that will be key to maintaining a fully functioning VAT system. The changes ultimately required will, of course, be dependent on the outcome of negotiations. Our intention, as outlined in our White Paper, is to keep VAT processes after our EU exit as close as possible to what they are now.
Under existing EU and UK rules for intra-EU trade in goods for VAT-registered businesses, the VAT on goods coming into the UK from the EU is known as acquisition VAT. Such goods are not subject to routine customs control or customs duty. Clause 41 will make changes key to ensuring that, in the absence of an agreement, goods entering the UK from the EU will continue to be subject to VAT. It will abolish the concept of acquisition for goods that enter the UK from the EU, classifying them as imports instead.
Clause 41 will also replace section 15 of the Value Added Tax Act, which determines when goods are imported for VAT purposes and who is liable for that VAT, with a new section 15. This change merely reflects the fact that the customs rules will be contained in UK rather than EU law. Time of importation and liability for import VAT will still be connected to the equivalent rules for import duty. No other changes will be made as a result of the clause.
Operating in conjunction with schedule 8, clause 41 will ensure that goods coming from the EU will be classified and treated as imports in the same way as goods entering the UK from the rest of the world. The application of import VAT will ensure a level playing field on which EU businesses do not have a competitive advantage over UK businesses.
As the Government outlined in our autumn Budget, VAT-registered businesses currently benefit from postponed accounting for VAT when importing goods from the EU. The Government recognise the importance of such arrangements to business because of the cash flow advantage they provide. We will take that into account when considering potential changes after EU exit and will look at options to mitigate any impact on cash flow.
Clause 42 will make changes that ensure that the status of EU law in relation to VAT is clear. The European Union (Withdrawal) Bill lays out the Government’s general approach to EU legislation post-EU exit. On VAT, we need to take steps to ensure that the regime works effectively once we have left. The clause will result in EU legislation being retained in respect of VAT only where it is sensible to do so. The approach adopted is as we envisaged in the European Union (Withdrawal) Bill.
Clause 42 will disapply EU regulations that relate to VAT, except the VAT implementing regulation. In the main, those other regulations relate to single market reciprocal arrangements such as for exchange of information; depending on the outcome of negotiations, they will be superfluous after EU exit. Removal of EU legislation that is no longer required or is otherwise deficient is anticipated in the European Union (Withdrawal) Bill.
The clause will, however, retain the VAT implementing regulation as a tool to interpret EU-derived law. This is required for ongoing certainty and consistency of interpretation of the Value Added Tax Act, providing certainty to business and the Exchequer. Where appropriate, parts of the VAT implementing regulation can be removed by secondary legislation—for example, parts specific to EU transactions that, subject to negotiations, will not be required when the UK is no longer a member of the EU.
In line with the European Union (Withdrawal) Bill, clause 42 confirms that certain rights and obligations recognised before exit day will continue to apply for VAT, while rights and obligations no longer considered appropriate or relevant for UK VAT, such as those that relate purely to membership of the EU, may be disapplied or modified by regulations. The clause also reinforces that other provisions of the European Union (Withdrawal) Bill will apply, particularly clause 6, on “Interpretation of retained EU law”. VAT law and policy has been developed to a significant extent through European case law, including through application of that case law in the UK courts, so UK legislation and policy are inextricably linked with the case law. The clause reinforces that EU principles and case law on VAT that were determined pre-EU exit will continue to apply when interpreting domestic VAT legislation. For example, it identifies the Halifax and Kittel principles of abuse, which have been instrumental in tackling avoidance and “missing trader” fraud and have protected billions of pounds of revenue.
Amendment 133 seeks to change the parliamentary procedure for the exercise of powers under clause 42 from negative to draft affirmative. The Bill ensures that the scrutiny procedures that apply to the exercise of each power are appropriate and proportionate. The procedures take into account the technicality of the regulations and the frequency with which they are likely to be made.
Clause 42 outlines how EU law relating to VAT will apply post-exit. The powers in clause 42 relate to residual rights, powers and obligations in relation to VAT incorporated by clause 4 of the European Union (Withdrawal) Bill and to the VAT implementing regulation. They are therefore limited to those specific areas. The EU law affected by those provisions reflects the fact that we are currently in the EU. Once we exit, some of it will no longer be relevant or could not be applied in its current format. Given the limited width of the powers in the clause, it is appropriate and proportionate that their exercise should be subject to the negative procedure. The Government therefore urge the Committee to resist amendment 133.
Amendments 83 and 84 seek to limit the duration of the delegated power under clause 42 to the period ending two years after the United Kingdom leaves the European Union. They are two of a number of amendments that would time-limit powers in the Bill. As the Committee is aware, the Bill is drafted to cater for a variety of long-term outcomes from negotiations on our future relationship with the EU. It is essential that we have a fully functioning VAT system on and after EU exit, including during any implementation period. The powers in clause 42 have a part in ensuring that we are able to achieve that. As we do not know the outcome of negotiations with the EU, or exactly when the final outcome will be confirmed, it would not be prudent to time-limit those powers at this stage. I therefore urge the Opposition not to press the amendments.
Clause 43 introduces schedule 8, which makes changes to the Value Added Tax Act 1994 and other consequential changes relating to VAT to take account of the UK’s withdrawal from the EU, should they be needed. The principal VAT directive sets out the framework for the EU’s VAT system. Unlike the EU’s customs regime, there is little directly applicable legislation in the VAT sphere.
The VAT system in the UK is set out in the Value Added Tax Act 1994. The main body of the Act sets out the general rules, and the schedules set out the detail of areas such as the scope of tax reliefs and registration requirements. As is usual in tax law, the Act provides a range of powers for the detailed rules—in particular in relation to the administrative framework of the tax—to be set out in secondary legislation, of which the Value Added Tax Regulations 1995 are an example. That allows us to react quickly to changing circumstances or to threats to tax, or generally to ensure its effective administration and collection. Appropriate parliamentary scrutiny is provided for that secondary legislation. Statutory instruments that deal with the administration of tax are generally subject to the negative procedure, whereas those that make more fundamental changes are generally subject to the affirmative procedure. The changes made by schedule 8 are fully consistent with those principles.
The changes made by schedule 8 remove the many references to EU law and EU-specific rules and processes. In particular, they remove references to “acquisitions” and “dispatches”, which would no longer apply to trade in goods with the EU. Instead, they would become “imports” and “exports”. That requires the removal of numerous sections and schedules of the VAT Act associated with EU trade, and consequential amendments to many others. The VAT Act contains many existing powers, which schedule 8 amends to reflect those changes. Most changes are therefore necessary housekeeping to reflect changes to cross-border trade arising from our exit from the EU and changes in the Bill. They do not affect domestic trade or the underlying principles of the system.
However, there are some areas where, depending on the outcome of negotiations, more fundamental changes may be required. For example, there is a new power in relation to small parcels sent from abroad, to be used in the unlikely event of the contingency scenario. That enables the transfer of the liability to account for import VAT from the UK recipient to the overseas seller, and provides for the necessary administration and compliance framework. There is also a power to govern the VAT treatment of goods entering the UK from another territory in a UK customs union, which would allow for a modified treatment for trade with the EU if that is the result of negotiations.
In addition, there is a new provision that enables HMRC to obtain information from businesses so that it can share that with others, subject to appropriate safeguards, if doing so is part of an international VAT agreement. That would ensure that the UK can give effect to agreements that help combat international avoidance and evasion. That power can be used only if the agreement facilitates the administration, collection or enforcement of UK VAT. That mirrors the power for excise.
Clause 43 and the associated schedule 8 are necessary to maintain the UK’s VAT system, provide certainty for the UK’s cross-border trade and maintain revenue flows as we leave the EU. They also, along with other powers in the Bill, provide the ability to make changes to reflect the outcome of negotiations.
Peter Dowd
I hope the Minister does it with more feeling next time. That was a whip through the clauses, but I will read them. The fact that any of us have any sentience at all is wonderful. I also notice that the Minister’s cut and paste button in relation to appropriate and proportionate has been in overdrive again.
This area of our future relationship with the European Union has been the subject of much public debate, because, like much of the Bill, part 3 is conditional upon the outcome of the Government’s Brexit negotiations, which appeared to take a further turn for the worse this week. This section of the Bill provides a framework for a new VAT arrangement between the UK and EU member states, to be enacted should we need to do so. Clause 41 makes no provision for the abolition of acquisitions, as far as I can gather, as a taxable event for goods entering the UK from member states and, in the absence of a negotiated agreement, goods would be subject to import VAT.
Amendment 133 seeks to add the affirmative procedure to secondary regulations under clause 42. The clause sets out that the automatic conversion of EU law into UK law following exit from the European Union does not apply in matters relating to VAT. It also provides the Treasury with the power to exclude or modify any other EU rights, powers, liabilities, restrictions, remedies and procedures by statutory instrument, currently subject to the negative procedure. The amendment would ensure that the modification or exclusion of EU rights, powers, procedures and so on would be subject to affirmative resolution.
It is a fact that when we leave the European Union, we will leave the EU VAT area, and therefore we cannot be subject to the rules governing it, at least until further negotiations have taken place. That is why we have not chosen to table amendments to clause 41, which as I have outlined, sets out the major legal changes necessary to exit from the European Union, but have instead sought to ensure that any further regulations necessary are subject to the proper scrutiny—appropriate and proportionate proper scrutiny.
I would like the Committee to once again note that the amendment is in line with the recommendations made by the Delegated Powers and Regulatory Reform Committee, which explicitly called for the powers to be made affirmative, as we are seeking to do. The report says:
“Clause 42(2) contains a wide power for the Treasury to amend VAT law which is retained EU law under clause 4 of the current European Union (Withdrawal) Bill...Regulations under these powers are subject to annulment in pursuance of a resolution of the House of Commons. Given the importance and scope of the powers in clauses 42 and 47, we do not consider that the regulations should only ever be subject to the negative procedure.”
I again appeal to members of the Committee to heed the advice of the Delegated Powers Committee and support our amendment to introduce proper parliamentary scrutiny to regulations made under clause 42.
Amendments 83 and 84 relate to clause 42. They seek to add what are commonly known as sunset clauses to the provisions in clause 42 and would limit the duration of the delegated powers to the period ending two years after the United Kingdom leaves the European Union, which we think is appropriate and proportionate in the circumstances.
As was pointed out by the Delegated Powers and Regulatory Reform Committee, the Government’s own White Paper, “Legislating for the United Kingdom’s withdrawal from the European Union”, acknowledged the importance of time-limiting delegated powers where powers are not needed in perpetuity, so there seems to be a little bit of flip-flopping on that one from the Government. Indeed, clauses 7 to 9 of the European Union (Withdrawal) Bill contain important time limits on the use of delegated powers. There are no corresponding sunset clauses on the use of delegated powers in this Bill—there seems to be a bit of a pick-and-mix approach to scrutiny. Despite the Treasury’s delegated powers memorandum acknowledging that the Bill has been drafted to cater for various contingencies that might never materialise—for example, if the UK left the EU without a negotiated agreement—we must have these scrutiny powers in place to keep checks on that one.
Peter Dowd
Yes, two buttons: control and whatever it is. As I have mentioned, we are not alone in this view, which is shared by the Delegated Powers and Regulatory Reform Committee. The Government ought to respond to our genuine concerns in this matter, and we will persist in asking them until they do respond to our genuine concerns and those of other agencies, bodies, organisations and people.
Mel Stride
I am grateful to the hon. Gentleman for his invitation to do some gymnastics, but I do not think they will be necessary, because his questions are easily answered. He referred to my cut and paste button in respect of “appropriate” and “proportionate” and he is right; there is a cut and paste button for those terms, because they are extremely important. At the heart of this is his cut and paste button, in which he regularly says something along the lines of, “All we are asking for is appropriate scrutiny on these important matters.” So the argument has gone back and forth over every area of the Bill as we have ranged across the various clauses.
Moving on to the hon. Gentleman’s remarks about the House of Lords Delegated Powers and Regulatory Reform Committee and its comments on sunset clauses, and his specific question about why we would have sunset clauses in the context of the European Union (Withdrawal) Bill but they would not be appropriate in the case of this Bill, the answers are clear and require no gymnastics at all. They are that the aims of this Bill are different from those of other Brexit Bills.
For example, while the European Union (Withdrawal) Bill makes provision for day one, with the understanding that further primary legislation will be made to supplement it, this Bill will be required in order to maintain a functioning customs regime, an effective VAT regime—as we are currently discussing in the context of these clauses—and an excise regime on an ongoing basis. There is a fundamental distinction between bringing the EU acquis into UK law and handling that process, which is the principal rationale for the European Union (Withdrawal) Bill, and what is happening on a dynamic, ongoing basis in terms of a customs, VAT and excise regime.
Anneliese Dodds
Can I read from the Minister’s remarks that the European Union (Withdrawal) Bill does not seek to create new institutions in, for example, environmental policy or other areas, which potentially need to be just as flexible in many ways as the taxation and customs system? I am struggling to grasp the essence of the Minister’s distinction here. Maybe he could provide more information.
Mel Stride
I have made the point about the day one situation with the European Union (Withdrawal) Bill and the primary legislation, and so on, that will follow. I will resist the urge to start debating another Bill, other than to repeat the points I have made about this Bill. We are of necessity in the context of customs, customs duties, export duties, import duties, VAT, excise regimes and excise duty. We are dealing with a rapidly changing set of measures going forward. We are in the middle of a complex negotiation, the outcome of which is not clear at this particular moment. That is why in many instances in this Bill where we have had these ongoing repeated debates about whether a stiffer, tougher form of scrutiny is necessary, we feel that a balance has to be struck, which is appropriate and proportionate—to use my cut and paste button again—between the needs of parliamentary scrutiny where it is appropriate, and the ability to get on with the job and ensure that this country is match fit for life outside of the European Union in terms of its imports, exports and trade.
Anneliese Dodds
I am grateful to the Minister for his response. However, we have been informed that the reason why sunset clauses are appropriate in the EU (Withdrawal) Bill and not in this Bill is because this Bill needs a more dynamic system—if I understand the Minister’s comments correctly—whereas that is not necessary in the EU (Withdrawal) Bill. I am still struggling, because if we look at an area such as environmental legislation, we have the institutions that are created, the overall framework and then the calibration within it that would respond to scientific information—levels of pollution, for example. There is also an international context with different treaties. Perhaps this is something we could correspond about another time, but I am struggling to discern the fundamental qualitative difference between this policy area, which apparently cannot be amenable to sunset clauses, and those contained in the EU (Withdrawal) Bill.
Mel Stride
I will be brief, because we are beginning to go around in circles, but I am very happy to discuss any of these matters offline, or to receive a letter from the hon. Lady, on the points she has raised.
Peter Dowd
We will not press the clause to a vote, because we have persistently made this point all the time. I completely accept that it gets pretty tedious, but it gets pretty tedious from this side as well, when we keep on getting told that Parliament cannot have the scrutiny that it constitutionally and rightly deserves. We will come back to this point.
I have to say that other nations and democracies, much younger than this one, are perfectly capable of dealing with such issues, very detailed issues, without this sort of carte blanche approach that the Government seem to take, where they want to block every opportunity for us to scrutinise. They are not even prepared, when things might have calmed down in relation to the processes of exit, to give us the opportunity to check them via a sunset clause and that is deeply regrettable.
Question put and agreed to.
Clause 41 accordingly ordered to stand part of the Bill.
Clauses 42 and 43 ordered to stand part of the Bill.
Schedule 8 agreed to.
Clause 44
Excise duties: postal packets sent from overseas
Question proposed, That the clause stand part of the Bill.
Kirsty Blackman
I am not trying to wrong-foot the Minister, but I just want to make a brief statement in relation to postal packets from overseas. I have mentioned the issue in previous debates. I genuinely think that it will affect individuals living our constituencies across the four nations of the UK. People will be shocked when they see the changes coming in relation to excise duty. It is incumbent on the Government, when HMRC make the relevant regulations, that they are as widely publicised as possible, and that if possible, some transitional arrangement should be put in place on costs. If people suddenly find that their postal packets are subject to an incredible charge to which they were previously not subject, they will be pretty upset, and rightly so.
Whatever HMRC does on the issue, we ask the Minister to ensure that there is adequate publicity and that any charges put in place are proportionate and not excessive, because people will be incredibly upset and negatively affected.
Mel Stride
I thank the hon. Lady for those well-made observations. We certainly want to ensure that whatever transition there is to the new regime for small parcels is handled correctly, for exactly the reasons that she has given. I am very close to that as a Minister; in fact, I will meet Royal Mail next week to discuss exactly those points. I will, of course, be happy to share that information and take any further questions that she might have.
Question put and agreed to.
Clause 44 accordingly ordered to stand part of the Bill.
Clause 45
General regulation making power for excise duty purposes etc
Jonathan Reynolds
I beg to move amendment 85, in clause 45, page 31, line 24, at end insert—
‘(3A) The power to make regulations under this section—
(a) insofar as it is exercised to replicate or apply, with or without modifications, any EU regulations mentioned in section 47(1), ceases to have effect after the end of the period of two years beginning with exit day; and
(b) insofar as it is exercised to make provision of the kind described in subsection (2)(k), ceases to have effect after the end of period of five years beginning with exit day.”
This amendment, together with Amendment 86, limits the duration of certain delegated powers under Clause 45 to periods aligned with other proposed limitations relating to withdrawal from the EU and to customs unions.
The Chair
With this it will be convenient to discuss the following:
Amendment 86, in clause 45, page 31, line 25, at end insert—
““exit day” has the meaning given by section 14(1) (interpretation) of the European Union (Withdrawal) Act 2018 and subsections (2) to (5) of that section apply to the term under this section as they apply to the term in that Act.”
See explanatory statement for Amendment 85.
Clause 45 stand part.
Amendment 135, in clause 48, page 33, line 29, at end insert—
“(5A) No regulations may be made under section 47 unless a draft has been laid before, and approved by a resolution of, the House of Commons.”
This amendment requires regulations under Clause 47 to be subject to the affirmative procedure.
Amendment 136, in clause 48, page 33, line 30, leave out “47” and insert “46”.
This amendment is consequential on Amendment 135.
Clause 48 stand part.
Jonathan Reynolds
The Member’s explanatory statement for amendment 85 states:
“This amendment, together with Amendment 86, limits the duration of certain delegated powers under Clause 45 to periods aligned with other proposed limitations relating to withdrawal from the EU and to customs unions”
in parallel legislation. In many ways, it continues the conversation we had during debate on the last group.
Effectively, the amendment would introduce a sunset clause to clause 45: a measure to prevent the indefinite extension of delegated powers by HMRC commissioners where they relate to excise duty. We have discussed many times—in some ways, we have discussed it in every debate—the democratic implications of the Bill. The addition of sunset clauses has been proposed by many partners as a solution to the need to safeguard against potential abuses of the powers in the Bill. As has been said many times, the House of Lords Delegated Powers and Regulatory Reform Committee, in its report, said clearly that the Bill transfers substantial powers to the Executive—that is not in doubt on any side of this Committee. The question is whether they are proportionate and whether appropriate safeguards are in place.
I listened carefully to the Minister during discussion of the last set of amendments about the differences between the European Union (Withdrawal) Bill and this Bill, but I must say that I am not convinced that the differences are substantial enough to envisage a completely different set of amendments’ appropriateness in terms of the use of sunset clauses. As the Lords Committee said,
“the Treasury’s delegated powers memorandum acknowledges that the Bill has been drafted to cater for various contingencies that might never materialise, for example, if the UK leaves the EU without a negotiated agreement.”
I do not agree that the European Union (Withdrawal) Bill and this Bill represent such wildly different circumstances that one set of amendments is appropriate for the other Bill but not for this one. The Opposition are firmly in agreement with the Lords Committee that a sunset clause is an appropriate manoeuvre to redress the balance of power. We must bear in mind that the use of delegated powers carries a risk of abuse by the Executive, which is not something the Opposition could ever support. Rather, it is our duty at this stage to check the powers of the Executive and ensure that we are not giving them carte blanche to change the balance of power permanently in their favour.
I also stress that the amendments offer generous provision in terms of timing. It varies for each item, with sunset clause terms of either two years or five years from EU exit day for the powers in question. That should give the Government ample opportunity to adapt, even if we face the nightmare “no deal” scenario. It makes little sense to the Opposition that such provisions are included in the European Union (Withdrawal) Bill, but that there are no corresponding provisions in this Bill. Adding these provisions to the Bill would be an important step in providing a much-needed check to delegated powers.
Mel Stride
Clause 45 provides powers to make changes to ensure the UK has a fully functioning excise regime after EU exit. The powers mean that the UK will be able to implement a range of negotiated outcomes. They also ensure that, after EU exit, we retain the same ability to legislate for excise that we have now.
EU legislation impacts on a number of areas of the excise regime. One example is the existing holding and movement regime for excise goods, which is based on a framework set up by the European Union. It allows the free movement of goods while ensuring excise duty is collected in the country of consumption. The UK needs the ability to make changes to the excise regime to reflect a range of negotiated or non-negotiated outcomes. The power will also ensure that, after EU exit and the repeal of the European Communities Act 1972, we maintain the same ability to legislate for excise as we have now.
The clause gives the Government a power to make regulations generally for the purposes of excise duty on alcohol, tobacco and fuels. It includes, among other matters, when the excise duty becomes due, who will be liable for excise duty, reliefs and the rules around the holding and movement of excise goods. It also ensures that, after EU exit, the Government have the same ability to legislate for excise as they have now. It does not, however, enable HMRC to set excise duty rates.
The excise regime is largely set out in secondary legislation made under various existing powers. However, we can anticipate that the primary legislation that underpins it may need to be amended. The clause allows any regulations made under this section to amend or repeal primary legislation using secondary legislation. It does not allow secondary legislation to amend or repeal provisions in the Bill.
Any negotiated outcome could include key administrative features such as the collection, control, management and enforcement of excise duties. Changes could also be needed in those areas if there is no negotiated agreement. The goods it could be applied to are alcohol, tobacco and fuels.
On repeal of the 1972 Act, we will retain the legislation made under it, but we will no longer have the power to amend that legislation. Clause 45 will ensure there are no gaps in HMRC’s powers to deliver the necessary changes to the excise regime as a consequence of EU exit. For example, the Government made consequential amendments to primary legislation in the last substantive overhaul of key excise secondary legislation in 2010. They relied on the powers provided for by the 1972 Act, which will not be available in future. The power could also be used to ensure that there are clear arrangements in place so that goods in transit between member states before EU exit are not subjected to additional controls or requirements after EU exit.
The power has, however, been limited in a number of ways. It does not allow any changes to duty rates. Clause 49 ensures that the power is no wider than necessary. It is limited to making provisions in respect of the excise duties on alcohol, tobacco and fuels. Those are the duties most impacted by EU legislation and EU exit. It is important that the Government can act quickly in case of changing circumstances, but it is also vital that Parliament is able to scrutinise the use of these powers. Clause 48 sets out the proposed scrutiny arrangements.
Amendments 85 and 86 seek to limit the duration of the power contained in clause 45 where it is exercised to replicate or apply EU regulations. They also intend to limit the duration of the power to make provision for excise duties in connection with the UK forming a customs union with other customs territories. The Government oppose the amendments. The Bill is drafted to cater for a range of long-term outcomes from negotiations on the future relationship with the EU. We do not yet know the outcome of negotiations with the EU or exactly when the final outcome will be confirmed. It would therefore not be prudent to include a sunsetting clause.
The clause provides the Government with the power to legislate for the excise regime to implement the outcome of negotiations. Just as importantly, it ensures that we can legislate for excise in the future—after exit—with the same flexibility we have now. It is essential that we have a fully functioning excise system on EU exit and the powers contained in the clause are necessary to achieve that.
If the amendments are accepted, after the relevant sunset period the Government’s ability to legislate quickly to respond to changing circumstances and future business processes will be limited. For example, the current excise duty suspension arrangements secure the movement of goods through a number of different countries, potentially over a large geographical area. On leaving the EU, the movement of excise duty suspended goods may be permitted only within the territory of the UK. The clause may allow further simplifications for compliant traders if the risks to revenue are considered to be lower in the United Kingdom.
Amendment 85, relating to subsection (2)(k), refers to clause 31, which allows for arrangements that establish a customs union, as we debated, between the UK and territories outside the UK to be given effect by Order in Council. If the UK forms a customs union with any other customs territory, the Government may need to adapt the excise regime accordingly to ensure that the UK can enforce and maintain the operability of the excise duty regime. For example, if an arrangement is made with any territory where free movement of goods is allowed now or in the future, the UK may wish to ensure that excise duties can be controlled and collected without customs formalities at the border, as is now the case. The requirement to make such arrangements may not be limited to the period following EU negotiations or the implementation period.
Clause 48 sets the procedure for making regulations under clauses 44 to 47. The powers in clauses 44 to 47 are necessary to ensure the alcohol, tobacco and oils excise duty regimes continue to function as required after EU exit. The clause ensures the use of those powers is subject to appropriate scrutiny. It also includes provision to streamline procedures where the new excise powers are combined with some existing powers. That gives the Government the flexibility to make the changes to the excise regime needed after EU withdrawal. A smaller number of statutory instruments will therefore be required and the legislation will remain accessible to users.
Clause 48 sets the procedure for exercising the powers in clauses 44 to 47 and gives further detail to their scope. On procedure, the clause sets out four scenarios in which regulations made using the powers will be subject to the made-affirmative procedure: first, where the changes amend or repeal any Act of Parliament; secondly, where changes extend the descriptions of goods on which excise duty is chargeable; thirdly, where changes extend the cases in which stamping or marking of goods is required; and fourthly, where changes restrict any relief or rebate. In all other cases, the negative procedure applies. That is in line with the existing approach to excise regulation-making powers.
A large number of changes need to be made to excise secondary legislation to maintain a functioning excise regime after exit. The Government plan to use existing powers as well as the new powers in the Bill. Clause 48(7) will streamline procedures to allow existing excise powers and the new powers to be combined in some cases. The streamlining applies only if regulations made under the existing powers would be subject to the negative resolution procedure—not where the affirmative procedure is to be used. Such streamlining gives Government the ability to maintain a functioning excise system after EU withdrawal. It reduces the number of statutory instruments to be laid on the same subject matter, making more efficient use of parliamentary time and limiting fragmented legislation, which is harder for business and its advisers to follow.
In some cases, that will have the effect that some provisions that are currently subject to the negative resolution in the Lords and Commons will be subject to the negative procedure in the Commons only. However, Commons-only scrutiny is in line with the convention that tax legislation is not subject to Lords scrutiny. The majority of excise regulation-making powers created in recent times are similarly subject to Commons scrutiny only. For example: the alcohol wholesaler registration scheme, introduced in 2015; the raw tobacco approval scheme, introduced in 2016; and the remote gaming duty, introduced in 2014. Members can be assured that, if the Government combine powers, they will not do so to make a trivial provision only to remove Lords’ scrutiny and bring this special procedure into play.
Amendments 135 and 136 seek to require that regulations made under clause 47 are subject to the draft affirmative procedure. Clause 47 gives the Government the power to exclude or modify EU rights, powers, liabilities and obligations relating to excise duty that continue to have effect in UK law after exit by operation of clause 4 of the European Union (Withdrawal) Bill. Some of those rights and obligations will no longer be appropriate after exit. Some may need amendments to deal with the outcome of negotiations with the EU. Therefore, this power has a part to play in ensuring that we have a fully functioning excise regime.
The power in clause 47 is targeted and proportionate. It is specific to the areas saved by clause 4 of the European Union (Withdrawal) Bill, and in addition, it may only be exercised in relation to excise duties on alcohol, tobacco and fuel. It is appropriate and proportionate that the power should be subject to the negative procedure and not the affirmative procedure. That reflects the specific nature of the power in the clause and the speed with which regulations may be required.
The Bill ensures that the scrutiny procedures that are applied to the exercise of each power are appropriate and proportionate. They take into account the technicality of the regulations and the frequency with which they are likely to be made.
Clause 48 ensures that the scrutiny procedures that apply to the exercise of the powers in part 4 are appropriate and proportionate. As far as is practical, the procedure that applies to excise regulations made under these powers is in line with the approach to procedures on existing excise powers.
Jonathan Reynolds
There is clearly a fundamental difference of opinion about these clauses. We absolutely support the right and ability of the Government to possess the requisite powers on exit to set the regime that is required. What is in dispute is whether those powers should remain on the statute book for a long time.
It seems entirely reasonable that the Government could come back to legislate for the power that they need in future, rather than giving themselves such a fundamental transfer that changes the balance of power between Parliament and the Government, but we may have to return to that question. Further groups of amendments are on the selection list that cover sunset clauses, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 45 ordered to stand part of the Bill.
Clause 46 ordered to stand part of the Bill.
Clause 47
EU law relating to excise duty
Anneliese Dodds
I beg to move amendment 134, in clause 47, page 33, line 7, at end insert—
“(5) No regulations may be made under this section after the end of the period of two years beginning with exit day.
(6) In this section, “exit day” has the meaning given by section 14(1) (interpretation) of the European Union (Withdrawal) Act 2018 and subsections (2) to (5) of that section apply to the term under this section as they apply to the term in that Act.”
This amendment limits the duration of the delegated power under Clause 47 to the period ending two years after the United Kingdom leaves the European Union.
The Chair
With this it will be convenient to discuss the following:
Clause 47 stand part.
Clauses 49 and 50 stand part.
That schedule 9 be the Ninth schedule to the Bill.
Anneliese Dodds
We have already discussed clause 47 to an extent, so I will just offer a couple of brief observations in relation to amendment 134. My reading of clause 47 is that it disapplies the European Union (Withdrawal) Bill provision that EU legislation should be copied into UK law, and empowers the Treasury to make alternative provisions on excise duty.
Some of our witnesses suggested that that could result in an unnecessarily complicated approach, and I do not feel that the Minister explained why the Government will not just retain the EU customs code during the transition period. The Minister has referred to a cut-and-paste approach. Yes, there is a lot of cutting, but then there is some spraying about of some elements and not others. It is perhaps not as well thought through as we might have hoped.
As with many Opposition amendments, amendment 134 asks the Government to include a sunset clause of two years for the application of these measures. We seek to ensure that the empowerment of the Treasury in these provisions is time limited. As my hon. Friend the Member for Stalybridge and Hyde said in relation to the sunset clause he discussed, the measures could be extended by Parliament if that was felt necessary, but having a sunset clause would prevent the inappropriate extension of the powers that the clause grants.
Mel Stride
Clause 47 makes changes that ensure that the status of EU law in relation to excise is clear. The European Union (Withdrawal) Bill lays out the Government’s general approach to EU legislation after EU exit. We need to ensure the consistency and certainty of the existing excise and VAT regimes to ensure that they work effectively after exit.
Excise is an important contributor to national revenue—receipts for 2016-17 were around £48 billion—so it is important that we have clarity on the rules, including the status of EU law in relation to excise. The approach adopted by this clause is consistent with the European Union (Withdrawal) Bill. It results in EU legislation being retained only where it is sensible to do so in respect of excise. There is a similar provision for VAT in clause 42.
Anneliese Dodds
I am grateful to the Minister for those helpful clarifications. I note in particular his determination that the provisions should foster continuity with existing provisions in the short term. That seems very sensible. I hope that, even if the Government are not willing to accept Labour’s call for sunset clauses, they will at least take on board our concerns that there must be appropriate ongoing scrutiny of the measures. Above all, they must not go beyond the scope of ensuring that there is an operable regime following whatever negotiations they have.
Many of those areas are very important for our constituents. I am sure that the Minister will remember the discussion that we had around tobacco excise recently in the Finance Bill. I had concerns about the stripping away of public health support for people to stop smoking, at the same time that duties are going up, and about the implications there might be for low-income people. We need to make sure when there is a fundamental change that we have the ability to properly debate and discuss it in the House. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 47 ordered to stand part of the Bill.
Clauses 48 to 50 ordered to stand part of the Bill.
Schedule 9 agreed to.
Clause 51
Power to make provision in relation to VAT or duties of customs or excise
Kirsty Blackman
I beg to move amendment 120, in clause 51, page 34, line 39, leave out second “appropriate” and insert “necessary”.
This amendment provides that the power to make regulations about VAT, customs duty and excise duty in consequence of UK withdrawal from the EU is only exercised when it is necessary to do so.
The Chair
With this it will be convenient to discuss the following:
Amendment 97, in clause 51, page 35, line 4, at end insert—
“(c) may not be made after 29 March 2021.
‘(2A) The Secretary of State may by regulations amend the date in paragraph (1)(c) to ensure that the day specified is at day that any transition period related to the United Kingdom’s withdrawal from the European Union comes to an end.
(2B) A statutory instrument containing regulations under subsection (2A) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”
This amendment inserts a sunset provision that disallows any regulations to be made under Clause 51 after 29 March 2021, while also allowing the Secretary of State to alter that date, by regulations subject to the affirmative procedure, in the event that this is not the date on which any transition period following the United Kingdom’s withdrawal from the European Union comes to an end.
Amendment 98, in clause 51, page 35, line 10, after “section” insert “, apart from regulations under subsection (2A),”.
This amendment is consequential to Amendment 97.
Amendment 99, in clause 51, page 35, line 25, after “apply” insert “, apart from regulations under subsection (2A),”.
This amendment is consequential to Amendment 97.
Amendment 87, in clause 51, page 35, line 38, at end insert—
“(10) No regulations may be made under this section after the end of the period of two years beginning with exit day.
(11) In this section, “exit day” has the meaning given by section 14(1) (interpretation) of the European Union (Withdrawal) Act 2018 and subsections (2) to (5) of that section apply to the term under this section as they apply to the term in that Act.”
This amendment limits the duration of the delegated power under Clause 51 to the period ending two years after the United Kingdom leaves the European Union.
Clause stand part.
Amendment 88, in clause 52, page 36, line 32, at end insert—
“(7A) No regulations may be made under this section after the end of the period of two years beginning with exit day.
(7B) In this section, “exit day” has the meaning given by section 14(1) (interpretation) of the European Union (Withdrawal) Act 2018 and subsections (2) to (5) of that section apply to the term under this section as they apply to the term in that Act.”
This amendment limits the duration of the delegated power under Clause 52 to the period ending two years after the United Kingdom leaves the European Union.
Clause 52 stand part.
Clause 53 stand part.
Kirsty Blackman
I will speak to amendments 120 and 97 and skim over consequential amendments 98 and 99. I will also mention Labour amendments 87 and 88.
Amendment 120 is an old discussion that we had with the Minister earlier in the debate. We ask for the second “appropriate” to be left out and replaced with “necessary”. That would mean that the powers to make the provision in relation to VAT or customs or excise duties would be made as the appropriate Minister considered necessary in consequence of, or otherwise in connection with, the withdrawal of the UK from the EU.
We have had the discussion before about whether it is best to have “appropriate” or “necessary” in these sections, but it would be sensible for Ministers to make a regulation that they thought was necessary rather than appropriate. The former is a stronger word—the Law Society of Scotland believes that it is a stronger word and has a more appropriate legal definition in this regard. It would be good if the Minister would consider making the change we are asking for in amendment 120.
On the first part of clause 51, I have heard concerns about some of the stuff that has not been written into UK law either through this Bill or possibly the European Union (Withdrawal) Bill. The shipwork end-use relief from customs duty is in EU law—it is a relief that people who bring things in for use offshore have from customs duty. It is written into EU law, but I have not been able to find in this Bill where it is written into UK law —perhaps it is in the European Union (Withdrawal) Bill. The offshore industry rely on it heavily and it would make a big difference, specifically on charges.
The shipwork end-use relief is relied on only for imports coming from third countries, but given that imports from the EU would now be potentially subject to customs duty, if the Government do not manage to get a deal to be in a customs union, it will become more applicable and will apply to many more products and goods coming through. It will be necessary to write that into UK law at some point, and I would very much appreciate a commitment from the Minister on that. A lot of companies that transport goods offshore, which particularly affects my constituency, would appreciate knowing the direction of travel in relation to this relief.
Amendment 97—the Scottish National party amendment that would apply a sunset clause to clause 51—serves a dual purpose. It submits that there should be a sunset clause and makes the case that regulations may not be made under the clause after 29 March 2021, but it would also change the procedures for the making of regulations, asking that they are made using the draft affirmative procedure. As we have discussed at some length, the draft affirmative procedure would be better than either the negative procedure or the made affirmative procedure. It would mean that no changes are made before Parliament has the opportunity to scrutinise them because they would be laid in draft rather than created and then consulted on with Members. That is why we are asking for both of those changes.
Although this is my first chance to talk about sunset clauses, we have had a fairly lengthy debate on them and they have been covered by various Members. Labour Front Benchers asked earlier why sunset clauses should be applicable to the European Union (Withdrawal) Bill but not this Bill. Even though they are separate pieces of legislation, I actually believe that, in this Bill, it is reasonable for Ministers to have one process relating to the setting up of a customs or an excise regime, and for that process to be different ever after. That is why a sunset clause would be a good change in that regard.
If future Governments are to make such changes, they should be subject to more parliamentary scrutiny. I have said to the Minister previously but remind him that the Conservative party will not be in government forever—I hope not—and in that case they will be sitting in opposition, unable appropriately or extensively to scrutinise the measures. That is a major concern given that the delegated powers in the Bill allow for the Government to make radical changes without the need for much in the way of parliamentary scrutiny.
I am sure the Government do not intend to give a future Labour Government a free rein drastically to alter the customs regime, but unfortunately the way the Bill is written would give them that right. I get the impression that I would be more likely to favour the Labour party’s customs regime than the Conservative party’s, but none the less no Executive should have the power to do all those things by using such things as the negative procedure. The made affirmative procedure is not even strong enough in some cases.
Labour amendments 87 and 88 are grouped with other amendments on sunset clauses. If they put the amendments to the vote, I will support them, because I believe a sunset clause is appropriate for the provisions made in clause 51.
Jonathan Reynolds
I wish to speak for what I will believe will be the final time in Committee. [Hon. Members: “Oh.”] There is always Report stage; we know the procedure here. I will speak to amendments 87 and 88, which relate to clauses 51 and 52. The explanatory statement for amendment 87 reads:
“This amendment limits the duration of the delegated power under Clause 51 to the period ending two years after the United Kingdom leaves the European Union.”
Amendment 88 would apply the same limits to the powers entitled under clause 52.
These are obviously a fairly similar set of arguments to those we have just heard relating to clause 45, but I think we have clearly established that there are strong reservations about the use of delegated powers under the Bill and its democratic implications. The famous House of Lords Delegated Powers and Regulatory Reform Committee said specifically in its report that clause 51, which relates to VAT or duties of customs or excise, is such that a sunset clause would be possible and welcome. As the Lords report said, clause 51 contains a very wide power that, in the words of the Treasury itself
“is necessary to ensure that the Treasury and Secretary of State have the ability to deal with the consequences of withdrawal from the EU and to maintain fully functioning and legally operable customs, VAT and excise regimes in a range of scenarios”.
It is about withdrawal from the EU, yet the powers would give considerable scope to the Executive to shape the regime for many years, perhaps decades, into the future. That is surely why a recommendation for a sunset clause relating to clause 51 is appropriate.
Nic Dakin (Scunthorpe) (Lab)
Is it not important that the Government take account of the evidence we have had from the Hansard Society supporting protections from whoever happens to be in Government in the future?
Jonathan Reynolds
I firmly agree. Members on both sides of the Committee have referred to the testimony the Hansard Society gave in the evidence sessions. It is not just the Opposition who have concerns. I would very much like to be a real, not shadow, Treasury Minister one day. Even then, we would require the proper checks and balances to be in place. It still seems counter-intuitive to include time limits in the overall European Union (Withdrawal) Bill but not in today’s Bill, when the principles we have established apply similarly to both. As with our other arguments on sunset clauses, we do not see how the Government can justify the use of the powers in the clause in perpetuity. We have established that that should not happen, and the Government have not yet been able to refute that case.
I emphasise again that we all have a duty to check the powers of the Executive and to ensure that we do not allow them to change the balance of power permanently in their favour. The time period of two years should be generous enough to fill any gap in provisions that may come about from the end of delegated powers through other channels. Sunset clauses provide a vital check on delegated powers, and I urge members on both sides of the Committee to support the amendment to help to mitigate the constitutional risks introduced by the Bill.
Peter Dowd
It is important that we deal with the question raised by the amendment regarding sunset clauses. The Government originally did not want any of the sunset clauses in the European Union (Withdrawal) Bill, but they were required or forced—people can call it what they will—by hon. Members from across the parties to put in sunset clauses. We were told at the time that the inclusion of a sunset clause in that Bill would result in the end of civilisation as we know it. Of course, someone threw a bucket of water over the Government, and they freshened up and realised that they were not going to get away with not having sunset clauses.
The Government have persisted in Committee—they might be doing the same with the Trade Bill—to argue against sunset clauses. They would have us believe that sunset clauses are some foreign or alien concept in parliamentary democracies. Well, they are not. There were even sunset clauses in the nuclear deal with Iran. Sunset clauses exist in all sorts of legislation, including treaties—and we have some 3,000 treaties. They exist right across the piece in legislation. Indeed, the coalition Government, when introducing the Enterprise and Regulatory Reform Act 2013, basically insisted on sunset clauses to reduce the legislative burden. When it suits the Government to have a sunset clause, they will have a sunset clause; in fact, they introduced an Act to have sunset clauses. They are now telling us that sunset clauses are outrageous, and will somehow mess up the whole VAT regime.
Other countries have sunset clauses. For example, sunset clauses in Texas mean that, after 10 or 12 years, some agencies will cease to exist unless they can prove their appropriateness, consistency and status. They have to go through that process. Even organisations have sunset clauses applied to them and they have to show how relevant they are.
The Prevention of Terrorism Act 2005 had a sunset clause. In the past, sunset clauses have been applied to the effectiveness of legislation, and yet we are now being told today that they are somehow outrageous and that the whole Government will grind to a halt if we have them.
Some Canadian legislation—in fact, a whole range of Canadian legislation—has an automatic five-year sunset clause. The Canadians manage perfectly well with sunset clauses. The question is: are this Government so fearful of a sunset clause, so fearful of challenge and so fearful of scrutiny, particularly in relation to this amendment, that they do not want sunset clauses?
There are even sunset clauses in Australia, and they seem to manage. Australia has general sunset clauses; they are not even specific. They have sunset clauses for whole swathes of legislation and they manage perfectly well. South Korea also has sunset clauses. Perhaps that is why it has such a booming economy—because the sunset clauses mean that, time after time, they test and challenge. The only sunset clause in North Korea, no doubt, is the sunset on democracy. We do not want that; we want sunset clauses for the powers this Government have taken for themselves.
Jonathan Reynolds
My hon. Friend is making a fantastic speech about the applicability of sunset clauses around the world. Again, however, we have to get back to this point: if the Government still need these powers after the sunset clause is done and the powers no longer exist, they simply have to come back to Parliament. It is not the case that they do not have the power to deal with things; a strong, united Government, with a parliamentary majority, would quite easily be able to come back and put on the statute book anything they needed. That argument simply has not been addressed by the Government.
The Chair
Order. Before I call Mr Peter Dowd, I will say that we are all immensely interested in South Korea, Texas, Australia and all the other places he has listed, but could he get back to this particular amendment?
Peter Dowd
I was trying to show that in this case there is a requirement for a sunset clause. It is absolutely crucial that we have sunset clauses and I am trying to show—I know that you will appreciate this, Mrs Main—that they are capable of being delivered.
Peter Dowd
That is spot on. We have raised that issue time after time. Having sunset clauses and taking control back is a sign of a confident Government who are strong and stable and know their direction of travel. That is why I am sure that every Government Member of the Committee will support the amendment’s specific proposal for a sunset clause.
The Parliamentary Under-Secretary of State for International Trade (Graham Stuart)
I just want to pay tribute to the hon. Gentleman and to the Labour party, because Labour does not just talk about sunset clauses; it actually works on them. And it is noticeable, frankly, that with real momentum behind sunset clauses, moderate leaders, councillors and moderate MPs are being hounded out. That is a true sunset clause.
Peter Dowd
We want transparency and openness, and that is why we are demanding sunset clauses, unlike the Under-Secretary of State, who would like this House to be as dark as Erebus. We want a sunset clause, and Parliament, the people and the Hansard Society all demand a sunset clause. We insist on sunset clauses and we will persist in insisting on them.
Mel Stride
Clause 51 confers a power on the Treasury or the Secretary of State to make regulations for VAT, customs or excise in consequence of, or otherwise in connection with, the UK’s withdrawal from the EU.
The Bill contains a comprehensive set of provisions to establish a stand-alone customs regime and to ensure that VAT and excise legislation will function as required on EU exit. The Bill does that through a mixture of primary legislation and powers to make subordinate legislation. Together the provisions will allow us to deal with a range of negotiated scenarios, as well as to prepare for a non-negotiated scenario. That will ensure that the UK’s customs, VAT and excise regimes function as required upon EU exit and thereafter.
The UK’s future arrangements for customs, VAT and excise will become completely clear only when negotiations are concluded. We cannot of course be certain what the detailed arrangements to be agreed will be, which is why the power in the clause is drafted as it is and why it is not possible to give an exhaustive list of the situations in which the power may be used. For example, we will need to use it to implement agreements with the EU that might involve alternative provisions to those made in the Bill, such as different amendments to those made to the VAT Act 1994 by schedule 8. Equally, the power will need to be used to address deficiencies similar to those dealt with in clause 7 of the EU (Withdrawal) Bill, to amend existing legislation to ensure that it is consistent with replacement domestic legislation; to legislate for policy decisions made in preparation for, or as a result of, a non-negotiated scenario; to transition existing EU trade remedy measures; or to legislate to deal with unforeseen developments arising from EU exit.
It must be noted that that the power is not an unlimited one: the scope of the power is, first, limited to VAT, customs and excise legislation; and, secondly, to changes that are made in consequence of, or otherwise in connection with, EU exit. As changes potentially required as a consequence of, or in connection with, EU exit may relate to primary legislation, the power extends to amending primary legislation, including the Bill. Given that we need to prepare for or implement a range of outcomes, including those that may differ from those set out in the Bill, it is appropriate that the power permits the Bill itself to be amended.
The affirmative procedure will be required for any use of the power to amend primary legislation in consequence of, or otherwise in connection with, EU exit. Any regulation that makes changes to primary legislation will have to be approved by the House of Commons if it is to have effect beyond the 28-day period starting from the day it is laid. That is unless clause 52 applies, in which case the relevant period extends to 60 days. The clause itself will make no changes but confers a power on the Treasury, or the Secretary of State, to make changes in the future in consequence of, or otherwise in connection with, EU exit.
Amendment 120 seeks to ensure that the power to make regulations under the clause is exercised only when it is necessary to do so. The Government oppose the amendment because it limits their ability to prepare effectively for EU withdrawal. The Bill is drafted to cater for a variety of long-term outcomes from negotiations on the future relationship with the EU.
In that context, the power is necessary to ensure that the UK can deal with a range of possible consequences of, or matters arising in connection with, EU withdrawal, and maintain fully functioning customs, VAT and excise regimes in a range of scenarios. Changing the wording to “necessary” may narrow the power in such a way that the Government cannot prepare effectively for EU withdrawal. That is because some of the uses for the power may be appropriate, but it may be hard or cumbersome to prove that they are necessary. For example, policy decisions may be made in consequence of, or in connection with, EU withdrawal where one option is chosen over others. That is “appropriate”, but it may be said that they are not “necessary”, since one option is not necessary in the sense that other options are available.
Anneliese Dodds
Surely in that case it would be possible to specify that one of the two options will be chosen and that that is a necessary choice between the two. I am struggling to grasp the need to avoid the word “necessary”.
Mel Stride
The point I would make to the hon. Lady is that if we had more than one option, one of them may be appropriate but not necessary, because if we chose that particular option there would necessarily be another option that could be chosen. The essential point is that the word “necessary” is not necessary, but in fact unhelpful—[Interruption.]
Mel Stride
It is difficult to sound exciting or entertaining when discussing a single word.
Mel Stride
There are moments. Amendment 97 inserts a sunset provision disallowing regulations to be made under the clause after 29 March 2021, while also allowing the Secretary of State to alter the date so that the date of sunset relates to the day of the end of a transition period. Amendments 98 and 99 are consequential to amendment 97. The Government oppose the amendments because they too would limit our ability to prepare effectively for EU withdrawal. We do not yet know the outcome of negotiations with the EU. Therefore, it would not be prudent to include a sunsetting clause at this stage.
Kirsty Blackman
I am feeling slightly sorry for you, Mrs Main—having to chair a Committee that erupts into riotous laughter, which is most unusual for a customs Bill Committee. I appreciated the Minister’s speech, but I think he is losing his oomph somewhat—[Hon. Members: “Oh!”]—although I am sure he will find it again.
We are reaching the end of our discussions. I am sure all members of the Committee are quite glad about that, because I am not sure how much more we can discuss sunset clauses. However, I have a few more points to raise about our amendments. Amendment 120 would replace the second “appropriate” in clause 51(1) with the word “necessary”, because otherwise Ministers will be given an incredible level of power to use their own discretion to decide what is appropriate. We have raised concerns before about the level of power that such clauses give Ministers. Changing “appropriate” to “necessary” would allay some of those concerns: it would be a stronger test and would require a stronger case from Ministers. I think that is a reasonable request.
Before I move on to Executive privilege more generally, may I address something the Minister said? When he raised his concerns about having a sunset clause that specified a date of 29 March 2021, he said that the agreement might be made very close to that date. That is incredibly worrying, given that we do not yet have any agreement or any idea what things will look like on exit day. The Government and the EU look likely to push the matter as close to the wire as possible, because it seems that there is an awful lot of distance to travel—particularly since the Government do not actually know what they want. If businesses face the same situation approaching 29 March 2021, after a two-year transition process—if the Minister wants to call it an implementation process, that is absolutely fine—and two years after having gone through a crazy period when they had no idea what was coming round the corner, that will be a major problem for them. It will be a major problem for productivity, as has been mentioned throughout. It is incredibly worrying that, at the end of a two-year transition period, we might still not be clear about exactly how things will look a very short period afterwards.
On what the hon. Member for Stalybridge and Hyde said about the duty to check the powers of the Executive and not to alter the balance, I argue that we actually do need to alter the balance. I find this job incredibly frustrating in a number of ways because of the extreme power of the Executive. In a lot of cases, they do not have to use their parliamentary majority—they do not currently have one—because they have Executive privilege to do a number of things that I do not believe they should have the power to do. In many cases, only Ministers are able to table amendments, programme motions and so on, because the Executive have that power. They also have the power to set the agenda. That means that, for parliamentarians outwith the Government—whether they are on the Government Back Benches or in opposition—things are more difficult.
The current system of Executive privilege is completely unbalanced. It should be shifted towards the Government having to use their parliamentary majority to do things. That would make this a better place. I am shocked that more parliamentarians are not as enraged as I am by that, and that it is not brought up in the House more often. It is not a good way to run a Parliament, and it should be changed.
That is important in relation to the Bill because the absence of sunset clauses gives Ministers powers in perpetuity that I do not believe they should have in perpetuity. In some cases, I do not think they should have them at all; they should have to be adequately scrutinised by Parliament and have to get measures through votes. The absence of sunset clauses gives Ministers powers for ever more, and I do not believe that should happen. It may be that, 10 years down the line, a Minister decides that something relates to the UK leaving the EU and therefore makes what he thinks is an appropriate change. I do not believe that should continue to be possible.
That is particularly important in respect of clause 51. I can see some of the arguments the Government may make about other clauses—they may say the changes they permit are just tinkering with technical regulations in relation to VAT, customs or excise duties—but in this clause Ministers give themselves power to make more fundamental changes. That completely fails the people who voted for Brexit to take back control. The Government say they intend to support that view and to assist people with taking back control, but what they are doing here absolutely will not achieve that aim; it will concentrate power for ever more in the hands of the Executive. The Government need to think carefully about that.
Mel Stride
I thank the hon. Lady for her contribution. I will not rehearse the entertaining conversation we had about “appropriate” and “necessary”, but I understand her points. However, I maintain that there is a logical, lexical complication with—[Interruption.] Yes, I am getting drawn back into the debate again. I do not want to go there.
The second, pertinent point the hon. Lady raised was that the Bill, by not having the sunset clauses that she seeks, conjures up the possibility of us catering for a very late deal. Although it does indeed allow for that eventuality, that is not the same as us suggesting that we expect it to happen. We are balancing the likelihood of a very late deal, which I suggest is extremely low, with the consequences of that happening, which would be significant. In a sense, it is almost analogous to why we insure our house. We do not expect it to go up in flames during our lifetime, but given the consequences of that happening, it is prudent to insure. On that basis, we are applying the same kind of principle in this particular situation.
Kirsty Blackman
I reserve the right to bring the amendment back on Report because it is incredibly important, but I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 51 ordered to stand part of the Bill.
Clauses 52 and 53 ordered to stand part of the Bill.
Clause 54
Consequential and transitional provision
Kirsty Blackman
I beg to move amendment 100, in clause 54, page 37, line 5, leave out the second “appropriate” and insert “necessary”
This amendment ensures that regulations making consequential and transitional provision may only be made when necessary.
The Chair
With this it will be convenient to discuss the following:
Amendment 101, in clause 54, page 37, line 14, leave out the second “appropriate” and insert “necessary”
This amendment ensures that regulations making consequential and transitional provision may only be made when necessary.
Clause stand part.
Kirsty Blackman
I confess I am also losing my oomph—[Hon. Members: “Never!”]—when it comes to talking about the differences between “appropriate” and “necessary”. [Interruption.]
The Chair
Order. The hon. Lady is seeking to make her views known, and I would like to hear her.
Kirsty Blackman
Thank you, Mrs Main. Both amendments would change the word “appropriate” to “necessary”. The first amendment relates to the powers that Ministers have over changing statutory instruments. The second also relates to statutory instruments, but in terms of transitional, transitory or saving provisions. We have previously rehearsed why I think “necessary” is a better word to use in these circumstances. The Minister thinks “appropriate” is better, so I imagine he will not need to speak for long in responding to my amendments.
Mel Stride
I will be brief. I am aware—it is one reason why I have been speaking fairly rapidly—that we still have a little to get through, and I do not want to deprive the Opposition of the opportunity to fully scrutinise what remains of the Bill. Clause 54 confers a power on the Treasury or the Secretary of State to make provision in consequence of the Bill. As the hon. Lady might expect, the Government do not feel that the amendments are either appropriate or necessary. On that basis, I hope she will consider withdrawing it.
Kirsty Blackman
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 54 ordered to stand part of the Bill.
Clause 55
Commencement
Anneliese Dodds
I beg to move amendment 17, in clause 55, page 38, line 15, leave out
“on the day on which this Act is passed”
and insert
“when the condition in section (Pre-commencement review: resource implications for HMRC) is met”
This amendment is consequential on NC9.
The Chair
With this it will be convenient to discuss the following:
Amendment 20, in clause 55, page 38, leave out line 23 and insert—
‘(1A) Section (Pre-commencement review: resource implications for HMRC)and this Part come into force on the day on which this Act is passed.”
This amendment is consequential on NC9.
New clause 9—Pre-commencement review: resource implications for HMRC—
‘(1) The condition in this section is met when—
(a) HMRC Commissioners have carried out a review in accordance with the provisions of this section, and
(b) the Chancellor of the Exchequer has laid a report of that review before the House of Commons.
(2) The review by the Commissioners under this section must consider—
(a) the staff requirements for implementation of the provisions of this Act,
(b) the extent to which provision has been made to meet those requirements;
(c) the information technology requirements for implementation of the provisions of this Act, and
(d) the level of certainty about the meeting of the requirements considered in accordance with paragraph (c).
(3) The review shall have regard to information provided by the Treasury and the Secretary of State about the likely outcome of negotiations between the United Kingdom Government and the European Union.”
This new clause requires HMRC to provide an assessment of the staffing and IT requirements for implementing the provisions of the Bill, and the prospects of those requirements being met prior to commencement of the main provisions of the Bill.
Anneliese Dodds
To make things totally clear, amendments 17 and 20 are consequential on new clause 9, so I will focus on that. The new clause would insert provision for pre-commencement review into the Bill. That relates to clause 55, which is about the conditions for commencement. We have asked for the HMRC commissioners to carry out a review that the Chancellor of the Exchequer would then lay before the House. We have asked for that review to examine a number of areas, such as whether the appropriate staffing requirements have been met for the Bill to be implemented properly, the extent to which information technology is ready for implementing the Bill’s provisions and the extent to which the Government believe that all the requirements in the Bill have been met.
The new clause is necessary for a variety of reasons; I will not go through all of them, because we covered some of the material when we talked on Tuesday about a review of resources in relation to the authorised economic operators scheme and the SNP amendment. None the less, there are matters that it is important this Committee covers before we finish. We heard some compelling evidence from witnesses last week who talked about changes that have occurred within HMRC and the resourcing of the customs element of HMRC. In particular, they talked about how a helpline for businesses with customs problems had been removed, the potential impacts of the new regionalised system for HMRC, and how the removal of local offices would mean that HMRC staff will no longer have a physical presence in Scotland north of Glasgow and Edinburgh, and none on the whole south coast of England. The Minister responded by saying that of course customs officials would be able to travel. Yes, that is definitely the case, but as someone who has frequently had to get to Dover by road and by public transport, I can say that that is often not easy. There are significant concerns about that.
There are also continuing worries about whether staff numbers are appropriate. We had a little bit of discussion about that at close of play on Tuesday, again in relation to an SNP amendment. The Minister said then that it was possible that, to deal with the requirements of the Government’s approach, the number of customs officers might increase from 5,000, according to figures submitted to the World Customs Organisation, by between 3,000 and 5,000. Let us say that they increase by 5,000 to 10,000, doubling the current number. I have redone the calculations that I did last Tuesday. That would mean that every British customs officer would still be required to process about 7,700 customs declarations a year. That is still substantially more than their counterparts in other countries: 20 times more than in Australia, six times more than in America, almost twice as many as in Norway and about 20% more than their Swiss counterparts, who seem to process the largest number after the UK, by my calculations on comparable countries. That is without the many additional declarations that might come if the Government decide not to form part of a customs union with the rest of the EU. Therefore, there are legitimate questions to ask about whether HMRC really has the capacity to deliver what is being asked of it.
That is particularly important today. I understand that there are leaked documents suggesting that the EU is concerned that the UK might seek to undercut standards, particularly on taxation requirements. I am not sure whether it mentions customs in that regard, but it is important for the UK to send out a strong message that we want to uphold standards—particularly on something like customs, where there is the potential for a large amount of fraud that could affect other countries, but also on many allied problems mentioned by our witnesses, such as phytosanitary measures, veterinary standards, control of illegal trafficking of goods and so forth. I hope that the Government will give us a strong commitment to properly review resources. We need more than what we have already.
Kirsty Blackman
I completely agree with everything that the hon. Lady is saying. It is important for businesses to have certainty about how the extra resourcing will work—if there is extra resourcing—so that they will know how to interact and have confidence that the system will work after exit or implementation day.
Anneliese Dodds
I am grateful for the hon. Lady’s support. Due to the changes to the deployment of HMRC in Scotland, the issue is very relevant to many of her constituents. I am pleased that the Government seem to be moving in the right direction. We have a commitment to more staff, which is positive, and the Minister’s responses to my written questions seem to focus more on additional numbers and less on redeployment, as they did in the concerning responses previously. Surely, given the potentially increased amount of activity that a new customs regime would necessitate, we need to be on stronger ground if we are to avoid a difficult time for British businesses and retaliatory measures from the rest of the EU if it feels that we are not upholding our obligations.
Mel Stride
Amendments 17 and 20 and new clause 9 seek to require HMRC to review its staffing and IT requirements, with the Chancellor to report that to Parliament before commencement. The Government oppose the amendments. It is not appropriate to legislate to require such a review, because HMRC staffing and IT requirements largely depend on the outcome of the negotiations with the EU and the details of the new customs regime, which will be set out in secondary legislation.
I assure the Committee that the Government are preparing for every possible outcome, and the activities required by the amendments are already happening as part of HMRC’s business planning. I am in discussions with HMRC on a regular basis, including with the head of HMRC, on the details of how we will ensure we have the technology in place.
We have had a number of conversations in Committee about the customs declaration service and the challenges of all the additional declarations that that system may yet have to handle, as well as the hon. Lady’s points on personnel. I am aware of the points she made on access to the various ports, given the changes to the structure of offices in the transformation programme that HMRC is undergoing. She is correct that the figure we will be looking at in terms of additional personnel is between 3,000 and 5,000. I suspect it will be nearer the upper limit than the lower limit, but those decisions are imminent. I hope that those reassurances will lead her not to move her new clause and to withdraw the consequential amendments.
Anneliese Dodds
I am grateful to the Minister for those clarifications and commitments, particularly on staffing. It is good to hear that the Government are considering ensuring that there are sufficient human resources. However, as I hopefully made clear in my remarks, I am concerned that, from an international perspective, we will still be under capacity. There may be reasons for that, but I would like the Government to explain them. We seem to be radically below par compared with other comparable nations.
When it comes to IT, the Government have now accepted that there are many challenges, and I understand that the CHIEF—customs handling of important and export freight—system will now be run on for a period. That is sensible, but it would have been good to get that agreement earlier, because not having that assurance before caused business some concern. Obviously, the CDS programme was announced before the European referendum—it has been a long-running process—but it is important that we recognise the additional pressure that that switchover will put on services at the very time a new customs regime might be coming in. I will not press the amendment, but we may move the new clause, as with a number of other new clauses. I am grateful to the Minister for those clarifications, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Peter Dowd
I beg to move amendment 18, in clause 55, page 38, line 15, leave out
“on the day on which this Act is passed”
and insert
“when the condition in section (Pre-commencement review: effects on frictionless trade with European Union) is met”.
This amendment is consequential on NC10.
The Chair
With this it will be convenient to discuss the following:
Amendment 21, in clause 55, page 38, leave out line 23 and insert—
“(1A) Section (Pre-commencement review: effects on frictionless trade with European Union) and this Part come into force on the day on which this Act is passed.”
This amendment is consequential on NC10.
New clause 10—Pre-commencement review: effects on frictionless trade with European Union—
“(1) The condition in this section is met when—
(a) the Treasury has carried out a review in accordance with the provisions of this section, and
(b) the Chancellor of the Exchequer has laid a report of that review before the House of Commons.
(2) The review by the Treasury under this section must consider the likely effects of implementation of the provisions of this Act on the prospects for frictionless trade with the European Union after the United Kingdom’s withdrawal from the European Union.
(3) The review must consider separately the matters specified under subsection (2) in relation to—
(a) circumstances in which there is no withdrawal agreement with the European Union (within the meaning of section 9 of the European Union (Withdrawal) Act 2018),
(b) any implementation or transitional period after the United Kingdom’s withdrawal from the European Union, and
(c) the period subsequent to that specified in paragraph (b).
(4) The review shall have regard to information provided by the Secretary of State about the likely outcome of negotiations between the United Kingdom Government and the European Union.”
This new clause requires the Treasury to provide an assessment of the effects of implementation of the Bill on the prospects for frictionless trade staffing and IT requirements for implementing the provisions of the Bill, and the prospects of those requirements being met prior to commencement of the main provisions of the Bill.
Peter Dowd
The proposals seek to provide commencement for various provisions in the Bill under parts 1 to 5. New clause 10 seeks to require the Treasury to carry out a pre-commencement review considering the likely effects of the implementation of the provisions of the Bill on the prospects for frictionless trade within the EU after the United Kingdom’s withdrawal from the EU.
The review should also consider circumstances in which there is no agreement with the EU and an implementation or transitional period after the UK’s withdrawal. It would also have regard to information provided by the Secretary of State about the likely outcome of negotiations between the UK and the EU. As the explanatory statement that accompanies the new clause makes clear, we seek to ensure that the Treasury makes a proper assessment of the impact of the implementation of the Bill on staffing and IT requirements in the context of maximising frictionless trade across the UK border.
In evidence to the Committee, the Public and Commercial Services Union commented on staffing, which the new clause seeks to ensure is properly addressed, as my hon. Friend the Member for Oxford East also indicated. Since 2006, the number of HMRC staff has roughly halved, from more than 100,000 staff members to 56,000, and the proposed office closures suggest that more might be on the way. It is not just PCS that is concerned. Anastassia Beliakova said:
“Another concern…is that there is an evidenced shortage of staff dedicated to goods checks. That has been ongoing for a number of years, and questions are being asked about whether there is sufficient resource and focus allocated to goods checks and support. Those questions will become much more acute with all the coming changes.”––[Official Report, Taxation (Cross-border Trade) Public Bill Committee, 23 January 2018; c. 4, Q1.]
At the end of the day, it is incumbent on the Government to hear what we have to say and act before it is too late to enable frictionless trade, which is one of their primary concerns.
Kirsty Blackman
I will be brief. Jeremy White from the Chartered Institute of Taxation said:
“The only frictionless trade known to man is customs union.”––[Official Report, Taxation (Cross-border Trade) Public Bill Committee, 23 January 2018; c. 28, Q33.]
I wholeheartedly agree. The Scottish National party’s position is and has always been that we should remain in the customs union with the EU. That is the only sensible way of eliminating all barriers to frictionless trade.
The thing about having a free trade agreement that removes tariffs is that tariffs are not the only barriers to trade. They are not the only thing to cause friction at borders and problems for companies and individuals. The non-tariff barrier issues include things like stacking lorries, which we heard about in relation to the issue of roll-on/roll-off; how companies and organisations will make customs declarations; the digitalisation or not of customs declarations; and the standardisation of rules of origin, which is the biggest issue relating to the customs union. Those who are exporting to the EU will have to complete rules of origin documentation, having never had to do it before. If we do not have a shared external tariff, that will happen.
I am absolutely clear that this is a good new clause. We need frictionless trade with the European Union, but I am clear that the only way to achieve that is by being in the customs union.
Mel Stride
Amendments 18 and 21 to clause 55 and new clause 10 seek to require the Treasury to review the likely effects of the Bill on frictionless trade with the EU, and for the Chancellor to report that to Parliament before commencement. I assure the Committee that the Government are committed to providing information on the impact once the outcome of the negotiations is clearer.
We believe that putting those requirements on the face of the Bill is unnecessary. Any changes will be set out in secondary legislation, and Parliament will of course have the ability to consider, scrutinise and decide upon the content of that legislation in the normal way. Furthermore, any review that is carried out before the outcome of the negotiations will necessarily be somewhat speculative.
Peter Dowd
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Peter Dowd
I beg to move amendment 19, in clause 55, page 38, line 15, leave out
“on the day on which this Act is passed”
and insert
“when the condition in section (Pre-commencement review: effects on border experience) is met”.
This amendment is consequential on NC11.
The Chair
With this it will be convenient to discuss the following:
Amendment 22, in clause 55, page 38, leave out line 23 and insert—
“(1A) Section (Pre-commencement review: effects on border experience)and this Part come into force on the day on which this Act is passed.”
This amendment is consequential on NC11.
New clause 11—Pre-commencement review: effects on border experience—
“(1) The condition in this section is met when—
(a) HMRC Commissioners have carried out a review in accordance with the provisions of this section, and
(b) the Chancellor of the Exchequer has laid a report of that review before the House of Commons.
(2) The review by the Commissioners under this section must consider the likely effects of implementation of the provisions of this Act on the border experience of importers and exporters and those engaged in associated economic activities.
(3) The review must consider separately likely effects on the border experience of those importing goods from or exporting goods to the European Union.
(4) The review must consider the matters specified under subsection (3) in relation to—
(a) circumstances in which there is no withdrawal agreement with the European Union (within the meaning of section 9 of the European Union (Withdrawal) Act 2018),
(b) any implementation or transitional period after the United Kingdom’s withdrawal from the European Union, and
(c) the period subsequent to that specified in paragraph (b).
(5) The review shall have regard to information provided by the Secretary of State about the likely outcome of negotiations between the United Kingdom Government and the European Union.”
This new clause requires HMRC to provide an assessment of the effects of implementation of the Bill on the border experience of importers and exporters and those engaged in associated economic activities, with particular reference to trade with the European Union, prior to commencement of the main provisions of the Bill.
Peter Dowd
The amendment seeks to oblige HMRC commissioners to carry out a pre-commencement review of the effect on the border experience. The Chancellor of the Exchequer will then be mandated to lay a report of that review before the House.
The reasoning behind new clause 11 is simple: we are facing a shift of enormous magnitude, which demands a corresponding change in our approach to how we practically handle the processing of customs at the border. The change comes at the same time as existing resource challenges to HMRC. We are concerned and will continue to be so about the issue of provision to the appropriate authorities. I have made that point to the Minister time and again, and I hope he listens to what we are saying, even at this late stage.
Kirsty Blackman
I have significant concerns about the way this clause is going to work, given that the UK Government’s priority in the Border Force has been immigration rather than customs staff. Therefore, there has been an erosion of the customs staff who have got experience and understanding of the frontline. I am not yet convinced. Although the Government are talking about putting extra people into HMRC, I have not heard enough about equivalent extra staff being put into the Border Force so that it can appropriately police things in relation to customs. I have significant concerns about the border experience, and I note that that is not just on the south coast of England. We have borders when things come in on international flights or ports outside the south coast of England. It needs to be taken over the whole geographical spread of the United Kingdom.
Mel Stride
Amendments 19 and 22 to clause 55 and new clause 11 seek to require HMRC to review the likely effects of the Bill on the border experience of importers and exporters, and those engaged in associated economic activities, and the Chancellor to report that to Parliament before commencement of the Bill. The reasons why the Government will resist them are similar to the reasons given for resisting the last group of amendments. It is not appropriate to legislate for such a review, because the experience of businesses at the border will depend on the outcome of the negotiations with the EU, the resulting details of the new customs regime and the resulting changes needed to maintain a fully functioning and legally operable VAT and excise regimes.
To respond to the specific points the hon. Member for Aberdeen North made about the Border Force, it is absolutely vital, as she has suggested, that we have appropriate resource. Of course, that is a Home Office matter and not within the direct remit of HMRC or the immediate scope of the Bill, but I reassure her that we are working across Government and closely with the Home Office to ensure that, whatever occurs in the negotiation and whatever the results for our day one arrangements, we will be ready in terms of both the Border Force and Customs and Excise.
Peter Dowd
The Minister has heard what I have to say. We will not be pressing the amendment, although we will press the new clause. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Kirsty Blackman
I beg to move amendment 102, in clause 55, page 38, line 17, after “(2)”, insert “and (2A)”.
This amendment paves the way for amendment 103.
The Chair
With this it will be convenient to discuss the following:
Amendment 103, in clause 55, page 38, line 32, at end insert—
“(2A) The following provisions come into force on such day as the Secretary of State may be regulations under this section appoint—
(a) section 41 (abolition of acquisition VAT and extension of import VAT),
(b) section 42 (EU law related to VAT), and
(c) section 43 and Schedule 8 (VAT amendment connected with withdrawal from EU).
(2B) Regulations under subsection (2A) may not be made until the Secretary of State has laid before the House of Commons an impact assessment that considers—
(a) the effect of leaving the EU VAT area on the lawful importation of goods into the United Kingdom from the European Union, and
(b) the effect of abolishing acquisition VAT and extending import VAT on the lawful importation of goods into the United Kingdom from the European Union.”
The effect of this amendment would require the UK Government to make an impact assessment on the effects of leaving the EU VAT Area before any system of upfront import VAT could be applied to goods lawfully being imported into the UK from the European Union under EU Law.
New clause 13—VAT deferral scheme—
“(1) This section applies if it appears to the Secretary of State that the United Kingdom will cease to be a member of the European Union taxation and customs union.
(2) The Secretary of State must by regulations introduce a domestic deferral scheme for UK importers.
(3) In designing a scheme under subsection (2), the Secretary of State must consult with whichever relevant stakeholders deemed by the Secretary of State to be appropriate.
(4) Regulations under subsection (2) may be made only if a draft of the regulations has been laid before, and approved by resolution of, the House of Commons.”
This new clause ensures that in the event that the UK is no longer a member of the EU VAT area, the Secretary of State must by draft affirmative regulation introduce a VAT deferral scheme.
Kirsty Blackman
This is the last section on which I will be moving anything. Amendment 102 is a consequential amendment and relates to amendment 103. Amendment 103 requires an impact assessment to take place on the changes of the EU VAT area, as we have rehearsed, and the move from acquisition VAT to import VAT.
I am neither convinced nor clear that the Government have adequately undertaken an assessment of the impact. Some 132,000 new businesses will come into paying import VAT for the first time. I do not know that the Government are aware of how much of an impact that will have on those businesses. I am not yet at the stage where I believe the Government have done enough impact assessments.
I was pleased that the Minister talked earlier about looking sympathetically at having a system of VAT deferral or something of that sort to improve cashflow issues for businesses. I appreciate his saying that and look forward to more details about how that will work, so that businesses can make adequate plans. That is not the only issue that occurs on leaving the EU VAT area. For the other issues mentioned earlier, for example on triangulation simplification where companies would have to register for VAT in more countries, I am again not convinced that the Government have adequately assessed the impact they will have on businesses. They are therefore not in a position to explain that impact to businesses and assist them in mitigating it.
On new clause 13, I appreciate that the Minister has said he is sympathetic to making changes on the VAT deferral scheme, but I intend to press new clause 13 to a vote so that it is written on the Bill and is not just words from the Minister that the Government agree to a VAT deferral scheme. The new clause would ensure that. I do not intend to push amendments 102 and 103 to the vote, but I may seek to return to amendment 103 on Report.
Mel Stride
I will start by addressing new clause 13. The hon. Lady will be aware that the issue of the potential move from acquisition VAT to import VAT and its effect on cash flow for businesses was raised by the Chancellor in the autumn Budget. We are very aware of that, as the Chancellor has indicated.
On Second Reading, from memory, I was intervened on by my right hon. Friend the Member for Loughborough (Nicky Morgan), the Chair of the Treasury Committee, who raised the same issue. Prior to that, I had had a meeting with her to discuss the matter in some detail. I was able to provide her with an assurance on the Floor of the House that was sympathetic—I think that word was used—to the issue. We certainly do not wish for a situation in which we are significantly damaging businesses as a consequence of any changes. Indeed, in this debate I have clarified that, under the terms of section 38 of the Value Added Tax Act 1994, we have the powers to make the kind of changes that my right hon. Friend and I would probably agree are appropriate.
I am grateful to the hon. Lady for not pressing amendments 102 and 103, which seek to prevent the Government legislating for a future outside the EU VAT area before we produce an impact assessment on the effects that leaving the EU will have on imports.
Peter Dowd
I welcome that point. I would speak to the amendment but I will not, given the time. Does the Minister have any indication what the timetable might be for that structure in relation to deferrals, or can he come back to us?
Mel Stride
That question prompts another question: at what point do we reach that matter in the negotiations with the European Union? It is not possible to answer that question because it depends on when we get our deal and where the parameters around VAT, imports and exports are. All those matters land in that negotiation. I reiterate the reassurance that we have the ability and the powers within the VAT Act to act accordingly and we have a firm intention to ensure that we deal with the concern we have all identified.
Kirsty Blackman
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 55 ordered to stand part of the Bill.
Clause 56 ordered to stand part of the Bill.
New Clause 1
Setting the customs tariff: enhanced parliamentary procedure
“(1) This section applies to—
(a) the first regulations to be made under section 8, and
(b) any other regulations to be made under that section the effect of which is an increase in the amount of import duty payable under the customs tariff in a standard case (within the meaning of that section).
(2) No regulations to which this section applies may be made by the Treasury in exercise of the duty in section 8(1) except in accordance with the steps set out in this section.
(3) The first step is that a Minister of the Crown must lay before the House of Commons a draft of the regulations that it is proposed be made
(4) The second step is that a Minister of the Crown must make a motion for a resolution in the House of Commons setting out, in respect of proposed regulations of which a draft has been laid in accordance with subsection (3)—
(a) the rate of import duty applicable to goods falling within a code given in regulations previously made under section 8 or in the draft of the regulations laid in accordance with subsection (3);
(b) anything of a kind mentioned in section 8(3)(a) or (b) by reference to which the amount of any import duty applicable to any goods is proposed to be determined; and
(c) the meaning of any relevant expression used in the motion.
(5) The third step is that the House of Commons passes a resolution arising from the motion made in the form specified in subsection (4) (whether in the form of that motion or as amended).
(6) The fourth step is that the regulations that may then be made must, in respect of any matters specified in subsection (4)(a) to (c), give effect to the terms of the resolution referred to in subsection (5).”—(Peter Dowd.)
This new clause establishes a system of enhanced parliamentary procedure for regulations setting the customs tariff, with a requirement for the House of Commons to pass an amendable resolution authorising the rate of import duty on particular goods.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Mel Stride
On a point of order, Mrs Main. Is this an appropriate moment to say a few words to thank the Committee? Perhaps I should begin by thanking you, Mrs Main, and Ms Buck, for the exemplary and impartial way in which you have both chaired our proceedings. I also thank all members of the Committee for the convivial and positive way in which we have conducted our proceedings, occasionally with a little levity creeping in, which is always a nice sign, I think.
Mel Stride
Yes, Mrs Main, necessary and appropriate levity has been put into our proceedings. I thank all Members for their contributions, as I always say on this occasion, particularly those on our side. When my hon. Friend the Member for York Outer intervened, that was a stellar and special moment. It was a highlight on our side of the Committee.
I thank the Opposition Front-Bench spokesperson, the hon. Member for Bootle, before he disappears into the sunset—probably under the auspices of his own sunset clause. I thank him for his usual good humour. His Henry VIII quote was particularly good, but I am convinced that, as with all the others, he probably just makes them up. I can assure the hon. Member for Aberdeen North I will get my oomph back on Report. My mojo will be in fine form. I thank the hon. Member for Oxford East for the assiduous approach that she has taken to her duties on the Committee and for not mentioning on this occasion the dead dog and the bicycle, for which I am ever so grateful.
I thank the Treasury and HMRC, in particular my officials, Tom Doherty, Matthew Parry, Emily Marsh and Fraser Eccles, for all the support that they have given to me personally, and the other Departments, the Department for International Trade and the Department for Environment, Food and Rural Affairs, that have contributed to the process. I thank our new Minister, the Under-Secretary of State for International Trade, my hon. Friend the Member for Beverley and Holderness, who put in a fabulous performance on his first Committee as a Minister, with great force and great style. I thank the Whips on both sides, who are the unsung heroes. I always thank the Whips because I care about my future and my career.
I thank Hansard and the Doorkeepers. I also extend a heartfelt thank you from the whole Committee to the witnesses who appeared before us—perhaps specifically to Joel Blackwell, who has emerged as the most celebrated witness of our proceedings. I thank them all for having contributed in such a positive way.
Peter Dowd
Further to that point of order, Mrs Main. I thank you and Ms Buck for the eloquence in which you have chaired the meeting, and for your forbearance. I thank the Clerks, Hansard and the Doorkeepers for their sterling work; they have even more forbearance. I thank colleagues who have undertaken scrutiny in a forensic, good-humoured and professional fashion, and that includes the Members on the Government Benches. I also thank all our staff, Sam Goodman, Tom Peters, Sophia Morrell and Jack Jenkins, for their hard work on the Bill.
The whole debate has been pretty commensurate and pretty good. I finish with a couple of things: the Government epitaph will be “Down with sunsets!”; and, finally, “Parting is such sweet sorrow”.
Kirsty Blackman
Further to that point of order, Mrs Main. In addition to the other thanks, I think this has been a very good debate and we have spoken in a lot of detail about a huge variety of issues, because the Bill covers a number of different things. The amount of knowledge expressed in the room has been a good display of what Parliament can do when it is doing something in the right way.
In particular, I say a huge amount of thanks to the Clerks, who have been absolutely invaluable in their support to me. I could not have done this without them—they have been fantastic, so I thank them so much.
Graham Stuart
Further to that point of order, Mrs Main. I will not repeat all the thanks that my right hon. Friend the Financial Secretary so eloquently made. I agreed with every word he said. Obviously, as the new boy on the block I thank him for his support, and I thank the Committee for being indulgent of me. In fact, the astonishing amiability and amicability of Opposition colleagues even in the face of my tetchiness is something on which I shall have to reflect over the weekend.
I thank all the Department for International Trade staff who supported me in work on the Bill. With HMT, we are bringing forward a piece of legislation that has been subject to good humoured but forensic scrutiny, not only from witnesses but from members of the Committee. I thank all the staff, Clerks and others for their support.
Bill to be reported, without amendment.
Westminster Hall
(6 years, 9 months ago)
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Leaving the EU: Chemicals Regulation
(6 years, 9 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Mary Creagh (Wakefield) (Lab)
I beg to move,
That this House has considered the Eleventh Report of the Environmental Audit Committee of Session 2016-17, The Future of Chemicals Regulation after the EU Referendum, HC 912, and the Government response, HC 313:
I am delighted to be here with you, Mr Evans, and with so many colleagues to debate this vital matter. I am grateful to the Liaison Committee for granting the debate and to colleagues for attending. I look forward to good speeches and good debate.
Nine months after the Environmental Audit Committee’s report, the chemicals industry in the UK remains deeply concerned about the Government’s decision to leave the European single market and customs union and the impact that doing so will have on their business. Today, I will set out why our chemicals industry is the foundation stone of UK manufacturing; how the chemical regulation REACH—the registration, evaluation, authorisation and restriction of chemicals—regulates the UK chemicals industry; and what the Government’s decision to leave the single market and customs union means in terms of jobs, trade, potential increases in animal testing, duplication of regulation and costs, the risk of tariffs and increased red tape.
Let us begin by looking at the chemicals industry. From the leaked Brexit economic analysis this week, we heard that chemicals is one of the five sectors that will be worst hit by leaving the European single market and customs union. Our Committee looked at that last year. The industry has a £32 billion annual turnover and provides half a million direct and indirect jobs across the country. Chemical clusters tend to be on coastal sites near to petrochemical sites because they are often connected by pipelines. Clusters are found in Hull, Teesside, Grangemouth and Runcorn—areas that have already been hit by industrial decline and capital flight, and where good, well-paid engineering jobs are not easy to come by.
The paints, adhesives, mixtures, polymers, plastics and dyes made by the industry are used in every aspect of our lives, including the car industry, aerospace industry, tech sector, energy sector and pharmaceutical sector—I could go on. They are the backbone of the nation’s manufacturing industry, and we rely on an integrated European Union supply chain. The UK no longer produces a number of important chemical feedstocks and is reliant on them coming in from the European Union.
The UK exports almost £15 billion-worth of chemicals to the EU each year. Chemicals is our second largest manufacturing industry and our second largest export to the EU after cars, but it is not getting the attention it deserves. It is not as glamorous; it is a Cinderella sector.
What is REACH? It is the EU’s regulation, agreed by this country about 10 years ago, which regulates chemicals and hazardous substances. It covers more than 30,000 substances bought and sold in the EU single market. It also covers products and articles such as the coating on a non-stick frying pan, flame retardants in sofas, carpets and curtains, and medicines.
Our chemicals inquiry came out of our inquiry into the future of environmental regulation after we leave the EU. People kept saying, “You need to look at the chemicals sector”, so we decided to do so. The inquiry found that, first and foremost, UK companies want to stay in REACH. They have made more than 5,000 registrations with REACH. Another deadline is looming—31 March—by which smaller tonnages of chemicals will have to be registered. By the end of March, UK companies will have spent an estimated £250 million on registering their products on the database. One concern raised in the inquiry was that smaller manufacturers, looking ahead at the potential of a hard Brexit, would baulk at spending £20,000, £30,000 or £40,000 on registering a chemical when that registration could fall exactly one year later, on exit day.
Kate Green (Stretford and Urmston) (Lab)
I congratulate the Select Committee and my hon. Friend on the report. I represent a constituency in which 7,000 manufacturing jobs are dependent on the chemicals sector and there are 1,250 jobs in chemicals companies. That exact point about the cost of registration has been raised by companies in my constituency. Some of them have spent hundreds of thousands of pounds on registering chemicals over the years, and they suggest that in the Brexit negotiations we should seek third-country status, so that our companies can continue to register within REACH. Does she agree that that would be one route forward?
Mary Creagh
I certainly do, and that was the route recommended in the report. The report was slightly curtailed—we had to rush it out in a form that was not as fine and detailed as we would have liked because of the early calling of the general election—but we were clear that that was the most pragmatic and cheapest route.
The looming deadline raises the threat of market freeze. If a small company decides not to register and just to run down its chemical feedstocks, when a big multinational manufacturer comes to apply that coating to whichever tiny aircraft engine part or car part requires it, the supplier—in some cases they are unique suppliers—might say, “We’ve run out of that stuff now.” We could see market freeze in the automotive and aerospace supply chains long before we leave the EU, because of that deadline and the lack of certainty about what will happen.
Leaving REACH puts at risk our trade in chemicals. The European Chemicals Agency has said that without an agreement to the contrary, all UK registrations will be invalid after exit day. Therefore, the jobs of my hon. Friend’s constituents and investment in their companies will all be put at risk. I will come on to talk about the threat from double regulation.
Secondly, the inquiry found that the chemicals regulation framework established by the EU through REACH would be difficult and—critically—expensive to transpose into UK law. It is not just a list of rules or restricted substances but a governance mechanism; it is an entire working body of parts. It involves data sharing and co-operation. For the UK to establish a duplicate system of chemicals regulation, as the Minister proposed when she gave evidence to us, will be expensive for us—the taxpayer—or the industry, or both.
Thirdly, after Brexit, REACH could become zombie legislation, which is no longer monitored, updated or enforced. When we debated the European Union (Withdrawal) Bill, I tabled new clause 61 to try to remedy that by ensuring that we remained part of REACH. However, it is part of the difficult third of EU environmental legislation that cannot be neatly cut and pasted into UK law through that Bill. The Minister in response said that the REACH regulation is directly applicable, but that is essentially meaningless without the chemicals agency to govern and regulate it. We will end up having zombie legislation, duplicating regulation and potentially diverging from the EU, which could also be a bad thing for British business.
Kerry McCarthy (Bristol East) (Lab)
My hon. Friend did an excellent job on this report and is doing an excellent job of leading the debate. Does she share my concern that when the Department for Environment, Food and Rural Affairs gave evidence to the Committee, it seemed to have only just started conversations with the chemicals industry about all these issues and how complicated they would be? It was almost on a learning exercise—doing its homework—long after article 50 had been triggered.
Mary Creagh
I did notice that. I went over the road to read the impact assessments that were not impact assessments, and it was good to read a secret document on the chemicals sector that quoted our Committee’s report heavily. There was some good analysis in there, but I was grateful to see that however thin our report was, the civil servants involved had looked at the evidence we had taken. It was certainly a very useful exercise.
The Government’s response to our report was pretty thin gruel—a couple of pages, and quite dismissive. That reflects what my hon. Friend says about the Government making it up as they go along. They are knitting their own policy as they go. There is nothing wrong with knitting, but we do not want something that ends up full of holes.
We put out the response because we wanted to see what the industry would do. It is fair to say that last year, when we were doing the report, the industry was perhaps more concerned about the impact of tariff barriers than it was about regulatory barriers. It was happy to give Government the benefit of the doubt, to believe what it was hearing and to accept reassurances, but as the exit day deadline heaves into view, that belief has been replaced by thorough scepticism and in some cases downright fear, particularly about the impact of a hard Brexit.
We put the Government’s response up on our Committee’s website and invited comments. The Chemical Business Association said,
“the Government Response to the EAC’s Report fails to…recognise the unique nature of the regulatory issues facing the chemical industry”.
Breast Cancer UK said,
“the Government’s response to EAC’s report is woefully inadequate. It fails to provide even an outline of how the Government will manage chemicals regulation post-Brexit.”
EEF, the manufacturers’ organisation, said:
“The degree of uncertainty in this area is causing concern not just in the chemicals industry but also very much among downstream manufacturing industries which are reliant on a wide range of substances and chemical formulations.”
That is why 20% of the 126 companies represented by the Chemical Business Association were looking at moving to the EU. We had that evidence almost a year ago, and it would be interesting to know how many of them have established presences in Dublin, Paris or Frankfurt.
On a recent visit in my Wakefield constituency I went to a bed manufacturer, Global Components. It is in Ossett, in what used to be called the heavy woollen district—the Dewsbury part of my constituency. I was not expecting to hear about Brexit, but the company told me that 90% of its products are imports, so it has been hit by the fall in the value of the pound. It is finding it harder to recruit new staff and has delayed a major investment as a result of uncertainties over Brexit. Crucially, the foam it uses in its mattresses comes from a German supplier, and the price of that foam has risen by 30% since the referendum. Global Components is having great difficulty passing those costs on to its consumers.
The European Chemicals Agency has been very clear that without an agreement to the contrary, all UK company registrations will be invalid after exit day. No REACH means no licences. No licences means no market access. No market access means no trade. It is that simple. As one senior executive said to me, on condition that I did not say his name or his company,
“Brexit is a business-killing issue.”
If we leave the single market and the customs union, businesses will no longer have access to the database they helped to fund and build. UK science, testing, ingenuity, innovation and creativity helped to build the database. UK scientists are present in Helsinki. We helped to build the database, but now we are ripping ourselves out of it and we will no longer have the detailed safety information on all the chemicals that are handled and produced. Obviously, that is of great concern to my own trade union, the GMB, which represents workers in what can often be hazardous industries.
What choice is left to our constituents and companies? UK companies that want to continue to trade must set up what is called an only representative in the EU to re-register with REACH the registrations they used to have. That is absolutely absurd, and it is duplication. If those companies want to stay registered, they must set up somebody in a European Union member state and pay twice for something they have already bought. That is the height of absurdity. It is a huge duplication of costs, and it risks making UK chemicals and manufacturing uncompetitive. Companies could ask the importer to register themselves, but why would they do that? Why would they take on the cost and documentation? They will just switch to an alternative supplier, and that will be bad for British jobs, British growth and British businesses.
Kate Green
Does my hon. Friend share the concerns of businesses in my constituency? Even if the Government are able to say that existing registrations would continue to be recognised in both European and UK law under some form of deal—the Minister suggested in a letter to me that that was the Government’s preferred position—that would not offer any certainty about future registrations and might lead to businesses relocating out of the UK altogether.
Mary Creagh
I do share my hon. Friend’s concerns. UK industry is not waiting for the Government to sort this out; it is already voting with its feet on this issue, delaying investment and winding down operations. None of that is being announced. I asked one senior executive why not, and he said, “In all my years in this industry, I’ve never done a press release announcing job losses and closures. This is not something we want to talk about.” That is understandable, but we have also seen courage—in the case of the chief executive of Airbus, for example, who has talked about how manufacturing and competitiveness will be hit. Our debate goes into the detail underpinning that: what do we mean when we say that, and what will it cost in jobs?
I turn now to what was a touchstone issue during the passage of the European Union (Withdrawal) Bill: the issue of animals and animal testing. We might be able to stay in the registration, but will we be able to stay in the knowledge-sharing scheme? If we do not participate in European Chemicals Agency scientific committees or the forum for exchange on enforcement, we may need more animal tests to be done in this country—something that none of us would welcome. At the moment, UK companies registering chemicals within REACH must share data from animal testing. Other registrants access that data, which minimises the need to carry out and duplicate animal testing, but only participants in REACH have access to that data, so we could see an unwelcome increase in animal testing.
The REACH framework is built on co-operation between signatories. It contains obligations, oversight and control mechanisms. It requires freedom of movement of products between all signing countries. If we do not co-operate in that way, how will we ensure that human health and our environment are protected from chemical hazards, and how will we stop our country from becoming a chemical dumping ground?
As an aside, the Committee travelled to the US to see how it regulates chemicals. We were pleased to hear that the US, after 50 or 60 years of fighting the chemicals industry on the issue, has set up its Toxic Substances Control Act, although there was a question mark over its implementation with the arrival of the new regime under President Trump. We also heard that the EU’s chemical standard was seen as the global gold standard and was being used by the states of California and New York; that things such as babies’ bottles were advertised and marketed as meeting EU chemicals standards as a badge of honour and safety; and that the US chemicals industry had asked for that regulation to keep up and compete with European chemical products and articles.
We also heard that the de-regulatory lobbying and the Americans’ approach in this area had led to the absurdity of asbestos—a known carcinogen hazardous to human health—never having been banned in the United States. I am sure that the citizens of this country, whatever their thoughts when casting their vote for leave or remain, were not asking for an increase in animal testing, a decrease in jobs and the supposed freedom to follow a weaker regulatory regime.
The Government have said that they want to set up their own chemicals agency, but they really have to clarify what system of registering, monitoring and authorising chemicals will be used in the UK post exit. The clock is ticking. What is the plan? How will decisions be made after exit day? Will we be like Switzerland, which does not have access to the REACH database, or Norway, which does, through its membership of the European economic area? How does the Minister propose to protect our £14 billion export trade with the EU?
The Government’s 25-year environment plan promises a new chemicals strategy that will set out the Government’s approach as the UK leaves the EU. I hope we will not wait two and a half years for that new chemicals strategy in the way we did for the environment plan. The Government say that the new strategy will “build on existing approaches”. When will we see it? When will it be published?
Words and phrases such as “build on existing approaches”, “looking” and “monitoring” are a prime example of the “muddling through” that former Department for Exiting the European Union Minister Lord Bridges talked about in the other place on Tuesday. Although we are not clear about what will happen during the two years of the Brexit transition phase—if it is for two years; it will perhaps be longer—Lord Bridges has warned that it
“will be a gang plank into thin air.”—[Official Report, House of Lords, 30 January 2018; Vol. 788, c. 1423.]
We must not force our chemicals industry to walk down it. Will the Minister clarify whether there will be a two-year transition period during which we will remain a member of REACH? Businesses need that clarity.
Let us look at the IT aspect of setting up our own agency. The European Chemicals Agency has a budget of more than £100 million a year and 500 staff to manage its database and monitor compliance. Will we still have our own agency? The Minister’s civil servant told our Committee that a new agency would cost tens of millions of pounds. Who will pay for that extravagant bauble? Will it be industry, which already has the double burden of re-registering the stuff they have already registered with REACH, and would then have to register again in a UK system—a triple whammy—or the taxpayer?
Several witnesses expressed concerns to the Committee about the Government’s poor track record in setting up IT projects. Setting up our own database will be expensive, and we have seen the beginnings of the taxpayer footing the bill for it. The DEFRA permanent secretary wrote to the Secretary of State for Environment, Food and Rural Affairs on 18 January requesting a ministerial direction to approve a spend of £5.8 million between February and July this year on the delivery of a new IT system for registering and regulating chemical substances placed on the UK market, as part of the preparations for a no-deal Brexit.
Will the Minister tell the House what that £5.8 million will pay for, the total estimated cost of the new agency, the total estimated cost of the new database and how much it will cost every year to run the system? How many staff will be needed and what happens to them if the Government negotiate to stay in REACH, as the Under-Secretary of State for Exiting the European Union, the hon. Member for Wycombe (Mr Baker), told Parliament could happen only this morning? How will we recruit the best people to a job that may not be there in a year’s time?
The UK’s chemicals sector will see its costs treble: it will re-register with REACH, thereby losing the money it spent first registering with REACH, and will also have to register with a new UK regime. However, the pain will not stop there. Leaving the customs union will compound that pain. As well as the regulatory barriers, the risks of tariffs and customs red tape on chemicals could cost companies dearly. A Chemicals Industry Association Brexit survey suggests that tariffs on imports could be in excess of £350 million, while re-exporting could cost £250 million.
Ministers often fail to understand that intra-company trade is a significant percentage of those imports and exports. We import things from the EU to make the wings of an Airbus aeroplane in Alyn and Deeside and then export them to Toulouse, where they are fixed on to an aircraft. Those are intra-company imports and exports, and customs and tariffs and paying more money to import and export such things will make British industry non-competitive.
When I first asked the Secretary of State for Environment, Food and Rural Affairs how he planned to regulate chemicals after the UK leaves the EU back in July, he said, “Better”, and sat down. However, 20 months after the referendum, things are much worse. I hope I have explained why “better” is simply not possible. Remaining close to REACH is not only unavoidable—it is desirable, pragmatic and sensible. Staying in REACH is the right thing for jobs, British growth and British investment, and the majority of our inquiry’s witnesses supported continued membership of REACH. The Green Alliance said:
“The REACH regime is the most advanced in the world, protecting citizens and the environment from tens of thousands of chemicals.”
Our Committee recommends that the UK remains in REACH. It is the passport to a global marketplace. UK companies do not care whether that passport is blue or brown, so long as it does not kill jobs and investment. Leaving REACH could mean lower environmental or safety standards than in the EU, exposing UK workers, consumers and the environment to greater risks. Leaving REACH places huge additional financial burdens on the chemicals industry and the UK taxpayer to comply with two different sets of regulations. Leaving the customs union creates the added danger of tariffs.
I look forward to the Minister’s response to colleagues’ speeches and to hearing how she will provide the certainty that our businesses and our constituents rightly crave.
Colin Clark (Gordon) (Con)
It is a privilege to serve under your chairmanship, Mr Evans. I am afraid that I may have to leave early to travel back to the frozen north. I appreciate your indulgence in that.
I congratulate my colleagues on the Environmental Audit Committee on producing the report. I have become a devoted environmentalist since serving with my colleagues on the Committee. I am a farmer, and partly an organic farmer, and as I said to the hon. Member for Bristol East (Kerry McCarthy) the other day, I once owned a vegan food manufacturer, of all the bizarre things. However, I am also a beef farmer. I seem to be crossing the divide.
The report was written largely before I joined the venerable Committee, which is so ably chaired by the hon. Member for Wakefield (Mary Creagh) with her typically collegiate approach, which I very much enjoy. Not being the author of the report, I will be brief. The report recommends that the Government take a pragmatic approach to the UK’s relationship with the EU’s single market for chemicals, and in particular that it should seek to remain a participant in the registration process for those chemicals.
I represent Gordon, the constituency with the biggest oil and gas footprint, so hon. Members will see how difficult it is for me to be on the Environmental Audit Committee. However, I see oil and gas as part of the solution, not part of the problem. The oil and gas industry is clearly a massive feedstock supplier to the chemicals industry, which employs 157,000 people. To put that into perspective, the oil and gas industry employs 320,000 people, down from 460,000.
The UK could decide to follow the regulatory decisions made through REACH—the regulation on the registration, evaluation, authorisation and restriction of chemicals—or to take a different approach while still allowing UK companies to sell their products in both the UK and the EU, thanks to continued data sharing. Oil and gas is an international, dollar-denominated industry; 60% of oil and gas exports are outside the EU. Oil and gas should be an example to other sectors of how there may be good things outwith the EU. UK oil and gas, a bit like the UK chemicals industry, sets EU standards and has done for the 40 years during which it has been producing. The Government indicating that they have no intention of aligning the future UK system of chemicals regulation with that of the US is welcome news. However, the experience of the US in providing consistent regulation across the country, rather than allowing variations from one state to another, could be a model for the Government should the UK decide to establish its own system. I say that because we have UK-wide frameworks and we will be maintaining the single market within the UK.
As I am not the author of the report, that is how brief I am going to be.
Mary Creagh
I am delighted that the hon. Gentleman has spoken on the report, and it has been fascinating to hear about the oil and gas industry, but does he agree that the experience in respect of, in particular, worker protection in that industry has been potentially much weaker outside the UK? I am thinking of the experience of Deepwater Horizon and some of the environmental degradation in the Niger delta in particular. Those are not models that we would wish to follow in our own oilfields, where we want workers and, of course, the environment to be protected.
Colin Clark
That is a very interesting point. The UK and Norway are obviously the two biggest oil and gas producers, by a long way. UK regulation has set EU regulation for the last 40 years; and interestingly, the EU is currently trying to put through regulation that Norway will not accept, because it feels that its regulation is already higher. I am therefore very optimistic that the oil and gas industry in the UK and in Norway will continue to set standards. It will be interesting to see how the UK chemicals industry will set international standards and have an effect on the EU going forward.
I look forward to greater participation in the Environmental Audit Committee, and I hope that the next time I stand here I am a signatory to its report.
Angela Smith (Penistone and Stocksbridge) (Lab)
As always, it is a pleasure to serve under your chairmanship, Mr Evans. I am grateful for the opportunity to speak in this debate. I congratulate the EAC on its report and my hon. Friend the Member for Wakefield (Mary Creagh) on her very clear and detailed explanation and defence of its recommendations, which I entirely endorse.
It is a pleasure to follow the hon. Member for Gordon (Colin Clark). He had no need to justify his position as both an MP for a constituency with oil and gas interests and as someone with an interest in the environment. If we dichotomise those two very important issues, we do a disservice to the country. The oil and gas industry remains important; it will not disappear overnight. We need to work hard to reconcile those two key interests as much as we can.
This topic is critically important. I am chair of the all-party group on the chemical industry, and this report is of great interest to me and to the all-party group. I reinforce the point that the chemicals sector directly contributes £6.4 billion to the UK economy each year and employs approximately 88,000 people—in all the areas that my hon. Friend outlined but also in areas such as the south bank of the Humber, where it is a critically important employer.
As has been pointed out, 60% of our chemical exports go to the European Union, and 75% of our imports in this sector come from the bloc. We must recognise that the chemicals sector has an important impact on all manufacturing sectors—in my constituency, for instance, we have the steel sector, which is an important downstream recipient of chemical products—and therefore the knock-on effects of regulation in this sphere will be profound and felt far and wide.
Mary Creagh
I congratulate my hon. Friend on the brilliant work that she has done in chairing the APPG and ensuring that the voice of the chemicals industry is heard loud and clear in this place. Does she agree that the issue is not just upstream but downstream chemicals, affecting things as diverse as kidney dialysis chemicals and machines, artificial limbs and so on? It spreads right out into the medical industry as well. We do not want there to be unintended or unforeseen consequences, because chemicals really do network out into every nook and cranny of our lives.
Angela Smith
I agree. That is why chemicals are considered one of our key foundation industries that is of profound importance to the UK economy in every respect. On that basis, it is imperative that we get this right; on that, at least, I hope that we all agree.
The Environmental Audit Committee made several very sensible recommendations as part of its inquiry. However, in their response, the Government have given very little away about policy proposals. Nine months later, and with the Brexit date looming on the horizon, I, alongside the sector, the members of the Committee and Parliament more generally, remain deeply concerned by the lack of clarity.
What do we know and what do we not know? Against the Committee’s explicit advice, the Government are attempting to use the European Union (Withdrawal) Bill to give Ministers the power potentially to create a new UK-based regulatory body to replace REACH. The industry has made it abundantly clear that replacing REACH would be costly and over-bureaucratic. It would also potentially limit important access to data, as my hon. Friend pointed out, and to scientific collaboration, a point made powerfully by the Royal Society of Chemistry.
REACH represents the gold standard in international chemical regulations, and there is no appetite at all in the industry for degrading regulatory standards, I am pleased to say. What is more, if companies are to continue trading with the EU, compliance is, in the words of the Chemical Business Association, “non-negotiable”. Failure to comply means no market access and therefore no trade, as my hon. Friend pointed out.
As I said, creating a body like the one that we are discussing risks costing the public purse and taking a huge amount of time, simply to add another layer of bureaucracy for no practical purpose whatever. After all, substances requiring evaluation or authorisation will already have achieved that status by complying with REACH by this year’s deadline of 1 May. I ask the Minister these questions directly. Will she urge the Government to reconsider their approach to chemicals regulation post Brexit? Can she assure the industry today that we will remain in full regulatory alignment, both in the transition and in the long term?
Another area causing immense concern relates to the registration process. The Committee recommended that “as a minimum” the Government should ensure that the UK retain the registration element of REACH. The Government even acknowledge that any company wanting to trade with the EU will have to engage with that element of REACH. So why leave it? In the short term, companies need assurance that REACH registrations made before May 2018 will remain valid post Brexit, because otherwise, why bother, why do it? Millions of pounds have already been spent on registrations. The Chemical Industries Association says that if companies have to re-register everything because of Brexit, the cost will be in the region of £350 million. That is not pocket money; it is a significant sum that could have a serious impact on the industry.
The uncertainty is enormously problematic for companies, which need REACH registrations to operate but are reluctant to make the payments in case they become invalid. That dilemma risks an exodus of companies from the UK to the European Union—to other member states—and has already led a number of companies to spend vast sums of money opening up offices on the continent.
Mary Creagh
My hon. Friend is making a brilliant point. As she sets it out, I am struck more and more by the fact that the Government like to talk about sound finance, but actually our own chemicals regime starts to look more like an ideological indulgence, an extravagance, with, of course, other people’s money—taxpayers’ money and the chemicals industry’s money.
Does she agree that many of the only representatives of American firms based here are now having to—or will have to—shut up shop and set up in other countries? Not only are our own companies moving out into the European Union, but companies from third countries, which use the UK as a springboard into that integrated European market, are also going shopping and setting up elsewhere.
Angela Smith
I agree with that latter point. On the first point that my hon. Friend made about ideological indulgence, I find it enormously frustrating that we are set not only to spend large sums of public money to achieve satisfaction and indulge ourselves ideologically, but to ignore the voice of business. I find it startlingly difficult to comprehend why what has always seen itself as the party of business is ignoring those very important voices—I just find it absolutely unbelievable.
Two years after the referendum, I still find it hard to reconcile my understanding of the party of Government. I have always respected it as a party that has always listened to the voices of those who make the wealth that keeps this country going, but it is no longer doing that—all in the name of a project that will damage the country’s economy in the long term. I find it absolutely astonishing, I have to say.
I ask the Minister what she is doing to give clarity to business in this area. Should businesses continue to make REACH registrations and will these registrations remain valid post-Brexit, or at the very least during the implementation period? Have her Government colleagues broached these subjects with their European counterparts during negotiations? I think we need to know—Parliament has a right to know this.
Does the Minister acknowledge that the easiest way to resolve these issues would be to stay in the single market and, as a consequence, to remain within REACH? That is the easiest way forward. It is the way forward that the chemicals industry prefers, and it would solve so many problems. I look forward to the Minister’s response and hope that she can provide some clarity.
Kerry McCarthy (Bristol East) (Lab)
It is a pleasure to see you in the Chair, Mr Evans. I congratulate my hon. Friend the Member for Wakefield (Mary Creagh) on her brilliant job chairing this inquiry. When we first started taking evidence, I thought, “How on earth are we ever going to get our heads around such a complex subject?” I have to confess that I might have got 50% of the way there, but I am pretty sure that she got 100% of the way there and it is a credit to her. I think we saw that in her speech.
It is unusual that both environmental NGOs and the chemicals industry think that the structure of REACH is about right. It is one of the most sophisticated chemicals regulations systems in the world, and if the Government are planning to leave its protective framework—I do not think they should—they need to clarify as a matter of urgency what will replace it. Not doing so is not fair on the industry. If the Government do not get on with the job, we are going to be left in limbo.
As my hon. Friend said, when we talk about chemicals, we are talking not just about things that are obviously chemicals—the sorts of things you keep under the sink, such as bleach or cleaning sprays—but the chemicals that are present in every product and activity. Chemicals are in car engines, in the paint on cars and in our carpets; I had never thought that carpet dye was a chemical. We are exposed to countless chemicals in every facet of our lives, and they are all controlled by REACH. They are all part of the system. It should therefore be of the highest priority to ensure that chemicals continue to be properly managed after we leave the EU, not least because of the potential harm that improperly regulated chemicals can cause to the environment, and human and animal health. There is another debate to be had about chemical use in the developing world, for example, where things happen that we would not tolerate here, but that is a question for another day.
Everyone has heard of the American case made famous by the film “Erin Brockovich”, in which 370 million gallons of chromium-tainted water leaked into the local water supply and dramatically increased the levels of cancer in residents. More recently, in 2008, tributyltin—a paint used to cover the hulls of boats—was outlawed in Europe after it was found to be extremely toxic to both humans and the marine environment, with the World Health Organisation reporting a 20% to 40% increase in the risk of certain types of cancer after regular contact with the substance. That shows us the importance of regulation and vigilance.
Mary Creagh
I thank my hon. Friend for her speech, and for the brilliant contribution she makes to the Committee. I am sure she was far more than 50% of the way there in this inquiry. If she did not feel that way, she certainly did not let on. I know that the inquiry was difficult. Does she agree that information sharing and knowledge sharing are a really important part of the REACH regime? This stuff is all around us and the evidence only builds up gradually, in bits and pieces, because we do not conduct controlled experiments on ourselves to see what gives us cancer—that would be unethical. The information emerges over time, and we are often ignorant of the damage that a chemical is doing to our body. When that gets out, there is always a vested interest that does not want it to be banned, changed or removed. That is why REACH is the global gold standard.
Kerry McCarthy
That is absolutely right. I do not think I need to add anything to that. My hon. Friend has told us, in a nutshell, why it is so important to be vigilant and on top of things—almost ahead of the game—in terms of what is being brought on to the market. If we are not, there could be quite devastating consequences that we might not discover for years. New chemicals are being manufactured continually, so we cannot rest on our laurels.
It is impossible to know what chemical regulation will look like in the future, so to transpose current standards without supplying the surrounding infrastructure would be an approach that was totally unfit for purpose. It is not a case of bringing in a law and then putting it into operation in the UK, as has been said—such a law would be out of date almost immediately. As we have heard, the infrastructure that is required to regulate chemicals is extensive. REACH manages tens of thousands of chemicals, with an estimated 140,000 chemicals present in the EU market, and 33 new chemicals are awaiting evaluation.
When we were in the United States, we discussed the time-lag—how long approval can take. I think the US system has been improved now, but, at one point, if a chemical had not been assessed and approved within, I think, six months, it automatically got approval by default. That seems a dreadful way of going about things, and I think that the US has introduced new legislation on the matter fairly recently. We want an efficient and speedy but absolutely thorough system that can get these new chemicals on the market or reject them as required.
The UK has the second largest number of REACH registrations in the EU. It is important to remember that REACH is a relatively new creation; it did not come into existence overnight. It came into force in 2007, after many years of preparation, and there are 600 people working on it at the European Chemicals Agency. There is a suggestion that we could create a British REACH. There was some laughter in the Environmental Audit Committee when the Minister coined the acronym BREACH, because it is probably not the best name for our own chemicals regulator. If we were to create BREACH, it would be impossible and absolutely foolish to try to replicate the work of REACH, when there are 600 people already working on it and we could seek to be part of it. Trying to duplicate that work would require the investment of a huge amount of time, resources and expertise.
We know that DEFRA has suffered from budget and staffing cuts over recent spending reviews. It has so many competing priorities—it seems to be about to release a new plan or strategy every other week—so I do not see how it could take on this task as well. We cannot match the pooled resources of all the EU member states. If we try to operate with a reduced capacity and a pared-down scheme for regulating and managing chemicals, the negative impact on the environment could be huge.
Hundreds of chemicals are classified as toxic to marine life under EU harmonised classification. That includes 1,045 chemicals that are classified as very toxic to aquatic life, 933 chemicals that are classified as very toxic to aquatic life with long-lasting effects and 405 chemicals that are classified as harmful with long-lasting effects. I use the marine environment as an example because, as people will know, it is a passion of mine. The organisation Blueprint for Water estimates that, even with the stringent regulation that is in place at the moment, at least 27% of total ecosystem losses are due to chemical pollution. Reduced capacity could further expose humans and animals to numerous cancers, disrupted reproduction, immune dysfunction, DNA damage and deformities, to name just a few concerns.
There is also the problem of persistent pollutants, called bioaccumulators, which build up inside cells or environments over time, meaning that humans, animals and the natural world are still exposed to them today. The negative impacts are felt only when a certain threshold of accumulation is passed, and that could be many years after their use begins. Bioaccumulation often occurs through food chains, with those at the top suffering from the worst exposure—in most cases, humans are at the top of the food chain. Polychlorinated biphenyls, which were once widely used in electrical products, paper and flame-resistant coatings, are a prime example. It took many decades, pre-REACH, for a ban to be finally implemented, and during that time people were regularly exposed to dangerous carcinogens. Surely, it is better to take a pragmatic approach and attempt to stay in REACH. Although it is not perfect, it has, as I said at the start of my speech, the support of both sides of the equation: the vested interests in the chemical industry, and those who seek to protect the environment, humans and animal welfare.
REACH is being constantly updated, and it has had 38 amendments since its creation. UK companies would have to continue to comply with REACH if they wanted to continue to trade with the continent. As we have heard, even if only a small component of a product—with a car, for example, it could be the paint, the seats or any of 101 different elements—is manufactured in the UK, that small part may well have to comply with REACH. The UK Chemicals Stakeholder Forum recorded that there was a
“clear consensus that businesses did not want to see a weakening of environmental standards”,
and that the industry wants to maintain access to REACH after we leave the EU.
REACH is also closely connected with the EU’s classification, labelling and packaging legislation, as well as the more general EU health, safety and environmental legislation. Just as “chemicals” includes a wide variety of substances, so too does the body of regulation that is required to adequately govern them. If we leave REACH, it is not just a case of replacing it; the UK would need to offer up a substitute for EU regulations, including the sustainable use of pesticides directive, the biocidal products regulation, the industrial emissions directive, the bathing water directive, the drinking water directive and the urban waste water treatment directive, to name just a few. They are all interconnected.
The UK has signed up to a number of sustainable development goals that bind us to regulate chemicals properly and not to support a drop in standards. They include ensuring that by 2020 we use and produce chemicals in ways that do not lead to significant adverse effects on human health and the environment; and, by 2030, reducing the number of deaths and illnesses from hazardous chemicals and air, water and soil pollution and contamination, as well as improving water quality by minimising the release of hazardous chemicals.
That strays on to the turf of another Environmental Audit Committee report on the sustainable development goals and how we can implement them in domestic policy. Again, we were not particularly happy with the Government’s response, and I am sure we will continue to pursue the matter. Despite the obvious risks and uncertainties that face both the chemical industry and the health of the public and the natural environment, the Government’s response to the EAC report was disappointing and rather lacking. I urge the Government to commit to and implement the Committee’s recommendations, because the cost of failing to act, and of not being adequately prepared for when we leave the EU, is too great. In the Government’s election manifesto, they promised to be
“the first generation to leave the environment in a better state”
than they found it, but achieving that is incompatible with their current approach to chemicals regulation, and with any regulatory system that does not adequately protect humans, the environment and animals to the extent that REACH does.
John Mc Nally (Falkirk) (SNP)
It is a pleasure to serve under your chairmanship, Mr Evans.
I take this opportunity to thank the hon. Member for Wakefield (Mary Creagh) for securing this crucial and topical debate. Some interesting and intriguing points and concerns have been raised. The hon. Lady has already said that she feels as though the Government are treating the chemicals industry as a Cinderella industry. Her point about zombie legislation was not lost on Members, and her detailed knowledge of this subject is admirable.
Other Members made clear their concerns about the loss of jobs and the possibility of animal testing, which raises another unnecessary problem that we would have to deal with. Many other important questions are as yet unanswered. It was good to hear that the hon. Member for Gordon (Colin Clark) might cross the divide—that intrigues me—but it was reassuring that he has already become a devotee of the EAC. The hon. Member for Penistone and Stocksbridge (Angela Smith)—
Angela Smith
The hon. Gentleman is one of the very few people who have got the pronunciation right.
John Mc Nally
Am I? If I can say “Auchtermuchty”, and so on, it is fairly easy.
The hon. Lady raised the importance of getting the transition right and reiterated that we need policy certainty on this issue. The modesty of the hon. Member for Bristol East (Kerry McCarthy) and her understanding of the complexity of this inquiry is to be admired. She is without doubt a very able and knowledgeable MP, as I have learned.
It has been a privilege to be a member of the Committee, as it is to follow the hon. Lady. As well as benefiting from my deeply committed and knowledgeable colleagues, I have relished fighting on issues that I am passionate about. Highlighting the need to protect our precious environment against pollution on a local, national and international level has been my mission. From the scourge of plastic microbeads and nurdles on our beaches, to plastic fibres from clothing that poison our waterways, the Committee has shone a light on environmental issues that the public want and need to know about. The Committee has successfully alerted corporate giants to their responsibility to communities and to the wider world that we share. We have never shirked asking difficult questions. I wish to acknowledge our Chair, the hon. Member for Wakefield, and I am sure that my colleagues want to do the same. In my opinion, she provides the best model for the operation of a successful Committee.
I, too, was on the trip that the hon. Lady mentioned to America prior to last year’s election. The Committee visited Washington DC to meet various agencies, senior academics and scientists. We were told by one of the scientists there that they had already had 100,000 companies registered in Ireland. That immediately raises concerns, and it reinforces what has been said today. We were all warned that Brexit threatened our membership of REACH and would result in disastrous consequences for our industries and economies. I was also warned that the Scottish Government’s competencies in environmental matters were facing an existential threat.
The chemicals industry is an economic linchpin, and we heard grave concerns from senior people who fear that Brexit may result in deteriorating standards if REACH is compromised. REACH has been widely described as the most complex piece of legislation ever undertaken in the EU’s history, and around 30,000 chemicals are registered under it at present. I think that in the UK something like 6,500 are registered under it at the moment. Meanwhile, as has been said, its membership is a passport to the global chemicals marketplace.
REACH standards are recognised by regulatory regimes worldwide. That enables exports worth £14 billion every year across the EU. By May this year—the looming deadline for registering chemicals under REACH—UK companies will have spent an estimated £250 million on the process over the past 10 years. If the unthinkable occurs and no agreement is hammered out between the UK and EU, are we then a UK out of EU reach? Chemical registration-related data sharing would cease to exist. That would be utterly disastrous for businesses and their investments, and they would have to reapply all over again. It would be an absolute nightmare for us to go through.
Let me turn to my homeland, Scotland. The Scots chemical industry is a truly international and invaluable part of the Scottish economy, second only to our thriving food and drink industry. It is a major exporter that delivers outstanding GVA and has shown remarkable resilience in these turbulent economic times. I believe that the most recent Office for National Statistics figures show that the Scottish sector maintained double-digit export growth between 2014 and 2015, before the recent weakening of the pound. Surely that success cannot be allowed to face uncertainty. As we know, the sector is acutely sensitive to any tariffs or barriers that would make exports less competitive. We must also think of the vast numbers of people employed in the sector, as has been said—more than 10,000 directly in Scotland and six times that figure indirectly—in an array of jobs ranging from manufacturing, sales and marketing to logistics. Chemical sciences account for 33% of all Scottish manufacturing.
The regulation system achieved through REACH allows us to protect our environment and therefore human health. Industry and the public—our constituents —cannot afford to wait for the UK Government to act on these issues. Industries will still need to meet EU regulations after we leave the EU if businesses are to continue trading, so why is the Government’s position so vague? We are painfully aware that prolonged uncertainty could cost the taxpayers of this country millions of pounds and leave our exports in disarray.
I believe wholeheartedly that membership of REACH is vital to allow unhindered movement of medicines and drugs post-Brexit. Yet when they were asked by the Environmental Audit Committee to take a pragmatic approach to the UK’s future relationship to the EU single market for chemicals, the Government gave a meaningless response that held no answer. That is simply not good enough. As for Scotland, its continuing transition to a low-carbon energy country must be allowed to continue. It is important for everyone that that approach is seen as a way forward for the environment. Everybody here has asked questions; we now demand some answers.
Dr David Drew (Stroud) (Lab/Co-op)
I am delighted to serve under your chairing, Mr Evans. It is good to see the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Suffolk Coastal (Dr Coffey), back in her place; I fear that we may spend some time in statutory instrument Committees, including on this topic. I congratulate my hon. Friend the Member for Wakefield (Mary Creagh), Chair of the Committee, on a thoughtful presentation. I do not intend to repeat much of it, because I think that the Minister has got her train of thought and will be answering some of her points.
I commend my hon. Friends the Members for Penistone and Stocksbridge (Angela Smith) and for Bristol East (Kerry McCarthy) for their speeches, and my hon. Friend the Member for Stretford and Urmston (Kate Green), who made an intervention. The hon. Member for Gordon (Colin Clark), although he is no longer in his place, made a good contribution, and the hon. Member for Falkirk (John Mc Nally), who spoke for the Scottish National party, also raised numerous pertinent points.
The report is good and, I must say, pithy. I enjoy Select Committee findings when they can be read within a relatively short time; I always think that the shorter they are, the better the quality. That would be fine, except that the Government’s response was even shorter and, I am afraid, not as pithy, in the sense that it did not get to the point of things, except one bit, which I will ask the Minister about. The Government say:
“The government will use the Repeal Bill (The European Union (Withdrawal) Bill) to convert EU law into UK law and use the powers to amend REACH, as well as other related chemicals regulation to make them work properly in the UK.”
Can I assume from that that REACH is still the preferred methodology for dealing with chemicals? That is important. As far as I understand it, this is an interesting issue, because the Department for Environment, Food and Rural Affairs is only one part of it, and the Department for Business, Energy and Industrial Strategy also has a strong interest. I gather that the Secretary of State for Business, Energy and Industrial Strategy has more or less intimated that he also wants some continuation of the relationship to REACH. Is that our starting point? That is my question for the Minister, because all other factors follow from that. The issue is important. Interestingly, this excellent paper from the House of Commons Library on Brexit and the environment uses REACH as an example of the implications, because it will have a pretty big impact on our industry, but also on how we feel safe with chemicals.
The report preceded the general election, even though the Government’s response came after it, so we must consider something a bit more recent—the 25-year environment plan, in which three pages are allocated to chemicals. It makes some clear commitments. On page 100, the Government commit to four actions. The first is:
“Publishing an overarching Chemicals Strategy to set out our approach as we leave the EU.”
When? The second is:
“Exploring options to consolidate monitoring and horizon-scanning work to develop an early warning system for identifying emerging chemical issues.”
How will that be done? The third is:
“Considering how we will address tracking of chemicals in products to reduce barriers to recycling and reuse whilst preventing a risk from harmful chemicals.”
Who will do that? If not Government, will it be done in partnership? The fourth is:
“Working internationally to strengthen the standardisation of methods that assess chemical safety in support of the mutual acceptance of data to identify and share information on emerging concerns and new approaches to risk assessments.”
If not REACH, what could it possibly be?
We have already talked about double registration, the impact on jobs and investment and the possibility of relocation. All four of those actions impinge closely on how the industry will evolve, so it is important for the Minister to give us at least some way forward on how the Government are tackling them. Like my hon. Friend the hon. Member for Wakefield, I read the previous Brexit impact assessment—are we allowed to call it an impact assessment now? Like everyone else, I do not know whether the Minister has seen the one on chemicals; presumably it would have been referred to in the latest documentation, which we have been debating this week. It is important to know that the industry will feature, because it is important.
In terms of where we are, it is not just a question of the chemical industry. As my hon. Friends have made clear, it is about how that locks into all sorts of other industries, such as the food chain, health and medicines and animal welfare. That is important, because every time I sit next to someone from those industries, all they say to me is, “Is there any certainty? Is there any way we can make decisions? We don’t know what we’re going to do, because we get nothing but confusion. We need some clarity.”
It is not just about the industry. My hon. Friend the Member for Bristol East discussed some of the implications when things have gone wrong. I mention organophosphates, to pick up an issue after not having been here for some time. I am dealing with a constituent who suffers from organophosphate poisoning. It has nothing to do with the Minister—it predates both her Government and mine, although it involved mine—but we all know that when regulation goes wrong, people suffer. For someone facing the repercussions of OP poisoning, it is awful. That is why we must get this right. It is a matter of human safety and, eventually, someone’s life experience, so it would be good to know that this issue is at the top of DEFRA’s agenda, and that the Department is talking to BEIS to ensure that we get it right.
I have a series of questions. I will go through them quickly, but they are important. First, the European Chemicals Agency, the current chemicals regulator, has extensive databases. Are we talking to the ECHA about how we could still access those databases after exit day? Secondly, I have already referred to the overarching chemical strategy. Is there a timetable? I know that it has been said that it will not happen until after exit day, but there must be some clear steer on what the timetable is. Thirdly, will the Department be transparent and publish what it is doing and thinking about how those procedures will be taken forward?
Chemistry World published a story—whether it was a leak or an inspired story—that said that Government had set aside £5.8 million for an IT system to look at the registration and regulation of chemicals. Can the Minister confirm that? Is that in addition to REACH or a replacement?
I have mentioned the Business Secretary’s view that REACH is something we need to build on rather than replace. It would be useful to know whether the Department is talking to BEIS about how that will happen.
The Department’s research is hopefully now focused on this issue. Does it have sufficient civil servants and sufficient expertise? Is it drawing in other outside expertise? It is very important to draw together to ensure that whatever the outcome, we get this right.
Finally, can the Minister assure me that there is no intention to lower standards? The bottom line is that it cannot be any worse, for the reasons that we have discussed: people suffered when we got it wrong, and the industry needs stability and security. The Minister has plenty of time to respond, and I look forward to hearing her answers.
Mr Nigel Evans (in the Chair)
I remind the Minister that it is customary to allow a couple of minutes at the end for Mary Creagh to sum up.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dr Thérèse Coffey)
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate the hon. Member for Wakefield (Mary Creagh) on securing this debate and I thank her Committee for its report.
The Government recognise that the UK chemicals sector is vital to the economy and to many other industries, often leading the way in research and innovation. Not only is it our second largest export industry, but it is a key component in almost all our other huge sectors. As the hon. Lady explained, chemicals are in many of the products and processes that we use. I am fully aware of the extent to which they can be in everyday products, and indeed in medicines and elsewhere.
The Committee’s inquiry took place nearly a year ago and we replied to it in July. I note that the Committee invited comments on our response. I have continued to meet the industry, and across Government, engagement with the industry and stakeholders will continue. I recognise that the principal concern of the industry—to ensure that existing REACH registrations remain valid—has not changed.
I also recognise that trade associations and other organisations have continued to call for the UK to stay in REACH. As I have explained elsewhere, given the principles set out by the Prime Minister in her Lancaster House speech, we will not stay in REACH per se but, through the provisions set out in the European Union (Withdrawal) Bill, we will bring into law the regulations that put REACH into effect. That is important because the continuity will provide an effective regulatory system for the management and control of chemicals to safeguard human health and the environment. It will also minimise any market access barriers for UK companies trading with the EU.
It has been suggested that we are not listening to the voice of business, but I humbly point out that the Government are listening to the voice of the people by respecting the referendum result. It was reiterated throughout the 2016 campaign that a vote to leave was also a vote to leave the single market.
Angela Smith
I differ on the point that people voted to leave the single market. Nevertheless, I am sure the Minister just said that the Government will do their best to minimise any lack of access to the European market. Is that not an acknowledgement that there will be some damage to the industry if we leave REACH and have to set up our own regulatory regime?
Dr Coffey
The hon. Lady will recognise that our future relationship is still a matter for negotiation. Phase 1 has happened and we are moving into phase 2. Having exactly the same regulation the day before and the day after we leave the European Union will minimise market access barriers for UK companies trading in the EU.
We agree that ensuring the continued validity of REACH registrations is a critical issue and fully recognise the investment that UK companies have made in the REACH registration process. We are clear that we want existing registrations, authorisations and approvals to remain valid in the EU and UK markets, which is clearly in the interest of businesses operating in the UK and the EU. That recognises the complex compliance activity that takes place through supply chains. As the hon. Member for Wakefield pointed out, it is not just about sales between companies but about the movement of goods through the supply chain within a company.
We want to avoid the unnecessary duplication of compliance activities undertaken by businesses prior to exit. That was set out in the Government’s position paper, “Continuity in the availability of goods for the EU and the UK”, published in August 2017, which also set out our principles for maintaining the availability of goods after exit.
It is likely that some products will be undergoing testing, registration or authorisation processes at the point of exit. For such cases, given the ambition for a close future relationship, the body carrying out the assessment should be permitted to complete it and the results should be recognised in UK and EU markets. That would be in the best interests of businesses across Europe, and I encourage them to work together to support that pragmatic outcome.
Although it would not be appropriate to pre-judge the outcome of the negotiations, we will discuss with EU member states how best to continue co-operation in chemicals regulation in the best interests of the UK and the European Union. That extends to aspects of knowledge sharing—it would be ideal to continue that work through the negotiations. For example, the EU is highly reliant on the expertise of the Health and Safety Executive in the assessment of chemicals, particularly biocides and pesticides.
I am aware that the guidance that the European Chemicals Agency published on its website about the UK’s withdrawal from the EU has caused concern. That guidance reflects the EU’s view of what would need to happen if there were no future relationship between the EU and the UK. It does not, of course, take into account potential negotiated outcomes and I am pleased to note that that has now been acknowledged on the ECHA website. As hon. Members may be aware, the guidance has recently been updated to reflect issues about the transfer of registrations and authorisations.
We have increased resources within my Department, in the HSE—a body sponsored by the Department for Work and Pensions—and in the Environment Agency to work on chemicals policy and prepare to deliver an effective regulatory regime after we leave the EU. We have established a joint programme of work with HSE to deliver what we need to have in place for day one. I work with ministerial colleagues across Government from the Department for Business, Energy and Industrial Strategy, the DWP, the Department for Exiting the European Union, the Department for International Trade and the Treasury.
We are also planning for a non-negotiated day one outcome to have a functioning chemicals regulatory and enforcement system. We are now scoping and designing what such a system would look like, including an IT system to replicate REACH. As the hon. Member for Wakefield pointed out, that includes the budget that has been released so far to scope that system.
On leaving the EU, our regulatory system and laws will be identical to those of the EU. There could be opportunities to consider improving the regulatory system to maintain standards in protecting the environment and human health. That is why we have considered the regulatory approaches of other countries, including those that are largely modelled on REACH.
Although we will not be part of REACH, there is an opportunity to work internationally to strengthen the standardisation of methods that assess chemical safety in support of the mutual acceptance of data to identify and share information on emerging concerns and on new approaches to risk assessments. In a global world where we share chemicals and have several existing chemicals conventions, it makes sense for our regulatory authorities increasingly to share that information to ensure that we have greater compliance and convergence in understanding and recognising the benefits and hazards that chemicals can pose. I do not see any reason why we cannot have that ambition once we leave the EU.
Dr Coffey
The system is at the stage where we are waiting for an aspect of the business case to be signed off. I have met the new Minister responsible for the Health and Safety Executive—the Minister for Disabled People, Health and Work, my hon. Friend the Member for Truro and Falmouth (Sarah Newton)—and work is ongoing between our Departments and the HSE.
The most relevant environmental principle to chemicals regulation is the precautionary principle, which is embedded in international conventions relevant to the regulation of chemicals, such as the Stockholm convention on persistent organic pollutants, to which the UK will continue to be a signatory in its own right. The Secretary of State has announced that we will consult on how we will incorporate various environmental principles and governance mechanisms, and we are carefully considering our proposals at the moment.
As the hon. Member for Stroud (Dr Drew) noted, we recently published our 25-year environment plan, in which we acknowledged that chemicals provide substantial benefits to society, but their widespread use in industry, agriculture, food systems and homes has led in some cases to pollution of land, water, air and food. We will publish a new chemicals strategy to tackle chemicals of national concern. The new strategy, which will build on existing regulatory approaches, will set our priorities for action and will detail how we will achieve our goals. It is intended to support collaborative work on human biomonitoring, address the combination effects of different chemicals and improve how we track chemicals across supply chains. I am not able to set out a timeline, but I certainly do not anticipate that the strategy will be published this year, because our main focus is implementing a smooth transition and continuing existing regulations.
We also need to consider the domestic market within the United Kingdom. REACH currently gives us a consistent framework across the UK, and we would like that consistency to continue. We have already started discussions with the devolved Administrations on a future chemicals framework across the UK.
Let me tackle some other questions raised by hon. Members. Is REACH the preferred methodology for chemicals regulation? In our international discussions, as I told the Environmental Audit Committee, we are not minded to take the United States’ approach. We think that REACH has shown its worth. As has been pointed out, a lot of chemical companies were not necessarily its greatest fans when it was introduced but are now embracing it. When I discuss the matter with Ministers from Brazil and other countries, it is clear that they are trying to get the best of all worlds, which is what we need to ensure for ourselves as we go forward. I have spoken to Switzerland, and I think officials have had discussions with South Korea. A lot of countries are taking a REACH-style approach but may not be replicating it in every detail.
On early warning and horizon scanning, I hope we can set out our approach in more detail when we publish our chemicals strategy. In answer to the question about sufficient expertise, I must point out that the HSE is the responsible authority and there is no reason to doubt its expertise; I commend it for its work in support of the chemicals industry.
I fully understand hon. Members’ concerns about bureaucracy, which is why we are in negotiations. I am afraid that I cannot give hon. Members an update on where we are, because phase 2 of the negotiations is yet to start; I fully understand the uncertainty that that brings. I have engaged with stakeholders. We have seen only representatives becoming part of networks or opening branch offices in different countries or a presence in the European Union. As I told the Committee, from my experience of working in multinational companies, I fully expect them to be contingency planning, but that does not mean that they will be abandoning this country all of a sudden. Far from it: the size of the market in this country, not only for chemicals but—as has already been explained—for many other manufacturing sectors, absolutely means that they will keep a permanent presence in the United Kingdom.
I do not anticipate any new approaches to risk assessment. The precautionary principle is well embedded in what we do. As I have articulated, we will be bringing different regulations into law, as will the devolved Administrations. We sit on committees now and we hope to retain those links in the future, but that is a matter for the negotiations.
The hon. Member for Stretford and Urmston (Kate Green) raised third-party country status. We still need to consider and negotiate elements of that. The approach set out by the Prime Minister on behalf of the Government, in which not being governed by the European Court of Justice is a guiding principle in what we do, still applies, so some assessment is still needed. Bioaccumulation is among the matters that we intend to cover in our chemicals strategy.
Let me assure hon. Members that ensuring we have a regulatory regime that continues to be effective is a very important part of my portfolio, but my top priority has been a smooth transition. As I am sure hon. Members recognise, I cannot answer questions today about exactly what our future customs arrangements with the rest of the European Union will be. However, I am highly conscious that we want to help business to continue to be successful, and I would like it to get certainty as quickly as possible. I am sure that I have disappointed hon. Members today by not being able to do that, but I will move on to the next phase of negotiations shortly.
I reiterate that we will do all we can to ensure a smooth transition and a successful industry for years to come. I saw the hon. Member for Stroud and members of the Environmental Audit Committee yesterday. I am sure that broad consideration of the environment in different ways and across different industries will continue, quite rightly, to be a key topic for debate in Parliament.
Mary Creagh
I thank Environmental Audit Committee members present—the hon. Members for Gordon (Colin Clark) and for Falkirk (John Mc Nally), and my hon. Friend the Member for Bristol East (Kerry McCarthy)—for their support, along with the Minister’s Parliamentary Private Secretary, the hon. Member for Taunton Deane (Rebecca Pow). I certainly feel that the Committee is waking up, having been a sleeping giant on the Committee Corridor; it is finally finding its voice.
I agree with the Minister that her response was very disappointing. Based on what she is offering the sector, I think the verdict is “Must try harder”. She has told us that the chemicals strategy will not be published this year, which is deeply worrying. She is not offering continuity, as she said, but rupture and multiplication of uncertainty. She is in danger of sounding complacent when she talks about only representatives setting up in other countries. These are the people through whom business flows, so if they leave, the business leaves with them.
Mary Creagh
The Minister says no, but we can have a debate about that. She talks about setting up a database with £5.8 million of our money, yet she says that a business case has not yet been developed for it.
Mary Creagh
This looks like a release of initial moneys to scope out and make the business case for the rest. I wonder about DEFRA’s capacity to deal with this. DEFRA has lost 5,000 civil servants in the past seven years.
The ECHA website states:
“Only a mutual agreement between the EU and UK authorities can change this date”,
meaning 30 March. It also states:
“It is the European Commission that conducts the withdrawal negotiations with the UK Government under a negotiating mandate…ECHA is not party to these negotiations.”
We face the uncertainty of whether there will be a transitional period, how long it will be and what will happen, and then the further uncertainty of what will happen afterwards. Lord Bridges said that the transition period was set to be one of “muddling through” and
“a gangplank into thin air.”—[Official Report, House of Lords, 30 January 2018; Vol. 788, c. 1423.]
The Minister says that when people voted in the referendum, they were voting to leave the single market. Daniel Hannan, her Tory MEP colleague, said that only a madman would leave the single market. Well, I am afraid the Minister’s party seems to have been taken over by the madmen. We need a sensible, rooted debate based on the reality of people’s lives and the reality for businesses in this country, not constant reassuring words that give solidity to mere wind.
Question put and agreed to.
Resolved,
That this House has considered the Eleventh Report of the Environmental Audit Committee of Session 2016-17, The Future of Chemicals Regulation after the EU Referendum, HC 912, and the Government response, HC 313.
Backbench Business
(6 years, 9 months ago)
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Leaving the EU: Agriculture
(6 years, 9 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Mr Alistair Carmichael (Orkney and Shetland) (LD)
I beg to move,
That this House has considered the policy framework for agriculture after the UK leaves the EU.
As ever, Mr Bone, it is a pleasure to serve under your chairmanship.
Before I start, I should say that I am very grateful to the Backbench Business Committee for having allowed the House the opportunity to debate this subject today. I see a reasonable number of Members in Westminster Hall, so I shall try to keep my remarks fairly short, to ensure that everybody gets a chance to have their say.
First of all, however, it is worth noting the context for this debate. For the 40-plus years that the United Kingdom has been a member of the Common Market, the European Economic Community and ultimately the European Union, the common agricultural policy has been the dominant force in shaping agricultural policy in the United Kingdom. As is often the case when there is such a dominant force, we can get dragged down into the weeds. We can lose sight of the higher purpose—I suspect that, if pressed, any of us could come up with lots of things that we dislike about the CAP.
The moment of our leaving the European Union will be, of course, an opportunity to change much of that and to do things differently, if that is what we choose. However, it is worth reminding ourselves about the context of what has been achieved and the nature of the agricultural industries—I use the plural advisedly—that we have had for the last 40 years as a consequence of our membership of the EU.
Some would say that this is a moment for moving away from financial support for agriculture completely—the New Zealand “cold turkey” approach. That is a respectable view; it is not one that I happen to share, for reasons that I will explain. However, it is a statable case, and if we are sensible it is one that we should address. When the Secretary of State recently made a speech at the Oxford Farming Conference, he spoke about the CAP being a mechanism for subsidising inefficiencies. One man’s inefficiency may be another man’s lifestyle, so I listen to terms such as that being bandied about with some caution, shall we say.
What would be the consequence, though, of ending the support there has been for agriculture? The most obvious consequence, in my view, would be food price inflation. There is a cost attached to maintaining an agricultural business, and if farmers are not to get the money they need through the mix of what they get at the farm gate and financial support from Government, then of course a higher price will have to be paid by the consumer in the supermarket.
In fact, earlier today it was put to me that the most obvious victims of the end of the era of cheap food—the era in which we have lived and continue to live—would be those on the lowest and fixed incomes. That is a good point: people on low incomes spend a higher proportion of their disposable income on food than on anything else. Ending support would also have very profound implications for our countryside. Many of the things that we value most about our countryside come about because people live there—because they can work there and make a living there. The countryside is not just a glorified retirement home.
I have seen a lot of farms’ books in my time as a Member of Parliament, for a whole variety of reasons. When it comes to farmers in my constituency and throughout the highlands and islands—and doubtless those in other parts of the country—there simply would not be a living to be made without the farm subsidy payment coming into their businesses every year. We would lose the farms, then the shops and the post offices. The country schools would close, which would lead to the loss of professional support, such as the lawyers, accountants and the vets. With that loss, we would start to lose the mix that a rural community needs to sustain itself. Thereafter, it is pretty easy to see where we would go.
The alternative to food price inflation, of course, would be to import cheap food from other parts of the world. However, I caution hon. Members about that. One of the reasons why our costs of production are high in this country, relative to other parts of the world, is that we maintain very good standards of animal welfare, traceability and biosecurity. Those all come at a price. We are told that such things are valued by the consumer, and there is a price attached to that. If our farmers are to compete on a level footing, we should expect the same standards in those countries from which we would envisage importing food. At that point, one would wonder whether the price difference between food produced here and imported food would be as marked as it is now.
In that context, the CAP and support for agricultural industries have given us considerable stability in recent decades. There is then the question of what will follow the CAP. If we take away the framework that we have had since the mid-1970s—the CAP—we will inevitably have to replace it with some other sort of framework: a UK-wide one, if that is to be the extent of our regulation. I am pleased to note an emerging consensus between the UK Government and the devolved Administrations: that the creation of a UK-wide framework is a desirable and necessary event, which will have to be taken seriously.
To my mind, there are something in the region of four different objectives that such a new framework would need to have built into it. First, and most importantly, it would need to preserve the functioning and integrity of the UK internal market. That is important for consumers and producers across the length and breadth of the country. Secondly, it would need integrity, to ensure that the UK was in a position to enter into trade agreements with other countries. Thirdly, it would have to ensure that the United Kingdom could continue to meet its existing international obligations, never mind those that we may seek to take on. Fourthly, it should provide for effective management of common resources. As I say, the first of those four objectives—preserving the integrity of a UK internal market—is the most important.
As the National Farmers Union Scotland has put it in one of the many briefings that have been provided for today’s debate,
“animal welfare and traceability, public health, pesticides regulation, and food labelling”
should all be part of a “commonly agreed ‘framework’”. That is in the interests of all parts of the United Kingdom.
Of course, once an overarching framework has been agreed, everything else that remains should be devolved to the constituent parts of the United Kingdom. For the purposes of England, that would obviously be the Department for Environment, Food and Rural Affairs; the Scottish, Northern Irish and Welsh Assembly Governments would have control and responsibility for their own respective jurisdictions. The thinking that needs to be done now about how we design that framework is important. We need something that will allow each Administration to implement it as is appropriate for their area.
As one who was always a keen supporter of the idea before it happened, I think that devolution since 1999 in Scotland has been very good for Scottish farmers. They say that the administration of agricultural policy from a dedicated Department in Edinburgh has been better for them: it is closer to their needs and better able to design a system that is suitable for the farmers in our constituency.
I am sure that that is true across the whole United Kingdom, so the framework must provide a structure without tying the hands of the devolved Governments. They should be able to continue to do as they currently do: look after the less favoured areas such as the highlands and islands, and perhaps then the beef farms and dairy farms; I am thinking not only of Orkney and such places, but the north-east of England—I see the hon. Member for Dumfries and Galloway (Mr Jack) from the south-west of Scotland—or the south-west of England.
There are upland farms in Yorkshire and Cumbria. All the different industries have needs that are best met by devolved Administrations delivering policy in their own jurisdictions. For that reason, when the framework is constructed, it has to deal with those matters in a way that that can be commonly agreed. If the Minister has not already had representations from the NFUS, although I suspect he probably has, he should consider its proposal for the creation of a strengthened joint ministerial Committee. The mechanisms of devolution already make provision for that sort of thing, but as we move to the next phase of our constitutional change, it is pretty clear that something of that sort will be necessary.
The idea posited to get a commonly agreed mechanism is that something such as qualified majority voting, as is often used in the Council of Ministers, could be engaged. The advantage would be to create something that was genuinely a common agreement, rather than a top-down approach where control would still be vested in DEFRA and in London.
Inevitably, one comes on to the question of finances. Currently the United Kingdom remits money to Brussels, which then pays the respective Administrations money that goes in a dedicated way to farm support. Obviously, after our departure from the European Union, that supply line will be significantly shortened and we shall look to the Treasury. I do not see any other mechanism than that the money should come from the Treasury, but perhaps the Minister has other ideas about how that would work. More importantly even than that, we need to know the mechanism by which that funding will be distributed across the different parts of the United Kingdom. For most public spending purposes, we currently have the Barnett formula, but that takes into consideration a whole range of different matters that would not really be relevant, so some sort of thinking at this point will clearly have to be done.
On the brass tacks of this, when the Minister comes to reply to the debate today—I realise we are in the early stages of the thinking and we can look only for broad principles—will he confirm that the pie that we will slice up by whatever mechanism we devise will remain the same size as the one we currently have? The one thing that consistently comes through to me, from talking to farmers and crofters in my constituency and to the farming unions, is that at this stage our objective should be continuity and stability. Farmers really need to know what the future holds for them. If we do not have early confirmation of what the future holds, we cannot expect them to have the confidence to keep investing.
A whole range of imponderables will come from our decision to leave the European Union. Access to export markets, the terms on which imports will be allowed from other countries, and the availability of labour for both the production and processing of food are just a few of them. All those matters are outwith our control, but the creation of a UK-wide framework is one element entirely within our own control; more than anything else, it will give our farmers the opportunity to continue their planning for future investment.
In his speech at the Oxford Farming Conference, the Secretary of State guaranteed support payments to 2024. That was a welcome announcement and I do not want to diminish the importance of it in any way, but in doing that he prayed in aid the need for long-term certainty.
I speak as a farmer’s son. I know two things about farming. First, I knew I was never going to be one; that is partly why I am here today. Secondly, I know that six years for a farmer is nothing like the long term. The long term is what agriculture is built on and what our farmers and crofters need to hear about. I hope the Minister will at least give an indication that we have started the process of giving it to them.
Mr Alister Jack (Dumfries and Galloway) (Con)
It is a pleasure to serve under your chairmanship, Mr Bone. I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing this debate. I listened intently to his speech and he will be pleased to hear that I agreed with absolutely everything he said. However, that will not stop me saying some of it again.
Brexit is a great opportunity for us to reform the policy framework for agriculture in a way that promotes both the agriculture sector and the environment, but it is crucial that we get it right. In Scotland, a healthy agricultural sector makes for a healthy economy. Across agricultural production and the food and drink industry, Scottish farming and crofting supports more than 400,000 jobs. Scottish agriculture has functioned for decades under the EU’s regulatory framework, including the flawed and inefficient common agricultural policy. It is no surprise, therefore, that a majority of British and Scottish farmers voted for Brexit.
Peter Grant (Glenrothes) (SNP)
Will the hon. Gentleman tell us the source of his information? The National Farmers’ Union of Scotland is under the impression that most of its members voted by a narrow majority to remain, so what is his source of information?
Mr Jack
My source is the farming press. According to The Scottish Farmer, a survey revealed that 66% of Scottish farmers said they had voted for Brexit.
Many farmers will be glad to see the back of the CAP and will be looking forward to what will replace it. I am encouraged by the UK Government’s commitment to deliver the same level of farm support money until at least 2024, which the right hon. Member for Orkney and Shetland mentioned. I am also encouraged by the plan to put in place a green Brexit that rewards good environmental stewardship. However, even more can be done.
The CAP has failed to keep up with the pace of change in agriculture, trade and the wider economy. We would be hard-pressed to find many farmers who would describe the CAP as modern, efficient, or even fit for purpose, and that assumes that they get their CAP payments on time, which I know, as a Scottish farmer, can sometimes be a bit of a luxury. We should build an agricultural policy framework fit for the 2020s and beyond that supports a healthy, profitable, diverse, innovative and sustainable sector in a global economy and that seeks to embrace the future and make the most of it, rather than shy away from the challenges it presents. But the issue goes far beyond farm support. As the right hon. Member for Orkney and Shetland said, it is vital that, for example, we maintain our high regulatory standards.
The EU is not a perfect regulator, and Brexit allows us to make changes to regulate better and smarter, and respond more proactively to changing circumstances. There is no case for compromising our standards, and we must make sure that standards in all parts of the United Kingdom are as high as or higher than they are at present. Animal welfare in particular is an area where we should seek to hold ourselves to even higher standards after Brexit. We must also maintain the commitment to high agricultural standards in our trade negotiations with third parties, and develop a framework that ensures that we can make such trade deals while preserving the devolution settlement. I expect that the powers over agricultural policy due to return from Brussels will in turn be devolved to Holyrood at implementation level.
The preservation of the UK internal market should underpin any future framework. If that were not to happen, it would be harder and more expensive for Scottish farmers to trade in the rest of the UK, and vice versa. We cannot allow that. That is a particular concern for farmers in my constituency. Dumfries and Galloway is near England and Northern Ireland, and trades extensively with both. We must not give our agricultural sector trouble at home when it should be seeking new opportunities around the world. We therefore need frameworks that ensure a degree of harmony between all parts of the United Kingdom, and that make sure our common resources are managed as effectively as possible.
Brexit is a challenge for Scotland’s agricultural sector, but it is also a great opportunity that can get the sector flourishing for decades to come. However, that will require the UK and Scottish Governments to work together to create an effective policy framework that can give a real boost to Scottish, and indeed British, agriculture.
Kerry McCarthy (Bristol East) (Lab)
It is a pleasure to see you here, Mr Bone.
The debate is very welcome. It has obviously been a long time since agriculture policy was in such a period of transition, and where there was so much up for debate and needing to be decided; as we come out of the common agricultural policy we look towards the negotiation of new trade deals, and there is an agriculture Bill on the horizon, I hope. The Environment Secretary has made some welcome statements at the Oxford Farming Conference and the Oxford Real Farming Conference—I attended the latter—which were restated in the 25-year environment plan, about trying to shift to the use of public money for public goods. That must be the backbone of the approach. I welcome his clarity about the ending of subsidy per acre, and using it to pay for public goods. It is encouraging that the direction of travel on that is so clear. Farmers want to do much more to conserve their land for future generations; the structure should be there to support that.
We need to do a much better job of internalising the external costs of the damage we do to the environment, including soil degradation, deforestation, biodiversity loss and the impact on public health of the routine use of antibiotics. Those have been disregarded for too long. I am sure that we all agree on the desirability of the new regime supporting the public goods that the Environment Secretary identified, such as planting woodland and restoring habitats for endangered species, and restoring and enhancing soil. I would add other things, but the direction of travel is good.
As chair of the all-party group on agroecology for sustainable food and farming, I would also like specifically to promote the benefits of agroecological approaches. They are sometimes seen as backward-looking, because they can involve reviving some old-age systems, but I am not personally anti-innovation. I think that agroecological measures can be adopted without a reduction in productivity. As the former UN special rapporteur on the right to food, Olivier De Schutter, said, the approach has been shown
“to improve food production and farmers’ incomes, while at the same time protecting the soil, water, and climate”.
That is the balance we need.
I want to focus my comments on two areas about which little has been said so far. The first is post-Brexit agricultural policy, which urgently needs to address how we increase our food sustainability and, given global pressures, ensure long-term food security. The second is the growth of diet-related ill-health and widening health inequalities. As to food security, leaving the EU potentially puts UK food security at greater risk. At the moment we produce less than 60% of the food we consume and rely on the EU for almost 30% of our imports. Post-Brexit, shortages of farm labour and a more volatile market could make that situation even worse. I am vice-chair of the all-party group on fruit and vegetable farmers. Witnesses from the sector, and the wider horticulture sector, gave evidence to the Select Committee on Environment, Food and Rural Affairs a while ago; the sector is already starting to suffer from the Brexit effect. Last year, there were reports of produce rotting in the fields in Cornwall from a lack of EU workers to pick it, put off by poor exchange rates and uncertain future employment. I know that the Minister has attended the all-party group and the Select Committee to hear our concerns. I am sure that the Committee Chair, the hon. Member for Tiverton and Honiton (Neil Parish), will mention that later.
Nothing was said about the workforce in the 25-year plan. Although the Environment Secretary has said that he recognises the need for seasonal agricultural labour, we do not have a clear indication of what he intends to do about that. We need to ensure that agricultural policy addresses the prevalence of low pay, insecure employment and the exploitation of workers in the food and farming sector. I do not think that that is too much to ask.
Mr Carmichael
The issue of labour availability is important, but it is not confined to low-paid workers. The hon. Lady should be aware that the veterinary profession relies heavily on vets who come to work in this country from other parts of the European Union, especially for meat inspection.
Kerry McCarthy
I think that I am right in saying that about 85% of the vets from overseas who work in this country have not been in the UK more than five years; so they would not be captured by the arrangements being put in place to enable people to apply for status to stay in the country. That is an important issue.
On the question of horticulture and healthy eating, we need to ensure that our agricultural policy not only maintains but widens access to healthy, nutritious food for everyone. Analysis by the Food Foundation, which was of course set up by a former Conservative MP, who is doing excellent work, shows that a British family of four could be spending up to £158 per year more on fruit and veg after Brexit, as a result of tariffs, inflation and increased labour costs. That is a huge amount of money for those already struggling to put nutritious food on the table. Ninety-two per cent. of teenagers in the UK already struggle to get their five-a-day, and diets low in vegetables are linked to 20,000 premature deaths every year. We had a debate in Westminster Hall the other day about the links between junk food and childhood obesity. Cancer Research provided inspiration for that debate, and the other side of the healthy eating coin is obviously the consequences of unhealthy eating.
Colin Clark (Gordon) (Con)
Does the hon. Lady accept that produce has never been so affordable or abundant, and that it may be more of a reflection on society that teenagers do not eat enough fresh produce, rather than what she suggests?
Kerry McCarthy
It is partly due to consumer choice; but it is also a question of what is presented to people in supermarkets, and the encouragement to people to get cheap ready meals. As we saw during the horsemeat scandal, it is much easier for people with a very limited income, who are running out of money before their next pay cheque, to buy a ready meal such as a lasagne that costs 99p or a pack of 12 Tesco burgers in the Value range, than it is to buy all the separate ingredients that would enable them to cook a similar meal at home. They just do not have the resources to do that.
That is something that the Food Foundation stresses. It says that if we increase the level of UK self-sufficiency in fruit and veg, production could become more competitive in comparison to pricier imports, and that there are 16 types of fruit and veg that we could grow more of in the UK, which would increase supply and help to protect demand in the uncertain times of Brexit. Last summer there was a sudden shortage of iceberg lettuce in shops because of the situation in Spain. I am sure that the Minister has looked at the Food Foundation report “Farming for 5-A-Day”, but if he has not I urge him to do so.
I want to raise the real threats to UK food and farming from a no-deal scenario and from free trade agreements with the US and countries with lower animal and food safety standards. The most carefully structured subsidy regime could be fatally undermined by the trade arrangements we enter into post-Brexit. The all-party parliamentary group on agroecology highlighted that in our recent inquiry. We found that trade deals post-Brexit could pose the biggest peacetime threat to the UK’s food security, if current environmental and public health standards are not prioritised in the terms of the negotiations. It is vital that agriculture does not become a bargaining chip or something that can easily be traded away during negotiations. We know there is a difference of opinion between the Environment Secretary, who has sworn that he wants to uphold standards, and the Trade Secretary, who has a less acceptable stance on these issues. He does not appreciate how much the public care about protecting these things.
There is a very real danger that when faced with the threat of rising food prices post-Brexit, many will argue for cheaper food through low or no tariffs, but that will come at a cost. The US Commerce Secretary, Wilbur Ross, has made it clear that any post-Brexit trade deal will hinge on the UK ditching its higher EU-derived food safety laws. The debate on chlorinated chicken and hormone-pumped beef is very much in the public domain. That situation could drive out higher-welfare and smaller-scale UK farmers who would be unable to compete on price. It could make it more difficult for British farmers to export to EU countries, with worries that they could provide a back door to the EU for these US imports. There are food safety issues, too, with US eggs and poultry much more likely to have salmonella contamination than UK products. At a recent meeting of the EU environment committee, Which? gave evidence. It said that something like one in six Americans get food poisoning over the course of a year, compared with one in 66 in the UK. That cannot just be down to poorer hygiene standards in people’s homes.
We cannot trigger a race to the bottom on standards. Nor should we seek to compete by copying American mega-farms, cutting costs by becoming ever more industrialised and intensive. One of the recent farming Ministers was very fond of the phrase “sustainable intensification”, but I never quite got him to explain what he meant by that.
Andrew Percy (Brigg and Goole) (Con)
The hon. Lady is making an interesting speech. It is important that our policy on food standards is evidence-based. Salmonella rates are 1.5 times higher in Europe than they are in the US. We must not proceed in any trade deals on the basis of any anti-American bigotry. I am not suggesting that the hon. Lady is guilty of that, but some who contribute to these debates are. We must proceed only on the basis of evidence.
Kerry McCarthy
I agree with that, but the Soil Association has come up with a list of 10 products that are currently banned that could enter UK markets if we enter into a trade deal with the US. Chlorinated chicken and hormone-pumped beef were banned for very good reasons.
Kerry McCarthy
We have different views on EU protections, but the EU ban on chlorinated chicken was introduced in 1997. Hormone-pumped beef was banned before that. If the hon. Gentleman asked his constituents whether they wanted these products in the UK market, I think they would support his Environment Secretary’s position, whether they see these things as animal welfare concerns or food safety concerns. When he was giving evidence to the Select Committee, the Environment Secretary said that he saw that issue as a red line in negotiations and that we should not allow such things in. Perhaps the hon. Gentleman can ask the Environment Secretary what evidence he has considered. On that note, I will conclude my remarks.
Scott Mann (North Cornwall) (Con)
It is a pleasure to serve under your chairmanship, Mr Bone; I think it might be my first time. I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing this important debate. I have four points that I would like to make, and I will try to keep my remarks brief because we have got just under half an hour before the first Front Bencher is called. The four points are about subsidies, promoting agricultural jobs, migrant workers and environmental protections.
On subsidies, it is my firm belief that the common agricultural policy is fundamentally flawed and wasteful. The UK could implement a subsidy of its own that could save money and create better standards. The safeguarding of our current level of subsidies in establishing the new system was a welcome announcement from the Government, but we need to look further ahead, and we need some strategic investment in our agricultural sector. We need to offer capital grants, loans and tax incentives for investing in infrastructure. It is my firm belief that farm-led research and things to do with equipment and buildings should be implemented in collaboration with farmers.
The need to support new entrants and succession in farms is an issue that I have picked up when I have been out speaking to my farmers. There seems to be a break in people wanting to take part in agricultural work. We need to ensure that we invest in that. We also need to make things much more resilient for farmers who need protection against and compensation for unforeseen circumstances, such as crop blights. We have a step to go in that direction, but by promoting agriculture, we will see huge investment in the south-west.
Secondly, there are big opportunities for tech-based agriculture jobs. I recently met with Duchy College in my constituency. People there talked to me about how they are linking food and agriculture, and teaching young people about how the new innovation and tech of the future will benefit them. The Government also need to explore the opportunities for apprenticeships in agriculture. We have not done enough in that regard, and we owe it to our agricultural workers to do much more.
My third point is on migrant workers. We heard from the hon. Member for Bristol East (Kerry McCarthy) about the challenges around crops in Cornwall. In the south-west, 57% of our workers in the meat sector and 40% of people in the egg sector are migrant workers. Leaving the EU will enable us to control the number of people entering and leaving the UK, but we must maintain the balance by ensuring that we have the right people in place to do farm work. We need that to continue.
The NFU has been keen to promote an agricultural permit scheme for a 12-month visa. We had a seasonal agricultural workers scheme that stopped in 2012 or 2013, and we should look again at that. We have a challenge that we need to address to ensure that everything in the field is brought in on time. In the short and medium term, I want our farmers to have access to labour markets and visas. In the long term, we should be looking to retrain and re-employ British people to do those jobs and to bring in EU or other workers if and when required.
My main point is about environmental protections. I see big opportunities post Brexit for us to have a British agricultural policy that shapes production and improves environmental standards. I recently went out with the Westcountry Rivers Trust on a farm visit in my constituency, and the trust talked me through its work on upstream thinking. It implements a policy with a water company to provide a 50% grant to take slurry pits away from water courses. As we move towards a British agricultural policy, our water protections, our improvements to soil quality, our ability to maintain the uplands to store water and our ability to deliver high standards of animal welfare are all vital.
In conclusion, I am firmly of the belief that we can improve our production and increase our environmental protections at the same time. We will need to shape a British agricultural policy. I am looking forward to the agriculture Bill coming to the House. I ask the Minister to consider the points I have made.
Mr Peter Bone (in the Chair)
I advise Members in the Chamber that I would like to start the wind-up speeches at 4 o’clock. First, I will call the people who have notified me that they wish to speak. If we have time, I will call the others.
Neil Parish (Tiverton and Honiton) (Con)
It is a pleasure to serve under your chairmanship, Mr Bone. I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing this important debate and getting Back-Bench time. It is also good to follow my hon. Friend the Member for North Cornwall (Scott Mann), who I know is very supportive of farming, agriculture and the countryside. It was good to hear what he had to say. I agreed with the right hon. Member for Orkney and Shetland when he said that the countryside and farming are intricately linked, and that farmers are very much a part of the community. He may be a farmer’s son who is no longer a farmer, but I am a farmer’s son who is still a farmer. We have much in common, even if he is not farming now. We were both born on a farm and have farming in the blood.
As we move forward, we have to look at exactly what we want agriculture and our land to provide. We want it to provide good, wholesome food, and a good quantity of food. Let us not just play at farming; let us have proper production. The common agricultural policy has many sins, but the money that comes in through the basic payment scheme is used by the farming community—especially family farms—to keep farming going and to keep it profitable. Contrary to popular opinion, most of it, especially in the livestock sector, does not drive food prices up. I suggest it probably keeps them down, because it keeps a level of production going, which is key as we leave the EU.
The Environment, Food and Rural Affairs Committee is conducting an inquiry into all the commodities. Some 70% of our exports go to Europe, so we need a combination of support payments, continuing into the future, and access to that market. We cannot have a New Zealand or Australian-style policy, because when the New Zealanders and the Australians got rid of subsidies they had virtually no regulation on their farmers whatsoever. The result would be a perfect storm were we to say, “Okay, we’ll allow all the food in. Let’s not worry about tariffs. Let’s have the cheapest food we can get from South America—Argentinian and Brazilian beef. Let’s get our sheep meat from New Zealand. Let’s not worry about the cost and the price of produce in this country.” We cannot do that, for the simple reason that we want an improved environment, and our farmers will have many controls, quite rightly, on the way we control water and nitrates, and the way we help to stop flooding. All those things are great benefits, but they come at a cost.
There needs to be a real policy, and I know the Minister is very keen to see that. I welcome the support payments, but whatever period we have them for, I do not want them to stay roughly the same and then fall off the edge. Whatever we do, we change the system of payment and move farmers in another direction. Certainly, we can make farming more competitive, and we can give grants and support, as my hon. Friend the Member for North Cornwall said, to help that happen. However, when it comes to livestock and the sheep and beef sectors, it is very difficult to see, given the present pricing structure, how those industries will thrive without some support.
The hon. Member for Bristol East (Kerry McCarthy) rightly talked about the availability and affordability of food. That is why we need enough production. We can have a great farm shop and a great tourist attraction, and we can sell food to our tourists—that is all great stuff—but it is perhaps 1% or 2% of the total production in this country. It is no more than 5% of food. We need to make sure, as we go into our large retailers as consumers, that we get British food. Back in the ’80s, around 80% of food was produced and consumed in this country, but that has gone down to 60%. Perhaps some tastes have changed. Even though we have a bit of global warming, I do not think that we can quite grow bananas, oranges and rice yet. Seriously, though, we still have a great opportunity to produce more food.
We also have a great opportunity to keep the environment sound. Where we draw water for our reservoirs, let us look at the amount of nitrates going into that water. Such things are important; however, every time we restrict a farmer in his or her operation, there is a cost. I do not think that our consumers and the population of this country really see the opportunity that that offers to support farming. I do not believe that we should control farming so much that we stop that production and the income from it. We have to do a combination of things. I know the Minister is very keen on looking at insurance policy and how we might remove some of the fluctuations in price. All of that is right, but the policy has to be a practical one that farmers can afford to buy into.
As we go forward, we must also look not only at ways to get new entrants in, but at our tenancy laws and how we rent our land. Perhaps slightly contrary to what I have been saying, as much as we like the support that comes to farming through the basic payment scheme, there is an argument that it drives rents up and can therefore make land, particularly for young entrants and other coming in, more expensive. As we target the payments, they must end up in the pockets of those who do the farming, manage the land and look after food production and the environment. I am very keen to see that that happens.
I do not believe that coming out of the EU will be a disaster, or that it will lead us to a great sunny upland where everything will be rosy—perhaps the Minister and I may slightly disagree on that. I think we have to be realistic as we leave. Food production is necessary. I am very fond of our Secretary of State, and I know that he loves to talk about the environment, but I want to hear more about food, farming, production and how we are going to feed the nation. It is important that we keep those exports going and that we have a market that works.
The environment is great, but we need a market along with the environment. We need profitable agriculture above all things. The Minister will know as well as I do that if someone goes to the bank manager and they are not making a profit, they will not stay in business for long. I have huge confidence in the Minister, and I am sure that he will have huge influence on the Secretary of State, so that when he gets to the National Farmers Union conference in a couple of weeks, we will hear about food production and how we will keep farming and food going in this country.
Colin Clark (Gordon) (Con)
It is a pleasure to follow my hon. Friend the Member for Tiverton and Honiton (Neil Parish), and to serve under your chairmanship, Mr Bone. I refer hon. Members to the register of interests: I am an active farmer and a recipient of single farm payment.
Many people have referred to the speech at the Oxford conference, which was described in Farmers Weekly as
“one of the most important speeches for UK farming in living memory”.
I think that is testament to the vision that the Secretary of State has had. On the face of it, funds are guaranteed, but it is up to the devolved Governments to set their own policies.
I have been involved in the agri-food industry for my entire career. I believe passionately that productive agriculture and protecting the environment are mutually inclusive—having well-to-do, or economically viable, countryside is the best way to protect the environment. The vast majority of our countryside environment has been shaped by man. We should not kid ourselves that this is North America; this is not a big wildlife park. It is very important that the general public realise that the main purpose of agriculture or farmland is to produce food. Many hon. Members have spoken about the affordability and availability of food, which is what is ultimately important. It is estimated that every household contributed £400 to the CAP every year, but we have affordability, availability, and wholesomeness in food that we have never seen before. The policy framework must recognise the importance of affordability of food because, as the hon. Member for Bristol East (Kerry McCarthy) said, many people find it difficult to make budgets balance, and we cannot have wild fluctuations in the price of food. It is not good for farming.
I have been involved in produce for ever, or at least since I was in my 20s [Interruption.] Not quite for ever—I thank my hon. Friends for their asides. If the production goes up, the price goes down. We have to have a leveller.
I would also clarify that a support payment, not a subsidy, supports agriculture and the food industry—the biggest manufacturing industry in the country. The vast majority of payments are effectively reinvested in the business. Anybody who looks at agricultural statistics will see that farmers are not making a fortune in the islands; they are not making a fortune in Gordon and they are not making a fortune in Dumfries. It is important to recognise that.
We must bring to the debate the scale of British farming and the proportion produced in the different areas. It is important to realise that the scale of farming in the UK is, on average, bigger than in the rest of the EU. It is very productive and relatively efficient, despite the CAP. A system of payments that achieves environmental and productivity targets would allow a mix of farming. There are 19,700 claimants in Scotland alone. Some 8,000 of them claim less than £5,000, and it is obvious that there is a socio-environmental opportunity there, not just a purely agricultural one.
The National Farmers Union Scotland has its own negotiation to do with the Scottish Government, and I will not speak about Scottish policy here because that will be formed in Scotland, but I would clarify one point. There have been concerns about a DEFRA-centric approach to the devolved countries, despite Ministers being crystal clear that that is not the case. For absolute clarity, I would ask the Minister to state clearly that there will not be a DEFRA-centric policy dropped down on to Scotland.
It is clear from comments made by many Members that we want to see a common framework across the whole of the United Kingdom. That is just good practice. Farmers in Aberdeenshire have as much to do with farmers in Lincolnshire as they do in Essex; similarly up and down the west coast. It is very important that we have standards across the entire UK, and how they are policed is also important. England, Scotland, Wales and Northern Ireland should be policed effectively, perhaps by some sort of super-environmental agency, as DEFRA has suggested.
There is an 80/20 rule in agriculture: 80% of all production is by 20% of farmers. It is probably nearer to 10% to 90%. It is important to recognise that the affordability of food depends on scale and productivity. Having come from the retail sector, I have seen rapacious rationalisation by the supermarket. In the long run, that does not bring us any benefit; it brings far too much dependency on one or two very big players, which makes us very vulnerable to food scares or problems.
Affordable food is every bit as much a public good as the environment. They must go hand in hand and I hope the policy framework will respect that.
Luke Graham (Ochil and South Perthshire) (Con)
It is a pleasure to serve under your chairmanship, Mr Bone. I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing this important debate. Many of my points have been raised by other Members, so I will keep this short and sweet, and make three key points. First, I will touch lightly on the UK framework and funding; secondly, I will talk about the opportunity to do things differently; and thirdly, I will stress the importance of the environment and infrastructure in the development of UK frameworks.
In my constituency of Ochil and South Perthshire, agricultural industries are a cornerstone. They are involved in land and environmental management. They create jobs. They help integrate the economies of the villages and towns that make up the constituency. Although farmers are different, whether they are arable, livestock or dairy, and face different challenges in different parts of the country, there are some common challenges throughout the UK, including price pressures from retailers, international competition and the pressure on innovation and value. It is important when we develop UK frameworks that we recognise the differences throughout the United Kingdom, but also that we, as elected Members, make sure we are reaching through each part of the United Kingdom to recognise the common challenges faced in each of our constituencies, and that we make policy that works for the entire United Kingdom.
As my hon. Friends have outlined, funding and decisions on how the spend is distributed should be devolved, as currently. However, it is very important that, whatever the UK body turns out to be, the funding should be ring-fenced. When Westminster is putting money out to the devolved Administrations around the United Kingdom, that should be ring-fenced and protected, so that devolved Administrations, which may be under some political pressure, do not shift funding from agriculture into health or transport or whatever might be the subject of political pressure at the time—maybe even things such as IT systems.
When we devolve different areas of funding, as already takes place, we still maximise the benefit of being one United Kingdom together. Central Departments such as DEFRA have central resources such as IT systems. Perhaps the devolved Administrations should have freer access to those things, which could save money and help farmers with the receipt of payments and other administrative tasks.
My second point is about the opportunity to do things differently. The Secretary of State outlined in his Oxford speech that we have a chance to develop our own policies, shaped by our collective interests. I could not agree more. This is an opportunity to tackle the criticisms of the common agricultural policy. Anyone who studied politics or economics at Higher or A-level has been taught for many years about butter mountains and the inefficiencies of the system. This is our chance to address that. We can create a bespoke policy for our industries, not for one political party.
On the environment and infrastructure, we have stressed the importance of the protection of the environment and its preservation, but it is important to remember that my constituency and others across Scotland and the United Kingdom are not biscuit-tin communities. They are active, working, agricultural landscapes. We have to make sure that we are educating people across the UK to understand the value of the agricultural industries, which help preserve, protect and progress the environment as a working, living landscape.
This is a prime opportunity for us to start redirecting payments towards more infrastructure. In reports on broadband over the last week, rural parts of our country fall vastly behind urban parts. We have targets of 95%, reaching 100% under the devolved Administration, for superfast broadband. My constituency is at 83.3%. I hope that when forming policy we look not only at direct payments but at how we can help regenerate our towns and villages and make sure that our rural economies are as connected as our cosmopolitan ones.
It is important that in our UK framework we make sure that we devolve implementation so that we recognise the nuances, but pull together common resources where that will serve our constituents best; that we take note of the opportunity and grasp it with both hands in order to do something differently, and finally, that we recognise the importance of the environment but also the opportunity to invest in more infrastructure.
Mr Peter Bone (in the Chair)
I appreciate the courtesy of Members. To give Mr Percy a little longer, the wind-ups will start slightly after 4pm.
Andrew Percy (Brigg and Goole) (Con)
Thank you, Mr Bone. It is a pleasure to serve under your chairmanship today. I am not a farmer—I am perhaps unique in that. I do farm votes, however, and I am pleased to say that my productivity rates in every election have improved, so that means I am doing a good job for the farmers I represent. Indisputably, I represent the finest farmland in the United Kingdom, in east Yorkshire and northern Lincolnshire, which is some of the most productive. [Interruption.] I am pleased to hear the cheers of agreement from my hon. Friends.
I have a number of points to make, many of which have already been made, but as Members new to the House will have realised by now, that does not prevent somebody else from making them. I would emphasise the point made by the right hon. Member for Orkney and Shetland (Mr Carmichael). I thought his speech was excellent and there was not much I could disagree with. Particularly important were his two points about a UK-wide framework and maintaining the integrity of the market within the UK. I entirely agree. It is an innovative idea to leave the European Union and then copy the European Union’s decision-making model, but it is one worthy of consideration.
In considering agricultural policy, we have to think in the broader context of the whole of food and drink in the UK and how we support that entire sector. What we do in the agricultural sector is so important in the supply chain through to the food and drink sector, which is such an important part of our exports. I am very involved in food and drink export promotion in my role as the Prime Minister’s trade envoy to Canada, and we need to ensure that policy is connected across Government with that in mind.
Comments have been made about labour flexibility. I am a Brexiteer, and I think we have made the right decision. Last night, I was a remainer, for staying in this place. I look forward to the second vote—obviously, we voted to leave by a very narrow margin.
I and most of my constituents fully understand that we have to maintain labour flexibility. I think most of the public will buy into an immigration system that we can trust, which matches skills to the areas of the country with shortages. Brexit gives us the opportunity to have a sensible, informed debate about immigration, as has happened in many countries, such as Canada and Australia.
I have another point here, but I cannot read my own writing—I used to be a schoolteacher—so I will ignore that. I agree with the comments that were made about animal welfare. My real reason for coming here this afternoon is that I want to talk about what we do in terms of our trade deals with the rest of the world. As I said when I intervened on the hon. Member for Bristol East (Kerry McCarthy), we must build trade deals on the basis of evidence. In the previous couple of Parliaments, I was very involved in the all-party group on transatlantic trade. It originally focused on the transatlantic trade and investment partnership negotiations, which of course are going nowhere, but eventually focused on the comprehensive economic and trade agreement.
I want to chide the Secretary of State slightly, because some of his comments about American food production and chlorinated chicken have not been helpful to our future relationship. Having access to the US market is incredibly important to British farmers post-Brexit, just as it is important for American farmers to gain access to our market. Any agreement must therefore be based on evidence. Let us look to the CETA model. In those negations, the language that Ministers, Secretaries of State and European Commissioners used was always modest—I will not say that it was not extreme, because that would be a terrible thing to say. The EU and Canada had big differences on standards. In particular, we had a 20-odd year dispute with Canada at the World Trade Organisation about hormones and antibiotics in beef, but it was resolved through CETA and has now ended. Of course, that beef is not coming into the European Union.
Where we have differences, it is still possible to negotiate a deal. Some of the comments that have been made about things such as chlorinated chicken have fed anti-American bigotry, which would not be accepted in any other relationship. There is a lot of evidence out there about chlorinated chicken. I do not propose to go into it, other than to point out that a person would have to eat a full chlorinated chicken to get the same amount of chlorine as they would get from one glass of water. I do not see many people advocating drinking or importing raw water. We must do this on the basis of evidence.
Some of the differences between the EU and the US are based on trade defence, rather than science, so let us have a scientific, evidence-based trade policy. The Secretary of State should be conscious of the fact that talking down the prospect of trade deals with a market as big and important as America is not particularly helpful. That said, it would be incredibly difficult to come to such a deal—I do not underestimate this—particularly if it includes agriculture. The all-party group on transatlantic trade went out and met various American food producers, including an American beef producer—he had a Stetson on—pork people and chicken people. I am not going to pretend that it will be easy to negotiate a deal. Given the agricultural propositions in CETA, it may well be very limited, but let us not buy into this bigotry. Let us ensure that our policy on agriculture and trading relations more generally is evidence-based. I hope the Minister will take that message back to his Secretary of State, who otherwise is doing an excellent job in his new position.
Peter Grant (Glenrothes) (SNP)
It is a pleasure to serve under your chairmanship, Mr Bone, and to start the summing up speeches.
We have had an interesting debate, but the most interesting aspect of it was what nobody said. Despite the fact that the overwhelming majority of those who spoke were Conservative MPs, nobody suggested that free-market capitalism should be the basis for the production of our most basic, fundamental commodity. The right hon. Member for Orkney and Shetland (Mr Carmichael)—I congratulate him on securing the debate—raised that possibility for as long as it took to shoot it down.
One thing is clear: whether we are in or out of the European Union, we need some kind of sustained Government intervention in our agriculture and food production industries. That is partly because where we have tried to run them through a free, unrestricted market, it has not worked. Does anybody seriously think we have struck the right balance between Tesco and the farmer with 50 or 60 cows, who is trying to get a decent price for their milk and to make sure that the person they sell it to this week will come back and buy it next week?
We have to be cautious, because although everybody can point to the faults, failings and weaknesses of the common agricultural policy, at the moment nobody knows what we are going to replace it with in 16 or 18 months’ time—perhaps in 30 months’ time if we get a transition and implementation period. We have to be very careful that we do not wait so long for a decision that there is a sudden shock to the system. Farmers are the same as workers in any other industry or business; sudden changes without adequate warning do not help them. I ask the Minister to guarantee that we will know about any decisions that are taken in plenty of time so people can adjust to them.
We have to remember that our agricultural industries are not just about the production of food. They also have a massive impact on the appearance and the very fabric of all the nations in these islands. The way that the land is farmed or worked makes a huge difference to its appearance, which makes a difference to its attractiveness as a place to live and has a huge knock-on effect, for good or for ill, on our tourism industry, for example.
Glenrothes and Central Fife does not look like the most rural, farming-intensive constituency in the United Kingdom, but I reckon about 1,000 households in my constituency live either in isolated homes or in homes in groups of two or three, scattered around the countryside. They do not all work full-time in agriculture, of course, but a lot of them do. My constituency is also home to Cameron Brig, the biggest grain distillery in Europe, and therefore perhaps the biggest customer for grain producers in Scotland—perhaps in the United Kingdom.
The hon. Member for Bristol East (Kerry McCarthy) made a very well-informed speech, which touched on a lot of areas that other hon. Members did not mention. She reminded us that Brexit is not just about what happens to the common agricultural policy; it is also about where workers come from and what conditions they work under.
On the affordability of fresh food, I think staff at my food bank in Glenrothes would beg to differ with the hon. Member for Gordon (Colin Clark), who said that food has never been more affordable. The hon. Member for Brigg and Goole (Andrew Percy) used a lot of his time to sing the praises of chlorinated chicken. We respect each other’s views in this place, so the hon. Gentleman is welcome to his opinion. He is also welcome to his chlorinated chicken, but I do not think many of my constituents will be too chuffed if taking back control means that someone else decides whether chicken can be chlorinated.
Andrew Percy
My point was that people should proceed on the basis of evidence. I am not an expert, but my simple point was that we should listen to what bodies such as the European Food Safety Authority say about such things, rather than rely on bigotry. I trust the experts, not those who buy into anti-capitalist, anti-American bigotry.
Peter Grant
It would be nice if the Government’s approach to Brexit was based on evidence, facts and proper analysis, rather than ideology. The hon. Gentleman also welcomed the opportunity to have what he described as an informed debate about immigration. I think it would have been nice if we had had an informed debate about immigration, rather than the desperately ill-informed debate we had up to, through and since the referendum. We have not heard enough about the enormous benefit that immigration brings to these islands and will continue to bring if we allow it to do so.
The hon. Member for Gordon reminded us at Brexit questions this morning that, as far as agriculture is concerned, one size does not fit all. In fact, the danger is that one size very often does not fit anything, so nobody gets the result they need.
Anyone can work out that the needs of a hill farmer or crofter in the highlands of Scotland or in Wales are very different from the needs of a dairy farmer in the south of England, or indeed of a fruit grower in lowland Scotland or lowland Perthshire. That means that whatever framework is put together has got to be capable of being adapted and applied flexibly to ensure that the decisions taken are those that are most suited to where they are being applied.
I do not have an issue, and neither does the Scottish National party, with recognising that in some areas of public policy there are huge benefits to having one framework and one set of rules to apply everywhere. For example, animal welfare standards are common throughout the United Kingdom—good idea. Let us face it, they are going to be common throughout the United Kingdom and the European Union, because we will still want to be able to sell our stuff across the Irish border, so Northern Ireland will have to fit in with European Union standards in the longer term.
It is essential that a decision that something will be taken on a UK framework basis is a decision by consensus. I am waiting, as are a lot of people back home in Scotland, to hear the Government confirm that no UK framework policy will be decided without the consent of the devolved Administrations, and that once it has been agreed that something needs a UK framework, the content and detail of that framework will be agreed by consensus among the four equal partners in the Union, not simply imposed on us by a Government in Whitehall—nor indeed imposed on the farmers of England by a Government in Edinburgh.
Mr Carmichael
What view do the hon. Gentleman and his party take of the NFUS suggestion that any decision should be taken on the basis of some form of qualified majority voting?
Peter Grant
I am not convinced that defining a specific voting system now would be particularly helpful. I would not have a problem with the system being more devolved in England, if only there were a government structure to allow that to happen, because farmers in Devon do not necessarily need the same response as the farmers of east Anglia—but that is for the people and representatives of England to sort out. If decisions are to be taken that will affect farmers in Scotland, it is essential those decisions are the right ones for Scotland. The best place for decisions affecting Scotland to be taken is in Scotland—if we want to, we can replace Scotland with Northern Ireland, Wales or even Cornwall.
Peter Grant
Yorkshire, absolutely—we could possibly even split Yorkshire into north and south, if the hon. Gentleman wants to go that far.
Decisions used to be taken by Ministers or civil servants in the ivory towers of Whitehall and imposed on communities the length and breadth of these islands, but those days have simply got to be over. Scottish farmers produce a significant amount of our food and export earnings. They often provide employment, as the right hon. Member for Orkney and Shetland pointed out, in areas where there is not a lot of alternative employment. It is important that decisions that affect our farmers are taken by the people they elect.
To pick up on a final point, the hon. Member for Ochil and South Perthshire (Luke Graham) asked for complete ring-fencing of the funding. Perhaps, but only as long as the decisions about how much funding is to be allocated and what is ring-fenced are taken by consensus—
Mr Peter Bone (in the Chair)
Order. I am sorry to interrupt the hon. Gentleman but I have to be fair and ensure that each party gets its allocated time, so we will have to move on.
Sue Hayman (Workington) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bone.
I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for securing the debate and recognising the challenges that we face in Cumbria. There have been many good contributions from Members across the Chamber. I thank my hon. Friend the Member for Bristol East (Kerry McCarthy) for expressing her concerns about food security and labour, which are an important part of the debate.
We have heard that British farming is critical to our economy, providing thousands of jobs and the cornerstone of our food production. It is therefore important for the Government to step up to the plate to get the best deal and maintain the high standards that we have heard about, to enable our businesses and farms to flourish and remain successful. When we negotiate our trade agreements, it is important to make sure that they work for British farming, while protecting the high standards of food safety and animal welfare that our consumers expect. As we have heard from a number of Members, it is important that any deals do not undercut British farming.
Food and farming need to be a clear strategic priority and a cornerstone of the broad industrial strategy that the Government are promoting. I agree that there is a clear need, as hon. Members have said, for a plan to enable food and farming to grow more, so that people have a greater appreciation of British food and are encouraged to buy British at every opportunity. We also need to look at the brand of Britishness to help us to export more and get others to appreciate our high standards.
It is important that we appreciate exactly what is at stake for the farming industry with Brexit. If we get it wrong, that is the nation’s food security, nutrition, environment and public health, as we have heard. Farming is an integral part of the Labour party’s vision of a fairer society—one that tackles the increasing social ills of food poverty, poor diet, environmental degradation and inequality. We believe that we must be ambitious in the creation of our new British agricultural policy, which should aim to establish a new deal and a consensus on what a modern farming industry can do for the economy, rural communities, consumers and the environment. Change cannot be left to market forces alone, as long as farming is critical to our food security and to stewardship of the natural environment.
We have to look at better food labelling, which is vital. If our farmers are to be able to compete fairly under any new trade deals, product labelling must be clear and unambiguous so that people know exactly what they are buying. Such labelling should include the country of origin and method of production.
As we have heard, the issue of farm labour is critical and immediate. Farmers and food manufacturers need to have access to a wider labour market. Without access to that labour, the agricultural sector and food manufacturers will face severe difficulties. A lack of labour will lead to consequences for UK agriculture. We could end up with product being left to waste, the movement of investment and operations out of the UK and, on top of that, price inflation for consumers.
At the moment, the profitability of many farms is too dependent on direct payments from the CAP. Because of the huge diversity in farming and the volatility in many areas, we need to consider how we can support farms to become more resilient, while mitigating the volatility. When it comes to replacing the CAP, we believe that a future payment system must broadly seek to do the following things. We need to look at how we target support to farmers who provide the most public good but may struggle to compete in the market, through no fault of their own—for example, the hill farmers in my Lakeland constituency. Any future system must be transparent as well as relevant. It must be easily accessible—we have heard about broadband—and cost-effective. It should reward environmentally sustainable practice and environmental stewardship, such as the management of habitat and natural resources. I believe strongly that we should recognise the cultural and historical landscape for the benefit of us all.
We should also support flood mitigation through land management, so we need to look at how any future programme can include that. We also need to include technological innovation, and consider how investment in it could meet the aims of improving resource efficiency and animal health and welfare, managing disease and adding value. It could also be used to encourage investment in machinery and software. It is important to support rural communities and family farms as part of any system. They, too, are central to the economy.
In short, any new system must enable profitable and sustainable farming businesses that support a vital and dynamic rural economy. Farmers tell me that their big problem at the moment is uncertainty about the future, so I am looking forward to hearing what the Minister has to say. I hope that anything being developed will provide that certainty and direction for our farmers, so that they can engage in long-term planning for sustainable future prosperity.
The Minister for Agriculture, Fisheries and Food (George Eustice)
I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing this debate. Like him, I am a farmer’s son. Unlike my hon. Friend the Member for Tiverton and Honiton (Neil Parish), I am not farming now, but I did try farming for 10 years. It is a real honour to be farming Minister at an exciting time: we have an opportunity, for the first time in half a century, to design fresh thinking and coherent policy in agriculture.
As the Minister for Agriculture, I have wrestled with the common agricultural policy, and the rules and bureaucracy, for four years. It is stifling. Although there have been changes to the CAP over the years, in its current incarnation it is a bureaucratic quagmire. It attempts to regulate every single field and every feature in them. Our administrators spend their time fretting about the width of a hedge: whether it is too narrow or too wide, whether the gateway is too big and whether there are too many trees on a parcel of land. It goes on forever.
Every Administration in the UK feels deep frustration at some of the bureaucracy in the CAP. We have an opportunity as we leave the EU to do things differently and to design coherent policy. We set out our intention in the Queen’s Speech last year to bring forward an agriculture Bill later this year. Before that, we will publish further plans about our initial thinking—some time later in the spring or in early summer.
The right hon. Member for Orkney and Shetland and others talked about the importance of UK frameworks. We absolutely recognise that and I think that all other parts of the UK do, too. As he pointed out, when we consider the UK framework, we will be looking predominantly at two areas: first, what is required to protect the integrity of the UK single market. Clearly, we could not have one Administration subsidising sheep farmers in a way that would be to the huge detriment of farmers in other parts of the UK. There would have to be some boundaries. Secondly, everyone accepts the need for UK frameworks when we talk about what is necessary to secure international agreements, be they on trade or other matters: things like phytosanitary, food safety and traceability issues to protect our export market. We will have to have some kind of framework and common outcomes and objectives to deliver those things.
I reassure the hon. Gentleman and others that we are engaging regularly with Ministers in all the devolved Administrations. We have regular meetings with them and in some of those meetings, different devolved Administrations lead on particular aspects. They have been updating us on some of the work that they have been doing. At official level there has been a very in-depth analysis, both to deliver what is necessary for the current European Union (Withdrawal) Bill and for the detailed work on the principles and features that a future UK framework will need.
Picking up on the point that my hon. Friend the Member for Gordon (Colin Clark) made, our critique of the CAP is that it is a one-size-fits-all policy, and it does not work for that reason. I want to ensure that leaving the EU and the CAP is liberating for everyone in this country—for all the devolved Administrations and for farmers right across the UK. As he put it, it is not our intention at all to have a DEFRA-centric, top-down policy. Far from it: we want to protect maximum flexibility and ability for each individual devolved Administration to design policies that work for them.
I will give an example of the sort of thing that we have to put up with. About 18 months ago, the Welsh Government got into a legal dispute with the European Commission because the Commission did not like the size and shape of the ear tag that they used as the second tag on cattle. I would have no intention of trying to dictate to other devolved Administrations what the size, shape or colour of their ear tags should be. All I would want to know is that they had proper traceability in place.
Mr Carmichael
The Minister’s policy is all very well, but it is meaningful only if we have the money to go with it. Will the Minister address the position of the Treasury in relation to funding of it?
George Eustice
The right hon. Gentleman pre-empted me—I was about to get to that point. We were very clear in our manifesto that the budget in cash terms for agriculture policy will stay the same until 2022. My hon. Friend the Member for Ochil and South Perthshire (Luke Graham) asked the question: I reassure him and other Members that that applies to all parts of the UK. There would be no question between now and 2022 of any devolved Administration departing from that and using those funds for some other purpose—that would be a breach of the manifesto commitment.
As a Government, we have been very clear that we will keep the cash total the same until 2022, but we have given a very clear undertaking that we will seek to phase out over time the single farm payment and to replace it with the new environmental land management scheme, which will be funded. It is not the case that funding will end in 2022; at this stage we have not set out exactly what the figure will be post-2022, but we are absolutely clear that there will be a gradual transition and a funded policy to support our environmental land management scheme after 2022.
I am going to touch very briefly on a few of the areas that we are looking at in England as future policy. For a new environmental land management scheme we want to move away from the current direct payments, which are on an area basis. I do not think there is much sense for that. We want to directly reward farmers for what they do by way of delivering public goods—whether enhanced animal welfare or environmental goods. We want to move to a system where we are rewarding farmers for the goods that they provide. We are also looking at innovation and competitiveness, including the possibility of grants to support investment on farms, to help farmers prepare for a new world in agriculture.
To pick up on the point that my hon. Friend the Member for North Cornwall (Scott Mann) raised, we are looking at whether we can help support and foster the development of futures markets and insurance products to help farmers manage risks. We are looking at issues such as fairness in the supply chain, too.
The right hon. Member for Orkney and Shetland and my hon. Friend the Member for Tiverton and Honiton raised the issue of New Zealand. New Zealand is different: people often forget to take account of the fact that when it removed subsidies, it also devalued its currency by 45% and priced itself back into world markets. In doing that, New Zealand had certain problems with the environment—even today, New Zealand dairy has environmental impacts that we would not want to tolerate in this country. There are differences and there are things that we would not want to follow in the case of New Zealand. There are also things that we can learn—for instance, its support for investments on farms through grants.
I assure the right hon. Member for Orkney and Shetland that I regularly meet with NFU Scotland—I can see its members today in the Public Gallery, carefully watching the debate—and we are very keen to get its engagement; we are not allowing that to be something that just the Scottish Government do. As the UK Minister, I want a UK perspective. My hon. Friend the Member for Dumfries and Galloway (Mr Jack) mentioned animal welfare. I agree with him; we have prioritised it and we are looking at ways that we can incentivise and support high animal welfare systems of husbandry. As I said, it is a public good and we recognise it as such.
The hon. Member for Bristol East (Kerry McCarthy) gave some positive comments on what she has heard so far. I very much look forward to her supporting us in the Division Lobbies as we try to take the Bill forward on that basis. She mentioned the issue of labour; I was formerly a strawberry farmer and I understand the challenges that fruit farmers face. We have been working with the Home Office to discuss what work permit arrangements we might put in place for when we leave. The Migration Advisory Committee has just started a big piece of work to look at the labour market in the round. I agree with what the hon. Lady said about some of the work of the Food Foundation. Horticulture often has been overlooked, and we have an opportunity to address that. I attended the launch of the project that she highlighted.
My hon. Friend the Member for Tiverton and Honiton talked about some of the pressure on the uplands. We recognise that, but I had a very interesting conversation with the Uplands Alliance just last week; it pointed out that although they are financially more vulnerable, it believes that there are more things that they can deliver by way of public goods—whether peatland restoration, flood mitigation work or public access. There are many opportunities for it to do that.
Farmers are the recipients of subsidies, but they are not always the main beneficiaries. Subsidies distort all sorts of markets. We have an opportunity to do things very differently. It would be remiss of me not to mention trade with the US. It is difficult to assign the description of “anti-American bigotry” to the Secretary of State, who is quite an Atlanticist, but we recognise and value our high animal welfare standards and we are determined to protect them.
Mr Carmichael
I thank all hon. Members who have taken part in the debate. I feel that we will return to this subject many times. In particular, I thank the Minister, who has been assiduous in addressing the points; he took copious notes throughout, but despite that, he still managed to send me an email at 3.30 inviting me to a reception to mark Cornish Pasty Week. I accept his invitation with some pleasure and look forward to discussing with him there the importance of protected geographical indications, of which Cornish pasties, Orkney beef and Shetland lamb are but a few.
Written Statements
(6 years, 9 months ago)
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Cabinet Committees and Implementation Task Forces
(6 years, 9 months ago)
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The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Mr David Lidington)
Today I am publishing the updated list of Cabinet Committees and Implementation Task Forces (ITFs). The updated list includes several key changes:
Housing taskforce: the ITF will now be chaired by the Prime Minister.
Industrial strategy taskforce; a new ITF has been established to oversee the delivery of the industrial strategy.
Rough sleeping and homelessness reduction taskforce: a new ITF has been established to co-ordinate action to reduce homelessness and halve rough sleeping over the course of the Parliament.
Copies of the associated documents will be placed in the Libraries of both Houses and published on gov.uk.
[HCWS441]
Faith Practices
(6 years, 9 months ago)
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The Secretary of State for the Home Department (Amber Rudd)
The Government have today published the independent review into the application of Sharia law in England and Wales. The review has been laid before the House (Cm 9560). Copies of the report will be available from the Vote Office and it is also available on the Home Office website.
The review was commissioned by the then Home Secretary in May 2016 and was chaired by Professor Mona Siddiqui, an internationally renowned expert in Islamic and inter-religious studies. Professor Siddiqui was supported by a review panel of experts that included experienced family law barrister Sam Momtaz QC, retired High Court judge Sir Mark Hedley, and specialist family law solicitor Anne Marie Hutchinson OBE QC. The panel was advised by two religious and theological experts, Imam Sayed Ali Abbas Razawi and Imam Qari Asim.
Sharia law has no jurisdiction in England and Wales and the decisions of Sharia councils are not legally binding. The review focused on whether and to what extent the application of Sharia law by Sharia councils may be incompatible with the law in England and Wales. This included ways in which Sharia law may be being misused or exploited in a way that may discriminate against certain groups, undermine shared values and cause social harms.
To gather evidence the review team issued a public call for evidence and ran a number of oral evidence sessions. During the course of the review, the review chair and panel heard evidence from stakeholders including users of Sharia councils, women’s rights groups, academics, lawyers and Sharia councils. I am grateful to Professor Siddiqui for the thoroughness of her review and for the review team’s comprehensive report.
The review found that most of the work of Sharia councils concerns Islamic divorces, and that the applicants are mostly women. While there are a number of reasons women desire an Islamic divorce, a significant driver is that some Muslim couples do not have a civil marriage as well as an Islamic ceremony. The review also found evidence of a range of practices across Sharia councils, both positive and negative. The review concludes with a series of recommendations to Government.
The review made three recommendations:
Recommendation 1 (legislative change): amendments to marriage law to (a) ensure that civil marriages are conducted before or at the same time as the Islamic marriage ceremony and (b) establish the right to a civil divorce.
Recommendation 2 (building understanding): proposes developing programmes to (i) raise Muslim couples’ awareness that Islamic marriages do not afford them the protections under the law that come with a civil marriage because their partnership is not recognised as a legal marriage; and (ii) encourages Muslim couples that have or are having an Islamic marriage to register for a civil marriage as well.
Recommendation 3 (regulation of Sharia councils): proposes regulating Sharia councils through the creation of a state-established body that would create a code of practice for Sharia councils to accept and implement.
The Government will carefully consider the review’s findings. The review team’s failure to reach a unanimous agreement on recommendation three (regulation of Sharia councils) demonstrates the complexity of the issues. The Government consider that the proposal to create a state-facilitated or endorsed regulation scheme for Sharia councils would confer upon them legitimacy as alternative forms of dispute resolution. The Government do not consider there to be a role for the state to act in this way. Britain has a long tradition of freedom of worship and religious tolerance and regulation could add legitimacy to the perception of the existence of a parallel legal system even though the outcomes of Sharia councils have no standing in civil law, as the independent review has made clear. Many people of different faiths follow religious codes and practices and benefit from their guidance. The Government have no intention of changing this position and for this reason cannot accept recommendation three.
The review found some evidence of Sharia councils forcing women to make concessions to gain a divorce, of inadequate safeguarding policies, and a failure to signpost applicants to legal remedies. This is not acceptable. Where Sharia councils exist, they must abide by the law. Legislation is in place to protect the rights of women and prevent discriminatory practice. The Government will work with the appropriate regulatory authorities to ensure that this legislation and the protections it establishes are being enforced fully and effectively.
[HCWS442]
Housing Infrastructure Fund
(6 years, 9 months ago)
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The Secretary of State for Housing, Communities and Local Government (Sajid Javid)
Today the Government announce that we will invest £866 million to help unlock up to 200,000 new homes through 133 marginal viability fund projects, within the housing infrastructure fund.
The Government have set out a plan that puts us on track to increase housing supply to 300,000 homes a year and this first wave of funding from the £5 billion housing infrastructure fund is part of a comprehensive programme to fix the broken housing market.
This investment will fund key local infrastructure projects including new roads, cycle paths, flood defences and land remediation work where it is needed for new housing to be built. Without this financial support, these projects would struggle to go ahead or take years for work to begin, delaying the homes these communities need.
The marginal viability fund was available to all single and lower-tier local authorities in England to bid into.
We received 430 bids from local authorities, worth almost £14 billion in total. This shows how much local authorities are willing to step up to fix the broken housing market, and we are committed to supporting this ambition. Bids went through a rigorous assessment process and were assessed on the basis of their strategic approach, value for money and the ability of the projects to be delivered. We are putting infrastructure at the heart of housing delivery and are committed to bringing communities, local authorities and the private sector together to solve this problem.
The second component of the housing infrastructure fund—the forward fund—is available to the uppermost tier of local authorities in England to bid into, and aims to pump prime a small number of strategic and high-impact infrastructure projects. Expressions of interest for forward funding are being assessed and the best proposals will be shortlisted to go through to co-development shortly. Local authorities will submit their final business cases with successful bids announced from autumn 2018 onwards.
The full list of successful marginal viability fund projects, and the indicative amount we are awarding (subject to final financial clarifications) can be found on the Ministry of Housing, Communities and Local Government website at:
https://www.gov.uk/government/publications/housing-infrastructure-fund
[HCWS440]
Justice and Home Affairs Council
(6 years, 9 months ago)
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The Secretary of State for Justice and Lord Chancellor (Mr David Gauke)
The first meeting of EU Interior and Justice Ministers during the Bulgarian presidency took place on 25 and 26 January in Sofia. Her Majesty’s ambassador to Bulgaria, Emma Hopkins, and a senior Government official represented the UK for interior day. I represented the UK for justice day.
Interior day began with a debate on European asylum policy. The presidency set out its objective to conclude negotiations on the reform of the common European asylum system (CEAS) package, including Dublin IV, by the end of June. Member states supported the aim of concluding negotiations by June but there remains a lack of consensus on the inclusion of burden sharing mechanisms in Dublin IV. The UK continues to support a comprehensive approach to migration but does not support a mandatory redistribution system within the EU and has not opted into the Dublin IV regulation.
Over lunch, Ministers discussed the global UN compact on migration (GCM), which will be negotiated in the UN over the next six months. The discussion aimed to initiate consideration on the alignment of member states’ positions on the principles of the GCM text. The UK is committed to agreeing a global framework for a new approach to orderly, safe and regular global migration. The UK reaffirmed the Government’s principles that underline our approach to achieving this, in particular that refugees should seek protection in the first safe country they can reach; that a distinction needs to be maintained between economic migrants and refugees; and that states have the right to control their borders and the duty to accept their citizens back.
Interior day ended with a discussion on integrated border management. Member states highlighted priorities for co-operation among the relevant authorities and agencies involved in border security and with third countries to help secure the Union’s external border. These priorities related specifically to implementation of the European Border and Coast Guard Agency (EBCGA) and related EU databases—the entry/exit system (EES) and the European travel information and authorisation system (ETIAS). The UK recognises the importance of increased border security across the EU. However, the UK is not part of the border aspects of the Schengen agreement and therefore does not participate in the EBCGA, EES or the ETIAS.
Justice day began with a consideration of the issues relevant to future co-operation between the European Public Prosecutor’s Office (EPPO) and other partner agencies and offices of the EU, such as Europol, Eurojust and the European Anti-Fraud Office (OLAF). Member states agreed on the importance of clear working relationships, with a clear delimitation of responsibilities so that the EPPO does not limit or encroach upon other agencies’ competences. The Government have been clear that we will not participate in an EPPO and did not opt-in to the regulation.
The day continued with a discussion on the Brussels IIa recast regulation. Member states agreed that the continued requirement for exequatur in some family cases was a significant obstacle to the operation of the system and should be abolished. Similarly, it was agreed that the grounds for refusal of recognition of a judgment should be limited, which is of particular importance where children are concerned.
The Commission presented an update on the progress of the forthcoming legislative proposal on cross- border law enforcement access to e-evidence held by communications service providers. The Commission aims to present the proposal to the JHA Council in March. The Government will consider their position and whether to opt in to the proposal when it is published. The Commission also provided an update on the code of conduct on countering illegal hate speech online which was signed in June 2016 by major social media companies and aims to ensure illegal hate speech is removed within 24 hours. The Commission detailed the progress made by social media companies and explained their intention to expand the number of signatories to the code.
Over lunch, Ministers discussed the justice issues raised by artificial intelligence, in particular on questions of liability. Member states broadly agreed on the need for clear, but light touch, rules on liability which would create certainty to allow investment decisions to be taken without overregulating and discouraging innovation.
[HCWS443]
House of Lords
Death of a Member: Lord Sutherland of Houndwood
The Lord Speaker (Lord Fowler)
My Lords, I regret to inform the House of the death of the noble Lord, Lord Sutherland of Houndwood, on 29 January. On behalf of the House, I extend our condolences to the noble Lord’s family and friends.
Dental Care
(6 years, 9 months ago)
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Baroness Kennedy of Cradley
To ask Her Majesty's Government what action they are taking to improve dental care in England.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord O'Shaughnessy) (Con)
My Lords, the Government are committed to increasing access to dentistry and improving oral health outcomes, particularly for disadvantaged children. Across England, access to NHS dentistry is improving. We are also reforming the current dental contract to increase dentists’ focus on preventing, as well as treating, disease and oral ill health. Alongside this, NHS England’s Starting Well scheme will help children in high-need areas to access appropriate dental care.
Baroness Kennedy of Cradley (Lab)
I thank the Minister for that reply, but dental care in England is in crisis. Charities now provide emergency dental care. A quarter of all five year-olds have tooth decay. More than half of dentists plan to leave the NHS within five years and government spending on NHS dentistry has fallen by £170 million since 2010, meaning that patients pay more and more. The NHS dental contract that the Minister mentioned needs urgent reform—something that Labour recognised back in 2009. Why, despite running pilots since 2011, are the Government now saying that they need more time—a couple of years, perhaps—before wider rollout can even be considered? By what date, therefore, do the Government expect to deliver reform to these urgently needed NHS dental contracts?
Lord O'Shaughnessy
I am afraid I do not recognise the picture that the noble Baroness paints. She is quite right that 25% of five year-olds are not decay-free; obviously, that is not good enough, but that figure has been increasing over the past 10 years. I should also point out that there are more dentists practising in NHS dentistry than ever.
The noble Baroness is quite right that a pilot has been going on in 75 dentists’ surgeries. An evaluation report will be produced by the deputy Chief Dental Officer in the next few months. That will set out the path toward the full reform of the dental contract.
Lord Colwyn (Con)
My Lords, dental care would be improved by the addition of fluoride to the water supply. This has been agreed by my noble friend and his department, but not all water authorities are prepared to take this step. In the last decade, dentists’ average earnings have gone down by a third in real terms. This is of great concern to dentists, who do not receive any government funding and have to cover all costs—equipment, staffing and training—unlike medical general practitioners. I declare an interest as vice-president of the British Fluoridation Society. According to a recent BDA survey, more than half of all dentists intend to leave NHS dentistry in the next five years. Perhaps my noble friend could start by looking at the current salary structures and contractual arrangements.
Lord O'Shaughnessy
We have talked about fluoridation a lot in this House recently. My noble friend knows the position: it is up for local areas to come forward with proposals. On his particular issue about dentists, they are doing a fantastic job in the NHS. We have more of them than ever. I want to point out that the 1% cap that was applied—we know that was because of the fiscal retrenchment that has had to take place in this country—no longer applies; indeed, we are waiting for dental review bodies to report on it so that we can arrange future payments for dentists.
Lord Hunt of Kings Heath (Lab)
My Lords, I remind the House of my presidency of the British Fluoridation Society. The noble Lord says that we have talked a lot. We have not quite talked enough, because the problem is this: fluoridation would deal with a lot of the areas with high numbers of oral health issues. The local authority is responsible for this and for paying the revenue costs, but the benefit falls to the health service. The cost annually for an average local authority is £300,000. Would the noble Lord be prepared to convene a discussion between himself, NHS England and Public Health England to see whether there could be a way to find some resources to help local authorities implement schemes?
Lord O'Shaughnessy
I recognise the benefits of fluoridation that the noble Lord has pointed out. There is no question about that. But we know that this is a very difficult and vexed issue locally—there are strong feelings either way. That is why the position was reached in the 2012 Act. The noble Lord’s idea of a discussion is a good one. I should point out that it is not a policy area on which I lead so I will have to speak to my colleague in the department, but if we can get that going and think about ways to encourage more action it would be a very clever thing to do.
Baroness Hollins (CB)
My Lords, I am sure that the Minister is aware that adults with learning disabilities are also at considerable risk of tooth decay, in part because of difficulties in maintaining their dental health. What measures are being taken to improve their dental health? I declare an interest here because I published a book on the subject. I am concerned too about excessive sugar consumption as a major cause of tooth decay. This is a risk for children and adults with learning disabilities. Will the Government consider introducing a ban on advertising high-sugar products on television before the watershed?
Lord O'Shaughnessy
The noble Baroness might send me her book so I can get her ideas on reaching adults with learning difficulties. Most adults with significant learning difficulties are likely to be on a range of benefits. That means that their dental care is free, if not for all, I suspect, then for some. She is absolutely right to point to sugar. We now have the sugar levy, which has had a really big impact. About 50% of drinks that would have been affected have been reformulated to either reduce or remove the application of that levy. That is a really good impact. On her point on advertising, we have very tough advertising rules in this country, including the banning of advertising of sweet drinks, sugary products and so on in children’s media. That is one of the reasons why we are seeing some hopeful signs on, for example, the number of extractions falling in primary care year on year.
Baroness Janke (LD)
My Lords, is the Minister aware that 41.5% of children have not visited the dentists for the year up to September 2017 and that many of these children are in the poorest communities of the country, many of which, as the noble Baroness, Lady Kennedy, said, are now dependent on charity for dental care? What action will he take to ensure that all children have proper access to NHS dentistry, wherever they live throughout the country?
Lord O'Shaughnessy
The noble Baroness is right. About 59% of children have seen a dentist in the last two years, but of course that leaves 41% who have not. I have to say that that is an improving picture. On her two particular issues, there is NHS England’s Starting Well programme, which is targeted on 13 local authorities that have the worst oral health outcomes for children. The range is really quite dramatic from one area to the next. It has also developed a core offer to help every local authority commission better dental health for children.
Baroness Hayman (CB)
My Lords, is not the issue of fluoridation of water just like the issue of adding folic acid to fortified flour, about which even more overpoweringly conclusive evidence was published this week? The Government need to take a more robust attitude towards public health.
Lord O'Shaughnessy
I return to the point that I have made: I do not think there is any doubt about the evidence on the benefits of fluoridation, but it is important to do it in a way that brings local people with you. I should also point out that a big programme of fluoride varnishing is going on for children’s teeth as well, so we are getting fluoride into children in other ways too.
Royal Navy: Warships
(6 years, 9 months ago)
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Lord West of Spithead
To ask Her Majesty’s Government whether the work being undertaken by the National Security Adviser has led to any changes to the planned paying off of any Royal Navy warships.
The Minister of State, Ministry of Defence (Earl Howe) (Con)
My Lords, no, it has not. As the noble Lord will be aware, the national security capability review will be published in late spring. Meanwhile, we have launched the modernising defence programme to make sure that our Armed Forces are able to meet the intensifying threats that this country faces.
Lord West of Spithead (Lab)
I thank the Minister for his reply. I have to say that I am rather surprised, because the whole reason for the review was that the threat is greater and more diverse than it was before. When one adds to that Brexit and its implications for our territorial seas and exclusive economic zone, it would seem that making any decisions about paying off ships that have already been decided would be rather foolhardy, not least because of the recent NAO report on the MoD equipment plan showing that there is no money there at all for the five frigates that have been much trumpeted. Would it be possible to go back to the MoD and look at the possibility of not paying ships off and selling them but rather holding them in reserve until we have finally come to a conclusion about the threats and what is required, so that in an emergency they could be regenerated and used by our nation?
Earl Howe
My Lords, I understand the point that the noble Lord is making, but he will recognise that putting any equipment, whether ships or not, into mothballs carries a cost with it. If he is referring to HMS “Ocean”, I am afraid that the decision not to extend her life has been taken and she will decommission this year as planned. But the noble Lord is right in substance: the aim of the modernising defence programme is to make sure that defence across the piece is sustainable, affordable and configured to address the threats that we face—and I am sure that he shares those aims.
Lord King of Bridgwater (Con)
Does my noble friend agree that in the modernisation programme it is extremely important that close attention is paid to recruitment? Will he confirm that that is being given high priority in the work that is being attended to at the moment?
Earl Howe
Yes, my Lords. As my noble friend is well aware, there are concerns about recruitment in all three armed services. There is no single reason for that. Some of it is attributable to the buoyant employment climate in the economy as a whole, but that is not the whole reason. This is a matter of constant attention by the service chiefs.
Lord Campbell of Pittenweem (LD)
My Lords, perhaps I might press the Minister on the points raised by the noble Lord, Lord West. If the integrity of the modernisation is to be preserved, no decisions can be taken that will affect capability between now and the conclusions of that review. Should not the principle of “nothing is decided until everything is decided” rule the Government’s position here?
Earl Howe
No, my Lords. The Ministry of Defence will continue to take decisions in parallel with the programme that is now in train. Where significant decisions need to be taken, their impact on the modernising defence programme and their relationship with it will of course be considered.
The Earl of Cork and Orrery (CB)
My Lords, the Navy is in the process of taking delivery of five Batch 2 offshore patrol vessels. These will displace four earlier vessels, one of which, HMS “Severn”, has already been decommissioned. She is only 15 years old. Will the Minister undertake to examine future uses for these versatile vessels, which might include Border Force or Royal Naval Reserve duties to augment our coastal and fisheries protection?
Earl Howe
I am grateful to the noble Earl for those suggestions, which I am sure will be noted by the department. But the modernising defence programme that is now in train is the body of work that will settle the specifics of what we require to meet our defence needs. As I have said, its aim is to ensure that we have defence that is sustainable, affordable and configured to address all the threats that we face.
Lord Howell of Guildford (Con)
My Lords, can the Minister say what discussions his colleagues have had with Commonwealth navies about the building, deployment and operation of warships? Does he accept that, while frigates are very valuable to our powered defence strength, they are also a major transmission of our influence and soft power across the globe?
Earl Howe
My noble friend is entirely right. We have regular discussions with our Commonwealth partners in particular and also with our NATO allies, in the light of the national shipbuilding strategy which, as he knows, is designed to ensure that we once again a competitive and vibrant shipbuilding industry in this country.
Lord Tunnicliffe (Lab)
My Lords, we have had report after report and promise after promise. Why should we have any faith in any of them? Yesterday, fortuitously for me—but not for the Minister—the National Audit Office produced its annual Ministry of Defence equipment plan report. Amyas Morse, head of the National Audit Office, said:
“The Department’s Equipment Plan is not affordable. At present the affordability gap ranges from a minimum of £4.9bn to £20.8bn if financial risks materialise and ambitious savings are not achieved”.
When reading the report, I got as far as page 14, on costs not included in the plan:
“As a consequence of the Strategic Defence and Security Review 2015, the Department introduced a number of new equipment commitments into the Plan. The Department was unable to demonstrate that all equipment requirements are now included within the Plan. We”—
that is, the National Audit Office, the highest analysing body in the land—
“have established that the Plan does not include the costs of buying five Type 31e frigates”.
If there is an error of that order of magnitude in the plan, how can we have any faith in anything that comes out in the next few weeks or months?
Earl Howe
My Lords, we have been quite open about the pressures that we face. The defence equipment plan summary, published yesterday, acknowledged that the equipment plan emerging from the MoD’s current year budget contains a high level of financial risk and an imbalance between cost and budget. It is exactly those risks and imbalances that we aim to resolve in the programme that is now under way.
Baroness Jones of Moulsecoomb (GP)
My Lords, is the Minister aware that, in answer to a parliamentary Question in the other place from SNP MP Ronnie Cowan, the Ministry of Defence said that it had spent more than £100 million on a study to explore options for a potential future warhead and whether to refurbish or replace? The noble Lord, Lord West, told me that he would have done it for much less money. Did the Ministry of Defence consider that option?
Earl Howe
I am sure that the Ministry of Defence could well have done with the advice of the noble Lord, Lord West, in this context—which we, too, are always keen to have. But I can assure the noble Baroness that, in all work undertaken by my department, cost-effectiveness and affordability are key.
United Nations Sustainable Development Goals
Lord McConnell of Glenscorrodale
To ask Her Majesty's Government when they intend to publish the Voluntary National Review of the United Kingdom in relation to the United Nations Global Goals for Sustainable Development.
Lord McConnell of Glenscorrodale (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and, in doing so, I welcome the noble Baroness, Lady Stedman-Scott, to her place to answer her first Question today—though I add that we are all delighted that the noble Lord, Lord Bates, will be back in his place soon, having withdrawn his resignation.
Baroness Stedman-Scott (Con)
My Lords, I thank the noble Lord. I am sorry that noble Lords have me today, but I am thrilled to say that it is not a permanent arrangement. I am sure that this is going to be the longest seven minutes of my life. Nobody more than me wishes to see my noble friend the Minister back in his usual place soon. However, I was able to take advice from him yesterday. He said two things: “Answer the Question, and don’t be late”.
The Government intend to present the UK’s voluntary national review of progress towards the sustainable development goals, or SDGs, in 2019. The Government are committed to delivering the goals, both at home and internationally, and departments are embedding them in their single departmental plans. High-level summaries of current plans were published on GOV.UK in December last year, together with examples of how government policies are contributing towards the SDGs.
Lord McConnell of Glenscorrodale
I thank the noble Baroness for that reply. Two of the key SDGs on which the Government will report next year are SDG 4 on quality education and SDG 17 on partnerships. Tomorrow in Dakar, Senegal, the Government will be represented at the financing conference for the Global Partnership for Education, where commitments will be made that will help to achieve these goals, particularly on quality education, over the coming years. Will the Government increase their contribution to the Global Partnership for Education? Will the noble Baroness take this opportunity from the Front Bench to join me in urging the Secretary of State to make a substantial contribution?
Baroness Stedman-Scott
I thank the noble Lord for his question. He is trying to lead me down the path of committing to provide extra money as I answer my first Question, but I am not going there. However, I will answer the question. The world has taken great strides forward in recent years on access to education: 89% of children are now in school. However, major problems remain with teaching quality, and in developing countries 90% of children are not learning even the basics of literacy and numeracy. We are proud to be a strong supporter of global education. Between 2011 and 2015, the UK supported 11.3 million children into primary and lower secondary education. The UK has been a strong supporter of the Global Partnership for Education from the outset. The Secretary of State for International Development will attend the replenishment conference tomorrow, and there will announce the size of the UK pledge as well as setting out DfID’s priorities for global education support.
Lord Chidgey (LD)
My Lords, I welcome the noble Baroness to her role on the Front Bench and commiserate with her on the unexpected adventure that she faces. Nevertheless, I hope that she will be aware of the vital role that Parliament will play in advance of any United Kingdom voluntary national review. That being the case, what measures are the Government preparing to enable Parliament to scrutinise this review in advance of its presentation to the high-level political forum in the UN? Will these measures include holding the Government to account through passing enabling legislation and approving the necessary budgets?
Baroness Stedman-Scott
I thank the noble Lord for his question. I love surprises. We still need to finalise the scope and process of the national review but expect to start it later this year. We will ensure that all interested parties have an opportunity to contribute their views. However, I am not able to answer the question about whether legislation will be involved. If I find that out, I will certainly let the noble Lord know.
Baroness Anelay of St Johns (Con)
My Lords, does my noble friend agree that the process of the voluntary review gives the Government the opportunity to showcase the work already carried out in supporting girls’ education, particularly on numeracy? For example, a DfID-supported project I witnessed in northern Nigeria which instilled basic numeracy skills meant that young girls could start micro-businesses.
Baroness Stedman-Scott
My noble friend Lady Anelay makes a very good point. In her previous role she will have seen this type of very important work at first hand. We should be proud as a country and a Government of the things that we have achieved, and definitely of what we have achieved through education. That is critical. Between April 2015 and 2017, we supported 7.1 million children to gain a decent education. While that is good, that and better will do.
Lord Collins of Highbury (Lab)
My Lords, what makes the sustainable development goals an incredibly powerful tool for change is the fact that they are universal. We are not simply saying to other countries, “Do this, do that”; we are judging the actions of other countries by the actions in our own country. The key to change is not only parliamentary scrutiny and engagement but the fact that all government departments—this is not a matter confined to DfID—should take their roles and responsibilities seriously. I hope that the noble Baroness will pass the following question on to the Prime Minister: will the Government please ensure that there is Cabinet responsibility for implementing the SDGs?
Baroness Stedman-Scott
I thank the noble Lord very much for his question. The SDGs are critical, and there is no better way to demonstrate commitment than by leading from the front on this. Our Government were absolutely at the front of designing and developing the goals, and we were the first to sign up to them, so your Lordships should be in no doubt that we are right behind this. The fact that they are universal, so that we can all be measured against the same things, makes people focus on what they are trying to do and deliver on their promises. The way in which this is structured means that, internationally, DfID will lead on this, the Cabinet Office will have a co-ordinating role, and everybody in each department will know exactly what is expected of them. We long for them to deliver.
Rough Sleeping
(6 years, 9 months ago)
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Lord Kennedy of Southwark
To ask Her Majesty’s Government what is their response to the Rough Sleeping Statistics Autumn 2017, England, published on 25 January, which demonstrate the largest number of people sleeping on the streets of England since those statistics were first compiled in 2010.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and in doing so I refer the House to my relevant registered interests as a councillor in the London Borough of Lewisham and a vice-president of the Local Government Association.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, the Government are providing over £1 billion of funding to combat homelessness and rough sleeping, implementing the Homelessness Reduction Act and piloting a housing-first approach for rough sleepers with complex needs. We are committed to halving rough sleeping by 2022 and eliminating it altogether by 2027. To achieve this, we have established a task force to drive forward a cross-government strategy. It will be supported by a panel of experts, who met for the first time this morning.
Lord Kennedy of Southwark
My Lords, these are shocking figures, and come less than a month on from when I asked the noble Lord in this House about the number of families who were homeless over the Christmas period. Rather than our usual debates on these matters, could the noble Lord tell the House what discussions have taken place with ministerial colleagues in the department and whether other departments have been spoken to, as homelessness can be solved only with cross-departmental working and seeking to address the root causes and avoid the problems of working in silos? The tragedy of homelessness needs to be addressed, but actions in the noble Lord’s department have been undermined—for example, by housing benefit cuts delivered by the DWP.
Lord Bourne of Aberystwyth
My Lords, the noble Lord is absolutely right about the need to avoid silo thinking, which is why the homelessness task force, which will meet shortly, is a cross-government approach. He will appreciate that we announced that recently. As I say, the advisory committee is meeting for the first time this morning and includes representatives of Crisis and Shelter, such as Polly Neate, and mayors such as Andy Burnham and Andy Street. That, too, will be vitally important. This is a complex problem. The figures in the noble Lord’s own Borough of Lewisham, for example, have gone up 30% over the last period, according to the most recent statistics we have, but other boroughs are doing a good job, such as Cambridge, which is Labour-controlled, and Staffordshire, which is Conservative-controlled. So the housing-first approach that they are adopting is a very good one.
Baroness Grender (LD)
My Lords, will the Minister consider a small, simple and immediate step, which is to reverse the cut in housing benefit for 18 to 21 year-olds? The cut was snuck in on a Friday afternoon by secondary legislation, and the savings are negligible. If just 140 young people are homeless out of the 10,000 affected in one year, it will start to cost the state more, not less. It is a simple measure that could be immediately changed. Why not get on with it and do it?
Lord Bourne of Aberystwyth
My Lords, this is precisely why we have the task force and the advisory committee, which, as I say, met this morning. To give an instance of how multifaceted it is, statistics produced yesterday by the GLA and St Mungo’s show that over 40% of people who are rough sleeping have alcohol problems, over 40% have drug problems and 49% have mental health problems. So it is not just about finance, although that is important. That is why we are looking at it across the piece, and why it is important that we take this forward with a cross-government approach.
Lord Spicer (Con)
How many empty dwellings are there in this country, and how many unused hostel beds?
Lord Bourne of Aberystwyth
My Lords, it will not be a surprise to noble Lords to hear that I do not have that figure at my fingertips. However, it is not just a question of how many empty properties there are; it is also a matter of matching them with the homeless, and they are not always in the right place. That is part of the issue and it is why local authorities now have the power to charge a premium on council tax for empty buildings. That will be part of the solution but, as I said, it is a multifaceted issue.
Lord Hylton (CB)
My Lords, the noble Lord, Lord Kennedy, is quite right to raise this issue because it is a sensitive indicator of far deeper problems. Does the Minister agree that a dramatic increase in the building of social housing is absolutely necessary if endless waiting lists are to be abolished?
Lord Bourne of Aberystwyth
My Lords, the noble Lord, Lord Kennedy, is right to raise this—it is a serious issue—but the noble Lord, Lord Hylton, is I think addressing homelessness rather than rough sleeping. They are somewhat different. However, I am certainly on record as saying, and say again, that we need more social housing for rent. That is part of the issue regarding homelessness but, as I said, that is different from rough sleeping, which is much more complex.
Lord Harris of Haringey (Lab)
My Lords, the Minister told us proudly that the Government have set themselves the target of halving the number of rough sleepers by 2022. That would bring it back down to the number they inherited from the Labour Government in 2010. Whose fault is the doubling in the number of rough sleepers? Is it a consequence of government policy on housing benefit and of other cuts in social care and mental health provision?
Lord Bourne of Aberystwyth
I am not really interested in a knockabout. The statistics were previously produced on a very different basis, so that is one factor to be taken into account. I am also on record as saying that it is a very complex issue. It is a problem across Europe, with the exception of Finland, and we have a Finnish adviser on the advisory committee. The Secretary of State has been to Finland to study what is happening there so that we can get to grips with what is a very serious problem across the country. It is also a problem in Wales and Scotland, which, the last time I looked, were not controlled by the Conservative Party.
Select Committees
The Senior Deputy Speaker
Investigatory Powers (Codes of Practice) Regulations 2018
(6 years, 9 months ago)
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Baroness Williams of Trafford
That the draft Regulations laid before the House on 18 December 2017 be approved.
Relevant document: 16th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, I am pleased to be given the opportunity today to debate these important regulations, which are all being made under the Investigatory Powers Act 2016.
That legislation brings together powers available to our law enforcement and security and intelligence agencies to obtain communications and data about communications. I make it quite clear that these powers are vital to the protection of our citizens. They ensure that our agencies are able to bring to justice serious criminals, including terrorists and paedophiles; they enable plots that threaten our national security to be investigated effectively; and they make sure that our agencies can locate and safeguard vulnerable and missing people.
The Act also ensures that these important powers are subject to rigorous safeguards and oversight. It has introduced a double lock, such that any decision to use the most intrusive powers in the Act must be approved by a judge, and it has created a powerful new Investigatory Powers Commissioner to oversee the use of these powers. That post is held by Lord Justice Fulford, who, as noble Lords will be aware, brings a wealth of experience in the judiciary and expertise in matters of law that will be crucial in carrying out this vital role.
The Act received Royal Assent in November 2016 following comprehensive scrutiny in this House as well as in the other place. The detail of that scrutiny has ensured that the Act provides a world-leading legal framework regulating the exercise of these crucial powers. The regulations that we are debating today form an important part of that legal framework and are all intrinsically linked to the Act’s implementation.
I make it clear that the regulations do not, of course, create any new powers. However, they ensure that a number of important powers in the Act can be exercised and they set out how a number of those provisions will be used. Collectively, they also create additional safeguards on top of the already rigorous controls that are contained in the Act itself.
We debate four sets of regulations today. First is the Investigatory Powers (Technical Capability) Regulations 2018. These regulations set out the obligations that may be imposed on a telecommunications or postal operator in a “technical capability notice”. Such a notice will require the relevant operator to maintain the necessary capabilities and infrastructure to ensure that when a warrant or authorisation is served on or given to them, they are able to provide assistance in giving effect to it quickly and in a secure manner.
The Act itself makes it clear that a telecommunications operator may be required, as part of maintaining a technical capability, to retain the ability to remove electronic protection from communications that they have themselves applied. The regulations do not change this position. They simply set out that such an obligation could be included in a technical capability notice, as well as making it clear that the obligation itself may only require any steps to be taken to remove encryption that are reasonably practicable.
The use of technical capability notices is subject to very strong controls and safeguards set out in the primary legislation. The Secretary of State may decide to give a notice only where it is necessary and proportionate and that decision must be approved by a judicial commissioner. In addition, before giving a technical capability notice the Secretary of State must consult the operator to whom it is to be given and must also take into account a number of factors, including the technical feasibility and likely cost of the operator complying with it. Further, before the notice is given, the Secretary of State must also consider the public interest in the security and integrity of telecommunications systems.
The Act also ensures that telecommunications operators have an effective right of redress where they have been given a technical capability notice or, indeed, a national security notice or data retention notice. Specifically, the Act makes it clear that the relevant operator may seek a review of that notice by the Secretary of State. When conducting such a review, the Secretary of State must consult the Technical Advisory Board—a non-departmental public body—as to the technical feasibility and cost of the notice, as well as a judicial commissioner in relation to its necessity and proportionality.
The second set of regulations that we debate today, the Investigatory Powers (Review of Notices and Technical Advisory Board) Regulations 2018, set out the circumstances in which such a review may take place and how the Technical Advisory Board must be constituted.
The third set of regulations is the Investigatory Powers (Codes of Practice) Regulations 2018. This instrument brings into force five codes of practice under the Act. The codes relate to the interception of communications; equipment interference; the bulk acquisition of communications data; national security notices; and the intelligence services’ retention and use of bulk personal datasets.
Each of the five codes sets out processes and safeguards governing the use of these vital powers. They give detail on how the relevant powers should be used, including examples of best practice. They provide additional clarity and will ensure the highest standards of professionalism and compliance with the Act’s provisions.
The codes are primarily intended to guide those public authorities that are able to exercise powers under the Act, as well as telecommunications operators that might be required to provide assistance in giving effect to its provisions. They provide detailed information on the processes for applying to use each of the powers, as well as in relation to the renewal, modification and cancellation of warrants and authorisations. They set out detailed safeguards in relation to the obtaining, retention, handling and destruction of information obtained in the exercise of the Act’s provisions, and they include detailed requirements on public authorities in relation to record-keeping and error reporting to aid the Investigatory Powers Commissioner in carrying out his oversight functions. The codes are detailed and comprehensive, and together include more than 400 pages of guidance and best practice, ensuring that the use of these important powers is subject to the most stringent safeguards.
The final set of regulations that we are debating today is the Investigatory Powers (Interception by Businesses etc. for Monitoring and Record-Keeping Purposes) Regulations 2018. As under pre-existing law, the Act makes it a criminal offence to intercept communications in the absence of lawful authority. It also makes it clear that lawful authority includes interception by businesses or other bodies where it is a legitimate practice. These regulations set out what conduct that includes. Such activities might be, for example, call centres recording telephone calls for training purposes, companies scanning their computer networks to detect cyberattacks or businesses ensuring that their systems are not being used for unauthorised purposes. These regulations simply ensure that companies can undertake these important routine activities without falling foul of the offence of unlawful interception.
In summary, the regulations we are debating today relate to provisions already set out in primary legislation and ensure that the provisions can be implemented effectively. They make it clear how a number of powers in the Act will operate and establish additional safeguards to the already rigorous controls set out in the primary legislation itself. I commend the regulations to the House.
Lord Murphy of Torfaen (Lab)
My Lords, I am happy to support the Minister in everything she has said about these regulations. A few years ago I had the privilege of chairing the Joint Select Committee on the draft of the Investigatory Powers Bill. The committee made around 80 recommendations which were all accepted by the Government, and I think that few Bills in the past couple of Sessions have been subject to as much scrutiny as this one. It was considered for many days in this House and in the other place, as well as in the Joint Committee. It was right that that was the case because the powers given by the Bill to the intelligence agencies are very wide and deep—rightly so, but safeguards have been built into the Act and now, of course, they are built into the regulations as well. That is necessary because we have to strike a balance between the liberty of the individual on the one hand and the safety of our citizens on the other.
I welcome in particular the regulations on the codes of practice, which were central to the thinking of the Joint Committee. The Minister in the other place, Mr Ben Wallace, indicated that they are “user friendly” in terms of their language, and certainly they are more user friendly than the regulations themselves, which are phrased in gobbledegook, to say the least. The Technical Advisory Board, something that the committee recommended, has now been set up. It is an important development along with, as the Minister has said, the appointment of the new Investigatory Powers Commissioner, Lord Justice Fulford. On behalf of the Opposition, my successor as the Member of Parliament for Torfaen, Nick Thomas-Symonds, supported these recommendations and I do not doubt that my noble friend Lord Kennedy is likely to do the same. As a former chair of the Intelligence and Security Committee, I support them too because these regulations are vital to implementing the Act. I also congratulate the services on their work in ensuring that our children are safe from paedophiles and our citizens are safe from terrorists.
Lord Paddick (LD)
My Lords, if the House will allow me, I should like to make a few comments about what happened during Oral Questions yesterday. Perhaps I may say that the decision of the Prime Minister, the right honourable Theresa May, to refuse the resignation of the noble Lord, Lord Bates, was one of her better decisions. I also commend the noble Lord, Lord Taylor of Holbeach, on how he picked up the loose ball and ran with it. It just shows what the Government can do if they work together rather than against each other. The noble Baroness, Lady Smith of Basildon, reflected the views of the overwhelming majority in the House in indicating genuine respect and affection for the noble Lord, Lord Bates. We are very pleased that he is having a couple of days of well-earned rest before he resumes the fray. However, I fear that is the end of me being nice.
I thank the Minister for introducing these regulations, which, if the House will allow me, I will take in the order set out on the Order Paper rather than in the order in which the Minister spoke to them. The regulations have been introduced against a background of two linked and significant matters. First, the 16th report of the Secondary Legislation Scrutiny Committee states:
“Because bulk interceptions in particular have the potential to include communications of people who are not suspects as well as those who the security services are targeting, this legislation is likely to be of interest to the House”.
In other words, this important committee of the House has given these regulations a red flag, not least because the codes of practice run to several hundred pages. Again I quote:
“We were therefore disappointed with the obscurity of the original Explanatory Memorandum which gave the reader no indication of the potential effects of these Codes.”
Secondly, the Home Office is having to make late changes to the Investigatory Powers Act in an attempt to comply with the European Court of Justice ruling on the UK’s mass surveillance powers following the decision of the Appeal Court this week. We had long debates, as the noble Lord has just said, during the passage of the Investigatory Powers Bill. We on these Benches argued that the bulk acquisition of communications data treated everyone in the UK as a suspect. We drew a distinction between mobile phone data that is routinely kept by communications services for billing purposes—such as where was the call made and where was the person calling, so that the person can be charged the right amount on their bill—and new communications data that CSPs do not routinely collect; for example, so-called internet connection records, where CSPs will be required to keep a record of the first page of every website that every user of the internet in the UK visits on a rolling 12-month basis. The Investigatory Powers Act allows police and other organisations to self-authorise access to such data. The Appeal Court ruled on Tuesday that the Data Retention and Investigatory Powers Act 2014, many of the powers in which are incorporated in the Investigatory Powers Act, is inconsistent with EU law because of a lack of safeguards and the absence of a prior review or an independent administrative authority.
Noble Lords may wonder what this has to do with the regulations before the House today. The Investigatory Powers (Codes of Practice) Regulations 2018 include a draft code of practice on bulk acquisition of communications data. My understanding is that the Government claim that the judgment does not affect bulk acquisition of communications data because this is limited to the intelligence services—the Security Service, the Secret Intelligence Service and GCHQ—and that these organisations are concerned with national security, which is outside EU data protection law. The first problem with this is that GCHQ, in particular, is involved in accessing data in relation to serious crime; for example, working jointly with the National Crime Agency on child sexual exploitation, which is not within the normal definition of a national security issue.
The second problem is that, after Brexit, the UK will be treated as a third-party country by the EU 27. National security issues will no longer be exempt from scrutiny and compliance with EU law if the UK wants to continue to exchange data with the EU 27. Will the Minister explain what impact the UK’s need to secure an adequacy certificate from the EU in relation to compliance with EU data protection standards once we exit the EU will have on the bulk acquisition draft code of practice? Will she also explain what advice Ministers are receiving about the likelihood of success of Liberty’s other challenge to the Investigatory Powers Act, due to be heard in the High Court later this year, and what effect that will have on these codes of practice? The bulk acquisition draft code of practice also talks about communications operators receiving public funding and support to ensure that they can provide an effective and efficient response to the security services’ requests for data. Can the noble Baroness tell the House how much public funding will need to be provided, particularly in relation to ICRs that are not collected and stored at the moment?
On the second code of practice, in relation to equipment interference, we pointed out in debate on the Investigatory Powers Bill the anomaly that while requests from the security services for equipment interference—downloading the contents of a mobile phone or exploiting weaknesses in software to enable remote accessing of a computer, for example—had to be authorised by a Secretary of State, requests by law enforcement agencies for equipment interference could be self-authorised by a law enforcement chief. The interception of communications warrants, covered by the third code of practice, has to be authorised by a Secretary of State whether the request comes from the security services or law enforcement agencies, but a Secretary of State’s authority is not required in the case of equipment interference warrants for law enforcement agencies. Surely, in the light of the decision of the Court of Appeal, such self-authorisation should no longer be permitted.
Targeted equipment interference warrants can be issued against equipment belonging to or in the possession of an organisation or equipment in a particular location. Can the Minister explain, if warrants allow interference with the equipment of innocent people within that organisation or at that location—collateral damage, if you will, in pursuit of the real criminals and terrorists—how that is compliant with the ruling of the High Court and the ECJ?
The Investigatory Powers (Interception by Businesses etc. for Monitoring and Record-keeping Purposes) Regulations are straightforward and we support them. The Investigatory Powers (Review of Notices and Technical Advisory Board) Regulations deal with appeals against technical capability notices, national security notices and data retention notices, which include consultation with the Technical Advisory Board. These regulations set out the composition of the TAB and the process and timing of appeals. We support these regulations as well.
Finally, we come to the Investigatory Powers (Technical Capability) Regulations, setting out what may be contained in technical capability notices, which impose obligations on a relevant operator in order that the operator can deliver what is required if served with an interception warrant, equipment interference warrant, or warrant or authorisation for obtaining communications data. In the tech sector, techUK represents 900 companies, employing about half of all those employed in that sector in the UK, and it has raised concerns about technical capability notices arising from these regulations.
Clearly, communication service providers must have the technical capability to be able to comply with lawfully authorised warrants. But these regulations also require CSPs,
“to notify the Secretary of State, within a reasonable time, of—
(a) proposed changes to telecommunications services or telecommunication systems to which obligations imposed by a technical capability notice relate;
(b) proposed changes, to existing telecommunications services or telecommunication systems, of a description specified in the notice, and
(c) the development of new telecommunications services or telecommunication systems”.
In her opening remarks, the Minister said that these regulations do not create new powers. But techUK claims that these notifications of innovation were not listed on the face of primary legislation, albeit that the primary legislation states:
“The obligations that may be specified in regulations under this section include, among other things”.
I emphasise “among other things”. It goes on to express concern that these provisions could force tech companies half way through development to notify the Home Secretary about what they were doing and that the Home Secretary could then come back and demand changes, extending the tight deadlines under which they operate and risking information about commercially sensitive developments being made public to the benefit of competitors. These provisions could be a barrier to innovation and drive tech companies overseas beyond the reach of these regulations. Can the Minister provide some reassurance to the House that these additional provisions will not stifle innovation and drive tech companies overseas?
Baroness Jones of Moulsecoomb (GP)
My Lords, it would be a pleasure to follow the noble Lord, Lord Paddick—except that he has covered everything I was going to cover, and more, and in much greater depth. So all that is left for me to say is that I am untrusting of this legislation—to put it mildly. I am offended by definitions that are not definitive. I am offended by the fact that some of the data collection is indiscriminate. For example, on the bulk personal datasets, on a typical travel route, if you are interested in one or two people, all the passengers will have their datasets collected. That is unreasonable and I deeply regret the regulations.
The Minister said that this is world-leading legislation, and it is in its draconian reach. Innocent people are going to be affected by this as their data is going to be collected. Whether people are migrants, journalists or innocent bystanders, they will be affected and their lives could be affected afterwards. That is unforgivable. We are being asked to approve these regulations. I do not approve of them; I think they are dreadful. I very much hope that the Government have got it right on the way to curb any excess by the security services. It is a real shame that this has happened. I thank the noble Lord, Lord Paddick, for covering this much more effectively than I have.
Lord West of Spithead (Lab)
My Lords, I agree completely with my noble friend Lord Murphy. As the Investigatory Powers Bill went through, it was quite remarkable to see that so many of the suggestions that were made by the committee were accepted—every single one, I think—and that there was such prolonged debate. I am not aware of any legislation or any normal practice in any other country in the world that pays so much attention to the rights of the individual.
Lord Judge (CB)
My Lords, I declare an interest as former Chief Surveillance Commissioner. The regulations which are proposed today seem to be entirely consistent with the primary legislation, and the primary legislation has increased the level of supervision, particularly in relation to the judicial commissioners and the responsibilities that are imposed on them by the legislation.
Lord Butler of Brockwell (CB)
My Lords, having had the privilege of serving on the investigatory powers pre-legislation committee under the chairmanship of the noble Lord, Lord Murphy, and on the Intelligence and Security Committee, and having long experience of the operation of GCHQ and the other intelligence agencies, I start from a different position from that of the noble Baroness, Lady Jones. I start from a position of believing that these agencies operate to very high standards and that the detail of these codes of practice, which have taken some time to produce, are an indication of that.
I have two questions for the Minister which may have been covered by the noble Lord, Lord Paddick, but in which I am interested. The cost of requiring providers to keep records of IP addresses which they would not normally want to keep in the course of their business was an open issue when the committee served. I would be interested if the Minister could tell us—as the noble Lord, Lord Paddick, asked—how much the Government estimate that that cost will be.
I would also like to know whether the codes of practice on the retention of records are consistent with the judgment of the European Court of Justice in the case brought by Mr David Davis and Mr Tom Watson, and whether that problem has been solved.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I thank the noble Baroness, Lady Williams of Trafford, for her explanation of the regulations before the House today. Like my noble friends Lord Murphy and Lord West of Spithead, I support these regulations.
These are important and serious issues, and the Government and Parliament have to balance the rights of individuals to privacy and protection from unwarranted intrusion on the one hand with the rights of us all to be protected and for the authorities to have proportionate powers to help them in the fight against serious crime.
As we have heard, the Investigatory Powers Act makes it a criminal offence to intercept the communications of a person in the UK without lawful authority and sets out what constitutes that lawful authority. I am clear that the warrants can be issued only where it is proportional and necessary on one or more of three statutory grounds: in the interests of national security; for the prevention and detection of serious crime; and in the interests of the economic well-being of the United Kingdom. Furthermore, the decision to issue an interception warrant will be subject to approval by a judicial commissioner.
In respect of the targeted interception warrants which would be used as an investigatory tool against individuals or small groups—and in particular points 5.81 and 5.82 of the Interception of Communications Draft Code of Practice, which covers urgent modifications of targeted warrants—can the noble Baroness, when she responds to this debate, tell the House what particular oversight and protections there are? When the senior official makes urgent modifications from the intercepting authority, it must be approved by a senior official in the warrant-granting department within three days, and then both the Secretary of State and the judicial commissioner must be notified as soon as reasonably practical. When you consider that this particular provision could relate to a terrorist incident, or a large quantity of drugs that is going to enter the country imminently, the oversight seems to be quite slow and not in step with the seriousness and urgency that were the reason why the original modification was sought.
Points 4.13 to 4.18 of the Intelligence Services’ Retention and Use of Bulk Personal Datasets Draft Code of Practice deal with confidential information relating to members of sensitive professions. Can the noble Baroness, when she responds, say something on how the code will protect journalists, and in particular their sources, from being identified? Investigative journalists play an important role in exposing corruption and wrongdoing, which can lead to serious criminal charges against individuals, and they provide an important public service. Can the noble Baroness also say for the record what she sees as “due regard” in respect of point 7.13 in the same code?
Section 9 of the Bulk Acquisition of Communications Data Draft Code of Practice covers “General safeguards”. Can the noble Baroness say something on how the safeguards on the copying of data, and on the destruction of the data when it is no longer required, will be managed? When data is acquired and copies taken, I can see the risk of losing track of all the copies and then having to ensure that all copies are properly destroyed in a timely manner when they are no longer needed. Can the noble Baroness, in her response, also make specific reference to the processes in place for complaints and for dealing with errors, including serious errors, and can she confirm that she is satisfied with the robustness of the procedures and what procedures are in place to review that robustness?
In respect of the Investigatory Powers (Technical Capability) Regulations 2018, can the noble Baroness explain why the figure of 10,000 customers was chosen as the one below which these types of warrants cannot be issued?
The noble Lord, Lord Paddick, made reference to the Appeal Court ruling. It would be useful to hear a response from the noble Baroness to the points he raised. With those questions, I am very happy to support the regulations before the House today.
Baroness Williams of Trafford
My Lords, I thank all noble Lords who have spoken, particularly the noble and learned Lord, Lord Judge, the noble Lords, Lord Butler and Lord Murphy of Torfaen, and of course the noble Lord, Lord West of Spithead, for in a nutshell outlining what these regulations do, which is to complement the primary legislation. This legislation was thoroughly scrutinised by the committee and all the recommendations that it made were accepted by the Government.
It is absolutely right that the most rigorous safeguards are in place. In introducing the Act, the Government struck a very clear balance between liberty and safeguarding the people of this country. It is not about undermining the work of journalists: it never was about undermining the work of journalists. As I said in my opening speech, these powers are absolutely necessary to prevent terrorism and intercept paedophiles and serious organised criminals. The aim of the legislation was never towards journalists.
The noble Lord, Lord Kennedy, asked about oversight. The oversight function is by the commissioner, as I think he suspected. Yes, the codes of practice are lengthy, but they are user-friendly. It is such a complex area, but that was the intention behind the codes of practice.
Before I turn to the numerous questions that the noble Lord, Lord Paddick, asked, I absolutely echo his words about my noble friend Lord Bates yesterday. He is a wonderful man, a wonderful Minister, and we are very glad that in a few days he will be back. My noble friend Lord Taylor picked up the Question. I do not know how well he answered it, but I am sure in his inimitable way he answered it pretty well, he is such a professional. Yes, I commend the words of the noble Baroness, Lady Smith. This was obviously a spontaneous event and those who responded spontaneously in your Lordships’ House were very generous and kind. I thank everyone who was there at the time.
The first question of the noble Lord, Lord Paddick, was about the Explanatory Memorandum to the codes. The committee made clear:
“At our request the Home Office has now replaced this”—
the Explanatory Memorandum—
“with one that sets out more clearly what the Codes do and why, which should aid the House in its scrutiny of the way the system is to operate”.
The noble Lord also asked about bulk communications involving those who are not suspects—innocent people. I reiterate what I said in my opening speech: there are extremely stringent safeguards in the IP Act regulating the use of bulk powers. A bulk warrant may be issued by the Secretary of State only where it is necessary and proportionate—they are the two key words here—and where the decision to issue it has been approved by a judicial commissioner. The bulk powers are available only to the intelligence services, and a bulk warrant may be issued only where it is necessary in the interests of national security.
Every bulk warrant must specify each of the operational purposes for which the data obtained may be subsequently examined. Examination may not take place for any purpose other than those specified in the warrant, and the Secretary of State and judicial commissioner must be satisfied when they issue the warrant that those purposes are necessary. Examination of bulk data itself may take place, again, only where it is necessary and proportionate. In practice, the safeguards mean that only a tiny fraction of the data obtained will ever be accessed.
Lord West of Spithead
Does not the Minister agree that the collection of bulk data does not assume that everyone in our population is a suspect, as the noble Lord, Lord Paddick, said, any more than the camera systems on our public transport assume that everyone on that bus is a suspect? Rather, it highlights and spots the person who sticks a knife in someone.
Lord Paddick
I am very grateful to the noble Baroness. The question I was asking, reflected by another noble Lord during the debate, was: what is the impact of the Appeal Court ruling this week and the decision of the European Court of Justice on these very issues? The expression I used was one that came from that judgment rather than being one I was adopting as my own.
Baroness Williams of Trafford
Sometimes the problem with interventions is that you do not get around to saying what you were going to say. Perhaps noble Lords will be patient. The noble Lord, Lord West, put it very succinctly and illustrated what we mean by bulk data.
Where the content of a communication is to be examined when it is of a person known to be in the British Isles, a separate targeted examination warrant must be obtained, which is in itself subject to approval by the Secretary of State and a judicial commissioner. The codes of practice that I have been outlining today provide additional safeguards on the use of bulk powers relating to filtering data, the training that must be obtained by those examining it and how bulk data should be handled, retained and destroyed.
The noble Lord, Lord Paddick, also asked if warrants allowed interference with devices of innocent people and asked how that was compliant with the ECJ ruling—the question on everyone’s lips. Equipment interference is subject to stringent safeguards and any warrant must be necessary and proportionate and must be approved by a judicial commissioner. This House has, of course, approved those strong safeguards.
I see the noble Baroness, Lady Chakrabarti, looking quite interested, because the noble Lords, Lord Paddick and Lord Butler, asked about the Liberty challenge to the IP Act and the Government’s response to it. The judgment handed down by the Court of Appeal on Tuesday this week—I presume that that is the one that they are referring to—relates to the challenge brought against the DRIP Act. It has now been replaced by provisions in the Investigatory Powers Act, and therefore the judgment relates to legislation that is actually no longer in effect. The provisions in the Act challenged by Liberty, which will be heard at the end of February in the High Court, relate to targeted communications data and, therefore, are not relevant to the debate today.
I move on to the technical capability regulations. I was asked whether they would stifle innovation. To be clear here, none of the regulations that we are discussing today in and of themselves place any burden on industry. To suggest that the Investigatory Powers (Technical Capability) Regulations 2018 would damage companies operating in this country is to misunderstand what the provisions in those regulations actually do. Those regulations do not themselves impose any requirements on telecommunications or postal operators. Rather, they set out what obligations could be imposed on an operator through a technical capability notice. The power for the Secretary of State to give such notice is set out in the Investigatory Powers Act itself, and has therefore already been approved by Parliament. There are stringent safeguards in the Act regulating the use of technical capability notices to minimise the impact on businesses, including that the notice must be necessary, proportionate and approved by a judicial commissioner. As I have already said, before giving a technical capability notice to a relevant operator, the Secretary of State must consult that operator. In addition, the Secretary of State must consider a number of factors before deciding to give a notice. Those factors include the technical feasibility and likely cost to the operator complying with the notice, which goes to the heart of ensuring that a notice does not damage a company’s interests.
The Act also makes it clear that the Secretary of State must ensure that arrangements are in force for securing that relevant operators receive an appropriate contribution in respect of their costs incurred in complying with the Act, as the Secretary of State deems appropriate. Such costs include those incurred in relation to complying with a technical capability notice. The Government’s policy is that the appropriate contribution is calculated on a case-by-case basis to ensure that the operator makes neither a loss nor a gain from complying with the Act. A number of the draft codes of practice that we have debated today include an entire chapter on technical capability notices, giving further information about their use, including details of the cost recovery process and the sorts of activities it is anticipated that the Government would fund as part of an operator maintaining a capability.
I may be repeating myself here, but the noble Lord, Lord Butler, asked about making sure that the codes of practice on retention records are made consistent with this week’s ruling. The judgment related to the retention of communications data by telecommunications operators is not being debated today. The CJEU ruling was not about safeguards for equipment interference or for access to bulk communications data. The IP tribunal considered the specific issue of whether the CJEU judgment applied to bulk communications data and has made a further reference to the CJEU on this very point and on whether the bulk communications data regime is within the scope of the judgment’s safeguarding requirements.
Lord Paddick
My Lords, I realise that I am intervening a bit late, but I did not want to interrupt prematurely, as I did before. Will the Minister comment on techUK’s specific suggestion that the regulations impose an additional aspect to the technical capability notice, in that the Home Office will be alerted to changes in innovation in systems and development? I do not think that the noble Baroness has addressed that specific issue.
Baroness Williams of Trafford
I do not think that they do, but I will write to the noble Lord, if I may, on that specific point.
The noble Lord, Lord Butler, asked about the cost of providers keeping IP addresses. The Act makes it clear that companies will be provided with an appropriate contribution to their costs of complying with the Act. The noble Lord will appreciate that I do not have the detail of that to hand, but I am happy to write to him.
The noble Lord, Lord Kennedy, asked about the processes in place for dealing with errors. There are entire sections of the codes of practice setting out the processes for reporting errors to the IP commissioner, including the timeframe for when it must be reported and what might constitute an error. The commissioner has broad and comprehensive powers to investigate such errors.
I think I have answered everything apart from the question from the noble Lord, Lord Paddick.
Capita
(6 years, 9 months ago)
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Lord Young of Cookham (Con)
My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given by the Cabinet Office Minister, Oliver Dowden, to an Urgent Question in the other place. The Statement is as follows:
“Mr Speaker, I have been asked to comment on the stock market update issued by Capita plc yesterday and its potential impact on the delivery of public services. I completely understand that this is a matter of significant interest to many in the House, following the recent failure of Carillion, but I can assure Members that this is a different situation.
To be clear, this announcement was primarily a balance-sheet strengthening exercise, not purely a profit warning, and, indeed, as has been widely reported, the company has significant cash reserves on its balance sheet. We do not believe that Capita is in any way in a comparable position to Carillion. Further, Capita has a different business model.
The issues that led to the insolvency of Carillion will come out in due course, but our current assessment is that they primarily flowed from difficulties in construction contracts, including overseas. In contrast, Capita primarily is a services business and 92% of Capita’s revenues come from the UK. We regularly monitor the financial stability of all our strategic suppliers, including Capita. As I have said, we do not believe that any of them are in a comparable position to Carillion. The measures that Capita has announced are designed to strengthen its balance sheet, reduce its pensions deficit and invest in core elements of its business. Arguably, these are measures that may have prevented Carillion from getting into the difficulties that it did. Of course, the impact of this has been to reduce dividends and shareholder returns in favour of others: evidence of shareholders—not the taxpayer—taking the burden.
My officials met with senior executives of Capita yesterday to discuss the impact of the announcement. We continue to work closely with the company to monitor the execution of its plan, and, of course, to ensure the continued delivery of public services. We continue to engage with all of our strategic suppliers and make continuing assessments as appropriate as well as contingency plans where necessary. It would not be appropriate to discuss in any further detail contingency plans associated with particular contracts due to issues of commercial sensitivity.
The priority of the Government is the continued delivery of public services. This is exactly what we achieved with Carillion. In respect of the collapse of Carillion, there has been minimal disruption to the provision of public services following its liquidation. We are continuing to make sure that public services continue to be delivered and that has happened”.
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to the Minister for repeating the Answer. Clearly, this is a matter of concern in the light of the failure of Carillion. The Minister said that the Government do not believe that any of their strategic suppliers are in a comparable position, including Capita. I wonder whether he can tell me what risk assessments have been undertaken and whether the Government will publish their criteria? Can he also say which contracts the Government are in the process of considering granting to Capita and its offshoots at the moment? Has a Crown representative been appointed to the board of Capita?
I understand that Capita was given 154 contracts last year, and that only last week, in the light of the Carillion collapse, contracts were being brokered to Capita, even though the firm is clearly facing challenges. That given, is the Minister really assured that the current outsourcing programme and restriction, essentially, of contracts to a very small number of companies does not deserve a fundamental review? Can he give assurances about the workforce? Is he confident of the viability of Capita’s pension scheme? He will know that Capita runs a lot of public sector pension schemes, including Teachers Assurance; I remind the House that my wife is a teacher. Are the Government confident that, in the event of Capita failing, the pension schemes that it runs will not be affected?
Finally, I want to ask the Minister about the impact on SMEs—and I should declare that my stepson and brother-in-law both run SMEs that contract for government contracts. The Minister will know that many SMEs were badly affected by Carillion’s collapse. I looked at the study published by the NAO last year. It showed that, partly because of the cuts in departments’ commercial capacity, but more generally because departments would prefer to contract with a limited number of large suppliers, SMEs will essentially get contracts only as part of a supply chain managed by the prime contractor. Given that SMEs can be particularly vulnerable in those circumstances, I wonder whether the Government felt that they responded adequately to the NAO report and whether they are changing their procurement practices.
Lord Young of Cookham
I am grateful to the noble Lord for his questions.
There are two levels of risk assessment. One is at the point at which a particular contract is let. A risk assessment that is obviously proportionate to that contract is made at that point, making sure, for example, that there are adequate cash reserves to see the contract through. Then, at a slightly broader level, one monitors continuously the broad health of the company concerned. On that point, there is a Crown representative in Capita and has been throughout the period in question.
In a moment, I will come on to the question of diversity of supply. On pensions, we do not believe that there is a risk to the pension funds that are administered by Capita. We think that that is perfectly safe. On Capita’s own pension scheme, its deficit in June 2017, I think, was £381 million. A triennial review is going on. The outcome is widely anticipated to be a lower deficit. Part of the announcement yesterday was on further resources being put into the pension fund.
The important issue that the noble Lord raises on trying to broaden the base of contractors that work for the Government is a priority. We have a target of allocating I think 30% of public sector contracts to SMEs. Work is ongoing. There is a good question as to whether work that is subcontracted by a major contractor to smaller contractors scores or whether the smaller contractor should be, as it were, the prime contractor. This work is ongoing, but we take the point. We want to see a greater proportion of work going to SMEs.
On SMEs, Capita’s record on prompt payment is quite good. Capita generally paid 70% to 90% of all subcontractors within 30 days. It has introduced a new payment system and aims to pay 100% of subcontractors within 30 days. I hope that that will be of some reassurance.
On the comparison with Carillion, I tried to make the point at the beginning that the steps that Capita announced yesterday were perhaps steps that Carillion should have announced earlier. They were designed to strengthen the balance sheet, reduce dividends and make sure that the fate that befell Carillion does not happen to Capita. Of course, Carillion was exposed to some major construction contracts. Capita’s business model is quite different. If I have not answered all the noble Lord’s questions I will drop him a line.
Lord Adonis (Lab)
My Lords, does the noble Lord think it appropriate that Capita is paying any dividends, given the huge stress that it is currently under? Will he tell your Lordships whether the Crown representative, who is currently on the board of Capita, has been continuously in post for the last 12 months?
Lord Young of Cookham
On the first question, I understand that dividends have been suspended. That was part of the announcement. That, together with the rights issue of some £700 million, will mean that there will be some additional £900 million available in cash to the company. I will write to the noble Lord. I have asked about the Crown representative. I was assured that one had been in place. I will drop him a line on the specific question of 12 months, but there has been, and indeed is, a Crown representative on the board.
Baroness Kramer (LD)
My Lords, I hope that the Government will understand that they now have a very strong warning sign from both the Carillion and Capita events that they have been concentrating their outsourcing on far too small a group of companies, but also companies that, partly through their concentration, are too complex not just to manage, but to audit, or for the analysts or the credit rating agencies to get a grip on them. Will the Government strengthen the assessment capability for central and local government, and other parts of the public sector, so that they can comprehend the risk far more accurately at the prequalification stage, when contracts are to be let, and during the period of supervision? Picking up on diversification, which is certainly crucial to small entities, does he understand that diversification in and of itself is necessary to break the systemic risk that comes with overconcentration?
Lord Young of Cookham
On the noble Baroness’s first point about it being too complex, I believe that the chief executive officer himself, Jon Lewis, said yesterday that it is too complex and he wants to streamline it, hence the asset disposal and the streamlining of the operation.
I know that more personnel have been recruited within the Cabinet Office to beef up the Government’s capacity to supervise these contracts. I take on board the point that the noble Baroness made about making sure the Government have the resources to monitor the contracts we have placed with private sector companies.
We are at one on her final point. We would like to reduce the concentration of these big contracts to a small number of companies. We would like to broaden the base and see more companies bidding for these contracts and winning them.
The Viscount Thurso (LD)
My Lords, further to the answer that the Minister has already given about SMEs, now that we know the risks of a small number of contracts with some very big companies, will he accept that it is the procurement process that drives people to tier 1 contractors? Will the Government look at improving the procurement process so that SMEs have a better chance to get contracts?
Lord Young of Cookham
I agree entirely with the point that the noble Viscount has just made. If we are to hit our 30% target, we will indeed have to look at the procurement process in order to ensure that smaller companies are able to bid for and win these contracts.
Lord Mackay of Clashfern (Con)
In construction contracts, is a guarantee given by an insurance company or some other sufficient guarantor for the performance of contractual arrangements?
Lord Young of Cookham
I will need to write to my noble and learned friend on that. Basically, the Government pay for work that has been undertaken, so we do not pay in advance. Before a contract is let, though, detailed questions are asked about the financial ability of the company to carry out the contract. Whether they are actually underwritten and guaranteed by an insurance company is a more detailed question, the answer to which is not in my folder.
Legal Services Act 2007 (Appeals from Licensing Authority Decisions) (General Council of the Bar) Order 2018
Baroness Vere of Norbiton
That the draft Orders laid before the House on 19 December 2017 be approved.
Baroness Vere of Norbiton (Con)
My Lords, while these statutory instruments are in the name of the General Council of the Bar, they relate to the functioning of the Bar Standards Board. In accordance with the Legal Services Act 2007, the Bar Council has delegated its regulatory responsibilities to the BSB. At their heart, the statutory instruments are designed to ensure that the BSB can regulate more effectively and efficiently. I confirm to the House that the Legal Services Board has consulted on and considered the proposals and made formal recommendations to the Lord Chancellor that these orders are made.
The first order is being made under Section 80 of the Legal Services Act 2007 and makes provision enabling the First-tier Tribunal to hear and determine appeals in relation to decisions made by the BSB in its role as a licensing authority. This is a straightforward matter. The BSB was made a licensing authority in February 2017, and on a temporary basis an appeal route to the High Court was established. However, it is accepted by all interested parties that it is more appropriate that the First-tier Tribunal determines any appeals against the BSB in its role as a licensing authority. The First-tier Tribunal has a jurisdiction in the General Regulatory Chamber and judges with experience in considering regulatory appeals. Similar orders have been made in the past in respect of the Council for Licensed Conveyancers, the Chartered Institute of Patent Attorneys, the Chartered Institute of Trade Mark Attorneys and many more.
The second order is being made under Section 69 of the 2007 Act and modifies the functions of the BSB in six main ways. It gives the BSB the power to make regulations or rules allowing for appeals to the First-tier Tribunal; this is in effect the counterpart to the Section 80 order already discussed. It gives the BSB, in its role as an approved regulator, the same intervention powers that it has as a licensing authority. And it gives the BSB powers to make rules in relation to information gathering; disciplinary arrangements, practice rules on engaging disqualified individuals; and compensation arrangements. These provisions will place the BSB’s regulation of barristers on a statutory footing. Currently there is no statutory basis for much of the regulation of individual barristers or entities by the BSB. Barristers are regulated under a non-statutory regulatory regime, with barristers in effect consenting to be bound by the BSB’s rules, thus establishing a contract between them. This arrangement is underpinned by a series of agreements between the Bar Council, the Inns of Court, the Bar Tribunal and Adjudication Service and the BSB.
In an ever-changing legal services market, a contractual mechanism of regulation is not sustainable in the long term. The legal services market continues to evolve with innovative businesses—with different and novel business models—entering the market at a rapid rate. Since February 2017, the BSB has been able to license alternative business structures, in addition to regulating barrister entities and individual barristers. As of today, the BSB regulates 80 barrister entities and seven alternative business structures. The LSB and BSB believe that the interests of consumers and the public would be better protected if many of the BSB’s arrangements for regulation were placed on a statutory basis, as it would enable the BSB to react more effectively and efficiently to the rapidly changing nature of the market.
Furthermore, the LSB has concluded that, while a contractual basis for regulation may be appropriate for arrangements where the regulator and the regulated person are in alignment, it may not be appropriate in other areas, such as when enforcement action is needed. Remedies exist in the current contractual arrangements, but they may be difficult to enforce and may become increasingly difficult as new business models emerge.
I am aware that, when the LSB consulted on the draft Section 69 order in 2016, concerns were expressed by the Council of the Inns of Court, the Institute of Barristers’ Clerks and the Bar Council. The BSB has taken time to consider these concerns carefully and has committed to working with interested parties to ensure that regulations are proportionate and in keeping with the eight statutory objectives in the Legal Services Act 2007. I note that, while the Section 69 order enables the BSB to make rules and regulations in a number of important areas, the BSB cannot make changes to its regulatory arrangements without first obtaining the approval of the LSB. The LSB has strict criteria under which it considers applications for amendments to regulatory arrangements, including an expectation that appropriate consultation has been undertaken. As the LSB has demonstrated previously, it will not approve changes unless it is satisfied that the changes are necessary and will promote the regulatory objectives. In summary, the powers sought are proportionate and there are appropriate checks in place.
In conclusion, these statutory instruments are necessary to enable the BSB to carry out its role as a regulator more effectively and efficiently, and to better regulate in the consumer and public interest. I commend them to the House.
Lord Thomas of Gresford (LD)
My Lords, I really have no objection to the first statutory instrument; it seems quite appropriate that, where there are appeals relating to licensing authority decisions, they should be made to the First-tier Tribunal. I note that, when there was a consultation on these provisions, the only response was from the Bar Council, which agreed that the draft order was appropriate. Another point is that the number of appeals is very low—it is planning for appeal volumes of less than 10 cases per year, which is a very small part of the work for the First-tier Tribunal.
The order on modification of functions, however, is of a very different nature. We were discussing yesterday—and will be discussing for the next couple of months—the problems of delegated legislation and, in particular, the ability to have tertiary, not secondary, legislation; that is, the power to make rules and regulations delegated to a body outside the ambit of parliamentary scrutiny. The Bar Services Board in particular will, I believe, be outside statutory oversight by this Parliament. Therefore, one has to look very carefully at what it proposes to do. Will the Minister confirm that the Bar Standards Board has said that it wants these powers but is not going to exercise them? That appears to be the nature of what is said in the policy background and in the papers supplied in connection with this application.
The powers granted to the Bar Standards Board to make rules and regulations—tertiary legislation—are very extensive. Article 3 of the order deals with appeals. Article 4 is concerned with intervention powers that would permit the Bar Standards Board to enter premises, seize relevant papers and prevent a person practising. These are significant powers. Article 5 allows the Bar Standards Board to introduce rules and regulations that will require an authorised person—an individual barrister—to provide information and documents for the purpose of ascertaining whether any rules, regulations or code issued by the Bar Council are being complied with. In other words, it is a power to seize documents and to make a person respond to questioning about the nature of those documents. Article 6 is just out of this world. It gives the Bar Standards Board power to make disciplinary arrangements, which include the possibility of imposing fines not exceeding £50 million. Could an individual barrister have to pay a fine of £50 million? What sort of world is the Ministry of Justice living in? After the cuts it has inflicted on the Bar over many years, it is now lashing out £50-million fines and fines not exceeding £250 million for entities. These are just ridiculous figures.
Article 8 allows the Bar Standards Board, under the aegis of the Bar Council, to make practice rules requiring the formulation of a list of disqualified persons. The order allows the Bar Council, through the Bar Standards Board, to make compensation arrangements. It simply disregards the fact that members of the Bar are not allowed to hold clients’ money in any way at all, yet there are extensive compensation provisions in Article 9 of this proposed order. It seems to me that these powers are way over the top. If the Bar Standards Board is just saying, “We would like these powers but do not intend to use them”, the whole exercise is complete nonsense.
Lord Beecham (Lab)
My Lords, I approach this matter as a mere happily retired solicitor. I defer to the noble Lord’s long experience in these matters. I certainly share some of his misgivings, particularly in relation to the ludicrous amounts of compensation which might be involved. However, I congratulate the Minister on sticking to her brief and delivering it very effectively. I take some comfort—perhaps she will, too—from the absence, apart from the noble Lord who has spoken and the noble Baroness who has just entered the Chamber, of others who practise at the Bar, or who have practised at the Bar, and many Members of your Lordships’ House are in that position. It suggests that perhaps there is no great concern about these arrangements among those who have served at the Bar. That is some comfort.
However, I am not entirely clear about another aspect of the compensation fund. It is not clear whether that relates, as the noble Lord implied, to moneys handled by the members of the Bar or to compensation for negligence claims—which, I fear, solicitors are from time to time involved in and for which, of course, they are insured. The Minister may be able to clarify that.
On the role of the LSB with regard to the Ministry of Justice, the Explanatory Memorandum says that the compensation fund,
“cannot be implemented unless the LSB grants approval”.
Will the Ministry of Justice have any say in that process or will it be left entirely to the LSB to determine?
However, the thrust of the order—subject to some of the questions which have been raised, particularly by the noble Lord—seems to be in the right direction and ought to give confidence to those involved in the legal system. Perhaps the Minister could indicate whether the MoJ will in due course seek an update on how matters are progressing in, say, two or three years’ time, to see whether things are working satisfactorily or whether it might wish to suggest to the Bar Council that the situation might be reviewed.
Baroness Vere of Norbiton
I thank both noble Lords who contributed to the debate today for their questions. It is helpful to consider the issues that have been raised. Of course I completely understand the position of the noble Lord, Lord Thomas, and his concerns, which I hope to be able to allay this afternoon.
He began by talking about the nature of the delegated powers, so to speak, that will be created in due course under these orders. I suppose that to some extent he is right, but of course these powers will not be unique; in many instances barristers and other similar organisations will just be falling into line with what happens with other legal services organisations. The LSB—this relates to comments made by the noble Lord, Lord Beecham, as well—is an independent body from the Ministry of Justice. As with these sorts of bodies, the board members and the chair are appointed by the Lord Chancellor in consultation with the Lord Chief Justice. These are ministerial appointments and, as noble Lords would expect, these public appointments go through the process that is regulated by the Commissioner for Public Appointments.
The Legal Standards Board is of course tasked with looking at the rules and regulations of all the organisations in its field of responsibility. In these circumstances, any rules and regulations that are put in place by the Bar Standards Board will have to go to the LSB for approval, which is very important in making sure that the process is robust. The LSB has strict criteria on what the regulations and rules can set out for all its organisations. This is definitely not a rubber-stamping exercise. For example, in 2014 the LSB rejected a request from the Solicitors Regulation Authority to reduce its professional indemnity insurance limit—so there are still more than adequate safeguards to ensure that the rules are proportionate.
On intervention powers, which, again, the noble Lord, Lord Thomas, raised, under Schedule 14 to the Legal Services Act 2002 the BSB already has intervention powers in its role as a licensing authority that licenses alternative business structures. This order simply gives the BSB the same powers in regulating barristers and barrister entities. I am very keen that we understand that this simply also creates a level playing field as the innovative nature of legal services moves on and the number and type of organisations increase.
The BSB would intervene only in very rare circumstances if it were necessary to protect consumer and public interest—for example, if an entity were about to go bankrupt. The powers include seizing papers and closing down an entity. Of course, there is a right for the person affected to appeal to the High Court. We are very clear that the intervention powers will be used as a last resort, and after other sanctions, where there is an urgent need for protection.
The noble Lord, Lord Thomas, also asked why the BSB is seeking these powers if it is apparently not going to use them. To a certain extent we have to look at the types of organisation that we have at the moment but we also have to future-proof our regulatory regime against what might happen in the future. The regulated legal services market is evolving very rapidly at the moment and we must be prepared for what may come in the future. For example, where there might currently be no need for compensation arrangements, this may change in the future. The draft order enables the BSB to take a proportionate and, importantly, consistent approach to regulation by being able to decide to whom the obligations should apply.
The noble Lord, Lord Thomas, raised a point about fines. The maximum levels of fines may appear to noble Lords to be very high, as indeed they do to me—I cannot conceive of having that much money—but we must understand that some of the alternative business structures in particular will contain significant amounts of capital and may grow quite large, involving not just legal services but other types of businesses. It is important that we have the right incentives to make sure that people do not contravene the rules. The amounts are absolute maximums and it will be for the BSB to consider and consult on what fining regime and fine levels it should have in the future. As with all proposed rules, the fining regime will need to be approved by the Legal Standards Board. This safeguard keeps coming back: the Legal Standards Board has to approve the issues that we are talking about today.
Lord Thomas of Gresford
My point is that nobody other than the Legal Services Board will ever look at the possibility of effectively an offence being introduced by the Bar Standards Board with a maximum fine of £50 million—or £250 million if it is an alternative business structure. What is the need for that?
Baroness Vere of Norbiton
My Lords, I think that I have already explained the need: we do not know now where these legal services companies are going to go. I am sure that noble Lords will be aware that many legal services companies have a great amount of wealth. These are maximum figures. They are not figures that will necessarily end up in the regulations but they are there to future-proof these orders so that we make sure that we have a system that will work in the longer term.
The noble Lord, Lord Thomas, also talked about looking for evidence for change and asked why the changes were necessary. Despite the prohibition on holding client money, the BSB has, for example, recent experience of a situation where it felt that it would have benefited from an intervention power. Given the changing legal services market, it is clear that the BSB is asking for these powers because it feels that they will be used in the future.
If I have not covered any points, I am sure that we will pick them up afterwards and I will write to noble Lords.
The Legal Services Act 2007 established a new regulatory framework with the overarching aim of putting the consumer at the heart of legal services, and these orders are a further step in that direction. The BSB believes that a consensual, non-statutory regulatory regime is not appropriate, particularly where there is disagreement between it and those that it regulates. It is therefore in the public interest for it to have clear statutory powers with clear judicial safeguards.
Non-Domestic Rating (Alteration of Lists and Appeals) (England) (Amendment) Regulations 2018
(6 years, 9 months ago)
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Lord Bourne of Aberystwyth
That the draft Regulations laid before the House on 21 December 2017 be approved.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, the Government are committed to delivering a fair and effective appeals system for business rates that provides an efficient means for ratepayers to challenge the valuation of non-domestic properties. That is why in April 2017 the Government introduced significant reforms to the appeals system, through the new “check, challenge, appeal” framework that is being delivered by the Valuation Office Agency and Valuation Tribunal for England. I hope that noble Lords agree that the system in place before April 2017 was clearly in need of reform.
Penalties for the provision of false information, which are the subject of the regulations we consider today, are an important part of these overall reforms. They will act as an important deterrent to providing false information that will help to maintain the integrity of the appeals process and the wider business rates system. Under the “check, challenge, appeal” framework, ratepayers are required to provide information to the valuation officer. This is both at the check stage when the underlying facts are confirmed and agreed, and throughout the challenge stage with the exchange of more detailed evidence. In line with other parts of the tax system, penalties will be an important mechanism to support the submission of accurate information. Specifically, the regulations will, if approved and made, provide the Valuation Office Agency with the power to impose a penalty on a person who provides false information knowingly, recklessly or carelessly.
The regulations specify the level of the penalty, which will be set at £200 for small businesses and £500 for all others. It may be helpful to remind noble Lords that the £500 maximum penalty reflects the level that was specified in the Enterprise Act 2016, which provided the enabling powers for penalties in the business rate appeals system.
The Government recognise that there may be cases where a person wishes to challenge the imposition of a penalty. The regulations therefore also provide a right of appeal. Any person who is subject to a penalty may, within 28 days of receiving a penalty notice, appeal to the independent Valuation Tribunal for England. Where the tribunal finds in favour of the appellant they will then be able to order the valuation officer to remit the penalty in full. Clearly, it is important that there is no financial incentive for the valuation officer to impose a penalty. The regulations therefore also require that any sum received by the Valuation Office Agency by way of a penalty must be paid into the Government’s Consolidated Fund. This will ensure that the Valuation Office Agency does not benefit financially from the imposition of penalties.
As part of the wider consultation on draft regulations for the new appeals system, the Government sought views on the proposed approach on penalties. The consultation received over 280 submissions, and the Government’s response was published in March 2017. As set out in the government response, there was clear support for the introduction of penalties from local government. Many businesses also accepted the need for a penalties framework, but expressed concern that penalties could be imposed where ratepayers have made a genuine mistake. Some respondents suggested that the level of penalties should be linked to rateable value, to ensure that they are an effective deterrent for large businesses.
In light of the concerns raised, the government response confirmed that the Valuation Office Agency would provide clear guidance to support ratepayers with the provision of information and on the application of penalties. Where ratepayers feel that a penalty has been unfairly imposed, as I have already outlined, they will have a right to appeal to the independent valuation tribunal. While these are important provisions to support a fair system, the consultation also confirmed the Government’s clear view that ratepayers have a duty to take reasonable care in providing information on their tax affairs.
Noble Lords will no doubt be aware that the wider reform to the appeals system is not without its critics and that the concerns of some noble Lords were discussed at length on a Motion to Regret late last year. Given that discussion, I do not propose to revisit those concerns in detail today. Suffice it to say the Government remain clearly of the view that the reforms were an important and necessary step to fixing what was clearly a flawed and inefficient system for all involved. I reiterate that we expect the Valuation Office Agency to continue to work closely with ratepayers to ensure that the system is meeting our objective of a more efficient and effective system.
For the purposes of today’s debate and the specific regulations at hand, I hope that noble Lords agree that it is entirely right that the system is supported by appropriate powers to penalise the provision of false information, and that these are accompanied by appropriate safeguards, such as the right of appeal, to ensure the system operates fairly and effectively. I commend these regulations to the House.
The Earl of Lytton (CB)
My Lords, I first declare a professional interest as a property consultant and a member of bodies concerned with business rates, as a vice-president of the LGA and, from time to time, as a non-domestic ratepayer. It will be no surprise, and I am sure that the Minister will understand, that I am coming at this somewhat from the ratepayer standpoint.
My concerns are with the penalty for inaccurate information under new Regulations 9A to 9D. I entirely accept what the Minister has said: the system needed a thorough going over. But I have a question surrounding the terminology of “knowingly, recklessly or carelessly” providing false information in new Regulation 9A(2)(b).
Penalising deliberately providing misleading information is absolutely fine in principle. I make no observation about the quantum of the fine either or, for the most part, the mechanisms for imposing it and appealing it. But if the process of “check, challenge, appeal”, as I perceive it, involves systemic complexity and a requirement for information from a ratepayer that they are unlikely to possess and probably cannot verify, the risks of infraction become unreasonably high. It is the working environment rather than purely the penalties that I will concentrate on.
We know that the intention is to discourage false information and that there was a problem about that in the past. All too often, it was perpetrated by so-called business rates consultants, who were, sadly, on a number of occasions, proven to be neither professional nor honest. But rather than tackle them—they were known firms and bodies—it seems to have been decided to scapegoat by design every appellant ratepayer. I do not accept that approach.
Noble Lords will also be aware that new arrangements for “check, challenge, appeal” mean that most of the proposals to alter entries in the rating list must be made via a government portal. That requires an individually named person to register by giving a lot of personal information. For example, for an SPV that has no employees and no land with buildings for development, that is clearly unworkable. I am also told that a number of local authorities are finding this difficult as well. If you do not have a UK passport or UK national insurance number it has to be done manually. If you register but then forget your password, I understand that there is no reset provision. If you have multiple properties, each must be individually linked to the person registering and the details re-entered for each one. If you appoint an agent, he or she has to go through this again once they have received a formal notification through the system that they have been appointed. Annoyingly, if as sometimes happens the agent does not get the notification, I am told that the only advice the Valuation Office Agency was able to give was that the ratepayer should deregister. In other words, they must reverse the entire process and re-enter the whole lot de novo. That cannot be right.
Once the registration has been done, the check stage comes in. As the Minister has said, that is the point at which a lot of information needs to be put in about the property. Some of the requirements are a little opaque, shall I say, such as how many floors the property has. Apparently one can select from minus nine to plus 55, which is mathematically slightly Quixotic but also happens to rule out the Shard. One may also be asked about the eaves height, for which the Shard would also be a non-qualifier. At other times people have been required to provide a net internal floor area for a property customarily measured and valued on the basis of gross externals. This is beginning to look a little problematic for the ratepayer. One may then be asked when the last refurbishment took place; as if the tenant would necessarily know that. The choices go back in tranches as far as 1900 on the online system. There is also a rather risible suggestion that the lease details or the local planning office might have information on refurbishment. In any case, a refurbishment undertaken 30 years ago is likely to be totally worthless in modern valuation terms.
I do not wish to poke too much fun because actually this is a very serious business. Let us remember that in the middle of all this there is a ratepayer trying to fill in an online form for which there is a potential liability for inaccuracies. The point I want to make is that the architecture is deficient and the system makes unnecessary and time-wasting demands on ratepayers as well as putting in place tripwires that really should not be there.
I note the answer given by the Financial Secretary to the Treasury to the Delegated Legislation Committee in the House of Commons on 29 January in answer to the honourable Member for Oxford East concerning rating appeals:
“The technical problems we have had with the system some months ago have largely been resolved”.—[Official Report, Commons, First Delegated Legislation Committee, 29/1/18; col. 6.]
That is not quite the message I am getting through the trade, if I may term it thus. In reality, although the digital platform may have improved, the environment in which it operates has not.
My concerns are the lack of clarity or definition over what will constitute a culpable error. I noted the noble Lord’s comment that guidance was to be provided. I am not aware that guidance has been provided, but I am aware that rating professionals have been asking the VOA whether it will produce anything to clarify the circumstances that constitute a culpable error, but I have been told that it does not propose to do so. This seems a rather one-sided situation, and the decision to impose penalties seems to be in the hands of a party to the matter even though they do not benefit financially. The process is a touch inequitable and asymmetric as a way of dealing with public administration.
I want to ask the Minister what proposals there might be to address some of these continuing problems, in particular the absence of a proper definition and guidance. By “guidance” I do not mean some general comment into which one can read anything, but how this will be dealt with and how individual business ratepayers will be protected from an honest error, because it is not clear how that will be done. In particular, I want to know what further steps the Minister feels could be taken to establish greater confidence among business ratepayers about the CCA system, because it seems to be still distinctly lacking.
Baroness Pinnock (LD)
My Lords, the noble Earl, Lord Lytton, has just made a forensic dissection of the process of business rate valuations and appeals, and I could not possibly add to that detail. However, I have some general points to share with noble Lords. I draw attention to my registered interests as a vice-president of the Local Government Association and an elected councillor in the borough of Kirklees.
It is totally acceptable for the Government to require accurate information for any appeal against business rates, but as the noble Earl, Lord Lytton, has drawn attention to, I am concerned about the use of the word “carelessly” in the regulations. What is the definition of the word and how will it be judged? I understand the use of “recklessly” and “knowingly”, but “carelessly” is not a word that is best used in regulations because I wonder how it will be defined.
The penalties being proposed seem to be appropriate and in line with penalties elsewhere in the system. However, the Government have a responsibility to review their actions in regard to the need to adhere to the timetable for rate reviews so that businesses are not subject to massive increases, as has happened with the latest review which was delayed by two years. It is totally unfair on businesses if the timetable is not kept up with and suddenly they find themselves facing significant increases in business rates.
Secondly, the Government must reconsider their approach to business rates. Ministers have rightly emphasised the importance of vibrant town centres, along with the changing nature of those centres, especially in smaller towns and villages where small businesses are likely to be paying a far greater proportion of their business income in rates than out-of-town concerns operating via online trade. This must be addressed in order to devise a more equitable business rate scheme between businesses serving their communities and gigantic out-of-town warehouses. I look forward to some positive news from the Minister on that score. It is not the first time that I have raised this issue and I shall keep on doing so until we make some progress.
My third point is to ask the Minister to explain the part that local authorities will play in this new regime. As he is aware, currently local authorities collect business rates and provide within their budgets for successful appeals via a grant from central government. The grant may or may not be sufficient to cover those appeals. From the local authority’s perspective, the existing regime for providing for successful appeals is not the most efficient that could be devised. Will the Minister consider producing a more effective and efficient regime that would suit businesses, the Valuation Office Agency and local authorities—and indeed the Government? All the money that is set aside for appeals is nominally from central government and in theory could be used more effectively in the provision of local services.
In general the approach is fair, but I look forward to the Minister’s responses to my questions.
Baroness Donaghy (Lab)
I have two very small questions. The first concerns the Explanatory Memorandum. Point 3.2 states:
“This entire instrument applies only to England”.
However, point 5.1 states:
“The extent of this instrument is England and Wales”.
Have I misunderstood the headings or is that a typo?
My question on guidance follows from the questions of the noble Earl, Lord Lytton, and concerns Paragraph 9.1. I would be grateful for some clarification. It states:
“The Department does not intend to issue formal guidance”.
That is fair enough, if it does not want to, but how will the department satisfy itself that the system is working? Will there be consultation with the VOA or will there be other mechanisms in the absence of formal guidance? It goes on:
“The VOA may issue internal guidance to their staff, in relation to the reforms to the business rates appeals system. As above”—
I am not quite sure what the phrase “as above” applies to—
“the VOA intends to provide specific guidance on the provision of information by ratepayers, and internal guidance on the application of penalties”.
I find that all a bit confusing, to be honest. Which is going to be transparent and available to the public, which is going to be an internal office one? I would be grateful for some clarification.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, as we have heard, the regulations before your Lordships’ House this afternoon provide for the imposition of financial penalties for giving false information in respect of a proposal and also provide for an appeal against the imposition or the amount of a financial penalty. I am happy to support these proposals, and in doing so draw the attention of the House to my relevant interests in the register, namely being a councillor in the London Borough of Lewisham and a vice-president of the Local Government Association.
Many years ago, in the 1980s, I was a member of a rating appeals tribunal and I agree with the Explanatory Notes, which state in paragraph 7.3 that little supporting evidence was supplied, what came in came in late, and most appeals,
“did not result in either an appeal hearing or a change to the rating list”.
That was what used to go on in the appeals I used to attend—it was certainly my experience serving on a tribunal in London. Looking at the papers there seem to be only two levels of fine. I thought that the purpose of any fine is to provide an element of deterrent. I am not convinced that these levels actually do that: perhaps a sliding scale would have been better, or some link to a rateable value, as I think the noble Lord, Lord Bourne, made reference to. I do not think that any large corporation will be the least bit worried about a £500 fine.
Paragraphs 8.1 and 8.5 of the Explanatory Notes refer to the number of responses to various consultations. Will the noble Lord give the House some more information about the range of responses received, as the notes have only such phrases as “the majority of respondents recognised”, and “many businesses accepted”. A bit more clarity would be useful for us to understand the range of responses that the department actually received. I accept the point, as set out in paragraph 8.6, that,
“in line with other parts of the tax system, ratepayers have a responsibility to take reasonable care when providing information in relation to their tax affairs”,
but coming back to my earlier point, I am not sure a £500 fine helps in any way to focus the mind of a large company or corporation in that respect. I am sure that all companies do these things properly, but if one were to decide that it could gain some advantage by not doing so, it might risk taking a punt. The worst it could get would be a £500 fine but if it got away with it, it might gain many thousands of pounds in a reduced business rate bill. Will the noble Lord address that?
I assume, since there is nothing about it in the papers, that there is no link to inflation, so these figures will wither on the vine, as it were, until the regulations are brought back here in a few years to be uprated. So I am not convinced that the sanctions are strong enough. Having said that, I support them in principle and I look forward to the noble Lord’s response.
Lord Beecham (Lab)
My Lords, I endorse what other noble Lords have said, particularly my noble friend on the Front Bench. I do not dissent from anything that has been said—I certainly endorse his views about the frankly ridiculously low levels of penalty for failing to comply with the requirements, given the amount of rates that will necessarily be involved in so many cases. My question is about the system more generally. There is well known to be a huge backlog of appeals across the country. That is difficult for local councils to manage because dealing with these issues requires expenditure in its own terms. What are the Government doing to speed up the process of dealing with appeals? Will they make resources available to local authorities to do that? It is an injustice to the local community if these decisions are delayed and is actually not very good for businesses anyway, because they ought to be clear what the position is. Yet for many years delays have taken place and proceedings are very costly.
I ought to remind the House of my local government interests, as a local authority member and, like several Members of this House, an honorary vice-president of the Local Government Association.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords who have participated in the debate on these Non-Domestic Rating (Alteration of Lists and Appeals) (England) (Amendment) Regulations 2018. I turn first to the noble Earl and thank him very much. We engaged on an earlier set of these regulations, on the “check, challenge, appeal” procedure. Picking up a point just touched upon by the noble Lord, Lord Beecham, the reason for that procedure was mainly to deal with the backlog of appeals, which, the noble Lord will know, was growing. I thank noble Lords for their general support for that procedure: it was felt that reform was greatly needed.
The noble Earl made two specific points. I know that he has requested a meeting with the Minister in the Commons. The Minister has indicated that he is very happy to talk further about some of these issues with the noble Earl but in the meantime I will deal with a couple of the specifics he raised. First, on the registration and verification process, which, as he said, appears in many regards to be unnecessarily wieldy, the Valuation Office Agency is working with businesses and agents to review the registration process to see what might be done to minimise any burden. I am very happy to write to the Valuation Office Agency again to ensure that that is being done—the noble Earl highlighted some areas where it clearly could be done.
The noble Earl secondly touched upon the issue of guidelines in relation to penalties and procedures: the noble Baroness, Lady Donaghy, also dealt with this. Some guidance is touched upon in paragraph 9.1 of the Explanatory Memorandum, as the noble Baroness said. I can confirm that the guidelines are being worked upon by the Valuation Office Agency, and I have ensured, in discussion with the Valuation Office Agency, that these guidelines will be issued ahead of any penalties being levied. They will be available and I will make sure that they are circulated to noble Lords who have participated in this debate and a copy is placed in the Library; that seems entirely reasonable.
The noble Earl and other noble Lords raised the definition of carelessness. This is a well-established definition in law. I refer noble Lords to many taxing statutes and other regulations where carelessness is defined. It is also true, although in fairness the issue was not raised, in relation to “knowingly” and “recklessly”. “Carelessness” would obviously require a much lower standard of proof than would be required for “knowingly” or “recklessly”, but it is a well-established principle in law.
Lord Kennedy of Southwark
I accept that inflation is low, which is good news for everybody, but I made that point because these charges are potentially very small. I think the cost of a parking ticket in London is about £120, just for parking in the wrong place. This provides for a £500 fine for a corporation that may, recklessly or knowingly, put in a submission and benefit by many thousands of pounds. I am glad that the Minister will look at it again; that is needed because that level is totally inadequate.
Lord Bourne of Aberystwyth
My Lords, I undertook to keep it under review rather than to look at it again, which is perhaps slightly different, but I thank the noble Lord for his intervention. The point is well made: parking meters are making a lot more money than a lot of individuals on an hourly or daily basis. We are aware of that.
If I may come back to the noble Baroness, Lady Pinnock, I missed the point she raised about the business rate revaluation. As she will know, at Budget 2017 the Government committed to increase the frequency of revaluation to every five years from the next revaluation, which is due in 2022. However, I understand her point.
Perhaps I could also mention at this juncture that we are looking to local authorities, which have the funds because we have made them available, to ensure that they pay out to public houses, where appropriate, and to businesses that secure a revaluation the money that is rightly theirs. I encourage local authorities to do that. The Government have got the money out of the door and are really looking to local authorities to ensure that they carry that forward.
I think I have dealt with the point about the backlog raised by the noble Lord, Lord Beecham. He also quite rightly made a point about the low penalty, which I have picked up, but if I have missed any points I will write to noble Lords. There were some particularly valid points from the noble Earl, Lord Lytton. I thank him for declaring his interest but that also means he is very expert in this field, which I am happy to acknowledge. With that, I commend these regulations to the House.
Co-operative and Community Benefit Societies Act 2014 (Amendments to Audit Requirements) Order 2017
(6 years, 9 months ago)
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Lord Young of Cookham
That the draft Orders laid before the House on 4, 19 and 20 December 2017 be approved.
Lord Young of Cookham (Con)
My Lords, these three orders relate to the mutuals sector, which encompasses co-operatives, community benefit societies, credit unions and building societies. In the mutuals sector the interests of members, not shareholders, are paramount. Mutuals are an important part of Britain’s diverse and resilient economy, and we wish to keep it that way. Recognising this, the Government have brought forward a package of measures to provide further support for the sector and level the playing field between mutuals and companies.
There are nearly 7,000 co-operatives in Britain today, which together contribute more than £36 billion to the UK economy. They employ over 200,000 people and are part-owned by 13.6 million members of our society. The Government recognise the value of co-operatives and want to ensure they are not saddled with unnecessary administrative burdens. Since 2012, small companies have enjoyed an exemption from the requirement in the Companies Act 2006 to have their accounts fully audited.
The first statutory instrument, the Co-operative and Community Benefit Societies Act 2014 (Amendments to Audit Requirements) Order 2017, will increase the thresholds at which co-ops are required to appoint a professional auditor from £2.8 million in assets and £5.6 million in turnover to £5.1 million in assets and £10.2 million in turnover, in line with those for companies. While this proposal is deregulatory, noble Lords can be confident that appropriate controls remain in place. Members must vote to apply the exemption and the regulators can still demand a full audit if they have concerns over the management of a co-operative. Furthermore, co-operatives which disapply the requirement to appoint a professional auditor will still be required to prepare a less onerous audit report.
The second of the three orders before the House is the draft Building Societies (Restricted Transactions) (Amendment to the Prohibition on Entering into Derivatives Transactions) Order 2018. Building societies serve over 20 million UK customers and are an integral source of loans to first-time buyers. In order to offer fixed-rate mortgages, building societies must hedge against the risk of interest-rate changes and may do so by buying derivatives. The European markets infrastructure regulation of 2012 requires all derivatives to be centrally cleared. This means that building societies must either become direct members of a clearing house or clear through third-party members.
However, as it currently stands, the legislation prevents building societies complying with the membership rules of the main UK clearing house. The specific rule which we are concerned with requires that, in the event of a member defaulting, other members must bid for a portion of the defaulted member’s derivatives portfolio. Under current legislation, building societies cannot take part in this process because they are prohibited from trading derivatives for any purpose other than to hedge balance-sheet risk. As a result, building societies must clear indirectly through third parties which are members, placing them on an uneven footing as compared to banks. Clearing through third parties incurs expensive broker fees and makes building societies dependent on clearing-house members continuing to offer this service.
This SI will amend the Building Societies Act 1986, which I believe I put on the statute book, to allow building societies to trade derivatives not just to hedge their balance-sheet risk but for the purpose of complying with the membership rules of a clearing house. The Government have consulted representatives of the building societies and the Prudential Regulation Authority in developing these proposals, and they are content.
The last order before the House concerns mutuals in Northern Ireland including, for this purpose, credit unions. Under the Financial Services and Markets Act 2000, mutuals in Great Britain are registered with and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. As noble Lords will recall, prior to the appointment of the FCA as the primary financial services regulator, this function was performed by the Financial Services Authority. Following the failure of Presbyterian Mutual in October 2008, at a cost to the taxpayer of £50 million, Northern Ireland Ministers and HM Treasury agreed that responsibility for regulating Northern Ireland credit unions and other mutuals should transfer to the FSA. Responsibility for regulation was transferred in 2011. The aim of this transfer was to provide members of those mutuals with access to the Financial Services Compensation Scheme and the Financial Ombudsman Service, among other benefits.
It was intended that the registration of Northern Ireland’s mutuals should follow in due course, once the establishment of the new Financial Conduct Authority and Prudential Regulation Authority was completed. It is clearly logical for registration and regulatory oversight to lie with a single authority. The Northern Ireland registering authority, the Department for the Economy, also supports the move. A good deal of preparatory work has now taken place, and Department for the Economy and FCA officials are working closely to ensure that Northern Ireland’s mutuals are supported during the transfer of registration, which is set to occur on 6 April this year. Societies previously registered with the Department for the Economy will not have to re-register; their records will simply be transferred to the FCA.
I trust that the Members of the House will agree that these orders represent a welcome update to mutuals legislation across the country for the wider benefit of the sector. I commend the orders to the House.
Baroness Kramer (LD)
My Lords, I have a few questions to ask the Minister on these orders, although I cannot see anything major wrong with them. The first order the Minister described lifts the threshold at which point a co-op is required to have a professional audit. I have two questions on that. Looking through the attendant paperwork, I notice that responses to the consultation came from different co-operative societies. It is no surprise that they would wish to be on a level playing field with their various competitors which are privately owned companies, so I perfectly understand why they feel it is unfair that they should carry a cost burden which their competitors of the same size do not. But there is a difference between a private company and a co-op, which is that the membership of the co-op, which in effect is its ownership, is typically much more widely cast and made up of a large number of people who may not have a great deal of financial sophistication, whereas the owners of a privately owned company may have much greater awareness of the financial structure and happenings within that company. So I wonder to what extent the Government in their consultations took into account the exposure of relatively small people to losses that might seem quite small to those who have very large incomes but might be significant to those who are part of the membership of a co-op. It is the first area of concern.
Secondly, I am curious to understand the choice of benchmark. From the outside, it looks slightly random. I wonder whether it was done on a percentage of size within the industry or whether there was some structural characteristic within the industry that led to the choice of that benchmark.
The second issue the Minister addressed was the provision of the order that would allow building societies to be members of clearing houses. I think that all of us in this House agree that it is crucial that interest-rate swaps are cleared through a central counterparty—in the UK that would usually be the London Clearing House—and that it is very frustrating for building societies and mutuals to have to go the agency route and pay a brokerage fee, usually through an existing member which, quite frankly, is fairly disinterested in the service that it provides to that building society, never mind charging for it—so I am entirely on board. Can the Minister strengthen his confirmation that this provides no capacity for building societies to engage in speculation? It seems to be very clear that it does not. We all recognise that anyone providing a fixed-rate mortgage can do so only if they can hedge it through a derivatives contract, so that is an entirely appropriate and necessary use of a derivatives contract, or by doing it at the level of the balance sheet to achieve the same kind of protection.
Lord Tunnicliffe (Lab)
My Lords, I congratulate the noble Baroness, Lady Kramer, for finding so much to say about these three orders. On the first order about equality with private limited companies, I have no comment. On the order relating to Northern Ireland mutuals moving under the control of the FCA, I was curious about why it took so long. The consultation started in 2010 and is only now coming into action. Were there some complications that were not brought out in the Explanatory Memorandum or was it just slowness of pens?
Finally, on derivatives trading, we have the same general concern as the noble Baroness, Lady Kramer, that we do not want to make building societies any less safe through the application of this order. Membership of a clearing house, at least at a theoretical level, has some risks—but, as I understand it, the building societies see this as a very positive thing, so I am hoping that the consensus that this makes sense is right. I would like an assurance that the extension of a building society’s right to trade in derivatives in order to be a member of the clearing house is so worded that it applies solely to that and does not in any way allow further extension of the building society’s right to trade in derivatives beyond that which is already exercised.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I have some brief comments in respect of the orders in front of us today. I declare that I am a member of the Co-operative Group and have been a member of the Co-op, as it were, for over 40 years, after starting off in the Royal Arsenal Co-operative Society. I am also a director of the London Mutual Credit Union, one of the biggest credit unions in London. These orders will affect us because its turnover is in excess of the uprated ones here.
The audit requirement is good news, and will certainly help many smaller credit unions in terms of the audit function burdens they have. The point the noble Baroness, Lady Kramer, made about ensuring that the organisations are properly accounted for is important as well. These sums of money are owned by members. They should be properly accounted for and any risks taken into account. Where there are problems, people should be alerted to them, and they should be dealt with properly.
I support the building society order, which enables them to join clearing houses. I see from the papers that the Government consulted the large building societies. That is fine, but did they also consult the Building Societies Association, which is the umbrella body for them? I cannot see that there are any views from it in the papers here.
It is a good move to put mutual societies in Northern Ireland under the umbrella of the FCA. The credit union sector in Northern Ireland is very big and much bigger than it is in the rest of the United Kingdom—in fact, the credit union sector is big in the whole island of Ireland. Giving it protection under the umbrella of the FAC is very welcome.
Lord Mawson (CB)
My Lords, I agree with the noble Lord, Lord Kennedy. Although I am not sighted on the detail of the co-operative and community benefit societies order, it feels like the right direction of travel. My point is really just a general one. I spend a lot of my life in SMEs and small charities, and at the moment many of them are becoming overwhelmed by the amount of bureaucracy, red tape and other things that are appearing on their desks. My question is really one that the Minister might take back to government. Someone needs to look carefully at what is happening to these small organisations, in terms of the amount of red tape and things that are appearing on their desks, and whether we can create this direction of travel for some of them. It is just a general point and a concern.
I was at a small charity last weekend, with one member of staff and two part-time people working in it, which is doing a great piece of work around education in the local community. The amount of treacle and stuff they were having to deal with was immense and extraordinary. You can feel many good people, who want to do good things in their community, wondering how much longer they can have a role in these kinds of things. They become very fearful of the 92-page document that appears on their desk. It is a general point, but one that needs to go back to government.
Lord Young of Cookham
My Lords, I am grateful to all noble Lords who have taken part in this brief debate and hope to address as many points as I can in response.
The noble Baroness, Lady Kramer, asked why the figures for the thresholds had been chosen. The reason is given at point 7.4 of the Explanatory Memorandum:
“These thresholds are out of step with both inflation over the last decade, and current company law. Over the same period, the thresholds for private limited companies of comparable size have been updated”.
We are aligning the thresholds in this order with those for companies. As we heard from the noble Lord, Lord Kennedy, this has by and large been welcomed. The noble Baroness made a different and wider point, which goes to the heart of the Co-operative movement— namely, how it takes decisions. Not just those on audit, but all decisions in co-operatives are nominally taken by the members. If she wants to press that issue, it goes to the heart of what the Co-operative movement is and how it is regulated. It is a much broader point than the specific one on audit. As I said, they would have to vote for this exemption. In addition, there is still an opportunity for the regulator to intervene if he is concerned, and there will still have to be an ordinary audit of the accounts.
A number of noble Lords, including the noble Baroness, Lady Kramer, and the noble Lord, Lord Tunnicliffe, asked about the exemption for building societies and were slightly concerned that it might go broader. But if one looks at new paragraph (d) in Article 2 of the SI, it is very narrowly drafted. The general exemption, which the noble Baroness referred to, is lifted in the very constrained circumstances of complying with,
“an obligation imposed by a recognised clearing house”.
So it does not open the building societies into the wider field of trading in derivatives and of speculation.
The noble Baroness asked a general question about cascades. When I introduced the order, it was in the specific context of a limited failure and the members having to bid for the interests of the defaulting member. On the broader question of what happens if the whole system collapses, the briefing I have here says, “I will write”. It is a good question about what happens if there is a systemic failure. As I say, I will write about that.
The noble Lord, Lord Kennedy, asked about consultation with the Building Societies Association. Yes, we consulted representatives of the BSA and they are supportive of the change. As I said a moment ago, the exemption is sufficiently narrowly drafted so that building societies will not be able to engage in speculation.
The noble Lord, Lord Tunnicliffe, asked about the delay in transferring the registration responsibilities from Northern Ireland over to the FCA. It was caused, first, by the transfer of the responsibilities of the FSA to the FCA and PRA, which were established in 2012. Secondly, time was needed to prepare for the transfer between the FCA and Department for the Economy officials. I do not think there is anything sinister behind it. Northern Ireland Ministers agreed with HM Treasury to transfer the function, and the Department for the Economy in Northern Ireland has indicated that it does not have the resource to continue providing this function. If it had kept on doing it, it would have had to increase the fees. As I said when I introduced the order, it is logical to have registration and regulatory oversight sitting with the same body.
The noble Lord, Lord Mawson, raised a more general point about regulation for charities. I will take that away, but we have recently made it easier for charities to reclaim the tax through Give As You Earn, by making it less bureaucratic to claim the extra tax. I think I remember taking through an SI, or indeed a Bill, on that a year ago. I will write to the noble Lord, because he raises a good, general point about the regulatory burden on charities, which we certainly want to lift.
I think I have covered all the points raised, apart from the systemic one about cascade failure. I beg to move.
Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) (Amendment) Order 2018
(6 years, 9 months ago)
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Lord Young of Cookham
That the draft Order laid before the House on 21 December 2017 be approved.
Lord Young of Cookham (Con)
My Lords, the order amends existing regulations to clarify an outstanding regulatory issue for the peer-to-peer lending industry. Peer-to-peer lending is not what happens at the Bishops’ Bar, but a thriving business activity which I will describe in a moment.
Specifically, the order, drafted in consultation with the Financial Conduct Authority and the Prudential Regulation Authority, will set out when a business borrowing via a peer-to-peer lending platform would need to have a deposit-taking licence to do so.
Peer-to-peer lending is a relatively new financial service, with the world’s first peer-to-peer loan originating in the UK in 2005. This nascent industry has experienced rapid growth and, at the industry’s request, the Government legislated to bring running a peer-to-peer lending platform into the scope of financial services regulation. Running a peer-to-peer platform is a discrete activity and not, for example, another type of asset management service. It allows investors, including consumers, to lend money directly to businesses or other consumers via the peer-to-peer platform.
The Government therefore introduced bespoke legislation regulating peer-to-peer lending where it interacts with consumers. This means that all P2P platforms used by consumers need to be authorised by the FCA and comply with financial, organisational and conduct requirements. These requirements include rules regarding separation of client money, business conduct such as fair treatment of customers, financial promotions and creditworthiness and affordability assessments.
This approach to regulation has allowed the industry to thrive, and £3.5 billion was lent via peer-to-peer platforms in 2016. In 2016, peer-to-peer lending to businesses grew 36% compared with the previous year, and was the equivalent of 15% of all new loans by UK banks to microenterprises in 2016. These impressive statistics demonstrate the Government’s commitment to fostering a diverse and competitive financial services sector which delivers quality services at efficient prices.
There is a degree of risk in members of the public making deposits, as they may not necessarily have the same degree of financial literacy as professional lenders. As a result, regulation surrounds businesses accepting deposits from the public. Under current legislation, conditions set out that if a business wishes to accept deposits from the public in order to wholly or materially finance their activities, such as a bank, they must be authorised and regulated by the FCA and the PRA. This could be termed “accepting deposits by way of business”. The regulatory permission for accepting deposits by way of business is known colloquially as a banking licence.
Currently when a business borrows money via a peer-to-peer platform, the legislation could be read as saying that businesses are technically accepting deposits from the public “by way of business” and therefore require a banking licence. In reality, it is not the case that the core business of these borrowers is accepting deposits. If it were, they would, for example, be operating like a bank and require FCA and PRA oversight.
However, for the vast majority of commercial borrowers, borrowing via peer-to-peer platforms is simply a way of financing their business—for example, capital expenditure. In the existing legislation as inherited by this new industry, there exists uncertainty as to whether those who are not accepting deposits as their core business would still need to be regulated.
It remains the case that peer-to-peer platforms used by consumers should be regulated, but some peer-to-peer platforms are therefore unsure as to whether businesses borrowing via their platform would require a banking licence. The practicalities of obtaining and then maintaining a banking licence just to borrow via a peer-to-peer platform would be burdensome for both the borrower and the platform, increasing costs and making it unviable as an efficient source of finance.
The order therefore provides clarity for peer-to-peer platforms and their business borrowers regarding the regulatory framework. It does this in a number of ways, specifically by making clear that where a peer-to-peer borrower is using deposits solely to finance their other business activity, they should not need a banking licence, and by ensuring that regulated financial institutions still need a banking licence to accept funds from the public, regardless of whether they do so via peer-to-peer or other means.
The order is required to provide certainty to peer-to-peer lending platforms and the businesses which fund their growth and other costs through this means. The certainty provided by the order will ensure that no undue burdens are placed on the sector or businesses because of legislation which predates the invention of this financial service. I beg to move.
Baroness Kramer (LD)
My Lords, I may have been the first person in this House to use the phrase peer-to-peer lending, to the enormous amusement of Lord Peston, who misunderstood it as “pier to pier”, which, as he said, was impossible. It is now a widely accepted, very successful strategy. I am not sure if this is officially a conflict of interest, but I declare that one of my children is an employee of a peer-to-peer lending platform. Back in the old days—and certainly before my son was involved—my noble friend Lord Sharkey and I helped to construct the framework that sits behind the regulations. We obviously missed a trick in allowing this discrepancy to enter the regulation, and for that, I—also on behalf of my noble friend—apologise. I am very glad that the Government are clearing up this misconception.
Lord Tunnicliffe (Lab)
My Lords, I came to the order in a state of almost complete ignorance, having never been involved in peer-to-peer activity in my life and not entirely understanding what it was. I did some research, and it seems that through peer-to-peer lending, the lender can get a better rate of return and the borrower has to pay less. I am reminded of the advice I would give anyone when it comes to financial affairs: “If it is too good to be true, it is too good to be true”. It is too good to be true in the sense that, in a peer-to-peer environment, one can lose one’s total investment and one is not covered by the FSCS guarantee.
I then did a bit more googling, and picked up an article from Which?, which stated:
“Two of the biggest peer-to-peer (P2P) lenders in the UK have been beset by problems over the past month, with RateSetter forced to make up a near £9m loan-deal gone sour and Zopa customers experiencing a severe cut in returns. So, is the market for peer-to-peer lending headed for trouble? RateSetter has announced that it had to intervene to protect investors from losing money in struggling wholesale loans. The company, which lent £664m last year, has now confirmed it has left a peer-to-peer lending trade body for breaching transparency rules”.
I say that because, with no experience, you have to turn to Google, but it does not look as though the peer-to-peer environment is entirely without problems.
I then read the order and the Explanatory Memorandum and it seemed to me in some way deregulatory. The last thing I naturally want when I read about this is for peer-to-peer lending to be deregulated. I then tried to understand the situation more carefully, and I concluded that peer-to-peer lending activity involves three parties: investors, platforms and borrowers. It is important to be absolutely clear what the order does to each of those groups. In my understanding, investors are in no way regulated and therefore the order has no impact on them, except where the investor is a company or firm involved in financial services.
My question to myself, which I have partly answered, is: are the platforms regulated? As has already been said, they are. Perhaps the Minister would enlarge slightly on his brief reference to the regulation of the platforms. The key question is: is the regulation of platforms in any way impacted on by the order?
Finally, under the present regulations, are borrowers regulated? Clearly they are if they are in the financial services business, but if they are ordinary firms, are they in any way regulated? I think that that is what the order seeks to address. The final question that sums up everything is: is the SI in practice solely related to borrowers? Does it leave the protection of customers using the platform in its present regulated state?
Lord Young of Cookham
I am grateful to both noble Lords who have spoken in this debate. I accept the mea culpa from the noble Baroness, Lady Kramer, although I assume that there was a Minister involved who also failed to spot this as the legislation went through. But it was generous of her to accept full responsibility for not spotting this lacuna.
In response to the noble Lord, Lord Tunnicliffe, this order is borrower facing; it does not affect the platform or the investor. The platform may be able to give greater assurance to borrowers that, because of this SI, the borrower need not worry about having to get a banking licence, but it is essentially, as I said, borrower facing.
On the issue of regulation by the FCA, like the noble Lord, I made a few inquiries about this, because, like him, I am new to this. There are roughly 60 P2P platforms active in the UK. Before the FCA’s regulatory regime was introduced, I understand that some platforms ceased trading and a couple of very small P2P platforms failed in the UK, but it is not known whether lenders lost any money as a result. But all this happened before the FCA’s regulatory regime. Since then, the FCA is keeping an eye on the industry. Occasionally, as with many other financial services firms, they have told platforms to take down a certain advertisement or amend a part of their business model. To be authorised in the first place, some firms have to make substantial changes to pass the FCA’s rigorous threshold conditions for advertising. But also there is a review, conducted by the FCA, going on at the moment, and I shall certainly feed the concerns of the noble Lord into that review, and into the wider P2P industry as a whole.
I think that I have answered all the questions that have been raised, and commend the order to the House.
Gambling Act 2005 (Amendment of Schedule 6) Order 2018
(6 years, 9 months ago)
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Lord Ashton of Hyde
That the draft Order laid before the House on 14 December 2017 be approved.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, Schedule 6 lists the bodies with which the Gambling Commission can share information, and vice versa, using powers in Section 30 of the Gambling Act. Gambling Commission licence conditions also require operators to share information with the bodies in the schedule in some circumstances. The list is made up of bodies which have functions under the Act, UK enforcement and regulatory bodies and sports governing bodies. The last substantive review of the bodies listed in Schedule 6 was in 2012. The Government propose to amend it to update the names of some sports governing bodies which are already listed, and add others which meet the criteria that I will touch on later. This will include the UK Anti-Doping agency. The update will help information flow between the Gambling Commission, which regulates all gambling operators selling to customers in Great Britain, and sports bodies. The integrity of sport is paramount. It is important that we make sure the Gambling Commission can share intelligence with sports governing bodies to help protect the integrity of sport and sports betting markets.
Sports betting is a popular entertainment activity for many who enjoy watching sport. Preventing the manipulation of competitions is essential to uphold public trust in sports betting and in the integrity of sport itself. Information sharing plays a central part in preventing corruption domestically and, given that threats can be cross-border in nature, internationally. The Gambling Commission’s statutory objectives include keeping gambling fair, open and free of crime. Its sports betting intelligence unit receives information and intelligence relating to potential criminal breaches of sports betting integrity, misuse of information and breaches of sports betting rules. This comes in particular from gambling operators who have noticed suspicious or irregular betting patterns. The intelligence is shared with other bodies involved in tackling these issues.
Bodies which are to be added were required to demonstrate that they had the necessary systems for information management in place, as well as the necessary rules governing betting. Although information can be shared with a body not listed in the schedule, this requires detailed consideration and, potentially, legal advice. While all data sharing remains subject to the Data Protection Act, listing a body in the schedule provides a legal gateway, which reduces the administrative burden on the commission and the bodies themselves, as well as helping information to be shared in a timely and effective way. The update is intended to ensure that Schedule 6 covers an appropriate range of sports, using information-sharing powers as originally intended for supporting the fight against corruption. The inclusion of UK Anti-Doping aligns with the Government’s approach to protecting the integrity of sport, as set out in the Sporting Future strategy and the anti-corruption strategy.
A government consultation on updating Schedule 6 ran between November and December 2016. During and after the consultation, the Gambling Commission engaged with governing bodies that had expressed interest in being included. This was to provide advice and determine whether their information management arrangements would make it possible to include them in this update. The consultation response was published in August last year. Where bodies were not able to be added this time, the commission is continuing to engage with them and to promote best practice. The intention is to help to establish arrangements that will enable more bodies to be added in a future update. In addition, the Sports Betting Integrity Forum’s key priorities include working with governing bodies to help to facilitate information sharing.
The following organisations met the criteria for inclusion and will be added to Part 3 of Schedule 6, subject to your Lordships’ approval. They are: United Kingdom Anti-doping Ltd, the Darts Regulation Authority, the Irish Rugby Football Union, the Rugby League European Federation, the Tennis Integrity Unit, Table Tennis England, Ladies European Tour for golf, and the International Paralympic Committee. The following bodies will have their names updated: London Marathon Events Ltd, World Rugby Ltd and European Professional Club Rugby.
I thank the Gambling Commission, sports bodies, betting operators and law enforcement for the excellent collaborative work they do to maintain the integrity of sports betting and uphold public trust in sport and enjoyment of sport. The regulatory regime that we have in the UK is recognised as being world-leading, but we can never be complacent. To support this collaborative work and maintain the UK’s international standing as a leader in this field, I commend the update to Schedule 6 to the Gambling Act 2005 to the House. I beg to move.
Baroness Finlay of Llandaff (CB)
I will ask a question that is probably very naive. I was surprised that neither football nor any kind of horseracing or any of those activities was included in the list. Is there a reason for that, or have I completely missed the point? I declare an interest as chair of the National Mental Capacity Forum. When people become hypomanic, lose capacity and go into a phase of placing large numbers of bets in a completely uncontrolled way, it is often football and horseracing where they will be placing those bets and running up debts.
Lord Griffiths of Burry Port (Lab)
My Lords, I have given due attention to the proposals before us and can see exactly the logic that brings them to our attention. My eyebrows have been raised by certain of the details; I wish I knew how people might gamble in an inappropriate way in terms of playing darts, for example. A treble 20 is a difficult thing to be sure about under any circumstances. For all that, I can see that, if assurances have been given by the various bodies that they will come into line with the expectations under the terms of the Act, they should be added to the list.
My pulse quickened when I saw the European Rugby Cup Ltd mentioned, since the Llanelli Scarlets are leading the way for British involvement in the European cup quarter-finals. I am happy as a Welshman to just lord that over any English friends I have here in the House with me.
I have one question that perhaps the Minister can help me with. How do we get the necessary information that relates to companies registered in the Republic of Ireland? That stands out as being a little different from the others.
I am happy to note that the anti-doping people, UKAD, are now involved. Having met their representatives on more than one occasion, I can see how there is an overlap of interest, but also that it adds competence to the governing of these different sports and this activity.
All that having been said, I think that due process has been followed. When I was growing up, it was inconceivable that anybody would bet on any of these activities at all. Indeed, betting on horseracing was done illicitly in my youth. Round the corner we had Dai Double-Ticket, as we called him, and he ran the bets to the local bookkeeper on our behalf. We hoped that he would share the profits with us eventually. We have now come to the point where we can bet during matches and all the rest of it. It is so complicated now compared to what it was, and adequate machinery has to be put in place. The Gambling Act 2005 sought to do that and, a few years having passed, we must of course seek to update the information base upon which we operate the provisions of that Act. Apart from those little questions I have, I am happy to concur with the recommendation.
Lord Clement-Jones (LD)
My Lords, just to follow on briefly, I am very pleased to see that, as in the Commons, there is a strong Welsh perspective being displayed on these matters today.
We all have a strong interest in sports betting integrity, and we had quite a debate on the issue during our discussion of the Data Protection Bill. I am pleased, therefore, to see the inclusion of UKAD in Part 3 of Schedule 6. In the Commons discussion of this order, there were some interesting debates about the inclusion of international bodies. Perhaps the Minister could slightly unpack the reason for those international bodies being included.
The last thing I want to say is that there is a distinction between Parts 2 and 3 of Schedule 6, and I wonder whether the Minister could explain why UKAD is included in Part 3 but not in Part 2. I know that the Explanatory Memorandum goes into that to some extent, but not entirely. UKAD is an enforcement body, and it seems slightly strange that it is not going to be on the face of the statutory instrument.
Lord Ashton of Hyde
My Lords, I am grateful to noble Lords for those questions. I will start with an easy one, that of the noble Baroness, Lady Finlay. The reason we have not talked about football or horseracing today is that they are already on the old schedule, which includes the British Horseracing Authority, the Football Association, the Scottish, Welsh and Irish associations, and FIFA.
The noble Lords, Lord Clement-Jones and Lord Griffiths, asked why an Irish body is included. We are pleased that the UK is home to some international sports bodies and that some of the world’s greatest sports events have been held, and will continue to be held, here. Therefore, it is only right that all relevant international sports bodies, such as the Tennis Integrity Unit, the International Olympic Committee, the International Paralympic Committee and the Commonwealth Games Federation, are listed under Schedule 6. Tackling corruption and protecting the integrity of sport requires a co-ordinated approach at the domestic and international level. We must remember also that the threat faced is often cross-border in nature.
The noble Lord, Lord Clement-Jones, asked about the differences in Parts 2 and 3 of Schedule 6. To be honest, I am not sure what the answer to that is. If it is okay with him, it will be better if I write to him afterwards and get it right.
The Gambling Commission’s statutory objectives include keeping gambling fair, open and free of crime. Millions of bets are placed on sport each day and a great deal of work goes on behind the scenes to ensure that the integrity of betting on sport is maintained. Information sharing plays a central part in preventing corruption, and the order will help promote that. To support this excellent work and maintain the UK’s international standing as a leader in this field, I commend the update to Schedule 6 to the Gambling Act to the House. I am grateful for the support of noble Lords, and I hope that the House feels able to approve it.
Particulars of Proposed Designation of Age-Verification Regulator
(6 years, 9 months ago)
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Lord Ashton of Hyde
That the Paper laid before the House on 14 December 2017 be approved.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, the Digital Economy Act introduced the requirement for commercial providers of online pornography to have robust age-verification controls in place to prevent children and young people under the age of 18 accessing pornographic material. Before considering the specific points related to this debate, I want to remind the House why we introduced this requirement.
In the offline world, there are strict rules to prevent children accessing adult content, but the same is not true in the online world. A large amount of pornography is available on the internet in the UK for free, with little or no protection to ensure that those accessing it are old enough to do so. This is changing the way young people understand healthy relationships, sex and consent. A 2016 report commissioned by the Children’s Commissioner and the NSPCC makes this clear: over half of the children sampled had been exposed to online pornography by the age of 15; nearly half of boys thought pornography was “realistic”; and just under half wished to emulate what they had seen. The introduction of a requirement for age-verification controls is a bold step to tackle these issues and it demonstrates our commitment to making the UK the safest place in the world to be online.
Section 16 of the Digital Economy Act states that the Secretary of State may designate by notice the age-verification regulator, and may specify which functions under the Act the age-verification regulator should hold. I am therefore seeking this House’s approval to designate the British Board of Film Classification as the age-verification regulator. We believe that the BBFC is best placed to carry out this important role, because it has unparalleled expertise in this area.
The BBFC has been classifying films for cinema release since 1912 and video content since 1984. In doing so, it has established a trusted reputation for making difficult editorial judgments and giving consumers, particularly parents and children, clear information about age-appropriate content. Importantly, the BBFC is currently responsible for classifying adult material for sale offline, including judging when content should be rated R18 and therefore available for sale only in licensed sex shops. Moreover, the BBFC understands how new technology is changing the way people access content. It provides the current framework for filtering content on mobile networks, which has been highly successful in preventing children accessing pornography on their mobile phones.
Lord Clement-Jones (LD)
My Lords, I have no great argument with the particulars and the designation of the BBFC as the age-verification regulator. Indeed, we had some debates on this. I know that we may have some differences with the Labour Front Bench, but we think that the BBFC is fit for this particular purpose and will carry out the job effectively. Conversations we have had have convinced us of that. Another aspect that is beginning to be unpacked is the appeals system. Although of course we put down amendments on the question of the independence of the age-verification regulator, we think that the appeals system being set up, which is qualified in the Act—we would have preferred it not to be qualified—will be fit for purpose as well.
I want to revert to something that may strike both the Minister and Members on the Labour Front Bench as rather déjà vu: the question of the specification of the type of age verification that is required, or not, by the age-verification regulator. When we talked about this issue in Committee—indeed, amendments on it were laid on 2 February 2017 in Committee and on 20 March on Report; my noble friend Lord Paddick had a particular role in that—we were very concerned on both occasions that the age-verification methods were not going to be specified in enough detail in the Bill. It did not appear that they would be specified in any great detail in the draft guidance.
Flash forward a year and I am afraid that nothing has changed. The Minister may remember that, back in January, the Select Committee on the Constitution said:
“We are concerned that the extent to which the Bill leaves the details of the age-verification regime to guidance and guidelines to be published by the as yet-to-be-designated regulator adversely affects the ability of the House effectively to scrutinise this legislation”.
We have not moved on a great deal. If we look at the details of what I have found—which appears to be the up-to-date draft of the government guidance on the age-verification regulator—under chapter 3, paragraph 4, there is this statement:
“The regulator is not required to approve individual age-verification solutions. There are various ways to age-verify online and the industry is developing at pace. Providers are innovating and providing choice to consumers”.
That is exactly the same wording as in the draft guidance last year and quoted by my noble friend Lord Paddick on 20 March. That is extremely disappointing. It appears that the age-verification regulator will play an incredibly light-touch role in the approval of the type of age-verification that takes place.
Of course, later in chapter 3—which is headed “Age-verification arrangements”—it describes,
“the expectation that age-verification services and online pornography providers should take a privacy by design approach as recommended by the ICO”.
I have the privacy by design guidance from the ICO in front of me and I must say, if I was an age-verification provider, I would not find it particularly onerous, in terms of requiring me to try to find an anonymised age-verification solution. I find the Government’s guidance, as per Section 27 of the Act, extremely disappointing. I very much hope that the Minister can explain whether the ICO will have a role in this, what the impact of privacy by design is, in terms of enforcement, and whether the ICO will have the ability to impose a privacy impact assessment—or even a data impact assessment—on the object of the age-verification regulator’s regulation. Perhaps at the same time the Minister can explain in this particular space the boundary between what the ICO is empowered to do and what the age-verification regulator will be doing.
I am sorry to have to be disappointing in that respect, but I think that as part of the wider landscape—a matter we discussed last year—where we have got to is not particularly satisfactory if the general purpose of the age-verification regulator is to make sure that age-verification really works and that there is not the access for young people to these pornography sites that the Act was designed to prevent.
The Earl of Erroll (CB)
My Lords, I want to say a few words. I was quite involved in this issue when it was going through as part of our consideration of the Digital Economy Act. The Digital Policy Alliance, of which I am chairman, has had a working group on age verification for several years, looking at whether there are available solutions and encouraging people to develop them. I am pleased to tell the noble Lord, Lord Clement-Jones, that there are some solutions out there. I will explain something about that.
The only thing I want to say is that the Act received Royal Assent on 28 April, I think, so it has taken a very long time to get this guidance in place. That is a bit of a worry and a bit of a disappointment. I seem to remember that there was an intention to try to have enforcement within a year, otherwise there would be a huge great gap in the meantime. We are trying to protect children after all; that was the whole point of this. Waiting for a year—it will probably now be longer—is an awfully long time not to have protection in place.
I am very glad that the BBFC is finally about to get some teeth, get into operation and do something about this, which I am sure it will do extremely well. I know that it has been consulting an awful lot with a lot of different people from all the different sides, from child protection right through to the adult industry. The interesting thing is that quite a lot of the adult industry is happy to help and to co-operate, because it does not want children wasting its time. It is not in the job of trying to pervert children, but of trying to sell adult content to adults, so it is willing to co-operate. The world is watching. There is apparently now a willingness to realise that this will happen and to co-operate to a large extent.
The noble Lord, Lord Clement-Jones, has put his finger on the point about age-verification methods: they have to work and to do various things. I say to him, though, that there is a difference between the bit that is checking the attribute—the age—and the bit about privacy, which is not identifying who the person is to a website and to a casual visitor to that website. It would be career-limiting were it to be found out that the noble Lord himself was visiting an adult content site, even though it would be totally legal for him to do so. Therefore, it is important to ensure that privacy happens at that point, which is the ICO’s part. It is not the ICO’s job to say how age verification should be done. That is a different job.
In fact, we have developed, along with the British Standards Institution, a publicly available specification, PAS 1296, which should be coming out quite soon. It has been around the houses several times and has been revised. That should allow it to be possible for an organisation to see for itself how well it is doing. It might be that an industry body should be set up that can check whether age-verification providers are doing something in alignment with the PAS, which goes into great detail about how you can do these things and make sure that it can be privacy enforcing. The privacy side is left up to the GDPR, but it is mentioned in there as well.
Those are the main points that I wanted to make. It is time to get on with this. It is a huge leap forward. As I said, the world is watching. A whole lot of good will is out there to get this done properly. I look forward to seeing the final draft regulations, which will probably do the job.
Lord Stevenson of Balmacara (Lab)
My Lords, are we not back in familiar territory? We seem to spend a lot of time on these important issues, first on the Digital Economy Act, then substantial work, discussion, debate and thinking in the debates on the Data Protection Bill. I will disappoint the noble Lord, Lord Clement-Jones, by agreeing with most of what he said. He has a good point about where the boundaries between privacy and the processes described in the Digital Economy Act come to bear. There is room for a variety of approaches here. This is not an easy issue to address. I am not going to go back over the ground he covered—I look forward to hearing what the Minister will say about that—so I will go into some constitutional issues.
I have two general questions that might be important as we continue with this. One was touched on by the noble Earl, Lord Erroll, in his concluding remarks. Is it not the case that, when the Data Protection Bill, which brings in the GDPR, becomes an Act in May, we have inserted into it a requirement that those who operate on data subjects’ information relating to age have to do so in a way that is age-appropriate, otherwise the design has to change? In a sense, is this not the other half of the equation about blocking those who provide material by requiring those who are preparing and disseminating material to have it in a way that will not lead to the problems that were discussed so graphically about what happens to children, who we want to protect, who stumble across material that should be behind an age-verification system? In that sense, age-verification seems to be a bit like shutting doors after horses have bolted. We have to get the design right. If it is right, there will be no such question about people stumbling on to things, because if they go through an ISP or any form of social media provision, such as Facebook and similar arrangements, their progress would be age-designed and could be managed that way. Can the Minister reflect on that? He may well argue that this is the sort of thing that needs to be addressed by a yet to be established data ethics commission. He would probably be right.
Lord Ashton of Hyde
My Lords, I am grateful to the noble Lords, Lord Stevenson and Lord Clement-Jones. There is a sense of déjà vu from the Digital Economy Act; we are continuing some of the discussions that we had then, and I am happy to do so. However, it is important to bear in mind what we are doing today, which is designating the BBFC. I hope we will come to other issues in the coming weeks. I will get into the definition of “soon” later.
Lord Clement-Jones
I apologise for interrupting the Minister. Perhaps he can explain why we are not doing this all in one fell swoop. It seems rather bitty. The draft guidance seems to be on the web, and certainly it seems to be all there, so why are we not trying to deal with this in a holistic way?
Lord Ashton of Hyde
The answer is that until the regulator is designated, it cannot issue guidance.
Lord Ashton of Hyde
We have the government guidance that the Secretary of State has issued. The important issue, which I was going to come to in answering the noble Lord’s question, is that this is a series of steps that involves consultation and then issuing guidance. Until the regulator is designated, it cannot begin to consult or issue guidance. It is a sequential process. There is no question that we want to get on with this; we are not trying to delay it. We are conscious that this needs to be done as soon as possible, and I will come to the steps that might explain that further.
The noble Lord, Lord Clement-Jones, was asking about how the system is going to operate and the level of detail. As I said, the Secretary of State’s guidance to the regulator is there for as and when it is designated, but then the regulator is required to publish its guidance on the age-verification arrangements that it will treat as compliant. So, as I was saying, once the BBFC has been designated, that draft guidance will be laid before Parliament. The noble Lord will be able to raise his objections or queries then, when he has seen the guidance that the regulator itself has made. Until that happens, it cannot either consult or lay the guidance. Parliament can then scrutinise it. That will involve the affirmative procedure in both Houses, so that will be an appropriate point to debate the issues.
We have absolutely understood the need for things like privacy. We understand that it is important to outline those issues and priorities in the Secretary of State’s guidance to the regulator, as and when it is designated. It is then up to the regulator to get into the detail of what it will consider compliant. There is no question that it will choose a particular method. It will set criteria. There will not just be one system, for example; it will make sure that its criteria are clear in the guidance. As I say, we will have a chance to debate that.
The noble Earl, Lord Erroll, talked about when the powers are going to come into force. As I said, we want to do that as quickly as possible. In fact the current Secretary of State said it was his ambition to complete it within a year, although that is going to be difficult. We want to get it right; we want the process of consultation and guidance to be done properly. Of course, there was the small matter of purdah and an election in the way. Now, however, if this House approves the regulator today, we will be well on the way to doing that, and we are definitely trying to do it as quickly as possible.
We take data protection and privacy very seriously. The age verification arrangements should be concerned with verifying only age, not identity; we absolutely agree with that. Providers of age-verification controls will be subject to data protection laws—the GDPR—from 25 May, and the BBFC will work with the Information Commissioner’s Office to ensure that its standards are met by age verification providers, particularly with regard to security, data minimisation and privacy by design. So the ICO is there to uphold the law and enforce data protection law and the GDPR. To go further on that point, the noble Lord, Lord Clement-Jones, mentioned the relationship. The BBFC and the ICO are going to agree a memorandum of understanding to ensure and clarify how they are going to work together and separate their various responsibilities.
I know the noble Lord, Lord Stevenson, is not entirely happy with some of the arrangements; we debated some of them on the Digital Economy Bill. He also mentioned definitions and said one of the things that the regulator—that is, the BBFC if it is designated—will have to do is regulate the definition of extreme pornography that is unlawful even if it has age verification in place. That is not really the subject of debate today. Noble Lords will have an opportunity to discuss that when the regulations come—
Lord Stevenson of Balmacara
I know the Minister was struggling with the wording there but this is really quite important. I thought he might have suggested that it would be up to the BBFC to define what was or was not permissible to view. I hope he is not saying that. I imagine the assumption is that there is a law of obscenity. Obviously it is interpreted through the courts in a way that is not entirely consistent in every case, but the law has to be the law and it must not be up to the BBFC to change the definitions.
Lord Ashton of Hyde
The noble Lord is absolutely right, and I apologise if I misled anyone. It is not the BBFC’s job to determine what is lawful. It is meant to implement the law. The debate that I think we will have when the regulations come to this House will be on the decisions that will have been taken on what is pornography available for commercial purposes. The definition of what is unlawful will be under the extreme pornography definition within the existing Act.
The Earl of Erroll
Leading on from that, I remember from the debates that the trouble was that the Obscene Publications Act was not aligned with the CPS guidance or with various other things. I presume therefore that some work will be done on this in the near future, otherwise I suspect that the BBFC will get into trouble. At the same time, because age verification may come into this too, presumably we will also try to align the internet stuff, which is what we have been talking about in the Digital Economy Act—broadcast, which is regulated differently, and video on demand, which I think is Ofcom’s responsibility at the moment. We really do not want different rules across all of those, so I hope we are going to get on with that.
Lord Ashton of Hyde
We debated this extensively during the passage of the Digital Economy Bill. Parliament agreed with the very clear definition of extreme pornography, which is based on the Criminal Justice and Immigration Act 2008. That is what it will opine on. The primary legislation—the Digital Economy Act—requires the Secretary of State to consult on the impact and effectiveness of the regulatory framework, including the definitions used, within 18 months of the powers coming into force. That will be the time to do it. What I meant about it not being the subject of debate today is that this regulation is very clearly to define the regulator, and we say it should be the BBFC. I am not trying to duck the issues that are still there, but they will come back and I am sure I will have to deal with them—unless I am late for something.
The other issue mentioned by the noble Lord, Lord Stevenson—which I fear we will not agree on today—is the structure of the BBFC. He did say that he did not want a full response; I will just say that the BBFC is set up as an independent non-governmental body with a corporate structure, but it is a not-for-profit corporate structure. We have agreed funding arrangements for the BBFC for the purposes of the age-verification regulator. The funding is ring-fenced for this function. We have agreed a set-up cost of just under £1 million and a running cost of £800,000 for the first year. No other sources of funding will be required to carry out this work, so there is absolutely no question of influence from industry organisations, as there is for its existing work—it will be ring-fenced. As far as surplus is concerned, it is relatively common for non-profit organisations to keep a surplus and to do things such as investing in major projects or equipment. We think that, because the BBFC has been doing a similar job and making very difficult judgments on these things since 1912, it is the most suitable body.
We are content—and the previous Secretary of State was satisfied—that, with this structure, including the appeals structure, we have done our best to ensure that the arrangements will be sufficiently independent. I am thankful to the noble Lord, Lord Clement-Jones, for his support on that. There will be an independent appeals panel, which will not include the regulator, the Government or the affected industries. The BBFC will play no part in deciding the chair or membership of the independent appeals panel; this will be the role of the independent appointments board, so there is a clear division between the BBFC and appointments board, which will ensure its independence. Interestingly, the BBFC in its other role has had remarkably few appeals. Since 1985, there has been a total of 21 appeals, nine of which were ruled in the BBFC’s favour, nine against, and the remaining three were withdrawn. Since 2007, no appeals have been made to the BBFC.
I think I have addressed most of the issues raised. The noble Lord, Lord Stevenson, mentioned some of the more philosophical issues on this—I agree with him; the data ethics body may be a place for that—and I can assure noble Lords that we will come back to some of these more difficult issues. In the meantime, to go back to where I started, today’s job is only to designate the BBFC as the regulator. I hope that, after what I have said, the House will agree that it is the best body to take on the role, and I therefore beg to move.
Littering From Vehicles Outside London (Keepers: Civil Penalties) Regulations 2018
Baroness Vere of Norbiton
That the draft Regulations laid before the House on 21 December 2017 be approved.
Baroness Vere of Norbiton (Con)
My Lords, I am pleased to introduce these regulations in your Lordships’ House today. I must begin by thanking my noble friend Lord Marlesford for his tireless campaigning over several years to bring these regulations to the statute book. I know from previous debates on this subject how strongly Members of this House feel about litter and littering. We launched the first ever litter strategy for England in April last year, which sets out our aim to clean up the country and deliver a substantial reduction in litter and littering within a generation. While improvements in education and disposal infrastructure are essential elements of our strategy, we must also ensure that councils have appropriate enforcement powers to back up the fundamental message that littering is not acceptable.
This brings me to the regulations before your Lordships’ House today. The purpose of these regulations is to make it easier for councils to take appropriate enforcement action to tackle littering from vehicles, by holding the keeper of the vehicle responsible. These regulations will give powers to councils in England, outside London, to issue a civil fixed penalty notice to the keeper of a vehicle when an enforcement officer has reason to believe that a littering offence has been committed from the vehicle. As set out in the underlying primary legislation, these powers may be given only to bodies that are under a statutory duty to keep their relevant land clear of litter and refuse. The powers will therefore be conferred on district councils—or the county council in an area for which there is no district council—in England, outside London, as well as the Council of the Isles of Scilly. In this context, a district council includes authorities that may call themselves district, metropolitan, borough, unitary or any other name; it simply means the council for that district. London boroughs, as your Lordships know, already have similar powers under private legislation.
I emphasise that the person liable to pay the penalty is the keeper of the vehicle from which litter is thrown at the time of the offence. This is presumed to be the registered keeper unless proven otherwise: for example, because the vehicle has been sold or stolen, or was hired out to someone else. Vehicles such as buses, taxis and private hire vehicles are exempt from liability if the offence is committed by a passenger.
The penalty amount payable is set by the litter authority and must be the same as the level of fixed penalty for littering in the area. From 1 April 2018, the Environmental Offences (Fixed Penalties) (England) Regulations 2018 will increase the maximum fixed penalty for littering from £80 to £150, with an increase in the default level of penalty from £75 to £100. From April 2019, the minimum fixed penalty for littering will also increase, from £50 to £65. The regulations on littering from vehicles therefore reflect these higher penalty amounts.
If the penalty is not paid within 28 days, and the recipient has not made any representation against the penalty notice, the regulations provide for the amount of the penalty to be increased by 100%—in other words, to double. If it is still unpaid, it can be recovered by the litter authority in the county court. Similarly, the regulations enable litter authorities to encourage prompt payment by offering a discount if the penalty is paid within 14 days. However, the discounted penalty must not be less than £50.
The penalty notice must give details of the alleged offence, the amount of the penalty and deadlines for payment, and information about what will happen in the case of late payment. It must also set out how the recipient may make representations or appeals against the penalty notice. It is of course crucial that any enforcement action is proportionate and in the public interest. The regulations provide for a number of grounds on which the recipient of a penalty notice may make representations to the litter authority against the issue of a penalty. If the recipient makes representations to the litter authority on one of the listed grounds, the authority must consider the representations and respond. If it agrees, it must cancel the penalty notice—and if it rejects the representations, it must also advise the recipient of the penalty that they have a right to appeal that decision to an independent adjudicator within 28 days. We are grateful to the Traffic Penalty Tribunal for agreeing to hear these appeals.
By giving councils this additional power to take action, we believe that these regulations will operate as a greater deterrent to those who may be tempted to litter and will reduce the build-up of litter on our roadsides and verges. I commend the draft regulations to the House.
Lord Marlesford (Con)
My Lords, obviously I welcome this very small step in the battle against litter and I am most grateful to my noble friend for introducing it. There are several lessons in it. It has taken an awfully long time. This requirement was introduced in the then Anti-social Behaviour, Crime and Policing Bill, which received Royal Assent on 18 March 2014—so it is now nearly four years old. That must be nearly a record for slowness in complying with the will of Parliament. It is, of course, a long way from the record of 10 years achieved when I persuaded this House, when I first arrived here, to introduce a requirement for an electronic central register of firearms. It was 10 years before that happened. The department did not like it and decided to ignore it for as long as it could. I had support from all parties and 10 years later it happened. That was about 12 years ago and it works extremely well—but that is beside the point.
I suspect the reason the department has delayed this provision for so long is that neither the Home Office nor the environment department wanted it. Eventually I obtained help from the then Home Secretary—now my right honourable friend the Prime Minister—and the then excellent Environment Secretary, the right honourable Owen Paterson, who personally intervened. Indeed, my noble friend the present Chief Whip of your Lordships’ House was the Minister who put it into practice—for which I am extremely grateful. But it has taken an awfully long time. The essence of this is that for a long while it has been a criminal offence to throw litter out of a car—but nothing is ever done about it because you have to prove who threw the litter.
I pay tribute to CPRE, of which I was chairman for five years some years ago, for campaigning for this measure from 2008. It will operate like a parking offence. If I lend you my car and you park it in the wrong place, I will get the parking ticket. That is sensible. There is no dispute and I can then, I hope, get the money back from you. Another plus of these regulations is that they decriminalise this offence. Previously, it was a criminal offence, which was virtually never successfully prosecuted. Now it is a civil offence with a civil penalty, which I hope will work. The penalty is actually very low. We have heard about the £100 basic penalty. This can go up if people do not pay it and can be halved if they pay it quickly. It is a small sum.
The Minister referred in particular to proportionality. It is important to administer this penalty proportionately. We do not want to discredit it by applying it to someone throwing a matchstick out of a car; we want to catch people who throw out containers, Big Mac packs and all that stuff. Another way of tackling this, which I hope the Government will soon introduce, is to bring in rules about deposits on returnable containers. This was introduced in the United States 30 years ago, originally in Oregon, and works very well because when the affluent discard these containers the less affluent pick them up and hand them into shops to collect the money.
Lord Bassam of Brighton (Lab)
My Lords, I was not going to intervene in this discussion but I am fascinated by this debate on littering. The noble Lord, Lord Marlesford, is a wonderful chap. I love his persistence. I well remember the guns registration issue because he rightly hounded me on it for two years. As he said, the then Government eventually sorted it out. He was right to say that that measure was obstructed inside the then Government.
I have a beef and it is called the A27. I am delighted that my noble friend Lady Jones is on our Front Bench because the A27 is the litter epicentre of the south-east. What grieves me most is that it is clear that someone there is failing to take responsibility for clearing it up properly. I would like to know who that is. I think the responsibility rests with the Highways Agency as I am sure that I have seen its contractors tackling this but they appear only once a year. In the intervening period, that road is a haven for rubbish and litter. That is not good enough. One of the reasons for the litter is that the road is not cleared frequently enough and a contract to do so is not let over sufficient phases of the year. I believe that this has a lot to do with the fact that contracts are not let in that way and that contractors do not have an obligation to clear the road when it becomes badly littered.
I have a serious question about this legislation, which I am sure is very well intentioned: what is the incentive for a district council to become involved in proceedings—civil proceedings at that—and follow up complaints made to it? Where is the incentive for it to deploy the “person power” to enforce this legislation? There are already enough financial pressures on local councils regarding all the other things they are supposed to enforce, so I cannot see that they will want to chase complaints and complainants of this sort. No doubt this is a very well-meaning measure but I guess that it will be barely enforced, as has been the case with all other litter legislation in the past. Will the Minister do some research on this and tell your Lordships on how many occasions people have been brought before the courts and fined for littering offences in the last two or three decades? My mind goes back to the time when Margaret Thatcher was Prime Minister. She introduced legislation by which she tried to grade the litter acceptability of land, and we were told that it would solve the problem. The problem is still with us and, until we get regular cleaning of the waysides and footpaths along roads and highways, it will not be solved.
This legislation is clearly well-meaning, but we need to know a lot more about the incentives to local government and the level of activity that has been employed so far in enforcing legislation in the past.
Baroness Stowell of Beeston (Con)
My Lords, I will make a brief contribution to this debate. I welcome these regulations, which tackle an important matter. However, I will use this opportunity to say something a bit more broadly about the topic of litter. While it is important that regulations are available to local authorities to go after people who commit these offences—doing things that are so unacceptable to us—it is also worth thinking about what more we can do to prevent litter in the first place.
Earlier this week there was a significant debate here in the Chamber about the Government’s environmental plan, and I was disappointed only that I was not able to participate in it. I absolutely share the commitment of the Government—and so many people—to a lot of the initiatives we are adopting to preserve our environment, and it is right that the Government, schools and everybody else use interest in preserving marine life and so on to encourage interest among young people and everybody else in the environmental issues that form part of the Government’s environmental plan. However, in the last few weeks the Government’s litter strategy, published just before the 2017 general election, caught my attention. It is incredibly important.
One thing that is a nuisance for us is the increasing litter we see, not just on our roads and our pavements, outside shops and fast food restaurants, but on public transport. We are not doing enough to encourage ourselves as citizens to take on responsibility for tackling these sorts of things. A few weeks ago I managed to gate-crash a meeting of a local authority about litter and the litter strategy, where I had the huge privilege of meeting the environmental manager for the area I live. This gentleman had worked for the local authority and is now in one of the subcontracted companies, and is responsible for litter. He cared very much about our area and was absolutely passionate about keeping our streets clean. I liked this chap. Through him, we managed to get some additional litter bins on our public roads in the area.
I wanted to have a conversation with one of the local shopkeepers, whose outside area can be rather unkempt and which rather lets us down because of the increasing litter. I spoke to him about the litter outside his shop and said, “You know, you are a very important man in our community. You are responsible for one of the most important hubs of our local environment”. I was able to encourage him and his sense of his importance in keeping our area clean and devoid of litter, and I do not think that he had ever understood and appreciated just how much of an important role he plays in his society.
While it is important that we have regulations that tackle people who adopt these kind of nuisance behaviours, that should not mean that we should avoid encouraging people to accept responsibility. We should acknowledge the importance of people, whether they are shop managers or bus drivers who find people abusing the vehicles that they are proud to drive themselves, and get behind them to support them to maintain the standards that are so important to us. That should prevent these kind of regulations ever having to be deployed.
Viscount Simon (Lab)
My Lords, I will be brief. In many other countries there is no litter on the ground or the roads at all. How come? Their drivers are encouraged to have litter bins in their cars. Why cannot we do the same?
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I am grateful to the Minister for her introduction to this important piece of legislation. I declare an interest as a district councillor. I was interested in the contributions made by the noble Lord, Lord Marlesford, and the noble Baroness.
We have all seen cars driving past us, or followed cars from which rubbish has been thrown carelessly out of the window. As we have heard, litter is one of the scourges of our throwaway society. When I was growing up, it was very unusual to see the countryside and pavements littered with bottles and packages. Sadly, now it is commonplace. If this issue is not addressed, we will all be knee-deep in litter. As the noble Lord indicated, there appears to be an attitude among some car drivers—but not all—that they do not need to take their rubbish home and dispose of it safely. Winding down the window appears to be a better option for some of them.
In the market town of Yeovil a few years ago on a retail park site, KFC, previously known as Kentucky Fried Chicken, opened a first new outlet. On the day it opened, a free meal was offered to the first batch of customers. The queues of cars to get to the outlet stretched around the site and down to the bypass. I believe that in excess of 6,000 meals were served that day. Sadly, afterwards, the litter from the takeaway meals was strewn for many miles around the town and countryside. The fact that this opening was such a major event in Yeovil says a lot about the level of leisure activities available—but that is another matter.
Fining motorists for discarding their litter from cars is a start to helping to solve this problem. However, it also has to be tackled at source as well. Burger King, McDonald’s and KFC, as well as other outlets of a similar nature, have their part to play: first, in providing incentives and signage, encouraging their customers to dispose of their litter sensibly and with a view to the state of the environment; but also in making their packaging biodegradable, including their drinking cups and straws and the food containers. It will simply not be good enough to say that it is only on “Blue Planet II” that marine life is endangered by plastic. What of the rarely seen hedgehog, the urban and rural fox, and badgers, mice and voles, which are all likely to pick up and try to eat discarded waste that smells so invitingly of food?
This piece of legislation is long overdue. The keeper is responsible for the action of their passengers. It contains exemptions for taxi drivers, who may not be able to control their passengers’ bad habits. The language in the SI makes it very clear what processes will be involved to ensure that those guilty persons are pursued and fined. There are appeal mechanisms and adjudicators.
My concern is that the enforcement falls back on the “litter authority”. As usual, this is a district council, or a county council where there is no district council, and applies only to England and the Council of the Isles of Scilly, as the Minister said. The good point about collecting the fines is that they may be kept by the collecting authority for execution of its duties under the Clean Neighbourhoods and Environment Act of 2005. The number of reasons that the recipient of fines can give as an excuse for not paying the fine are extensive and lean overly towards the offender. I am concerned that many will be able to wriggle out of paying.
I hope that the fines imposed and collected will recompense the local authorities for the work involved. This should send a big message to the public that the country is no longer prepared to accept such loutish behaviour from car drivers and their passengers. I fully support the SI.
Lord Swinfen (Con)
My Lords, I am sorry; I was trying to be polite to my noble friend. I thought he was intending to speak but he has decided not to.
In 1959, which was some time ago, I was on leave in Munich and was warned by my German hosts not to drop even a match when I lit my pipe or I would be fined on the spot, so I did not drop a match. However, the lane that leads to my home in east Kent, where people frequently stop to have their lunch in the middle of the day, is often full of litter. Some of it is biodegradable and some is not, but there is absolutely no need for it to be thrown out of a window. In places where a lot of litter is deposited, we should have cameras, hidden in trees if necessary, to photograph people dropping litter out of their cars.
I also think the fine stipulated in these regulations is far too low. Most people can afford £100 and would not worry too much about that. I think we should have a fine in the region of £1,000 as a preventive measure. The noble Lord, Lord Griffiths, indicates that it should be higher than that. If that is what he wishes, that is fine, but I think £1,000, which might need to be raised in a few years’ time, would be quite sufficient to deter a lot of people. Very often there has to be a deterrent to stop people doing something that they ought not to do. Today, we make it too easy for them. You have only to drive around south-east England to see litter everywhere on minor and main roads and thrown out of windows on motorways. We are far too tolerant of the mess that other people make.
I remember hearing a story many years ago about a farmer who saw someone having a picnic on one of his fields. They left an awful lot of mess. He cleared it up, followed them home and deposited it on their front lawn. I hope it made them think. It would make a lot of other people think as well.
Baroness Jones of Whitchurch
My Lords, I was very interested in the comments of the noble Lord, Lord Marlesford, about the delay in introducing measures. If he had been present at other debates in which I have taken part, he would have seen that the progress Defra makes on legislation is a bit of a running theme and that we have had a bit of an issue with the department about it for some time. I will not dwell on that too much but I have some sympathy with his point.
I am very grateful to the Minister for explaining so clearly the intention behind these regulations. As she said, they form part of the Government’s littering strategy, which was published last year. Of course we welcome that strategy and share its objectives of cleaning up our urban and rural landscapes to make them better places to live and work—a theme that all noble Lords have echoed this afternoon. The strategy makes it clear that litter is not only an eyesore but hugely costly—a point made by the noble Baroness, Lady Bakewell. Street cleaning cost local government £778 million in 2015-16, and we can all think of better ways to spend that money. Clearly, dropping litter from vehicles adds to the overall litter challenge, so it is important—again, this is a point all noble Lords have made—that we create a culture where dropping litter is simply considered unacceptable and communities and individuals learn to value their local environment.
In principle we do not have a problem with extending to other councils across England the powers already granted to London councils to fine those who litter from vehicles. It is very clear from the consultation carried out by Defra that this extension has received broad support from the Local Government Association and organisations such as Keep Britain Tidy. However, I have a number of questions about the detail that I would like the Minister to address.
First, what lessons have been learned from the London experience? London has had these powers for five years but what discernible difference has it made? My noble friend Lord Bassam made a very good point in this regard. What are councils doing to take up these powers? Defra’s scoping study of November 2015 showed a marked reluctance from London boroughs to participate in a pilot study of the scheme’s effectiveness. As the scoping study identified:
“The London boroughs have been slow to enforce their ‘litter from vehicles powers’, but there is a lack of robust empirical evidence to help understand where the problems lie”.
At the time, a number of London boroughs basically said that they had other priorities and did not want to set up a new system for charging and recovering fines. In fact, it appeared that Wandsworth Council was the only one to actively pursue these new powers. So what is the position after five years? A recent study of appeals against vehicle-litter fines to London Tribunals found that Wandsworth was the only council that anyone appealed against. Of course, that might be because Wandsworth was particularly draconian, but perhaps it is more likely that many other London councils are simply not implementing the fines in the way intended. Therefore, can the Minister clarify how many London councils are using the powers and what lessons we are learning from those not currently doing so?
Secondly, in Defra’s Explanatory Memorandum which accompanies the regulations, it is recognised that the guidance on environmental fixed-penalty powers needs to be updated and clarified. The memorandum goes on to say that Defra intends to consult on the new guidance and have improved guidance in place before the powers in these regulations come into force in April 2018. It does not take a genius to say that that date is looming, so what progress is being made with this consultation? Will the deadline be met, and does the Minister think that this new guidance will go some way towards encouraging uptake of the new powers?
Thirdly, who will police these new regulations, and will it be acceptable for councils to outsource this responsibility? I ask that because the Minister may be aware of a “Panorama” programme aired last summer which showed that a private company, Kingdom Services, was employed as an environmental enforcement agency by around 28 councils around the country, dealing not with littering from cars but with littering in general. It paid its staff what it called a competency allowance, which amounted to a bonus for every littering incident at which they issued a fine. As a result, people were fined for ridiculous incidents—someone for pouring coffee down a drain, another for dropping and then picking up a piece of orange peel, and someone else for putting out their recycling on the wrong day. It was alleged that the company was working with the councils to fine as many people as possible and to profit from the income from the fines.
Does the Minister accept that the purpose of these new powers to fine those who litter from vehicles is not to add to the profits of councils but to change behaviours and keep the public on our side? That means rolling out the new powers intelligently and sympathetically. It also means that a high standard of reliable evidence has to be at the core of the scheme. Does she agree that for the new regulations to have public trust, the money from the fines should be used solely for further improvements to the environment and not for councils to make a profit?
Fourthly, as the noble Lord, Lord Marlesford, said, these provisions will allow for a fixed penalty to be issued with the lesser civil standard of proof. However, as I understand it, normal street-littering is dealt with under the criminal standard of proof—again, I may have got this wrong but I am sure that the Minister will clarify it—which includes the risk of criminal prosecution. Does the Minister think that having both a civil and criminal penalty for different sorts of littering in different circumstances can be justified?
Finally, my noble friend Lord Bassam mentioned the A27, which is an issue very close to my heart. I agree with him about what an eyesore it is. A number of noble Lords talked about littering in the countryside. How it is envisaged that the scheme will work in rural areas and on motorways? We all feel particularly affronted when we drive through the countryside and see litter left in the hedgerows and on the grass. Often, we know that it will be left there for a very long time. It seems unlikely that an enforcement agency would have the staff to police rural roads, but at the same time, the eyesore is even more powerful in areas of natural beauty. So do the Government have further plans to help clean up the countryside?
Also, am I right in saying that responsibility for litter on the side of motorways has transferred to Highways England? If so, will it have the same powers to catch and fine drivers throwing litter out of car windows, which again is a real blot on our landscape? Will the Minister clarify how that will work and what the Government’s target is, particularly for cleaning up the countryside?
I raise these issues not because I want to oppose the regulations—far from it—but because I want regulations that are effective and transformative. It is important that we learn the lessons from our experiences of tackling litter so far and that the new regulations really make a difference in the future. I hope the Minister will confirm that that will be the case. I look forward to her response.
Baroness Vere of Norbiton
My Lords, I thank all noble Lords for their contributions to what has turned out to be a fascinating debate, with some interesting points made. I will do my utmost to respond to all of them. However, as usual, if I do not I will write noble Lords a letter.
First, I thank my noble friend Lord Marlesford for his contribution today and his welcoming of these regulations. I agree with the noble Lord that this is a small step. There is no magic bullet when it comes to litter, but I hope that it is one step along the journey to making our country litter free. I also welcome the support that these regulations have received from my noble friend Lady Stowell, who made a very good contribution about it being everybody’s responsibility to stop littering.
My noble friend Lord Marlesford and the noble Baroness, Lady Jones, asked about timing. I admit that these regulations are a little delayed. However, we have used the time since the Anti-Social Behaviour, Crime and Policing Act achieved Royal Assent in March 2014 to carry out a scoping study into how the regulations were being used in London, and councils’ expectations or desires for a civil penalty system. We then developed and consulted on the draft regulations as part of preparing our new litter strategy for England. That is one reason for the delay. I hope that there will be no further delays when it comes to the department.
On the experience in London and the lessons learned, the slow take-up in London so far has been disappointing. I am surprised that London boroughs have not adopted these powers with more enthusiasm. I will certainly be on the case to my local councillor to ask exactly why this is the case. It is beholden on all of us as citizens to get in touch with our local councillors, because littering is a very important issue. Wandsworth is the only borough using the powers at the moment and we will take this opportunity to encourage other London boroughs to make use of the powers.
However, we are aware that there were some initial teething problems with these powers, which is why there may have been some delay. There was a problem with processing and enforcing payments. We have worked with the Traffic Penalty Tribunal and the MoJ to ensure that we have not replicated the problems initially experienced in London. We know that local London councils are using a mix of education and the threat of prosecution to change behaviour, and that is as important as fining people as they throw things out of their cars.
Independent Radio Production
Lord Stevenson of Balmacara
To ask Her Majesty’s Government how they intend to ensure that a sustainable independent radio production sector is operating over the period to 2027, with particular reference to maintaining the quality of programming across the BBC and commercial services, and to ensuring appropriate skills and working conditions.
Lord Stevenson of Balmacara (Lab)
My Lords, I am grateful to the noble Baroness, Lady Grender, and the noble Lord, Lord Berkeley, for speaking in the debate. The noble Lord is a practising radio performer, I think one can call him, whose programmes I listen to regularly—an interest that I should declare. I am sure he has a lot to say from the other side of the microphone. We are a small but select group interested in the future of radio in this country and I look forward to all the contributions, including that of the Minister, as well as that of my previous apprentice and now fully fledged shadow Minister for DCMS, my noble friend Lord Griffiths of Burry Port.
In our debate on the Digital Economy Bill last year, discussed in an earlier debate today, I tabled an amendment on the future of the UK radio production sector. It attracted only one speaker apart from myself and the Minister, but unfortunately that speaker did not give his full-hearted support to the amendment, which was a bit of a downer. However, I am doing better today. We have double the numbers and I think I shall get a slightly better response.
If my amendment to the Digital Economy Bill had been accepted, it would have required the Secretary of State to report, within a year of the passing of the Act, on the impact of the BBC royal charter and agreement—particularly the agreement—on the balance between in-house and independent production of programmes for BBC radio broadcast; the extent to which the training and development of production staff may have been affected; the number of staff active in radio production compared to 2016, including details of gender and other indicators of diversity; and the impact that the changes had had on the salaries and conditions of radio production staff. These issues are still relevant today, although I now think we need to spend a little time reflecting on the changes that have been made in the intervening period.
My reason for raising the issue at the time was that we had learned at a very late stage in the discussions on the BBC royal charter renewal process that the BBC had decided to make significant changes to radio commissioning. Not only were changes going to be made, they would be incorporated into the BBC agreement. This decision deeply affects the health of the radio production sector in this country as radio production moves broadly from a system in which most programmes are produced in-house to a commissioning-driven model. That is why my original amendment called for a report to assess the implications of this decision for the wider UK radio production sector, because it certainly changed the terms of trade. It is important to recognise that we are not talking only about quality of output, although that is important, but an analysis of staff numbers, training, pay and conditions, gender and diversity, as set out in the original amendment.
Radio is a popular medium with a wide audience reach and we are well served by the present diverse mixture of national, regional and local stations, the mixture of public service broadcasting and commercial channels, and a wide variety of genres and styles. They make a terrific offering which many people enjoy. Of course, sound probably lay at the heart of our civilisation itself. It is an amazing experience to have pictures created in your brain by sound alone and a wide range of skills are needed to provide a proper system of radio production.
Sound is also used here, of course: our voices are amplified and taken from here by the use of a sound recording system. We could not enjoy concerts without it and there is obviously a question about how we would get on in safety situations if there were no proper system of communication through sound. So it is really important that we get a broader picture of this. It is therefore a bit ironic that radio, as part of the creative industries, does not get as much political attention as it should. That may be because it is not a major part of the UK’s creative industries; although it is very successful, it does not contribute to the bottom-line figures as much as film or television. However, it is part of our creative economy, so its health and future success should matter to the department, to Ministers, to Parliament and to the country.
There is a debate to be had on some future occasion—not now—about how and in what format Parliament should engage with the BBC charter renewal process. I give notice that at the appropriate time I will argue that Parliament is not as engaged as it should be in the process and we need to do something different in the future, particularly on the agreement, which is at the heart of how the contract between the Government and the BBC works in practice but is never discussed, mainly for lack of time. We focus on the charter, which is the very broad-brush stuff, but we ignore, at our peril, the detail in the agreement.
However, for the remainder of this speech I want to focus on two small asks that I am sure the Minister will want to consider very carefully and, I hope, respond to positively. I should like her to arrange a meeting for those who have been affected by the current changes in the BBC and in the wider radio community so that the department is properly briefed about what is happening on the ground—I worry that it is not. Secondly, the original idea of having a review immediately after the passing of the Digital Economy Act was, as I said, a little previous. I now have a suggestion that I hope the Minister will take up when the Government come to do their mid-term review of the operation of the BBC charter. We had previous assurances about it being a very limited, light-touch review, but I hope it will be appropriate for it to look at the particular issues raised in this debate. The review will be in about 2022, I gather; half way between now and the next renewal of the charter in 2027.
I should make clear before I proceed that my focus is on the public interest as it affects the whole radio production sector; it is not about the BBC. It is quite inappropriate for Ministers, or indeed the Opposition, to pontificate about what the BBC should or should not do: that is set out in the charter and agreement and we should leave them to get on with it. However, it is important that we recognise the impact that decisions will have on the wider community involved in radio production. In a helpful note for this debate, the BBC points out that before the current BBC charter and agreement commenced in 2017, the BBC guaranteed 10% of eligible BBC network radio hours to independent production and a further 10% was open to competition between the independents and in-house departments. In fact, the total available up to 2017 was about 9,000 competitive hours per year. Following the charter process and the new agreement, the BBC committed to opening up 60% of eligible hours to competition within six years. There are restrictions on that because BBC news output, BBC Weather, EBU broadcasts, BBC local radio and coverage of state occasions are not included in the eligible hours. Even so, this brings the eligibility for consideration for outsourcing to some 27,000 hours per year—an increase of a staggering 300%.
I accept that, as the BBC points out, this does not mean that everything put out to tender will be lost by the BBC and I respect the belief expressed by the BBC that the process will be what it describes as a robust, transparent and fair system of competition: they would, wouldn’t they? However, I put it to the Government that we do not know enough about the radio production industry at present to understand the impact that these changes will have and that this new policy will bring to bear on the sector. While it may be true, as the BBC asserts, that,
“the broadcasting ecology works best when we have in-house and independent production working in creative tension”,
I, for one, would like to see the evidence. The Government should ensure that it is presented in their mid-term review.
Total radio production in the UK is generated by a very small group of people. There are about 150 relatively small companies, spread right across the country. Do we actually know the numbers involved? Who is charged with collecting and reporting on this sector and where is the data published? There is clearly an issue about scale. The present group of independent radio production companies are surely not currently capable of operating, like the BBC, on a scale that would enable them to take over the huge increase in the proportion of radio that we are talking about. Add to that the fact that most staff are freelance and that some, but not a huge amount, of training is done outside the BBC and I think we have a perfect storm.
As we have heard in this House on many occasions, one of the problems facing the creative industries is that they are not structured in a way that encourages apprenticeships, and it is generally agreed that there are far too many unpaid interns. What is the current position and how will it change through this change in the BBC’s work? Given that more than 50% of programmes are likely to be commissioned from outside firms, for how long will the BBC be expected to continue to operate as a major trainer, perhaps the sole major trainer, in this area? Who is going to pick up the slack? Will the present voluntary levy system in the creative industries survive the apprenticeship levy? We can all agree that radio needs a flow of qualified people coming forward, but if the independent production companies are not able to do it and the BBC will not, who will take this on?
What will happen to current staff contracts, for those who are involved in the BBC and whose work is outsourced? Clearly, TUPE rules may well apply, in which case there will be quite a lot of constraints on the ability of existing independent companies to respond in a different way from what is currently the case for in-house commissioning. There are already concerns about gender balance in the radio sector, including on pay, as we have heard in recent weeks. Again, we lack the baseline data that would help assess the situation. It needs to go wider than just the BBC.
It is important to recognise that there is considerable disquiet across the industry about these changes. A long list of top BBC radio professionals and others had a letter published in the Sunday Times not so long ago, at the time the BBC was considering this decision, calling on the Government and the BBC to scale down proposals to outsource 60% of radio output. They said:
“As radio professionals, we are extremely worried about the proposal … to put 60% of BBC national radio output out to competitive tender. Over the past 20 years BBC Radio has gradually increased external commissioning from zero to around 20% … This gradual increase has fostered evolution while maintaining stability, allowing BBC Radio to sustain its international reputation for excellence. The proposal to increase competition to 60% … threatens severe damage to that excellence”.
At a subsequent public meeting, Gillian Reynolds, the distinguished radio critic, said that while the 20% of production that has gone out to independent companies has resulted in some excellent programmes, she saw no benefits in outsourcing 60%, or what she called the,
“Uberisation of the radio workforce”.
I take it as given that the BBC’s charter and framework agreement, in effect since January 2017, obliges it to open up 60% of “relevant broadcasting time” on BBC Radio to competitive tendering by 2022, with a review at that point. I have no problems with that: it is happening and we should watch it be taken forward. However, while the BBC has to do what it has to do, and we should not interfere, there is a public interest in ensuring the more general continuing success of the radio production sector. This change of practice at the BBC gives rise to serious concerns, centring on the sustainability of what is really a very fragile radio production market. The potential threat to smaller independent producers and to the BBC’s own in-house, world-leading production capacity has to be borne in mind. I look forward to the debate and to the Minister’s response to my two asks.
Lord Berkeley of Knighton (CB)
My Lords, with unerring accuracy the noble Lord, Lord Stevenson of Balmacara, has put his finger on a vital and current issue. Before I begin, I draw attention to my work as a broadcaster and composer, as stated in the register of interests.
Long before the advent of television, radio—as provided then exclusively by the BBC—carved out a niche in the public psyche that has never really gone away. Think of Churchill or Eden; think of the King. Indeed, given the way television is gradually morphing into something that will doubtless be unrecognisable to us in a few decades, radio may well be the long-term survivor. What is it about radio that makes it so special, if less high-profile than its visual partner?
At its best, it is very much to do with the imagination, as the noble Lord, Lord Stevenson, suggested. By not spelling out every detail, radio allows listeners—indeed, forces listeners—to use their imagination, to build pictures in the mind. I enjoy drama on television very much but I invariably find drama on radio more challenging and more satisfying. Radio, particularly local radio, is the great friend of the car driver—with information on where he or she is, what they can expect to find weather-wise, local events. That is very important, particularly in remote rural areas. Television, apart from short bulletins and the occasional magazine, cannot really devote the time to discussing local issues in the way that radio can and does.
Television has, in fact, been forced further and further down the one-way road of instant gratification. There is a terror that without quick editing the viewer will be bored, so we get faster and faster intercutting to hold the attention. Of course television can take us directly to world events as they unfold—the Twin Towers, Grenfell—and yet, does not a wonderfully scripted description, as we often hear on, say, “From Our Own Correspondent”, sometimes and somehow give us more human insight? What we get on television will be the same footage repeated over and over again until we almost feel we are becoming immune to the full horror of what is happening, whereas a radio correspondent will act as our witness and as our conscience, especially in the case of gifted reporters such as Fergal Keane, Kate Adie, George Alagiah and Robert Simpson, to name but a few.
I had the pleasure of working with the current director-general of the BBC, the noble Lord, Lord Hall, at the Royal Opera House. What he achieved at the ROH was a remarkable turnaround. I believe that what he is attempting to do at the BBC is equally ambitious and admirable—for example, rationalising salaries in management, cutting through excess middle management and opening up the BBC to fair competition from the independent sector, as we have just heard, although that in itself raises problems. This latter move is still in its infancy but it has been welcomed by the Radio Independents Group. However, between the ROH and the BBC there is a huge difference in size and scale. Turning round an ocean liner—which Broadcasting House indeed resembles—is one thing on the open sea but quite another if you are hemmed in on both sides as though instead of being on the ocean you are actually trying to turn a liner round on the Serpentine.
I love the BBC and have contributed to it in many ways since the early 1970s. Even then, we were trying to attract younger listeners—well, they are our listeners now. In the spirit with which the noble Lord, Lord Hall, invited constructive suggestions at the Select Committee yesterday, I am going to make some observations which I believe are central to securing a continuing and healthy radio sector. The gender pay issue and the size of well-known presenters’ salaries has rather masked a troubling state of affairs on the factory floor—the grass-roots. I am talking here in particular of local radio, which the BBC has done so much to set up, but which is now in pretty dire straits. Several factors have fed into this, but one is that there is absolutely no equality in terms of rates for the job. I am certainly not saying that a local radio breakfast host should get a comparable rate to a “Today” presenter—obviously not—but the disparity has grown out of all proportion. Instead of the possible £325,000 that a “Today” presenter might get, let alone what they have been getting, a local radio man or woman gets up at 4 o’clock in the morning and, with no assistance, entertains and informs his or her local community or county for, after tax, something like £76. I support the request made to the Minister by the noble Lord, Lord Stevenson, and I shall add another one. I would like to know whether local radio staff are working for figures above, near or even below the minimum wage when the hours are properly and fairly accounted for.
Let us move up the ladder and take very knowledgeable and skilled specialist presenters on BBC Radio 3 and BBC Radio 4, but not on “Today”. Why do they get a fraction of what, say, leading BBC 6 Music presenters get? Audience sizes are similar, as is profile. I realise that in a commercial world there has to be some element of hierarchy and that the BBC has to have the right to say that so-and-so is worth so much to it and to use some sort of yardstick, but that yardstick needs to be transparent so that Miss A can say, “Is my job not more or less identical to that of Mr or Mrs B?”. My suggestion is that the BBC may need, in this area, to jump the hurdle of network budgets in order to achieve greater visible equality across the board in terms of fees. I think the BBC might have some sympathy with this, or at least a version of it. I want to add that I am not speaking out of personal desire here. It is a matter of public record that when the controller and my editor at BBC Radio 3 pointed out that I was being paid more than my colleagues who did similar jobs, I volunteered to take a 33% pay cut to bring me more in line with them. That is a perfect example of what I would like to see more of, as long as the proceeds really do go to the underpaid.
Let me turn now to an issue that has caused huge distress and hardship. It is the handling by the BBC of HMRC’s IR35 directive, which the BBC has interpreted, lazily in my view, as meaning that virtually all freelancers must be put on PAYE. Except that is not the whole picture. The Revenue wants to cut down on abuses, as it sees it, involving PSCs—personal service companies—but the BBC could and should have fought for those people who are arguably not required to go on to PAYE. The Revenue took a sledgehammer to crack a nut here, and the fallout has contaminated people who are completely blameless.
Instead, by its own admission, the BBC not only dropped the ball, it simply did not see it coming. These executives are presumably on rather good salaries, and get pensions, perks and expenses. No such goodies were offered as compensation to presenters, many of whom had been forced by the BBC to set up personal service companies in the first place, often against their wishes and those of their accountants—not cheap. So while the BBC sorts out this mess, presenters do not actually have contracts at all, and furthermore, people have been required to pay tax in advance without knowing what they are going to earn. This is devastating for many people with mortgages and families, not to mention cases I have heard of women being denied maternity leave.
To sum up, the BBC has been overzealous in its interpretation of IR35 and CEST—“check employment status for tax”, which determines whether or not someone should be on PAYE. It saddens me to have to say that an organisation that is supposed to be expert at communication with the public has been so utterly disorganised and inept in that regard when dealing with its own employees.
The BBC appears to have paid HMRC up front without any idea of what will be owed and has applied IR35 to sole traders unnecessarily, forcing people into unacceptable contracts that tax them as staff, but with none of the benefits. All of this is a legacy of making people set up PSCs so that the BBC could avoid employer’s national insurance contributions. Can it be right that the BBC can simply disregard contractual obligations and, without consent, claw back tax from the past as well as the future? Many talented radio people are now questioning whether they can carry on working for the BBC. These matters really go right to the heart of this debate and the future of radio. I cannot help pointing out that under most BBC contracts, I could be sacked for saying what I have said and for criticising the BBC—but then again, I do not have a contract.
I end on a note of optimism. The BBC is like the NHS: it has myriad components that make it the impressive vehicle it unquestionably is. As a fine Culture Secretary in her day, I hope the noble Baroness, Lady Jowell, will not mind me taking an important point from her moving speech about illness and the NHS, and applying it to other large institutions such the BBC: we have to nurture the small specialist departments that contribute so much to making the body whole.
Of course, as with the NHS, money is the game-changer, but I believe that the BBC can be seen to be economising—it just has some of its priorities and methods horribly wrong. However, while it can give us programmes as diverse as “Test Match Special”, “Moneybox”, the “Shipping Forecast”, “Hear and Now”, “All in the Mind”, “Choral Evensong”, the “Proms”, “New Generation Artists”, “In Our Time”, “Open Book” and so many more, it will continue to hold a place of great affection and importance in the national psyche.
Baroness Grender (LD)
My Lords, I congratulate the noble Lord, Lord Stevenson of Balmacara, on securing the debate. He has championed broadcasting issues here in the Lords for longer than I have been in this place, and I look forward to hearing even more from him on this.
I also thank all those organisations that provided briefings for the debate. There is clearly strong interest in the progress of building a sustainable radio production sector for the future. It is important today that we continue to review whether or not the current arrangements will achieve just that. Indeed, as a member of the Artificial Intelligence Committee, I am only too aware of the significant changes we are facing in the media and almost every other walk of life. Some suggest that Al will bring us the next industrial revolution. Changes are coming, particularly to platforms for media, changes that will require vibrant, creative and innovative approaches to all forms of media production, including radio. Yes, great change is coming, but there is a constant too. Radio continues to reach 90% of adult audiences. Radio was condemned long ago. The advent of TV was thought to be its death knell. As eloquently described by the noble Lord, Lord Berkeley of Knighton, radio is woven into people’s lives. It is conversational rather than just informational. It establishes a unique one-to-one relationship with the listener. Radio has adapted well to new lifestyles through the use of apps, podcasts and access to Freeview. The BBC’s global news service, the World Service, is the most trusted news source in the world and reaches a quarter of a billion people every week, more than any other international broadcaster.
The background to this debate is all-important, as the noble Lord, Lord Stevenson, set out in his opening remarks: the new charter and what followed, the “compete or compare” speech by the noble Lord, Lord Hall, in 2014. On these packed Benches, we welcomed the opening up of competable radio hours—as many as 27,000 by the end of 2022, a minimum of 60%. We believe that external commissioning is a good way to grow a strong and creative independent production sector.
We also believe that, for this to work, the process has to be as described by the noble Lord, Lord Stevenson: a level playing field and transparent. However, we wonder whether it is a bit early in the process to assess progress. Although the BBC Radio “compete or compare” strategy was initially set in place in 2015, the BBC’s new radio commissioning framework started only in April 2017, and there have not been many commissioning rounds since. For example, there has not been a full Radio 4 commissioning round so it is early to assess the overall impact, as the Radio Independents Group explains in its briefing.
There are encouraging anecdotal signs from both the independent production side and commissioners at the BBC. The BBC believes that “compete or compare” opens up BBC Radio to the best creative ideas, in turn driving up standards and getting value for money. There is anecdotal evidence that commissioners believe that the process so far has raised the game. RIG has been encouraged by the new Radio 2 schedule changes that were put out to competition, and remains in regular dialogue with the BBC over any teething troubles regarding the overall strategy. I therefore support the call of the noble Lord, Lord Stevenson, for other discussions to take place—in particular, about whether in-house staff are having equal teething troubles.
RIG remains convinced that these changes will revitalise BBC radio production, both in-house and independent. If both the BBC and RIG are right and this heralds a transformative period for independent radio production, I wonder what the potential is for this open competition to increase in the commercial sector, which is sometimes a little more conservative about some of these things.
There are examples of where it has been working. For instance, companies such as Somethin’ Else and TBI Media work with stations such as Classic FM, Absolute Radio and Virgin Radio. Is there potentially a day when the radio industry could learn from the experience of Sky and BT, which have shared content in recognition of their need to compete in what is now a new world of streaming and YouTube?
Perhaps the BBC can lead the way, if the positive feedback so far proves accurate. As the noble Lord, Lord Stevenson, explained, this view is in sharp contrast to other reports. I refer in particular to the NUJ report, and look forward to hearing the Minister’s response to some of those concerns. I should like to hear the Minister’s view of the need for some kind of public value test for this process and what discussions have been held with the BBC Trust on that undertaking.
Fostering independent production in all parts of the country, rather than the current media centres, is also an important objective. We therefore hope that the new BBC Radio commissioning arrangements result in more opportunities for companies outside the normal media centres. Does the Minister believe that there is any scope for local radio to be included within eligible hours? I recognise that lack of finance and resource may be the main challenge to such an undertaking, but wonder whether the potential has been considered.
I hope that radio is not one of the casualties from an across-the-board percentage cut, when the BBC has to fund licences for the over-75s from this dodgy smash-and-grab policy that was imposed on the BBC. The budgets in radio are so much lower than those in TV that it could ill afford that kind of cut.
As one of our greatest global assets, the BBC should, and often does, lead the way, which is why the equal pay issue, raised by the noble Lord, Lord Berkeley, is such an outrage. As we saw yesterday, when Carrie Gracie gave evidence to the culture Select Committee, she is a women promised equal pay for equal work who has been treated badly—and she is not alone in that. Many other women sitting behind her, and many of the BBC women, now 200 strong, have similar stories. Indeed, there are other stories much beyond the 200 women who have signed up to this. The noble Lord, Lord Berkeley, is an example in having shown the way and taken the pay cut that he described. The issue has shamed the BBC, and the sooner that it puts this right the better. Until people know what different jobs are worth, and where they sit on salary bands, the culture of secrecy and an environment where unfairness can fester and breed will sadly continue.
While the deregulation issue was not in the wording of the debate, I would like to touch briefly on two areas. First, we in the Liberal Democrats remain convinced that we should retain existing local news requirements and commit to this principle being extended to DAB services in future, in line with the current rules for FM and AM. Seventy per cent of listeners say that they trust radio for national and local news. In a world of fake news, where President Trump can denounce the New York Times from Davos—a paper featured in the film “The Post” for publishing the Pentagon papers —the need to protect and preserve news has never been greater.
Secondly, we support greater freedom for radio stations to choose the music they want to play, to cater for their own listeners. Music consumption and distribution through streaming has moved on, and so should we. So we support the Government’s intention to reform in this area but ask them to examine with care what impact that may have on minority genres, such as the Asian Network.
Digital switchover is well overdue. The Communications Minister at the time, Ed Vaizey, said as far back as 2010 that 2015 remained the target. A commitment was made to lead in the drive to overcome the remaining barriers to switchover. While it is also true that he wanted to wait for the listeners to move, surely we are now close enough to 50% to simply get on with it. If we want to encourage this sector, we need to ensure they are not being charged to be on two radio bands rather than one.
If the future of radio is to be secured, I hope that the meeting next week with the DCMS and the industry will go well when they discuss the new contestable fund for public sector broadcasting. As the Minister is aware, my noble friend Lady Benjamin successfully campaigned for greater funding for children’s content, particularly on TV. Children’s TV has needed this boost for some time but, at the same time, it was noted that it might be possible to use some of this fund for radio. We hope that that is the case, if relevant to children. We also hope that additional funding above the £60 million is found, if that is applied to radio, for adults. We look forward to hearing reports of those discussions.
Radio in the UK is a great asset. We need to keep it that way and ensure that future generations continue to use this wonderful medium.
Lord Griffiths of Burry Port (Lab)
My Lords, I am delighted to add my voice to those taking part in this debate. I have come to feel like Tweedledum to the Tweedledee of my noble friend Lord Stevenson over the time I have been standing in this position, although his description of me as fully fledged is not one I am ready to accept. I feel half way between fully fledged and half-baked. I hope that, at least on good days, I am getting there.
I welcome the concentration on radio that this debate opens up for us. Perhaps I should begin by declaring my interests, as well as a little of my experience. I have been a contributor to BBC radio for over 30 years, mainly, but not entirely, to its religious output. I have worked with in-house production teams over that time, many members of which have since grown wings and are now occupying very senior positions in the corporation and other bodies. I sat alongside Brian Redhead, of beloved memory, and John Humphrys, James Naughtie, Sue MacGregor and others, in a 17-year stint with my “Thought for the Day”. I still do the “Daily Service” and “Prayer for the Day”, and, with BBC Radio Wales, “Weekend Word”. I can testify to the skills and experience, and the innovative and creative energy, of the teams that present these programmes. The plans and proposals we are discussing today should never be at the expense of the expertise gathered and honed in those production teams. However, these teams should, of course, constantly be kept on their toes by the knowledge that, even in religion, they do not operate by divine right.
Because of my decision to take the Labour Whip when I entered your Lordships’ House in 2004, I was obliged to drop out of the number of those doing “Thought for the Day”—par for the course. Another opportunity soon opened up. For the last four or five years, I have been offering my “Pause for Thought” on the “Chris Evans Breakfast Show” on BBC Radio 2. I assure noble Lords that moving from Radio 4 to Radio 2 was like moving from Neptune to Mars, but I have come to love the bustle and the culture of my new habitat very much. “Pause for Thought” is one of the strands won by an independent company in competition with the BBC. Its quality control mechanisms are good, and I am kept up to the mark by two levels of production scrutiny. Once again, the company is only too aware that its licence will need to be reviewed from time to time and that a renewal will depend entirely on the quality of its output.
Finally, I have been a long-time contributor to the output of Premier Christian Radio. For 10 years I co-presented a programme called “Taking the Tablet”, a half-hour show in which an Anglican priest, a woman, interviewed me, a Methodist minister, about three stories chosen from the Roman Catholic weekly newspaper, The Tablet. My association with the station has intensified of late, and in four days’ time I shall attend my first meeting as a trustee of Premier, where I will be meeting the issues and themes of this debate head on. The station operates in a fiercely competitive marketplace and, apart from the usual ways of funding such independent bodies, is greatly supported by private subscription. All this is by way of declaring my interests in this matter.
I would like to address the question of training, raised by my noble friend Lord Stevenson. If the independent sector is to take up even half the openings that are declared available between now and 2022, it will be increasingly necessary to ensure that the work it wins will be done by properly trained personnel. The question of payment for people involved in the commercial sector needs to be addressed; so many people are freelance, volunteers or interns, and it is necessary to monitor that.
A helpful briefing from RIG, the Radio Independents Group—I think that if I were the Radio Independents Group I would choose a more fortunate acronym—gives a snapshot of where we are now on the issue of training. It indicates that its members are involved in training “the next generation” of producers, and claims to have so far provided over 2,000 learner days, comprising over 1,100 individual learners and including a diversity mentoring scheme. It states that:
“Around 60% of learners have been women and around 15% BAME and 5% disabled”.
This is, of course, to be welcomed. But someone needs to monitor the figures as the great leap forward scheduled over the next three or four years takes place.
Is anyone doing the bespoke work previously undertaken by the Radio Authority? One feels that Ofcom treats radio as a Cinderella and gives it only marginal attention; the Radio Authority, of course, existed with the sole purpose of looking at the quality of radio. Quis custodiet ipsos custodes? A bit of Latin—who will regulate the regulator? It seems to be a relevant question as we move into the different situations that face us.
Of course, the commercial sector is driven largely by finance. No problems there—expect that when difficult decisions about expenditure have to be taken, there will always be a temptation to make economies in areas that tend to be more costly. The results of the recent consultation on these matters recognised how, in the event of greater deregulation, the relatively expensive news service currently required of them may well be diminished or even abandoned. Yet local news, traffic conditions, weather and events would seem, for the most part, to be an essential ingredient in the output of any commercial broadcasting company anxious to give its audience what it most wants.
Indeed, once listeners are thought of merely as customers—and then, en masse, commodified—radio itself loses out on what it is, at the end of the day, all about, for radio is the most intimate medium of communication available to us. Whereas the BBC blazons its vocation at Broadcasting House as helping nation to “speak peace unto nation”, the actual activity is more about speaking peace to individuals in the privacy and intimacy of their own space. Certainly, that is how I was taught to do it; I always feel that I am talking to someone in their car, or in their bed, or at breakfast, or taking the children to school. It feels such a personal medium as a result of that way of looking at it.
Great care should be exercised to ensure that greater freedoms do not lead to lesser quality of output. The overarching responsibility for the commercial sector taking up its new opportunities must have the effect of:
“Holding the BBC to account for the delivery of its mission and public purposes”.
Good regulation should make this a priority. The National Union of Journalists is concerned that a proper review has not yet been carried out of the likely impact of the proposal to boost the number of hours available to independent companies to bid for production previously held within the BBC to see what damage it might do, both to the commercial sector and the BBC. The NUJ suggested that it might cost the BBC up to £1 million without the BBC benefiting from it at all. It is worth at least thinking through.
I have one further matter to bring forward. The commercial sector consists, so we are told, of about 150 companies. The self-styled “trade body” for two-thirds of these SMEs is the Radio Independent Group, which I have already mentioned. The bulk of commercial radio stations seems to have been consolidated within two large companies: Global and Bauer. No doubt this achieves critical mass for negotiating contracts, offering infrastructural support, sharing experience and ensuring solidarity in what can be a difficult commercial environment.
My concern is that the way these chips fall might well militate against the entry of smaller, innovative, aspirational newcomers. In the overorganisation of the commercial sector into large blocs, we must also throw in Arqiva, which is responsible for pretty much all of the transmission. We should be very careful about keeping space and offering opportunity to newcomers who may start in a very small way but might become something of great interest later on. There must be scope for bright new things as well as seasoned and organised veterans in the bidding process, which will increase in pace as that 60% of BBC output becomes open to others.
So I am delighted that, even at the fag end of an exhausting week, we can give our attention to the present and future needs of radio, and I hope the Minister can give us, with a little élan and freedom to anticipate the weekend, some firm assurances on the questions that we have asked.
Baroness Chisholm of Owlpen (Con)
My Lords, this has been an interesting but short debate. The noble Lord, Lord Stevenson, told me that he was going to step back, do much less and spend more time at home. All I can say is that I have seen him on either the Front Bench or the one behind more than ever before. I am not quite sure what “taking more time” actually means. I thank him for bringing forward this debate on independent radio production, and all those who contributed.
The independent radio production sector is a growing and exciting industry. Many of us will be familiar with its offerings, particularly on BBC Radio, with programmes such as “Diplo and Friends” on Radio 1, and two of my favourites, “Sounds of the 60s” on Radio 2 and “Gardeners’ Question Time” on Radio 4, which I am afraid slightly shows my age. With the high quality of programmes provided by the independent radio production sector, it is important that those within the industry are supported to grow their businesses and to secure commissions for programming, as the noble Lord, Lord Stevenson, mentioned.
In June 2015, the BBC reached an agreement with the Radio Independents Group, known as RIG—I agree with the noble Lord, Lord Griffiths, that it is a slightly unfortunate name for the trade body for the sector—which sought more opportunities to pitch its independent radio production ideas to the BBC. This agreement was then written into the BBC framework agreement and provides a level playing field for independent and in-house producers.
RIG represents the independent radio/audio production sector in the UK, which comprises around 150 companies. This agreement established that the BBC will move from the limited quota-based arrangements to a new commissioning structure, which subsequently opens up 60% of eligible hours—all radio hours except for news and current affairs—to competition by 2022. Prior to this, independent radio producers were able to pitch ideas for only around 20% of BBC programmes, which meant there were relatively few opportunities to offer new ideas for many parts of the BBC’s schedule.
Although the Government are not party to this agreement, we continue to support this change. The agreement from 2015 provides many more new opportunities to the growing independent radio production sector. This sector has a track record of producing high-quality content and gives BBC Radio audiences access to the best ideas and productions available.
However, I emphasise that increasing the competition between independent and in-house productions does not automatically guarantee that the independent sector will receive more commissions. Both independents and BBC in-house will be eligible to bid for work and the best ideas will win commissions. There will still in effect be an in-house guarantee, consisting of 40% of all programmes, reflecting the BBC’s continuing importance to radio.
As far as the timetable is concerned, the new BBC charter sets a firm timescale for the implementation of this change. The timescale for the transition by 2022 was set by the agreement between the BBC and RIG. Following on from that, since 2015 the independent radio production sector has remained strong and continues to thrive.
The noble Lord, Lord Griffiths of Burry Port, talked about quality. With the possibility of more independent radio productions being commissioned by the BBC, we expect that the high quality of programmes should be maintained or even increased by offering a wider choice of programmes to licence-fee payers.
The changes to BBC Radio continue to take place within a broader strategy called “compete and compare,” as mentioned by the noble Baroness, Lady Grender. It aims to extend competition, where it works, across the BBC’s output and, where this is not appropriate, to make greater use of comparisons with best practice in the market to ensure that we are given universal access to great quality content. I am pleased to be able to share an update from the BBC on the progress that this strategy has made. As of January 2018, 70% of “compete and compare” hours have already been awarded, with a further 6% to be awarded by March 2018. That means that in the first full year of “compete and compare”, BBC Radio will have put up 23% of eligible hours for tender, which equates to around 10,800 hours of content. So far, there has been a marginal shift of hours from BBC in-house production to indies totalling 89 hours, and competition is working with commission going in both directions.
I acknowledge that there may be concerns about the possible implications for BBC staff, such as possible job losses. These changes are being introduced with a long transition, and both the BBC and RIG are taking steps to ensure that the transition is as smooth as possible. As of now, no BBC in-house redundancies have resulted through the “compete and compare” strategy.
The noble Lords, Lord Griffiths of Burry Port and Lord Stevenson, talked about skills, training and contracts. The independent radio production sector strives to support all its members and advocates skills training, adequate employment conditions and the training of new entrants into the sector. As part of its remit, RIG offers advice, resources and training to its members to ensure that all those working in the sector have the essential skills required and can access further development opportunities as their careers progress.
The noble Lord, Lord Berkeley of Knighton, talked about wages. Independent production companies contracted by the BBC are obliged to comply with all legal requirements and the BBC’s living wage policy, with many firms employing a standing staff with the rest employed on freelance rates set by the market.
The noble Lord, Lord Stevenson, mentioned diversity and training. Independent radio producers are heavily involved in training the next generation of producers. Through the RIG training programme, they have so far provided 1,959 learning days involving 1,089 individual learners, including a diversity mentoring scheme. Around 60% of learners have been women, around 15% BAME and 5% disabled—I hope that last statistic will rise—showing the industry’s commitment to promoting diversity within the workforce.
Noble Lords raised several points, which I hope I can answer. The noble Baroness, Lady Grender, raised a couple of points that I will have to write about because the inspiration that normally appears over my left shoulder was not here until five minutes ago, so I probably did not pick up everything. Inspiration is appearing now, though.
The noble Lord, Lord Stevenson, mentioned a meeting, and we are of course more than willing to ensure that that happens. Perhaps we can talk about how we can go ahead with that. Several noble Lords, including the noble Lord, Lord Stevenson, mentioned a report and a review. The Government do not plan to produce a report on the BBC’s new strategy but, as I think several noble Lords mentioned, we have the opportunity to review this at the mid-term review of the BBC charter. That is when many concerns raised today by noble Lords can probably be discussed further.
The noble Lord, Lord Berkeley, talked about HMRC. The original IR35 or intermediaries legislation was introduced in 2000 but the legislation has now been changed regarding the engagement of individuals through personal service companies for all public sector bodies. There are two main areas of change. First, it is now the BBC’s obligation as a public body to deduct the right amount of tax and NIC for all those whom it engages. To do so, it must assess individuals’ employment status. Secondly, the employment test that we previously used to indicate employment status has been replaced by a new one-size-fits-all test called the CES tool, designed by HMRC, which is intended to apply to all industries. This is being used to assess the status of all on-air contributor engagement, new and current, which extend beyond 6 April 2017. The CES tool provides HMRC’s view of the employment status of a worker; if the outcome of the new tool deems the engagement to be one of employment, we will deduct the appropriate tax via PAYE and NIC at the point of payment.
The noble Baroness, Lady Grender, talked about digital. We are making steady progress towards reaching 50% of listings on digital platforms and the radio industry expects this figure to be reached in 2018. Decisions on future switchover are not simple or straightforward. It is important for the Government, the BBC, commercial radio and other stakeholders to take time and care in how we approach any decisions. A review by government, following the reaching of 50%, will need to carefully consider the key factors that will need to be in place, including issues in relation to cars, DAB coverage for all those parts of the country without digital services and the potential timing and approach to switchover. The noble Baroness also talked about extra funding. I do not know if she was thinking about the contestable fund.
Baroness Grender
My understanding is that there is a meeting at DCMS next week. It sounds like an excellent idea; it is about whether some of the contestable funding is available for radio. As the noble Baroness will be aware, that is something that was hard fought for. The £60 million is going towards children’s TV content and maybe some radio, but we would like to know that it will still be directed towards children’s content, even if some is allocated to radio. If it becomes adult radio, we would ask for there to be additional funding to the £60 million.
Baroness Chisholm of Owlpen
The noble Baroness is right; that is for children’s television. In fact, we want to engage with the radio industry to explore whether there might be alternative options, so as to use a small proportion of the funding marked for the contestable fund to support the radio sector in a more bespoke way, but that would not take away anything from children’s programmes.
I have now been inundated with papers, including on public value tests, which I thought I would have to write to the noble Baroness about. No review is planned, but we are confident that the compare or compete strategy is working. We have the power to review this midway through the charter, should there be any worries. When the BBC wishes to launch a new service, Ofcom may have a role in asking about its public value and the market impact that it may have. It equally may apply when the BBC wants a major change to how it provides its services. I may well not have answered all the questions. I apologise to noble Lords but I will certainly write if I have not.
To conclude today’s debate, independent radio production remains a strong industry and the agreement made between RIG and the BBC will ensure that the best programming is made available to BBC radio listeners. I look forward to the new and exciting programming that the independent radio production sector will continue to offer in the future. Like the noble Lord, Lord Berkeley of Knighton, I, too, am looking forward to listening to the radio on my long journey home tonight.