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Oral Answers to Questions
(6 years, 1 month ago)
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Albert Owen (Ynys Môn) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
My ministerial colleagues and I have regular discussions with our counterparts in the Welsh Government on all aspects of the industrial strategy. Last week, my officials were in Cardiff to discuss with the Welsh Government the proposed Swansea bay tidal lagoon.
Albert Owen
At the heart of the industrial strategy is spreading prosperity across the whole of the United Kingdom, and working with devolved Administrations in our nations and regions will help to achieve that. The Welsh Government are working with practical developers—Minesto, an international company, and local company Morlais—to develop marine energy in my part of the world. The Secretary of State mentioned the Swansea bay tidal lagoon. Will he now make a decision and work with the Welsh Government and with developers so that we can roll that out, maximise our potential, and spread prosperity in this part of the United Kingdom?
Greg Clark
I share the hon. Gentleman’s enthusiasm for green energy, as he knows, and I am proud of our achievements. Since 2010, we have quadrupled the proportion of our electricity that comes from renewable sources. However, as the hon. Gentleman understands from being on the Select Committee, we also have a responsibility to minimise the impact on consumers’ bills. The Swansea proposal was very much more expensive—more than twice as expensive—as the Hinkley nuclear power station, for example. As I said, though, we are in discussions with our colleagues in the Welsh Government. I do not want to close the door on something if it is possible to find a way to justify it as being affordable to consumers.
Jessica Morden (Newport East) (Lab)
I, too, say to the Minister that making a decision on the Swansea bay tidal lagoon is important for Wales as a whole. There is huge potential for future lagoons around Newport following the Swansea pathfinder. It is really important that we do not pass up these opportunities.
Greg Clark
I take the hon. Lady’s point. I think that everyone recognises these issues. In fact, the First Minister wrote to me yesterday and acknowledged the
“genuine challenges in…considering a proposal involving untried technology with high capital costs and significant uncertainties.”
That is why the best way to do this is to explore all the possibilities and to recognise the constraints. That is what I have committed to with colleagues in the Welsh Government.
Lee Rowley (North East Derbyshire) (Con)
Bill Grant (Ayr, Carrick and Cumnock) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)
Government research on consumer satisfaction published in August last year shows that satisfaction with smart meters is high. Eighty per cent. of consumers are satisfied with their smart meters and 80% would recommend them to friends and family. Smart Energy GB found that nearly 90% of people with a smart meter made energy savings and changed their behavioural patterns.
Lee Rowley
I thank the Minister for his response. It is good to hear that so many people are reaping the benefits from smart meters. No system is ever perfect, however, and that is the case for a small number of customers such as a club in my constituency, Killamarsh juniors athletics club, which is now on its third smart meter and is getting really unhelpful responses from its electricity provider. Can he provide any advice to the club in my constituency?
Richard Harrington
My hon. Friend has made a point about the Killamarsh juniors club in his constituency. I would be very happy to meet him on that specifically. However, I have not found this generally to be the case. The roll-out of smart meters is a very important national modernisation programme that brings major benefits to consumers generally and to his constituents specifically.
Bill Grant
Smart meters are good for consumers and suppliers alike, but the roll-out relies on there being a good mobile phone signal for them to be effective, and in many parts of rural Scotland that is simply not the case. Can the Minister reassure me that he is working across the Government and with relevant stakeholders to ensure that residents in rural areas benefit from smart meters?
Richard Harrington
I agree entirely with my hon. Friend. We are working on that, and the Arqiva radio solution provides communications services for the north region. That covers Scotland, and it is contracted to cover nearly 100% of premises by the end of 2020.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Does the Minister accept that his statistics are based on surveys that are carried out about 10 weeks after installation? My own survey found that 54% of constituents would currently refuse a smart meter, 97% want to see the costs of the programme shown on their bills, and 74% said that receiving one had not yet made any difference to the size of their bills. Will he also take those findings into account?
Richard Harrington
The hon. Gentleman knows me well enough to know that I am very interested in anything he has to say. He contributed a lot to the passage of the Smart Meters Bill in the House of Commons. I would be very interested to receive those statistics, but we do receive them from quite a few different places, and I do not just quote one sample.
John Cryer (Leyton and Wanstead) (Lab)
I am sure the Minister is speaking in good faith, but I have come across constituents who find that bills are not reducing, but increasing. Has he had discussions with the utility companies about keeping an eye on this and making sure that the effect of smart meters is to reduce costs for constituents, many of whom are poor, not raise them?
Richard Harrington
I am very surprised to hear what the hon. Gentleman says. As he said—I am grateful for it—I am talking in good faith; I know he is too. I would be pleased to hear of those examples, but I cannot quite understand why bills would go up, because nearly 90% of people with smart meters say that it is changing their energy patterns and that bills are going down.
Stephen Kerr (Stirling) (Con)
Can the Minister update us on where we are with the roll-out of SMETS 2 smart meters?
Richard Harrington
As my hon. Friend, who also contributed a lot to the passage of the Bill, knows, SMETS 2 is the newer type of meter which at the moment is in its trial phase. As the months go on, SMETS 1 meters will be converted through software that is being developed by the Data Communications Company, and all new meters will be SMETS 2.
Alan Brown (Kilmarnock and Loudoun) (SNP)
How satisfied are consumers when they realise that a smart meter becomes a dumb meter when they switch suppliers? Can he put an accurate timeline on the roll-out of SMETS 2 meters?
Richard Harrington
As I explained, the software that is being developed now and will be in place shortly after the summer will ensure that that does not happen. The comparatively small number of SMETS 1 meters that do not operate as smart meters when suppliers change will suddenly become compliant, and they will all be able to speak to one another electronically, which is what we all want.
Anna McMorrin (Cardiff North) (Lab)
Teresa Pearce (Erith and Thamesmead) (Lab)
The Minister for Energy and Clean Growth (Claire Perry)
We should all be proud of the progress the UK has made in meeting its carbon reduction targets. The current statistics show that we have met our first budget, are on track to exceed our second and third budgets and are 97% and 95% of where we need to be to meet our fourth and fifth budgets—[Interruption.] I hear groaning, but I think those are decent numbers, given that we are 10 and 15 years away from achieving those budgets.
Anna McMorrin
The lack of commitment, focus and ambition from this Tory Government mean that we are set to miss our legally binding carbon targets. Three easy wins could be to repeal the ban on onshore wind, prioritise energy efficiency measures and zero-carbon homes and commit to the Swansea bay tidal lagoon. When are this Government going to get their act together, demonstrate their commitment to future generations and get on with it?
Claire Perry
I think the hon. Lady perhaps wrote that before hearing my answer. Let me share two facts with her. First, Britain has led the world in decarbonising our economy while growing it at the same time, not delivering carbon cuts with recessions, as other parties would like. Secondly, there are two countries in the world considered to be doing enough to meet even a 2° C target, and those are China and the UK. We have set out what has been described as the most ambitious set of policies and proposals ever seen from a Government in the clean growth strategy. We are bringing that forward, and it would be nice to feel we had a cross-party consensus on doing something that is so vital for both this country’s future and the future of the world.
Teresa Pearce
I was interested to hear the Minister say that we are on target for three carbon budgets but will miss the fourth. The Committee on Climate Change said that the fourth carbon budget will not be met unless policies are supplemented by “more challenging measures”. She spoke about ambition. Can she tell us what those challenging measures will be?
Claire Perry
As I answered before, the calculations for the fourth and fifth carbon budgets—which, I repeat, end in 10 and 15 years’ time and which we are 97% and 95% of the way to meeting—are based on an analysis of only 30% of the policies and proposals in the clean growth strategy. [Interruption.] My right hon. Friend the Secretary of State says he thinks that that is quite good; I agree.
We are bringing forward further work on those policies and proposals and also spending an unprecedented amount on research and development in this space—more than £2.5 billion over this Parliament. I am extremely confident that we will meet our budgets, with our ambitious policy, the ingenuity of British businesses and the science base, the strong campaigning and the structure of the Climate Change Act 2008—the Act that we were the first country in the world to pass.
Antoinette Sandbach (Eddisbury) (Con)
Does the Minister agree that improving home energy efficiency measures would help us to meet our carbon budgets?
Claire Perry
My hon. Friend led an excellent debate on this in Westminster Hall, where we had a very strong outbreak of cross-party consensus. I entirely agree, and that is why we have set our home efficiency targets at band C for 2035. We are keen to do that in a cost-effective way, and I will shortly be bringing forward the consultation on ECO—the energy company obligation—and how to target it at fuel-poor households. In addition, we need to create a route to market for some of our best British technology to solve that problem.
John Stevenson (Carlisle) (Con)
Nuclear power will clearly be central to us reaching our carbon targets. Is the Minister confident that enough progress is being made to see the construction of nuclear plants in Anglesey and Cumbria?
Claire Perry
As the hon. Gentleman knows, making these long-term decisions and creating costs for consumers over decades—whether in tidal lagoons or in nuclear—are matters that we have to take extremely seriously. We have to reduce the carbon emissions of our power supply, cut costs for consumers and create innovation that we can export around the world, and all of those considerations are being taken into account.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
To meet carbon reduction targets, the Government will need to support, among other technology, offshore wind projects. In Scottish waters, Dounreay Tri, Kincardine and Forthwind are working to deliver first generation projects with an immediate value of £200 million for jobs and the supply chain, yet due to factors outwith their control, they will struggle to hit the UK Government’s October deadline. Will the Minister meet me to discuss how we might support these projects in making their contribution to carbon reduction?
Claire Perry
We have worked very hard on the wind industry in Scotland—the hon. Gentleman and I both welcome the recent announcement about remote island wind, which is a really positive step forward—but the challenge is that the phasing out of the renewables obligations was set over four years ago. People have been fully aware of them, and we are currently not intending to extend the length of the grace periods. However, as he knows, I am always happy to try to build cross-party consensus on this vital agenda for this country.
Dr Alan Whitehead (Southampton, Test) (Lab)
I am sure it is absolutely not the intention of the Minister to mislead the House in any way, but her statements about our being 96% of our way towards meeting our fourth and fifth carbon budgets need to be put in the context of the fact that we are committed to reducing CO2 emissions by 225 million tonnes, but the Government proposals will reduce the amount by only 116 million tonnes, which is only just over half the requirement between the fourth and fifth carbon budgets. What are the Minister’s proposals under the clean growth plan to make sure that we reduce the amount by the outstanding 109 million tonnes?
Claire Perry
The hon. Gentleman is a clever scientific fellow, and he knows that those numbers refer to the baseline numbers of 1990. I would be very happy to sit down with him and go line by line through the carbon budgets and the policy proposals. Again, he and I both need to be absolutely clear that regardless—[Interruption.] There is an awful lot of shouting from the hon. Member for Blyth Valley (Mr Campbell), who wants to bring back coal. Regardless of what this and future Governments do, those budgets must be fit for purpose, and we have to be absolutely clear and transparent about how we are going to meet them, and that is exactly what the clean growth strategy has done.
Mark Pawsey (Rugby) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Britain is building one of the best charge point networks in the world, and our £400 million charging infrastructure investment fund, announced at the Budget, will see thousands more charge points installed across the UK.
Mark Pawsey
Yesterday, the Business, Energy and Industrial Strategy Committee visited the London Electric Vehicle Company in my constituency. The Secretary of State will remember opening it a year ago, and it is great that we are now seeing electric taxis on the streets of London. We also went to the Electric Vehicle Experience Centre in Milton Keynes, where we heard concerns about the fact that the lack of compatibility between chargers and connectors is in danger of putting people off buying an electric car. What will the Secretary of State do to encourage the industry to adopt a standard?
Greg Clark
I am delighted that the Committee went to see the electric taxi company. The opening, at which my hon. Friend accompanied me, was a fantastic event. Having such compatibility is a very important matter. The recently introduced Alternative Fuels Infrastructure Regulations 2017 set minimum standards for publicly accessible charge points. In addition, the Automated and Electric Vehicles Bill, which is currently before Parliament, will give the Government new powers to regulate these technical standards.
Mark Tami (Alyn and Deeside) (Lab)
Many supply companies are worried that if there is a high uptake, which I think we would all support, the infrastructure will not be there to support it. It is just not true that electric vehicles do not use a great deal of power, so there are concerns about strain on the system as a whole.
Greg Clark
I am grateful to the hon. Gentleman for those comments. Our access to the network is one of the best in the world, especially for fast chargers. He is absolutely right that electric vehicles can contribute to the electricity grid’s resilience, because their batteries can store electricity generated by renewables for a time when it is needed, which is very much part of the smart systems plan.
Michael Fabricant (Lichfield) (Con)
Batteries, of course, are one of the constraints that people consider before buying electric cars, because of their limited range. Does my right hon. Friend therefore welcome the initiative of the Mayor of the West Midlands, along with the Government, for introducing a battery research centre in the west midlands?
Greg Clark
Not a Question Time goes by without me welcoming an initiative from the Mayor of the West Midlands. We have worked very closely with the Mayor, and with the automotive industry, to ensure that we are investing at the cutting edge of research into battery technology, precisely so that we can build the cars of the future.
Thangam Debbonaire (Bristol West) (Lab)
What comfort can the Secretary of State give the people of Bristol, who wish to see the number of electric charging points massively increased?
Greg Clark
I am delighted that there is such enthusiasm in Bristol. The hon. Lady will be aware that the funding for charging infrastructure is available especially for city-centre authorities that can put it into public car parks.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)
The Government remain committed to supporting the industry and building on the £2.3 billion package announced in recent Budgets. My right hon. Friend the Minister for Energy and Clean Growth greatly enjoyed her recent visit to Aberdeen—as did I, when I visited—when the industry presented its initial proposals for a deal. My right hon. Friend is meeting the sector deal champion, Trevor Garlick, tomorrow.
Andrew Bowie
I thank my hon. Friend for that answer. The oil and gas industry based in the north-east of Scotland has contributed over £330 billion to the economy, supports over 330,000 jobs across the United Kingdom and has a supply chain worth nearly £30 billion. With an estimated 20 million barrels of oil still to get out of the North sea, the industry has huge potential to drive this country’s growth, but of course there is still uncertainty, so I know that the Minister will welcome the response—
Mr Speaker
Order. I am sorry to interrupt the hon. Gentleman, but we need a single-sentence question, not a preamble.
Andrew Bowie
Will the Minister pledge to work continually with the industry to develop and deliver the sector deal?
Jim Shannon (Strangford) (DUP)
What discussions has the Minister had with the Treasury about the impact of Her Majesty’s Revenue and Customs’ new end-use procedure changes on the gas and oil industry?
Richard Harrington
I will give a very succinct answer, as you have requested, Mr Speaker. I do not know, but I will happily meet the hon. Gentleman to discuss it.
Stephen Crabb (Preseli Pembrokeshire) (Con)
What consideration is my hon. Friend giving to the downstream sector? Our remaining oil refineries are important national assets and major centres of employment, and they could benefit from clear, long-term thinking.
Richard Harrington
As my right hon. Friend will be aware, the whole sector is important to us, and specifically the supply chain. I have met various players involved, and it is of critical importance to us.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
The UK Government have so far failed to announce a sector deal for oil and gas, and there was no mention of one in their industrial strategy. There is a need for a sector deal approach to the industry. The Scottish Government have been calling for such action. Will the Minister finally rectify this glaring omission and commit that vital support for the industry and the jobs and investment it relies on?
Richard Harrington
The hon. Gentleman should be aware that this is a priority for us. We are working very hard with the sector to come up with a sector deal, and I expect those talks to come to fruition very soon.
Mr Ranil Jayawardena (North East Hampshire) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
The automotive sector deal will ensure that the UK continues to reap the benefits from leading the transition to zero-emission and autonomous vehicles. Last month that drew in £33 million of investment into the UK-based connected and autonomous vehicle programmes, with participation from across the industry.
Mr Jayawardena
Jaguar Land Rover recently developed the I-Pace, its first all-electric performance SUV, and, as my hon. Friend the Member for Rugby (Mark Pawsey) mentioned, the London Electric Vehicle Company has developed the world’s first purpose-built electric taxi. Will my right hon. Friend join me in congratulating those great British manufacturers on the world-leading role they are playing in the sector?
Greg Clark
I certainly will. The Jaguar and the London taxi are iconic images, and to see them leading the way into the future is a matter of great delight. I congratulate both companies on choosing to manufacture those vehicles in the UK.
Mr Jim Cunningham (Coventry South) (Lab)
What is the Secretary of State doing to help development in the transition from diesel to electric vehicles? In particular, how is he helping with infrastructure?
Greg Clark
We are working very closely with the industry to ensure that as it develops the new technologies of the future, it is able to plan a smooth transition to a world in which all vehicles will be compatible with our climate objectives.
Steve Double (St Austell and Newquay) (Con)
All the new electric vehicles will need batteries, of which lithium is an essential element. Recent discoveries of large deposits of lithium in Cornwall open up the possibility of the UK securing a domestic supply for this vital element. What support can the Secretary of State give to this exciting new emerging sector?
Greg Clark
Through our industrial strategy, we have highlighted the potential for new developments in battery storage. If Cornwall can supply the lithium to power that new industry then I am delighted to hear it. I will discuss the possibilities further with my hon. Friend.
Peter Kyle (Hove) (Lab)
At yesterday’s Select Committee visit, mentioned by the hon. Member for Rugby (Mark Pawsey), it became very apparent that the market for electric vehicles is maturing at a much faster rate than many people realise. Is it possible that the ambition of the sector itself is outstripping the ambition of the Government, and should the 2040 target not be brought forward, perhaps even by a decade?
Greg Clark
When it comes to the new generation of automotive technology, the ambition of this Government is not outstripped by anyone. We are working very closely—hand in glove—with the industry, through the Automotive Council, to make sure that we are the best placed in the world not only to research the new technologies, but to manufacture them in this country.
Justin Madders (Ellesmere Port and Neston) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
The Government’s long-term partnership with the automotive industry is an exemplar of our industrial strategy. Only a fortnight ago, I went to Derbyshire to welcome Toyota’s decision to build the new Auris in Burnaston, helping to secure 3,000 jobs between Burnaston and Deeside in north Wales.
Justin Madders
I am sure that, while welcoming that investment, the Secretary of State will have been alarmed by the comments made by the chief executive of the PSA Group, which owns Vauxhall in my constituency, about the lack of certainty, with Brexit affecting investment decisions. Will the Secretary of State meet the PSA Group and me to give us confidence in terms of investment in the future of that plant?
Greg Clark
I regularly meet with chief executives of car companies, including Mr Tavares. It is very clear that we are determined, as the Prime Minister set out in her Mansion House speech, to make sure that this very important integrated supply chain is able to continue to operate. It is worth bearing in mind that since my team have been in the Department every single major new model decision has gone our way. I am determined to keep up that advocacy.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
The automotive sector is crucial to UK industry. It employs 814,000 people and we are all proud of British car manufacturers, including the iconic Rolls-Royce and Jaguar. In recent weeks, however, President Trump has revealed an appetite for a trade war that began with the announcement of steel tariffs and now includes threats to put tariffs on EU cars, which could hit our industry hard. Will the Secretary of State tell this House what he is doing to avoid a trade war with the US? Should such tariffs come into play, what will he do to protect our steel and automotive sector?
Greg Clark
I am sure the hon. Lady was in her place yesterday when the Trade Secretary gave a very comprehensive statement. There was some welcome for the cross-party approach that went into defending the international system of free trade. It does no one any good if we have tariffs in place that impede trade. Her endorsement of the approach being taken by the Trade Secretary would be welcome.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
Alex Chalk (Cheltenham) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
The official receiver and special manager are working to ensure an orderly transition by facilitating the transfer of contracts. As of 12 March, 8,521 jobs have been safeguarded and 1,536 people have been made redundant, sadly, through the liquidation. My right hon. Friend the Business Secretary has set up a taskforce, bringing together trade associations, bankers and representatives of Government to ensure that we support the Carillion supply chain. The taskforce has delivered a range of supportive measures, including more than £900 million of support from UK lenders.
Gerald Jones
Let me seek some further clarification. If there is any doubt that TUPE applies, can the Government confirm that they will instruct the official receiver to transfer employees on private sector contracts as if TUPE applied? Will the Government also ensure that trade union recognition is transferred with those staff?
Andrew Griffiths
I thank the hon. Gentleman for that question and refer him to the recent Westminster Hall debate, when we discussed at some length the legal responsibilities in relation to TUPE, which do not apply in many cases during a liquidation. Transferring employers may well decide to offer terms to transferring employees that recognise existing employment rights, terms and conditions. The Government are focused on ensuring that transferred employees are no worse off, and the official receiver is doing all he can to facilitate this wherever possible.
Alex Chalk
The Carillion collapse has exposed what can only be described as market abuse by lead contractors, with subcontractors in Cheltenham suffering as a result of the failure to adhere to best practice schemes such as the prompt payment code. What steps are the Government taking to ensure compliance with the schemes and more generally to stamp out market abuse?
Andrew Griffiths
My hon. Friend, who has met me on a number of occasions to defend the interests of businesses in his constituency, will know that the Government had two priorities: to protect the provision of vital public services and to do what we could to protect jobs in Carillion and jobs in the supply chain. We are clear that we must learn the lessons from the collapse of Carillion. This could be a catalyst for change for the good. We are concerned to ensure that we do all we can to learn the lessons on procurement, and we also want to do more to ensure that the supply chain is promptly paid and that small businesses are paid speedily. Looking at the prompt payment code is an important part of that.
Rachel Reeves (Leeds West) (Lab)
Following on from the question from the hon. Member for Cheltenham (Alex Chalk), when Carillion went bankrupt, many of the subcontractors had not been paid for 120 days. The money coming to Carillion was from the Government, so what are the Government doing to ensure that when they give contracts to big businesses, those businesses pay their subcontractors on time? Small businesses are the lifeblood of our economy and they have been destroyed by the collapse of Carillion.
Andrew Griffiths
I thank the hon. Lady for that question and particularly for the work that her Select Committee is doing in getting to the bottom of exactly what happened in Carillion. That is very important work. The Government are clear that with public sector contracts we pay in 30 days, and we expect tier 1 contractors to ensure that they pay their supply chain in 30 days too. We are determined to take action to ensure that this happens, and we are looking at what we can do to make sure not only that small businesses in the public sector supply chain get paid within 30 days, but that we do more to support private sector suppliers as well.
Henry Smith (Crawley) (Con)
What support has been given to British nationals working abroad who were with Carillion?
Andrew Griffiths
The main priority for this Government has been to protect jobs here in the UK and the continuation of public sector contracts and services. The special manager, of course, has a responsibility to wind up the business to get the best value for creditors, but he is responsible for dealing with businesses overseas.
Eleanor Smith (Wolverhampton South West) (Lab)
For the Carillion workers who were not transferred under TUPE, what was the degradation of their terms?
Andrew Griffiths
I have met the hon. Lady several times, and I know that she is working hard to ensure that her constituents employed by Carillion get all the protections possible. The Secretary of State has had conversations with the special manager to ensure that wherever possible when contracts are transferred employees get like conditions so that they are no worse off. As she will understand, this is a very complex and complicated business, and I do not at the moment have the specific statistics she requests.
Andrea Jenkyns (Morley and Outwood) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
We want people to be self-employed when it is the right thing for them, which is why the Government have introduced new measures to ensure they are even better supported. These include improved support for embarking on self-employed careers, encouraging pension saving and supporting people to pay the right tax. From 6 April 2016, we have also given self-employed people the ability to build their entitlement to the new state pension at the same rate as employed people.
Andrea Jenkyns
Morley is lucky to have a thriving high street, which matters to me as an ex-retailer. During the recent cold weather, Apollo Fisheries in Morley handed out free food to cold residents. What are the Government doing to support our businesses on the high street, and will the Minister take this opportunity to congratulate Apollo Fisheries on its fine example of Yorkshire hospitality at its best?
Andrew Griffiths
I think the House will recognise that I am no stranger to a fish supper, and I would like to join my hon. Friend in congratulating Apollo Fisheries on the community spirit it showed. It clearly demonstrates that businesses contribute not just to the economy but to our society. The future high streets forum provides joint business and Government leadership to enable our high streets and town centres to adapt and compete in the face of changing consumer and social trends, but we want to go further, so last week I announced the establishment of the Retail Sector Council, which will bring together leaders in retail to help to develop policies and support for the vital retail sector.
Ms Angela Eagle (Wallasey) (Lab)
We all want self-employment to grow, but we also want to crack down on apparent self-employment, where people are forced to become self-employed by exploitative employers who then save on national insurance contributions while putting all the risk of that employment on often vulnerable individuals. What are the Government doing about that?
Andrew Griffiths
I am sure the hon. Lady will be delighted to know that the Government are taking forward the proposals set out by Matthew Taylor. We recognise that employment status—whether workers are employed or self-employed—is key to their getting not only the payments but the protections they deserve. That is why we have embarked on a full consultation with the intention of clarifying the status of workers, giving them extra protections and ensuring that if it looks like work and feels like work, it is work and they are paid properly.
Rebecca Long Bailey (Salford and Eccles) (Lab)
The Government’s response to the Taylor review did virtually nothing to tackle the challenges and insecurity that self-employed people face. Equally poor was the Government’s response to the treatment of gig workers.
“Don has died and they should be making changes”.
Those were the words of DPD gig worker Don Lane’s widow, Ruth. With this in mind and with Matthew Taylor himself last week rating the Government’s response to the Taylor review a shocking four out of 10, what score would the Minister give himself?
Andrew Griffiths
Seven weeks in, I think I would give myself 10 out of 10. The hon. Lady quotes Matthew Taylor. He has said quite clearly that this is a complex and complicated matter. He wants us to get the definition of status right, because the rights of thousands of gig workers depend on it. That is why in the passage the hon. lady quotes he also said that when we have finished our consultation, if we deliver what we have promised he would give us seven or eight. I want to go further; I want it to be 10.
Rebecca Long Bailey
Ten out of 10 indeed! The Chancellor today might attempt to laud employment figures as positive news, but he will fail to state that over 3 million people are in insecure work, and, according to a recent report by the Centre for Labour and Social Studies, over a third of all workers do not even earn enough to live. There are also real fears, despite the Prime Minister’s assurances, that the quality of work will worsen still, with reports that the Foreign Secretary and other Ministers are pushing for major employment law deregulation. Will the Minister confirm whether his Department is carrying out any work looking at the deregulation of certain employment rights?
Andrew Griffiths
The hon. Lady must have missed the intention behind what the Government were doing with the Matthew Taylor report. Not only are we committed to continuing the existing employment rights and protections, but we are going further and faster than anyone else—further and faster than our European colleagues—to give gig workers and others in vulnerable conditions, such as agency workers, greater protections than ever before. We are not just talking about it; we are protecting those workers.
Stephen Hammond (Wimbledon) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
Apologies, Mr Speaker. I was congratulating myself too much!
The Government-owned British Business Bank provides £4 billion to support more than 60,000 UK small and medium-sized enterprises. We plan to unlock more than £20 billion of investment in innovative and high-potential businesses, including a new £2.5 billion investment fund with the British Business Bank. The Small Business Commissioner helps with payment issues, dispute resolution, and the sourcing of advice throughout the UK. Through the industrial strategy, we are continuing to invest in 38 growth hubs across England, as well as the business support helpline.
Stephen Hammond
Of course I join in the congratulations to the Minister, but he will know that one of the crucial requirements for the success of the small business sector is access to and understanding of finance, and there is considerable evidence that there is currently a knowledge gap in the market. What are the Government doing to address that?
Andrew Griffiths
My hon. Friend has hit the nail on the head. We are concerned by reports that businesses, particularly small businesses, are reticent about coming forward to access finance that could help them to invigorate and grow. That is why the British Business Bank produces “The business finance guide”, in partnership with the Institute of Chartered Accountants in England and Wales and industry bodies. The guide explains the different sources of finance that are available to smaller businesses, and is also published online. The British Business Bank will launch a new digital platform in the spring to raise awareness even further.
Tim Farron (Westmorland and Lonsdale) (LD)
Small businesses in Cumbria, particularly those involved in farming and tourism, were integral to the Lake district’s gaining world heritage site status last summer, a designation that could lead to a massive increase in the number of visitors to what is already Britain’s second-biggest visitor destination. Will the Government back those small businesses with the infrastructure investment that they need in order to cope and to grow? Will they, for instance, electrify the Lakes Line?
Andrew Griffiths
I am delighted to support the small businesses to which the hon. Gentleman has referred. He will be pleased to know that we are boosting infrastructure, including digital infrastructure, with more than £1 billion of public investment, including £176 million for 5G and £200 million for local areas to encourage the roll-out of full-fibre networks. I should also be delighted to meet him to discuss what more we can do for lakeside businesses.
Bim Afolami (Hitchin and Harpenden) (Con)
Hitchin and Harpenden, which are both small towns, have a thriving independent retail sector, but in recent months they have reported that things are getting harder for them. Will the Minister reassure me that the Government are doing everything they can to help independent small retailers in thriving market towns?
Andrew Griffiths
As the retail Minister, I recognise the real challenges faced by our high streets and, in particular, by independent businesses. In his spring Budget statement, the Chancellor announced a package of measures for business rate relief, including a £1,000 discount for pubs with rateable values below £100,000, £300 million for local authorities to fund discretionary rate relief, and a cap on rate increases, which means that businesses that lose their small business rate relief will not see their bills increase.
Bill Esterson (Sefton Central) (Lab)
The Minister should stop being quite so complacent. Carillion was a signatory to the prompt payment code; Interserve still is. Carillion suppliers were paid on terms of 120 days, while Interserve subcontractors say that they are being absolutely hammered by late payment. Yesterday the Federation of Small Businesses again highlighted the damage done to growth by late payment. When will Ministers support smaller firms in the public sector supply chain, and enforce the prompt payment code?
Andrew Griffiths
We are certainly not complacent, which was why we set up the trade body group to assess the impact of Carillion. The hon. Gentleman will be delighted to know that yesterday I spoke to Phil King, who runs the prompt payment code, and I will be meeting him later this week to discuss how we can tighten up the code and give it real teeth. We are determined to help small businesses.
Stephen McPartland (Stevenage) (Con)
The Minister for Universities, Science, Research and Innovation (Mr Sam Gyimah)
We remain firmly committed to local enterprise partnerships. As announced in the industrial strategy, we are currently reviewing the roles and responsibilities of LEPs so that they are able to play an important role in developing local industrial strategies and driving growth across the country as we prepare to leave the European Union.
Stephen McPartland
Hertfordshire LEP has been a disaster for Stevenage people. Does the Minister agree that it is shameful that growth deal round 1 money is being used to build new council offices and sell off public sector land for developers to build luxury flats, with less than 10% being affordable homes?
Mr Gyimah
Some £15 million of growth deal round 1 money has already been invested in Stevenage, and that has helped to leverage a commitment of £350 million of private investment into the town. My hon. Friend raises an issue of concern, and I urge him to speak to the Secretary of State for Housing, Communities and Local Government to resolve it.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
May I invite the ministerial team to step out of its bubble by coming to Yorkshire and talking to our local enterprise partnerships to respond to their pessimism that while London and the south might survive post Brexit, the midlands, the north and the regions will be in bitterly disappointed territory?
Layla Moran (Oxford West and Abingdon) (LD)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)
I know that the hon. Lady has a keen interest in this subject, and we have met to discuss the impact on many of her constituents working at the Culham Centre for Fusion Energy. As she knows, our assessment was detailed in the “Nuclear Sector Report” at the end of December last year, and in an impact assessment for the Nuclear Safeguards Bill, which was first published on 18 December. We continue to engage with stakeholders, and the hon. Lady knows that my door is always open if she wishes to discuss this matter further.
Layla Moran
I thank the Minister for his response. We know that the Government are seeking a close association with Euratom, but with just 109 days until Austria takes up the presidency, Oxfordshire needs clarity now to plan for the future. Can the Government categorically say they are seeking an associate agreement, and can they guarantee that they will kick-start the process before 1 July?
Richard Harrington
I can confirm that, as the hon. Lady knows, we are seeking the closest possible association with Euratom. We are working very hard to achieve that objective.
John Howell (Henley) (Con)
Does the Minister agree that at the recent meeting of the all-party group on nuclear fusion, which I chair, the Government’s attitude to expanding their collaboration in nuclear activity was greatly evident?
Richard Harrington
I thank my hon. Friend for that question. He also has a keen constituency interest in this, and I am very keen to represent the interests of his constituents.
Mark Menzies (Fylde) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Since our last questions, Toyota has announced, as I said a few moments ago, that it would build its new model in Derbyshire, with most of the engines coming from the Deeside factory in north Wales. We also published our response to the Taylor review on modern employment practices. A million more vulnerable consumers will be protected by the extension of the Ofgem safeguard tariff cap and, as Members know, the Domestic Gas and Electricity (Tariff Cap) Bill has been introduced into Parliament. Yesterday, as part of our industrial strategy, we announced a major £300 million research programme into technologies to serve the ageing population and to ensure that we can benefit from this encouraging global trend.
Mark Menzies
What engagement is the Secretary of State having with a Canadian company called Brookfield, the likely buyer of Springfields nuclear fuels in my constituency, which manufactures nuclear fuel for the UK and provides over 1,200 well-paid jobs?
Greg Clark
My hon. Friend is a champion of this sector. The Under-Secretary, my hon. Friend the Member for Watford (Richard Harrington), has met the vice- president of Brookfield and expressed our continuing support for Springfields to have a future in providing fuel for plants in this country and overseas.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
GKN was forged in our country’s first industrial revolution. It built the tanks used in the D-day landings, and its innovative battery technology will power our future economy. The Government’s industrial strategy identifies batteries as a key technology and manufacturing as a priority sector, yet the Secretary of State has nothing to say about the hostile takeover of that great firm. Why is it that all too often, as with Arm and Unilever, his industrial strategy seems to leave great British success stories less great or less British?
Greg Clark
I would have thought that the hon. Lady would have informed herself as to the responsibility of Ministers under the Enterprise Act 2002. That Act, which was passed under the previous Labour Government, states that Ministers can intervene only in mergers that raise public interest concerns on the grounds of national security, financial stability or media plurality. She should know that the Government’s corporate governance reforms have ensured that GKN had longer to prepare its defence, preventing the kind of smash and grab raid that Cadbury’s was subjected to under the previous Government, and that provision has been made for legally binding undertakings to be given in takeover bids. Those are intended to be used, and I would be surprised and disappointed if any bidder did not make their intentions clear, extensive and legally binding.
Mrs Sheryll Murray (South East Cornwall) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
It is said that I am no stranger to the fish supper, and I also have knowledge of the Cornish pasty and, indeed, Cornish clotted cream. All those products will achieve UK geographical indications and will continue to be protected in the UK after our EU exit. As negotiations are ongoing, I cannot give my hon. Friend a cast-iron assurance right now that UK products will remain protected in the EU after exit, but I can categorically state that that is the Government’s clear objective.
Graham P. Jones (Hyndburn) (Lab)
Andrew Griffiths
I assure the hon. Gentleman that we are acting right now; a consultation is under way with regard to the Swedish derogation. Firms and businesses should be in no doubt that this Government expect everyone to be paid either the national minimum wage or the national living wage. That is why we have doubled the amount of enforcement and protected the pay of 98,000 workers. We are absolutely committed to everybody getting paid the national minimum wage.
Douglas Ross (Moray) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)
The Government are determined to improve payment practices, and we understand that retentions have caused problems for contractors in the supply chain. We consulted on the contractual practice of cash retention and we are now considering the responses to assess the extent of the issues and to determine what further intervention is required.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
Greg Clark
I think that we all recognise the extremely positive contribution made by workers from the EU, whether in business or in our public services, and I endorse that.
Damien Moore (Southport) (Con)
The Minister for Energy and Clean Growth (Claire Perry)
My hon. Friend is, as ever, assiduous in promoting the interests of his constituency, and I would be delighted to meet him. I should point out that the lagoon project in his constituency is currently not part of the proposal being put forward by the company promoting other tidal projects.
Jeff Smith (Manchester, Withington) (Lab)
The Government raised business rates on rooftop solar schemes by up to 800% last year, and it now appears that on-site battery storage is likely to go the same way. Given that gas combined heat and power has been exempted from business rates, should not the Government do the same for solar and battery storage to support clean energy?
Claire Perry
Our solar capacity has increased by more than 30% in the past two years, so we clearly are bringing forward such schemes. The hon. Gentleman will know that we are looking closely at ways of reducing some of the disincentives, particularly around on-site storage, but I am happy to meet him to discuss things further.
Peter Heaton-Jones (North Devon) (Con)
Andrew Griffiths
The south-west is indeed a great region in which to do business. Chambers of commerce including Barnstaple’s, which has been serving its community since 1911, have a valuable role to play in supporting local businesses and ensuring that their voice is heard. That is why I have met chambers of commerce 11 times in the seven weeks in which I have been the Minister for small business.
Chris Law (Dundee West) (SNP)
Solar power is the most popular source of clean energy and one of the cheapest, so why has it been excluded from clean power auctions for the past three years? Why oh why does it continue to be excluded, putting the industry at a clear competitive disadvantage?
Claire Perry
We continue to look at ways of bringing forward all forms of renewable energy. Indeed, up to 30% of energy generation in this country now comes from renewables. We have not yet taken decisions about future contract for difference allocation rounds, but we intend to do so.
Kevin Hollinrake (Thirsk and Malton) (Con)
Andrew Griffiths
I pay tribute to the work of the all-party group, of which my hon. Friend is a vice-chair. I met it just last week to explore the options. I share his aim that small businesses should have an accessible and impartial forum through which to seek redress when things go wrong. There is work to be done on how that would be paid for and on whether legislation would be required, but I look forward to seeing the research and to working with him.
Richard Burden (Birmingham, Northfield) (Lab)
The 220 people who work at GKN Aerospace in my constituency produce windshields for military and commercial aircraft, so is that not another indication that the hostile takeover bid raises national security implications? The Secretary of State has the power to intervene under the Enterprise Act 2002.
Greg Clark
As we have met to discuss this matter, the hon. Gentleman knows that I must ensure that I do not prejudice any assessment. I set out to the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) the constraints under which I have to operate.
Paul Masterton (East Renfrewshire) (Con)
Richard Harrington
I have met Juergen Maier, the chief executive of Siemens UK, to discuss that. At a recent dinner, my right hon. Friend the Secretary of State announced a “Made Smarter” commission and asked Sir Mark Walport to work with Juergen on the development of an industrial strategy challenge for the digitisation of our manufacturing industry.
Mr Gregory Campbell (East Londonderry) (DUP)
The number of electric vehicles on our roads is likely to increase significantly over the next few years. What work is being done to ensure that charging points are more frequently powered by renewable sources over that period?
Greg Clark
The hon. Gentleman makes an excellent point. Part of our industrial strategy is about bringing together the energy and automotive sectors, so that one reinforces the other. That is the Faraday challenge, which is attracting so much attention in both industries.
Mr Philip Dunne (Ludlow) (Con)
Richard Harrington
I was in Brussels yesterday to meet other European Union Ministers, trade union leaders and representatives of employers to ensure that we do exactly that.
Rachel Reeves (Leeds West) (Lab)
The Business, Energy and Industrial Strategy Committee has heard powerful evidence on why the Government should call in the Melrose bid for GKN on national security grounds, and the Secretary of State for Defence has written to the Business Secretary about the matter. Will the Business Secretary use his powers, before it is too late, to protect this great British engineering giant?
Greg Clark
I will look very carefully at the report of the Committee and that will be one of the pieces of evidence that I will seriously consider.
Richard Graham (Gloucester) (Con)
The Secretary of State has said that his door is still open to discussions about the benefits of green energy, so will he commit today to seeing Charles Hendry—the author of the Hendry review, which is still awaiting a response from the Government 14 months on—me, as chair of the all-party group on marine energy and tidal lagoons, and representatives of Tidal Lagoon Power and TidalStream?
Claire Perry
It is always a pleasure to respond to my hon. Friend, who is an assiduous campaigner for this form of energy. We continue to commit to supporting our marine energy industry. I refer him to the answer that my right hon. Friend the Secretary of State gave at the start of questions. We continue to exchange information with the Welsh Government, and we have to understand what is on offer. We want to reach the right decision on behalf of low-carbon technologies, but also British bill payers and taxpayers.
David Hanson (Delyn) (Lab)
The county in which I live, Flintshire, has only two electric charging points. Given the earlier exchanges, can the Secretary of State set targets for charging points in rural areas as well as urban ones?
Greg Clark
The right hon. Gentleman makes an excellent point. It is true that the charging network needs to extend right across the country if people are to have the confidence that they will be able to recharge their vehicle, and we have the rural aspect very much in mind.
Anna Soubry (Broxtowe) (Con)
According to the press, the Secretary of State gave a presentation to a Sub-Committee of the Cabinet about the automotive sector and how important it is that we do not have a hard Brexit. That seems to have persuaded members of the Cabinet who had thought that a hard Brexit might be a good idea that it would, in fact, be a very bad idea for British business, notably the automotive sector. On that basis, will the Secretary of State make that presentation available to all right hon. and hon. Members?
Greg Clark
It would be wrong of me to disclose conversations that took place in Cabinet—my right hon. Friend understands the requirements of collective responsibility—but it is no secret to anyone in this House that I regard the fact that the success of the automotive sector depends on integrated supply chains as good evidence of what type of trade agreement is needed. That was highlighted in the excellent speech made by my right hon. Friend the Prime Minister at the Mansion House.
Spring Statement
(6 years, 1 month ago)
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The Chancellor of the Exchequer (Mr Philip Hammond)
I am pleased to introduce to the House the first spring statement. The UK was the only major economy to make hundreds of tax and spending changes twice a year, and major international organisations and UK professional bodies alike have been pressing for change. In 2016, I took the decision to move to a single fiscal event in the autumn, giving greater certainty to families and businesses ahead of the new financial year and allowing more time for stakeholder and parliamentary engagement on potential fiscal changes.
Today’s statement will update the House on the economic and fiscal position, report progress on announcements made at the two Budgets last year and launch further consultations ahead of Budget 2018, as I set out today in my written ministerial statement. I will not be producing a Red Book today, but of course I cannot speak for the right hon. Member for Hayes and Harlington (John McDonnell).
I am pleased to report today to the House on a UK economy that has grown in every year since 2010—an economy that, under Conservative leadership, now has a manufacturing sector enjoying its longest unbroken run of growth for 50 years, that has added 3 million jobs and seen every single region of the UK with higher employment and lower unemployment than in 2010, that has seen the wages of the lowest-paid up by almost 7% above inflation since April 2015 and that has seen income inequality lower than at any time under the last Labour Government. That is solid progress towards building an economy that works for everyone.
So I reject the Labour party’s doom and gloom about the state of the nation. Every Wednesday, we have to listen to the Leader of the Opposition relentlessly talking Britain down, and every year since 2010 we have had to listen to the right hon. Member for Hayes and Harlington predict a recession—none of which has actually happened. So if there are any Eeyores in the Chamber, they are on the Opposition Benches; I, meanwhile, am at my most positively Tigger-like today, as I contemplate a country that faces the future with unique strengths: our language is the global language of business; our legal system is the jurisdiction of choice for commerce; we host the world’s most global city and its international finance and professional services capital; our companies are in the vanguard of the technological revolution, while our world-class universities are delivering the breakthrough discoveries and inventions that are powering it; British culture and talent reaches huge audiences across the globe; and our tech sector is attracting skills and capital from the four corners of the earth, with a new tech business being founded somewhere in the UK every hour, producing world-class products, including apps such as TransferWise, Citymapper and Matt Hancock.
Today, the Office for Budget Responsibility delivers its second report for the fiscal year 2017-18, and I thank Robert Chote and his team for their work. It forecasts more jobs, rising real wages, declining inflation, a falling deficit and a shrinking debt. The economy grew by 1.7% in 2017, compared with the 1.5% forecast at the Budget, and the OBR has revised up its forecast for 2018 from 1.4% to 1.5%. Forecast growth is then unchanged at 1.3% in 2019 and 2020, before picking up to 1.4% in 2021 and 1.5% in 2022. That is the OBR’s forecast, but forecasts are there to be beaten; as a nation, we did it in 2017, and we should make it our business to do it again.
Our remarkable jobs story is set to continue, with the OBR forecasting more jobs in every year of this Parliament and over 500,000 more people enjoying the security of a regular pay packet by 2022. I am pleased to report that the OBR expects inflation, which is currently above target at 3%, to fall back to target over the next 12 months, meaning that real wage growth is expected to be positive from first quarter of 2018-19 and to increase steadily thereafter.
I reported in the autumn that borrowing was due to fall in every year of the forecast and debt was to fall as a share of GDP from 2018-19. The OBR confirms that today, and further revises down debt and borrowing in every year. Borrowing is now forecast to be £45.2 billion this year. That is £4.7 billion lower than forecast in November and £108 billion lower than in 2010, which, coincidentally, is almost exactly the total cost of the additional spending pledges made by the Labour party since the general election in June last year; it has taken them just nine months to work up a plan to squander the fruits of eight years’ hard work by the British people.
As a percentage of GDP, borrowing is forecast to be 2.2% in 2017-18, falling to 1.8% in 2018-19, 1.6% in 2019-20, then 1.3%, 1.1% and finally 0.9% in 2022-23, meaning that in 2018-19 we will run a small current surplus, borrowing only for capital investment. And we are forecast to meet our cyclically adjusted borrowing target in 2020-21 with £15.4 billion of headroom to spare, which is broadly as forecast at the Budget. The more favourable outlook for borrowing means the debt forecast is nearly 1% lower than in November, peaking at 85.6% of GDP in 2017-18 and then falling to 85.5% in 2018-19, then 85.1%, 82.1%, 78.3%, and finally 77.9% in 2022-23.
That is the first sustained fall in debt in 17 years; a turning point in this nation’s recovery from the financial crisis of a decade ago; light at the end of the tunnel; another step on the road to rebuilding the public finances that were decimated by the Labour party. And it is one that Labour would again place at risk, because under Labour’s policies, our debt would not fall over the next five years; it would rise by more than £350 billion to more than 100% of our GDP, undermining our recovery, threatening investment in British jobs, burdening the next generation and wasting billions and billions of pounds more on debt interest. There is indeed light at the end of the tunnel, but we have to make absolutely sure that it is not the shadow Chancellor’s train hurtling out of control in the other direction towards Labour’s next economic train wreck.
In autumn 2016, I changed the fiscal rules to give us more flexibility to adopt a balanced approach to repairing the public finances. We are reducing debt not for some ideological reason, but to secure our economy against future shocks, because we in the Conservative party are not so naive as to think that we have abolished the economic cycle, because we want to see taxpayers’ money funding our schools and hospitals, not wasted on debt interest, and because we want to give the next generation a fair chance. But I do not agree with those who argue that every available penny must be used to reduce the deficit; nor do I agree with the fiscal fantasists opposite who argue that every penny should be spent immediately. We will continue to deliver a balanced approach. We are balancing debt reduction against the need for investment in Britain’s future, support to hard-working families through lower taxes and our commitment to our public services.
Judge me by my record. [Interruption.] We will see whether the Opposition have done their homework; they might be surprised. Since the 2016 autumn statement, I have committed to £60 billion of new spending, shared between long-term investment in Britain’s future and support for our public services, with almost £9 billion extra for our NHS and our social care system. There is £4 billion going into the NHS in 2018-19 alone and, as I promised at the autumn Budget, more to come if, as I hope, management and unions reach an agreement on a pay modernisation deal for our nation’s nurses and “Agenda for Change” staff, who have worked tirelessly since the autumn, in very challenging circumstances, to provide the NHS care that we all value so highly. There is £2.2 billion more for education and skills and £31 billion to fund infrastructure, research and development and housing, through the national productivity investment fund. That takes public investment in our schools, hospitals and infrastructure in this Parliament to its highest sustained level in 40 years.
At the same time, we have cut taxes for 31 million working people by raising the personal allowance again, in line with our manifesto commitment. We have taken more than 4 million people out of tax altogether since 2010. We are freezing fuel duty for an eighth successive year, taking the saving for a typical car driver to £850, compared with Labour’s plans, and raising the national living wage to £7.83 from next month, giving the lowest paid in our society a well-deserved pay rise of more than £2,000 for a full-time worker since 2015.
Since becoming Chancellor, I have provided an extra £11 billion of funding for 2018-19 to help with short-term public spending pressures and to invest in Britain’s future. In the longer term, I can confirm that, at this year’s Budget, I will set an overall path for public spending for 2020 and beyond, with a detailed spending review to take place in 2019 to allocate funding between Departments. That is how responsible people budget: first, they work out what they can afford; then they decide what their priorities are; and then they allocate between them. If, in the autumn, the public finances continue to reflect the improvements that today’s report hints at, then, in accordance with our balanced approach and using the flexibility provided by the fiscal rules, I would have capacity to enable further increases in public spending and investment in the years ahead, while continuing to drive value for money to ensure that not a single penny of precious taxpayers’ money is wasted. We are taking a balanced approach—getting our debt down, supporting our public services, investing in our nation’s future and keeping taxes low—as we build a Britain fit for the future and an economy that works for everyone.
There is much still to do. Since autumn 2016, we have set out our plan to back the enterprise and ambition of British business and the hard work of the British people. It is a plan to unleash our creators and innovators, our inventors and discoverers, to embrace the new technologies of the future and to deliver the skills that we will need to benefit from them. It is a plan to tackle our long-standing productivity challenges and to say more loudly than ever that our economy will remain open and outward looking, confident of competing with the best in the world.
We choose to champion those who create the jobs and the wealth on which our prosperity and our public services both depend, not to demonise them. The shadow Chancellor is open about his ideological desire to undermine the market economy, which has driven an unparalleled increase in our living standards over the past 50 years. We on the Conservative Benches reject his approach outright. The market economy embraces talent, creates opportunity and provides jobs for millions and the tax revenues that underpin our public services, so we will go on supporting British businesses. We are reducing business rates by more than £10 billion, and we committed at autumn Budget 2017 to move to triennial revaluations from 2022. Today, I am pleased to announce that we will bring forward the next business rates revaluation to 2021 and move to triennial reviews from that date. We will also launch a call for evidence to understand how best we can help the UK’s least productive businesses to learn from, and to catch up with, the most productive, and another on how we can eliminate the continuing scourge of late payments—a key ask from small business. We are the party of small business and the champions of the entrepreneur.
Since the Budget, we have made substantial progress in our negotiations with the European Union to deliver a Brexit that supports British jobs, businesses and prosperity. I look forward—[Interruption.] I do not know what the hon. Member for Wansbeck (Ian Lavery) does, but I look forward to another important step forward at the European Council next week. We will continue to prepare for all eventualities. Today, my right hon. Friend the Chief Secretary is publishing the departmental allocations of over £1.5 billion of Brexit preparation funding for 2018-19, which I announced at the autumn Budget.
Our modern industrial strategy sets out our plan to keep Britain at the forefront of new technologies with the biggest increase in public research and development spending for four decades. Much of this new technology depends on high-speed broadband, and today I can make the first allocations of the £190 million local full-fibre challenge fund announced at the autumn Budget and confirm £25 million for the first 5G testbeds.
As our economy changes, we must ensure that people have the skills they need to seize the opportunities ahead, so we have committed over £500 million a year to T-levels—the most ambitious post-16 reforms in 70 years. From next month, £50 million will be available to help employers to prepare for the roll-out of T-level work placements. Last week the Education Secretary and I chaired the first meeting of the national retraining partnership between the Government, the TUC and the Confederation of British Industry. I can reassure the House that there was no beer and no sandwiches—not even a canapé—but there was a clear and shared commitment to training in order to prepare the British people for a better future ahead. Next month our £29 million construction skills fund will open for bids to fund up to 20 construction skills villages around the country.
The Government are committed to delivering 3 million apprenticeship starts by 2020, with the support of business through the apprenticeship levy, but we recognise the challenges that the new system presents to some small businesses looking to employ an apprentice, so I can announce today that my right hon. Friend the Education Secretary will release up to £80 million of funding to support those small businesses in engaging an apprentice. We publish a consultation on improving the way in which the tax system supports self-funded training by employees and the self-employed. Because we currently understand more about the economic payback from investing in our infrastructure than we do about investing in our people, I have asked the Office for National Statistics to work with us on developing a more sophisticated measure of human capital so that future investment can be better targeted.
We are undertaking the largest road building programme since the 1970s. As Transport Secretary in 2011, I gave the green light to fund the new bridge across the River Mersey, and I was delighted to see it open late last year. The largest infrastructure project in Europe, Crossrail, is due to open in just nine months’ time. We are making progress on our plans to deliver the Cambridge-Milton Keynes-Oxford corridor. We are devolving powers and budgets to elected mayors across the northern powerhouse and midlands engine. We are in negotiations for city deals with Stirling and Clackmannanshire, Tay cities, borderlands, north Wales, mid Wales and Belfast. Today we invite proposals from cities across England for the £840 million fund that I announced at the Budget to deliver on their local transport priorities as part of our plans to spread growth and opportunity to all parts of this United Kingdom.
At the heart of our plan for building an economy that works for everyone is our commitment to tackle the challenges in our housing market, with an investment programme of £44 billion to raise housing supply to 300,000 a year by the mid-2020s. Today I can update the House. The Housing Minister is working currently with 44 authorities who have bid into the £4.1 billion housing infrastructure fund to unlock homes in areas of high demand. We are concluding housing deals with ambitious authorities that have agreed to deliver above their local housing need. I can announce today that we have just agreed a deal with the West Midlands Combined Authority, which has committed to deliver 215,000 homes by 2030-31, facilitated by a £100 million grant from the land remediation fund. My hon. Friend the Housing Minister will make further announcements over the next few days on the housing infrastructure fund.
We will more than double the size of the housing growth partnership with Lloyds Banking Group to £220 million, providing additional finance for small builders. London will receive an additional £1.7 billion to deliver a further 26,000 affordable homes, including homes for social rent, taking total affordable housing delivery in London to over 116,000 by the end of 2021-22.
My right hon. Friend the Member for West Dorset (Sir Oliver Letwin) has outlined his initial findings on the gap between planning permissions granted and housing completions in a letter that I have placed in the Library. I look forward to his full report at the Budget. I am delighted to inform the House that an estimated 60,000 first-time buyers have already benefited from the stamp duty relief that I announced at the autumn Budget. I remind the House that the Labour party voted against this.
In the autumn we published a paper on taxing large digital businesses in the global economy. Today we follow up with a publication that explores potential solutions. I look forward to discussing this issue with G20 Finance Ministers in Buenos Aires at the weekend. We also publish a call for evidence on how online platforms can help their users to pay the right amount of tax, and we will consult on a new VAT collection mechanism for online sales to ensure that the VAT that consumers pay actually reaches the Treasury. We will also call for evidence on how to encourage cashless and digital payments while ensuring that cash remains available for those who need it.
The Government are determined that our generation should leave the natural environment in a better state than we found it and improve the quality of the air that we breathe, so we will publish a call for evidence on whether the use of non-agricultural red diesel tax relief contributes to poor air quality in urban areas. Following our successful intervention to incentivise clean taxis, we will help the Great British white van driver to go green with a consultation on reduced vehicle excise duty rates for the cleanest vans.
We will follow up on the vital issue of plastic littering and the threat to our oceans with a call for evidence to support us in delivering on our vow to tackle this complex issue. It will look at the whole supply chain for single-use plastics, and at alternative materials, reusable options and recycling opportunities. It will look at how the tax system can help to drive the technological progress and behavioural change that we need—as a way not of raising revenue, but of changing behaviour and encouraging innovation. We will commit to investing to develop new, greener products and processes, funded from the revenues raised. As a down payment, we will award £20 million now from existing departmental budgets to businesses and universities in order to stimulate new thinking and rapid solutions in this area during the call for evidence.
We are delivering on our plan with a balanced approach, restoring the public finances, investing in our economy and our public services, raising productivity through our modern industrial strategy, building the homes our people need, tackling the environmental challenges that threaten our future, embracing technological change and seizing the opportunities ahead as we build our vision of a country that works for everyone and an economy where prosperity and opportunity are in reach of all, wherever they live and whatever their gender, colour, creed or background, where talent and hard work alone determine success, as a beacon of enterprise and innovation and an outward-looking, free-trading nation, confident that our best days lie ahead of us, a force for good in the world and a country that we can all be proud to pass on to our children. I commend this statement to the House.
John McDonnell (Hayes and Harlington) (Lab)
I thank the Chancellor for providing me with early sight of his statement, but I have to say that his complacency today is astounding. We face in every public service a crisis on a scale that we have never seen before. Has he not listened to the doctors, nurses, teachers, police officers, carers and even his own councillors? They are telling him that they cannot wait for the next Budget. They are telling him to act now. For eight years they have been ignored by this Government, and today they have been ignored again.
The Chancellor has proclaimed today that there is light at the end of the tunnel. This shows just how cut off from the real world he is. Last year, growth in our economy was among the lowest in the G7—the slowest since 2012. The OBR has just predicted that we will scrape along the bottom for future years. Wages are lower now, in real terms, than they were in 2010—and they are still falling. According to the Resolution Foundation, the changes to benefits due to come in next month will leave 11 million families worse off—and, as always, the harshest cuts fall on disabled people.
The gap in productivity between this country and the rest of the G7 is almost the widest for a generation. UK industry is 20% to 30% less productive than in other major economies—and why? In part, the reason is that investment by the Government, in real terms, is nearly £18 billion below its 2010 level. This is a Government who cut research and development funding by £1 billion in real terms. Business investment stagnated in the last quarter of 2017. Despite all the promises, the Government continue to fail to address the regional imbalances in investment. London will, again, receive five times more transport investment than Yorkshire and Humberside and the north.
How dare this Government speak on climate change? This is a Government who singlehandedly destroyed the solar industry, with 12,000 jobs lost as a result of subsidy cuts. The Chancellor talks about the fourth industrial revolution, but Britain has the lowest rate of industrial robot use in the OECD. The Government have put £75 million into their artificial intelligence programme—less than a tenth of what the US is spending.
John McDonnell
The Tory bully boys can shout all they want. They can make—[Interruption.]
Mr Speaker
Order. There will be a full opportunity for people to contribute, but the right hon. Gentleman must be heard.
John McDonnell
The Tories can shout all they want and they can make their snide remarks, but people out there know about the crisis in our communities.
The Chancellor has made great play this week of reaching a turning point in reducing the deficit and debt. That is a bit rich coming from a party that has put £700 billion on the national debt over the past eight years. It is worth remembering that this is a party that promised us that the deficit would be eliminated completely by 2015 and then 2016. Bizarrely, his predecessor, now ensconced in the Evening Standard—or Black Rock, the Washington Speakers Bureau, or whatever number of jobs he now has—has been tweeting about achieving, three years late, a deficit target that he actually abandoned himself.
The reality is that the Chancellor and his predecessor have not tackled the deficit: they have shifted it on to the public services that the Chancellor’s colleagues are responsible for. He has shifted it on to the Secretary of State for Health and the shoulders of NHS managers, doctors and nurses throughout the country. NHS trusts will end this financial year £1 billion in deficit. Doctors and nurses are struggling and being asked to do more and more while 100,000 NHS posts go unfilled. Does the Chancellor really believe that the NHS can wait another eight months for the life-saving funds it needs? How many people have to die waiting in an ambulance before he acts? He has mentioned the pay offer to NHS staff that we are expecting shortly. That was forced upon him by campaigns against the pay cap by the Labour party and the trade unions. Taking away a day’s holiday from those dedicated staff is mean-spirited. I ask him now: will he drop this miserly act?
The Chancellor has also shifted the deficit on to the Secretary of State for Education and head teachers, with the first per capita cut in schools funding since the 1990s. Today the Government are even trying to deprive 1 million children of a decent school dinner. I am asking the Chancellor, and I am asking every Conservative MP —[Interruption.]
Mr Speaker
Order. The House must calm down. There will be plenty of opportunity for questioning from Members in all parts of the House. The right hon. Gentleman must be heard.
John McDonnell
I am appealing to Tory MPs today, if they are serious about ending austerity, to vote with us this afternoon to give those children the free school meal they are entitled to.
The Chancellor has shifted the deficit on to the Home Secretary and the Justice Secretary. Crime is rising, yet he has cut the number of police officers by 21,500 and the number of firefighters by 8,500, and our prisons and probation service are in dangerous crisis.
In shifting the deficit on to the shoulders of the Secretary of State for Housing, Communities and Local Government, in reality he has shifted the burden on to local councillors—Labour, Lib Dem and Conservative councillors alike. I raise again the stark reality of what that means for the most vulnerable children in our society. There has been a 40% cut in early intervention to support families. The result is the highest number of children taken into care since the 1980s. Children’s charities—not us but children’s charities—are saying that this crisis could turn into a catastrophe without further funding. Last year, 400 women seeking refuge were turned away because there were no places available for them in refuges. There are now nearly 5,000 of our fellow citizens sleeping rough on our streets—more than double the number in 2010. Tragically, one of our homeless citizens died only feet away from the entrance to Parliament.
The Chancellor mentioned additional housing funding in London. The additional housing funding announced for London today is not a new announcement: this is money already announced. Any new funding is welcome, but it is simply not enough and it represents a cut in London’s budgets compared with the money that Labour allocated in 2010. One million vulnerable older people have no access to the social care they need. Conservative Councils are going bust. Many will be forced to hike up council tax. Councils are running out of reserves, as the National Audit Office explained to us. I ask the Chancellor: will he listen to Conservative council leaders, such as the leader of Surrey, who said:
“We are facing the most difficult financial crisis in our history. The government cannot stand idly by while Rome burns”?
How many more children have to go into care? How many more councils have to go bust? How many more have to run out of reserves before the Chancellor wakes up to this crisis and acts?
Today’s statement could have been a genuine turning point but it is, depressingly, another missed opportunity. People know now that austerity was a political choice, not an economic necessity. The Conservatives chose to cut taxes for the super-rich, the corporations and the bankers, and it was paid for by the rest of us in society. They even cut the levy on the bankers in the Finance Bill. We were never “all in this together” as they claimed—never. They cut investment at the very time when we should have been developing the skills and infrastructure needed to raise productivity and grasp the technological revolution with both hands. And when they had a responsibility to meet the challenge of Brexit, we have a Chancellor who this weekend admitted he has not even modelled the Government’s options.
Today we have the indefensible spectacle of a Chancellor congratulating himself on marginally improved economic forecasts, while he refuses to lift a finger as councils go bust, the NHS and social care are in crisis, school budgets are cut, homelessness has doubled and wages are falling. This is not a Government preparing our country for the future; it is a Government setting us up to fail.
Mr Hammond
The right hon. Gentleman supported the switch to a single fiscal event, and now he is complaining that I have not delivered a mini Budget today. I am not surprised that he cannot quite understand anybody passing up the opportunity to introduce some new taxes, because that is what a Labour Government would be doing, not once a year or twice a year but every other week.
I heard the right hon. Gentleman referring to some of my hon. Friends as “Tory bully boys”. I remind the House that this is the man who still refuses to apologise to my right hon. Friend the Secretary of State for Work and Pensions, so I do not want to hear anything about bullying from the Labour Benches. The public will draw their own conclusions.
The right hon. Gentleman knows his Lenin, of course. The task is to win power, and that is why we see from him the smooth reassuring mien of the bank manager, but every now and again, the mask slips, and we get a glimpse of the sinister ideology that lies beneath—an ideology that would wreck our economy if he ever gets anywhere near the controls, threatening confiscation, dismissing property rights, undermining the cornerstones of our economy and the basis of our freedom and prosperity.
The right hon. Gentleman talks about political choices. Let me tell him the political choices we have made. We have closed the tax gap to one of the lowest in the developed world. We have raised £175 billion by 100 measures against tax evasion and avoidance. We are collecting 28% of all income tax from the richest 1% in our country—a higher percentage than in any year under Labour. He says that real wages are falling. I have good news for him: the OBR expects real wages to rise from quarter one 2018, which, in case he has not worked out, starts in two weeks’ time.
The right hon. Gentleman talks about spending on the disabled. Well, I have good news for him again: spending on the disabled will be higher in every year of this Parliament. He talks about research and development to support our economy. Research and development spending is at a record high.
The right hon. Gentleman reels out the same old bogus statistics on regional distribution; I think he has got the briefing from Russia Today. Let me tell him this: the Infrastructure and Projects Authority has published figures that clearly show that the highest per capita spending on transport infrastructure investment is in the north-west region, not, the last time I checked, one of the southern regions. All regions have benefited from the boom in employment. All regions will end this Parliament with lower unemployment and higher employment.
The right hon. Gentleman talks about £700 billion of increased national debt. We have had to deal with the legacy of Labour’s meltdown in 2009 because they did not fix the roof while the sun was shining. Our historical function is to clean up Labour’s mess, and my report today shows that we are doing it once again.
The right hon. Gentleman talks about funding for the NHS. I have put £9 billion into the NHS since autumn statement 2016. He talks about school budgets. School budgets are increasing per pupil in real terms. On children’s services, he must know that Department for Education research shows that spending on the most vulnerable children has increased by around half a billion pounds in real terms since 2010. We have committed £1 billion to tackling rough sleeping and homelessness and made a manifesto pledge to eliminate rough sleeping by 2027 and halve it by 2022.
No one watching our exchanges today can be in any doubt that Britain faces a choice. We have a plan to get our economy growing. The shadow Chancellor says it does not matter whether GDP grows or not. We have a plan to get people on the housing ladder, while the shadow Chancellor does not want “to get bogged down in property rights”. We have a plan to deal with our debts. The shadow Chancellor wants to send debts soaring because he fantasises that he can borrow for free.
The choice is clear: our vision of a dynamic, modern economy, or the Labour party’s vision of an inward-looking, narrow-minded country. We have to win this argument, because if we do not, it will be ordinary people—not the rich and the powerful and not the globally mobile—who pay the price, as they always do for Labour’s failings.
Mr Kenneth Clarke (Rushcliffe) (Con)
I congratulate my right hon. Friend on his very forceful statement based on competent government and grown-up politics, which are worlds that the shadow Chancellor will never enter. When my right hon. Friend comes to prepare his Budget for November, I am sure he will be looking for any new source of taxation that may be needed to put even more money than he already has into the NHS and social care, which are facing vast increases in demand.
May I suggest that my right hon. Friend looks at some of the extraordinary anomalies he has inherited in the tax treatment of older prosperous people in full-time work in this country? [Laughter.] Well, I think I am perfectly well placed to make my point and cannot be accused of personal bias. It is absurd that older employees pay less tax on their income than their younger colleagues because they do not pay national insurance. It cannot be right that people in large houses enjoying capital gains from the housing market have those disregarded for means test purposes if they ever need certain types of social care. As the early Budgets in a Parliament are a time for tough and difficult decisions, will my right hon. Friend let me know that he will be looking at those much overdue anomalies, which need to be addressed? Some justice between the generations, I think, is being demanded by our constituents.
Mr Hammond
I am a great fan of the concept of intergenerational fairness. My right hon. and learned Friend will know, as a former Chancellor of the Exchequer, that all Chancellors look at all options in the run-up to every Budget. I can undertake that I will do so in the run-up to Budget 2018. In the meantime, I can tell him that there is a mechanism for voluntary donations to Her Majesty’s Treasury, and in case he has mislaid it, I will send him a copy of our bank details.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
I have to say, that was much ado about nothing. The real tragedy is that we are 10 years on from the financial crisis, but austerity is still with us, and there was a lack of hope given to the people of the United Kingdom from the statement today.
At the weekend, we saw the hon. Member for Moray (Douglas Ross) at the Glasgow Celtic versus Rangers football match, in his other job as a linesman, waving his flag and enthusiastically calling for a red card. If anybody deserves a red card today, it is the Chancellor of the Exchequer.
We hear the Chancellor proclaiming that we have had consistent economic growth since 2010 and that we can look forward to continued economic growth over the course of the coming years. The reality is that in 2019, when we are supposed to be leaving the European Union, the OBR predicts that growth will be a measly 1.3% and is forecast to remain at around 1.5% over the coming years, significantly below the historical trendline of growth for this country.
When I hear the Chancellor talking about wage growth, he ought to reflect that we have had a lost decade of wage growth in the United Kingdom. Let me prick his balloon on this one, because the OBR book is very clear that real earnings growth will “remain subdued” for the next five years. That is the reality, and perhaps the Chancellor should stop spinning and be honest with people about what is going to happen. The Chancellor talks about light at the end of the tunnel. Let me tell him that the light at the end of the tunnel is a hard Brexit and the impact of lower growth, which is going to cost jobs and prosperity in this country.
Slow earnings growth, higher inflation and cuts to the benefit system are resulting in falling incomes for the poorest households and in rising inequality. Once again, the Chancellor has failed to bring his Government’s disastrous austerity programme to an end. Worse still, he has his head firmly in the sand over Brexit.
This Government are going ahead with a devastating cut to Scotland’s budget. [Interruption.] I hear the Scottish Tories shouting “Rubbish”. Perhaps they could join those of us on the SNP Benches and defend Scotland’s interests. Let me explain the reality: over the decade from 2010-11 to 2019-20, Scotland’s block grant has been cut by £2.6 billion in real terms, which is an 8.1% cut. [Interruption.] The people of Scotland should watch the Scottish Tory MPs who are calling out: once again, they are failing to stand up for Scotland’s interests. [Interruption.] Let me say respectfully that these Tory MPs have been here for quite some months, and they should understand that if they want to speak, they should try to catch your eye, Mr Speaker. It is undignified to call out in the way they are doing. [Interruption.]
Mr Speaker
Order. There is much excitable gesticulation taking place on both sides of the House. I urge Members to keep their Order Papers to themselves, and not to lash out with their hands, gesticulating in all sorts of directions. They are in danger of becoming rather eccentric denizens of the House.
Ian Blackford
Thank you, Mr Speaker. These are, after all, serious matters. The extent of the block grant reduction is highlighted by the Fraser of Allander Institute, which has noted:
“By 2019/20 the resource block grant will be around £500 million lower than in 17/18”.
I pay tribute to my hon. Friends on the SNP Benches who fought so hard on behalf of their constituents to have Police Scotland and Scottish Fire and Rescue Service VAT scrapped. That was a fantastic result. However, the reality is that Scotland has suffered under this policy for the past five years. Will the Chancellor be bringing forward plans to return the £175 million that has already been paid? VAT should never have been charged: it was a vindictive measure imposed on Scotland by a Tory Government. Give Scotland back the £175 million to invest in our frontline services. Will Scottish Tory MPs join the SNP in standing up for Scotland, or will they remain silent on the cash grab we have seen from Westminster?
This Tory Government’s austerity policies disproportionately affect the most disadvantaged individuals, while giving tax breaks to the better-off in society. The Resolution Foundation recently estimated that the Government’s austerity programme will leave the poorest third of households an average of £715 a year worse off by 2022-23. In Scotland, we have a new progressive income tax policy. [Interruption.] I can hear Conservatives saying, “Up”, but the reality is that for most people in Scotland tax is lower. The Scottish Government are able to reverse this year’s real-terms budget cut inflicted by this Tory Government, and ensure that the majority—I repeat, the majority—of taxpayers in Scotland pay less than in the rest of the UK.
However, Scotland’s new taxation powers should not exist simply to mitigate UK Government austerity. In Scotland, the SNP Government have gone further to support those on low incomes. In the recent budget at Holyrood, a package was secured that raises the threshold of a guaranteed 3% increase for those earning up to £36,500, benefiting up to three quarters of Scottish public service workers—a Scottish Government on the side of hard-working public sector workers.
As we near the EU summit at the end of this month in Brussels, the progress of this Government in readying for Brexit has been nothing short of shameful. The UK Government’s own analysis tells us that, under all scenarios, Scotland would suffer a relatively greater loss in economic output than the United Kingdom as a whole. A no-deal scenario would be significantly devastating, threatening to reduce growth by a massive 9% over 15 years.
Make no mistake: a hard Brexit is going to hit the pockets of families and lead to a loss in tax revenue expectations, and is therefore going to affect spending on public services, yet the Chancellor is silent on the risks to our economy—risks to our economy when the stresses and strains of a near decade of austerity are hurting. The fact is that Scotland is shackled to a sinking ship.
The Scottish budget passed last month illustrates the real divergence in political choices across the UK. In Scotland, we have chosen to stand by our outstanding public sector staff and give them the pay increase they deserve. We continue to mitigate the worst atrocities of this Government’s ideological austerity agenda. We will continue to press for nothing less than continued UK membership of the single market and customs union to prevent the economic catastrophe of an extreme Tory Brexit. We will never stop fighting to get justice for the 1950s women, whom the SNP are so happy to support.
In conclusion, the choices are clear and the opportunities obvious. The Chancellor must wake up to the economic injustices he has overseen, and he must tell this House as a matter of urgency how the economy will stand a hard Brexit.
Mr Hammond
Probably a matter of rather more immediate urgency for the people of Scotland is how their economy will withstand the highest rates of taxation in the United Kingdom—an economy that, under the SNP Government, is already growing more slowly than the economy of the United Kingdom. I do not know about a sinking ship; I suggest to the right hon. Gentleman that this is about keeping afloat.
The right hon. Gentleman talks about earnings. I suggest that he looks at real household disposable income, which, as I am sure he knows, is now 4.4% higher than at the start of 2010. We have cut taxes for 31 million people across this country, at a time when his Government are putting taxes up. We have taken 4 million people out of taxation, improving the ability of people to retain their hard-earned incomes.
The right hon. Gentleman talks about Brexit, spreading alarm, but he knows very well that my right hon. Friend the Prime Minister is working tirelessly to deliver a Brexit that will secure British jobs, British businesses and British prosperity. We would be aided in that enterprise if he and his Government worked closely with us to deliver an outcome that is good for the whole of the United Kingdom.
The right hon. Gentleman talks about Scotland’s budget and the block grant, but of course Scotland now has its own tax-raising powers, and the people of Scotland know how he intends to use them. Perhaps he has forgotten, but I will try to help him with his short-term amnesia: at the autumn Budget in 2017—just four months ago—Scotland received an additional £2 billion of funding as a result of the measures announced then.
As for the VAT on police and fire services measures being vindictive, the Scottish National party Government were told explicitly that it would not be possible to refund VAT if they went ahead with the police reorganisation, and they decided to do so anyway. He may use the adjective “vindictive”, but I suspect my right hon. and hon. Friends will be able to think of another adjective to describe a Government who pursued such a ridiculous course of action.
Several hon. Members rose—
Mr Speaker
Order. I gently remind the House that, whatever impression might have been given so far, this is not a debate; it is a question and answer session following a ministerial statement.
Nicky Morgan (Loughborough) (Con)
I congratulate the Chancellor on his balanced approach. He and the Prime Minister have rightly identified housing as an economic and social priority. He will be aware that the Treasury Committee’s report on his autumn 2017 Budget recommended that the housing revenue account borrowing cap could be lifted to allow local authorities to play their part in building the right homes in the right places. Is that something he will consider?
Mr Hammond
I am grateful to my right hon. Friend. We have already relaxed the borrowing cap for local authorities in areas with high demand and low affordability. We will monitor the consequences carefully and keep how it delivers under continuous review.
Mr Chris Leslie (Nottingham East) (Lab/Co-op)
The light that the Chancellor can see at the end of the tunnel is the Brexit locomotive barrelling headlong towards him, and towards our schools and hospitals. What will he do to prevent that free trade agreement-style scenario, which his own Treasury officials say will leave a £55 billion train wreck in our public services?
Mr Hammond
As the hon. Gentleman knows, I am committed to delivering a Brexit that protects British jobs, British businesses and British prosperity, and I spend a significant amount of my working time ensuring that that is the route we follow. I expect that we will make further progress at the March European Council. I understand the concerns that he expresses on behalf of British businesses, but I talk to businesses all day, every day, because that is my job—[Interruption.] The shadow Chancellor says so does he, so he will know this already. Business is concerned about what the consequences of a bad Brexit deal could be, but business is much more concerned about the consequences of the policies advanced by his right hon. Friends on the Opposition Front Bench.
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
May I say what a huge pleasure it is to hear the Chancellor so upbeat, and indeed Tiggerish? He has a right to be so, given that unemployment is at its lowest level for 40 years, and manufacturing is seeing its best performance for 50 years. Given his answer to our right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) on looking at every avenue for money, and given that we will be about four months away from our official departure date, at the next Budget will my right hon. Friend consider setting out in the Red Book what he plans to do with the money that we will no longer have to pay in contributions to the European Union?
Mr Hammond
It is always a pleasure to hear from my right hon. Friend. We are absolutely not complacent, because there are many challenges as well as opportunities ahead of us, but we have a plan to embrace the opportunities and rise to the challenges. This country has many advantages that our neighbours would give their right arm to enjoy. We must go forward robustly and in good heart to seize those opportunities and make the best of them for the future. On his specific point, of course in the forthcoming Budget we will look at taxation and spending over the future period. The OBR, of course, will decide what to present in its report to the House. He will have an opportunity to question OBR officials about their approach when they appear before the House shortly after the Budget statement.
Rachel Reeves (Leeds West) (Lab)
Consumer credit has risen by 9% over the past year, and the ratio of household debt to income, at 138%, is rapidly approaching a level not seen since before the financial crisis. With interest rates now forecast by the OBR to rise faster than we previously envisaged, are we not asking consumers to keep the wheels on the road for the economic recovery? Is that sustainable, and is that the right thing to do?
Mr Hammond
The hon. Lady is right to raise this issue. It is something we keep under constant review, and I talk regularly with the Governor of the Bank of England about personal debt. She will probably know that personal household debt rose in all but one of the 13 years of the Labour Government, and it is now lower than it was before the financial crisis. The judgment of the authorities at the moment is that household debt levels are sustainable, but she is right to draw attention to it. It is something we keep under close review.
Justine Greening (Putney) (Con)
Can the Chancellor give more detail on the announcement that the Office for National Statistics will work with the Treasury on a more sophisticated measure of human capital? In a knowledge-based economy, that becomes more crucial than ever for driving our economic productivity. Can he give us more detail on the timelines and the nature of that work?
Mr Hammond
I am glad that my right hon. Friend has asked this question, because it gives me an opportunity to thank her for sparking this line of inquiry in a letter she wrote to me. I did challenge the Treasury with the idea that it is more focused on the returns to infrastructure investment than on skills investment. When we looked at it in detail, we discovered that the metrics for measuring the returns to investment in human capital are not as well developed as they should be. That is something the ONS has to take forward, but it is important, as we move increasingly into a knowledge-based economy, with a huge set of technological changes ahead of us, that we can compare appropriately and objectively investment in physical infrastructure with investment in human capital, and that is what we will be able to do if we get the new metrics right.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Chancellor of the Exchequer is doubtless aware that the OECD this morning published its own growth forecasts, putting us at the bottom of the OECD economies, with forecast growth this year of 1.3%. It is pretty clear that there is no Brexit dividend on the scene for the British economy. It is to be welcomed that the deficit is getting back to a manageable level, but he must know—even his own Back Benchers are telling him—that extra money is needed now for our hospitals, our schools and our police. That money is not there because of previous decisions to make premature cuts to capital gains tax and inheritance tax. He must have heard the Institute for Fiscal Studies calling for increased capital investment in housing, up to 3% of our economy. Why does he not listen to the IFS?
Mr Hammond
First, the right hon. Gentleman knows, as I do, that our economy still faces uncertainty as we go through the negotiation process with the European Union. I am convinced, from every conversation I have had with business leaders and investors, that as we deliver greater clarity about our future relationship with the European Union over the coming months, we will see business investment and consumer confidence increasing. We beat the forecast in 2017. Let us beat it again in 2018. I do believe that economic growth matters. The shadow Chancellor says that it does not matter what the level of GDP is, but I do not agree—[Interruption.] Well, I will send him the quote if he cannot immediately recall what he said. I do believe that GDP matters, because it is what drives living standards. We are putting extra money into public services—£11 billion since I have been Chancellor. I agree that we have a major challenge in the housing market. We have put a significant amount of money—£44 billion—into dealing with the challenge over the rest of this Parliament, but there are significant non-financial constraints on being able to do more, such as physical bottlenecks in relation to skilled labour and materials. But it is something we will keep under review.
Sir Edward Leigh (Gainsborough) (Con)
Perhaps the current Conservative Chancellor of the Exchequer could remind the previous Conservative Chancellor of the Exchequer that, given where our electoral support comes from, it might not be wise politics to impose a targeted new tax on our older supports. He could also remind our right hon. and learned Friend that he will be delighted to know that after we leave the EU we will be saving £12 billion a year in contributions.
Mr Hammond
I assume that my hon. Friend is referring to the previous Conservative Chancellor but one, in which case I think our right hon. and learned Friend has probably heard him.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
The winter crisis in the NHS left us with cancelled operations, ditched targets, patients sleeping on the floor, and a public apology in the end from the Prime Minister. Neither the spring nor the spring statement has provided any easing of those pressures. Given that the right hon. Gentleman knows the November Budget will be too late to provide any additional funding that he knows both the NHS and social care will need for next year’s winter crisis—he knows this both in his heart and in his spreadsheet—will he now follow the Prime Minister and announce a public apology to the staff and patients of the NHS who are going to have to endure next year’s crisis because of this failure?
Mr Hammond
I have already made it clear that we admire greatly the work of NHS staff who, with the pressures of flu and extreme winter weather, faced extremely difficult circumstances this winter. This is a spring statement, not a fiscal event, but I have said and I will say again to the right hon. Lady that we are putting an additional £4 billion into the NHS in 2018-19, and I have committed to putting in further money in-year in 2018-19 to fund a pay settlement for nurses and “Agenda for Change” staff, if the management and the unions reach an agreement.
Damian Green (Ashford) (Con)
It is very welcome to hear from the Chancellor such good news on debt and growth, in particular their effect on the real lives of people in my constituency, where since 2010 youth unemployment is down 48% and apprenticeships are up 6,850. In continuing his successful balanced approach, will he commit to dealing with the social care sector, because we both know it will become an increasingly important issue in the years and decades ahead?
Mr Hammond
I am grateful to my right hon. Friend, who has done a great deal of work on this issue. We are absolutely aware of the pressures on the social care system. They are not short-term pressures; they are driven by the demographics of an ageing population. We have to do three things. In the short term, we have provided additional money. In the spring Budget last year, I put in £2 billion of additional support. My right hon. Friend the Secretary of State for Housing, Communities and Local Government put in another £150 million of social care grant at the local government settlement just a few weeks ago. In the medium term, we have to work to get all authorities meeting the standards of the best. There is excellent practice across the country, but it is not everywhere. The variation in delayed discharges between different authorities is completely unacceptable. In the long term, we are committed to publishing a Green Paper on social care and the future of social care, which we will deliver to the House before the summer recess.
Alison McGovern (Wirral South) (Lab)
The Chancellor says that forecasts are there to be beaten and I agree with him, so can he explain to me why, since his Budget in November, the OBR has not been able to increase the growth forecast for 2019, 2020, 2021 or 2022? It cannot be the negative impact of Brexit, because the OBR still does not have the information from the Government to be able to forecast that, so what on earth is his excuse?
Mr Hammond
I will perhaps remind the hon. Lady that the OBR’s autumn report in November was only four months ago and that in the normal course of events one would not expect, in the absence of some shock to the economy, economic forecasts to change very significantly. The front-end forecast has changed, because the outturn for 2017-18 has changed. The OBR forecast growth 0.2% lower than it turned out to be in 2017-18 and that has a knock-through effect, which has increased its growth projection for this year.
Stephen Hammond (Wimbledon) (Con)
Investing in our economy creates jobs and growth, and successful businesses drive that. Will my right hon. Friend tell the House how much the corporate tax take has gone up since the cut in corporation tax? Will he confirm that he will do nothing to hinder our internationally competitive corporate tax rates?
Mr Hammond
Yes, I can. I am happy to tell my hon. Friend that since we reduced the rate of corporate tax to 19%, the yield—the amount of tax we raise for our public services, our hospitals and schools—has gone up 54%. It is clear that being one of the most competitive tax jurisdictions in the G20 is one of the determining factors in many investment decisions coming to the UK, creating the jobs and prosperity we need for the future.
Sammy Wilson (East Antrim) (DUP)
The Chancellor is right to talk up the UK economy when there is good news, because there are plenty in this House who will recklessly talk it down. There was, however, one gap in today’s statement. He promised an inquiry, in time for the autumn Budget, into air passenger duty and VAT on the hospitality industry. When will he make an announcement on when that inquiry will start and on the terms of it?
Mr Hammond
I have laid a written ministerial statement today that sets out the reviews and consultations, and that is among them. If the right hon. Gentleman looks at that after this statement he will see that it is there.
Mr Mark Harper (Forest of Dean) (Con)
May I draw the attention of the Chancellor to the recent research published by the International Monetary Fund, which shows that the choice we made in 2010 to deal with the deficit primarily by controlling spending rather than raising taxes, as the Opposition would have done, was the right choice? It meant that the economy grew faster than those of our European competitors and has put him in the position where he can deliver more money for our priorities, while reducing the debt in the balanced way he has set out.
Mr Hammond
I am grateful to my right hon. Friend. He is right: it was the right choice. Because we made that choice, throughout that period employment in this country continued to grow. We avoided the very high levels of unemployment suffered by many of our European neighbours. We avoided the catastrophic, generation-blighting levels of youth unemployment suffered by many of our European neighbours, which will be affecting their economies and societies not just for a few more years but for 30, 40 or 50 years to come. It was the right decision. We have executed our plan and we should stick to it.
Ms Angela Eagle (Wallasey) (Lab)
The Chancellor has been very upbeat today, but why is he so upbeat when the growth figures show that we have gone from being near the top of the G7 and the G20 growth lists to the bottom of both?
Mr Hammond
I am clear—I think I have alluded to this already—that one of the factors depressing the forecast growth is the uncertainty that still exists around the economy. If the hon. Lady, like me, expects that uncertainty to dissipate over time, she should look through it to the fundamentals of our economy and its underlying strengths. This economy is in a fundamentally good shape. Once we can restore confidence and certainty about our future path, I am confident that those fundamental strengths will deliver increased economic growth.
James Cartlidge (South Suffolk) (Con)
My right hon. Friend made a fantastic statement. Does he join me in welcoming the 65% fall in youth unemployment in South Suffolk since 2010? Does he agree that while my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) is entirely right to mention inter- generational fairness, the worst form of intergenerational unfairness would have been to allow our youth unemployment to peak at socially dangerous levels, as it has in the rest of Europe?
Mr Hammond
My hon. Friend is absolutely right. I welcome the very large fall in youth unemployment in his constituency, but that will be from a base that was very much lower than what has come to be considered normal by many of our European neighbours. As he rightly says, this is not just an economic factor, but a societal factor. Persistent high levels of youth unemployment have a hugely damaging effect, as we have discovered in the past in this country to our cost. If someone is unemployed during their formative years, they are far more likely to remain unemployed and unemployable for the rest of their working lives.
Wes Streeting (Ilford North) (Lab)
It is astonishing that Brexit, the single biggest risk to the economy, merited only two sentences in the Chancellor’s otherwise uneventful spring statement. If the economy and economic outlook are so rosy, perhaps he can explain why almost every school in my constituency is facing budget cuts, why my local NHS trust is in special measures, and why, when my constituents are crying out in the face of one of the worst waves of burglaries we have ever seen, the police are not responding because the Metropolitan police is subject to real-terms budget cuts. Is that not the grim reality facing our country, and is it not set to get worse because of the hard Brexit course his Government are following?
Mr Hammond
No. The Government are pursuing a Brexit that protects British jobs, British businesses and British prosperity, as the hon. Gentleman well knows. We have protected school funding so that it will rise in real terms per pupil over the next two years, and as we move to the fair funding formula for schools, every school will receive a cash increase. The police settlement on which the House recently voted provides £450 million of additional resource for police forces across the country. We have protected police budgets since 2015.[Official Report, 24 April 2018, Vol. 639, c. 8MC.]
Mr Jacob Rees-Mogg (North East Somerset) (Con)
The OBR’s report—I refer to table B.7 and chart B.4—assumes that the Brexit dividend will be recycled into ordinary expenditure. I wonder whether the Chancellor accepts that conclusion. If so, what thought has he given to spending this money, and is the NHS near the top of his list?
Mr Hammond
As I suspect my hon. Friend knows well, this is the assumption that the OBR has adopted at the last three fiscal events. It has assumed that any saving from a lower contribution to the European Union will be recycled to fund things that would have been funded by the EU, but will no longer be so. How we choose to use that money and what our priorities are will, of course, be an issue for this Parliament, but we should note that we have already made certain commitments—to our agricultural community, for example—to maintain spending at EU levels until the end of this Parliament.
Caroline Lucas (Brighton, Pavilion) (Green)
I have to say that the levels of hypocrisy from the Government are quite extraordinary. How can the Chancellor pledge to be improving air quality while simultaneously boasting of undertaking the largest road building programme since the 1970s? How can he say that the plastics crisis is urgent and then propose a deadline for the elimination of plastics in a quarter of a century’s time? Where is the latte levy? Where is the deposit scheme? Where is the urgency for action? Why is there such a gulf between the Government’s action and words?
Mr Hammond
I am tempted to say, “Eeyore.” I think that the hon. Lady is making a fundamental mistake by linking the road building programme to air quality. I urge her to take at least a medium-term view of the world. The vehicle fleet is decarbonising. Certainly within her lifetime, if not mine, we will have fully electric vehicles, and probably autonomous ones as well. We should think of the road building programme not as a negative feature, but as an enabler in the transformation of how our vehicle fleet works. We have made announcements today, and I hope that she will be pleased with the consultation on VED for vans. This is a much-needed approach to incentivise van drivers to buy the cleanest and greenest vehicles available.
Robert Halfon (Harlow) (Con)
I strongly welcome the housekeeping dividend that my right hon. Friend set out in the spring statement, particularly with its focus on the cost of living and skills. In the forthcoming Budget, I ask him to continue that focus on the cost of living, to maintain the freeze in fuel duty, and to develop a skills strategy with the Department for Education to ensure that we meet the needs of the fourth industrial revolution.
Mr Hammond
If my right hon. Friend will forgive me, I will not make a commitment ahead of the next Budget on any specific tax or duty measures, but of course we will maintain the focus on the cost of living and living standards. He will know—I certainly know—that one of the biggest problems that we have faced over the last year has been the impact on real wages of high levels of inflation. Getting that inflation back down to target is a crucial priority, and I am delighted that we will see real wages rising again from next month as a result of falling inflation and strong nominal wage growth.
Chuka Umunna (Streatham) (Lab)
I cannot believe that the Chancellor did not have more to say about the NHS in this statement. The NHS in my area is not just in crisis, but at breaking point. He refers to putting an extra £4 billion into the NHS in the current financial year, but if we extrapolate what the OBR says that the NHS will need just to keep current standards of care going and to meet rising demand, we will need at least £30 billion extra going into the NHS by 2022-23. We need a solution that can subsist across Governments of different persuasions, so will he meet the demand that the hon. Member for Totnes (Dr Wollaston) and others across both Houses have made for a proper, cross-party convention on how we put our NHS on a sustainable footing? Secondly, will he support the suggestion of the former permanent secretary of his Department for a proper, hypothecated NHS tax to help to give it the funding that it needs?
Mr Hammond
I suspect that now is not the moment for a long debate about the structural funding challenges of the NHS, but the hon. Gentleman is right. We have an ageing population. Technology is driving an ever-wider array of interventions that can and should be made to support people with medical conditions—particularly chronic medical conditions—and we have to look at how to ensure that our NHS remains sustainable in the future. Of course we are looking at that issue. I will not give him a commitment today at the Dispatch Box on how we will do that, but it is absolutely something that we need to do. I very much hope, as he suggests, that this could be done on a serious, cross-party basis, but I fear that his Front Benchers would not be able to resist the temptation to try to play politics with any such serious discussion.
Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
It was excellent to hear the Chancellor talk about educational investment and our human capital. Further to the comments made by my right hon. Friend the Member for Putney (Justine Greening), will he explain further whether the Treasury will create standards that will technically value human capital across our Government Departments? That can then drive decision making so that taxpayers’ money is best spent to maximise the human capital that we invest in so much through education and training, rather than being wasted.
Mr Hammond
We have asked the ONS to look at this and to consider the metrics that we could use. The objective is to be able to assess clearly where the marginal pound of capital investment should go to achieve the best effect on the economy. Without wanting to pre-empt the outcome of that work, I suspect that in the future, in a very rapidly changing economy, we will find that retraining and upskilling will be a very large part of our investment requirement.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Would the Chancellor be good enough either to meet me or send me a letter to outline the blockers to the Ayrshire growth deal, to which the UK Government have not yet committed?
Mr Hammond
It would be for my right hon. Friend the Secretary of State for Housing, Communities and Local Government to have that meeting with the hon. Gentleman, but I am very happy to pass on his request.
Andrew Bridgen (North West Leicestershire) (Con)
Has my right hon. Friend made any assessment of the Venezuelan economic model that is so favoured by the shadow Chancellor? I understand the Venezuelan Government have made huge progress on reducing income inequality. Unfortunately, as is always the case with socialism, they have done so by pushing 80% of the population into poverty.
Mr Hammond
Actually, while watching Russia Today, I saw a very interesting piece on the Venezuelan economy—apparently everything is going swimmingly.
Liz Kendall (Leicester West) (Lab)
In response to my hon. Friend the Member for Wallasey (Ms Eagle), the Chancellor suggested that our economy will be stronger once there is greater certainty over Brexit. Can he confirm that the Treasury analysis published last week showed that under all the Government’s Brexit options, long-term growth will be lower than it would otherwise have been? Does he not realise that that will be the true legacy of his Government and his party, which can no longer claim to act in the national economic interest?
Mr Hammond
Just to correct the hon. Lady on a couple of points, the report that she refers to, which was published by the Exiting the European Union Committee, was not done by HM Treasury. It was prepared, as I think she knows very well, by a cross-departmental group of Government economics professionals in response to the criticism that had been levied at the Treasury model that was used before the referendum. Of course it did not model the Government’s preferred outcome scenario; it modelled a couple of standardised outcome scenarios that the Prime Minister has already rejected. We are not going for a Norway model or a Canada model. We are negotiating with the EU for a bespoke solution. When we have made progress in those negotiations, we will model the outcome that we expect to get, and when Parliament comes to vote on this issue—hopefully later this year—it will have in front of it the output of that modelling.
Richard Drax (South Dorset) (Con)
I congratulate my right hon. Friend on his upbeat performance, and on standing up for the economy and our country. As a former soldier, may I put in a plug for our armed forces? They undoubtedly need more money. We live in dangerous times. Will he take that into account in the Budget?
Mr Hammond
As a former Defence Secretary, I yield to no one in my admiration for the armed forces. I understand the challenges that defence faces and the complexity of the defence budget, with its many long-term projects operating at the cutting edge of technology. In case there is any misapprehension, however, I would like the House to be absolutely clear that defence will receive more than £1 billion of additional funding in each year of this Parliament. It has the fastest-growing RDEL—resource departmental expenditure limits—budget of any Department across Whitehall. We will, of course, continue to consider the specific needs of defence, but I would not like anyone to have the impression that, as I have read in some organs, the defence budget is being cut. It is not—it is being substantially increased.
Helen Goodman (Bishop Auckland) (Lab)
Much is not under the Chancellor’s control, but the subject of my question is. One year ago, we were promised that Making Tax Digital would be put back to help small businesses, but in the intervening time—since the election—very little progress has been made in the countryside on broadband roll-out, so will he please consider putting it back by another year for small businesses?
Mr Hammond
No. We made our decision to defer Making Tax Digital mainly because there was a need for greater awareness among businesses and more time to prepare for the relevant software and so on. We are confident that businesses will be able to roll out the programme on the current schedule. Although I readily accept that there is some disquiet among potential business users, I also confidently predict to the hon. Lady that once they have got used to it, they will find that it is hugely beneficial to them, and that it saves them a lot of time and angst in their dealings with HMRC.
Chris Philp (Croydon South) (Con)
Since 2010, the minimum wage has increased from £5.93 to £7.83 an hour—a rise of 32%. At the same time, the take-home pay of someone on the minimum wage has gone up by 37%, thanks to the increase in the income tax threshold. Will the Chancellor join me in welcoming the fact that the Government have directed assistance at those on the lowest earnings, and will he assure the House that that excellent approach will remain at the heart of the Government’s strategy?
Mr Hammond
We are focused on the needs of those on the lowest pay who are in the workforce. Making work pay, particularly low-paid work, is a priority. I repeat what I said in the statement: partly as a result of the introduction of the national living wage and its subsequent increase to £7.83 an hour, income inequality in this country is now lower than at any point under the last Labour Government. It is falling in this country while it is rising in all other G7 countries.
Laura Smith (Crewe and Nantwich) (Lab)
Today’s statement was an opportunity for the Government to ease the burden on care providers by offering a solution to the sleep-in crisis. Sleep-in shifts are an integral part of public services which the Government have a statutory obligation to provide. Have the Government ruled out paying directly and in full the six years of back pay to which low-paid careworkers are entitled?
Mr Hammond
I am not sure about the end of the hon. Lady’s question. Is she asking whether the Government have ruled anything out? The Government have not ruled out anything—we are still considering this issue. Of course these workers must have the pay to which they are entitled and which they should have been paid. What we are doing—the Cabinet Office is leading on this—is working with the key providers to see how best to deliver that in a way that does not have negative impacts on the provision of care.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
Youth unemployment in my constituency has fallen by 55% under the Conservatives, which is fantastic news. Does my right hon. Friend agree that the last thing young people in Teesside need is a reckless borrowing binge to reverse that progress?
Mr Hammond
My hon. Friend is absolutely right. Over the past few years, parts of the country that have suffered for far too long from low employment and investment have seen increased investment—much of it foreign investment—as well as increased employment and rising wages. They absolutely do not need to take risks on the kind of policies that the shadow Chancellor is proposing, which would plunge us back into a place we have been before and have no wish to revisit.
Alison Thewliss (Glasgow Central) (SNP)
People doing the same job should be entitled to the same day’s pay, but the Chancellor continues to ignore the fact that his pretendy living wage is not for under-25s, as 21 to 24-year-olds will earn 45p less an hour; 18 to 20-year-olds £1.93 less; 16 and 17-year-olds £3.63 less; and apprentices a full £4.13 less. Why does he believe in state-sponsored age discrimination?
Mr Hammond
The hon. Lady will know, I think, that we also announced—again, this is due to come in in April—record increases in the youth rates of the minimum wage. We have had several exchanges in this Session about the importance of maintaining low levels of youth unemployment and about the devastating effects of youth unemployment—[Interruption.]. I am sorry if she does not like this. The Government take advice from the Low Pay Commission about the impacts of different pay rates on employment prospects, and we balance the need to give people a fair wage with the need to maintain high levels of youth employment, in the interests of those people themselves and of our economy.
Jeremy Quin (Horsham) (Con)
I welcome the projection that real wages will increase in the coming year, but that can continue in the longer term only if we improve our productivity. In that context, may I welcome not only what the Chancellor has said about human capital and long-term endeavour, but the improvements in productivity over the last six months?
Mr Hammond
Yes, and my hon. Friend is right to draw attention to two quarters of very good productivity data. I do not want to change policy or to pivot on the basis of two quarters’ data, because data can be revised, but we are starting to think that we might just be at the beginning of a turn in the trajectory of productivity performance in this economy.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
Liverpool has many success stories, but 30% of its children are in poverty and our public services are under pressure as Liverpool City Council loses 68% of its funding. The whole economy is threatened by Brexit. What will the Chancellor do differently to address these injustices?
Mr Hammond
Obviously the best way out of poverty is to get people into work, and the proportion of workless households is at its lowest level since records began. The hon. Lady will know that 200,000 fewer children are in absolute poverty than was the case in 2010. We are focused on using our modern industrial strategy to drive economic growth across the regions of our country, and on working with the elected Mayors and the devolved authorities to ensure that the necessary investment is made in all corners of the British economy to deliver the growth that is the only way to get people sustainably out of poverty and into well-paid work.
Anne Marie Morris (Newton Abbot) (Con)
May I congratulate the Chancellor on his progress to date, but ask him to consider investing in a long-term innovative strategy for transport infrastructure—road, rail, air and sea—in the south-west so as to drive productivity north and south of the peninsula, and to include a commitment to such a strategy in the Budget so that we build a great south-west to rival the northern powerhouse? We thank him for his support for the Peninsula Rail Task Force. It is welcome, but not enough.
Mr Hammond
My hon. Friend will have to think of a snappy name for that—if she can, please will she let me know?
We are investing already in the south-west, including, as my hon. Friend will know, in the crucial A303 programme—£2 billion in a vital transport artery feeding the south-west. I know that many of the bids to the housing infrastructure fund come from south-west authorities, and we are acutely conscious that as we ask authorities to build more homes, we must provide them with the resource to build the supporting infrastructure—that is the purpose of the fund. I hope that she will get some good news when my hon. Friend the Housing Minister makes announcements in due course.
Stephen Timms (East Ham) (Lab)
The number of apprenticeship starts plummeted after the botched introduction of the apprenticeship levy last year. I welcome the additional support for apprenticeships in small businesses that the Chancellor has announced today, but does he recognise that to get anywhere near the 3 million target by 2020 will require much more radical action, and will he return to that at the time of the Budget?
Mr Hammond
Our target—our commitment—is to deliver 3 million apprenticeships by 2020. The introduction of the apprenticeship levy changed the game, and we were always anticipating that it would have an impact on the profile of starts. The additional £80 million announced today is targeted specifically at small, non-levy-paying businesses to help them to take on apprentices. In a couple of weeks, at the beginning of April, large businesses that pay the levy will be allowed to transfer 10% of their levy funds to small businesses in their supply chain to support their engagement and training of apprentices. We will, however, keep the programme under close review. This is a commitment that we must deliver, and if we need to intervene in a different way to deliver it, we will.
Huw Merriman (Bexhill and Battle) (Con)
According to page 193 of the OBR report,
“The future is uncertain and the likelihood of unexpected…political developments means…there are significant…downside risks to…forecasts for the public finances.”
Does the Chancellor see any of those political downside risks sitting directly in front of him?
Mr Hammond
Yes. As I said earlier to an Opposition Member, in conversation, businesses—[Interruption.] Perhaps I should just sit down while the shadow Chancellor conducts his own conversation.
As I said earlier, businesses, in conversation, identified two risks about which they were concerned: the risk of a bad Brexit deal, which will have an impact on our economy, and the risk of the right hon. Gentleman’s ever getting his hands on any of the levers of power in our economy. Of those two, there is no doubt that business—as represented in the voice of Paul Drechsler this morning—regards the risk posed by the right hon. Gentleman as by far the bigger.
Marsha De Cordova (Battersea) (Lab)
The Chancellor has claimed that spending on disabled people has gone up, but we know that next month cuts in social security will hit them the hardest. He has also spoken about apologies. Would he like to apologise to the millions of disabled people whom he blamed for low productivity?
Mr Hammond
Of course I did no such thing. [Interruption.] No, I did not. We spend more than £50 billion a year on benefits to support disabled people and people with health conditions. That is a record high, and we have spent £7.5 billion more in real terms since 2010. As a share of GDP, our public spending on disability and incapacity is the second highest in the G7. It amounts to 2.5% of our GDP and to 6% of all Government spending.
Mr William Wragg (Hazel Grove) (Con)
My right hon. Friend has struck the right balance between the need for financial discipline and the justifiable need for investment in public services. With that in mind, will he ensure in the autumn Budget that additional funds are provided for schools to ensure the successful implementation of the national funding formula, which we welcomed in Stockport?
Mr Hammond
When she was Education Secretary, my right hon. Friend the Member for Putney (Justine Greening) announced that the fair funding formula would be introduced in a way that would protect per capita spending per pupil, and we would guarantee that every school would receive a cash-terms increase. That guarantee stands today.[Official Report, 24 April 2018, Vol. 639, c. 8MC.]
Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)
My right hon. Friend the shadow Chancellor talked about the increasing number of children being taken into care. In Liverpool, there has been an 11% increase in the past 12 months alone. Local authorities in the north-west wrote to the Chancellor last month calling for additional funds to address the growing crisis in children’s social care. May I ask him to address that growing crisis, and to do so as a matter of urgency?
Mr Hammond
As I said earlier, spending on support for the most vulnerable children has increased by £500 million since 2010. There is a distinction to be drawn between services provided for the most vulnerable children—children in care, children in the adoption and fostering process, and children at risk—and the wider children’s services budgets. The shadow Chancellor has made that point several times over the past week or so. Let me repeat, however, that we are giving local authorities £225 billion of spending power over a five-year period, and it is for them to decide how they allocate those funds.
Rachel Maclean (Redditch) (Con)
There can be no truer test of a Government’s commitment to fairness than their commitment to the next generation, and I know that the 7,110 young people who started apprenticeships in Redditch under this Government would agree with my right hon. Friend. Can he say more about the funds that he has set aside to help more small businesses such as those that I visited last week to access apprenticeships, and does he agree that the best place for his construction skills village is Redditch, a new town in the heart of the country?
Mr Hammond
I am glad to be able to tell my hon. Friend that there will be 20 construction skills villages. We look forward to the bid from Redditch, and I am sure that it will be considered carefully.
As I said earlier, my right hon. Friend the Education Secretary is contributing an extra £80 million specifically to help small businesses that are non-levy payers with the costs of engaging apprentices, and from April many small businesses will benefit from the flexibility that allows large business levy payers to transfer 10% of their levy funds to small businesses in their supply chain. The impression that I have from talking to the CBI and other organisations is that businesses are keen to do that, and many of them will make such transfers.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Is the OBR right to calculate in its report that the United Kingdom will be making payments to the European Union until 2064 as part of the divorce settlement and that that will not include any new commitments that the British Government may make in the remaining parts of the negotiation? Would it not be better just to stay in the EU?
Mr Hammond
The payment profile has three parts. There are payments during the two years—more or less—of the implementation period; there are payments as the EU dispenses the so-called reste à liquider over the following few years; and then there is a very long tail of what will actually be very small payments relating to pensions. Of course, by their nature, they will stretch over a very long period, but they are very small amounts of money.
John Stevenson (Carlisle) (Con)
Carlisle Lake District airport is about to open for passenger flights; we have a garden village development south of the city; and there is the prospect of a borderlands growth deal. Does the Chancellor agree that the only way to grow the economy and balance the books is through such investments? Does he also agree that it is important for the Government to support local initiatives of that kind, because they will help to rebalance the economy and sort out our finances?
Mr Hammond
Yes. Local government, local people and local businesses understand best how to grow the economies of their regions. I welcome the initiatives that my hon. Friend has mentioned. I am aware of the garden village, and I look forward to perhaps being able to visit it in the spring.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Is it not true that young people in our communities are paying the biggest price for this Government’s choices and failures? Local government faces a funding gap of £5.8 billion by 2020. The income of my local council, Hounslow, has been cut by 40% since 2010, with more to come. There are 400,000 more children in poverty than five years ago, and in some wards in my constituency the proportion is now hitting 40%. The Chancellor asked to be judged on his record. Is that a record of which he is proud?
Mr Hammond
Yes, it is, because the figures given by the hon. Lady are not quite right. There are 200,000 fewer children in absolute poverty than in 2010. [Interruption.] Absolute poverty is the relevant measure. The crucial point that she simply skirts around is that, after the financial crash during the last Labour Government, we could have gone down a route that many of our continental neighbours went down, which would have seen hundreds of thousands, if not millions, of young people cast on to the scrapheap of unemployment and left there potentially for decades. We did not go down that route, and we have seen youth unemployment in this country relatively low and falling, and that is a huge benefit to the next generation, who will be able to benefit from their engagement in the workforce and, as they go forward, from rising living standards.
Andrew Jones (Harrogate and Knaresborough) (Con)
I welcome my right hon. Friend’s statement and the balanced approach to the economy he detailed. I particularly welcome the attention on digital and skills, as these are the main issues businesses are raising with me, and I hope Yorkshire will be one of his local full fibre allocations. Will he continue to focus on fibre and digital as critical to boosting our national productivity?
Mr Hammond
Yes, if we do not have these enabling network technologies—a good fibre-optic backhaul network, good digital technologies—we will not be able to exploit the technologies of the fourth industrial revolution, and we must do so.
Neil Gray (Airdrie and Shotts) (SNP)
The Office for Budget Responsibility says that real earnings growth for the next five years is expected to remain subdued, averaging just 0.7% a year, and real household disposable income per person is expected to average only 0.4% per year. So why will the Chancellor not properly fund his Departments to ensure that the public sector pay freeze is properly lifted, as has been done in Scotland?
Mr Hammond
The public sector pay freeze has been lifted: we have removed the 1% cap, so it is up to departmental Secretaries of State to make appropriate recommendations and provide appropriate evidence to pay review bodies. But we do expect them, where they recommend settlements above the level they are already funded for, to use workforce management measures and efficiency improvement measures negotiated with the workforce, to ensure that over time increases are self-funded through higher efficiency and productivity.
Mark Pawsey (Rugby) (Con)
The Chancellor is right to focus on how the tax system might be used to encourage improvements in the environment, and I know that the packaging industry recognises the need to reduce waste and will respond positively to his call for evidence. I ask for it to include two things: first, that it is people who cause litter, and the Chancellor spoke about the need for behaviour change; and, secondly, will it recognise the important role packaging has in reducing food waste by keeping food fresh for longer?
Mr Hammond
Yes, of course, and the point of having a call for evidence is to make sure that the decisions we make are based on full knowledge and full information. My hon. Friend makes a very important point: it would be massively shooting ourselves in the foot to make a change in relation to packaging that then massively increased food waste and the energy cost of food that was wasted.
Carolyn Harris (Swansea East) (Lab)
Why is the Chancellor refusing to share the light at the end of his tunnel with grieving parents who are struggling to pay for their children’s funerals? Their lives are forever blighted by darkness. A children’s funeral fund is the dignified, compassionate and sympathetic thing to do.
Mr Hammond
The hon. Lady is a tireless campaigner on this issue, and both I and my right hon. Friend the Prime Minister have heard her pleas on behalf of parents in this terrible situation. I am sure, however, that the hon. Lady recognises that this is not a fiscal event; there have been no fiscal announcements today, but I am absolutely certain that she will want to make a representation to me ahead of the Budget in the autumn.
Giles Watling (Clacton) (Con)
I thank the Chancellor for his very spring-like statement, and it is good to hear that there is light at the end of the tunnel. What plans does he have to support our vital £90 billion creative industries sector, which is growing in my constituency of Clacton?
Mr Hammond
Creative industries is an increasingly important part of the UK economy, and one in which we have a significant comparative advantage, and the best way the Government can support the creative industries, apart from the obvious one of training and skilling, is through supporting the roll-out of digital technologies on which so many of the creative industries these days depend.
Tony Lloyd (Rochdale) (Lab)
The Chancellor’s constituency will have families on the national living wage, and I have many more. Does he agree with the Joseph Rowntree Foundation, which has demonstrated that a two-parent family with one working and two children will, because of tax credit cuts, be £450 a year worse off? That is not fair shares, is it?
Mr Hammond
The national living wage has given a pay rise of more than £2,000 a year to anyone in full-time work since it was introduced in 2015, and of course it is not just the national living wage; it is also the increase in the personal allowance, which means that people are now able to keep more of what they take home, and because it is an allowance, rather than a rate cut, it disproportionately benefits those on the lowest earnings.
Alan Mak (Havant) (Con)
Fourth industrial revolution technologies are transforming and boosting productivity across the whole country, particularly in the small and medium-sized enterprise sector. As my right hon. Friend considers future spending priorities ahead of the Budget, may I urge him to continue and accelerate support for our entrepreneurs and innovators, who create the wealth of the future?
Mr Hammond
My hon. Friend is a tireless advocate of the technology that will fuel the fourth industrial revolution, and the important thing is that, while we are talking about it, this is actually happening across the country. These technologies are actually being used by large, medium and small businesses. They are not just something in the laboratory or the university classroom; they are actually happening in the factories and business parks across Britain, and they will transform the way we live and work.
Peter Kyle (Hove) (Lab)
I am sure the Chancellor will agree that it is not talking down the economy to report in this place the real lived experiences of the people we represent, the majority of whom will not see real average wage incomes exceeding the pre-crash levels until 2022. Does he not agree that all the measures announced today and the rhetoric will not make a difference to those who need it most until their average incomes increase above the pre-crash levels? When will that happen?
Mr Hammond
Real income growth is the principal target that we focus on, but the country suffered a recession after the financial crisis that wiped out 6% of our national income, and we are rebuilding our economy from that crisis, hindered and hampered by the fact that the previous Government were ill-prepared for the crisis when it came. As I have made clear today, we are determined to ensure that our economy and public finances are in good shape to deal with the economic cycle in the future, because we do not believe that we have abolished that economic cycle, and we have to prepare for future downturns because that is the nature of economic life.
Robert Courts (Witney) (Con)
I welcome the progress made in reducing the debt and the deficit, but will the Chancellor confirm that we are still spending £50 billion in debt interest—more than the armed forces and police force combined receive—and if we do not get control of this, there will be less money for the things we value, such as the housing infrastructure fund, Oxfordshire’s excellent submission for which is so important to my constituents?
Mr Hammond
My hon. Friend is absolutely right. This is current spending; this is £50 billion that we could spend on hospitals, on schools, or, if we chose, on investment in infrastructure. The answer to this from the right hon. Member for Hayes and Harlington (John McDonnell) is to increase the amount of borrowing we have, and to increase the amount of money we are pouring down the drain every year on debt interest, reducing the amount of money available for our public services. That cannot be the right way to go.
Ruth George (High Peak) (Lab)
In spite of the claims for what will happen to real wages on April fool’s day, the fact is that real wages are now lower than in 2010, and debt has grown twice as fast under this Government as it did under the previous Labour Government, in spite of the global economic crash in 2008. So does the Chancellor agree that his strategy is failing people like my constituents, who are suffering from £6 billion of cuts to social care? They can no longer get care packages so they can die at home surrounded by their loved ones, but instead are stuck in hospital.
Mr Hammond
I do not agree with the hon. Lady, and her numbers are wrong, as I am sure she knows. The soaring deficit in 2009-10 has created a legacy that of course was going to lead to increasing debt. Our challenge has been to get the deficit down so that debt can now start to fall, and as debt starts to fall, we are able then to fund our public services, invest in Britain’s future, and provide some relief for hard-pressed families and small businesses through easing their tax burden, and that is exactly what we intend to continue to do.
Alex Burghart (Brentwood and Ongar) (Con)
A number of hon. Members have mentioned the next generation. Is it not the case that only this Government’s approach can really deliver true intergenerational fairness, because the alternative is ever-increasing borrowing, which would be put on the shoulders of young people?
Mr Hammond
My hon. Friend is absolutely right, and that point needs to be made more often. When the right hon. Member for Hayes and Harlington talks about borrowing an extra £100 billion, £250 billion or £350 billion—or whatever figure he is thinking about this week—and when he talks about nationalising an industry for £190 billion or whatever, he is talking about burdening the next generation with yet more debt that will blight their futures and limit their chances. That is not fair; it is not right, and we must make sure that he never gets the chance to do it.
James Frith (Bury North) (Lab)
Some small businesses in Bury are still picking up the pieces following the Carillion collapse. Small business confidence in the north-west is at its lowest in four years, with UK skills shortages being blamed for some £3 billion of lost earnings. The Chancellor chose to come to the House today to give us this spring statement, yet he had nothing to say. We heard a fake news forecast with nothing for the real job creators. Will he give some certainty to the small businesses that are providing the jobs in towns such as mine, and will he stop this outsourcing to puffed-up vehicles such as Carillion, which appear to be too big to fail until the point when they do fail?
Mr Hammond
On the statement, the reason that I have come to the House to make this statement today is because the OBR has published its second report of the fiscal year. It is mandated by Parliament to produce two reports a year, and I think that the House would have regarded it as a gross discourtesy if I had published the report without coming to the House to answer questions on it. I am glad that the hon. Gentleman has mentioned skills shortages. He will recognise that, while skills shortages are a serious problem, it is in a sense the better problem to have, rather than having skilled people looking for employment. The work is there, the jobs are there and the economic growth is there; we now have to respond to that by delivering the skills that people need. On outsourcing, we will continue to pursue the best value for money for every pound of taxpayers’ money that we spend, and where that involves collaborating with the private sector, that is what we will do. The way in which we have handled the Carillion situation has ensured that public services continue to be provided and that the public purse has not had to bail out a private company.
Luke Graham (Ochil and South Perthshire) (Con)
I should like to join the Scottish National party Finance Secretary in Holyrood in acknowledging the additional funding for Scotland’s block grant. The extra £479 million will mean a real-terms increase over the next few years. Given that Scotland’s GDP growth is forecast to be less than 1%, will my right hon. Friend commit to driving economic activity across all our constituencies through initiatives such as the Stirling and Clackmannanshire city deal?
Mr Hammond
Yes, but it is a pity that the SNP spokesman here did not feel inclined to acknowledge the same thing. My hon. Friend is right to suggest that we are a Government for the whole of the United Kingdom. It is not the Scottish people’s fault that they have a Government who are adopting policies that are depressing economic growth in Scotland and will depress it further in the months and years ahead. We will go on delivering policies that are designed to improve the economy across the whole of the United Kingdom, including the growth deals in Scotland.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
Last week, it was revealed that the Ministry of Housing, Communities and Local Government returned £1.1 billion of unused housing money to the Treasury over the past two years. That money should have been spent on recladding tower blocks that were found to be unsafe after the Grenfell Tower tragedy. Will the Chancellor use his autumn Budget to fund the work that is required to keep our tower blocks and their residents safe?
Mr Hammond
My hon. Friend the Housing Minister and I have both made the point that local authorities and social landlords that have blocks that need recladding should carry out that work. Any work that is required for urgent safety reasons should be done, and any local authority or housing association that has a genuine inability to fund the work should get in touch with the Ministry of Housing, Communities and Local Government, which will work with them to find an appropriate solution. Safety-critical work must be carried out. That is the legal obligation of the landlord, and we will work with them to ensure that it is carried out.
Maggie Throup (Erewash) (Con)
I welcome my right hon. Friend’s continued commitment to increasing the housing supply. I would also like to put in a bid for Erewash in relation to the construction skills villages. Does he agree that measures such as the housing infrastructure fund and the cut in stamp duty for first-time buyers will help many of my constituents to realise their ambition and aspiration to get on to the housing ladder?
Mr Hammond
Yes, the housing investment package that we have put together is important, because it has ensured that financial support will not be the constraining factor in building more homes in this country. We have other constraints—including skills constraints, land supply constraints and materials supply constraints—but finance will be available. The measure that I announced in the autumn Budget to remove stamp duty for 1 million first- time buyers will allow 1 million mostly young people once again to aspire to the dream of home ownership.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
On the Chancellor’s announcement on cashless and digital measures, he claims that he will ensure that cash will be available for those who need it. He further claims that his is the party of small business. If he stands by that, will he come to Nairn, Grantown and Aviemore to explain to businesses there why, with more than 70% of the shares in the Royal Bank of Scotland at his command, he is failing to block the closure of its branches? The Federation of Small Businesses says that those closures will make it more difficult to do business in Scotland.
Mr Hammond
It is absolutely always a pleasure to visit Nairn, but I have no immediate plans to do so. As the Prime Minister has told the hon. Gentleman and his hon. Friends on several occasions, we do not interfere in the day-to-day management decisions of the Royal Bank of Scotland—[Interruption.] Let us treat this seriously. The consultation that we published today is about cashless and digital payment systems, but it specifically acknowledges, as I said in my statement, that we also have to ensure that cash is available to people who need it. If the hon. Gentleman looks at the consultation when it is published, he will see that we are determined to address that issue. I hope that he will engage in that consultation.
Kevin Hollinrake (Thirsk and Malton) (Con)
The Chancellor is right to look at the impacts of the VAT threshold on business. It is a disincentive to growth and an incentive to avoid tax through cash deals. Does he agree, however, that registering for VAT does not just have financial implications—it also has an administrative impact? Would this be an appropriate time to look at the entire VAT regime?
Mr Hammond
I think that that would involve widening the scope of the intended consultation rather dramatically. I remind the House that, when I referred to this issue in the autumn Budget, I said that I was not minded to lower the VAT threshold because I recognise that, at its current level, it keeps a lot of small businesses out of the administrative burden of VAT. However, we are keen to ensure that the cliff-edge effect, which has a damaging impact on businesses that are trying to grow, should be addressed if it is possible to do so. The consultation will pursue those ideas.
Rachael Maskell (York Central) (Lab/Co-op)
There is a reason why we need to invest in our public services. In York, our schools have gone from being the seventh worst funded to the very worst funded authority, our NHS is in a capped expenditure process, and no social housing has been built. Should not the Chancellor invest in our children and in the sick, and provide homes for the homeless?
Mr Hammond
I am afraid that it is characteristic of the Opposition that they are able to see the world only through the lens of inputs—
Mr Hammond
The reality is that since 2010 we have increased the number of schools that are good or outstanding. That means that 90% of schools are now either good or outstanding, and that 1.9 million more children are being taught in good or outstanding schools. That is the metric that matters to parents and to children themselves in terms of their life chances. It is not always just about the money; it is also about the outcomes.
Ross Thomson (Aberdeen South) (Con)
I welcome the measures introduced by the Government to help the oil and gas industry, including a £2 billion package of support and the introduction of transferable tax history, which has been a much-needed shot in the arm. With the industry set to contribute over £1 billion in tax to the Treasury this financial year, will my right hon. Friend tell me what further steps the Government can take to support this vital sector?
Mr Hammond
We are committed to the oil and gas industry and, as my hon. Friend knows, to measures that will ensure that every drop of economically recoverable oil and gas in the UK continental shelf is recovered, which is in the interests of the Scottish economy, the UK economy and Her Majesty’s Treasury. I am delighted that the increase in the price of oil, together with the uptick in activity as a result of that rise and of the measures that we have announced, means that the oil sector’s contribution to the UK Treasury will again become positive in the year to come.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
The Conservatives have cut the Welsh Government’s budget by around £1 billion a year since 2010, and the knock-on impact on public services in Wales and on Welsh local government’s ability to deliver key services has been huge. Will the Chancellor apologise for the failed Tory austerity that has caused so much damage to public services in Merthyr Tydfil and Rhymney and across the UK? Given his outlining of a rosy picture, will he set out his plan adequately to fund the public services on which many people rely?
Mr Hammond
I do not have the figures to hand, but if my memory serves me correctly, I was able to confirm at the Budget last year that Wales will receive over £1 billion of additional funding, including as a result of changes to the agreed formula. So funding is not down, but up. The failure of services in Wales, mainly in the Welsh health service, that we regularly catalogue across the Dispatch Box is a result of decisions made and priorities set by the Welsh Government, not the UK Government.
Alex Chalk (Cheltenham) (Con)
Economies move in cycles. Does my right hon. Friend agree that there is a moral case for ensuring that our public finances are in a state to help the poorest in society, some of whom live in my constituency, when the next slowdown comes? Does he also agree that the Labour party manifestly failed to take that approach?
Mr Hammond
It did. My hon. Friend is right. It is precisely because we have seen the devastating impact of being unprepared for a serious economic downturn following a financial crash that we are determined to ensure that the UK economy is robustly prepared for the next normal cyclical downturn, whenever it occurs. Such things are normal, they happen in everyday economic life, and we must be able to ride through them without damage to our economy and without the poorest in our society paying the price. The poorest always pay when Labour’s model fails.
Matt Western (Warwick and Leamington) (Lab)
Following the global financial crash, the American Recovery and Reinvestment Act 2009, introduced by Obama, saw $800 billion of investment pumped into the US economy, leading to the most sustained period of growth. By contrast, the UK embarked on a sustained period of austerity, and UK growth is now half that of the US and the eurozone. Which was the right ideological choice?
Mr Hammond
The United States is in a different position from the United Kingdom. Sadly, we no longer operate the world’s reserve currency and are no longer able to borrow under the same conditions as the United States. Decisions on the United States economy are for the United States Administration. This Government have made the right decisions for the UK economy, and the benefit of those decisions—the outcomes that we are now beginning to see—demonstrates the case for them.
Bill Presented
Tuesday 13th March 2018
(6 years, 1 month ago)
Commons ChamberRead Full debate Housing and Planning (Local Decision-Making) Bill 2017-19 View all Housing and Planning (Local Decision-Making) Bill 2017-19 Debates Read Hansard Text
Holocaust (Return of Cultural Objects) (Amendment)
Tuesday 13th March 2018
(6 years, 1 month ago)
Commons ChamberRead Full debate Holocaust (Return of Cultural Objects) (Amendment) Act 2019 View all Holocaust (Return of Cultural Objects) (Amendment) Act 2019 Debates Read Hansard Text
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Theresa Villiers (Chipping Barnet) (Con)
I beg to move,
That leave be given to bring in a Bill to prevent the Holocaust (Return of Cultural Objects) Act 2009 from expiring on 11 November 2019.
It was on 10 November 1938 when the horrors of Nazi persecution began in earnest with the shameful episode known as Kristallnacht. Lives were lost during that terrifying “night of broken glass” but a key focus of the violent attacks that took place was property—the homes, buildings and businesses owned by Jewish people. Throughout the 1930s and ’40s, property of all kinds was systematically stolen from millions of people as part of Hitler’s horrific genocidal campaign against Europe’s Jewish community. That included many precious works of art. It is estimated that up to 20% of Europe’s cultural treasures were lost during world war two, and around 100,000 cultural objects pillaged during the Nazi era still remain hidden today. The horrific crimes of the Nazis can never be remedied, but there is action that we can take to return works of art to the people from whom they were stolen.
At the end of the last century, there was growing international awareness of the risk that looted art may have been inadvertently acquired by museums and galleries. That led to the 1998 Washington conference on holocaust era assets, where a number of countries, including the UK, pledged that they would work to identify treasures stolen by the Nazis and seek to return them to their rightful owners. Compared with other European countries, it seems that little looted art found its way to the UK, but that should not be an excuse for inaction.
In 2000, the previous Labour Government established the Spoliation Advisory Panel to consider claims from anyone who had lost possession of a cultural object in circumstances relating to the Nazi era. A problem arose in 2002, when the heirs of Dr Arthur Feldman sought the restitution of four old master drawings in the British Museum on the grounds that they had been stolen by the Gestapo from Dr Feldman’s collection in March 1939 in what was then Czechoslovakia. The British Museum wanted to return the objects, but the High Court ruled that it could not lawfully do so. No matter the moral case for giving property back to the heirs of its owner, the museum was under a binding statutory obligation not to give away items in its collection. Several other national institutions were also subject to the same restriction.
That and other similar cases were raised in Parliament in 2009 by Andrew Dismore, who was the MP for Hendon at the time. He brought forward a private Member’s Bill to remove the statutory restrictions on national institutions, such as the British Museum, that prevented them from returning works of art confiscated by the Nazis. With cross-party support, the Holocaust (Return of Cultural Objects) Bill received Royal Assent on 12 November 2009. It provides that the 17 national institutions named in the legislation have the power to return works of art to their rightful owners in cases where that is recommended by the advisory panel and approved by the Culture Secretary.
However, section 4(7) of the 2009 Act contains a 10-year sunset clause, meaning that the Act will cease to have effect after 11 November next year. After that date, the institutions named in the legislation will no longer be able to return works of art to Holocaust survivors or to the families of those who perished in the genocide. The Bill that I am seeking leave to bring in would keep the legislation on the statute book by repealing section 4(7) and thus removing the sunset clause.
Parliament was entirely right in 2009 to give our national museums the power to restore property lost in such terrible circumstances to its rightful owners. The legislation was subject to exacting scrutiny and was significantly amended and clarified during its passage through Parliament. It has worked well during its eight years on the statute book, resolving cases in a fair and balanced way. Take, for example, the 12th century manuscript known as the Beneventan Missal. The advisory panel concluded that the manuscript had been looted during the chaos that followed the Allied bombing of Benevento in 1943, and, with the approval of the Secretary of State, the missal was returned to Italy. In 2015, a John Constable painting from the Tate Gallery was restored to its owner after the panel concluded that it had been stolen when the German army invaded Budapest in 1944.
The 2009 Act is a carefully targeted measure that applies to a defined and limited period and set of circumstances, so it does not open the door for more contentious claims relating to objects brought to the UK in past centuries and under different circumstances. The Act has not had a disruptive impact on our national museums. When the proposal to keep the measure on the statute book was announced in 2017, it was warmly welcomed by the museum community. Today the director of the National Gallery, Dr Gabriele Finaldi, issued the following statement:
“The museum community is committed to fair and just redress in the case of works taken wrongfully during the Holocaust and World War II. It is fully supportive of the proposal to amend the Act by removing the so-called sunset clause.”
The task of identifying and returning objects that have an incomplete history during the relevant period is by no means at an end. As recently as last September, the Government hosted an international conference in London to consider how efforts to identify and give back works of art lost during the holocaust could be accelerated. The UK has been at the forefront of global efforts to resolve those cases in a fair way, and the 2009 Act has played an important part in that. The 2009 legislation had the backing of the last Labour Government, and my proposed Bill has the support of the current Conservative Government. I thank the Department for Digital, Culture, Media and Sport for its work, which has included engaging with the Scottish Government with a view to securing their support to reflect the fact that Scottish institutions are included in the list in the legislation.
There may still be potential claimants who are unaware of the location of artworks owned by relatives who died in the holocaust, so the moral case for this legislation remains as strong today as it was eight years ago. Indeed, the case is arguably stronger than it was in 2009. We have fewer and fewer holocaust survivors still with us. I take this opportunity to pay tribute to all the survivors who live in my Chipping Barnet constituency. I have had the great honour of meeting many of them during my years as their local MP. I thank them for all that they do to ensure that the current generation hears their testimony at first hand, as part of the efforts we must make as a society to ensure that the horrors of the holocaust are never forgotten.
Surely, it would be heartless and wrong to deprive the last survivors of their right to recover treasured works of art. Nothing can make up for the trauma and suffering of those who experienced the holocaust at first hand, or who lost loved ones in that horror, but at least we can give them back the precious works of art that were stolen from them. That is what my proposal is designed to achieve, and I commend this Bill to the House.
Question put and agreed to.
Ordered,
That Theresa Villiers, Bob Blackman, Dr Matthew Offord, Stephen Crabb, Ian Austin, Mr Edward Vaizey, David Evennett, John Mann, Andrew Percy, Charlie Elphicke, Mr Iain Duncan Smith and Andrew Rosindell present the Bill.
Theresa Villiers accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 27 April, and to be printed (Bill 182).
Statutory Instruments (Motions to Annul)
Universal Credit
(6 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
17:55 - The House divided: - Ayes: 288 / Noes: 315 - Question accordingly negatived.
Madam Deputy Speaker (Dame Rosie Winterton)
We now come to the four motions on universal credit, children and young persons and social security, which will be debated together. I must inform the House that the Speaker has certified the two motions on children and young persons as relating exclusively to England, and as falling within devolved legislative competence. The motions relating to those statutory instruments are therefore subject to double majority voting, by the whole House and by Members representing constituencies in England. I should inform colleagues that this is a three-hour debate. It is very well subscribed; there are more than 40 Back Benchers wanting to speak. I hope that both Front Benchers and Back Benchers will bear that in mind.
Angela Rayner (Ashton-under-Lyne) (Lab)
I beg to move,
That an humble address be presented to Her Majesty, praying that the Universal Credit (Miscellaneous Amendments Saving and Transitional Provision) Regulations 2018 (S.I., 2018, No. 65), dated 22 January, a copy of which was laid before this House on 22 January, be annulled.
Madam Deputy Speaker
With this it will be convenient to discuss the following motions:
That an humble Address be presented to Her Majesty, praying that the Free School Lunches and Milk, and School and Early Years Finance (Amendments Relating to Universal Credit) (England) Regulations 2018 (S.I., 2018, No. 148), dated 6 February, a copy of which was laid before this House on 7 February, be annulled.
That an humble Address be presented to Her Majesty, praying that the Local Authority (Duty to Secure Early Years Provision Free of Charge) (Amendment) Regulations 2018 (S.I., 2018, No. 146), dated 6 February, a copy of which was laid before this House on 7 February, be annulled.
That an humble Address be presented to Her Majesty, praying that Social Security (Contributions) (Amendment) Regulations 2018 (S.I., 2018, No. 120), dated 31 January, a copy of which was laid before this House on 1 February, be annulled.
Angela Rayner
I ask all Members of the House to bear in mind what Madam Deputy Speaker has said when they make interventions. I will try to be as brief as I possibly can.
As my right hon. Friend the Member for Hayes and Harlington (John McDonnell), the shadow Chancellor, has said, this Tory Government have created a crisis on a scale that we have not seen before. Today, they did nothing to tackle it, and in these regulations they seek to make it even worse. If the House does not vote for our motions today, more than 1 million families will lose out. First, they will lose their free school meals.
Chris Philp (Croydon South) (Con)
Does the hon. Lady agree with Channel 4’s FactCheck, which says:
“This is not a case of the government taking free school meals from a million children”?
These are children who are not currently receiving free school meals, and in fact the Government’s proposals would see 50,000 extra children receive free school meals. Perhaps the hon. Lady could stop giving inaccurate information to the House.
Angela Rayner
The hon. Gentleman should know that his Government have introduced transitional arrangements, and we are clear that under the transitional arrangements, those 1 million children would be entitled to free school meals. With the regulations, the Government are pulling the rug from under those hard-working families.
In my own boroughs of Oldham and Tameside, a total of 8,700 children growing up in poverty are set to miss out. In the Secretary of State’s own area, the total is 6,500. So much for the light at the end of the tunnel that the Chancellor mentioned over the weekend on “The Andrew Marr Show”!
Catherine West (Hornsey and Wood Green) (Lab)
Is my hon. Friend aware that the Government did an assessment of the impact on childhood obesity prior to taking this statutory instrument through?
Angela Rayner
My hon. Friend makes an important point, because childhood obesity is an important issue at the moment. The Children’s Society found that 1 million children growing up in poverty will lose out on free school meals that they would have been entitled to. Incredibly, the Government have the audacity to claim that they are being generous. They want to pretend that no families will lose because the small numbers who are benefiting under universal credit will not lose out now.
Rebecca Pow (Taunton Deane) (Con)
Is it not right that money should be placed where it is most needed? That is where we need the most support. When universal credit is fully rolled out, it is absolutely a fact that 50,000 more children will be getting free school meals. It is not right to mislead about this issue.
Angela Rayner
I am sure that the hon. Lady does not believe that I am trying to mislead the House. Let me be absolutely clear: many people, including MPs, wrongly believe that all children in poverty already get free school meals. That is not currently the case. But under the transitional protections under universal credit, those 1 million children would be entitled to the benefit. Through the secondary legislation, the Government are pulling the rug from underneath those families.
Mr Jim Cunningham (Coventry South) (Lab)
Does my hon. Friend agree that this will make the working poor poorer and hit families deeply?
Angela Rayner
I am sure that my hon. Friend made an excellent point, but I am sorry to say that I did not quite catch it.
Mr Cunningham
Does my hon. Friend agree that this will make the working poor even poorer, in this day and age?
Angela Rayner
That is absolutely right—my hon. Friend did make a really important point. Those who currently get free school meals who were not part of universal credit were in households on out-of-work benefits. If these regulations were to go through, the people on whom they would have the most detrimental effect would be those in work.
The current system would help more than 1 million more children than the plans we are voting on today. The former Secretary of State for Work and Pensions, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), once wrote that universal credit
“will ensure that work always pays and is seen to pay”,
yet under these plans, universal credit will mean that work does not pay for hundreds of thousands of families. Those just above the threshold would be better off earning less.
Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)
One of the biggest and most fundamental errors that the hon. Lady and her party are making is in their understanding of what transitional protection is about. I helped to design this, so let me inform her—[Interruption.] Perhaps Labour Members would like to listen as they might learn something. Transitional protection was designed to protect those moving from tax credits into universal credit so that they did not—if this would have happened to be the case—lose any money in the transition. It was not about increasing to the degree that she is talking about the numbers in receipt of free school meals. Under universal credit, more will receive free school meals than would have been the case under Labour’s plans.
Angela Rayner
The right hon. Gentleman acknowledges the fact that under the transitional protections many more in-work families would have received free school meals than will be the case under the Government’s secondary legislation. We hope that Conservative Members will help those hard-working families by ensuring that passported benefits do apply to them. We hope that they will help out those who are just about managing, which was what the Prime Minister claimed that she was going to do in the first place.
Karen Lee (Lincoln) (Lab)
Some 27% of children in Lincoln live in poverty. Does my hon. Friend agree that this cliff-edge threshold might mean that some of those children might not get a hot meal one day?
Angela Rayner
I absolutely agree about that. [Interruption.] Conservative Members keep saying that we are scaremongering, but it is absolute fact that under the transitional arrangements that currently apply, as they do in my constituency, which was one of the first to roll out UC, free school meals do cover those applicants who receive universal credit. The regulations will remove that right for those individuals, which is scandalous.
Lucy Powell (Manchester Central) (Lab/Co-op)
My hon. Friend is making an excellent opening statement. Does she agree that the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) almost makes her point for her? He made it clear that this is about making sure that people who are currently in receipt of benefits and free school meals would not be worse off when they transition, in which case they are going to be worse off under these regulations—[Interruption.] He is making that case for her. For all the huff and puff from Conservative Members, one would have thought we would remember that this is about children and families who are living in poverty in work. We should be doing our utmost to help them, not having a semantic argument.
Angela Rayner
I absolutely agree with my hon. Friend.
As I was saying, people should not just take our word for it. They should look at what the Children’s Society has said about those 1 million children who will not receive free school meals if the regulations come into force.
Imran Hussain (Bradford East) (Lab)
My hon. Friend is making a very persuasive case. In the Bradford district, more than 10,000 children who are living in poverty will miss out on free school meals, but Northern Ireland will be exempt from the same policy. Are not the Government putting their own political benefit before child poverty?
Angela Rayner
My hon. Friend makes an excellent point, which I will come on to later in my contribution. As I said, those who are just above—
Angela Rayner
You have had your chance, thank you. As I said—[Interruption.] Hon. Members have been told that more than 40 people want to speak in this debate, and I am trying to give way as best I can. The hon. Gentleman has already intervened once; I think that was more than enough.
Those who are just above the threshold would be better off earning less under these proposals. The Government are pulling the rug from under their feet, because once they earn above £7,400, they will be about £400 a year worse off for each child they have in school. So just when did the Government abandon the principle that work should pay? Perhaps the Secretary of State can tell us why she will be voting for a policy that, as my hon. Friend the Member for Bradford East (Imran Hussain) said, is twice as generous in Northern Ireland as it will be for her own constituents?
Stephen Lloyd (Eastbourne) (LD)
Does the hon. Lady agree that although the Conservative party talks about making work pay, it completely demolished that with universal credit through George Osborne’s removal of work allowances, meaning that now work does not pay?
Angela Rayner
The hon. Gentleman makes an important point. Universal credit has had add-ons and add-ons ever since the Government proposed it. That has made it very complex and, as I have outlined, work will not pay for some in receipt of it if these proposals go forward.
I would like to make a little more progress and address the issue of free childcare. Once again, the Government have a policy in transition—one that they are seeking to restrict. About 200,000 two-year-olds are currently eligible for 15 hours of free childcare, but there will be more than 400,000 two-year-olds in families receiving universal credit. Ministers have refused to say how many children will be eligible under their policy, so will they finally do so now? I ask that because hundreds of thousands of children may lose out under their plans. Once again, some of the most vulnerable children are first in line for Government cuts.
Neil O'Brien (Harborough) (Con)
In this House, we all believe in an honest and balanced debate, so may we just hear from the hon. Lady that it is clear that 50,000 more children will be entitled to free school meals under universal credit than under the previous system, and that 7,000 more children will be entitled to the two-year-old free offer—it is more, not fewer?
Angela Rayner
The Government have plucked the 50,000 figure from their own consultation document, but it had no accompanying methodology, so I am not convinced. Indeed, that makes up less than 5% of those who are in poverty. The regulations would mean that those who would currently be eligible for support under the transitional protections this Government laid out for universal credit would have that rug pulled from under them—[Interruption.] Conservative Members can keep making faces, but those are the facts.
Once again, this creates a cliff edge for families in receipt of childcare, and the policy will squeeze the income of working families who are already struggling to get by. Under universal credit, they have to pay their childcare costs up front and then claim the money back. With childcare costs rising faster than wages, meeting these costs up front will make it impossible for many working families to make ends meet, so yet another barrier is put in their way. Only months ago, several Conservative Members asked the Chancellor to look again at the taper rate because it meant that work would not pay for low-income families. Today’s vote is on exactly this issue. When the Government have already made those families bear the brunt of their cuts, adding yet another burden is just wrong.
Alex Burghart (Brentwood and Ongar) (Con)
I thank the hon. Lady for giving way; she is being extremely generous with her time. The Labour party manifesto committed to extend free school meals to all primary school pupils. This is an additional extension of free school meals to a lot more children who are in secondary school. Will the hon. Lady please tell us how much that would cost and how her party would fund it if it was in power?
Angela Rayner
The hon. Gentleman will know that the “School Food Plan” that was published in July 2013 recommended that the Government looked into free school meals for infant and junior schools. The Labour party manifesto was clear that we would just extend that. It was unfortunate that the Government chose not to do as recommended, instead just giving it to infants. If Conservative Members would like to see our costings and manifesto, I am sure I could provide that, because there were many more costings in our manifesto than there were in the Conservative manifesto—[Interruption.]
Madam Deputy Speaker (Dame Rosie Winterton)
Order. This is an extremely important and very serious debate. The hon. Lady has taken a lot of interventions. When she takes interventions, there is no point in just shouting at her; it is important to listen to her answer. The same will go for when the Secretary of State is speaking.
Angela Rayner
Thank you, Madam Deputy Speaker.
The Government are phasing out childcare vouchers as they transition to a policy of tax-free childcare, but that policy is simply not working. The introduction of tax-free childcare has been so shambolic that the Government fell 90% short of their take-up target, and spending was less than 5% of their projection. Instead, nearly £1 billion that was earmarked for childcare was returned to the Treasury. Yet the Government are still pushing ahead with their plan to phase out childcare vouchers, which will leave families hundreds of pounds worse off and directly transfer Government support to those who are better off.
Stephanie Peacock (Barnsley East) (Lab)
My hon. Friend may have seen written answers I have received from the Government showing that 10,000 of their own officials still use childcare vouchers, and the same number are signed up to a Ministry of Defence scheme. Does she agree that if Ministers will not protect their own officials, they should at least stand up for our armed forces?
Angela Rayner
I absolutely agree with my hon. Friend. The armed forces do a magnificent job for us and it is an absolute scandal that they will also be caught up in this and made worse off as a result of these measures.
Members from all parties will know that hundreds of their constituents have written letters and signed petitions to express their concerns about these policy changes, yet the Government continue to push ahead with them, and have tried to do so by the stroke of a ministerial pen. The only legislation that has come to this House is the regulations before us, which complete the phase-out for those who change employers after April. We have therefore called for a vote on the regulations, and we want to make it clear that if the House passes our motion, we are sending a clear message to the Government that it is time to think again and keep childcare vouchers available.
The regulations on universal credit apply new sanctions to those who are currently protected and cut the time period that claimants have to provide evidence. Despite the Government’s rhetoric on people with disabilities and mental health needs, it will be them who suffer. Charities have urged the Government to reconsider, with Mind saying that the regulations will
“make the system harder to navigate at a time when people are unwell and most in need of support.”
Why is the Secretary of State for Work and Pensions ignoring those voices and making the system even harder for the very people the Government claim they want to support?
Self-employed people are the absolute bedrock of our economy. The Chancellor spoke of start-ups and new businesses in his statement earlier, but this legislation will make things harder for self-employed people. The TUC warns that a short start-up period for the minimum income floor could close businesses with the potential to become sustainable and profitable. The rules could discourage people from self-employment entirely. So, again, why is the Secretary of State making things so much harder for the people her Government claim to support? We know that the self-employed are more likely to be on lower earnings than employees, yet in its recent welfare trends report, the Office for Budget Responsibility confirmed that the low-paid self-employed face a much tougher benefits system under universal credit. On average, those affected are set to lose around £3,000, so the savings seem to be coming from the pockets of the low-paid self-employed. Why is the Secretary of State pursuing a policy that will make so many self-employed people much worse off?
The regulations make the universal credit system even more complicated, with the introduction of the surplus earnings rule. As universal credit is based on the previous month’s income, a self-employed claimant could get substantially less universal credit than an employed claimant earning a similar annual income. Successive Secretaries of State for Work and Pensions have said that universal credit will be simpler and will make work pay, but once again they are proposing the opposite.
All these statutory instruments share a common theme: they are about the support that we offer to families and their children, particularly those already struggling to get by. I remember when the Prime Minister said that the mission of her Government was the acronym JAMs—I am starting to think that really it stood for “Just about May’s survival”. It was meant to be about those who are just about managing, yet under this Government, there will be JAMs today and there will still be JAMs tomorrow, because instead of helping them to get on and get by, the Government are making their lives ever harder. Today is a chance to say that enough is enough. I commend the motions to the House.
The Secretary of State for Work and Pensions (Ms Esther McVey)
As the hon. Member for Wirral West (Margaret Greenwood) is on the Opposition Front Bench, may I start by congratulating her on her promotion? I am sure that she would have liked to have got it in happier circumstances, but none the less I welcome her to her role. I hope that she does not fall victim to the bullying culture of the Leader of the Opposition’s office, as the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) has.
Well, well, well, what a strange old topsy-turvy world we find ourselves in. Measures so strongly fought for and won by claimants, MPs, stakeholders and charities only months ago are now being opposed by the Opposition. These changes were proposed by the most vocal defenders of benefits, and they are now being obstructed. We in the Chamber should not be giving the public misinformation, but unfortunately that is what has been happening so far.
Last month, stories emerged from Opposition Members—particularly the hon. Member for Ashton-under-Lyne (Angela Rayner)—that have been repeated today: namely, that our plans for entitlement to free school meals would deprive more than a million children. It took a “Channel 4 News” FactCheck to point out that no child who currently receives meals would lose their entitlement and that, in fact, some 50,000 more children would benefit under our proposals when compared with the previous system.
I understand that it is the nature of the Opposition to oppose, but the scaremongering and misinformation from the Opposition has surely reached a new low as today they seek to annul regulations that consist largely of changes that were introduced purely to support benefits claimants—changes that Opposition Members have themselves called for. All this after a recent intervention by the UK Statistics Authority, which made it clear that the claims made by Opposition Members about universal credit causing poverty, debt and eviction were not supported by the evidence.
Of course, the scale and nature of the change represented by universal credit means that scrutiny is inevitable and important, and I welcome that, but unsubstantiated and exaggerated claims about widespread problems caused by universal credit amount to nothing less than scaremongering. They cause claimants alarm and, in the worst cases, stop them getting the money that they are entitled to, yet we find ourselves here again, debating universal credit, with the same false alarms coming from the shadow Cabinet—only this time we are debating the very regulations that we have designed to address the legitimate concerns of Opposition Members and our stakeholders.
Ruth George (High Peak) (Lab)
The Secretary of State has said that claims should not be made when they are unsubstantiated. I have been asking parliamentary questions about the £50,000 increase that is in the consultation response, and I have received no facts about how the figure has been arrived at—none whatsoever. Will that be published, please?
Maggie Throup (Erewash) (Con)
Will my right hon. Friend dispel some of the myths and scaremongering that have been put out by the Opposition and reassure my constituency, where universal credit is being fully rolled out, that those already in receipt of free school meals will not lose that eligibility?
Several hon. Members rose—
Ms McVey
I will carry on for a bit, and then I will gladly take some more interventions.
We are not just debating these regulations today, but trying to save them from the Opposition, who would be happy to destroy this extra support for our benefit claimants. Perhaps I should remind the House of some of the changes that are in these regulations and what benefits they will bring to claimants. After all, the policy underpinning these regulations has been widely debated and supported both inside and outside this Chamber. The regulations abolishing waiting days will help many claimants by, on average, £160, while reducing the time taken to receive the first monthly payment. These regulations bring into effect the housing benefit transitional payment, which amounts to two weeks of housing benefit at the start of the claim. That is worth, on average, £233 towards helping claimants stay on top of their housing costs as they move into universal credit. These regulations increase the work allowances and are worth around £68 a year in further support for those who are striving to enter work.
Neil Gray (Airdrie and Shotts) (SNP)
The Secretary of State is attempting to provide a stout defence of the impact of universal credit. Why is it then that, only last month, her colleagues on Stirling Council proposed three years’ worth of mitigation against the impact of universal credit, worth more than half a million pounds?
Ms McVey
Actually, if the hon. Gentleman looks at what this Government introduced in the Budget, he will see that it was a package of support worth £1.5 billion for the country. What we are doing is supporting people as best we possibly can. Additionally, these regulations fund temporary accommodation through housing benefit, which has been widely called for and unanimously welcomed by local authorities.
These regulations follow on from a host of other changes that we have already implemented, including making our telephone lines Freephone numbers, extending the maximum repayment period for advances from six months to a year, increasing the maximum advance that claimants can receive to up to 100%, changing the guidance to ensure that, when private sector housing claimants come on to universal credit, we know whether their rent was previously paid directly to the landlord and can ensure that that continues.
Clive Lewis (Norwich South) (Lab)
Meaner even than the master in Oliver Twist’s workhouse, the Secretary of State seeks not just to stop the second helping, but to stop any meal at all. I ask her to come to Norfolk. If these changes go through, 12,500 children will be denied a hot midday meal. How does that square the circle in relation to making work pay? Please, can she tell us —anything?
Ms McVey
Unfortunately—I think that I was taught this as a child—when someone has totally lost the argument, they make up the facts, and that is what we are hearing from the Opposition. Although we have brought in all the requests that they wanted to support more people into work—I have just read out the list—they just scaremonger and make things up as they go along. I hope that it is clear to the whole House that these regulations will bring in real and tangible benefits for claimants and that, as promised, we are making the changes necessary to continue to deliver universal credit safely and securely, with all the necessary support that claimants need.
I want to be clear about another thing, too, because Members have stood up during past universal credit debates to recount stories of cases where their constituents have reported difficulties with universal credit. Where that has happened, we have immediately sought to address the concerns, because it is vital to us all that we get this right, so that we can deliver the most modern, forward-thinking, flexible benefit in the world, and that is what this Government are seeking to deliver. This benefit will be at the cutting edge of support throughout the world—that is what this Government are delivering.
Stephen Timms (East Ham) (Lab)
On problems with universal credit, the Secretary of State will, I think, recognise that the last thing that families earning a bit less than £7,400 a year will want is a pay rise, because if they get it, they will immediately lose their free school meals and be much worse off as a result. That is a very serious problem for work incentives, which used to be a big priority for her Department. Does she recognise that major problem?
Ms McVey
The right hon. Gentleman raises a fair point that I would like to address. By contrast, the other points that we have heard so far have been fabrication. He mentioned people earning £7,400. Actually, with universal credit, we are talking about people who will be bringing home somewhere between £18,000 to £24,000. He is quite right—[Interruption.] If Members will kindly let me finish this answer to the very pertinent question asked by the right hon. Gentleman, as this is now a personalised benefit where people will have their own work coaches, we will not seek to put someone in a less advantageous situation. Therefore, if people look at the money that is coming in and the extra support that is coming from school meals, they can see that we will not seek to do that to an individual. A work coach will be working with individuals to help them to progress in work, so that they are in a better situation.
Chris Philp (Croydon South) (Con)
On work incentives, can the Secretary of State confirm that there have been two studies—one in December 2015 and another in September 2017—both of which showed that people on universal credit were more likely to get back into work than those people on the predecessor benefits? Therefore, this is helping to get people back into work.
Ms McVey
My hon. Friend is quite correct. Further studies show that people on universal credit are much more likely to look for work than people on jobseeker’s allowance—86% of those on universal credit, compared to 34% of those on jobseeker’s allowance. Under the legacy benefits came things that I am sure we all remember, such as the 16-hour rule, which trapped people on benefits. That will not happen under universal credit because it pays people to work, every hour that they work.
Mr Duncan Smith
My right hon. Friend is doing a fantastic job. She has pointed out the absurdity of the Opposition’s position, whereby they will now vote against the changes that will benefit those who most need them. Alongside that, they are now voting for a policy that would deliver free schools meals to families earning £40,000 a year. Does not she think that the Opposition are for the few, not for the many?
Ms McVey
My right hon. Friend makes a very good point. Perhaps these are honest mistakes by the Opposition; I am not sure. Under universal credit, people can be in work and not in work. Perhaps the Opposition do not understand the complexities of this system, which is helping people into work and then to progress at work. As my right hon. Friend said, if we allowed free school meals in every family on universal credit, those families could include parents earning £40,000 a year. As has always been the case, we support people on free school meals from families who are either not in work or in low amounts of work.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Again, can we listen to the Secretary of State? It is fine if she wants to take interventions and she has indicated that she will take some more, but I do think that hon. Members should be a bit calmer.
Helen Whately (Faversham and Mid Kent) (Con)
Jobcentres in my constituency tell me with some passion that universal credit is really helping them to get more people into work. The Government have also listened to concerns about universal credit and are making improvements. Does it not baffle the Secretary of State and is it not bizarre that the Labour party is trying to block those improvements, when the Government are doing exactly the right thing?
Ms McVey
My hon. Friend is spot on, and the incredulity with which she says what the Opposition are stopping points out the ridiculousness of their position. Not only have we helped an extra 3.1 million people into work, but these regulations help the most vulnerable and will bring in an extra £1.5 billion of support.
Several hon. Members rose—
Ms McVey
I will carry on for a little bit more before taking more interventions from Opposition Members.
I turn to the Free School Lunches and Milk, and School and Early Years Finance (Amendments Relating to Universal Credit) (England) Regulations 2018. The Government have recently published their responses to two consultations on the earnings thresholds to receive free school meals under universal credit. The scope of these consultations includes entitlement to free school meals, the early years pupil premium and free early education provision for two-year-olds. The intention of these regulations is to replace the transitional criteria introduced in 2013. These transitional measures made all families on universal credit eligible for these entitlements—a move that was necessary so that no household should lose out during the early stages of the universal credit roll-out. Having fully considered all the responses to the consultation, the Department for Education laid these regulations before the House on 7 February to replace the temporary criteria with the new earnings threshold. This is what much of the debate has centred on so far. I hope that we have given clarity and the Opposition now understand why accepting these regulations would be so helpful to their constituents.
Catherine West
This change to benefits shows how untrusted the Government are on benefits. If they are trying to sell something good, they cannot, because they are so untrusted on benefits. If the system is so fantastic, why do 80% of people who come to see MPs get their benefits? Why should not the system just work? [Hon. Members: “What?”] Some 80% of appeals for universal credit—
Mr Deputy Speaker (Sir Lindsay Hoyle)
Order. May I help a little bit? Would hon. Members make short interventions? I want to ensure that all Members get in. The sooner we get this speech over, the sooner we can get to the Back Benchers.
Ms McVey
It would be helpful if hon. Members did not just make up statistics and facts as they went along, as we just heard from the hon. Lady. Hon. Members should listen to us regarding the support that we are now providing to claimants. As I said, it is a topsy-turvy world. There was a ding-dong when the Opposition were calling for the changes. Now that we are introducing the changes, we are back to another ding-dong and they do not want the changes—but never mind.
I turn to the regulations concerning national insurance contributions and childcare. These regulations align the tax and national insurance treatment of employer-supported childcare, where parents opt into the new tax-free childcare scheme. They remove the national insurance disregard to new entrants to the scheme, once the relevant day has been set. They are vital to ensure that the tax system operates fairly and consistently and that the Government can target their childcare support effectively.
For many parents, being able to afford good-quality childcare is essential for them to work and support their families. That is why we are replacing the childcare vouchers with tax-free childcare, which is a fairer and better-targeted system. Tax-free childcare is now open to all eligible parents, who can get up to £2,000 per child per year to help towards their childcare costs. More families will be able to access support through tax-free childcare because only about half of employed working parents can access vouchers, and self-employed parents were excluded from vouchers. Therefore, 1.5 million families are now eligible for tax-free childcare compared with about 600,000 families currently benefiting from vouchers.
Mr Ivan Lewis (Bury South) (Ind)
Will the Secretary of State clarify something she said in relation to people getting pay increases that then perversely lead to them being worse off? She appeared to say that she would instruct personal trainers to put that right financially. I can hear a shudder going around benefits offices up and down the country at the idea that she has unilaterally said that if any constituent of ours faces being worse off as a consequence of a pay rise, perversely, her personal trainers will compensate them for that loss.
Ms McVey
I thank the hon. Gentleman for that intervention, because it allows me to explain that universal credit works on a tailor-made basis, so that the claimant will always be in contact with their work coaches to work out what is better, how progression would be better and why they would be taking reasonable work because it makes them better off. I am not saying this unilaterally. I ask all Opposition Members please to go to their local jobcentre and meet the work coaches, who can then explain how the system works.
In 2013, the Government announced the introduction of tax-free childcare as the successor to childcare vouchers. The passing of the Children and Families Act 2014, which legislated for tax-free childcare, had cross-party support. Tax-free childcare is now fully rolled out, and the date for the closure of the voucher scheme to new entrants is April this year. This was set out in the 2016 Budget, giving two years’ notice. Parents receiving childcare vouchers can continue to use them while their current employer continues to offer the scheme.
Mr Marcus Jones (Nuneaton) (Con)
Is not the bottom line that under the previous tax credits system people got 75% of their childcare costs but under universal credit they get 85% of their childcare costs, and they can work all the hours that they want to?
Ms McVey
Universal credit is far more generous, as my hon. Friend points out. Up to 85% of childcare costs will be given to people who need it.
Under the childcare voucher scheme, the estimated cost to the Exchequer of forgone employers’ national insurance contributions is £220 million per year. This is paid to employers and voucher providers to administer the schemes, so it is not surprising that voucher providers are lobbying hard to keep the scheme open. However, we are focused on delivering a better childcare offer for working families. Tax-free childcare is simpler to administer for childcare providers, who will not have to deal with multiple voucher providers. These regulations will bring the national insurance contributions relief in line with the income tax treatment. They are an essential step in reforming Government childcare support to provide a fair and well-targeted system. Closing the childcare voucher scheme to new entrants will ensure that more Government support goes directly to parents and helps working families to reduce their childcare costs.
Dr Philippa Whitford (Central Ayrshire) (SNP)
With the consultation that the Government are carrying out on abuse of women, does the Secretary of State recognise the threat of financial control and abuse posed to women by the single payment? Would she be willing to consider making individual payments of child tax credits to the mother, and so on, the norm? Charities have demonstrated that women who are being abused will not apply for exception because they feel they will come under physical abuse.
Ms McVey
The hon. Lady makes a good point, and that is why it is possible to split payments according to need. The devolved Administration in Scotland have the right to alter these rules and provide extra support, should they wish to, but it is safe to say that payments can now be split, and we have listened to those concerns.
We are also listening to colleagues in Northern Ireland, who have raised specific circumstances relating to certain public sector service employers, and have committed to ongoing engagement with them to look at these issues, as tax-free childcare continues to roll out to replace employer-supported childcare. We have seen the success of 30 hours’ free childcare for three and four-year-olds in England, so we are committed to working with the Northern Ireland parties to administer childcare support of that kind in Northern Ireland, in the absence of an Executive.
For the reasons I have set out, annulling these regulations would deprive families and their children of the important and positive support that this Government are determined to offer and would have a range of very negative effects, so I call upon the House to oppose the motions.
Neil Gray (Airdrie and Shotts) (SNP)
I am grateful for the opportunity to speak to these motions for the Scottish National party. I will use the bulk of my time on early-day motions 1004 and 921, as motions two relate only to England or England and Wales.
The universal credit regulations referred to in early-day motion 921 cover most of what was announced in the Chancellor’s autumn Budget, after months of negative headlines for the Government about universal credit. It was the Government’s big sell to their concerned Back Benchers, which was really not much. For instance, they reduced the waiting time before universal credit can be paid to recipients from six weeks to five, which was a welcome but very wee step.
Meanwhile, the Government also included more controversial measures such as changes to the rules on surplus earnings and self-employment losses, which come into force next month. They removed the automatic temporary exemption from work search and availability requirements for illness for claimants who have been found fit for work, and they reduced the time people have to register and supply evidence regarding a change in their circumstances from one month to 14 days.
The Government’s tweaks to the welfare system over the last eight years and the drip, drip, drip of cuts are slowly eroding the value and support it provides. It is completely unfair to expect people on low incomes to cope with the fact that their benefit will be frozen and fail to meet their costs of living, while the Government continue to add layers of punitive bureaucracy designed to trip them up. An individual financial sanction or one person missing the deadline for an increase in entitlement is of tiny financial value to the Department for Work and Pensions, but it is proportionally an enormous chunk of that person’s income. Yet this Government seem content to make these changes off the cuff, in the same way they tweaked the universal credit work allowance, which eroded its value, and the same way they tried to tweak personal independence payments, to stop people with severe mental health problems receiving the higher rate. It is underhand, and it is appalling.
I received an official warning recently that universal credit will be rolled out in my constituency next month. I have been working closely with my local citizens advice bureau to make sure there is a joined-up response to the issues as they unfold, as it has done in many Members’ constituencies. I am worried about the impact that the roll-out of universal credit will have on local employers and their employees, because the picture elsewhere has been disastrous. The continued roll-out of universal credit is having a devastating impact on claimants, with debt and rent arrears through the roof.
Rachel Maclean (Redditch) (Con)
The hon. Gentleman is speaking about the roll-out of universal credit. We had the roll-out in Redditch just a few months ago. I can assure him that, according to the manager of the jobcentre, who has worked there for 30 years—an independent person working day in, day out to help people—the roll-out is much better than any previous system. Maybe he would like to visit Redditch and speak to her.
Neil Gray
I have no reason to doubt what the hon. Lady says, except that the experiences of Members on the Opposition Benches are rather different. I point her and her colleagues to my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), who has been working tirelessly on this not only while he has been a Member of the House but while he was leader of Highland Council, when universal credit was first tested in Highland. He has been knocking against a brick wall trying to get the DWP to listen to the concerns that he has found in his area, and his experience is not the same as the one the hon. Lady says she has had in Redditch.
David Linden (Glasgow East) (SNP)
I intervene in response to the hon. Member for Redditch (Rachel Maclean), who said how wonderful jobcentres are and how much work they do. I do not know whether she has had the same experience as me, but in my city of Glasgow, the UK Government have closed six jobcentres, and in my area of the east end of Glasgow, they have just butchered three out of four jobcentres. How can we go and find out how things are going in jobcentres, when her Government are busy closing them?
Neil Gray
I absolutely concur with my hon. Friend, who has been an assiduous campaigner to protect and save the jobcentres in his constituency. Even at this late stage and after some of their doors have closed, I hope that the Government may listen and finally provide a reprieve.
It is right that we acknowledge the knock-on effect felt by landlords, whose incomes are in turn being squeezed due to tenants falling into arrears because of successive cuts to universal credit. The SNP has continually called for the roll-out of universal credit to be paused and properly fixed. That is not just about reducing the wait time by a week for those receiving universal credit, but about restoring the original principles of universal credit, which have been cut back so far to their roots that they have been battered.
The UK Government’s woeful ignorance on this is shameful. The evidence of the social destruction caused by universal credit in its current form is clear from report after report by expert charities. Such social destruction is not masked by the line, repeated ad nauseam by the Government, that universal credit is getting people into work. It is not much good for people if this is just a shift from out-of-work poverty to in-work poverty. We know there has been a rise in the rate of in-work poverty, and we also know that 67% of children—I repeat, 67% of children—currently living in poverty do so in a family where at least one person works.
Catherine West
Does the hon. Gentleman agree that most housing providers have deep concerns about universal credit in general, and in particular about direct payments to tenants who have problems with such a relationship?
Mr Deputy Speaker (Sir Lindsay Hoyle)
I just warn Members that we will have to have a five-minute limit. I do not want to start off with a four-minute limit, but we are in danger of going that way.
Neil Gray
I agree with the hon. Lady, which is why we are looking to introduce some flexibilities in Scotland, where we have the minimal powers to do so.
The Government must open their eyes to the crisis that they have created for workers, people who are sick or disabled, landlords and tenants, and employers, and urgently halt and fix universal credit before any more of our constituents have to suffer. In Scotland, the Scottish Government are using some of their minimal new powers in this area to give people in Scotland more choice over the universal credit payments and enable them to manage their household budgets better. We of course want to do more, and we wish that the whole of universal credit had been devolved to allow us to do so.
Dr Whitford
Does my hon. Friend agree that the Secretary of State’s suggestion that women can apply for the exceptional alternative payment scheme is not enough? The evidence shows that this needs to be the norm.
Neil Gray
I fully agree with my hon. Friend. Again, I hope that the Government are looking at her private Member’s Bill, which is due to be given a Second Reading on Friday, and that they will do what is right and is needed so that all areas of these isles can bring about the changes that are required.
Turning now to early-day motion 1004 on the changes to national insurance contributions that come into force on 6 April, much of the comment in this area has been not about the regulations themselves, but about a policy underpinning one of the changes. That policy is the UK Government’s decision to introduce a new scheme to support parents’ childcare costs—tax-free childcare—and to close employer-supported childcare schemes to new applicants from April 2018. Parents will not be able to receive support simultaneously from both the current scheme and the new tax-free childcare scheme, but parents who wish to remain in the old childcare vouchers scheme will be able to do so while the current employer continues to offer such a scheme. There is no obligation to switch to the new scheme, but existing voucher schemes will be closed to new applicants from next month.
The delivery of affordable childcare is crucial for the development of children as well as for providing for families. Fundamental to that is that parents on low incomes need to be protected from the impact of enormous childcare costs. That is one of the major barriers to resolving the gender pay gap and the gender employment gap. Childcare continues to be expensive and inflexible.
We are deeply concerned about the UK Government’s plans to close the childcare voucher scheme to new entrants from April this year. The SNP wishes to support policies that deliver for parents, ensuring that they have the resources and flexibility they need to give their children the best start in life. The UK Government must support working parents by keeping the scheme going, alongside the tax-free childcare scheme, so that parents can choose what is most suitable for their needs and offers the most support for their family. We must also consider in more detail the impact that the introduction of tax-free childcare will have across all different family types.
One of the key problems is that this is an extremely complex area, and the interaction of two schemes with the benefits system is an additional layer of complicated bureaucracy for parents. For example, the Low Incomes Tax Reform Group highlighted in February that universal credit and tax credit claimants must seek advice before applying for tax-free childcare:
“If an existing tax credit claimant makes a claim for TFC, even if they do not claim any help with childcare costs through tax credits, their whole tax credit claim will be automatically terminated. If they live in an area where universal credit full service has rolled out they may find that they are not able to claim tax credits again and this is very confusing.”
That is a significant issue with the new scheme, so how are the Government making people aware of it? We know that the DWP is notoriously bad at awareness campaigns, as we have seen with the WASPI women—Women Against State Pension Inequality Campaign—or the massively under-marketed Access to Work programme. We also know that the UK Government’s benefit changes are already creating confusion for people. Figures from the Government Digital Service have revealed that claimants appear to be encountering significant problems with the Government’s Verify system for universal credit, with 48 out of 91 needing help at a jobcentre to set up an account.
In Scotland, the SNP Government have committed to almost doubling the funded early learning and childcare entitlement by 2020, from 600 to 1,140 hours, in a bid to transform the life chances of children in Scotland. Our universal childcare offer is unmatched in the rest of the UK. In Scotland, all three and four-year-olds, and eligible two-year-olds, will benefit from 1,140 hours. The full entitlement is estimated to save families over £350 per child per month, or £4,500 a year.
Before I conclude, I would like to touch briefly on the other two motions, which relate to devolved matters. On the free school lunches and milk motion, every child at a local council school in Scotland can get free school lunches in primary 1, 2 and 3, regardless of financial circumstances. Some children in funded childcare before starting school can also get free meals. That is a year more than is currently provided in England. The UK Government’s universal credit system requires arbitrary thresholds, which create a cliff edge for parents, as has been discussed. We continue to call on the UK Government to devolve powers and funding so that we can take control of universal credit in its entirety in Scotland and deliver it in the best way possible for the people of Scotland.
Finally, on the free childcare motion, we have committed to fully funding our transformative expansion of early learning and childcare entitlement to 1,140 hours by 2020, and we have a track record of delivering on the previous expansion from 475 hours to 600 hours.
In conclusion, in all these areas what is clear is that when issues are devolved we see better policy and better outcomes for the people of Scotland.
Several hon. Members rose—
Mr Deputy Speaker (Sir Lindsay Hoyle)
Order. There is now a five-minute limit on speeches.
Mr Marcus Jones (Nuneaton) (Con)
I welcome the universal credit regulations that the House is considering. We should not forget that universal credit is an important reform that is getting more people back into work and helping them to stay in work. People are getting help and support from DWP staff that they did not get in the past.
I think that a mark of the policy is the enthusiasm shown by jobcentre staff. I had the privilege of visiting my local jobcentre in 2014—I have visited it since, of course—alongside my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith). That day they were holding a regional training conference for up-and-coming leaders, and when we walked into their training room, which was full of civil servants, they all immediately started applauding my right hon. Friend. That showed me that they do not owe any Government anything, in terms of support or loyalty. It showed me that they think the reforms that he was introducing, and that the Government are now rolling out, are worth doing. Having visited the people who work in jobcentres, and having spoken to them since, it is clear to me that they think that the reforms are now making a real and positive difference.
I will not say that the roll-out of universal credit has been without challenges. We all know it has, which is why the Government are putting forward this package today worth £1.5 billion. We should also acknowledge that if the package is voted down, people who need help might not be able to receive their advance within five weeks or get the extra six months to repay any advance, and they might have to go back to seven weeks of waiting time while their claim is processed. My right hon. Friend the Secretary of State also raised the possibility of people being in a worse position with regard to housing benefit. The House therefore needs to think very carefully before voting down these regulations, which are positive and are what Opposition Members wanted just a few months ago.
On free school meals, it is important to point out that the regulations we are debating today do not change the entitlement for year 1 and 2 children, all of whom receive free school meals. We also need to be careful with the figure of 1 million children losing out. As soon as I heard that figure—on that same afternoon—I accosted the Education Minister during a vote to ask him whether it was true. He said clearly that it was not true, so we need to look at the facts.
Alec Shelbrooke (Elmet and Rothwell) (Con)
My hon. Friend will recognise that the Opposition’s proposal on free school meals in their manifesto was to pay for them by charging VAT on private schools, which is illegal under EU law. Does my hon. Friend find it confusing that they would prefer to stay in the single market and the customs union, when that would be at odds with that policy?
Mr Jones
My hon. Friend demonstrates the complete confusion and disarray of the Opposition, not just on this policy but on our future outside the European Union. That goes to the heart of the situation: this is all about political dogma, rather than practical ideas and practical help for people.
Mike Amesbury (Weaver Vale) (Lab)
Does the hon. Gentleman think that the Children’s Society’s figure of 16,500 children being denied free school meals in the county of Cheshire, which the Secretary of State and I represent, is political dogma?
Mr Jones
The new system is more generous than the old system. I will come on to the external evidence that explains that in a moment.
Returning to what I was saying about free school meals, under the old system of jobseeker’s allowance as soon as a parent worked 16 hours, or two parents worked 24 hours, they lost their children’s entitlement to free school meals. The crux of this debate is comparing and contrasting that with what we are moving to. All those currently in the system have been eligible, because of transitional arrangements. Conservative Members have made it clear why the transitional arrangements were put in place. Under the new system, when everybody is on universal credit and these regulations are in place, by 2022 an additional 50,000 children will be eligible for free school meals. I hear all the noise from Opposition Members, but they should not just take my word for it or that of other Conservative Members. They should go on to the “Channel 4 News” FactCheck website, which says:
“This is not a case of the government taking free school meals from a million children who are currently receiving them. It’s about comparing two future, hypothetical scenarios.”
Both of them are more generous than the old benefits system.
The Labour party frequently looks for us to improve the situation and the lives of the most vulnerable. That is what this policy and these regulations are doing today, but unfortunately, Labour seems not to let the truth and the facts get in the way of a good story. There is too much political dogma and it is putting that before people. The Government are putting people first. This system will be better than the system was hitherto and that is why I will support the Government tonight.
Mr Ivan Lewis (Bury South) (Ind)
The measures that we are debating expose what has been happening to our country since 2010. In the name of deficit reduction and fiscal responsibility, the Tories have allowed the poorest and most vulnerable to become poorer and even more vulnerable. A Prime Minister who once courageously warned her own party that it was perceived by too many as the nasty party is presiding over a Government who have a cavalier disregard for social justice and the poverty that shames our country.
It is true that in the aftermath of a global financial crisis, any UK Government would have had to make tough choices, striking the right balance between spending cuts, tax increases and investment in growth. However, the reality is that too often they have made the wrong choices—choices motivated by an ideological project to wither the state, irrespective of its impact on local communities, the poorest in our society and growth.
Anna Soubry (Broxtowe) (Con)
Could the hon. Gentleman just remind us all that a note had been left by a member of his Government that said, quite properly, there was no money left? Not only have this Government restored our economy, but in so doing they have absolutely protected the very people that matter to all of us. This is tribal nonsense.
Anna Soubry
The hon. Gentleman is rewriting history. The fact is that if the Labour Government had fixed the roof when the sun was shining, when that crisis came along they could have weathered the storm. That is what this responsible Government have been doing since 2010.
Mr Lewis
The right hon. Lady’s party wanted us to regulate the banks and the financial services sector less than under the regulatory system we had in place. It committed to matching our spending and borrowing and did not want us to rescue the banks. Imagine if that prescription had been followed at the time we were dealing with the financial crisis.
The Government’s choices are motivated by an ideological project to wither the state, irrespective of its impact. Their disproportionate cuts have choked off growth and destroyed too much of our social fabric. Their tax changes have failed dismally to tackle tax avoidance or to ensure that, in tough times, those with the most carry the greatest burden. Their failure to invest in infrastructure, skills and jobs has led to economic growth that is anaemic compared with similar economies. The Government’s own assessments predict that this economic failure will be made even worse by the uncertainty and instability that are the inevitable consequences of Brexit.
Perhaps the right hon. Lady will agree with me on this point: history will record that the referendum was nothing to do with the national interest or giving voice to the will of the people. It was David Cameron’s fix for managing the Tory party through a general election.
Mr Lewis
I am not giving way again to the right hon. Lady. Far from being the party of economic competence, hers is the party of economic chaos.
To be clear, the policies we are opposing today are neither necessary nor acceptable in a civilised society; they are political choices made by this Tory Government. As we have heard in this debate, Tory Members are in denial. Too many of our fellow citizens might as well be living in a different country from the one they describe. The reality for those people is food banks, perpetual debt, a poor quality of life and a lack of hope for themselves and their children. Some, of course, are dependent on benefits, but increasing numbers are people in work on permanent low pay and insecure contracts. This should offend any Member who believes not only in social justice but in the future of mainstream politics. Here and abroad, people who feel left behind by mainstream politics are increasingly turning to anti-establishment nationalism, which spreads hate and division. That is another reason these policies are so irresponsible.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
A few moments ago, the hon. Gentleman denigrated Brexit, yet his own area of Bury voted to leave the EU. How would that have helped with the politics of disenfranchising people and making them turn towards extremes?
Mr Lewis
The hon. Gentleman entirely misses the point. Of course I believe that the result of the referendum must be respected; I question the motive for the referendum in the first place. It was David Cameron’s folly—that is how history will remember him—and was done in the interests of the Conservative party, not those of our country.
Anna Soubry
I too have respect—some—for the hon. Gentleman, although it is beginning to wane. I do not want to fall out with him, but I would make one point to him. It is not good enough just to blame it all on David Cameron. The hon. Gentleman, like me and the majority of people in the House, walked through the Lobbies in support of a referendum, and we are now dealing with the consequences. We were all complicit in agreeing that the British people should vote and determine whether we stayed or left.
Mr Lewis
I simply say—I think that history will bear this out—that it was done purely to keep the Conservative party together and to get through a general election. It had nothing to do with the national interest and everything to do with the arrogance of the then Prime Minister and Chancellor in believing that they would almost inevitably win such a referendum.
I will turn now to the measures on universal credit and free school meals. The Government could hardly have made more of a mess of universal credit. The National Audit Office stated that the project had suffered from
“weak management, ineffective control and poor governance”.
Is that the responsibility of the current Secretary of State or her predecessor? Perhaps she would like to respond—no? Okay. Cuts to universal credit passed in the last two years have left a majority of families worse off on universal credit than under the system it replaces, and this further reduction in support will add to their financial pain. The proposed threshold could have a negative effect on work incentives and risks creating poverty traps for families on universal credit, which goes completely against the Government’s goal that universal credit should always reward work.
In the 1980s, Tory policies created a deeply divided society. They have learnt nothing from history and are once again fuelling a cycle of intergenerational deprivation that hurts those most affected but which in the end damages us all. I hope the House will today force the Government to rethink these regressive measures.
Mark Menzies (Fylde) (Con)
I do not approach the matters in the statutory instruments lightly, and I will tell hon. Members why. I was brought up by a single parent who was widowed a month before I was born, who worked shifts in a factory and who got by on a widow’s pension, child benefit and the money she made and by managing that money carefully, so I know only too well the impact that such changes can have. But I also know that people in those situations are acutely concerned about changes coming down the line and the alarmist things being said currently. I appeal to the Opposition, particularly the Front-Bench team, to think of those people when they make alarmist statements. By all means have legitimate, fair and open debate, but do not trot out numbers that are simply not true; do not let people believe that something as precious as free school meals is being taken away from them when that is not the case. I ask those on our Front Bench whether these changes remotely resemble what has been proposed by Labour Front Benchers. They are not changes that I could support, but they are nothing like what Labour is proposing.
I thank the Secretary of State for Education for his letter outlining the Government’s position on free school meals. In it, he states:
“The proposed changes to the eligibility criteria have been designed to ensure that support is targeted where it is needed most, meaning that those on the lowest incomes remain the focus of Free School Meals…
No child will lose their meals during the rollout of Universal credit as a result of these changes.
Our plans mean an extra 50,000 children will be eligible for a nutritious meal at school by 2022.
Labour’s claim that our changes could leave over a million children without this is deliberately misleading.”
As I have said, there are people out there in the real world who think that something will be taken from them and their children, which causes them concern and alarm. I question whether there is a deliberate attempt to weaponise the vulnerable, just as people once boasted about the NHS being weaponised in order to rig votes. I urge Members not to do that, because they will cause fear and anxiety where it is not required. There is enough fear and anxiety in those households as it is.
The letter continues:
“Since 2010, we have extended the availability for free school meals to disadvantaged students in further education and introduced universal infant free school meals.
When Universal Credit was introduced, the Government were clear that they would set a new criteria for free school meals. To ensure that no one was adversely affected during its roll out, the Government temporarily made Universal Credit a qualifying benefit for Free School Meals, regardless of income. As was made clear at the time, this was always an interim measure…
If you receive a free school meal now—you will continue to do so until the end of the rollout of Universal Credit, planned for 2022, and then to the end of either primary or secondary school (which ever you are in at this point).
For example a child in year 5 on a FSM now, whose parents are on UC but have an income of £40,000, will continue to get a FSM until the end of secondary school.”
I know that many colleagues want to take part in the debate, but I particularly want to thank the Government Front Bench for a robust defence of an important policy. Let us nail the myths, the untruths and the attempts to frighten people. If the Labour party continues to peddle things that are untrue, it behoves us to state what is true and not to frighten the vulnerable, many of whom we are all proud to represent.
Lucy Powell (Manchester Central) (Lab/Co-op)
I have been raising these issues in the Chamber for a number of years. Why is that? First, those we are talking about today, whether they are above or below the arbitrary thresholds that the Government are setting, are by their nature very low-income families who are struggling every day to get by. Secondly, the whole point of universal credit was to remove cliff edges from the system, so that once people reached a certain point they would not suddenly lose a number of benefits that make quite a significant difference to a “just about managing” family. Those arbitrary thresholds are taking away the very principles of that position.
I recently spoke to a number of parents in Moss Side, in my constituency, about their predicament. Those who had lost free school meals described acutely what it meant to them. Some had two, three or four children, which meant that they were losing £10 or £11 a week per child. Moreover, they were losing bus passes, the entitlement to free school uniforms and the entitlement to free school trips. What were they doing? They were not going to pay that £10 or £11 to the school for free school meals, so most of them were sending their children to school with white-bread jam sandwiches to last them for the entire day. That is not something I want to see happening in my constituency.
The need of these families has not changed; they are still on the breadline—they might be just above it, but they are still absolutely operating on the breadline. The impact of losing the two-year-old offer for these families could mean that about £54 a week is suddenly gone because of this cliff-edge. For those with children aged two this is particularly pernicious, because we are probably talking about young mums who are re-entering the labour market for the first time, and we are disincentivising them from working. The real problem with the Government’s policy is that it breaks the principle of universal credit: it is putting into the system disincentives to work more or take on higher paid work for, by their definition, low income, just-about-managing families.
My wider point is about the impact of these policies on social mobility and supporting these families to get on in life. The mothers I spoke to in Moss Side also had the school headteacher there, and she told me about the impact of the loss of free school meals on her school budget. This is a single-form entry primary school in Moss Side where the needs of the community are the same today as they have ever been. About 25 out of 30 children in year 6 are on free school meals, and coming in from nursery are about four or five; that is because of changes already coming in. We must remember that this has a huge impact on school budgets as well, because of the loss of the pupil premium.
I want to talk particularly about the developmental gap at the age of five and the impact of this particularly stringent new threshold on receiving the two-year-old offer. I fully supported the Government in bringing in the two-year-old offer for disadvantaged families, and we know from the evaluation that where that is given in a quality setting it can transform the life chances of those children, so surely we should be debating how we can extend that provision for more disadvantaged families, not reducing it.
Analysis I produced last year showed that many of the tax-free childcare offers and the three and four-year-old offer coming in disproportionately benefit better-off families: 75% of that extra money going into tax-free offers, and the three and four-year-old offer will go to the top 50% of earners in this country. Lower-income families and those on universal credit will reap very little benefit from these other offers. We are therefore going to see lack of social mobility getting entrenched, not being addressed.
I will leave everybody with the words of the Prime Minister, who said that to
“build a great meritocracy in Britain, we need to broaden our perspective and do more for the hidden disadvantaged”.
These new measures will narrow the current provisions, not broaden them.
Several hon. Members rose—
Mr Deputy Speaker (Sir Lindsay Hoyle)
Order. The time limit is now four minutes.
Edward Argar (Charnwood) (Con)
We are debating a number of important statutory instruments, and in the light of the time constraints, I will confine my comments to the measures relating to free school meals.
The benefits of free school meals for those who need them have been set out today and in the past. While it is absolutely right that we debate these new eligibility criteria for free school meals, although it is disappointing that there are no Liberal Democrats in the Chamber, it is also right that we do so with a focus on facts, not inaccurate claims—the Secretary of State made the position clear—that these proposals take away free school meals from children. In fact, as has been set out, it is estimated that by 2022, under the new regulations, about 50,000 more children—more, not fewer—will benefit from a free school meal than under the previous benefit system.
The approach in these regulations not only extends support to more children, but ensures, as my hon. Friend the Member for Fylde (Mark Menzies) made clear, that we target that support at those who most need it and where it will have the greatest impact in changing lives. As he also set out, the Government have always been open and clear that when universal credit was rolled out, there would be new criteria, but that no child currently on free school meals would lose out until 2022, and that those in either primary or secondary school would continue to benefit while in that school.
Much is being made of claims that 1 million children will have free school meals taken from them, but that is simply not accurate. I am not usually one to cite “Channel 4 News”, but on this occasion, like my hon. Friend the Member for Croydon South (Chris Philp), I will quote its FactCheck verdict, which reads:
“This is not a case of the government taking free school meals from a million children who are currently receiving them. It’s about comparing two future, hypothetical scenarios, one of which is more generous than the other.”
Both of them are more generous than the old benefits system.
Edward Argar
I will not, because I am conscious of the time.
An issue such as this, which is of real importance to many people, quite rightly excites strong passions and strong arguments, but it is important that we stick to the facts. An Opposition who are unable to muster coherent arguments against actual Government policy are instead taking issue with hypothetical Government policy and scenarios. I am committed to ensuring that disadvantaged young people can get a free nutritious meal at school, and I am sure that that is true of all colleagues on both sides of the House, regardless of where they stand on these two hypothetical scenarios. These measures mean that more people will be able to get free school meals than at present, which is why I will be voting with the Government to extend the eligibility for free school meals.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
These regulations will affect millions of families up and down the country, so it is only right that we are able to discuss them today. The Government consulted from November to January on introducing an earnings threshold that would restrict free school meals to families with net earnings under £7,400 per annum. The consultation received 8,981 responses. However, the Government excluded 8,421 of those responses from their analysis, meaning that fewer than 4% of respondents agreed with the Government. Surely that goes against every rule of public consultations. Talk about statistics being used against vulnerable people!
In 2010, the then Secretary of State for Work and Pensions promised in the White Paper on universal credit that it would
“ensure that work always pays and is seen to pay. Universal Credit will mean that people will be consistently and transparently better off for each hour they work and every pound they earn.”
Stephen Timms (East Ham) (Lab)
I am glad that my hon. Friend has picked out that point. She will have heard the Secretary of State saying that jobcentres would advise people not to take extra work or to get a pay rise because they would end up worse off. Is that not absolutely contrary to the whole principle of universal credit that she has just read out?
Mrs Hodgson
Yes, absolutely. We know that the Government are today reneging on the former Secretary of State’s commitment.
Free school meals are worth far more to a family than £400 a year per child. That might not seem to be a lot to some hon. Members, but to those families it is an absolute lifeline. By introducing a £7,400 threshold for eligibility, the Government are forcibly creating a cliff edge that will be detrimental to families, especially children. To give just one example, someone with three children in their family who earns just below the £7,400 threshold is set to lose out on £1,200-worth of free school meals if they work only a few extra hours or get a pay rise. The Opposition’s proposal would simply remove the huge cliff edge and the work disincentive for families who most need support. It would take away the barrier to working extra hours or seeking promotion. Our proposals would therefore make work pay. The Government’s proposal is in fact the new 16 hours, which they said was a disincentive.
Mike Hill (Hartlepool) (Lab)
Is my hon. Friend aware that in Hartlepool, where universal credit is not being rolled out—it is already in—more than 1,000 children are being denied free school meals on the basis of the new proposal?
Mrs Hodgson
Yes. We can all cite the numbers from our constituencies. Even Conservative Members need to think about what they are doing to some of the poorest children in their constituencies. In the example I just quoted, the family’s annual wages would need to increase from £7,400 to almost £11,000 to make up for what they would lose by rising above the eligibility cliff edge. That problem did not occur under the old tax credit system, because that provided an offsetting income boost at the point at which free school meals were withdrawn. However, there is no equivalent mitigation under universal credit.
The Children’s Society has been much maligned today and has been cited as giving duff statistics—Conservative Members should be ashamed of themselves. It estimates that the cliff edge will mean that a million children in poverty will miss out on free school meals once universal credit is fully rolled out. They will miss out on something that is crucial for their physical and mental development.
The Government have said that 50,000 more children will benefit by the end of the roll-out in 2022, when the transitional protections are at capacity, but I and many others struggle to understand how that can be the case. Parliamentary questions tabled by my hon. Friends and others have gone unanswered, and the Government cannot just pluck figures out of the air, as they claim so many others have done. At least we can back up our claims with evidence from the Children’s Society, Gingerbread, the Child Poverty Action Group and Citizens Advice, all of which agree that this statutory instrument would take free school meals away from a million future children—[Interruption.] It would. If the SI does not come into force, a million more children will receive free school meals—[Interruption.] Conservative Members can shake their heads all they like.
During my recent Westminster Hall debate, I offered Ministers a solution that would mean that all children in universal credit households would continue to receive free school meals. As somebody asked earlier, I can say that it would cost half a billion pounds—not a huge cost to feed over a million of the poorest children. My proposal would see around 1.1 million more children in years 3 and above from low-income families receiving free school meals compared with under this change.
Heidi Allen (South Cambridgeshire) (Con)
If we were to maintain free school meals for absolutely everybody on universal credit, does the hon. Lady think it would be right to prioritise those coming from the legacy tax credit system, who could be earning up to £50,000 a year, instead of opening up eligibility and getting free school meals to more children in poverty?
Mrs Hodgson
I am running out of time, so— [Interruption.] Perhaps Conservative Members would let me finish before they use up all my time. I was going to say that while I cannot go into the full details, because of the time, I understand from the Children’s Society that a small number of people are getting up to £40,000. Those people are in large families with severely disabled children. The large amount of money is down to how much they receive for those children. It is disingenuous to use that as an example and to make out that all those families are receiving that amount.
The Minister claimed yesterday that my proposal would result in around half of all pupils becoming eligible, increasing the figure to 3.3 million children. Even the much-cited Channel 4 FactCheck article states that our proposal would extend to 1.1 million children, making the total 1.8 million children. When we talk about facts, Conservative Members need to get their facts right. Where do the extra 1.5 million children come from?
Heidi Allen (South Cambridgeshire) (Con)
Opposition Members know that I have been the first to stand up and challenge the Government on universal credit, and the Government have listened. First, at the 2016 autumn statement, we reduced the taper rate from 65% to 63%, which cost the country £700 million but put around £300 into families’ pockets. Secondly, I worked with the Government at the end of last year to secure £1.5 billion of comprehensive improvements: two weeks’ extra housing benefit for those transitioning on to universal credit with housing payments; double the advance payment and twice as long to pay it back; direct payments to landlords; and a slowed-down roll-out. Those were all things that the Opposition asked for, so I am staggered that they are asking us to vote against them today.
For the past two years, I have worked not only with my colleagues, but proudly on a cross-party basis to achieve those improvements. Today is a big wake-up call. These motions are not about improving universal credit, but simply about playing politics. I have seen that for the first time. The Government have taken the time to understand how best to transfer a lump-sum benefit such as free school meals into a tapered system such as universal credit. An earnings threshold is perfectly acceptable to all reasonable people—by the way, we are talking about taxpayers. The only possible improvement I could encourage Ministers to look at is automatic entitlement if there is a disability in the family.
Let us get the facts straight. All reception, year 1 and year 2 children will continue to receive free school meals—full stop. The measures apply only to year 3 and beyond. All those currently receiving free school meals will continue to receive them until the end of their phase of schooling or 2022, whichever is the further away. Labour is creating false headlines by saying that any child will lose. Under the proposals, the Government will focus better on children who are in, or at risk of, poverty. That is, as we have heard, around 50,000 children by 2022.
Ben Bradley
Conservative Members know that no children will lose their existing entitlement to free school meals or free childcare as a result of our policies. Meanwhile, my jobcentre says that fear of universal credit is the biggest challenge that it faces in the roll-out. Will my hon. Friend comment on where that fear might be coming from?
Heidi Allen
My hon. Friend makes a valuable point. That fear is particularly prevalent on social media. There is a saying that a mistruth can travel halfway around the world before the truth has even put its boots on. That is happening with universal credit, aided and abetted by social media. Universal credit is not even in my constituency yet, but I hear from constituents who are worried about it. Oddly enough, I can put their minds completely at rest when I explain it to them.
As I have mentioned, tax credits recipients automatically get free school meals at the moment, which could mean that a family on £50,000 a year receives them. That cannot be right—[Interruption.] People on legacy tax credits who do not have disabilities in their family—those on the old benefit system who are transferring over—can have regular incomes of up to that level. The new system expands the criteria so that we can get to more children who need our support, not fewer.
Although I understand that a key part of any charity’s role is lobbying, I am disappointed in the Children’s Society. Its suggestion that 1 million children will lose free school meals is simply not true. Labour has jumped on that bandwagon, and it has taught me a lesson. There are colleagues from all parts of this House—SNP Members included—whom I trust and respect, and with whom I will continue to work to improve the lives of the most vulnerable in society, but if people think that the Labour party is the answer to tackling poverty, they are being misled. Today—this is a big wake-up call to me—the Labour party has clearly shown that it is prioritising headlines over improving the lives of struggling families. If you want a headline spun, Mr Deputy Speaker, ask the Labour party; if you want a competent job done, ask the Tory party.
Stephen Timms (East Ham) (Lab)
I want to focus on a single point. The proposals for eligibility for free school meals are catastrophic for work incentives in the welfare system. The right hon. Member for Chingford and Woodford Green (Mr Duncan Smith)—I am sad to see that he is not in his place—used to tell us that the central point of welfare reform was to improve work incentives, but these proposals rob universal credit of its most attractive feature.
The Secretary of State for Education used to be in charge of universal credit, but this is not so much a criticism of him as a criticism of his predecessors. Ministers in the Department for Education have had seven years to solve the problem—admittedly, it is difficult and technical—of how to define eligibility for free school meals against the backdrop of universal credit. Instead of solving the problem, they have simply adopted a very lazy solution. In doing so, they are creating a very big problem for work incentives in the welfare system. One day, future Ministers will have to resolve that problem. It is disappointing that under the leadership of the Secretary of State, who understands universal credit as well as anybody, they have gone down this very lazy line.
My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) has just quoted from the universal credit White Paper, which sets out the philosophy that underpins the new benefit. I will quote another bit from chapter 2, which makes clear the principle that
“increased effort will always result in increased reward.”
That is what UC is supposed to be about, but under these proposals that will not the case. As we have heard, the Secretary of State for Work and Pensions told us that, when someone is just below the threshold, the jobcentre will advise them not to put in any more effort, not to get a pay rise and not to put in more hours. The jobcentre will recognise that, if they were to do that, they would end up worse off.
Mrs Hodgson
Does my right hon. Friend agree that this just reintroduces in a different guise the much maligned 16-hour threshold, which the Government said this was all to do away with?
Stephen Timms
My hon. Friend is absolutely right about that. The whole idea about UC was that it was supposed to get rid of cliff edges and benefit traps, but instead it is introducing a benefit trap far bigger and far worse than anything in the old benefit system. This is completely scuppering the whole purpose of UC. If it is true, as the Secretary of State told us, that jobcentre coaches are going to say to people, “No, don’t take on extra work. Don’t get a pay rise. Don’t go for more hours because if you do, you will end up worse off,” how are people supposed to progress? Surely all of us would recognise that the point about this system is to encourage progression, not to have bureaucrats telling people, “Oh no, don’t progress because if you do, you’ll end up worse off.” This is a catastrophic holing of the whole purpose of UC, and it is not as though only a few people will be affected.
The prospectus was that UC would solve all these cliff edges and benefit traps, but instead it is creating one that is much bigger. It has been calculated—I am indebted to the Children’s Society for this calculation—that more than 1 million people will be caught in the trap if these proposals go ahead. I will explain to the Education Secretary exactly why that is; he can read this in briefing the Children’s Society has provided. Some 280,000 families are affected, containing between them more than 700,000 children. Among those are 125,000 families earning below the threshold who risk being worse off if they take on extra work or get a pay rise, as the Work and Pensions Secretary recognised. In addition, there are 150,000 families earning above the threshold who would be better off if they reduced their earnings to below the threshold, so that they would then qualify for free school meals. What sort of system is that? Everybody will recognise that we do not want a welfare system that puts people in that position, but that is the system we will end up with if this statutory instrument goes through. The Children’s Society calculates that almost 21,000 families—containing more than 80,000 children aged eight to 15—who earn more than £7,400 would be better off if they cut their earnings to below the threshold to qualify for school meals. This is a catastrophic arrangement.
Neil O’Brien (Harborough) (Con)
It is a pleasure to speak in this important debate, particularly after my hon. Friend the Member for South Cambridgeshire (Heidi Allen), whose speech was really powerful. It showed how badly Opposition Front Benchers have misjudged this debate. For weeks, outside this House, they have sought to pretend that we are taking free school meals off 1 million children, but that has come to this House and has bombed, because it is not true. The reality is that not a single child currently eligible for free school meals will lose them and that, under UC, 50,000 more children will be eligible for free school meals. This shows the limits of an approach that is all about the viral video and getting something that goes around on social media quickly; it goes too quickly for the fact-checkers to catch up with, but when it comes to this House and we learn the facts, it absolutely bombs.
If people are serious about being in government, they have to make choices, and this Government have made choices. The Opposition say they would like simply to give free school meals out universally, as part of a wider strategy in which we can just spend more money on everything and no one will have to pay any more tax—of course, it is all nonsense. It is the kind of dangerous nonsense that led to the Government borrowing a quarter of all the money they were spending in 2010, a disastrous situation in which we also had half a million men and women thrown on the dole in the worst economic meltdown for a generation.
If we choose priorities that enable us to do important things for working families with children, that allows us to extend eligibility for the new tax-free childcare from 600,000 people to 1.5 million people, to have important things such as the 30 hours’ free childcare offer, to have the important two-year-old childcare offer, which under UC is being expanded by another 7,000, and to have the more generous childcare element of UC, which is going up from 75% to 85%.
Prioritisation also helps with important interventions such as the pupil premium, with another £2.5 billion for the most disadvantaged children, and the new fair funding formula for schools, which is backed up by another £1.3 billion. The year 7s I met the other day at Beauchamp College in my constituency, of whom 60% will be eligible for the pupil premium, will get to go to Cambridge, do a science project and see their lives and opportunities absolutely transformed, because we are prepared to take the difficult decisions, to invest in those children’s futures and to give them a better chance in life.
It is incredibly important that we do not simply drift back to the mistakes of the past. Compared with what it was like when I was at school, the help for children who are less advantaged is so much better now. We have done brilliant things such as destigmatising free school meals: pupils no longer go in with their money, so it cannot be seen who is on free school meals and who is not. When I think back to what it was like when I was at school, I can see the big improvement we have made since my generation.
We have seen big improvements for working families with children because even as we have brought down the worst Government Budget deficit in this country’s entire peacetime history, we have prioritised, and we have done so in ways that help the most vulnerable and that help to improve life chances for those who do not have them.
Layla Moran (Oxford West and Abingdon) (LD)
It is a pleasure to speak in this debate, in which I wish to focus my remarks on childcare and free school meals.
I put on record that the Liberal Democrats are proud of the role that we played in the coalition Government to secure a generous tax-free offer on childcare that helps many families. Although it is true that it will extend to more families, it is also true that many others will be left out. That was never the intention. Many parents—particularly those with older children, lower childcare costs or lower incomes—will find themselves worse off under tax-free childcare than they would have been with childcare vouchers. It is unfair to close the scheme to new entrants, particularly because, unsurprisingly, the information about the closure of the scheme has not been spread as far and wide as it could have been. I urge all those parents who are listening to the debate—I am sure that there are many—to do their research before April, so that they can decide what is best for their families. All we are suggesting is that tax-free childcare and childcare vouchers are kept open concurrently, so that we can provide maximum flexibility for families. Surely, the Government would agree that that would be a good thing.
I hope that the whole House will join me in paying tribute to the former Liberal Democrat Ministers David Laws and Sarah Teather for battling to secure universal free school meals for all children in key stage 1. Soon after I was elected, I visited West Oxford Community Primary School and had the pleasure of meeting the catering manager. She told me that, despite being sceptical of the policy initially, she now thinks it is brilliant. She took great pride in telling me of a boy from a deprived background who did not eat much veg at home because it is quite expensive. Slowly—slowly—she got him to love broccoli.
I am a primary school governor, and the teachers at the school are absolutely clear—this is backed up by the evidence—that universal free school meals are beneficial for learning and attainment and help all children. The Government like to nick Liberal Democrat policies—including same-sex marriage, the pupil premium and lifting the income tax threshold, as we heard in the spring statement earlier—and I am not precious, so they can have another one: extend free school meals to all children in primary schools. If not that, they could at least extend them to all children on universal credit.
Unlike under tax credits, universal credit creates an absurd situation wherein a single-parent household on the national living wage will have to work eight more hours to make it work. Surely, that is not what the Government intended. Linked to that, of course, is the fact that the number of children on free school meals will affect the pupil premium. I posit that that is the reason why the Government will not roll out free school meals to all children on universal credit—because, yes, it would be prohibitively expensive and would stop the targeting of the pupil premium.
May I suggest to the Secretary of State that, to sort that out, just decouple them? They are, in their own right, worthy policies. They are policies that are working and there is no reason to throw the baby out with the bathwater. May I urge the Government to think again on free school meals and to think again on closing the childcare voucher scheme?
Tom Pursglove (Corby) (Con)
It is good to follow the hon. Member for Oxford West and Abingdon (Layla Moran). She talked about the years when our two parties were in coalition, and we all recognise and welcome the fact that we have those universal free school meals for infant children; it was a positive step forward.
I was not intending to speak in this debate this afternoon—and I am someone who is always happy to debate with anyone—but I was moved to speak not just because I have received quite a bit of correspondence from concerned constituents on this matter, but because I genuinely believe that it is incumbent on all Members of this House to argue and to make their points. In doing so, though, we must make sure that what we say is grounded in fact, and that we do not play fast and loose with the arguments, because what we say here has very real consequences for people in our constituencies.
Some very worried parents have been in contact with me today. This situation is rather like the time when the shadow Front Bench claimed that 40,000 children would wake up in poverty on Christmas day because the Tories refused to pause and fix universal credit, and the chairman of the UK Statistics Authority said that that was not fully supported by the statistics and the sources on which it had relied. I am afraid that it appears to me that the Opposition are at it again. Therefore, I want to use my remarks this afternoon to speak directly to those concerned parents in Corby and east Northamptonshire who have been in touch with me about this issue.
First, we would all agree that free school meals, and the provision of those free school meals, should be targeted at the most disadvantaged children; I would like to think that there was universal agreement on that point. To say that meals are being taken away from those disadvantaged children is simply plain wrong. It is not just me who is saying it—[Interruption.] Opposition Members can chunter all they like, but that is the case. The independent “Channel 4 News” FactCheck website exposed all of this for exactly what it is and I recommend that everybody takes a look at it. “Channel 4 News” would not necessarily be considered to be a friend of the Conservative party, but it made this point none the less. No child will lose their free school meals during the roll-out of universal credit as a result of these changes. In actual fact, an extra 50,000 children will probably have access to free school meals by 2022. I would welcome that, and I would expect the Opposition to welcome that, too. I cannot possibly see what there is to argue against in that position. Again, I make the point that, since 2010, we have extended the availability of access to free school meals to disadvantaged students in further education and introduced universal infant free school meals.
We should not look at this issue in isolation; other things are going on as well that are very important to those families. Not only do we have record numbers of people in employment, but we have also taken 4 million of the lowest paid out of income tax altogether. We have cut income tax for 31 million people in this country, and we have focused on the principle that being in work should always pay. Any fair-minded person in this country would agree that that is the right approach, but that, of course, there should always be a safety net for those who find themselves in need. That is exactly what this policy, in a holistic sense, allows.
I am proud of our record. I have to say that I am slightly perplexed by where we find ourselves today, because rather like on police funding, on local government funding, and on protecting our industries from dumping on our market, the Labour party tonight will vote against extending free school meals for another 50,000 children, and I find that extraordinary.
Mohammad Yasin (Bedford) (Lab)
It is a pleasure to follow the hon. Member for Corby (Tom Pursglove). The Government know that stopping free school meals for the poorest children is a shameful policy. They sought to bring the measures in using statutory instruments, in the hope that any challenge would be ineffective. It is clear that the Government do not want to explain this indefensible change.
Some 3,700 children in Bedford are set to miss out on vital support if free school meals are withdrawn from families on universal credit. The Government need to understand that the poverty trap is very easy to get into, but very difficult to get out of. Every penny counts for those families, and for many working families there simply are not enough pennies to get through the month. Last summer, 47% of children who received support from food banks were between five and 11 years old.
Mohammad Yasin
I am sorry, but I cannot. Many other Members want to speak and it is fair to give them a chance.
During the summer holidays 4,412 more three-day emergency food supplies were given to children than in previous months, and we know that children on free school meals already underperform in schools. Why would any Government choose to make life more difficult and more challenging for those children?
Mohammad Yasin
A number of Members want to speak. It would be unfair if I gave way, as the hon. Gentleman has spoken already.
Why would a Government who claim to want to tackle inequality, to help the disadvantaged, to tackle child obesity and to help out those who are just about managing come up with a policy that does the exact opposite? The new earnings limit is a huge step backwards. According to the Children’s Society, 1 million children in poverty who could benefit now will not. This policy also undermines one of the main reasons given for introducing universal credit in the first place—to ensure that “work always pays”. The new rules will create a situation where working families will be punished for taking on extra hours or accepting a pay rise because they would have their free school meals taken away. These are worth around £400 a year per child—a huge sum for those on a low income.
A recent report from the Food Foundation highlights the deprivation gap, which has increased by more than 50% in a decade. Children in the poorest areas of England are twice as likely to be obese as their wealthier neighbours. The Government could have tackled that problem by increasing the uptake of free school meals and ensuring that all children from low-income households receive a nutritious meal at lunchtime. Instead they are taking those meals away. The Government should have learned from their attempts to take away free school meals in the manifesto that they put to the country last year that they have no mandate to reduce school meals and it makes no sense to do so. Schools cannot teach hungry children. If the Government were serious about life chances and social mobility, they would not be taking food out of the mouths of babes.
Chris Philp (Croydon South) (Con)
We live in strange political times both in this country and across the Atlantic, where we frequently hear reports about fake news. In such times it is therefore particularly incumbent on Members of all parties in this House to be very careful about the way in which they use and present facts, because democratic discourse is impossible without honest and accurate facts. We undermine our entire system of democracy when elected Members of this Parliament play fast and loose with facts.
We have heard Members in this debate saying that free school meals are going to be reduced—that was the phrase used by the previous speaker. Other Opposition Members have said that free school meals would be “taken away”. It is clear that those statements are not accurate. Several colleagues have referred to the “Channel 4 News” FactCheck discourse on this matter, and it is clear that no children currently in receipt of free school meals will have them taken away. In fact, more children will receive free school meals as a result of these proposals. It is simply untrue to say that 1 million children will have their free school meals taken away or reduced. By making comments implying that, the shadow Education Secretary, who I can see chuntering, is doing our democracy a disservice.
Perhaps the hon. Lady is trying to insinuate that there was a Government policy that would have provided extra school meals, but for some kind of U-turn. The “Channel 4 News” FactCheck is clear about that as well, and the Government have also been clear about it. There was an interim transitional measure. My right hon. Friend the Member for West Suffolk (Matt Hancock), when he was a junior Skills Minister, made that clear when the scheme was set up in April 2013, and my hon. Friend the Member for Scarborough and Whitby (Mr Goodwill), when he was a junior Education Minister, made the same point last July. It is wholly inaccurate to suggest that there was ever a hypothetical Government policy under which these children would ever have received extra school meals.
The shadow Education Secretary has done this House and herself a great disservice—[Interruption.] Indeed she has the right to speak, but she ought to take care to be accurate when she does so, because her words matter and she should weigh them carefully.
Angela Rayner
On a point of order, Mr Deputy Speaker. Is there any recourse for me to challenge the fact that an hon. Member is suggesting that I have misled this House in this debate?
Mr Deputy Speaker (Sir Lindsay Hoyle)
First of all, nobody will mislead this House because we are all hon. Members. I am sure that when we come to the wind-ups, everything will be put in its correct order.
Chris Philp
The hon. Lady and her party have suggested that everybody in receipt of universal credit should receive free school meals. That has never been the policy of the Government, but apparently it is the policy of the Labour party. That would entail about 50% of schoolchildren receiving free school meals. She was asked, in a direct question from my right hon. Friend the Member for Broxtowe (Anna Soubry), how much this policy, which goes beyond that in the Labour manifesto, would cost and how she would pay for it, but she declined to answer. If she is advocating this policy which goes far beyond current Government policy—as she clearly is—she ought to explain how much it would cost and how she would pay for it, because promising things for free without explaining how they would be paid for is a deeply irresponsible thing to do. I will support the Government in this evening’s Divisions.
Thelma Walker (Colne Valley) (Lab)
It is time to be frank. Universal credit is currently a failure. It is not working how it was meant to. It is not supporting the people who need it. Its roll-out happened too fast, which meant that there has not been time to fix the many issues that have been brought to the House’s attention.
Twenty-four per cent. of children in my constituency live in poverty. In some areas, that figure increases to 40%. For some of the children whose parents are on universal credit, the hot, nutritionally balanced meal they have for lunch at school will be their main meal of the day. In no way is that a good situation to face, but at least those children are being fed. Well, not if Government Front Benchers have anything to do with it. Removing free school meals from those families who are claiming universal credit and who need them the most is deplorable. What kind of society do we want to live in? What Government in their right mind would take a hot meal off a child in need?
Thelma Walker
I am going to make progress.
Let me take hon. Members back to the 2016 Conservative party conference, where the Prime Minister said:
“I want to set our party and our country on the path towards the new centre ground of British politics built on the values of fairness and opportunity where everyone plays by the same rules and where every single person—regardless of their background, or that of their parents—is given the chance to be all they want to be. And as I do so, I want to be clear about something else: that a vision is nothing without the determination to see it through. No vision ever built a business by itself. No vision ever clothed a family or fed a hungry child. No vision ever changed a country on its own. You need to put the hours in and the effort too.”
Why are the Government not following the Prime Minister’s vision? Is it another sign of how she is in position but not in power? If she still believes in her own words, she must stand up and stop this attack on the poorest in our society.
My local authority, Kirklees Council, has seen a 20% increase in pupils claiming free school meals over the last four years, which goes to show how hard the Government’s austerity programme is hitting families. There has been a huge spike in food bank use, which also shows that we are a country on the cliff edge. Food banks do an amazing job of supporting those in need, and I commend the work of local food banks such as the Welcome Centre, which serves my constituency.
What kind of country do we want to live in? Do we want to live in a country where a child clings to a teacher’s hand as the school holidays approach, not wanting to leave school because they know they will be hungry for the next six weeks? Do we want to live in a country that chooses to let disadvantaged children go hungry? Do we want to live in a country where a child comes to school with a lunchbox filled only with a slice of stale bread? I have witnessed those things, and I can say that it is certainly not the kind of country I want to live in. Some 6,400 children in Kirklees will lose their free school meals because of the Government’s actions. I will bring my remarks to a close with a thought from Buzz Aldrin: if we can conquer space, we can conquer childhood hunger.
Maria Caulfield (Lewes) (Con)
I am pleased to follow the hon. Member for Colne Valley (Thelma Walker), but I have not heard any real vision at all from Labour Members. It is disgraceful that their only vision for working-class people in this country is to remain on benefits. Universal credit is getting people into work. Some 63% of people on universal credit get into work, compared with 59% who were on jobseeker’s allowance.
No one can tell me that I do not know what it is like to grow up in a working-class family. I grew up in a working-class area of south London, where there was no hope or aspiration for working-class kids like me. We were told that all we would achieve was a lifetime on benefits. Our working-class communities up and down this country can achieve a lot more, and universal credit will help them to do so.
The second reason I am particularly angry with Labour Members is that they are spreading fear. I think they underestimate the fear they are causing in this country. When I was growing up, my family were poor. My dad worked as a labourer, and he did not often know when his next job was coming. If his job finished early, he did not get paid. If the subcontractor did not get paid, he did not get paid. There is a sickening, gnawing feeling in your stomach when you are not sure where the next penny is coming from. To tell 1 million families in this country that they will lose free school meals when that is absolutely wrong is scandalous, and Labour Members should be ashamed.
Let me reiterate the facts. All children in reception, year 1 and year 2 will continue to get free school meals, thanks to this Government. No existing recipients of universal credit will lose free school meals, thanks to this Government. Some 50,000 extra children will get free school meals who currently do not, and that is down to this Government. The means testing will not affect those who are earning just over £7,000, but those who are earning around £19,000 to £24,000. I do not think that Labour Members understand the impact they have when they spread this fear—and it is not a genuine mistake; it is political point scoring and using working-class families in this country as a political football. They should be ashamed of themselves.
I will be supporting the Government. I will be supporting 50,000 vulnerable families getting free school meals. If Labour Members vote against those working-class families, they need to look at themselves in the mirror, because it is the same thing they did a few months ago when they voted against 60,000 young people in this country benefiting from the abolition of stamp duty for first-time buyers. Labour Members talk about supporting working-class families in this country, but it is the Conservative Government who are actually delivering for them.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I will limit my remarks to the universal credit portion of this debate. In accepting the failures so far, the Government have made some changes, but as my hon. Friend the Member for Airdrie and Shotts (Neil Gray) pointed out, the changes due to come into force in April do not go far enough. Ministers should pause the roll-out of universal credit and review all the processes.
I want to go through a couple of the issues, but I could speak for a lot longer on many of the issues affecting my constituents. My constituency was a pilot area from 2013, and went from live service to full service in June 2016. Local agencies, Highland Council and I have been voicing such concerns since the pilot, and the proposed measures do not scratch the surface of what is required. The Secretary of State said earlier that this benefit will be “at the cutting edge”. I say to those yet to experience full service that, yes, they will see more cutting, particularly when it comes to the housing arrears that are being built up.
Like other local authorities, Highland Council is paying the price, and this will have an impact on all our communities, not just on people who are on universal credit. The additional administration costs alone are running at hundreds of thousands of pounds, but rent arrears continue to soar and will have an impact on the delivery of much needed housing, for example.
Luke Graham (Ochil and South Perthshire) (Con)
The hon. Gentleman is making a very serious point about housing benefit. Does he welcome the change that allows the benefit to be paid directly to the landlord, as opposed to going to the claimant?
Drew Hendry
I welcome any change that allows such things to happen. I would point out that we made that request of the Government for many years, and the concession was finally made, as I have pointed out, but much more needs to be done.
Rent arrears continue to soar, as I have said. Rent arrears due to universal credit were already at £1.6 million in Highland in 2016, but they were at £2.2 million in March 2017, and just six months later they were at £2.7 million. The average rent arrears for someone not on universal credit is £250, but for those on universal credit it is £840. We know that 30% of private landlords have already evicted a tenant because of universal credit arrears. According to the DWP’s own figures, this means that over 70,000 tenants in private accommodation face the threat of eviction due to the shambles of universal credit.
The UK Government continue to ignore the plight of people with a terminal illness who are forced to meet work coaches. I give credit to my local jobcentre, which has tried to put in place local workarounds to overcome the faults in the process. The UK Government must listen to MND Scotland, MND UK and Macmillan CAB, and remove these conditions to allow the terminally ill and their families some dignity as they face the end of their life. I ask Ministers to meet me to discuss how that can be brought forward. MND UK has said it does not believe that people who have claimed using DS 1500 should have to meet and have a conversation with a work coach, as this is highly inappropriate. The Government have already been found to have acted unlawfully in relation to 1.6 million people, at an estimated cost to the taxpayer of £3.7 billion, and they should not risk the same kind of slap-down over their treatment of the terminally ill.
As the roll-out continues, many more right hon. and hon. Members will feel the sharp effects on people and their communities. Ministers should go further in acknowledging the systemic failures before it adds more costs to people’s lives and drains local government of vital resources.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
I am pleased to be called to speak in this important debate, and it is a pleasure to follow so many powerful speeches by Conservative Members.
Yet again, we heard it said from the Labour Front Bench that children in poverty will lose out in relation to free school meals. First, that is factually inaccurate; and, secondly, figures on poverty are often bandied around in this place, but it is time we had a grown-up conversation about both poverty in general and child poverty in particular. So often, the Labour party uses relative poverty as a measure. When there is a recession, a fall in average earnings will of course mean that suddenly—hey presto!—children are lifted out of poverty: the poverty statistics improve. For example, in 2008, following Labour’s recession, there was a sharp reduction in the proportion of children in workless families living in relative poverty. Living standards had not improved and incomes had not increased, but, as a result of the measure that Labour used, suddenly children were lifted out of poverty. Conversely, when real wages rise, poverty rates increase, despite the fact that people’s incomes have not fallen.
It is time we had a grown-up conversation about this, because relying on that measure fails to tackle the root causes of poverty and could result in Governments pursuing skewed policies. Work remains the best route out of poverty, which is why I firmly support universal credit and these measures. These measures are part of a £1.5 billion package brought in by this Government. Frankly, I am surprised that Opposition Members will not support them this evening.
That brings me to free school meals. Children currently in receipt of free school meals will not lose out. In fact, 50,000 more children will benefit from free school meals than under the legacy benefits system. Free schools meals should be targeted at the most vulnerable. It is not a fair allocation of resources that a family with a total income in excess of £40,000 is entitled to free school meals. Neither would it be right and proper to aim free school meals at 50% of children, yet that is what would happen if these measures are not allowed to proceed this evening. Free school meals should be targeted at the most disadvantaged. These measures will ensure that help is targeted at those who need it most, and that should attract support from both sides of the House.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I have to reduce the time limit to three minutes, because so many Members wish to speak.
Laura Pidcock (North West Durham) (Lab)
I have been texting my team furiously during the debate to check, double check and triple check that what I am about to say is accurate. I asked them to ring the DWP and the Library and then assure me that this is right. The vast majority of my constituents who currently receive tax credits are not on universal credit and will not be migrated on to it for some time, and they will not be protected by transitional arrangements, which will not apply. I have just checked this with the DWP and the Library. This is about the future denial of free schools meals, and it is valid that we have a conversation about that. I am not interested in embellishment in this debate, because the truth is enough.
For people who are in work and in poverty, or looking for work and in poverty, food is a huge part of their expenditure. It is a never-ending struggle to make sure that there is enough to eat, and that children are getting enough to keep them healthy and well. Children cannot concentrate in school when they are hungry—we all know the arguments. For many young people, that one hot meal is all they will get. I have not been told, despite the claim being repeated time and again, what calculation was used to reach the figure of 50,000 for the number of extra children who will get free school meals. I am sorry, but I am just not able to believe that on a whim, or on a calculation that was plucked out of thin air.
Under the current system, families are normally entitled to free school meals if their income is under £16,190. That will be changed to £7,400 per year, unless it is covered by transitional protections. The reduction to £7,400 is, frankly, delusional. Who will it help? What is the figure based on? Which advisers, experts or charitable organisations have the Government met who actually think that slashing the threshold is a good idea for children in low-income households? The BBC rang around headteachers to try to get a quote on these changes, but not one headteacher knew about them, so what consultation has there been with schools?
Laura Pidcock
Time is very short, so I am certainly not going to give way to somebody who has intervened many times and was not here for the start of the debate.
Nearly 2,000 children in my constituency quite rightly—
Anna Soubry
Just for the record, Madam Deputy Speaker, I was in this place when the debate started.
Laura Pidcock
Well, that was not my experience. Anyway, the idea that claimants in my area—[Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I cannot hear the hon. Lady. [Interruption.] The hon. Lady should not shout from a sedentary position when I am defending her and giving her space.
Laura Pidcock
I have 17 seconds left and there have been so many interruptions.
Mrs Hodgson
My hon. Friend is making an excellent speech. As a fellow north-easterner, I want her to be able to finish her point.
Laura Pidcock
There are 2,000 children in my constituency who rightly receive subsidised school meals. The reason that new claimants after 1 April will not be protected is not that they no longer need that protection or need those meals; it is due to arbitrary cuts. This change will ensure that more children are in poverty and that more people have to access food banks. The Government may be able to justify that in this Chamber, but how can they justify it to a child? Taking all the proposed changes together with all the changes that have already happened to the so-called social security system, the only conclusion I can draw is that there is no security anymore. That is not embellishment: I know poverty when I see it staring me in the face in my constituency surgeries. We do not need to lie, we do not need to embellish. The truth is good enough: these changes are shambolic.
Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)
As a fellow north-easterner who also has a great deal of poverty in his constituency, perhaps I might be allowed to speak in this debate.
I will be blunt. I am tired of the Opposition playing games with this issue, not just today but over the preceding weeks and months. Let us be very clear: by 2022, 50,000 more children will have free school meals than is the case today. Nobody—not one child in any school, anywhere in our country—is going to lose the free school meal they currently receive. I must admit that I am somewhat surprised, even by the standards of the Labour party, by today’s claims. It was only a month ago, in response to a letter from me, that the chair of the UK Statistics Authority, Sir David Norgrove, wrote to rebuke the now former shadow Secretary of State for Work and Pensions, the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), about her use of statistics in this field. All the claims were found by the UK Statistics Authority not to be supported by statistics, or by the sources on which they purported to rely.
We can add today the frenzied assertion that universal credit will leave 1 million children without a free hot school meal. That is wrong, not just because of its flimsy attachment to reality, but because it creates needless anxiety in the communities we serve. We need to be very clear about why universal credit is being introduced in the first place. The hostile approach with which Labour has chosen to approach the issue is regrettable and damaging. It is not about what is right for the jobless or for the working poor in our society; it is about what is in the electoral interests of the Labour party.
The reality is that the professionals I have spoken to at the DWP have told me repeatedly that this system is working and that they believe it is doing the right thing by the people whom they serve. Women like Sindy Skelton—[Interruption.] Perhaps the hon. Member for Bootle (Peter Dowd) wants to accuse Sindy of being a liar or of misleading me in some way, but I think that jobcentre staff up and down our country have every right to be angry at the way in which they are permanently castigated by Opposition Members as somehow the embodiment of a cruel and faceless state. Ministers have demonstrated time after time that they will take whatever action is necessary to make sure that universal credit delivers the outcomes we all want. If Labour is serious about helping people into work, and serious about supporting the most vulnerable in our society, it should give up the cheap posturing we have seen today. Many Labour Members know in their heart of hearts that they have over-embellished and laid things on a bit too thick. In the end, there is a serious debate to be had about poverty reduction.
Heidi Allen
Does my hon. Friend think that the number of Members on the Opposition Benches, and the lack of retaliation, means that they have realised that they have pushed it too far, and that they are now woefully out of their depth and just plain wrong?
Mr Clarke
My hon. Friend made a very powerful speech on this theme earlier. I think what she says is true. In fact, there is a pretty sparse attendance on the Opposition Benches, given that this was meant to be an open goal. This was absolutely all about clips for the TV news, Facebook pages and Twitter—“The heartless Tories ripping food out of the hands of kids.” Well, that is not happening. None of us came into politics to make anyone’s lives worse. I am sick and tired of being told that we are somehow the bad guys because we believe in running a balanced economy and focusing on helping those in need, rather than trying to use them as political footballs to achieve political goals.
Ruth George (High Peak) (Lab)
As the chair of the all-party group on universal credit, I want to lay out the facts of the measures for Members from across the House. I am very sorry that they have not been before Select Committees to allow them to look properly at the case. Unfortunately, the facts in the Government’s case are wrong. They claim that this is about parents of school-age children who are on about £7,400 a year and say that, with other benefits, those people will be on between £18,000 and £24,000 a year. However, according to the benefits calculator on the gov.uk website, we are thinking about a single parent with one school-age child who is on £14,200. She will be on the poverty line but will not be eligible for free school meals. Under tax credits, that single parent would have been £1,600 a year better off. She will lose that money and her child will not be able to claim free school meals. She will be £25 a week worse off and will still have to pay around £11.25 a week towards school meals. She does not get a free school meal at the moment, but she can afford that, because she is on tax credits, which is a far more generous system.
This is the trouble with universal credit: it cuts an average of £1,300 a year from working single parents. At the moment, one in three of the children of these single parents is in poverty. Gingerbread, the Child Poverty Action Group, the Children’s Society, the Institute for Fiscal Studies and the Resolution Foundation all say that universal credit will increase the number of children in poverty over the next four years by 1 million. Not only will those children be in poverty, but now, thanks to a statutory instrument, they will not be able to claim free school meals. They will not get that hot, nutritious meal at lunchtime that will help them to concentrate throughout the day and to realise the levels of nutrition that they need. This also affects their eligibility for school trips through the pupil premium.
My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson), the chair of the all-party group on school food, gave Education Ministers the proposal of delinking the pupil premium to enable pupils to still be able to receive free school meals. Children might not be in poverty now and might not be receiving a free school meal, but they will be in poverty in four years’ time, thanks to the cuts introduced under universal credit. They will not be eligible for a free school meal either, and they should be. Not to make that change, not to look properly at it and to go on figures about benefits that are wrong—to try to mislead the House with figures in a consultation document that are blatantly wrong about the people’s income—does a disservice to the 1 million children and the 280,000 families who will be on the cliff edge and seeing a disincentive to work. Across this House, we all want to see an incentive to work. Any parent with children who is earning between £7,400 and around £11,000 a year will not be better off in work.
Mrs Hodgson
My hon. Friend mentioned decoupling the pupil premium. Under the Digital Economy Act 2017, that is now possible. Schools already know how to claim pupil premium for the universal infant free school meals offer. Does she agree that we are totally able to decouple the two?
Ruth George
Absolutely. I thank my hon. Friend for her intervention. In a Westminster Hall debate a few weeks ago, Conservative Members said it was because of the cost of the pupil premium that they did not want free school meals extended, and that we could therefore set the pupil premium at the level proposed by the Government. We must, however, make sure that every child in poverty is entitled to the free school meals they need so that they have a better chance in school and better life chances, and to ensure that we try to eradicate child hunger instead of increasing it.
Helen Whately (Faversham and Mid Kent) (Con)
We are here to improve lives and to raise the sum of human happiness. We know that the best way out of poverty is work and that purposeful work is the key to human happiness, and we all want to give kids the best possible start in life, which includes meals for the poorest and high-quality pre-school childcare, which we know improves outcomes for the most disadvantaged children in our country.
We know, too, that universal credit is helping to improve lives. It has been on offer in my constituency for some time and has now been fully rolled out. The feedback I get from the jobcentres that serve my constituency—job coaches tell me this with great passion—is that it is helping them to help people, and helping people to get into work, increase their hours and find better work. It is overwhelmingly a good thing. I spoke to my local citizens advice bureau to find out what problems it was experiencing, following rumours that universal credit was causing trouble, and on the day I went in, there had been two calls about universal credit. I asked what they were. One was, “How can I get it?”, and the other was, “Am I eligible?” So people were calling the CAB because they wanted to be on universal credit, because they had heard good things about it. I am therefore really concerned that we are hearing such misleading information in the Chamber, when we know that universal credit is helping people to get into work, stay in work and find better work.
The Government have listened to and addressed concerns about universal credit, for instance by giving people better access to advance payments and not making them wait for payments. The Government are doing exactly the right thing to make universal credit work even better, and Labour Members should be supporting that, not trying to block it. I am worried that they are stuck in the 1970s. Perhaps then it was okay to give up on people and condemn them to a life on benefits, but we know now that that is not the right thing to do. They should be supporting us to help their constituents to get into work and stay in work.
On free school meals, we have seen a shocking abuse of figures. We know that as a result of the Government’s policies, 50,000 more children will get free school meals and no child will lose their right to them, so let us not have any scaremongering about children losing free school meals. Let us also have a bit more clarity about how Labour might pay for their proposals which, according to latest estimates, would cost the country an extra £100 billion and increase borrowing per family by £4,000. I say to Labour Members, “Let us do the right thing.” Let us not play party politics, but help to make people’s lives better.
David Linden (Glasgow East) (SNP)
I am mindful of the time, so I will not take up as much of it as I had planned.
It is disappointing that there are now few ways in which the House can express its opinion, but one of those ways is by our debating and voting on statutory instruments. We see time and again on Opposition days the House making its voice clear. In October, the House voted by 299 votes to zero to call for a halt to the roll-out of universal credit, but that did not happen. Conservative Members talk about parliamentary sovereignty and the will of the House being listened to, but they do not then follow through. I am glad, therefore, that we have an opportunity today, on a binding vote, to make our view clear to the Government.
Today we are debating four statutory instruments. I will focus on the one relating to universal credit, but before I do so, I want to touch on childcare vouchers. I and many other Members are worried about the UK Government’s plans to close the childcare voucher scheme, so we urge them to reconsider. I want to draw a contrast with some of the family-friendly policies that we are pursuing north of the border, such as the baby box scheme, which gives children the very best start in life from birth—that sends a strong signal about equality. We have free school meals for children in primaries 1 to 3 and the doubling of childcare provision. On the latter, I must declare an interest, as my son is starting nursery in August, and is very excited about going to Sgòil Àraich Lyoncross. The Scottish Government have made it clear that children should be able to get such childcare, and it is good that we are delivering on that.
I wish to commend the new city government in Glasgow led by Susan Aitken. In the last council budget, they announced that free school meals would be rolled out to primary 4. As someone who is married to a primary school teacher, I know at first hand the importance of schoolchildren having a warm and nutritious meal inside them. I welcome the efforts of Glasgow City Council to tackle holiday hunger as well.
I will focus briefly on universal credit, because I am mindful of the time. I pay tribute to my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), who has done a power of work on universal credit since long before it was fashionable to talk about it. He has, I believe, been pursuing the issue since 2013. I think that his work on terminal illness is especially important. There have been some pretty unedifying scenes on both sides of the Chamber today. We should be mindful of the fact that we are talking about real people, and, in particular, about people with terminal illnesses. That message should go to all of us, including me.
I have made it clear to journalists that I have no interest in being on “Newsnight” or “Question Time”, or in clocking up views in Nigeria on YouTube like my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black). I see the job of being a Member of Parliament as being out in the constituency listening to people and hearing about lived experiences. I appreciate that at various points during the debate, the Government will say that the Opposition are scaremongering, and they can say that to a certain extent—they would be expected to say it. However, as a constituency Member of Parliament, I speak to constituents regularly, and people at the Parkhead housing association, the West of Scotland housing association and the Glasgow NE food bank say that universal credit must be halted.
Chris Green (Bolton West) (Con)
I have a qualified welcome for this important debate. I will touch briefly on universal credit and free school meals.
On universal credit, I welcome what has been done by the Chancellor and a succession of Secretaries of State. Universal credit is there to get people into work and to ensure that, when they are in work, they can take on more work, make progress in their careers and, ideally, cease to be dependent on welfare payments. That is what we want to happen, and the system has been reformed over the years to become better and better.
I have very little time, but I want to highlight the speech made by my hon. Friend the Member for South Cambridgeshire (Heidi Allen). She captured brilliantly the reforms that have been delivered in recent years and made the point that a debate that should have been about improving universal credit has turned into a headline-grabbing agenda by the Labour party.
I have visited the two jobcentres that serve my constituency, and the enthusiasm of the staff in both of them for universal credit was incredible. I was blown away by their support for it. They can help people now: rather than being faceless, grey, stand-offish organisations, they can engage with people in a way that has not been possible for them before. We should support universal credit enthusiastically—and, yes, where improvements need to be made, let us make them.
On free school meals, we ought to have a vision that the children who are most in need should receive them, but they should not be received by the children of those who are earning a significantly higher amount of money. It is disappointing that Labour Members will vote today to prevent 50,000 children—the poorest children in our country—from receiving free school meals when universal credit is rolled out and will vote to ensure that families with an income of more than £40,000 a year continue to receive them. I think that the Labour party has the wrong values, but it is not just the Labour party: in my constituency, the Liberal Democrats have been putting out propaganda saying that the children of those who earn more than £7,400 a year will no longer receive free school meals. That is not a cut-off; it is only a fraction of the actual income.
Because of the time constraint, I will end my speech by saying that I support the Government and their actions.
Peter Dowd (Bootle) (Lab)
I would like to feel able to thank every Member who has spoken in the debate, but, frankly, the only meals Tory Members are interested in are when their rich donors pay them to have them. Those are the only meals they are interested in. [Interruption.] That is all they are interested in.
Several hon. Members rose—
Peter Dowd
We have been asked today to tell the truth: I have just told the truth, and the truth hurts as far as Tory Members are concerned. [Interruption.] The four statutory instruments we are debating today—
Several hon. Members rose—
Peter Dowd
That has upset Tory Members; they are deeply upset about it. The four statutory instruments taken together would end childcare vouchers, restrict the number of children receiving free school meals and limit access to universal credit for the self-employed and disabled people.
Peter Dowd
No, I will not.
Far from seeing the light at the end of the tunnel, this Government have indicated once more their relentless desire to throw some of the poorest into the shade. While the Chancellor came to the House today to pat himself on the back, with no sense of irony whatsoever, these new regulations remind us that austerity is far from over. Depriving some of the poorest children in the country access to a free school meal on its own would be considered shameful, but paired with the restriction on childcare vouchers and the introduction of tougher criteria for universal credit, we have a cruel cocktail of cuts and misery—and Tory Members know a lot about cocktails as well when they are at their meals.
The Children’s Society estimates—[Interruption.] Fact check: the Children’s Society estimates that the changes the measures the Government are seeking to introduce will see 1 million children in poverty unable to benefit from free school meals because of them pulling the rug on the current transitional arrangements, and to add insult to injury, by setting an income threshold for the children of those on universal credit to qualify for free school meals, the Government are creating a cliff-hanger which will leave around 350,000 families worse off. [Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. There are clearly heightened tempers, but we must have some decorum to allow us to listen to Mr Dowd.
Peter Dowd
Thank you; “They don’t like it up ’em.”
These families, who will move just above the threshold, will be forced to shoulder the cost of school meals from their household budgets at the cost of hundreds of pounds per child.
Mr Duncan Smith
The hon. Gentleman now has to answer one very simple question. He and his whole Front -Bench team have been putting it about that 1 million children will lose their right to free school meals. Will he now stand at the Dispatch Box and apologise to the House for misleading the public?
Peter Dowd
What I will say is this—[Interruption.] If Tory Members want to listen, I am more than happy to say this:
“I am unable to watch passively whilst certain policies are enacted in order to meet the fiscal self-imposed restraints that I believe are more and more perceived as distinctly political rather than in the national economic interest.”
That is from the right hon. Gentleman’s resignation letter.
Why do the Government feel the need to cut the number of children who are eligible for free school meals? Why are the Conservatives keen to limit the number of parents eligible for childcare vouchers? And why do Ministers seem content with ensuring that the self-employed and disabled on universal credit are worse off and at further risk of sanctions?
The Chancellor’s mantra, as with his predecessor, has been fiscal prudence, a concept hijacked by an ideologue for ideological purposes. He has long proclaimed, whether on spending on public services or on the welfare state, that there must be belt-tightening. In the name of balancing the Budget, we have seen almost a fifth of women’s refuge shelters close under this Government’s cuts, while 41% of children’s services are unable to perform their statutory duties. Yet the Chancellor can somehow conjure up money to give large multinational corporations and the wealthiest £70 billion-worth of tax cuts by the end of the Parliament; no belt-tightening there.
If we look at the decision to cut the top rate of income tax from 50p to 45p alone, research—fact—has shown that those earning over £1 million pounds a year have saved on average £554,000 from 2013 to 2018. There was no belt-tightening there, either. [Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Members must not shout at the hon. Gentleman.
Peter Dowd
Over the past five years, this tax cut has cost the British taxpayer £8.4 billion. That £8.4 billion could instead have fully funded universal credit, extended free school meals or ensured tax-free childcare for all. Fact check: that is a fact.
Childcare remains the biggest cost for working households. For some families, the childcare bill is crippling their finances. The childcare voucher scheme is not only popular but well subscribed, with some 780,000 parents using vouchers and more than 50,000 employers offering childcare voucher schemes. Most employers who provide vouchers currently do so through salary sacrifice schemes, exempting recipients from income tax and national insurance on vouchers up to a maximum of £55 a week. The scheme has its flaws—for example, it does not cover self-employed people and requires employers to be registered—but overall, most parents and employers who use the scheme believe that the system works, and an overwhelming majority want it to stay. There is another fact check.
It is not really surprising that the Government are planning to pass regulations this evening that would close the scheme to new applicants, particularly considering their shambolic introduction of the alternative tax-free childcare scheme. The Government’s much-awaited tax-free childcare scheme opened to parents this year, a full five years since it was originally announced. [Interruption.] That is another fact that Conservative Members do not like. To call the roll-out disastrous would be a grave understatement. On top of the delays, HMRC’s website crashed, forcing the Government to pay nearly £1 million to parents in lieu of childcare payments. Hardly a great start! Under the current voucher system, the amount of childcare a family gets is tied to their earnings. Under the new system, it is based instead on expenditure, so the childcare system will benefit those who can afford to spend the most, with the Government’s headline figure of £2,000 tax free reserved for those parents who have an extra £10,000 lying around.
It is well known that the tax-free childcare scheme is the pet project of the Chief Secretary to the Treasury. She has consistently called for better value for money when it comes to public spending and said that the Government should avoid spending money that they do not have. However, under the new scheme, parents sending their children to independent schools will also be able to claim the £2,000 tax-free amount for childcare. How can the Chief Secretary justify that? Surely, the money spent giving a tax break to those who can afford to send their children to some of the most expensive fee-paying schools in the country could instead be used to ensure that a million children do not lose access to free school meals. There is no reason why the Government should not listen to the calls of the Opposition, of parents and of employers across the country who want to keep the voucher scheme open and extend it to the self-employed.
I should like to turn now to the Local Authority (Duty to Secure Early Years Provision Free of Charge) (Amendment) Regulations 2018 and the Universal Credit (Miscellaneous Amendments, Saving and Transitional Provision) Regulations 2018. As we have heard, the first of these instruments creates new eligibility criteria for families applying for 15 hours of free childcare for their two-year-old through universal credit—
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The hon. Gentleman is not going to give way. Please allow him to finish.
Peter Dowd
The facts do rile them, don’t they? They have asked for facts all afternoon. Then they get a few and they just don’t like them. I shall be coming to a close very shortly. It is as simple as this. Fortunately, at least the public now have a clear choice between the two parties: a Government of the past wedded to a failed ideological nightmare, or a Labour party that will govern for the many, not the few. Finally, is there any vulnerable group or person that this self-obsessed, clapped-out, washed-out, out-of-time Government are not prepared to attack?
The Secretary of State for Education (Damian Hinds)
There are sometimes days when Ministers have to come to this House to defend difficult decisions that have had to be made, but this is not one of those days. Today, we are talking about increasing spending and widening eligibility. I would never dream of accusing any Member on either side of seeking to mislead the House, but I will make a more general point: the mere repetition of a falsehood does not turn it into the truth.
We have had fully 24 Back-Bench speeches in this debate, and I will seek to respond to as many as I can in the short time available. There are five main elements to our support in early years and childcare, and each one is a bigger offer than under Labour. First, there are 15 hours a week of free early education for disadvantaged two-year-olds. There was no such entitlement under Labour. Today’s regulations amend the eligibility criteria, introducing an equivalent earnings threshold of £15,400, which typically equates to somewhere between £24,000 and £32,000 in total household income. By 2023, we estimate that around 7,000 more children will benefit from the entitlement compared with the previous system.
Secondly, there is the universal 15 hours a week free childcare for three and four-year-olds—more hours than under Labour and now with the early years pupil premium, which was also not available under Labour. Thirdly, there are an additional 15 hours for working parents, and guess what? No such offer existed before 2010. Fourthly, up to 85% of childcare costs can be reimbursed through universal credit, which is a higher percentage than was ever available under tax credits. Finally, tax-free childcare will provide support for nearly 1 million more families than the existing vouchers scheme.
Emma Little Pengelly (Belfast South) (DUP)
Given the concerns raised across the House about the April closure of the childcare vouchers scheme, does the Secretary of State agree that the closure should be delayed to allow for those concerns to be addressed?
Damian Hinds
I have heard the concerns about the timing, and I can confirm that, following the hon. Lady’s representations, we will be able to keep the voucher scheme open to new entrants for a further six months.
Tax-free childcare will mean that more people become eligible, regardless of their employer and including the self-employed for the first time. The hon. Member for Ashton-under-Lyne (Angela Rayner) raised concerns about families having to pay childcare costs up front, but I reassure her that the flexible support fund is available to help in such cases.
Damian Hinds
I am short of time, so if the hon. Lady will forgive me, I will come back to her if there is time.
Turning to free school meals, we have extended the availability of free meals since 2010, going much further than Labour. The Conservative-led coalition extended free meals to disadvantaged students in further education institutions and introduced universal infant free school meals. We are investing £26 million in a breakfast club programme over the next three years, using the soft drinks industry levy.
When universal credit was introduced, we made clear our intention to set new criteria for free school meals, as my hon. Friend the Member for Fylde (Mark Menzies) rightly pointed out. We stated that intention in our response to the Social Security Advisory Committee report on passported benefits in March 2012. We repeated it in April 2013, when we introduced a temporary measure enabling all universal credit families to receive free school meals during the early phase of universal credit, and we have repeated it again several times since, as my hon. Friend the Member for Croydon South (Chris Philp) mentioned. We are now, as we always planned, introducing new eligibility criteria to ensure that those entitlements continue to benefit those who need them the most.
Under our new regulations, we estimate that by 2022 around 50,000 more children will benefit from a free school meal compared with the previous system. The hon. Member for Washington and Sunderland West (Mrs Hodgson), who is shaking her head, asked about the methodology, as did the hon. Member for High Peak (Ruth George) and, I believe, the hon. Member for North West Durham (Laura Pidcock). We responded to the Social Security Advisory Committee on that exact point, and it put the information into the public domain.
Damian Hinds
I cannot. No child who is receiving free meals now or who gained them during the roll-out of universal credit will lose their entitlement during the roll-out, even if family earnings rise above the threshold, as my hon. Friends the Members for Nuneaton (Mr Jones) and for Harborough (Neil O’Brien) mentioned. Once roll-out is complete, those children will be protected until the end of their phase of education—primary or secondary—as my hon. Friend the Member for Charnwood (Edward Argar) reminded us.
The protection arrangements will enable hundreds of thousands of children to continue to receive a meal during the roll-out, even if family earnings exceed the threshold. The £7,400 threshold relates to earned income, and it does not include additional incomings through universal credit. Depending on their exact circumstances, a typical family earning around our threshold would have a total annual household income of between £18,000 and £24,000.
The hon. Member for Manchester Central (Lucy Powell) said that the threshold was arbitrary. It is not arbitrary; the thresholds for these passported benefits are set at such a level as to hold the eligibility cohort steady, except that in the case of free school meals we took the decision to make it somewhat more generous than the previous system. The threshold is comparable, by the way, to that in the approach in Scotland, where there is a net earnings threshold equivalent of £7,320.
It is simply not true to say that we are introducing a cliff edge; there has always been one. The simple fact is that a child either gets a lunch or does not. A plate of food does not lend itself well to being tapered, as my hon. Friend the Member for South Cambridgeshire (Heidi Allen) has said. Some have suggested that we could convert the benefit into cash—that is true, of course—so that we could have a taper, but the whole point of free school meals is to guarantee that an individual child will receive a nutritious and healthy lunch.
Extending eligibility to all children in households on universal credit would result in around half of pupils becoming eligible. We estimate that that would cost in excess of £3 billion a year more by 2022. The additional meal costs alone, excepting the deprivation funding, would be in excess of £450 million a year—quite close to the figure mentioned by the hon. Member for Washington and Sunderland West. I reiterate that eligibility is going up, not down, as my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) said.
I am running short of time, so I will turn to the regulations on universal credit. My right hon. Friend the Secretary of State for Work and Pensions earlier outlined the changes in these regulations for UC. They include the removal of waiting days, which will put an average of £160 extra in people’s pockets and get them into the monthly routine sooner, and an additional two weeks of housing benefit to smooth the transition to universal credit. That one-off, additional, non-recoverable payment is worth an average of £233 to 2.3 million claimants over the roll-out period. Those measures form part of the £1.5 billion package of reforms that the Chancellor announced at the Budget. My hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) said that he was surprised to hear that Labour Members would be voting against those measures. I suggest that their constituents will be even more surprised.
Damian Hinds
I hope my hon. Friend will forgive me if I do not; we are very short of time. As my hon. Friend the Member for Lewes (Maria Caulfield) reminded us in her unique style, the Government are committed to tackling injustices, removing barriers and widening opportunity. Because of the strong economic management that my right hon. Friend the Chancellor recapped for us earlier, we are able to continue our bold and ambitious programme of social reform extremely quickly.
Emma Little Pengelly
Can the Secretary of State confirm clearly for the House—this is very important—that the six-month delay in the closure of the childcare voucher scheme will be used to address concerns and issues that have been raised in the House today?
Damian Hinds
I already confirmed that we would have this period to reflect concerns and to allow the bed-in.
Our approach is working, including through advances in education, ensuring everyone can get the best start, unprecedented investment in childcare to support career choices and household budgets and universal credit, helping people into work, faster. In this generation, we have employment at record levels, household incomes at record levels and income inequality down. For the next generation, we have major improvements in the early years foundation stages, 1.9 million more children in good or outstanding schools and a 10% narrowing in attainment between the rich and poor. Today’s legislation continues this important work. I am proud of the enhanced support we are offering families through these programmes, and I commend the regulations to the House.
Question put.
Children and Young Persons
18:10 - The House having divided: - Ayes: 254 / Noes: 312 - Question accordingly negatived.
18:26 - The House having divided: - Ayes: 253 / Noes: 315 - Question accordingly negatived.
18:40 - The House divided: - Ayes: 285 / Noes: 314 - Question accordingly negatived.
Madam Deputy Speaker (Mrs Eleanor Laing)
I remind the House that this motion is subject to double-majority voting: of the whole House and of Members representing constituencies in England.
Madam Deputy Speaker (Mrs Eleanor Laing)
I remind the House that this motion is subject to double-majority voting: of the whole House and of Members representing constituencies in England.
Angela Rayner
On a point of order, Mr Speaker. It is clear that the Secretary of State has survived the Division by promising not to press ahead with the Government’s plans to phase out childcare vouchers for another six months, along with other new childcare measures. May I ask your opinion, Mr Speaker, on any suggestion from the Government that there will be an oral statement explaining what will now happen during and after that period?
Mr Speaker
I am grateful to the hon. Lady for her attempted point of order, but I am afraid that her attempt to solicit my opinion will not be successful. I am not aware of any intention for a statement to be made, but the hon. Lady has aired her concern, and it is therefore on the record for all to see.
Tom Watson (West Bromwich East) (Lab)
On a point of order, Mr Speaker. Last week the Secretary of State for Digital, Culture, Media and Sport announced his intention to drop the Leveson inquiry despite new revelations from The Sunday Times whistleblower John Ford, including the obtaining of stolen data on the private information of Dr David Kelly a week before his death. The Secretary of State justified the decision by saying that
“the fact that this activity stopped in 2010 underlines the point that the world has changed. Practices such as these have been investigated. Newspapers today are in a very different position from when the alleged offences took place.”—[Official Report, 7 March 2018; Vol. 637, c. 326.]
I have just received new allegations that contradict that information. The blagger says that he knows individuals who are still engaged in these activities on behalf of newspapers. The Secretary of State has no evidential basis on which to make his rather complacent assertion. Have you had notice of a statement from the Secretary of State, Mr Speaker, so that he can justify what evidence he has to say that blagging ended in national newspapers in 2010?
Mr Speaker
I have not received any such indication, I must advise the hon. Gentleman, but he has registered his concern and it will have been heard on the Treasury Bench.
Hemel Hempstead Urgent Care Centre
(6 years, 1 month ago)
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Sir Mike Penning (Hemel Hempstead) (Con)
First, may I say what a privilege it is to have secured this Adjournment debate this evening, and how proud I am of my constituents who for so many years have been fighting the changes and particularly the cuts to healthcare in the Dacorum area where my constituency sits? In particular, I thank Edie and Ron Glatter and the Dacorum Hospital Action Group and its fantastic chair Betty Harris, who is very poorly; they have been fighting this campaign for many years. I also pay tribute to the fantastic work our local BBC radio station, BBC Three Counties, has done over the years, in particular that of the excellent journalist and reporter Justin Dealey; without his work, this debate would probably not have taken place.
For the national health service to carry on being the world-class service it is today, the public, our constituents, need to have faith not only in the fantastic doctors, nurses and porters and those who run the frontline services, but in the management of our hospitals and health provision. I am sorry to say, however, that the trust and feeling of commitment we need from our health service management in our part of the world are not just broken, but have completely failed.
I will not go into the history because tonight I want to talk about the urgent care centre, but the history of what has been happening to out-of-hours and urgent care, including A&E, in my constituency has been going on for many years. The previous Labour Administration decided to close the A&E and all acute services at the Hemel hospital after they had already been closed at the St Albans hospital, with all services moved into a Victorian hospital next to a football ground in Watford. We will not dwell on that tonight, however, but will come back to it on another evening.
As part of the sop to my community, we were given an urgent care centre—24/7, seven days a week, throughout the day and night—and next to it a walk-in GP centre. I was therefore surprised when Ms Fisher, chief executive of the West Hertfordshire Hospitals Trust, phoned me just before Christmas to say that, sadly, the urgent care centre would have to temporarily close on safety grounds at night. I was shocked by that, not least because the A&E in Watford struggles greatly, so the more people we can encourage to use other NHS facilities instead, the better. I said, “This is happening over Christmas which is one of the busy times,” and was told, “Don’t worry, Mr Penning, it’s only a temporary thing and we’ll have it open again just after Christmas.” They then put out a press release headed “Temporary overnight closure of Hemel Hempstead Urgent Care Centre”. Interestingly, that press release is still on their website today. I actually printed it off before I came into the Chamber this evening. As I go through my comments, Members will realise just how false that statement was.
One of my constituents then contacted Three Counties Radio, and Justin Dealey, its excellent reporter—
Sir Mike Penning
Thank you, Mr Speaker. I have even longer to pontificate, which is great news.
Justin Dealey acquired an interview with the said Ms Fisher, the chief executive of West Hertfordshire Hospitals NHS Trust. It was quite a long interview, in which Ms Fisher indicated:
“This is a short-term measure which is us acting in the interest of patient safety because, for the next few weeks over the festive period, we are unable to secure GP cover.”
I think most people would understand that, but not if they knew that the GPs were working in the room next door. But that is a separate issue. Justin went on to suggest that surely Ms Fisher understood that local constituents would have real concerns, and asked her whether she would be concerned if she lived in the area. She said:
“I completely understand their concerns, but what I want to reassure the residents of Hemel is that if there were to be any permanent change it would be our absolute intention to include people fully”
in that decision. She went on to say that
“legally we would be obliged to consult for a permanent change of that nature.”
That press release was issued not before Christmas this year but in December 2016. We have had no night provision at all in Hemel since then. Everybody has to go for urgent treatment to Watford A&E. Alternatively, they have to dial 111, which is an excellent service, but after they have been triaged they apparently get sent to Watford A&E. Watford has just come out of special measures, and I praise the work that has been done at the hospital but there is still a lot more to be done.
Jim Shannon (Strangford) (DUP)
I thank the right hon. Gentleman for giving way. I sought his permission to intervene on him beforehand. He is outlining very well the issue with the Hemel Hempstead urgent care centre. Does he agree that, although there is immense staffing pressure, closing or scaling back on urgent care units and minor injury units only adds to the pressure on A&Es? There must be more investment in these mid-level centres if we are to prevent the A&Es from crumbling under the weight of the work they have to do.
Sir Mike Penning
I clearly agree with my hon. Friend. It was kind of him to come and tell me that he wanted to intervene on me on behalf of other parts of the country that are facing similar pressures.
This was not about money. Normally, when our constituents come to talk to us, especially about the health service, it is about money. They tell us that they are really concerned that there is not enough money to provide the services, but on this occasion we were told that this was nothing to do with money. It was to do with the contractual problem with the GPs. We kept on asking what was going to happen, and then—completely out of the blue and still without consultation—we were told that the Government had said that there should be no more urgent care centres and that they should become urgent treatment centres instead. I was repeatedly told that it was the Government saying that this should be done. I asked whether the Government had said that the centre should not be open 24/7. I was told no, but that we had to move to being an urgent treatment centre. In the past couple of weeks, the unit has changed from being an urgent care centre to being an urgent treatment centre. Interestingly enough, that means that paramedics and nurse practitioners are running the facility, and in many cases—without being rude to our GPs—they have more skills than a basic GP. I have to declare an interest, in that I was a military paramedic, so I am slightly biased about these things.
Was there a consultation before that decision was made, not just to close the UCC but to change to a UTC? No, there was not, even though it is a legal requirement to have one. We are now in a consultation, however. I could not believe it when I first heard this, but I have now heard from several constituents that in the actual meetings that took place—not when people were writing in—when different plans and options were being put to my constituents, a member of the clinical commissioning group staff was at the table trying to convince the public what sort of option they should go for. If we are going to consult the public, surely we should trust them and then have the confidence to listen to them.
What I find really fascinating about what is happening in my part of the world is that people from nowhere near my constituency—from the other side of Watford—are being consulted. They would never come to my facility in a million years—unless they just happen to be in the area—but they apparently have the same rights in this consultation as my constituents, who are again losing facilities hand over fist. Those other views are being taken into consideration because they happen to be part of the trust area. My constituents just scratch their heads and say, “This is illogical.” This facility, even though it is part of the NHS and anybody could come to it, is obviously being used by the largest town in Hertfordshire and the other towns and villages within Dacorum. However, I have no problem with the people of St Albans being consulted over this, because they are clearly part of the process.
Trust has been severely damaged. A highly paid chief executive of an NHS trust went on the radio—telling an MP is one thing, but going public is another—and tells listeners, “This is temporary. Please do not worry; it will all be okay. By the way, if I did actually change the service, that would be illegal because I have not consulted.” Frankly, when they then did not consult—the UCC is quite clearly never going to open again—that breaks the trust.
I have raised the accountability issue in the House before. It is absolutely right that my good friend the Minister on the Front Bench does not make decisions about what A&Es and UCCs are open and how many beds there should be. Those are quite clearly clinical decisions that should be based on knowledge and demand in the area—that is not what happened when our A&E was closed—but we seem to have moved from one extreme to another. I am told that if we want to challenge the consultation, the only way is to put the decision to judicial review based on the consultation. We tried that when the A&E was closed and we got a judicial review. The judge was generous and said, “You have a moral case, but you probably don’t have a clinical case. You don’t have a case in law, because the consultation was done.” However, if the consultation was a complete sham or did not take place at all, where do we go?
I have asked Ministers, I have tabled questions and I have been to see the Secretary of State. At the end of the day, who are these people accountable to? I know that we can go to the health committees at the local council, but they do not have the powers to say that an individual or a trust has brought the NHS into disrepute, and yet that is what has happened here. Nobody was twisting the chief executive’s arm to go on the radio and say what she said. We all listened to it—I got a transcript the following morning—and I sat with Justin and said, “Well, that’s it, Justin. We’re okay.” I was not at all happy about the facility being closed over the 2016 Christmas period, but at least we knew that GPs were going to be recruited and that we were going to get there.
However, the exact opposite has happened. We are not getting the GPs back, and now the facility being open 24 hours a day is only one of the options. I know that the Minister’s notes will say how many people used to go to it at night and so on, but half the problem was that it was never properly promoted. There are access issues at the A&E because so many people are turning up and being triaged when a huge percentage of them do not need to be at an A&E but somewhere else within the NHS. I would argue that they should be at a UCC or UTC or that a GP should come out to them, but that is a separate issue because hardly any GPs make home visits in my constituency.
I know exactly how things work, because I was a Minister for a while and know about the advice that comes down from the trust and the clinical commissioning group, which will say things that are different from what I have said. However, I can honestly say that if there is one issue in my constituency that absolutely unites every political persuasion on my patch, it is the acute health provision in my constituency. We pushed a coffin on a hospital trolley all the way from Hemel Hempstead Hospital to Watford, to indicate that lives would be lost. We had debate after debate with the ambulance service, which said, “Don’t worry, we can get the ambulances there on time.” It probably could, if it rushed them through on a blue light in the middle of the night—if an ambulance was available. Because of the previous Administration’s botching of the regionalisation of the ambulance service, there are often not that many ambulances available, even though the ambulance depot is on my patch.
People do not want to clog up A&E; they want to have the confidence that there is somewhere safe that they and their kids can go for treatment. We have no idea what the conclusion of this retrospective consultation will be. We have no faith that even if the conclusions are in agreement with what we want, we will actually get it. Not all my constituents agree with me, but in a treatment centre I would rather have a highly qualified paramedic nurse practitioner than—I have to choose my words carefully here—an ordinary GP, simply because the paramedic nurse practitioner has so much experience in that area. That is where the modernisation of the health service has been so brilliant. But after telling me that the decision was not about money, it is, frankly, disgusting to sit people down at consultation meetings and try to convince them that it would be better if the centre was not open 24 hours a day.
I hope that the Minister understands how passionate we are about the matter. My constituency is 17 minutes from London and it shares a boundary with yours, Mr Speaker. People in the top part of my constituency all go to Luton and Dunstable—quite rightly so; it is an excellent facility—and those in the bottom part of my constituency, or anyone who comes off the M1 and the M25, end up going to Watford for their acute care.
I want Watford General Hospital to succeed. I think the location of the site is completely ludicrous, and we need a new general hospital for the growing population in our part of the world. I know that you have pressures on housing, Mr Speaker, as we have. But I want the houses, because I want people to have somewhere to live—so many families are struggling at the moment—and if we are to build those houses, we need facilities, such as schools and everything else. When my constituents go to bed at night, they need to know that the urgent care centre is open in case something happens; and that if they cannot cope, we can blue-light them to Watford or to Luton and Dunstable.
I have tried for weeks and weeks to get this Adjournment debate. My hon. Friend the Minister is lucky, because I had been asking for a 60-minute debate in Westminster Hall. We may yet end up there, but that will depend a lot on what he says from the Dispatch Box.
The Minister for Health (Stephen Barclay)
I will do my best to address the issues raised by my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) in order to pre-empt the further debate to which he alludes. I congratulate him on securing this debate. I commend him for his continuing and passionate campaign on behalf of his constituents, and for his expertise on health issues, which he has brought once again to the House.
I reiterate the fundamental principle for all service change in the NHS: it should be based on clear evidence that it will deliver better outcomes for patients. That is the framework that is applied. I understand that my right hon. Friend is concerned about the changes proposed in his constituency. He will appreciate, not least as a former Minister, that I cannot say anything that would prejudice the outcome of the ongoing consultation, but he has spoken powerfully about his concerns in the House tonight.
I am sure that my right hon. Friend agrees that any decision should be driven by what is best for the constituency clinically, by what is best for the health service in the area, and by what is of most benefit to the greatest number of people in the area. I shall briefly set out some of the background, as I understand it, to the issues that inform the consultation. As he mentioned, in December 2016, the urgent care centre was temporarily closed overnight because of concerns about patient safety as a result of problems with staffing the GP overnight shifts. The CCG’s advice was that the urgent need to address patient safety issues did not allow time for consultation about that temporary change. I appreciate the concern that he raised about the manner in which that decision was taken.
The local NHS has worked hard to manage the consequences of the decision. I understand from the CCG that the volume of overnight patients at the centre was relatively low, and that the impact that has been felt at Watford General Hospital, notwithstanding the other challenges it faces, has been of the order of one or two patients per night, usually those with relatively minor injuries. As my right hon. Friend will be aware, emergency cases have been sent to Watford since the closure of Hemel Hempstead’s A&E in 2009—he referred to the protest involving a coffin about that decision, which was taken under the previous Labour Government. On provision in the early hours of the morning, he will also be aware that journey times then will be shorter than they would be at the times when the urgent care centres are open.
Sir Mike Penning
Let me go back a fraction. If the decision has to be based on clinical advice—I understand the principle—what is the point of consulting the public, who are not clinically trained? We have to consult them, because that is what the law says, so is the law wrong for saying we should consult people who are not clinically trained? If the decision has already been made, what is the point?
Stephen Barclay
The public consultation is to inform the discussion with clinicians. If such a decision were taken by Ministers—my right hon. Friend alluded to this in his remarks—it would likewise be informed by public consultation. That is part of running a transparent and open process.
The CCG is now consulting the public on future opening hours, following a broader urgent care strategy review. The consultation seeks views on three options: retaining the current temporary hours; increasing the temporary hours by two hours at the end of the day; or re-opening on a 24-hour basis. As it runs until 28 March, I know that my right hon Friend and his constituents will wish to share their views as part of the process.
I do understand the criticism made by my right hon. Friend’s constituents that the overnight closure has been dragging on for too long and that a final decision needs to be made as soon as possible. The views gathered during the current consultation will inform the CCG’s decisions about the future opening hours for Hemel Hempstead UTC, as well as about the contract for West Herts medical centre. I further understand that the CCG has commissioned an independent research company to review and analyse all the comments received, and the feedback will be compiled into a summary report. That will be presented to the Herts Valleys CCG board meeting, in public, on 26 April, when a decision on both issues will be made.
Turning to the issue of the treatment centre’s status, on 1 December 2017, Hemel Hempstead UCC changed to a UTC, as part of national measures introduced by NHS England. I understand from the CCG that this was a change of name, not of service. The CCG therefore did not carry out a further consultation on the establishment of the UTC as it did not feel that that represented a significant change in service. I understand that no services have been withdrawn from the UTC, but there have been a number of enhancements, including: the introduction of a number of bookable appointments through NHS 111; the addition of near patient testing for some conditions, reducing waiting times and reducing the need for patients to attend Watford General Hospital for some tests; and an improved IT system, meaning that medical staff will be able to access patients’ records if they give consent. The CCG also expects services to expand to include other professionals, such as pharmacists, emergency care practitioners, those providing access to mental health services and community nursing staff.
That also dovetails with some important changes in planned care locally. I understand from the CCG that improvements in the treatment of musculoskeletal disease mean that the single point of access triage at Hemel can direct people on to community physio, where that meets their needs. That is good for the individual patient and also ensures that capacity in the acute settings is able to concentrate on those with more complex needs.
Sir Mike Penning
The Minister has just told the House that there has been a complete change in how physiotherapy is provided—it was provided at the hospital and is now provided elsewhere. There was no consultation on that, although I understand that there was a requirement to do so, because this involved a complete change of service in respect of where people go and so on. The point I am trying to make is: when there is no consultation, what do we do? Do we just sit back and say, “Okay”? Some kind of measure has to be taken when consultation continually gets ignored or does not happen at all.
Stephen Barclay
The distinction that was being drawn was in respect of services that have been removed, on which my right hon. Friend is right that there is a legal requirement for a consultation. He has expressed to the House his concerns about the process by which that temporary decision on patient safety was taken. The point I was making was that the services that have been brought to the area are bringing a benefit to the local community. I would have thought that they would be welcomed. Indeed, from April, many patients with diabetes in the area will no longer need to travel to Watford to be seen by a consultant, because the consultants will be coming to them by working in the community. Again, that is good for patients and for the system as a whole. It is part of the way in which these systems evolve: some services come closer to the community, while others, as under the decision taken by the Labour Government in 2009, are rationalised into Watford A&E.
I understand my right hon. Friend’s frustration that in his view the local CCG seems out of touch with popular opinion. Given the way in which he champions the community that he represents, I know that he is not out of touch with popular opinion—he always speaks in a well-informed way about his constituents’ needs, and I would expect that to be represented in the consultation responses that the CCG receives. The CCG is accountable to NHS England for fulfilling its functions. It is also a member of the health and wellbeing board, at which local authorities and other partners can challenge how it has been fulfilling its functions. The CCG’s activities are subject to scrutiny by local authorities and to supervision by NHS England. If NHS England believes that the CCG is failing to discharge its functions, it has the power to intervene and issue directions, or to replace the accountable officer.
It is worth reiterating that all proposed service changes should meet the four tests for service change. They should have support from GP commissioners; be based on clinical evidence; demonstrate public and patient engagement; and consider patient choice. It is right that such matters are addressed locally, where local healthcare needs are best understood, rather than in Whitehall. I think my right hon. Friend recognised the point about Ministers not making clinical-led decisions. For those reasons, I am sure that he will appreciate that I am not able to offer the House an opinion on the merits of the proposals, but of course we recognise that changes to health services inspire passionate debate, as they should, from all quarters, as we have seen this evening.
There is no standard approach on what an urgent care centre should offer. The offer varies between different urgent care centres, depending on the services required locally. Urgent care centres can treat a range of injuries, including sprains, strains and broken bones.
Sir Mike Penning
I want to help the Minister. The urgent care centre is gone. We do not have an urgent care centre; it is now an urgent treatment centre. This is something that confuses my constituents as well. I was trying to make two points. First, it is not just about the clinical commissioning group on its own. The decision to close over Christmas in 2016 was made by West Hertfordshire Hospitals NHS Trust, and it cannot escape blame, because it was the trust’s chief executive who made that decision and went on and acted. Secondly, it is also about the lack of knowledge and understanding of the community. We have had a churn of people coming through and running the services. They seem to come and go and come and go, never understanding or empathising with the constituency.
Stephen Barclay
Before my right hon. Friend’s intervention, I was just coming to the urgent treatment centre, because there is obviously a distinction. Urgent treatment centres are about standardising the range of options and simplifying the system so that patients know where to go and have clarity about which services are on offer. My right hon. Friend made the point about how we direct footfall and constituents into services at the right point to reduce the demand on the A&E at Watford by simplifying what the UTC does, what it offers and how that is understood by constituents.
Patients and the public will be able to access urgent treatment centres that are open for 12 hours a day, and that are GP-led and staffed by a range of clinicians with access to simple diagnostics. They will have a consistent route to access urgent appointments offered within four hours and booked through NHS 111, ambulance services and general practice. A walk-in access option will also be retained. They will increasingly be able to access routine and same-day appointments, and out-of-hours general practice for both urgent and routine appointments at the same facility where geographically appropriate. UTCs are also part of a locally integrated urgent and emergency care service working in conjunction with the ambulance service, NHS 111, local GPs, hospital A&E services and other local providers.
In conclusion, these are important issues, and decisions should not be taken lightly. The location of services is a difficult and often controversial issue, and my right hon. Friend is to be commended for his campaign and the points that he has made on behalf of his constituents.
Sir Mike Penning
It is not often that we get more time to speak in this place, so while I have the Minister at the Dispatch Box, can he answer this very simple question: what recourse is there for me, as the MP, and for my constituents when we are misled—I know that I have privilege, but I am using the word “misled”—by a senior NHS management team about what is going to happen to the urgent care service? I am talking about when what the team says turns out to be completely untrue. What recourse is there so that we can start to rebuild some trust in my constituency?
Stephen Barclay
As my right hon. Friend knows, it would be inappropriate for a Minister to comment on a specific allegation such as that from the Dispatch Box. I cannot comment on this specific consultation, which is under way as we speak. The point that has come out of this debate is that the decision of December 2016 was taken on patient safety grounds, owing to a difficulty in recruiting GPs at that time. A consultation is now under way, and it is for my right hon. Friend’s constituents to make their case as part of that consultation.
The people affected by these changes need to be involved in the decision; that is what the consultation will seek to achieve. Our starting point for discussing service change is that there will be no changes to the services that people currently receive without proper public consultation. I therefore urge my right hon. Friend and his constituents to make their voices heard as part of that consultation in the usual way.
Question put and agreed to.
Draft Non-Domestic Rating (Alteration of Lists and Appeals) (England)(Amendment) (Regulations) 2018
(6 years, 1 month ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
I beg to move,
That the Committee has considered the draft Non-Domestic Rating (Alteration of Lists and Appeals) (England) (Amendment) Regulations 2018.
It is a pleasure to serve under your chairmanship, Mr Rosindell, in my first Delegated Legislation Committee as a Minister. The draft regulations, which were laid before the House on 21 December, will give the Valuation Office Agency the power to impose a penalty on a person who provides false information knowingly, recklessly or carelessly in the business rates appeals process. They will set the level of such penalties for small and larger businesses and will make provision for ratepayers to appeal to the independent valuation tribunal if they disagree with the imposition of a penalty.
Introducing penalties for the provision of false information is an important part of the wider reforms to the system through which businesses may challenge, and appeal against, the valuation of their property. The Government introduced the majority of those reforms in April 2017; the enabling legislation for the draft regulations was approved by the House in the Enterprise Act 2016. As the Committee may be aware, prior to the changes introduced last year, we had a flawed and inefficient system that caused uncertainty both for businesses and for local government. Appeals were made almost as a matter of routine, whether or not there was a clear case that the valuation was wrong. Encouraged by a no win, no fee agent system, this resulted in large numbers of speculative appeals that were backed with little or no evidence. More than 1 million appeals were made against the 2010 ratings list, covering a huge proportion of the total number of properties liable for rates. A significant number were made with the spurious claim that the rateable value should be just £1, and although 1 million appeals have been made, as of December 2017, 72% had led to no change to the ratings list.
The volume of speculative appeals and the frequent lack of supporting evidence made it extremely difficult for the Valuation Office Agency and the valuation tribunal to prioritise appeals and focus on ratepayers with a valid case. The result was delays for ratepayers due a refund, and significant public resources wasted on dealing with speculative appeals. We are still dealing with the consequences: a large number of appeals to the 2010 list are still outstanding.
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, from April 2017, we introduced the check, challenge, appeal framework, which is being implemented by the Valuation Office Agency and the valuation tribunal for England. The reforms are designed to tackle some of the flaws of the previous framework and deliver a more efficient system that is grounded in early engagement and sharing of evidence. Under the new system, challenges to the list will—quite rightly—need to be backed by clear arguments and supporting evidence. This will support proper engagement with the Valuation Office Agency and, where possible, resolution of cases before they reach the tribunal. Restrictions have been placed on introducing evidence at the tribunal stage that could reasonably have been disclosed earlier to prevent ratepayers from withholding evidence and—as we saw under the old system—attempting last-minute negotiations on the steps of the tribunal. Quite rightly, those restrictions will be subject to a right for ratepayers to bring forward any genuinely new evidence that they could not previously have obtained.
Penalties for false information, which are the subject of the draft regulations, are a key part of our reforms. They will act as an important deterrent to providing false information and 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 both at the check stage, when underlying facts are confirmed, and throughout the challenge stage, when more detailed evidence may be exchanged. In common with in other parts of our tax system, penalties will be an important mechanism to support the submission of accurate information.
Specifically, the regulations will, if approved and made, give the VOA 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 £200 for small businesses and £500 for all others. The £500 maximum penalty was specified in the Enterprise Act 2016, which provides the enabling powers for penalties in the business rates appeals system.
A person may, of course, wish to challenge the imposition of a penalty. The regulations therefore also provide a right of appeal. Any person subject to a penalty may, within 28 days of receiving a penalty notice, appeal to the independent valuation tribunal for England. If the tribunal finds in favour of the appellant it will be able to order the valuation officer to refund the penalty. It is clearly 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 VOA by way of a penalty must be paid into the Government’s consolidated fund, which will ensure that the VOA does not benefit financially from the imposition of penalties.
As part of the wider consultation on the new appeals system, the Government sought views on the implementation of penalties. More than 280 submissions were received and the Government’s response was published in March 2017. As set out in that response, many stakeholders accepted the need for penalties but expressed concern that they could be imposed where ratepayers had made a genuine mistake. In light of that, the Government’s response confirmed that the VOA would provide clear guidance to support ratepayers in the provision of information and on the application of penalties. The agency has recently assured my Department that that guidance will be available before any penalties are applied. If a ratepayer feels that a penalty has been unfairly imposed, they will, as I have already outlined, have the right of appeal to the independent valuation tribunal. Although it is important that guidance is available and that ratepayers have a right of appeal, 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.
The Committee will be aware that the wider reforms to the appeals system are not without their critics. In particular, there have been issues with the introduction of the VOA’s new online system and concerns that it is not working effectively or is lacking some key functionality that stakeholders want. On the stability of the current IT system, my understanding is that the portal is fully functional and my Department is not aware of any recent major system issues. On the wider functionality, ensuring that the new system works for ratepayers is critical and, as a Department, we have been extremely clear to the VOA that we expect it to work closely with stakeholders to achieve exactly that. Given this debate’s focus on penalties, I do not propose to go into more detail on those issues. Suffice to say that the Government remain of the view that the reforms were an important and necessary step towards fixing what was clearly a flawed and inefficient system for all involved.
I hope that the Committee will agree that it is entirely right that the system is supported by appropriate powers to penalise the provision of false information and that such powers are accompanied by appropriate safeguards, such as the right of appeal, to ensure that the system operates fairly and effectively. On that basis, I commend the regulations to the Committee.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Rosindell. I congratulate the Minister on his 10-minute speech on what is, essentially, narrow legislation. Nevertheless, it is important that we make progress and resolve the business rates issue.
Rather than give a set speech, I want to try to probe some areas where the Government have not been clear about what capacity and resources have been provided to make sure that the appeal system can work effectively.
We know that the SI is about the financial penalty and that it is a split payment of £200 or £500 depending on the size of the applicant. First, what consideration was given to a different schedule for levying penalty fees? For instance, for a large business rate occupier such as a big supermarket, whose rating could be £1 million a year, will probably be paying £500 a day for their consultant to lodge the application. If that consultant is giving false or misleading information on their behalf , it seems slightly out of kilter for the penalty to be what is effectively their day rate. Compare that to a small business, which would pay the £200 penalty, and is trying to navigate the system alone. It could make a very genuine mistake but be found by the office to be perhaps misleading, and that would be a significant and disproportionate penalty.
The question is less about the principle of bringing in penalties, which is now very commonplace across Government Departments. However, an explanation of the rationale behind the split payment would be welcome. By that, I mean that we should move beyond referring back to the Enterprise Act 2016 as a reference point and make the case for why £500 is appropriate.
The second point refers to capacity in the valuation office. We know that there have been IT problems and gremlins in the system, but we cannot get away from the fact that the office has had significant staffing reduction since 2010. In terms of head count, the number of people working for the valuation office now is 546 lower than in 2010, when they are expected to implement a brand new system. We all know that the introduction of a new system requires a double run—existing creaky old systems need to be run, and the capacity is also needed to bring in a new system and implement it. I am not sure that the Government have provided the adequate resource to do that when 500 fewer people are working for the valuation office today than in 2010.
I also wonder whether the Government have reflected on other Government Departments making appeals against their rating valuation. For instance, up to 100 NHS hospital trusts are appealing their ratings liability to their local authorities. At the moment, they are being supported by a company called Bilfinger GVA, which is being paid a percentage fee of whatever is saved in that potential successful appeal. At the moment, councils have had to put £1.6 billion to one side in the likelihood that those appeals are successful, and face an ongoing pressure of £250 million a year. So, £1.6 billion a year is potentially needed for back-dated payments over six years and £250 million every year going forward if they are successful. On the back of that, a company that will be taking a percentage fee from the potential saving.
We know that Government money is Government money. Wherever it is placed within different Departments, it is still public money that will be used for public good. When the Treasury give the NHS money to pay its business rate bills and it is transferred to the local authority, that is still Treasury money that is being funnelled through to fund public services at a local level. If a private company is taking a percentage fee of 5%, 10% or even 20%, that is a net reduction in the money that is available to fund public services in an area, whether it is at local government level or within the NHS.
Have the Government given any thought to having a different approach for Government Departments that make ratings appeals to the valuations office? How can it be right that we are having a net reduction in the money that will be available for public services because money is going out to consultants? Surely a better way of doing that would be either to have a restriction on the ability to use external consultants charging a percentage fee on any potential savings, or to have some kind of mediation service within Government to resolve these issues between different Departments. That would, for me, feel like a potential way forward.
Have the Government considered that? When I first raised the question in November 2016, although I had a holding reply quite soon after that, it took six months for the Government to come back with their substantive reply, which said only that they were looking into it. I am still no clearer about what action they are taking, and whether they consider this to be a significant issue, both in terms of the principle behind it and the particular issue of NHS trusts making appeals. If the Government believe that it is an issue, will they support the Local Government Association and its campaign to make sure that the issue is addressed? I should declare an interest as vice-president of the LGA.
Finally, we know that the gremlins in the system are still there. I respect the Minister for acknowledging some of the technical issues that have occurred, but I come back to the capacity issue. If the Government really want this to work, they need to present an invest-to-save model. If they are going to put a new system in place, which they believe will be fundamentally more efficient and deliver a better service, they ought to be able to provide the upfront capacity to deliver that on the ground, and ensure that it comes in in a smooth and managed way. At the moment, the evidence does not support that.
Dame Caroline Spelman (Meriden) (Con)
The rating revaluation has thrown up a number of anomalies. As chair of the all-party parliamentary group for the horse, I draw the Minister’s attention to the anomaly that riding schools are facing up to a 356% increase in their business rates. There is now hard evidence from the British Horse Society that riding schools are closing as a consequence. The Treasury is aware of that anomaly, and at a meeting with the Chancellor he indicated that the problem may be that the Valuation Office Agency lumps private livery yards with property together with little riding schools. As property has gone up in price, that has apparently driven up the value.
I wonder if the Minister could comment on the fact that the Valuation Office Agency refuses to share the evidence base for such an increase with stakeholders such as the British Horse Society. Does he agree that it is unfair to penalise people for the evidence that they bring to support their claim if, in return, the Valuation Office Agency will not explain to the ratepayers what the evidence base is for the calculation of their rates?
Nigel Mills (Amber Valley) (Con)
I have a couple of questions about the order, which I broadly welcome. I think we have all seen constituency cases where businesses have an assessment for business rates that are far higher than they can afford, and seem to be based on historical, inaccurate levels of turnover or profitability. We would all like those businesses to be able to appeal and reach a more sensible rating valuation as quickly and reasonably as possible.
I happily welcome all measures to take away frivolous appeals, but will the Minister confirm that there will be no penalty for making a frivolous business rate appeal and then not providing any supporting information? He used the example of making an appeal and saying that the right value should be £1. In the legislation, I can see penalties only for incorrect information, not for frivolous appeals. We probably have to strike a balance between not taking away someone’s right to appeal, or scaring them out of making the appeal in the first place, and asking the office to decide whether the appeal is really worth having. That puts the office in the rather strange position of having to assess every appeal to see whether it is reasonable. I suppose the real question is how we can discourage pointless appeals if there is no sanction for making one.
Secondly, the Minister will perhaps realise, if he is in his role for a while, that I like to ask drafting questions about such orders. I am intrigued by the fact that someone can get a penalty for providing false information “knowingly, recklessly or carelessly.” I understand that knowingly means deliberately providing incorrect financial information, for example, and that carelessly means not checking, or providing information that is out of date or inaccurate, but what does reckless mean in this situation? The normal dictionary definition of reckless is not caring about danger. I cannot quite see what the danger is of providing false information to a business rates appeal. Perhaps he could give us an example of how behaviour could be reckless but not knowing or careless in this situation. I assume that it is a phrase that we always use in this kind of thing, but I cannot work out what it means in this instance.
Mr Mark Francois (Rayleigh and Wickford) (Con)
Mine is a very brief contribution. Can I lend weight to the very good point made by my right hon. Friend the Member for Meriden? I, too, have some equestrian centres in my constituency, and I have received representations from them on exactly the same point. The Minister will know that the British Horse Society is quite exercised about this matter. I do not know how much he can say about that today, but will he undertake to take the point away and enter into discussions with the Valuation Office Agency to see whether something can be done to unpick that rather difficult and, I think, unintended consequence of the Government’s action?
Mr John Whittingdale (Maldon) (Con)
I had not intended to speak, but I am spurred to do so by my right hon. Friends the Members for Meriden and for Rayleigh and Wickford. I represent the Chelmsford equestrian centre, which has been to see me about this very point. The fact that three members of a fairly small Committee have raised this issue indicates that there is a serious problem. I am sure that the Minister did not come here fully briefed to talk about equestrian centres, but we would appreciate it if he could look into the issue and let us know about it in due course.
Rishi Sunak
From my perspective, this has been a good and helpful debate. I was grateful to receive so many contributions which, to be honest, I did not expect at 9 o’clock on a Tuesday morning. I shall briefly turn to the various points raised, starting with those of the hon. Member for Oldham West and Royton.
The hon. Gentleman talked about the schedule of fees, which is £200 for smaller businesses and £500 for larger ones. That approach was taken in the first instance for reasons of simplicity. He will know that HMRC’s penalty system is relatively complicated and works on a sliding scale as a percentage of the potentially lost revenue. The decision in this instance was to start with a simple, fixed system. On the £500 maximum penalty, I appreciate his point about that perhaps not being a huge amount for a large company and the Government are committed to reviewing the limits over time. In the short term, as he rightly pointed out, the limits are fixed in primary legislation—in the Enterprise Act 2016.
His second point was about the VOA’s capacity. In the first instance, I believe it is right for any agencies of the state to ensure that they make the best use of their resources and organise themselves as efficiently as possible for the benefit of all our constituents who work hard to pay the taxes that fund them. That said, the hon. Gentleman is right that with the introduction of a new system the appropriate capacity must be there to deliver the smooth transition we would all like to see. Part of the reason for the reforms to the business rates system is to reduce the volume of speculative appeals. As I mentioned, 70% of appeals under the previous system were denied in the end, so we clearly had the balance wrong. The new system should reduce the amount of burden for things that are, frankly, a waste of time for the VOA and, in time, the benefits of that will come through. In the short term, I assure the hon. Gentleman and the Committee that I will hold the VOA to the strongest possible account for delivery against the targets and will shortly meet the agency’s director to discuss exactly that.
On his third point, NHS trusts are independent of my Department and of the Government in general, as he will be aware. That said, the scale of the challenge he talked about has reached my desk. I am monitoring it and am in discussions about it with the LGA. I think I agree with his broad point that if there are to be large transfers of financial resources between different parts of Government, it is appropriate that that is done through the Government and the normal matter of a spending review, with the priorities being worked out through Parliament rather than through ad hoc decisions of courts. We will keep the matter under review.
On the points raised by my right hon. Friends the Members for Meriden, for Rayleigh and Wickford and for Maldon, as I probably come from one of the most rural constituencies in the country—certainly among those in this room—I am personally aware of the issue with riding schools, spending, as I do, most of my Saturday mornings with my daughters at the Northallerton equestrian centre. I would be delighted to take up the issue directly with the VOA, to ensure that appropriate information flows properly between the various claimants and the VOA and to see whether there is a broader system issue that has not been picked up by the regulations.
Mr Francois
May I take this opportunity to congratulate the Minister on a very polished debut? I knew today was going to be an interesting day when I went down to the Tea Room and found it in darkness—clearly the victim of a Russian cyber-attack. I am grateful that he said he would look into that point with the VOA, but I would like to charge him to do slightly more. When he has done so, will he write to members of the Committee, including the Chair, who obviously has an interest, to let us know whether it is possible to make any progress?
Rishi Sunak
I would be delighted to write to you, Mr Rosindell, and to other members of the Committee on that point. Before I confirm that, however, in the short term, I urge hon. Members to ensure that riding stables in their constituencies appeal to their local authorities for discretionary relief, as I have encouraged my auction marts and riding stables to do. The Chancellor announced a £325 million fund to deal with cases that were not captured by the other reliefs put in place around the time of the revaluation.
Jim McMahon
On the unintended consequences of the revaluation, the Association of Convenience Stores has raised the matter of the introduction of cash machines in convenience stores. When high street banks close in a precinct, village or town centre, so there is no cash machine, and a convenience store steps up to provide one, the turnover of that cash machine goes towards its rateable value. Will the Government look at that as part of their review?
Rishi Sunak
I do not have the full details on that issue, but I would be happy to look into it. As the hon. Gentleman will know, the VOA makes decisions independently of Government, according to its guidelines, so it would be inappropriate for a Minister to interfere on an individual case. On his broader point, however, if the system is not picking something up properly, I would be happy to look at that.
My hon. Friend the Member for Amber Valley talked about the appeals process and how exactly it will work. In the old system, everything automatically turned into an appeal. In the new system, there will be two stages before an appeal—check and challenge—which anybody can avail themselves of. First, the appellant will ensure that the basic details of their business rates valuation are correct. Secondly, they will engage with the VOA to discuss that. Those two stages will hopefully mean that there is less reason to go to a formal appeal—although the appellant will still have the right to do that—which should reduce the incidence of spurious appeals.
I hope that I have covered all the points made by hon. Members and that I have assured the Committee that the Government are providing appropriate safeguards to ensure the fair operation of penalties, particularly through the right of appeal. It is clearly in everyone’s interest to ensure that the appeals system is underpinned by accurate information. I commend the regulations to the Committee.
Question put and agreed to.
Draft Non-Domestic Rating (Alteration of Lists and Appeals) (England)(Amendment) Regulations 2018
(6 years, 1 month ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
I beg to move,
That the Committee has considered the draft Non-Domestic Rating (Alteration of Lists and Appeals) (England) (Amendment) Regulations 2018.
It is a pleasure to serve under your chairmanship, Mr Rosindell, in my first Delegated Legislation Committee as a Minister. The draft regulations, which were laid before the House on 21 December, will give the Valuation Office Agency the power to impose a penalty on a person who provides false information knowingly, recklessly or carelessly in the business rates appeals process. They will set the level of such penalties for small and larger businesses and will make provision for ratepayers to appeal to the independent valuation tribunal if they disagree with the imposition of a penalty.
Introducing penalties for the provision of false information is an important part of the wider reforms to the system through which businesses may challenge, and appeal against, the valuation of their property. The Government introduced the majority of those reforms in April 2017; the enabling legislation for the draft regulations was approved by the House in the Enterprise Act 2016. As the Committee may be aware, prior to the changes introduced last year, we had a flawed and inefficient system that caused uncertainty both for businesses and for local government. Appeals were made almost as a matter of routine, whether or not there was a clear case that the valuation was wrong. Encouraged by a no win, no fee agent system, this resulted in large numbers of speculative appeals that were backed with little or no evidence. More than 1 million appeals were made against the 2010 ratings list, covering a huge proportion of the total number of properties liable for rates. A significant number were made with the spurious claim that the rateable value should be just £1, and although 1 million appeals have been made, as of December 2017, 72% had led to no change to the ratings list.
The volume of speculative appeals and the frequent lack of supporting evidence made it extremely difficult for the Valuation Office Agency and the valuation tribunal to prioritise appeals and focus on ratepayers with a valid case. The result was delays for ratepayers due a refund, and significant public resources wasted on dealing with speculative appeals. We are still dealing with the consequences: a large number of appeals to the 2010 list are still outstanding.
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, from April 2017, we introduced the check, challenge, appeal framework, which is being implemented by the Valuation Office Agency and the valuation tribunal for England. The reforms are designed to tackle some of the flaws of the previous framework and deliver a more efficient system that is grounded in early engagement and sharing of evidence. Under the new system, challenges to the list will—quite rightly—need to be backed by clear arguments and supporting evidence. This will support proper engagement with the Valuation Office Agency and, where possible, resolution of cases before they reach the tribunal. Restrictions have been placed on introducing evidence at the tribunal stage that could reasonably have been disclosed earlier to prevent ratepayers from withholding evidence and—as we saw under the old system—attempting last-minute negotiations on the steps of the tribunal. Quite rightly, those restrictions will be subject to a right for ratepayers to bring forward any genuinely new evidence that they could not previously have obtained.
Penalties for false information, which are the subject of the draft regulations, are a key part of our reforms. They will act as an important deterrent to providing false information and 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 both at the check stage, when underlying facts are confirmed, and throughout the challenge stage, when more detailed evidence may be exchanged. In common with in other parts of our tax system, penalties will be an important mechanism to support the submission of accurate information.
Specifically, the regulations will, if approved and made, give the VOA 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 £200 for small businesses and £500 for all others. The £500 maximum penalty was specified in the Enterprise Act 2016, which provides the enabling powers for penalties in the business rates appeals system.
A person may, of course, wish to challenge the imposition of a penalty. The regulations therefore also provide a right of appeal. Any person subject to a penalty may, within 28 days of receiving a penalty notice, appeal to the independent valuation tribunal for England. If the tribunal finds in favour of the appellant it will be able to order the valuation officer to refund the penalty. It is clearly 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 VOA by way of a penalty must be paid into the Government’s consolidated fund, which will ensure that the VOA does not benefit financially from the imposition of penalties.
As part of the wider consultation on the new appeals system, the Government sought views on the implementation of penalties. More than 280 submissions were received and the Government’s response was published in March 2017. As set out in that response, many stakeholders accepted the need for penalties but expressed concern that they could be imposed where ratepayers had made a genuine mistake. In light of that, the Government’s response confirmed that the VOA would provide clear guidance to support ratepayers in the provision of information and on the application of penalties. The agency has recently assured my Department that that guidance will be available before any penalties are applied. If a ratepayer feels that a penalty has been unfairly imposed, they will, as I have already outlined, have the right of appeal to the independent valuation tribunal. Although it is important that guidance is available and that ratepayers have a right of appeal, 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.
The Committee will be aware that the wider reforms to the appeals system are not without their critics. In particular, there have been issues with the introduction of the VOA’s new online system and concerns that it is not working effectively or is lacking some key functionality that stakeholders want. On the stability of the current IT system, my understanding is that the portal is fully functional and my Department is not aware of any recent major system issues. On the wider functionality, ensuring that the new system works for ratepayers is critical and, as a Department, we have been extremely clear to the VOA that we expect it to work closely with stakeholders to achieve exactly that. Given this debate’s focus on penalties, I do not propose to go into more detail on those issues. Suffice it to say that the Government remain of the view that the reforms were an important and necessary step towards fixing what was clearly a flawed and inefficient system for all involved.
I hope that the Committee will agree that it is entirely right that the system is supported by appropriate powers to penalise the provision of false information and that such powers are accompanied by appropriate safeguards, such as the right of appeal, to ensure that the system operates fairly and effectively. On that basis, I commend the regulations to the Committee.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Rosindell. I congratulate the Minister on his 10-minute speech on what is, essentially, narrow legislation. Nevertheless, it is important that we make progress and resolve the business rates issue.
Rather than give a set speech, I want to try to probe some areas where the Government have not been clear about what capacity and resources have been provided to make sure that the appeal system can work effectively.
We know that the statutory instrument is about the financial penalty and that it is a split payment of £200 or £500 depending on the size of the applicant. First, what consideration was given to a different schedule for levying penalty fees? For instance, a large business rate occupier such as a big supermarket, whose rating could be £1 million a year, will probably be paying £500 a day for their consultant to lodge the application. If that consultant is giving false or misleading information on their behalf, it seems slightly out of kilter for the penalty to be what is effectively their day rate. Compare that to a small business, which would pay the £200 penalty, and is trying to navigate the system alone. It could make a very genuine mistake but be found by the office to be perhaps misleading, and that would be a significant and disproportionate penalty.
The question is less about the principle of bringing in penalties, which is now very commonplace across Departments. However, an explanation of the rationale behind the split payment would be welcome. By that, I mean that we should move beyond referring back to the Enterprise Act 2016 as a reference point and make the case for why £500 is appropriate.
The second point refers to capacity in the valuation office. We know that there have been IT problems and gremlins in the system, but we cannot get away from the fact that the office has had significant staffing reduction since 2010. In terms of head count, the number of people working for the valuation office now is 546 lower than in 2010, when they are expected to implement a brand new system. We all know that the introduction of a new system requires a double run—existing creaky old systems need to be run, and the capacity is also needed to bring in a new system and implement it. I am not sure that the Government have provided the adequate resource to do that when 500 fewer people are working for the valuation office today than in 2010.
I also wonder whether the Government have reflected on other Departments making appeals against their rating valuation. For instance, up to 100 NHS hospital trusts are appealing their ratings liability to their local authorities. At the moment, they are being supported by a company called Bilfinger GVA, which is being paid a percentage fee of whatever is saved in that potential successful appeal. Councils have had to put £1.6 billion to one side in the likelihood that those appeals are successful, and face an ongoing pressure of £250 million a year. So, £1.6 billion a year is potentially needed for back-dated payments over six years and £250 million every year going forward if they are successful. On the back of that, a company will be taking a percentage fee from the potential saving.
We know that Government money is Government money. Wherever it is placed within different Departments, it is still public money that will be used for public good. When the Treasury gives the NHS money to pay its business rate bills and it is transferred to the local authority, that is still Treasury money that is being funnelled through to fund public services at a local level. If a private company is taking a percentage fee of 5%, 10% or even 20%, that is a net reduction in the money that is available to fund public services in an area, whether it is at local government level or within the NHS.
Have the Government given any thought to having a different approach for Departments that make ratings appeals to the valuations office? How can it be right that we are having a net reduction in the money that will be available for public services because money is going out to consultants? Surely a better way of doing that would be either to have a restriction on the ability to use external consultants charging a percentage fee on any potential savings, or to have some kind of mediation service within Government to resolve these issues between different Departments. That would, for me, feel like a potential way forward.
Have the Government considered that? When I first raised the question in November 2016, although I had a holding reply quite soon after that, it took six months for the Government to come back with their substantive reply, which said only that they were looking into it. I am still no clearer about what action they are taking, and whether they consider this to be a significant issue, both in terms of the principle behind it and the particular issue of NHS trusts making appeals. If the Government believe that it is an issue, will they support the Local Government Association campaign to make sure that the issue is addressed? I should declare an interest as vice-president of the LGA.
Finally, we know that the gremlins in the system are still there. I respect the Minister for acknowledging some of the technical issues that have occurred, but I come back to the capacity issue. If the Government really want this to work, they need to present an invest-to-save model. If they are going to put a new system in place, which they believe will be fundamentally more efficient and deliver a better service, they ought to be able to provide the up-front capacity to deliver that on the ground, and ensure that it comes in in a smooth and managed way. At the moment, the evidence does not support that.
Dame Caroline Spelman (Meriden) (Con)
The rating revaluation has thrown up a number of anomalies. As chair of the all-party parliamentary group for the horse, I draw the Minister’s attention to the anomaly that riding schools are facing up to a 356% increase in their business rates. There is now hard evidence from the British Horse Society that riding schools are closing as a consequence. The Treasury is aware of that anomaly, and at a meeting with the Chancellor he indicated that the problem may be that the Valuation Office Agency lumps private livery yards with property together with little riding schools. As property has gone up in price, that has apparently driven up the value.
I wonder whether the Minister will comment on the fact that the Valuation Office Agency refuses to share the evidence base for such an increase with stakeholders such as the British Horse Society. Does he agree that it is unfair to penalise people for the evidence that they bring to support their claim if, in return, the Valuation Office Agency will not explain to the ratepayers what the evidence base is for the calculation of their rates?
Nigel Mills (Amber Valley) (Con)
I have a couple of questions about the regulations, which I broadly welcome. I think we have all seen constituency cases where businesses have an assessment for business rates that are far higher than they can afford, and seem to be based on historical, inaccurate levels of turnover or profitability. We would all like those businesses to be able to appeal and reach a more sensible rating valuation as quickly and reasonably as possible.
I happily welcome all measures to take away frivolous appeals, but will the Minister confirm that there will be no penalty for making a frivolous business rate appeal and then not providing any supporting information? He used the example of making an appeal and saying that the right value should be £1. In the legislation, I can see penalties only for incorrect information, not for frivolous appeals. We probably have to strike a balance between not taking away someone’s right to appeal, or scaring them out of making the appeal in the first place, and asking the office to decide whether the appeal is really worth having. That puts the office in the rather strange position of having to assess every appeal to see whether it is reasonable. I suppose the real question is how we can discourage pointless appeals if there is no sanction for making one.
Secondly, the Minister will perhaps realise, if he is in his role for a while, that I like to ask drafting questions about such measures. I am intrigued by the fact that someone can get a penalty for providing false information “knowingly” recklessly or carelessly. I understand that “knowingly” means deliberately providing incorrect financial information, for example, and that “carelessly” means not checking, or providing information that is out of date or inaccurate, but what does “reckless” mean in this situation? The normal dictionary definition of “reckless” is not caring about danger. I cannot quite see what the danger is of providing false information to a business rates appeal. Perhaps he will give us an example of how behaviour could be reckless but not knowing or careless in this situation. I assume that it is a phrase that we always use in this kind of thing, but I cannot work out what it means in this instance.
Mr Mark Francois (Rayleigh and Wickford) (Con)
Mine is a very brief contribution. May I lend weight to the very good point made by my right hon. Friend the Member for Meriden? I, too, have some equestrian centres in my constituency, and I have received representations from them on exactly the same point. The Minister will know that the British Horse Society is quite exercised about this matter. I do not know how much he can say about that today, but will he undertake to take the point away and enter into discussions with the Valuation Office Agency to see whether something can be done to unpick that rather difficult and, I think, unintended consequence of the Government’s action?
Mr John Whittingdale (Maldon) (Con)
I had not intended to speak, but I am spurred to do so by my right hon. Friends the Members for Meriden and for Rayleigh and Wickford. I represent the Chelmsford equestrian centre, which has been to see me about this very point. The fact that three members of a fairly small Committee have raised this issue indicates that there is a serious problem. I am sure that the Minister did not come here fully briefed to talk about equestrian centres, but we would appreciate it if he looked into the issue and let us know about it in due course.
Rishi Sunak
From my perspective, this has been a good and helpful debate. I was grateful to receive so many contributions, which, to be honest, I did not expect at 9 o’clock on a Tuesday morning. I shall briefly turn to the various points raised, starting with those of the hon. Member for Oldham West and Royton.
The hon. Gentleman talked about the schedule of fees, which is £200 for smaller businesses and £500 for larger ones. That approach was taken in the first instance for reasons of simplicity. He will know that Her Majesty’s Revenue and Customs’s penalty system is relatively complicated and works on a sliding scale as a percentage of the potentially lost revenue. The decision in this instance was to start with a simple, fixed system. On the £500 maximum penalty, I appreciate his point about that perhaps not being a huge amount for a large company and the Government are committed to reviewing the limits over time. In the short term, as he rightly pointed out, the limits are fixed in primary legislation—in the Enterprise Act 2016.
The hon. Gentleman’s second point was about the VOA’s capacity. In the first instance, I believe it is right for any agencies of the state to ensure that they make the best use of their resources and organise themselves as efficiently as possible for the benefit of all our constituents who work hard to pay the taxes that fund them. That said, the hon. Gentleman is right that with the introduction of a new system the appropriate capacity must be there to deliver the smooth transition we would all like to see. Part of the reason for the reforms to the business rates system is to reduce the volume of speculative appeals. As I mentioned, 70% of appeals under the previous system were denied in the end, so we clearly had the balance wrong. The new system should reduce the burden for things that are, frankly, a waste of time for the VOA and, in time, the benefits of that will come through. In the short term, I assure the hon. Gentleman and the Committee that I will hold the VOA to the strongest possible account for delivery against the targets and will shortly meet the agency’s director to discuss exactly that.
On the hon. Gentlemans third point, NHS trusts are independent of my Department and of the Government in general, as he will be aware. That said, the scale of the challenge he talked about has reached my desk. I am monitoring it and am in discussions about it with the LGA. I think I agree with his broad point that if there are to be large transfers of financial resources between different parts of Government, it is appropriate that that is done through the Government and the normal matter of a spending review, with the priorities being worked out through Parliament rather than through ad hoc decisions of courts. We will keep the matter under review.
On the points raised by my right hon. Friends the Members for Meriden, for Rayleigh and Wickford and for Maldon, as I probably come from one of the most rural constituencies in the country—certainly among those in this room—I am personally aware of the issue with riding schools, spending, as I do, most of my Saturday mornings with my daughters at the Northallerton equestrian centre. I would be delighted to take up the issue directly with the VOA, to ensure that appropriate information flows properly between the various claimants and the VOA and to see whether there is a broader system issue that has not been picked up by the regulations.
Mr Francois
May I take this opportunity to congratulate the Minister on a very polished debut? I knew today was going to be an interesting day when I went down to the Tea Room and found it in darkness—clearly the victim of a Russian cyber-attack. I am grateful that he said he would look into that point with the VOA, but I would like to charge him to do slightly more. When he has done so, will he write to members of the Committee, including the Chair, who obviously has an interest, to let us know whether it is possible to make any progress?
Rishi Sunak
I would be delighted to write to you, Mr Rosindell, and to other members of the Committee on that point. Before I confirm that, however, in the short term, I urge hon. Members to ensure that riding stables in their constituencies appeal to their local authorities for discretionary relief, as I have encouraged my auction marts and riding stables to do. The Chancellor announced a £325 million fund to deal with cases that were not captured by the other reliefs put in place around the time of the revaluation.
Jim McMahon
On the unintended consequences of the revaluation, the Association of Convenience Stores has raised the matter of the introduction of cash machines in convenience stores. When high street banks close in a precinct, village or town centre, so there is no cash machine, and a convenience store steps up to provide one, the turnover of that cash machine goes towards its rateable value. Will the Government look at that as part of their review?
Rishi Sunak
I do not have the full details on that issue, but I would be happy to look into it. As the hon. Gentleman will know, the VOA makes decisions independently of Government, according to its guidelines, so it would be inappropriate for a Minister to interfere on an individual case. On his broader point, however, if the system is not picking something up properly, I would be happy to look at that.
My hon. Friend the Member for Amber Valley talked about the appeals process and how exactly it will work. In the old system, everything automatically turned into an appeal. In the new system, there will be two stages before an appeal—check and challenge—which anybody can avail themselves of. First, the appellant will ensure that the basic details of their business rates valuation are correct. Secondly, they will engage with the VOA to discuss that. Those two stages will hopefully mean that there is less reason to go to a formal appeal—although the appellant will still have the right to do that—which should reduce the incidence of spurious appeals.
I hope that I have covered all the points made by hon. Members and that I have assured the Committee that the Government are providing appropriate safeguards to ensure the fair operation of penalties, particularly through the right of appeal. It is clearly in everyone’s interest to ensure that the appeals system is underpinned by accurate information. I commend the regulations to the Committee.
Question put and agreed to.
Petition
East End Jobcentre Closures
Domestic Gas and Electricity (Tariff Cap) Bill (First sitting)
Tuesday 13th March 2018
(6 years, 1 month ago)
Public Bill CommitteesRead Full debate Domestic Gas and Electricity (Tariff Cap) Act 2018 View all Domestic Gas and Electricity (Tariff Cap) Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 13 March 2018 - (13 Mar 2018)
The Chair
Before we begin, I am afraid I have a list of dos and don’ts; I hope that we are not going to continue in this vein. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings. Today we will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication, and then a motion to allow us to deliberate in private about our questions before the oral evidence sessions. In view of the limited time available, I hope we can take these matters without too much debate. Date Time Witness Tuesday 13 March Until no later than 10.15 am Octopus Energy Bulb Energy Good Energy Tuesday 13 March Until no later than 10.45 am Ofgem Tuesday 13 March Until no later than 11.25 am Citizens Advice Bureau Which? National Energy Action
I call the Minister to move the programme motion, which was agreed by the Programming Sub-Committee yesterday.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 13 March) meet—
(a) at 2.00 pm on Tuesday 13 March;
(b) at 11.30 am and 2.00 pm on Thursday 15 March;
(2) the Committee shall hear oral evidence in accordance with the following Table:
TABLE
(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 15 March. —(Claire Perry.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Claire Perry.)
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Claire Perry.)
The Chair
Good morning. We will now hear evidence from Greg Jackson, CEO of Octopus Energy; Hayden Wood, co-founder of Bulb energy; and Juliet Davenport, the CEO of Good Energy. Thank you all for being here this morning. Members of the Committee will now ask a series of questions. Unfortunately, this session has to finish by 10.15, so brief questions and brief answers will be gratefully heard.
Vicky Ford (Chelmsford) (Con)
Q
Octopus, do you think there is a risk that once the cap comes in, prices will all bunch around that cap level? Some people have said that switching activity might then reduce. Do you think that is a risk? Bulb, do you think that the cap will disincentivise investment in infrastructure at this stage, or do you think we can manage the infrastructure need separately?
Greg Jackson: To answer those three questions, on the bunching question we do not agree. There are 70-odd energy suppliers in the retail market currently. The majority of them price below any realistic level at which an absolute cap would be introduced. If there is any bunching, it will be the welcome bunching of the suppliers that currently charge their loyal customers more than an absolute cap by bringing their prices down to that level. Underneath any realistic cap, there is still plenty of room for competition, and competition among the challengers that have to fight for and win every single customer from scratch will be unabated.
In terms of switching rates, the first thing is that the idea that very high levels of switching is a good thing is outdated. For 20 years, consumers have been told that they have to switch; in any given year, no more than 15% to 20% will do so. All the rest are getting ripped off. What we need is a market in which you get good value without switching, and an absolute cap is a step in the right direction. It is an excellent measure that will help reduce the rip-off for those who switch and those who do not.
Finally, in terms of investment in infrastructure, Octopus Energy is backed by the Octopus Group, which is one of the largest investors in renewable generation in the UK. Frankly, something that makes the retail market behave more like a proper market—one in which consumers get good value by staying loyal to good suppliers—will generate more investment in the sector, rather than the current strangulation that occurs because of things such as predatory pricing, whereby back-book customers of large companies cross-subsidise loss-making deals.
Vicky Ford
Q
Juliet Davenport: It is going to be interesting—that is the answer. If you look at the current data in the marketplace, with no intervention whatever four out of the big six have a 25% gap between their most expensive tariff and their cheapest tariff. There are two that do not—two have closer to a 6% to 8% differential between the two. Interestingly, the one with the smallest differential also has the lowest standard variable tariff.
If you have an absolute price cap, you will obviously see that the affordability of the lower tariffs for the big six will be less: you will see some shrinkage between the highest price and the lowest price. That is what we are trying to do—to get rid of cross-subsidisation between the most expensive and the cheapest.
Will we see some bunching? We will see a narrowing of that. The question is: how do you want to achieve that? I am assuming that is what you are trying to achieve: the stopping of cross-subsidisation, keeping those people who are very faithful to their suppliers and making the suppliers pay for the discounts that they are using to get other people. I think there will be some slendering through that and the data is kind of showing that already, if you look at it.
Hayden Wood: I would say two things. The first, on the bunching question, is that a price cap would have absolutely no effect on how Bulb sets its prices. We have one tariff, so whether the cap is there or not we would continue to charge the rates that we charge now, and they are among the cheapest rates in the market. There will probably be some bunching, but it is going to occur because suppliers currently adopting these “tease and squeeze” tactics, where they have a great rate in the first year and then they charge more in later years, will be less able to do that: they will not be able to subsidise those teaser rates with expensive rates later. However, we do not expect the long-term cost of energy to change.
On your question about whether this will disincentivise investment in infrastructure, there are two parts of infrastructure that spring to mind: the first is network infrastructure and the second is generation infrastructure. On the network infrastructure question, those investment decisions are made by the regional power networks. Those are regulated local monopolies. They make a metronomic profit margin of between 7% and 9%. The price cap should not affect the profit margin that they will make here, so I do not see any reason why they should be disincentivised from investing.
On the question of generation, from where I am sitting the introduction of a price cap would be a big stimulus to investment in renewable generation, because it would mean that more and more homes could choose to buy their energy from a low-cost, efficient renewable supplier. We see no reason why renewable suppliers should be exempt from this cap, because my view is that Bulb can provide 100% renewable electricity, at a rate that is at least £200 lower than the cap.
Bim Afolami (Hitchin and Harpenden) (Con)
Q
Hayden Wood: I struggle to explain it. We do not understand why two people in the same street using the same amount of energy from the same supplier should pay different rates. That just does not seem fair to us. There are some suppliers who will provide a fixed tariff and then they claim that there are substantial costs to providing that fixed tariff, and that those costs then need to be reflected in a—
Bim Afolami
Q
Hayden Wood: Like a hedging cost—exactly. But the irony with the cost of hedging, which you need to put on to a fixed tariff, is that very often those fixed tariffs are cheaper than the variable tariffs. That does not make any sense to us, which is why we have chosen to have a simple offer that consumers can understand, and we think that if you provide something that consumers understand, they are more likely to engage with it.
Juliet Davenport: Most fixed-price tariffs are slightly cheaper because it is cheaper to do that. If you minimise your risk, you can guarantee that that customer will be there, and you can buy forward. If you do not know whether that customer will be there, you have a bigger risk, because you might buy the power and then they do not turn up. That is why, when you buy forward on fixed-rate tariffs, you tend to get those.
I do not agree with the myriad. There are too many tariffs—agreed—but there are some differentials. People want choice, and we must not forget what customers want. Some customers want to fix their tariffs for the next two years. Some customers—they are fairly rare—want to have a daily price, maybe even a half-hourly price, where they can see what is going on and change their behaviours as things go on. Whatever we do, we must make sure that we take into account a wide range of customers in this marketplace and actually deal with their needs.
From talking to our customers we know that there are different needs. Some want smart meters. Some love the idea of smart meters, and some hate the idea, so we have to work our way through that one. Some love the idea of fixing their power for the next five years, because then they do not need to think about it and can get on with the rest of their life, but some want to be much more active. For me the key thing is to look after the people who cannot make those decisions—who do not necessarily have the time, the capability or the access to go and find tariffs that are good for them.
Bambos Charalambous (Enfield, Southgate) (Lab)
Q
Juliet Davenport: In our view, green gas is an area that is developing in the UK. At the moment, we have a limited amount of green gas. I think the heat targets under the Climate Change Act 2008 are quite significant, and we as a country are behind those targets. We are doing relatively well on electricity, but not so well on gas. My personal view is that we need to try to seed that market. People want to choose.
It reminds me of the early stages of the mobile phone market. If we had said that everybody had to have access to mobile phones right at the beginning, we would not have ended up with a product that was cheap enough. So if you think about technological innovation, that is the way we should go. I think it is the same in this area. We should allow the early adopters to come into this marketplace, which is why there is the idea of giving an exemption on that. We should allow the infrastructure investment.
I am afraid I disagree with Bulb. A lot of work goes into making sure that there are contracts in place to allow for infrastructure investment. We are currently running a pilot with the Eden Project in Cornwall to look at how to buy storage in this marketplace. Our customers back that—they love that—but we would not be able to do that unless we had a whole team managing it and looking at that. It is the same with green gas. You can go and buy certificates, which is really easy. You can buy them on the wholesale market. But if you want to provide investable contracts that allow people to put money behind the projects, then that looks very different.
Hayden Wood: To add to that, today Bulb supplies green gas to more homes in the UK than any other energy supplier. We are growing so quickly that there are new green gas plants being built at pace in order to meet the demand from our future customers. We see absolutely no reason why a green gas tariff should be exempt from the Bill. The cost of providing green gas to homes is between £25 to £50, which is much smaller than the £200 gap between the best tariffs in the market and the most expensive tariffs under a capped regime.
Greg Jackson: In our view, what we cannot allow is a loophole that allows exploitative suppliers to create fake green products in order to evade the cap. It needs to be formulated in such a way that, for example, a company like Good Energy, which has highly informed customers that have chosen to be with an innovative supplier and chosen the price they are on, can carry on doing the good work that it does. But at the same time it should not allow what we are seeing already, which is two of the big six launching green products since the Bill has been under discussion. I do not want to sound cynical, but I cannot help feeling there is a connection.
Bambos Charalambous
Q
Greg Jackson: That is exactly right. For example, if you are going to have an exemption, maybe a company would have to do 100% green products for all of its customers on all of its products. Something simple like that means you cannot get away with greenwashing a company that is really a cap evader.
Vicky Ford
Q
Juliet Davenport: What is the alternative? Is there an alternative? To make a definition in the Bill?
Vicky Ford
Q
Juliet Davenport: I would agree on that.
Hayden Wood: This Committee has an opportunity to help 12 million homes that are currently languishing on standard variable tariffs and massively overpaying for their energy, and help them to reduce their bills. If we allow a loophole such as this into the legislation—let us say that it is Ofgem’s responsibility to manage that loophole and to keep it closed—we open it up to being manipulated or lobbied on or people working around it. We saw how the retail market review regulation years ago led to some unintended consequences in how the energy market is structured, and we now suffer from this “tease and squeeze” problem, which others on the panel have described. We would propose completely removing clause 3(2) of the Bill to eliminate any issues with unscrupulous suppliers introducing non-green tariffs and removing the effect of the cap.
James Heappey (Wells) (Con)
Q
Hayden Wood: I completely agree with that. It perpetuates the myth.
Juliet Davenport: My view is that you can have cheap greenwash tariffs alongside genuine innovative tariffs and you can have a differentiation. You have to focus on the big six and make sure that there are not any loopholes, but most of these companies have had people come to them as a choice. What is great about this market is that we do have choice. We have the cheap greens, and we also have the more innovative products such as us. Why would you close that down? You can see that we have been leading this market and making changes in it. We support about 140,000 homes who generate power in their own house. Those are the kind of innovations that we want to continue to do. To be honest, if you price-cap us, we are going to have no investment left for that kind of innovation.
I completely agree that we should have a differentiation and we should have products that are cheaper green. I met one of Bulb’s customers at the rugby the other day who was very enthusiastic. She was so excited by the fact that she is going on a green journey. I think that is brilliant, and that is what we should embrace in this. We should not try to close it down to be one thing or another. We should allow innovation within the marketplace.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Q
Greg Jackson: That is the most important issue to address during these conversations. An absolute cap, as per the Bill, will provide a decency level beyond which no default customer will be charged. That is a good thing. However, at the moment, a loyal customer of, for example, one of the big six is paying £250 a year more than the price that the same company advertises openly to new customers. When I say “openly”, of course, you still have to type in 25 sets of details to see that price, because energy is too complicated. Under an absolute cap, we think that might fall to £200. It is still not going to create an effective market in energy, where competition thrives, if we do not do something about those tremendous differentials. That loyalty penalty is by far the biggest barrier to true competition in the energy industry, so we would propose that, with the protection of an absolute cap, it is the perfect time to bring in a simple limit on the difference between the cheapest and most expensive tariff offered by a supplier, to prevent it hoodwinking its customers into overpaying for loyalty.
The only reasons given during the Select Committee hearings not to have a relative cap were a concern that large suppliers—existing former nationalised suppliers—would raise their prices to fit a relative cap. The absolute cap prevents that being a concern. Bringing in the absolute cap provides the perfect opportunity to generate real competition underneath it by a simple limit on the loyalty penalty. If you do that, I think we will find a price war among energy companies, equivalent to that in supermarkets, where everybody sees the same price. In supermarkets, you do not need to switch, because the threat of some people switching forces supermarkets to bring prices down for everybody. That will be the effect of a relative cap underneath an absolute cap. It is one line of additional rule in the statement of a price cap that would enable this. I think that what you would find, when you take away the absolute cap, which is defined to be a temporary measure, is that you would have a truly competitive market in energy for consumers.
It is worth noting that we are all challenger brands. We have to fight for every single customer from scratch. Eleven challenger brands favoured a price cap, and split roughly equally between absolute and relative, with a lot favouring the combination. We are one of those companies, and that is because we know that will generate the most competitive market for the benefit of consumers.
Juliet Davenport: This is not a position, so much as I just want to add in the risks that we need to be aware of with the absolute price cap, just to see whether there is anything else we can think about in terms of softening those risks.
One risk with an absolute price cap that I am concerned about is that Ofgem will be setting the prices. There is no downside to Ofgem with getting that wrong; if Ofgem sets that price incorrectly—I know you are seeing Dermot after this, so you can ask him the question—what are the sanctions against Ofgem for getting that price wrong?
And it is really difficult to set prices at the moment. I could ask my colleagues about the unidentified gas charges that we have just seen go from 0.6% to 2% of gas bills. This is a post-charge that we were not aware was coming. We knew there was some discussion of it, but it has been charged in arrears. How does Ofgem factor some of those things into its price? Does it put a risk in the price? That would be one question.
The other question is, because we set the price cap at a particular time of year, we will get everybody forward-contracting with their hedging position at the same time of year. The concern I have is that we might see some distortion within the wholesale market. Can we keep an eye on the wholesale market? I do not know whether that means that we have to ensure that there are extra powers to ensure that the wholesale market does not try to spike at exactly the time that everybody will be forward buying their power.
Those are the two risks that I am concerned about with the absolute cap. That is not to argue against it, but those risks are there and they need addressing whether in the Bill or in guidance from Ofgem.
Alan Brown
Q
Hayden Wood: We think that the top priority is the absolute cap. As I have mentioned before, there is a risk that homes will not get relief from the cap if that is not in. The idea of a relative cap underneath the absolute cap sounds fine to us, too. I think more price competition in the energy market is a great thing.
The third point I would mention on these extraordinary powers that Ofgem would have under this new set-up to set prices is that those powers need to come with more transparency. The formula and methodology for calculating what the absolute cap would be should be published so that there are no surprises for suppliers and we can plan. We also think there should be more transparency around the contributions that Ofgem receives from suppliers and the meetings that they hold with them, in order to ensure that there is more transparency.
Dr Alan Whitehead (Southampton, Test) (Lab)
Q
Greg Jackson: You are quite right that the phrase “relative price cap” is not necessarily the most helpful name. It is a simple restriction—a simple limit—on the difference between the highest and lowest price from a single supplier. There is no reason at all why that would not operate underneath an absolute cap. In fact, there is no reason at all why it would not be defined at the same time as the pricing rules of an absolute cap.
If we did that, it would simultaneously attack the loyalty penalty, which is one of the biggest topics currently being looked at in pricing in consumer markets where you pay by direct debit. The real issue is that in consumer markets where you pay by direct debit—running an account—you do not know what you are being charged. If you do not know what you are being charged, companies essentially can have these enormous false differentials, and the opportunity, alongside this absolute cap, to bring the differential down is sitting there today. That would turbocharge competition because it would mean that, if a company wants to win new customers, it would have to bring prices down for its existing ones. But not only that: if it wanted to hang on to its existing customers, it would have to bring prices down.
We saw that British Gas provided a useful case study during the period when they were having to sit in front of Select Committees. They reduced their differential to basically zero for that period, and they lost 823,000 accounts in four months, I think, leading to a 12.5% drop in share price and a 20-year share price low. That demonstrates that companies that try not to offer good value in a world of a relative price cap will lose customers, market share and share price.
Therefore, we think that bringing that alongside the absolute cap, sitting underneath it, is the best way to use the force of competition to drive prices down for everyone. When you remove the protection of the absolute price cap, you will actually have a competitive market.
The Chair
I want to bring in Stephen Kerr here. I should say that we have only another seven minutes.
Stephen Kerr (Stirling) (Con)
Q
Greg Jackson: Appeal rights—for example, Competition and Markets Authority appeal rights—would probably mean that every time the cap is being reviewed every six months or quarter, it gets tied up in process. It means it never actually happens. Of course, that is what the big six want.
Hayden Wood: I completely agree. If consumers are going to benefit from this, we want them in by the next winter, and also Ofgem needs to be able to set the price, and not have to go through a long appeals process because, as Juliet said, things move in the energy market, so it needs to be nimble—
Stephen Kerr
Q
Juliet Davenport: The only thing I would comment on is this. In a business you have got a first line, a second line and a third line of defence. Normally, Ofgem would be your second line of defence. The issue you have got is that you are blurring their rules: they are acting as first line and second line. That is where the appeal is a concern because they are setting the prices, and then they have got to judge themselves, almost, on setting the prices.
Stephen Kerr
Q
Juliet Davenport: I wonder whether you have to look at the role within this: how you get that to be independent rule setting—whether it almost has to sit aside from Ofgem so that Ofgem can oversee it. If you put it within the regulator, I agree it is going to get—
Stephen Kerr
Q
Juliet Davenport: They will have to consult but, even so, I think you can see this being contested time after time. On the prepayment meter cap that has gone in so far, our calculation is that it has been incorrectly calculated probably about twice already. The question is that, if that then goes across 11 million customers, what is going to happen at that point, when it really starts to hit people’s balance sheets?
Stephen Kerr
Q
Juliet Davenport: It is not.
Stephen Kerr
It is not?
Juliet Davenport: It is not transparent till afterwards. You are immediately in breach if you do not comply. There is a process where you cannot actually challenge it.
Stephen Kerr
Neither of you had any concerns relating to that. You agreed with the Select Committee.
Hayden Wood: I would say that this goes back to the transparency point that I made earlier. I have an issue with a non-transparent process where the methodology, formula, and data input into that process are not published. That is an issue. I do not have information on the appeal issue.
Greg Jackson: The idea that you end up going to appeal in order to get the right to over-charge customers is going to be pretty grotesque. The reality is that they may try to do that, and you have to stop them. We have to prevent it becoming tied up in process. The prices are all still grotesquely high, whether they are set at £1,050, £1,075 or £1,030.
Bill Grant (Ayr, Carrick and Cumnock) (Con)
Q
Greg Jackson: I think smart meters make this all the more important right now. If we do not clean up the energy market before we end up with everybody having a different price every half hour, it is going to be a wild west. We have the opportunity to clean up pricing now, and that is why it is particularly important that we deal with this topic of the difference between the highest and lowest tariffs. If it is hard for someone to know where they stand at the moment, then it will be even harder for them to know where they stand in the world of rampant time-of-use tariffs. Let us tidy up pricing now, and then smart meters really can be a path to success.
Hayden Wood: To add to that, we find the conflation of the price cap and the smart metering quite troubling. We do not see a relation between them. A person’s understanding of how much energy they use does not influence how often they might go into the market and look at price comparison sites and understand how much they are paying versus other suppliers. We are also not aware of any evidence suggesting that installing a smart meter would offset the £100 a year that a consumer would save under this price cap. The Government’s own data would suggest that the installation of a smart meter saves the consumer only £11 a year on their energy bill. They are actually separate things.
Juliet Davenport: My personal view is that they do come together when we get proper smart meters: SMETS2 in as opposed to SMETS1. The SMETS2 meters are going to make a significant difference to switchability. At the moment, if you take on a SMETS1 and you are not SMETS1-qualified you cannot switch them to smart metering. You would have a proper smart process in terms of switching. We are going to see some disruption in the market there with accessibility of data and third parties providing information in the house that can switch you instantly to another supplier if you are over-paying. That is the intelligence we are going to see with an increased amount of data. I am quite excited about smart meters and what they can do. They will facilitate households in saving much more than at the moment because we are going to see the smart house plug into that.
Bill Grant
I welcome the embracing of the new technology and I know it is not perfect right now. You seem rather negative, Hayden.
Hayden Wood: On smart meters? Oh no, we are extremely positive about smart meters, but not—
Bill Grant
Thank you, we will leave it at that. It was my misinterpretation.
James Heappey
Q
Greg Jackson: You now have a market of 70-odd companies, mainly vying it out in a 20% churning area. If we get this right, you will be able to let loose the competitive efforts of companies like ours and 68 or however many others to bring prices down for everyone. Getting it right involves the decency cap or the absolute cap and finding a way to tidy up the entirely unjustifiable hundreds of pounds of difference between the cheapest and most expensive tariffs from each supplier. At that point you can let loose our competitive efforts to bring prices down for everyone.
The Chair
Order. I am ever so sorry about what I am about to do, but I am required to do it. I am afraid that has brought us to the end of the allocated time to ask questions. I thank all the witnesses. It has been a very good session. Thank you very much. I now call the next panel.
Examination of Witnesses
Dermot Nolan and Rob Salter-Church gave evidence.
The Chair
We will now hear from Dermot Nolan, chief executive of Ofgem, and Rob Salter-Church, acting senior partner for consumers and competition at Ofgem. For this session, we have until 10.45 am. Will the witnesses please introduce themselves, although I may have already done that?
Dermot Nolan: Thank you, Chair. I am Dermot Nolan, the CEO of Ofgem.
Rob Salter-Church: I am Rob Salter-Church, the interim senior partner for consumers and competition at Ofgem.
Bim Afolami
Q
Dermot Nolan: We have already commenced the process in the sense that last Thursday, after Second Reading, we put out an open letter specifying our processes over the next few months. Yesterday we released one of a series of discussion papers that looks at certain elements of the cap and how it might work. We will do that over the next month or so. We will gather information, consult as widely as possible and issue a more formal consultation while the Bill is still passing through Parliament. That will try to tie together the various proposals that we will put in place and look at a potential framework for the cap. After Royal Assent we will issue a statutory consultation, which we are required to do, so we can put the cap in place as quickly as possible.
Bim Afolami
Q
Dermot Nolan: It certainly informs us, as indeed do the designs of price caps around the world. We have caps in place for pre-payment meters and particular tranches of vulnerable consumers, and they will inform us. Given the statutory duties as we interpret them, though, we will I think have to design the cap ourselves while being informed about others. One point about the Northern Ireland cap is that it was designed specifically for one firm, for the previously dominant firm, so it may not be exactly wise to take it off the shelf for the cap in GB.
Bim Afolami
Q
Dermot Nolan: I am confident. I am confident that it is a difficult task. There are statutory objectives, and we have to be mindful of them all. It will require a lot of analysis, which we are already commencing on, a lot of evidence and, ultimately, a degree of regulatory judgment to get it right, but I am confident that we can do it. It is an absolute priority for the organisation, and for my board and me.
Bim Afolami
Q
Dermot Nolan: Yes, I certainly would have. I will be responsible if I do not get it right, so I would have communicated that.
Vicky Ford
Q
Dermot Nolan: We will consult as openly as possible. We will issue consultation documents, because that is the nature of what we are required to do, but we will also hold workshops which are open to all and we will try to get views from every possible supplier. Not only that, however—I want to be very clear on this—we will want views from stakeholders far beyond suppliers. I think your next session is consumer groups, and we will try to consult as extensively as possible with them. In fact, being blunt, we are both required to and want to listen to as many as we can hear over the next few months, to inform any decision.
Regarding next winter, as you say, it was cold recently, but I have said before and I repeat again very clearly here that we will have the cap in within five months of Royal Assent. We will have it in place and affecting consumers by that point.
Vicky Ford
Q
Dermot Nolan: Yes, it would be on our website and we would make a specific—[Interruption.] Sorry, Chair.
The Chair
No, no, I am sorry. I am just keen to get as many people in as possible. Alan Whitehead.
Dr Whitehead
Q
Dermot Nolan: I might ask Rob to answer that, but I may come back at the end.
Rob Salter-Church: That five-month period will start with us issuing a statutory consultation, which will run for eight weeks, or two months. That is something that we are required to do by law as part of the due process that we go through. Thereafter, we would have a period to analyse fully the responses to the consultation. As we said, that will be a transparent process; there will be lots of information that we will need to review. Thereafter, when we publish our decision and the final drafting of the cap, it is subject to a 56-day notice period, which again is a legal requirement that we have to go through before the changes can take effect. When you add those various stages together, it gets to five months. Can I guarantee you that there will not be any drift? What I can guarantee is that we will have this as our absolute No.1 priority for Ofgem to deliver.
One of the things that is important for us to consider in ensuring that this cap is in place as quickly as possible is making sure that the due process is gone through. It would be unfortunate if, in trying to do something more quickly, we created a legal risk around process, and that could be exploited by somebody challenging it and seeking to delay the introduction of the cap. So, we are confident that we have a good, robust process and we will get through it as quickly as we can.
The Minister for Energy and Clean Growth (Claire Perry)
Q
Dermot Nolan: Retrospectively, Minister, in the sense of—?
Claire Perry
In other words, reimburse customers who would otherwise be overcharged if for some reason the energy companies delayed the introduction of the cap through any form of legal challenge.
Dermot Nolan: First, before coming back to that, I want to reiterate again that we want the cap in as quickly as you do. There will be no drift; we will make sure that we meet that timeline. I absolutely say that as clearly as I possibly can. So we will bring in the cap.
At that point, the cap would apply to all energy suppliers. If they were in breach of it, they would be in breach of their licence obligations and potentially they would be subject to fines, and ultimately to losing their licence. So, it is almost inconceivable to me that, if the cap was in place, a supplier was not in compliance with it. We would obviously use every single power we had at that point in time.
James Heappey
Q
Dermot Nolan: Absolutely. Two points on that. First, regarding, the events of last week, it is difficult to be precise. I would say they are more the type of once-in-five-years spikes. I will note that, if I may sound very gnomic, there are spikes and spikes. This was quite an acute spike in the gas price, and then there was a spike in the electricity price, but it was not that long-lived. Forward prices for four or five days did not change dramatically, so it was an abrupt spike but a short one.
The whole point of how to set the cap, and over what time period, is a fundamentally important one. The Bill suggests that the price cap must be updated every six months or less. There is an inherent trade-off. One of the things I particularly want to hear about from consumer bodies is over what period people want their prices to change. All the evidence we have in many ways suggests that people like smooth energy prices. They do not like spikes in their own bill. If the cap is set every six months, and a one-week spike is smoothed out over that six months, there is an appeal to that—you get relatively sure prices over a six-month period.
At the same time, you find that if there have been spikes of whatever form during a six-month period—if there has been, say, a fall in energy prices after two or three months—people say, “Why is this fall in wholesale prices not being reflected in my bill? Why do I have to wait six months for it? Why can I not have it after three months?” If we did a three-month price cap, that would ameliorate that issue, but we might be a little bit more vulnerable to spikes and changes in prices. How we balance that is not straightforward and is one of the things that we would particularly want to hear from consumer groups on during a consultation.
Michelle Donelan (Chippenham) (Con)
Q
Dermot Nolan: I think six months is the maximum. If the Bill goes through as is, we will consult on it. I honestly cannot say what we would ultimately pick, because it would be an open consultation. Certainly, I cannot imagine, at this point in the way the energy market is, having prices change every week or month. I think it would be a consultation along the lines that I have already mentioned. There is no perfect number though. We would want to try to hear from consumers what they thought was best and what reflected their preferences.
Vicky Ford
Q
Dermot Nolan: We will listen to everybody when taking views on setting the cap. However, the infrastructure should not formally be part of the price cap. It should not affect the way in which the price cap will broadly be set in terms of interactions with suppliers and the prices of the inputs they purchase. So although we will listen to everyone, I do not think infrastructure investors per se will be crucially involved.
I came in at the end of the last session and heard about smart metering. We will have to consider the smart metering costs, but only in the efficient cost. One of the difficult tasks in setting any level of cap is deciding a precise, efficient cost for the firms and ensuring that those efficient costs are passed on in the cap.
Stephen Kerr
Q
Dermot Nolan: The CMA view was split. We said we would go with the majority view, but one of the points about the process is that Parliament has now taken a decision. It is absolutely something that we will implement, because we are servants of Parliament, and we will implement it as quickly and as effectively as possible.
On the theme of competition, in my reading of the draft legislation, it seems to me that there is a desire to bring in a cap but also a desire to develop a more competitive market. There are a number of things that we are putting in place that we believe will help develop a competitive market further.
On smart metering, I know there were different views among the earlier panel, but smart metering is helpful. It is in some sense a necessary condition for, if you like, a digitised retail energy sector. There will be faster and more reliable switching processes. There are a number of remedies we have tested for prompts—ways in which people who have not yet been prompted to engage in the market will be prompted further. We have tested a lot of those already, trialled many of them and are going to roll them out in the next couple of years. There is the work on what we call midata, where we are going to push forward with a secure piece of your data that you can use in any price comparison website or any particular thing that will facilitate competition.
There are two more points—I know I am listing them off, but I want to be clear. One is that we think vulnerable protections will still be necessary if a full price cap is removed. We will look at whether any vulnerability price caps should be kept and, in particular, whether other forms and ways of protecting vulnerable customers, including things such as collective switches, could be used.
Stephen Kerr
Q
Dermot Nolan: Those are things that will be done over the next year to two years.
Stephen Kerr
Q
Dermot Nolan: Last year we published a response to the Competition and Markets Authority—which, going forward, will form the core of our report to the Secretary of State, as envisaged under the Bill—that we called a state of the market. It was a detailed look at the state of competition in the retail sector. It will look at a number of indicators; it will be on the basis of this suite of indicators—there will not be one perfect one. It will include the numbers switching, but also survey evidence, levels of satisfaction in the market, whether people feel more trust in the market, and whether the vulnerable, in particular, feel empowered to switch or still feel disengaged. We will focus on and continue to develop a suite of indicators that will form the basis of a report to the Secretary of State, which, as envisaged in the Bill, we will make on a yearly basis.
James Heappey
Q
I wonder how we do something in this price-capping process that, when energy companies go to war with one another over price, ensures that all of their consumers, including those who are loyal and seeing the benefits of good customer service, get rewarded, rather than simply perpetuating this view that a good energy market is one in which everybody is moving constantly and there is no incentive for companies to deliver good service.
Dermot Nolan: Absolutely. When I talked about a suite of indicators earlier, I think one should not over-concentrate on switching. It is perfectly possible, as James Heappey has said, to have a market that is functioning relatively well, but, actually, observed levels of switching are slow. What is important is that the customer must have the ability to switch if treated poorly.
In that sense, what we have seen, particularly in the energy market over the past two years, as we have seen in other markets, is a divergence of outcomes—£200 or £300 between people’s bills. Some—not all, because more than 20% of our domestic residential customers now come from small suppliers—have the disengaged feeling of, “I don’t feel comfortable switching and don’t feel protected.” The reforms that I mentioned in the last question are about trying to create a situation where we go back to the engaged customer—in some sense protecting the disengaged—with less variation between the engaged and the disengaged as a result and with people feeling, “I don’t need to switch, because I am not going to get charged £300 or £400 more by my own supplier if I don’t switch.” That is the kind of market that we would revert to. I think the reforms that we have set out will get us in that direction.
James Heappey
Q
Dermot Nolan: That must be the market we are seeking to design. I would say more generally that new technology, through which we are buying goods and services in many areas, is such that that old area is, to some extent, breaking down. I do not want to go beyond the topic, but you will see people paying different prices buying online, and that is good in many ways, but it also has public concerns more generally. One thing about the energy market is that it will clearly not be successful if we are still seeing observed differentials of £300 in two or three years’ time.
Alan Brown
Q
Dermot Nolan: I think there are already 5 million people who are vulnerable under price cap protection. If the Bill was not going forward, we would have extended that, anyway, to another tranche of vulnerable customers. Regardless of whether there is a price cap or not market-wide, the regulator is likely to have price caps for vulnerable customers going forward. I might be wrong on that, but it will be an absolute priority for the regulator to do that, which we believe we can and already are doing under our own powers. Obviously, I want as much protection as possible for vulnerable customers. Any regulatory body, given the statutory duties that it has, will take on that itself. If it does not, it will be messing up. So I feel there will be protections there from the regulator in any case.
Alan Brown
Q
Rob Salter-Church: At this stage it would be difficult to say exactly how much money a customer would be able to save through the price cap that will be put in place. We can say that—indeed, the Bill requires this—our first and primary objective is to think about protecting consumers, but we need to make sure that in setting the cap we also take account of the other factors that we need to consider, which is ensuring there are incentives for customers to switch and ensuring that suppliers are able to continue to finance their activities and fund things such as the smart metering roll-out. Although we are keen to ensure that we can save consumers as much money as possible, ultimately it would potentially create some unintended consequences to fix that amount at this stage in the Bill.
Michelle Donelan
Q
Dermot Nolan: Is this a relative price cap and an absolute price cap co-existing at the same time?
Michelle Donelan
Yes.
Dermot Nolan: I have only heard that recently. I am sceptical for a number of reasons. First, I think it is always difficult, and it is undesirable, to tell a company it cannot charge a price below a certain level, which is what a relative price cap might do. I would always be reluctant, personally, to endorse something like that. More generally, the absolute price cap will, to be candid, have an effect on the larger companies. It will drive down the prices at which they charge standard variable tariffs. They will react to that, hopefully, by becoming more efficient and so on, but it seems likely that, for the larger companies, it would reduce the differential between their standard variable tariffs and their fixed tariffs. The idea that they would then be able to cross-subsidise seems unlikely, so I do not see the need for a relative price cap on top of an absolute price cap.
As I said earlier, I think that anything that involves telling a company it cannot charge a low price is not a great thing. Further, if I may say, it complicates the cap. We can figure out an absolute price cap. It will not be easy to set, but we will muster every fibre we have to set the right cap. To complexify it further with a relative price cap strikes me as undesirable.
Michelle Donelan
Q
Dermot Nolan: I think it will have an effect. We have a prepayment meter cap already. I said that switching is only one aspect of competition; I want to be clear on that. After the prepayment cap, we saw that some of the cheaper deals left the market, but not all of them did. Some stayed, including from existing suppliers, and there were still cheaper deals from some of the smaller suppliers. I think that is likely to occur. There might be a measured drop in switching for a period of time, but as long as the mechanisms are put in place, this can facilitate competition over the medium and long term.
James Heappey
Q
Dermot Nolan: I think it is an opportunity for transformation. I have talked about some of the short to medium-term things we will do. Over the period of the price cap—this would probably be a legislative thing, working with the Department and ultimately with Parliament—it represents a chance to perhaps radically recast the supply market.
The supply market has become quite complex. I am not saying that the system of suppliers acting as vehicles for delivering the various obligations has not worked—in many ways, it has—but we see a situation in which a host of new suppliers will be entering the market in three to five years. These might be quite large ones that do not currently provide energy, and they could come in selling energy in a bundled product with other goods.
We will see electric vehicles being rolled out, and a price cap will have to deal with issues such as electric vehicle charging and how people are charged for them. I see a situation in four to five years’ time in which the energy market could have changed radically. The key point of the price cap is that it has to be flexible to any changes and fulfil its basic role of protecting consumers. With great respect to the suppliers in this room and suppliers already out there, I would hope that we could see radically different sets of people providing energy in five years’ time.
Alex Norris
Ofgem said to the Department for Business, Energy and Industrial Strategy Committee when this was being considered that the cap ought to be temporary. How do you feel about 2023 as the sunset clause? What should Members in 2023 have seen to be assured that the cap would be unnecessary?
Rob Salter-Church: It is right that everyone is focused on what happens at the end of the price cap. It is important to us that if the price cap is removed, then all consumers get to benefit from the new competitive market that we are seeking to create.
We are comfortable with how the Bill is currently drafted. It requires us to have a comprehensive report from 2020 on the state of competition, and whether we believe that the conditions for effective competition that benefit all consumers are in place. Every year, we will be providing recommendations to the Secretary of State.
We are confident that, as the Bill is drafted, there is sufficient opportunity for the Secretary of State to determine whether there is a future role for an overall price cap, or whether there are things within our powers that we should be doing. Earlier on, Dermot mentioned the likely ongoing need for vulnerable consumer price protection. More broadly, we will be able to report on the progress made by us in creating what is ultimately a more effective form of competition where everyone benefits, whether you choose to switch or whether you choose to stay with your current supplier.
Vicky Ford
Q
Dermot Nolan: I hope we do not, frankly. We will do our very best to bring competition as quickly as possible.
Dr Whitehead
Q
Are you happy with what appears to be an almost complete lack of pillars on which your report might be based? Is that something that you can live with easily, or would you prefer or welcome further pillars in the report to ensure that your understanding of the report was in line with what was required to bring competition back into the market?
Dermot Nolan: It is a fair question. I am personally content with the drafting, but I respect the fact that it is a matter for Parliament. I think we have a reasonably clear idea, and I hope we have given some of it today, but I assure you that we will spend a lot of time preparing an analysis of whether we think competition is working effectively in the market.
If further areas are to be put in, that is a matter for Parliament. I am slightly worried that putting specific targets and measures directly into legislative language now, in a market that will change radically over the next five years, might be somewhat distortionary. All I can say is that on the current language we will do as comprehensive a job as we can and look at all possible indicators to give an overall assessment to the Secretary of State of whether we think the market is working for consumers.
The Chair
Order. I am very sorry, but that brings our session to an end. I thank the witnesses for giving their evidence and I ask the next panel to come forward.
Examination of Witnesses
Rich Hall, Pete Moorey and Peter Smith gave evidence.
The Chair
We will now hear evidence from Rich Hall, Chief Economist for Energy at Citizens Advice, Pete Moorey, Director of Advocacy and Public Affairs at Which? and Peter Smith, Director of Policy and Research at National Energy Action. We have until 11.25 am.
Claire Perry
Q
One question that I think is exercising us all is support for vulnerable customers, who we strongly believe the Bill will help. We are interested in your views as to what else, as well as the Bill, would be necessary to deliver what we all want: maximum protection for the most vulnerable.
Rich Hall: I will kick off. I think we would strongly support the view that we would like to see protections in place for vulnerable consumers as a priority—for them to be the first to be protected and the last to lose protection if there were to be a circumstance in which it would be lost. We know from the CMA’s investigation and from other studies that consumers with vulnerability characteristics are less likely to switch than the norm: disabled people, the elderly, those on low incomes, renters, people in rural areas and those who left education early. Some of the most vulnerable consumers in society are likely to be on the worst rates.
The Bill should provide significant protection to those consumers for the lifespan of the legislation, but that lifespan is clearly finite in its current form. There would be annual reviews from 2020 to 2022, which we would expect to pay particular regard to the impact of the price cap on vulnerable customers and to the extent to which they are engaged in the market and benefiting from it or need further protection.
However, in its current form the Bill would fall away no later than 2023, which creates an issue around how you would ensure that those consumers continued to be protected beyond that date. Clearly, if it were possible to encourage them to engage more in the market and to switch, that would be our first line of protection in which they could help to protect themselves. However, we have to look back at the historic records here and note that over 20 years or so there has been significant disengagement in the marketplace. It might be difficult to tease vulnerable customers into the market. From our perspective, we would be looking to see price protection for vulnerable consumers extended beyond the lifespan of the legislation.
We note and welcome the comments from the Minister and the Government in their response to the Business, Energy and Industrial Strategy Committee’s pre-legislative scrutiny, that enduring protections might be needed, and also Dermot Nolan’s comments, from Ofgem, to a similar effect. I think the challenge is: if it is not going to be in the form of protection through this cap, what is it? We currently think that there might be a need for an enduring cap, and the Bill in its current form does not necessarily provide for that protection after 2023.
Claire Perry
Q
Pete Moorey: I support everything that Rich said on the potential need for ongoing support for vulnerable consumers beyond the end of the cap as set out in the Bill. It is important, though, that we do not assume that vulnerable consumers across the board do not engage in the energy market. We know that the most vulnerable are often the savviest consumers. They have to be: they are on tight budgets and, therefore, they can be the most adept at engaging with markets. I know Peter’s organisation, National Energy Action, has done an awful lot of work with very vulnerable people to get them engaged and on to some of the best deals in the market.
Our—and, I hope, your—vision is ultimately of a market that is competitive and delivering good outcomes for consumers. That should include vulnerable consumers and the ability for those consumers to be as actively engaged in the energy market, as they are in many other markets—notwithstanding the fact that, as Rich said, there will potentially be some people who will need ongoing additional support. We would support that.
Peter Smith: There are two clear priorities that sit outside the Bill. The first would be to extend the warm home discount scheme to smaller suppliers; currently, smaller suppliers, with fewer than 250,000 customers, are not required to provide the warm home discount scheme. That means a real challenge on the doorstep in terms of encouraging households, particularly vulnerable households, to switch to the smaller suppliers. Those smaller suppliers are often able, at least on a price comparison website, to provide the cheapest deal but households do not know that they might be missing out on the warm home discount scheme.
The second element is to get on and use the data-sharing powers on which there was a recent consultation, which would enable Government to better share information about households eligible for the warm home discount scheme and could, therefore, benefit from the safeguard tariff.
Those two actions can take place regardless of this Bill. As we warned in the Business, Energy and Industrial Strategy Committee’s pre-legislative scrutiny, if we do not do those things, the cost might be that 500,000 low income and vulnerable households—many working-age—will miss out on approximately £260-worth of support this winter and next. It is an urgent priority.
Two things that can be done inside the Bill, reflecting on the previous evidence and remarks from the rest of the panel, would be to clarify in clause 2 that Ofgem should have due regard to households on the safeguard tariff. We are particularly worried that there is an assumption being baked in at this stage that the SVT-wide cap will protect exactly the same households as are protected by the safeguard tariff. That is not the case. We are also making an assumption that the relative values of those two different caps are going to be broadly the same. Again, that is not the case. We would like Ofgem to consider those two issues specifically. It is right that that is reflected in clause 2, and we support the hon. Member for Southampton, Test’s amendments that seek to achieve that outcome.
The final thing from my perspective is in relation to clause 8, where the conditions by which we remove this SVT-wide price protection need to be met. The opportunities that Dermot Nolan talked about to reflect on vulnerability within that context, particularly engagement for vulnerable consumers, are the clear priority and should be listed in the Bill to make sure that that assessment on competition is also reflecting on engagement of consumers, particularly the most vulnerable households. There would be a set of things that could be done to make that clear.
Michelle Donelan
I just want to follow up and build on the topic of consumers. How do you each feel this Bill will impact on the interest groups you represent? This is particularly pertinent to Which?
Pete Moorey: We represent all consumers, and the Bill may have a number of different impacts for all consumers. Clearly, for the large number of people on standard variable tariffs, it is going to mean a cut in their energy bills, which will be very welcome for them.
However, as you are probably aware, we have some concerns about the risks presented by a price cap and the impact that could have for consumers as a whole, which may well be mitigated by the measures in the Bill regarding Ofgem, ensuring that it maintains attempts to promote competition.
Nevertheless, the things that we are concerned about with the introduction of a price cap are that we do not see any softening of competition and that we do not see prices for consumers overall going up. It is likely that for some consumers we will see some price rises, as some tariffs get removed. We do not want to see a reduction in the standard of customer service, which is often deemed as being poor among the larger suppliers; the annual satisfaction survey that we do at Which? every year shows that the larger suppliers do very poorly on a whole range of metrics.
Also, we do not want to see less innovation in the market. So we do not want to see the introduction of a cap having an impact on the smart meter roll-out, or indeed on the transformation that Dermot Nolan spoke about, which we really support, around the introduction of new suppliers in the market, who may well be able to bring a transformation to energy, which is what we want to see.
I absolutely understand why the price cap is being introduced. I think the energy industry had opportunities, time and again, to stop this from happening, and they failed to react to that and to the problems that their customers were facing in the market. However, as we now introduce the cap, we have to be very mindful of those risks: the last thing we want is a price cap to come in, be removed at the end, and for us then to be left with exactly the same kind of broken market that we have now.
Vicky Ford
Q
Pete Moorey: Absolutely. Smart meters themselves are only the facilitator of a new kind of market. Gas and electricity is a homogenous product. Of course it is dull for consumers to engage with, and our expectations around them switching have been—by and large—fairly ridiculous really, given that there is generally little value in switching beyond the price that you can be saving, which can be significant. But beyond that, why people should really engage with this market has been bewildering to consumers, really.
However, we are now just starting to see potentially a very different energy market, because of smart metering and then smart appliances, as well as the introduction of electric vehicles, storage and a whole range of other changes. They should make energy an attractive industry for new kinds of players to enter, which may well mean that consumers start to be offered very different kinds of things. It may well be, as Dermot said, that there will be much more bundled products, whereby suppliers effectively offer to look after your whole house—your whole life—and that may well be attractive.
Of course, with that comes the risk that that will potentially only benefit people like me, who perhaps have the ability and the money to engage with that market. We obviously want to see all consumers benefiting and we will need to be very mindful, as that change comes, about vulnerable consumers and their ability to benefit from the price cap, too. They should do, because the positive benefit could well be that you can target much more specific products at the most vulnerable, and ensure that they really are getting value out of their relationship with their energy supplier, or indeed with a whole range of other suppliers that could start to form a hub around smart meters and other smart appliances.
Vicky Ford
Q
Pete Moorey: Yes. I think it is the right date, but the critical thing is that Ofgem has the ability on a very regular basis to review how the price cap is working, to set out transparently the changes being made in the market, and to be able to recommend to the Government whether the cap should be removed earlier. I think that having that balance is right.
Bill Grant
Q
Finally, picking up on Pete’s reference the less well-off groups, or those who are less price-savvy—I think that was the term—do you think the meters will assist those people in understanding their expenditure? Do you really think it will have an impact?
Pete Moorey: I hope so, but I think there are significant challenges for the roll-out. The fact is that the roll-out does not appear to be going as well as it should. Our own research in the last few months revealed that energy suppliers would be having to install 24 meters per minute for us to hit the target by 2020. So we have to keep a close eye on the smart meter roll-out. I do hope that it leads to changes, and changes that benefit all consumers, but that will require not only groups like us but also yourselves to keep an incredibly close eye on the roll-out.
Peter Smith: National Energy Action runs something called the communities programme, alongside Smart Energy GB, which is the organisation that exists to engage smart meter roll-out. We are doing some valuable work on that, but we are concerned that the roll-out is significantly back-loaded now. That challenges the cost-benefit analysis that the Government originally estimated, which assumes cumulative benefits running all the way through successive years, up to 2020. Now we are in 2018—and 2020 is there; so there is a concern.
Bill Grant
Q
Peter Smith: It would be slightly less than that, but it depends whether you think you need to put in SMETS2 meters, once they are ready, and replace the SMETS1 meters. We recognise the value of smart meters, particularly for low-income and vulnerable households, given the fear of an unknown bill. Estimated bills are the biggest concern that these guys get, so we recognise that they can have sufficient benefits. The trouble is we are so back-loaded now, the care and attention and extra help that we thought was going to be possible with smart meter roll-out is now going to be compromised, as everybody, as you say, is just going for volume.
Kerry McCarthy (Bristol East) (Lab)
Q
Peter Smith: First things first: it was reflected in my comments to the Business, Energy and Industrial Strategy Committee as well that NEA believes we must also tackle the vicious overlap between the households with the lowest incomes living in the least efficient homes. That needs to continue to be a priority, and, sadly, we have seen a dramatic drop-off recently in home energy efficiency delivery rates. You could build that into one condition by which Ofgem could make an assessment about whether we are now pulling on that lever as hard as can, maybe as part of an ambitious energy efficiency infrastructure programme.
The second thing relates particularly to the Bill. As I have described, there is a risk that we are assuming that the same people are covered through the SVT-wide cap as benefit currently—or would do in a few months’ time, with the extension of data-sharing powers—in the safeguard tariff. There is a difference between the people that it covers, so not everybody that will be protected by the SVT-wide cap will be protected by the safeguard tariff currently; and the values are very different—or could potentially be very different—in terms of the value of the safeguard tariff currently in place. That is about £100.
Given the drivers on Ofgem to create headroom to encourage competition and so on, that headroom might be significantly reduced. Therefore the general value that the two relative caps present might be very different. So in simple terms we cannot assure ourselves that the provisions in the Bill are consistent with the value that the safeguard tariff is currently providing. Ofgem need to consider that issue in relation to clause 2. It should be written into the Bill.
Kerry McCarthy
Q
Peter Smith: Clause 2 needs to say that there should be specific regard to customers that currently benefit from the safeguard tariff, and that the value of those relative price protections should be considered, to make sure that vulnerable customers benefit from the most attractive option.
Kerry McCarthy
Q
Peter Smith: Currently, the safeguarding tariff only targets those households that receive the warm home discount scheme. Those are typically poorer pensioners who automatically receive the warm home discount scheme, and some households in what is called the “border group”, which have to apply for support. Some households apply and are eligible, but miss out on the assistance because the programme is a first come, first served programme. Therefore we have been urging—and there were encouraging signs recently that this was going to be acted upon—that that should be extended to all households that were eligible for the warm home discount scheme, so it would cover those people who apply but maybe miss out on support.
Kerry McCarthy
Q
Peter Smith: You are either doubly benefited or doubly negatively impacted, because you do not receive the warm home discount scheme and therefore miss out on the safeguard cap, or you get the warm home discount scheme and the safeguard cap. We can reconcile all of that without these provisions. It was encouraging to hear Dermot Nolan say that he is minded to have due consideration of those issues when he sets the cap—because we could get into a situation where we look to preserve the extended safeguard cap at the same time as continuing with this endeavour. That would make sure that some of the issues I have spoken to are addressed. We would welcome that approach.
Dr Whitehead
Q
Pete Moorey: We supported many of the remedies of the CMA, so while we did not believe that they would take us far enough to deliver effective competition, it was absolutely right that the CMA recommended that we would be testing and trialling new ways of engaging people in the energy market. We were disappointed that the energy industry did not respond effectively enough to that. We said to the industry immediately after the CMA inquiry, “Start getting on with it. Test and trial new ways of engaging particularly the most disengaged people with the energy market.” I think that a lot of that work should continue. The good news from Dermot Nolan this morning, and from other statements Ofgem have made over time, is that they are going to continue to do work on that, which is welcome.
We are not necessarily suggesting that there are other remedies such as that that could be trialled. It is more that we should be spending time considering what transformational changes can be made to the market along the lines that Dermot Nolan was talking about, particularly in his responses to James Heappey, to ensure that we have much more innovation in the market through new suppliers who can be tapping into the benefits that smart and other changes in the energy market will make. That is likely to be the transformation that will lead to a new kind of energy market where consumers are more engaged. That is the critical element, alongside all the key factors around switching levels—particularly engagement of more vulnerable consumers, energy satisfaction, trust in the market and so on—that we should be looking at.
As I say, simply removing the cap in 2023, and the market looking effectively as it is now, will not, I think, be the kind of change that we all want to see in the energy industry, and certainly will not deliver the kind of change that consumers need.
Alan Brown
Q
Peter Smith: I will try to be a bit more concise than I was earlier. Clause 2 needs to be amended specifically to ensure that the safeguard tariff is considered when setting the SVT-wide cap, and Ofgem needs to have a duty to consider that. In clauses 7 and 8, we need to include customer engagement, particularly vulnerable customer engagement, as part of that overall assessment of competition and of whether it is working effectively.
I could give you a couple of examples, but perhaps they are best fleshed out in some further written evidence. They would include online access. For instance, we know that households that are offline do not benefit from the considerable discounts for online deals and from paperless billing discounts, and they do not get to apply to the warm home discount scheme. Cumulatively that could be up to £300. Things like that need to be considered when we make that overall assessment.
Rich Hall: From our perspective, we are broadly comfortable with the Bill in its current form. In the area of providing enhanced assurance that vulnerable customers’ circumstances are being improved, we think that is something that should be captured within the annual assessment by Ofgem and by the Secretary of State. We are reasonably comfortable that that is implicitly delivered through the Bill, but I can understand that there are arguments that there might be benefits in it being explicitly delivered on the face of the Bill.
In terms of there potentially being a relative cap underneath the absolute cap, I have some similar views to Dermot on that, in that it is an idea that has been floated only really in the last few days and weeks, possibly by people who would prefer a relative cap and who are now trying to use absolute plus relative as an alternative vehicle to reintroduce that approach.
We have some concerns about the relative cap approach. Because the large incumbents have so many sticky customers, in comparison with the relatively small number of customers they could pick up through any promotional campaign, if they were to seek to hold their line on their acquisition prices, that would make the cost of acquiring new customers punitively expensive. Because of that, we think it is more likely that the large incumbents would simply exit the acquisition market, which would neither help their SVT customers, who would continue to pay the same prices, nor improve pressure in that market. There is a risk that a relative price cap could backfire and be worse than the status quo, so we see the decision on absolute versus relative as not simply a choice between a good model and an excellent model, but as a choice between a good model and an unworkable model.
Pete Moorey: I would not add anything to what Rich said, but in terms of other changes to the Bill, there could be some changes to ensure there is more transparency and accountability of Ofgem, in terms of setting the cap. We would like to see changes so that Ofgem are required to set out clear criteria for monitoring and evaluating the success of the cap. We wanted to see a requirement to review the price cap every six months. It may well be that the evidence you have just heard from Dermot Nolan suggests that they will be reviewing it anyway every six months and that the bar could be set lower. It may well be that that is unnecessary in the Bill itself, given that it seems likely from what he said this morning that we will have a consultation on that as well. I think Ofgem should be required to publish reports on the impact of the cap on a regular basis and on how they would take any action if the cap was having any negative impacts.
James Heappey
Q
Rich Hall: We do not have any analysis on that to hand, but it is a crucial issue, in that the problem with SVTs is not their name, but their characteristics; it is the fact that they are extremely poor value products that exploit consumer inertia. If the replacement products simply have the same characteristics, and they are benchmarked to a similar level of pricing, that is simply an attempt to get around the intent of the Bill rather than to reduce the detriment that those customers see. That is an area where we, Ofgem and others will need to improve our monitoring in the coming months, as we see more of those tariffs in the market. At the moment, it is still fairly soon after the launch of these approaches by three suppliers, so it is a bit too early to say, but it is a genuine issue.
Vicky Ford
Q
Pete Moorey: That is good news.
Stephen Kerr
Q
Pete Moorey: I don’t know. It might do. That probably returns to the point I made to Alan Whitehead around testing and trialling different ways of engaging people in the market. It is really important that Ofgem tests how it communicates the safeguard and whether it should be called the safeguard. There is a real danger that most consumers, once they hear they are on a safeguard tariff, think that there is absolutely no reason for them to switch. Once the cap is in place, one of our key messages at Which? would be to go out there and say to people, “The safeguard tariff is not the cheapest tariff on the market. You could well still be saving hundreds of pounds by switching, particularly to some of the smaller suppliers in the market.”
Stephen Kerr
Q
Pete Moorey: Absolutely.
Stephen Kerr
Q
Pete Moorey: I think it should be tested.
Peter Smith: There is also a risk that if people are on the safeguard tariff, they think that they are safeguarded, but they are not taking up the wider support schemes that the Government have made suppliers deliver—things such as the energy company obligation, the warm home discount scheme, free gas safety checks and the priority services register. There are a number of other things that need to be considered to assess whether or not consumer engagement is happening, particularly for vulnerable households.
The Chair
If there are no further questions from Members, I thank the witnesses for their evidence.
Ordered, That further consideration be now adjourned. —(Rebecca Harris.)
Domestic Gas and Electricity (Tariff Cap) Bill (Second sitting)
Tuesday 13th March 2018
(6 years, 1 month ago)
Public Bill CommitteesRead Full debate Domestic Gas and Electricity (Tariff Cap) Act 2018 View all Domestic Gas and Electricity (Tariff Cap) Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 13 March 2018 - (13 Mar 2018)
The Committee divided: - Ayes: 8 / Noes: 9 - Question accordingly negatived.
The Chair
We now begin line-by-line consideration of the Bill. Today’s selection list, which is available in the Committee Room, shows how the amendments selected have been grouped for debate—generally because they relate to the same or similar issues. Please note that decisions on amendments will take place not in the order in which they are debated, as shown on the selection list, but in the order in which they appear on the amendment paper. Decisions on each amendment will be taken when we reach the relevant clause. I will use my discretion to decide whether to allow a separate stand part debate on individual clauses and schedules after debate on the relevant amendments.
Clause 1
Cap on standard variable and default rates
Dr Alan Whitehead (Southampton, Test) (Lab)
I beg to move amendment 3, in clause 1, page 1, line 3, leave out
“after this Act is passed”
and insert
“and no later than 30 November 2018”.
It is a pleasure to serve under your chairmanship, Ms McDonagh. Let me start us off this afternoon with what I hope will be the first of many amendments that the Minister and other Conservative Members think so reasonable and constructive that they feel impelled to accept them.
Amendment 3 relates to our consensus that an energy price cap needs to be agreed across the board and brought in as soon as possible. Without presuming to speak on behalf of all Committee members, I believe that we are all united in our support for a temporary cap to allow the market to be set right. We hope that by the time the cap comes to an end, we will be reasonably assured that the market is working much better and that the circumstances that led to the cap’s introduction will not be repeated further down the road.
The Committee is united on our endeavour this afternoon. We want to finish our deliberations, get the Bill passed as speedily as possible, and have it on the statute book by the summer—hopefully the early summer—so that Ofgem can execute it. We heard this morning from Ofgem’s chief executive, Dermot Nolan, about the processes that Ofgem will be required to undertake to ensure that the price cap is properly implemented. The Bill requires it to have regard to a number of concerns, which I am sure we will discuss in our deliberations.
Essentially, Ofgem has the task of ensuring that the provisions in the legislation for the implementation of the price cap are legally waterproof, that the measures in the Bill around Ofgem’s responsibility for having regard to those various pillars are properly carried out, and that Ofgem has the arrangements in place that it will need to look periodically at what is happening to wholesale prices and to produce reports and proposals for how those wholesale price changes can be taken into account under the umbrella of the cap. Ofgem has to get a whole range of things right before the cap is properly in place. It is proper and right that Ofgem takes a reasonable amount of time to ensure that happens.
We heard this morning that Ofgem already has some consultations and discussions under way in anticipation of the Bill shortly being on the statute books, but there are a number of statutory things that it has to do and a number of further consultations that it has to undertake. We were told this morning that all this is about five months’ work as far as Ofgem is concerned. In principle, if we assume that the Bill will be on the statute books by the end of June, the five-month timescale that Ofgem has set itself would mean that the cap could be effective by the end of November this year.
Pretty much everybody associated with this Committee and the passage of the Bill has said that they fervently want to see this legislation enacted and a proper price cap in place before winter this year. By that, I am sure they do not mean when a cold snap takes place next February and looks a bit like winter, but the onset of winter—about the time people get their winter fuel allowances. That will ensure that the price cap is in place and benefiting customers in advance of the bills they face over winter.
To get this price cap in place not just over winter but as winter comes in—absolutely on the nail, given the time that Ofgem says it will need to get this Bill into shape and to get an operational cap—we will clearly want to ensure that that timetable is adhered to as closely as possible. That is why I asked Dermot Nolan this morning whether he thought the five-month period was an exact period, a maximum period or an approximate period. What was his view? He said that they would do their best to ensure it was within that five-month period. However, I did not get the impression from that evidence this morning that Ofgem was saying to us, “We can absolutely stand by the idea that there is a maximum possible period of that amount of time for us to do our work.”
James Heappey (Wells) (Con)
My reading of Mr Nolan’s evidence this morning was somewhat different. I thought that he very much felt this could be delivered within five months. The only note of caution he sounded was over a legal challenge. I am not sure that any timeline that we prescribe in legislation would prohibit such a legal challenge from one of the current large suppliers.
Dr Whitehead
The hon. Gentleman is absolutely right. If there do turn out to be legal challenges, despite our best efforts in this Committee to ensure that the Bill is as watertight as it can be, it is conceivable that the whole timetable of a price cap could be seriously derailed—I think we have all understood that, as far as the process is concerned. Indeed, one reason there is legislation, rather than Ofgem going down the road of a price cap under its own steam, which it has been claimed at various times could have been the case, is to ensure that, as far as possible, the proposals and what Ofgem puts in place around them, are legally watertight. That comes in two parts. First, there is the question of ensuring that the legislation is as watertight as possible, but there is also a duty on Ofgem to ensure that, in translating the instruments in the legislation into a workable price cap, it takes measures that are also legally watertight, so that it does not slip up after we have done the good work in Committee of making the legislation as watertight as possible.
Vicky Ford (Chelmsford) (Con)
In the evidence session this morning, I clearly asked whether Ofgem would be ready for next winter, and Ofgem was not only clear that it would be ready for next winter, but outlined the very robust, transparent and deep process being undertaken to ensure that.
Dr Whitehead
Yes, indeed. The hon. Lady will recall that, in answer to my question, Ofgem went through the processes it is statutorily required to undertake, together with an estimate of the time that that would take. Between us, we were able to get on record a pretty clear note of intention from Ofgem that, subject to the possibility that the whole thing could come off the rails because of an unexpected legal intervention, it would bend its efforts to ensure that the process of five months was adhered to.
The amendment seeks to go a small step further and to place on the face of the Bill an indicative time by which Ofgem should have done its business, to ensure that the working price cap becomes reality under the Act. The amendment does not seek to interfere with, foreshorten or undermine what Ofgem is trying to do, quite properly, to make the Bill a reality.
Vicky Ford
I am sorry, but I read the amendment completely differently. If we have all agreed that Ofgem has made it clear that it will go through the process to come up with the right level of cap—taking the right level of evidence—by next winter, and that the only thing that could delay it would be a legal judgment, why would we even suggest, through the amendment, that it may not be ready? That throws unnecessary doubt on the process, which would still be subject to a legal challenge were the amendment there. I think it would just add confusion and doubt.
Dr Whitehead
I fully accept the hon. Lady’s reading of the amendment, but I assure her that that is not its purpose.
Caroline Flint (Don Valley) (Lab)
Does my hon. Friend agree that it is quite useful to discuss this at the start of our Bill consideration, because our constituents will want to know that, in truth and earnest, we are going to push, in whatever way we can, to ensure—let us hope we do not have as bad a winter as we have had in recent weeks—that we get this cap into place? It is worth while to have this discussion. I hope the Minister can give reassurance in her response that it is up to all our endeavours to ensure that the cap is in time for when those winter bills drop on our mats.
Dr Whitehead
I thank my right hon. Friend for that intervention underlining the thrust of what I have to say. Although we may take serious account of Ofgem’s earnest intentions, which we heard about this morning, we are not legislating for the good side of earnest intentions, but for what we want to happen in the end with the Bill. To put in the Bill what we actually want to happen clarifies matters for the future, rather than spreading confusion. We will have declared—I use that word because we cannot entirely proof ourselves against the possibility of an unexpected legal challenge, although, if I can be congratulatory to the Bill’s constructors for a moment, they have done a good job of ensuring that it is as legally unchallengeable as it can be—
Stephen Kerr (Stirling) (Con)
I perfectly understand where the hon. Gentleman is coming from, because Ofgem’s performance over the last few years has been less than inspiring. Having said that, both sides of the House have said, and we heard it again from Ofgem today, that we know what our destination is with the Bill. I cannot understand what we gain by putting a date in it, beyond what we have already amassed in terms of collective evidence and collective will that we have to see this enacted before next winter.
Dr Whitehead
I fully accept that there are different interpretations of the best way forward within the overall agreed framework of where we want to go. Perhaps hon. Members take the perfectly reasonable, honourable and thought-out view that we have got what we want to say in the Bill, we have heard what Ofgem thinks it can do and we are happy to leave it there. My view is that it would be helpful to properly encapsulate our position on the Bill by saying in it what we want to happen—by setting an out-date for the considerations that Ofgem has to undertake before the cap becomes real.
Although I do not doubt for a moment the bona fides of Ofgem, or the sincerity of what Dermot Nolan said this morning, nevertheless, if we are not as clear as we can be about what we want to put forward in the Bill, it is conceivable—no more than conceivable—that someone could say, “Actually, we said five months, but some unexpected circumstances have cropped up—not a legal challenge, but other things—so we can push that further down the line. We’ll have to say that we are a bit sorry about that, but that’s how it is.” I do not want that circumstance to be even remotely in the minds of anyone at Ofgem over the next few months.
Kerry McCarthy (Bristol East) (Lab)
Is it not also a fact that in 2012, under the last Government, the then Prime Minister promised that he would force companies to switch customers to the lowest tariff? When he was talking about the “green crap” on energy bills, he also promised to use regulatory measures to reduce energy bills for consumers. As we have already heard, if we had introduced measures after last year’s election, when there was a manifesto commitment to do it, customers would have been protected in the cold weather we have just had. So I think it is only fair that people have some concerns about whether this is actually going to happen, when there have been so many false promises in the past.
Dr Whitehead
My hon. Friend makes a powerful point. Today, thinking about the cap, we are not in such a position that we can look back with complete equanimity and say, “Actually, everything that could have been done to hasten the cap, once it was decided that there should be a cap, has been done over that period.” There has been quite a bit of equivocation since, for example, the suggestion at the time of the Conservative manifesto for the last election that there should be a cap. It made an appearance but then went through a period when there seemed to be some resiling from that particular commitment.
As hon. Members will recall, there were indeed suggestions and discussions that Ofgem, in its own right, could and should undertake a cap: a cap would need no legislation from Government, so Ofgem could go ahead and put one in place. Indeed, as I recall it, a letter to Ofgem from the Secretary of State during the summer in effect said that. At the time, as hon. Members will also recall, Ofgem came back fairly publicly to say, “We are not convinced that we have the powers to do this,” or rather, “We may technically have the power to do this, but we wouldn’t be proof against legal challenge were we to go ahead and introduce a price cap administratively without the back-up of legislation from Parliament.”
As hon. Members will again recall, it was at that point—I think it was at the Conservative party conference—that the Prime Minister reasserted the fact that she wanted a price cap. Perhaps we will come on to what she said about the consequences of that price cap in a moment, but she certainly said at Conservative party conference that she wanted a price cap and that, in effect, legislation was to be introduced to produce one. So, arguably, we could say that, had we got on with legislation from the moment that the idea that there should be a price cap was put forward, we would not be sitting here today. Instead, we would be contemplating a price cap having been introduced, probably this autumn.
James Heappey
The hon. Gentleman makes his case well, but I remain to be convinced that putting in a deadline makes a difference. The biggest pressure that Ofgem will be operating under once we clear the Bill through Parliament—surely the biggest variable in the whole process—is an enormous amount of political pressure. Given that the hon. Gentleman does not propose a sanction against Ofgem should it miss the deadline, one would imagine that the political pressure Ofgem will be under from both sides of the House to deliver the cap is more than enough to deliver it very quickly. He will remember that the last time that there was a notice of insufficient margin, with the price spike that it brought, was in the middle of November 2015, so a date of the end of November seems somewhat arbitrary. We want it done as quickly as possible.
Dr Whitehead
The hon. Gentleman’s point about the amendment not suggesting any sanctions on Ofgem is an interesting one. Were that suggestion put into operation, it would require about six more pages of amendments to secure a sanctions regime against Ofgem, but that is not how Ofgem works. In effect, Ofgem has a requirement to do things—in its charter of existence, in legislation—and it is instructed by legislation and not, by the way, in final and legal terms by what a Minister may or may not write to it on a daily basis. It is supposed to go along with what is in legislation. That was the problem that arose with the letter from the Secretary of State to Ofgem when the idea of a legislatively based price cap appeared to be up in the air.
Ofgem made the point that it would prefer, or that it thought it necessary, to have some kind of legislation on the statute book to guide and advise it—or, more than that, to be a framework for its carrying out of its responsibilities. The Bill requires Ofgem to do all sorts of things but contains no sanction. It does not set out what would happen to Ofgem—whether Dermot Nolan would be taken out, and something would be done to him—if it did not do all that is specified. The point is that there are requirements on Ofgem under its charter from Government.
The Chair
Order. May I suggest to the shadow Minister that we have an awful lot of amendments to deal with this afternoon, and sanctions are slightly off track.
Dr Whitehead
Yes, I am happy to accept your guidance, Ms McDonagh. I am being enticed down the road I have taken by hon. Friends and colleagues, and of course as far as I am able I will not give way to temptation.
The central point, on which I want to end, is that we do not need a lot of sanctions to get Ofgem to do what it is supposed to do under legislation; but if something is in legislation it is pretty sure that it will get done, because that is how it works. An out date in the Bill would be a little further help in making sure that Ofgem would do what it has said it will do to put the measure into practice. Hon. Members will have a view on how important or necessary that approach is, but I do not think it can be gainsaid that putting the date into the Bill would provide a little further assurance.
That is the basis for the amendment. I hope that Members will support it, if they decide they want that further assurance, but I am sure that the Minister will come up with persuasive reasons why another view could be taken. We will listen with interest.
The Minister for Energy and Clean Growth (Claire Perry)
It is a pleasure to serve under your chairmanship, Ms McDonagh. I thank all members of the Committee. We have a highly qualified Committee here to deliver, over the next few days, what we all want: a legally watertight price cap Bill that enables some of the more egregious pricing structures in the energy market to be addressed.
The amendment moved by the hon. Member for Southampton, Test is intended, as he said, to put a hard-stop deadline on the implementation of the Bill. I understand his reasons exactly. We have discussed the Bill and are broadly in agreement about what we are trying to achieve. I agree that it is imperative for the measure to be in place before the end of the year. People say “before next winter”, and that somehow rolls into 2019. I want it on the statute book and implemented by the end of the year—ideally well before 31 December—because we owe it to the customers whom we are trying to protect. We have all been clear about that, and it is the message delivered in multiple debates and in multiple communications with Ofgem and suppliers. I shall speak in a moment about the possible risks of accepting the amendment.
Something else that is refreshing is that all parties have committed to getting the Bill through. I do not suggest that there will not be strenuous attempts to amend it, but I intend that it should be sent up to the other place in good order, so that it can go through the Lords effectively and we can get what we want, which is for the Bill to be in place and in good shape by the summer recess.
It was helpful to have the witness sitting this morning. We heard Ofgem say that, once we have given the go-ahead on Royal Assent, it will have to take a whole series of statutory measures, including developing the cap. Of course, some of that work has already started, quite rightly. We do not need to do this sequentially; we can do it in parallel. We are then going through a fairly transparent consultation process to make sure that any possible objections or concerns about the tests we have set out in the Bill on competition, switching and maintaining investment are met. There is a statutory duty to have a consultation period. We heard this morning that that will take five months, albeit with some things starting already and processes going on in parallel.
Alan Brown
It is a pleasure to serve under your chairmanship, Ms McDonagh. I was not originally going to talk, but 25 minutes into the Bill Committee my frustrations kicked in. It felt like 25 minutes of almost agreeing with the amendment. We have got an amendment with a date and everybody agrees that it is a reasonable deadline and timeframe. We are seeming to agree that Ofgem has committed to doing this in five months. I thought that Dermot was absolutely resolute in the evidence session in saying “We will do it in five months”, but his colleague had slightly more caveats and was slightly more restrained.
I cannot see any problem in getting a deadline that puts a marker down: humans work better to a deadline. It sends a message to our constituents and the people out there that we have this clear deadline. I listened to the comments from the Minister and I understand that she is saying that she wants to minimise any risks going forward in getting the Bill implemented. What if there is a legal challenge and then the deadline becomes a possible issue? But given that we have already agreed that we think this is a robust Bill that has been well written and well crafted, I think we have got to have confidence that it is robust. Having a date on the face of the Bill will make it that bit more robust and watertight.
Claire Perry
I appreciate the hon. Gentleman’s support, and I am delighted that we have cross-party support. I think we are all agreed that this is a robust Bill. I thank the hon. Gentleman for sharing his tribute to the parliamentary team, who have done a good job drafting it.
Stephen Kerr
I would like to pick up on the comments made by the hon. Member for Kilmarnock and Loudoun about the robust performance that we saw from Ofgem this morning. Frankly, that could be, in part, because when Ofgem appeared before the Select Committee scrutinising the legislation, it was less than robust—the witness was less than robust. I think he has got the message: he cannot be neutral on this; he has to be robust. We saw that today and that gives me great confidence that we will see this Bill enacted in the way we envisage.
Claire Perry
I defer to my hon. Friend’s experience. He sat through this process, doing an excellent job on the Business, Energy and Industrial Strategy Committee, and has seen the evolution of this robustness.
In response to the hon. Member for Kilmarnock and Loudoun, I think the Bill is absolutely robust. We are agreed: we have a tight, well-drafted Bill that does not allow for random amendments. The challenge is that the actual job of setting the price cap has, quite rightly, been given to the independent regulator. We have to go through a process of transparency and confidence building, if you like, with participants in the market, so that the number is set at the level we want to deliver maximum benefits to consumers without the dis-benefits of driving investment out of the industry, or indeed providing a less competitive environment. That is why I have been persuaded that Ofgem gets the deadline, believes it has the right to do it, but has asked for a period in which, quite rightly, it can go through a very transparent process. The more transparency the better, because that will head off any possible legal challenge. I wish we did not have to be in the world of worrying about future legal challenges, but I think we are all convinced that we need to make the whole process as robust as possible.
In responding to the hon. Gentleman from north of the border, Kilmarnock and Loudoun, I hope I have persuaded the hon. Gentleman from a long way south of there to withdraw his amendment.
Dr Whitehead
I would not say that I am wholly convinced but, as I mentioned in my opening remarks, to some extent it is a matter of how one views what has been said so far and the degree to which one thinks that this really is going to work as well as it could. Having been in this place for some while, I must admit that I am of a mind that one ought to legislate for things being as terrible as they possibly can be, and make sure that one moves upwards from there. Obviously, that view is not entirely shared but, on the other hand, it is also not a particularly big deal. We have heard from Ofgem that it is pretty committed to that five-month period. As I said, if all goes well with this Bill getting on the statute books when we think it will, that just about gets us to the right time. I am happy to withdraw this amendment on that basis, but I hope that I will not have to say I told you so come 31 December if it is all not in place as well as it should be. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Whitehead
I beg to move amendment 4, in clause 1, page 2, line 15, at end insert—
“(e) the need to ensure that customers on standard variable and default rates have their annual expenditure on gas and electricity reduced by no less than £100 as a result of the tariff cap conditions, and
(f) the need to ensure that adequate protection exists for vulnerable and domestic customers, including those customers protected by the safeguard tariff.”
The Chair
With this it will be convenient to discuss the following:
Amendment 8, in clause 8, page 5, line 21, leave out from beginning of line to end of line 24 and insert “—
(a) the statement published by the Secretary of State in that year under section 7 is to the effect that the conditions are not yet in place for effective competition for domestic supply contracts, or
(b) effective competition does not exist for vulnerable or disabled domestic customers,
‘(none) in which case the tariff cap conditions have effect for the year 2021.”
Amendment 9, in clause 8, page 5, line 26, leave out from “unless” to end of line 29 and insert “—
(a) the statement published by the Secretary of State in that year under section 7 is to the effect that the conditions are not yet in place for effective competition for domestic supply contracts, or
(b) effective competition does not exist for vulnerable or disabled domestic customers,
‘(none) in which case the tariff cap conditions have effect for the year 2022.”
Amendment 10, in clause 8, page 5, line 31, leave out from “unless” to second “in” in line 33 and insert “—
(a) the statement published by the Secretary of State in that year under section 7 is to the effect that the conditions are not yet in place for effective competition for domestic supply contracts, or
(b) effective competition does not exist for vulnerable or disabled domestic customers,”
New clause 1—Duty to consider the needs of vulnerable and disabled domestic customers—
‘(1) When exercising its duties under section 1, the Authority must have regard to—
(a) the need to protect vulnerable and disabled domestic customers, and
(b) the needs of domestic customers protected by the Authority’s safeguard tariff at the date the cap outlined in section 1 comes into force.
(2) When exercising their duties under sections 7 and 8, the Authority and the Secretary of State must have regard to—
(a) whether effective competition exists for vulnerable and disabled customers, and
(b) additional protection in place for vulnerable and disabled customers.”
This new clause requires the Secretary of State and the Authority to have regard for vulnerable and disabled customers when exercising their powers in setting, reviewing and terminating the cap.
Dr Whitehead
The amendments and new clause 1 are grouped together because they refer to the pillars of consideration that Ofgem—the authority—must have regard to when drawing up the process of turning our legislation into a practical price cap. That is essentially the subject matter of clause 1(6), which sets out the four pillars instructing the authority about its considerations. They include incentives for holders of supply licences to improve their efficiency; setting the cap at a level that enables holders of supply licences to compete effectively; the need to maintain incentives for domestic customers; and the need to ensure that holders of supply licences who operate efficiently are able to finance activity, as authorised by the licence.
The amendments essentially agree that those pillars should be in place, and it is right that Ofgem should have clear guidance in the legislation about how to go about their business. We suggest that further pillars be added to the considerations that Ofgem should have in mind when it is doing its work after we have done ours. Amendment 4 has two further pillars: one relates to further amendments to enforce that. As stated in the amendment, it refers to
“the need to ensure that adequate protection exists for vulnerable and domestic customers, including those customers protected by the safeguard tariff.”
We know that a number of customers are protected by a safeguard tariff. Effective price caps relating to those ranges of customers are already under way and, as far as this Bill is concerned, the price cap that will be introduced will add to those protections, placing a much wider tariff cap on to SVT customers in particular, whether or not they are vulnerable. It also substantially widens the scope.
We suggest that it would be a good idea to put in the pillars relating to Ofgem’s work; the fact that they should have consideration, particularly for those vulnerable domestic customers and those protected by the safeguard tariff, should relate to this wider tariff. That seems a reasonable addition, as a reminder to Ofgem that it ought to be considering that issue during its discussions about making the price cap a reality.
The other pillar suggested in amendment 4 is that Ofgem should bear in mind what sort of saving—it cannot be exact, obviously—should be considered as being possible as a result of those tariff cap conditions. I have a view on what that figure ought to be—not because I put the figure forward, but because the Prime Minister did. I will not ask hon. Members about their reading habits, but some of them may have seen a piece in The Sun newspaper on 25 February.
Dr Whitehead
The hon. Gentleman shakes his head. I cannot possibly comment on that. I got this on the internet, by the way. The headline was “Millions of Brits in line for £100 as Theresa May delivers on energy price cap promise”. Underneath, it said:
“The price cap on 11 million gas and electricity bills is to come in by end of the year as The Sun’s Power to the People campaign pays off”.
“It was The Sun wot done it”—not us, by the way.
Claire Perry
It is worth saying that that fine newspaper The Sun has campaigned for an end to various aspects of rip-off energy tariffs, and it is great that it was celebrating the fact that we had finally launched this Bill and got the provisions in. In this case we should all say, “Power to the people!”
Dr Whitehead
Since I do not read The Sun, I am not entirely up to date with all its campaigns, but obviously the Minister does and is. We will leave it there.
Bim Afolami (Hitchin and Harpenden) (Con)
I understand the thinking behind amendment 4. At first glance, one might almost be persuaded by it—until one looks at the clause in its entirety. The first sentence of clause 1(6), which governs all its paragraphs, states that functions must be exercised
“with a view to protecting existing and future domestic customers”.
That consideration is already in the legal framework.
With respect to the hon. Gentleman’s second pillar, the reference to £100 in his proposed new paragraph (e) is very prescriptive. It would make Ofgem’s already pretty difficult job—setting the cap at a level that satisfies all the conditions—even harder.
Dr Whitehead
I appreciate the hon. Gentleman’s point. Paragraph (e) would, conceivably, make life more difficult for Ofgem with respect to what it has to consider. As he correctly points out, it is required first to take a very general view
“to protecting existing and future domestic customers who pay standard variable and default rates”,
and then
“in so doing it must have regard to the following matters”—
those listed in the following paragraphs. In other words, if my reading is correct, after Ofgem has undertaken its initial consideration, it has a number of specific further considerations to take into account. All our amendment says is, “Here are two more to add to the list.”
Vicky Ford
The way I read amendment 4, it suggests that all customers on standard variable and default rates will get a £100 reduction, whereas the Prime Minister’s statement was that the millions of consumers who are on unacceptably high default rates would get a reduction. In the statement this morning, there was a suggestion that at least two of the big six do not have unacceptably high rates. I am rather concerned about the one-size-fits-all nature of the amendment.
Dr Whitehead
The hon. Lady has a point, but if hon. Members read amendment 4 and clause 1(6) reasonably carefully, they will see that
“the need to ensure that customers on standard variable and default rates have their annual expenditure on gas and electricity reduced by no less than £100 as a result of the tariff cap conditions”
would be a consideration—I emphasise the word “consideration”—that Ofgem needed to take into account.
James Heappey
I am afraid that I agree with my hon. Friend the Member for Chelmsford. A number of the larger supply companies have already sought to get ahead of the Bill by transferring their most loyal, or “sticky”, customers from what used to be called SVTs—standard variable tariffs—to other tariffs that are called something else but may be just as expensive. My concern is that the hon. Gentleman’s amendment is overly prescriptive and might allow the energy companies to get round what we seek to achieve.
Dr Whitehead
I do not think the amendment would allow energy companies to get round what we seek to achieve, although I accept the analysis that it may produce more work for Ofgem. I based amendment 4 on what the Prime Minister said. One could argue that she was being overly prescriptive—I do not know.
Alan Brown
I am glad the hon. Gentleman has explained that the £100 is not arbitrary, but a figure from the Prime Minister. Equally, I assume the Prime Minister’s £100 was arbitrary as well, so I must admit that I have concerns about stipulating a figure in the Bill. When I asked about it earlier, Ofgem said that there would be unintended consequences.
Presumably, concerns have been expressed about the big energy companies gaming in terms of exemptions and green tariffs. I am concerned that they will use this as a way to do gaming, so that they provide savings on paper by dodging and changing rates before the legislation kicks in. Could he address that?
Dr Whitehead
The hon. Gentleman makes an important point about what could happen prior to the cap coming in. Energy companies could be gaming ahead of the game with their prices, so what would savings look like after that? I am not sure that we can do anything about that right now. As Ofgem mentioned, if energy companies are too blatant in their price rises over the next period, they will be in breach of their obligations to Ofgem anyway.
We have seen several instances of small price rises recently. We heard about one—a comparative gas price—this morning. Bulb, one of the witnesses this morning, put up its rate by £24 just a few weeks ago. That was for particular purposes, but one could argue that it was a gaming price rise ahead of the legislation. Bulb was very clear that it was not, and that it was for other purposes, but we clearly have to be alert to that possibility.
If that does happen, what anyone has said about what savings would result from this price cap would have to be taken relative to whatever that price was at the point when the price cap was introduced. It would be possible for consumers to say at that point, “Actually, we were promised a £100 price saving. It does not look like a £100 saving to me, because it is a saving against a price rise that will end up increasing my bills.” In wishing to place this in the legislation, I am indicating that we in this Committee do not wish to let the public down regarding what might happen with this price cap.
The Prime Minister has already said that there will be a £100 saving. Indeed, I do not know whether this applies to anyone present, but interestingly The Sun article states:
“Government insiders say the cap should save at least £100, potentially rising to £300 a year with increased competition and faster switching.”
Government insiders, whoever they are, are suggesting that the £100 is a minimum and it could be considerably more.
Stephen Kerr
More important than any quotation from The Sun, the number that really counts is the £1.4 billion of detriment that was identified in the CMA report. That is the number we should be going on. Confusing the issue by coming up with arbitrary numbers in the Bill means taking our eye off the ball of the £1.4 billion.
Dr Whitehead
The hon. Gentleman is right to draw attention to the CMA figure. Customers were, in effect, being overcharged by that over a considerable period. Indeed, that was a substantial precursor to the idea that there should be a price cap in legislation in the first place. A regime was in place that allowed overcharging by a variety of devices, a number of which were identified by CMA in its report. We want not only to cap the price for a certain period of time, but to ensure that the behaviour that allowed more than £1 billion to be overcharged is not repeated. We do not want to be back here in a few years’ time, saying “That is terrible—now we have to implement another price cap.”
The issue is not just about the price cap, but about what happens afterwards. We need to do what we can, both during the passage of the Bill and during the price cap, to ensure that circumstances in the market prevent such overcharging from happening again. One of the underlying aims of the Prime Minister’s statement about the savings that would arise was that the price cap should be more than just a temporary punishment for certain energy companies; it should be an attempt to reset the market so that things work differently. The proposal for the £100 saving derives from that.
In May 2017, the BBC site—I do watch the BBC—reported that the
“Prime Minister…said 17 million households would benefit by up to £100 from the cap on poor value standard variable tariffs.”
What has been in the papers recently is slightly different, but it is clear that the original plan was a £100 saving for customers paying standard variable tariffs. That is the public’s expectation, as franked by the Prime Minister, of the consequences of the price cap; committing to it in the Bill would show that our intention is in line with the results they expect. Including the £100 saving as a consideration for Ofgem would complete the circle. As I say, it was a suggestion not from any Opposition Member, but from the Prime Minister, about how the Bill should work. We merely seek to enshrine her words in the Bill.
Our other amendments serve essentially the same purpose but relate to later clauses, especially clause 8, which sets out a clear mechanism for the circumstances in which the cap can be terminated, describing subsection by subsection what will happen at the end of each year from 2020 until 2023, when the sunset clause has effect. In each year, the trigger for rolling over the tariff cap conditions for another year is that
“the statement published by the Secretary of State in that year under section 7 is to the effect that the conditions are not yet in place for effective competition for domestic supply contracts”.
Our amendments would insert an additional condition for effective competition in each year, based on whether the Secretary of State thinks that
“effective competition does not exist for vulnerable or disabled domestic customers”.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I rise to speak to new clause 1, which is tabled in my name. It replicates or mirrors amendments 8, 9 and 10 in trying to provide explicit support for vulnerable and disabled consumers.
In the Minister’s opening remarks this morning—in private and in the evidence session—she expressed her concern to ensure that vulnerable customers are protected in future. Clearly, part of the Bill’s aim is to protect the vulnerable and those who have been getting ripped off. When I asked one of the panels about improving the Bill, and I specifically mentioned vulnerable and disabled people, the representative from Citizens Advice said that the protections are implicit in the Bill, but not explicit. Ofgem agreed that the protection of vulnerable people needs to be considered, although it believes that some measures are already in place. New clause 1 would explicitly ensure that vulnerable and disabled consumers have that protection and consideration in terms of effective market competition for the grouping they sit within.
New clause 1 effectively mirrors a clause proposed by Scope—a charity whose strapline claims that it exists
“to make this country a place where disabled people have the same opportunities as everyone else.”
Given that Scope are expert advocates and campaigners, I was happy to move this new clause.
As Scope rightly observes, people with disabilities are often high consumers of energy due to their impairment or condition. The hon. Member for Southampton, Test highlighted that a quarter of the households in which a disabled person resides—4.1 million households—spend more than £1,500 per year on energy, and nearly 800,000 households spend over £2,500 a year. That is a huge, significant sum and clearly has a huge impact on their expenditure. In terms of market regulation, it therefore makes absolute sense to make specific provision for vulnerable and disabled consumers.
We heard that some disabled people are protected under current schemes, but not all disabled people are automatically eligible for the warm home discount, and nor do they automatically get registered on the priority services register. That, again, reinforces why the Bill needs to make explicit provision for vulnerable and disabled people when setting, implementing and reviewing the cap, particularly in terms of whether conditions for effective competition are in place and whether the cap should be lifted.
We have already heard that, as predicted, additional protections will need to remain in place post cap. I want to conclude with an example from Scope. This is from someone called Lynley:
“Before I became disabled, I never gave heating a second thought. But now, as I’m home every day, things are very different. I find it hard to stay warm as I can’t move around to generate any heat. I need the heating on pretty much constantly. I also use an electric heat pad to help manage my pain and an electric powerchair to go outside. This equipment requires charging frequently. My energy bills are much higher than before, and—coupled with the loss of my income as a teacher—have made getting by very difficult.”
There is cross-party support for the Bill as a whole, and we all agree that it is about doing the right thing to protect consumers from getting ripped off in what has been a market failure to date. But let us do this absolutely properly and make sure that the rights of the vulnerable and the disabled are explicitly protected in the Bill as well.
Claire Perry
I would like to speak to amendments 4, 8, 9 and 10 and new clause 1. I will start with the first part of amendment 4, which requires a hard estimate on the face of the Bill as to what the saving might be. I was delighted to hear the hon. Member for Southampton, Test quoting our Prime Minister so extensively. I could quote some of the things she has said about the Labour party, but I would not like to challenge the spirit of cross-party consensus. [Interruption.] The hon. Gentleman really does not want to tempt me on that.
We can all sit and make estimates of what the savings ought to be, but all of that will depend on the level at which Ofgem chooses to set the cap.
Alex Norris (Nottingham North) (Lab/Co-op)
Does the Minister think that it is regrettable that, in the newspaper with the biggest circulation in the nation, a legitimate expectation may now be created that the saving will be at £100 or greater?
Claire Perry
I am sure the hon. Gentleman listened to the Prime Minister talking about the Labour party as being divided, divisive, tolerating anti-Semitism and supporting voices of hate. He probably does not want to trade quotes the Prime Minister has given.
However, let me move back to what we discussed in relation to the previous amendment. We talked extensively about how Ofgem needed to set the level of the cap to avoid crowding out investment, to encourage switching and, importantly, to set the cap at a level that does not facilitate strong legal challenges. That is why it is so important that we let Ofgem—which I think we all now believe does have the capability, and does share our commitment, to get this done by year end—get on and set the cap.
My hon. Friend the Member for Chelmsford made the point about setting an arbitrary figure. The problem with that is that this is not an average figure. We all know that we tend to work in averages, so just having that as the target would lead to all sorts of gaming.
The three things we all want are for the cap to come in, for it to be set at the right level and for it to be proportionate—once again, I wish we were not worrying about legal challenges, but we have to make sure. This is absolutely vital.
The hon. Member for Southampton, Test and I have discussed at length the difference between a cap and a freeze. We do want this cap to move over time. We know that prices go up as well as down. We know that the wholesale cost changes. We want to have the most efficient energy system we can, but the cost may increase. Having this number in the Bill would, in effect, bind Ofgem into setting a number that had no relation to the underlying costs.
I absolutely support the hon. Gentleman’s intentions. He and I both want to see these sorts of savings. In fact, the average spread between the cheapest tariffs in the market and the average of the standard variable tariffs is more like £300, so we would both confidently expect the savings to be greater than this. I will turn to the prepayment meter cap—the safeguarding cap—in a second in relation to the specific regard for vulnerable customers, but it is notable that the average saving after the April increase will be north of £100. Customers who are on that tariff are more than £100 better off than they would have been if that tariff had not come into place, so there is evidence that more than that amount could be achieved.
I will turn now to the second part of amendment 4, plus amendments 8 to 10 and new clause 1, which was tabled by the hon. Member for Kilmarnock and Loudoun.
Kerry McCarthy
If I heard correctly, the Minister was saying that people on the safeguarding tariff would be better off. However, in evidence this morning we heard that people will be eligible for it only if they have successfully applied for the warm home discount. Is that right? There is a waiting list and money runs out before time, so would she give consideration to the notion that it should be people who are eligible for the warm home discount and not just the people who have actually managed to get it?
Claire Perry
That is a very important point, and the hon. Lady is extremely knowledgeable in this area. She brings me to the second part, when I will hopefully address her point.
The safeguarding tariff came into force in April 2017. That perhaps gives the lie to the idea that the previous Government did nothing; this was all part of the pressure that we put in place. The tariff initially affects people who are on prepayment meters, who are often exactly as the hon. Member for Kilmarnock and Loudoun described—perhaps living in fuel poverty. That tariff is put in place by the CMA—it is nothing to do with Ofgem—and it will run until 31 December 2020. We have seen Ofgem extend that to this additional group—those who have claimed warm home discount—as the hon. Lady quite rightly said. She raises an interesting point, and we should take a look at it to ensure the maximum number of people are capable of achieving that safeguarding discount.
I asked the team to look at the impact on the bills of customers on these tariffs. Before the safeguarding tariff came in, the PPM average standard variable tariff was about 5% more expensive than the average standard variable tariff. Now, those who are on the PPM and vulnerable tariff pay on average 8% less than those on standard variable tariffs. That is absolutely working, independently of the Bill, to deliver the savings that we want to see for vulnerable and disabled customers. Those caps will continue to be in place, and it is very important that both are in place and that the Bill does nothing to remove eligibility for them.
I want to talk about some of the other duties on Ofgem, which are already covered in clauses 1(6), 7 and 8. They require Ofgem to protect all existing and future domestic customers, including vulnerable and disabled customers, and to consider whether effective competition is in place for the domestic energy supply as a whole. When effective competition is considered, it has to apply for all customer groups, including vulnerable and disabled customers.
James Heappey
Before the Minister gets too far from the issue of vulnerable customers and the cap, I thought National Energy Action’s evidence this morning was interesting. It is probably premature to react to that evidence by enacting the Opposition’s amendments. Could the Minister confirm that she will go back and look at whether the evidence provided this morning warrants some action, perhaps before the Bill comes back on Report?
Claire Perry
Again, it was a very effective evidence session this morning. I was just going to come on to some of the other support we are looking to provide, in particular through the Energy Company Obligation, where we may be looking to help a broader group of people than is currently eligible.
I want to touch on some of the other duties that Ofgem already has in relation to protection of this customer group. The original gas and electricity Acts place a duty on Ofgem to protect the interests of existing and future customers. In carrying out this duty, Ofgem should have regard to the interests of individuals who are disabled or chronically sick, individuals of pensionable age, individuals with low income and individuals residing in rural areas. So I would argue that Ofgem already has these duties in place as part of its conditions. Indeed, the Bill, in which we make it explicit that we need Ofgem to consider all customers and all competition in setting the cap, makes the amendment surplus to requirements.
Stephen Kerr
I just have a brief question. I know the Minister has acknowledged the Select Committee’s work on pre-legislative scrutiny. One of the recommendations in its report was about amending the Digital Economy Act 2017 to allow data to be shared with energy companies. That is a huge impediment right now to getting help to the most vulnerable—particularly those who are on SVTs.
Claire Perry
Yes. Again, I want to thank my hon. Friend and the Select Committee for bringing forward a series of recommendations, which we have accepted. He refers to a statutory instrument that is being started in the Cabinet Office, which I am assured will receive assent—or whatever the right word is—during the passage of this Bill, subject, of course, to cross-party support. That opens up the opportunity for much better data sharing to support vulnerable and disabled consumers.
It is extremely important that we continue to look at this group. We heard today that some of those we might consider most vulnerable are also the most assiduous switchers, because they simply do not have a penny to spare. I guess the issue I have, which is why we are here, is that we do not want people to have to invest the time in shopping around to feel that they are always getting the best deal.
Households that are receiving the warm home discount, in addition to qualifying for the safeguarding tariff, get £140 a year. Of course, we protect our pensioners, with up to £300 a year for winter fuel payments. Sadly, the cold weather payment was also triggered in the last couple of weeks, and that was another £25 during the cold snap. There is also the priority services register, which is a free service provided by suppliers for people of pensionable age who are disabled or chronically sick, have a long-term medical condition or are in a vulnerable situation. Those people go to the front of the queue should an emergency—a supply interruption—interrupt their heating or cooking facilities.
Finally, I want to mention the ECO consultation, which we will bring forward shortly. It is my intention, as far as possible, to pivot the whole of ECO to focussing on the challenge of fuel poverty and trying to make sure that those in the greatest poverty receive the greatest benefit, but also to use the programme to support more innovation and more targeting. I live in an off-grid area, and I am fed up of getting ECO leaflets through my door. It does not feel like the best targeted scheme to me, and I would like it to be targeted at those who are perhaps time-poor and need the help the most.
Kerry McCarthy
In the NEA’s evidence this morning, it said that one of the additional things needed for a package for the most vulnerable customers was energy efficiency measures. I know the Government are consulting on energy efficiency programmes, and particularly on amending the energy efficiency standards for rented homes. May I urge the Minister to make sure that that is brought forward quickly as well, because it will take a while to implement these measures in people’s homes? This is not just about lowering the bills; it is about making sure that people are not using huge amounts of electricity and gas in the first place.
Claire Perry
The hon. Lady is quite right: the great thing about energy efficiency in the home is that it cuts both carbon emissions and bills, so it is a win-win situation, and that is why we have set an ambitious target. She is right that we have started with homes in the rented sector and the social rented sector, and our intention is to make sure that progress is delivered as soon as possible.
Dr Whitehead
I am grateful to the Minister for not exactly spilling the beans but giving us a little preview of what the Government will come up with in response to the consultation on ECO. If there is to be much more concentration on those in fuel poverty, regardless of one’s view on whether the total sum on ECO is sufficient to do what we want on energy efficiency, that is a positive step.
Will the Minister also say a word or two about the regulations that I think are still not yet with us on the responsibilities of landlords to raise the energy efficiency of their properties? I am sure the Minister will know that overwhelmingly those who are vulnerable and in fuel poverty are concentrated in that private rented sector—
Dr Whitehead
Substantially, I think we can agree. Does the Minister have any idea whether the regulations will turn up shortly? Secondly, if they do turn up, will they have within them the requisite amount of money that landlords should spend on bringing their properties up to band E, so that we can have reasonable assurance that will help vulnerable and fuel-poor customers?
Claire Perry
At the risk of being ruled out of order, I will write to the hon. Gentleman. He is quite right that we want to make sure that people are not living in private rented accommodation with poor quality safety or energy efficiency. We intend to introduce those regulations—indeed, they are already on the statute book. We intend to make sure of the maximum amount of cash that is required.
The other question on this is that the vast majority of landlords are small: they are people owning one or two properties that they rent out. As the hon. Gentleman will know, the whole scheme was based on the green deal. It was a Bill Committee that I was proud to sit on; we thought that was going to provide a financing mechanism, but it has not. That is why the work of the Green Finance Taskforce, which we will be bringing forward to assist in financing mechanisms, will be helpful. I will write to him with those details.
Turning to amendments 4, 8, 9 and 10 and new clause 1, I hope I have persuaded the Committee, first, that to put an arbitrary number for savings in the Bill would not be appropriate. It would not be an average number and is not necessary, because we can see from the safeguarding tariff that bills have fallen. Also, we would all expect that number to be greater. Secondly, I think we are all seized of the need to protect and improve services for vulnerable customers. That is part of Ofgem’s duty and is part of the tariff cap conditions and the conditions for competition. There is a lot of support already. I take the point made by my hon. Friend the Member for Wells that more needs to be done. That is why we would like to bring in ECO, to make sure that that customer group is paying the least possible for their energy and getting the best possible service.
On that basis I invite the hon. Member for Southampton, Test, to withdraw his amendments.
Dr Whitehead
As I have mentioned, our amendments are requirements on Ofgem to take these matters into account. It may be that, as a result of what we have discussed in Committee—after all, it will be on the record—that Ofgem might consider itself to be rather better instructed.
Claire Perry
I want to emphasise that this is exactly why this process is so incredibly helpful. The signalling that collectively we can give about the need to consider the conditions that might be there—albeit perhaps buried in a statute book somewhere—is vital. That is why it is a pleasure to have these conversations.
Dr Whitehead
I think the Minister for giving that additional weight to the points we made this afternoon, which will amplify our intentions for those reading our deliberations. It is clear that the intention behind the amendment—what Ofgem should have regard to in setting the tariff cap—is shared across the Committee.
I also take the point in practice that the first part of amendment 4 would give Ofgem additional work and could be a little problematic as far as getting the amount right before the price cap comes in is concerned. It might have been prudent for the Prime Minister to put those caveats in what she said a little while ago about how the Bill was to proceed, but on the basis of our discussion this afternoon, I do not wish to proceed further and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.
Clause 3
Exemptions from the cap
Dr Whitehead
I beg to move amendment 5, in clause 3, page 3, line 17, after “Authority” insert “wholly”.
Hon. Members will find the amendment rather hard to spot. It is to insert one word, “wholly”, and I want to explain why that is important and give some of the background to how the clause came about in the first place. There is no universal agreement on the need for the clause. After all, it exempts certain providers of certain tariffs from conditions that elsewhere will apply as far as the price cap is concerned. The providers exempted under subsection (2)(b) are those that appear to the authority to support the production of gas or the generation of electricity from renewal sources. There are a number of arguments about whether an exemption should be in place; my view is that there should be.
We heard in the evidence session this morning about suppliers of renewable tariffs ensuring that what they source is genuinely from renewables. They might undertake power purchase agreements from independent producers so that they can guarantee that their tariffs are sourced directly from those producers or, under certain circumstances, they might have their own supply of renewable energy because they have themselves invested in wind farms or other forms of such energy and therefore know that their renewable energy is wholly such. Under those circumstances, those companies—there are a number of them—inevitably incur rather more complicated arrangements in the delivery of their tariffs and in guaranteeing that these really are what they say they are, wholly renewable tariffs delivered to customers on that basis.
Bambos Charalambous (Enfield, Southgate) (Lab)
When I asked Octopus and Bulb this morning whether there was a need to tighten the definition of renewable energy, they both agreed that there was. They saw it as a way of the big six getting round the cap. So does my hon. Friend agree that there needs to be a tightening of the definition?
Dr Whitehead
Yes, I certainly do. If one first agrees that this particular provision should be made, the question of tightening it is quite an important aspect of the Bill.
I am sure that hon. Members will be aware that the draft Bill, when it first appeared, had a much wider and I think much less satisfactory definition of the circumstances under which an exemption could be made. The Select Committee that considered the draft Bill and produced its excellent report singled out this particular clause as one that should be strengthened, as my hon. Friend the Member for Enfield, Southgate has pointed out. It thought it should be strengthened on the basis that a number of stakeholders viewed the Bill as then drafted as allowing for
“unscrupulous suppliers to game the system and avoid the cap by moving customers on poor-value tariffs onto loosely-defined green tariffs.”
It recommended:
“The Government should work with Ofgem to strengthen the definition, standards and checks for electricity tariffs with environmental claims so the system cannot be gamed in this fashion and undermine the success of the cap.”
That concern was absolutely right. Regrettably, it is the case that throughout the present tariff offer a number of tariffs are in place that purport to be green tariffs, but when we drill down to what they consist of, they are pretty much not green tariffs. They may have a part of renewable energy in their make-up. It may be claimed that the company is advantageously purchasing renewable energy as part of its overall purchase arrangements, but of course we know in terms of today’s energy mix that it is fairly difficult to rigidly remove oneself from purchasing any renewable energy in the portfolio of purchases for tariff purposes.
James Heappey
I have huge sympathy with the point that the hon. Gentleman is making. My concern is that we risk letting the perfect be the enemy of the good. There may well be tariffs that are 95% or 99% green that really should be supported, but would not be under his amendment. The wider issue of greenwashing is a matter for the regulator more generally, rather than specifically a matter for this Bill.
Dr Whitehead
I take the hon. Gentleman’s point. I have tried to think about this point precisely on those sort of lines. It is difficult, in looking at such tariffs, to see the circumstances under which a company offering not a wholly renewable tariff is protected from a slippery slope—from going right down that slope and saying, “Well, as long as there is something in there that is renewable, we can call it a renewable tariff.”
I was about to make a point about the circumstances under which companies trade. Normally, because of the extent of renewable penetration into the energy system, most companies will come across a renewable supply as part of their trading arrangements. As I said, it is pretty difficult to avoid that, so we can imagine how relatively easy it is in principle for someone sitting in a company boardroom to say “How can we produce a tariff that looks like a green tariff but does not give us any sort of problem in producing it? Why don’t we just set aside what we have come across by chance, as far as our energy supply is concerned, say that it is our green purchase and put it in a tariff? Then we will have a green tariff and will be fine.” No work would have been done to distinguish that tariff from anything else, and the company would have no intention of doing anything within their tariff offer but trade in the ordinary way. That is a worry.
Caroline Flint
This is an important area of the Bill. Does my hon. Friend agree that there is a requirement on energy companies to source renewable energy—quite rightly—and those costs are already spread across all bill payers? Why should there be a premium on top?
Dr Whitehead
The point that my right hon. Friend makes is, I think, taken into account by the circumstances that now apply across the board for energy sourcing. As she and I know, having talked about this for years, the process of the renewables obligation did impose a particular obligation for a proportion of energy purchased to be green. Then there was a system of trading those obligation certificates. Those people not directly purchasing green energy would have to purchase certificates, which could be traded from those who had actually traded in green energy in the first place, so that those involved had, in one way or another, carried out their obligation. The overall design of the renewables obligation system was to encourage the production of green energy, because the beneficiaries of the certificates when they were traded in cash would be the producers. That was a system that very much incorporated in it an incentive to trade in green energy in the first place.
Now, of course, the renewables obligation is no more. It continues as a ghost trade system and will continue on a declining basis, I think, until 2027, but as of March 2017 no more renewables obligation certificates are being issued. They are being replaced by the contracts for difference system, which does not impose an obligation to purchase green energy in the same way as the renewables obligation system did. The prospective system does not, as my right hon. Friend suggested, provide a universal underwriting of green energy production. She is right, of course, that the system overall encourages renewable energy production, but not in the same way as the renewables obligation.
I do not think that that particularly detracts from my right hon. Friend’s fundamental point, but it puts us in a position where we can properly consider the idea that a number of energy companies might accidentally, as it were, purchase green energy that does not, otherwise, have an obligation attached to it, and introduce it as part of a green tariff that is not really a green tariff. I suggest that companies wholly in the business of producing renewable energy, or those that produce it from their own sources or sources guaranteed through a power purchase agreement, or something similar, with the operator, are in a different category. I want to emphasise that difference with respect to the purpose of the amendment.
James Heappey
I think the point made by the right hon. Member for Don Valley was really about the existence of clause 3(2)(b) in the first place. I have a lot of sympathy with that. I think it is unhelpful to mark out green tariffs as a premium product—that is counter-intuitive to the wider effort we are making. However, if clause 3(2)(b) must remain, I am not convinced that the amendment tabled by the hon. Member for Southampton, Test is necessary. I encourage him to consider again whether where we all agree is that Ofgem might take a much more robust view on the practice of greenwashing and that that is the actual challenge that we want the regulator to close with, not necessarily an amendment to the legislation this afternoon.
Dr Whitehead
I would say that the essential point is how far up the beach and close to the walls the greenwashing actually goes. Can we conversely say that we can put greenwashing into a particular box and say “That looks like greenwashing”, but as we move up the scale of more and more renewables in the system, the greenwashing ceases and therefore can we say that this really is a renewable product and is something we can apply special exemption arrangements to? That is the nub of the debate.
Stephen Kerr
I would like to share with the hon. Gentleman the very words of Dermot Nolan in relation to this issue. In evidence to the Select Committee, he said in answer to a question about how it is decided whether energy is green or not:
“There are ways to determine the source of energy as to whether the generation of energy by that company has occurred in a sufficiently green fashion, which we have a definition for already, although not a perfect one. We would make specific requirements of companies on that. We would audit them and we would police it. If they were not compliant, we would tell them they must immediately withdraw the tariff or face enforcement action.”
That answer and the agenda that Ofgem is following make the amendment redundant.
Dr Whitehead
That is a reasonable and honestly held opinion about the extent to which it is possible easily to distinguish when greenwash is not greenwash and the point at which an energy company, even with a partially green tariff, puts in something that is honestly green and not something that they have just cooked up because they happen to have purchased something that has an element of traceable green energy in it.
Even under the circumstances that the hon. Gentleman mentions, it would be fairly difficult for Ofgem to make easy distinctions when it came to what it was doing about tariffs that could be jumbled up with a lot of brown energy but nevertheless be claimed to be at least partially green.
I have tried to think this through and consider how we might be able to make honest citizens of those companies under such circumstances. It is possible to argue that even if a company accidentally buys green energy, if it is genuine green energy, then yes, it has sourced green energy. However, the bar needs to be set rather higher.
Vicky Ford
The hon. Gentleman’s amendment uses the word “wholly”. In my view, “wholly” means that 100% of the energy would be renewable. To me, that is wholly unworkable. I want more consumers to get more choice. If they really wish to buy more renewable energy packages, they can do that. I would also like to see green tariffs that encourage smart consumption—smart appliances that switch on and off at peak times, for example. Those could also be bundled into a green tariff.
Furthermore, as more and more people want to buy renewable packages, what happens at a peak time on a very, very cold day when our renewables cannot cover the amount of consumption those consumers need? Would they have to be switched off and have no energy at all? Would they not be allowed any back-up supply? “Wholly” is not the right word.
Dr Whitehead
I hope the hon. Lady will forgive me for saying this, but she makes a rather good case for my amendment. Let us consider circumstances, such as those she mentions, in which insufficient renewable energy is generated on a particular day to “go round”. What we mean by “go round” is that renewable energy, in most instances, is variable. If we look at our little National Grid—
Dr Whitehead
The app, to see what is being generated on any particular day, we will see that it varies from 4% or 5% to 20% or more, depending on the circumstances, so it certainly is true that there will be a variable amount of renewable energy to go round.
However, that is not the point as far as renewable energy suppliers who contract to supply wholly from renewable sources are concerned because they will provide themselves with power purchase agreements or will own their own generating capacity and guarantee that, come what may, what the consumer gets as a result of their tariff is renewable. In a sense, they will have pre-empted the “not enough to go round” point by guaranteeing with their arrangements that there is. I suggest, precisely for the reasons the hon. Lady set out, that that can be problematic for those companies. Nevertheless, that is what they guarantee as part of their tariff.
As far as brown energy companies that want to do a bit of greenwashing are concerned, the hon. Lady is absolutely right that if there is not enough green energy to go round they remove the portion of renewable energy from their supply and the tariff becomes browner, even though they say it is partially green. That is precisely what the amendment seeks to avoid, by making the starting point that the exemption applies to tariffs that are clearly wholly renewable and about which it can be said without a doubt that that is what they are—no messing about. That is why they should be exempted.
Michelle Donelan (Chippenham) (Con)
Further to the point made by my hon. Friend the Member for Chelmsford, I am a little confused as to why the hon. Gentleman would add “wholly” when he admits that that is a virtually impossible state for companies to be in at present. Would the amendment not make the Bill have a null and void section, if the word “wholly” was used when that was unachievable?
Dr Whitehead
Forgive me, but I was trying to distinguish between other companies and those that guarantee to provide a green tariff come what may because they have either their own supplies or a power purchase agreement with a supplier that guarantees to supply them come what may with renewable energy.
Let us remember that not all renewable energy is variable. Not all renewable energy is reliant on a variable supply being continuously variable. I have recently been to see a number of plants, one of which was a large solar farm close to the Minister’s constituency, which had a large battery installation next to it. The power produced from that source is continuous even though the solar is variable because of the existence of the battery. If a company offering a wholly renewable tariff has a power purchase agreement with that producer, it will have a reliable source of renewable energy come what may, because that is the contract it has made. That is essentially the contract that those companies are undertaking on their renewable tariffs.
Michelle Donelan
Is that not disincentivising the green company from growing? It knows that if it takes on more consumers, it cannot 100% guarantee to fulfil their needs on a cold day or in a cold snap. That would cap the green market, which is contrary to what we want to do—we want to encourage it to grow.
The Chair
Order. Before the shadow Minister responds, we will have a short comfort break.
Dr Whitehead
I was about to reply to the hon. Member for Chippenham, who suggested that the amendment might be superfluous because, as she put it, if companies cannot supply from renewable energy in any event, putting forward an amendment to require an exemption only where a supplier wholly supplies renewable energy might be a step too far for the energy market.
The amendment sets the bar fairly high, but not impossibly high. Companies that genuinely supply renewable tariffs have effectively pre-empted the variability of the market by securing reliable renewable supplies one way or another in advance, because of their power purchase agreements or their individual ownership, so that they can reliably offer a renewable tariff.
On a wider basis, it is true that what we want is to have as much renewable energy on offer as possible, as a general policy good thing, but that amount on offer will necessarily vary, although as I think hon. Members can see—the Minister has mentioned the nice app that we both watch regularly—those numbers have come up enormously in recent years.
Caroline Flint
It is a pleasure to serve under your careful stewardship, Ms McDonagh.
I find myself in an interesting position. I completely understand what my hon. Friend the Member for Southampton, Test is trying to do with his amendment. The sense I get from the interventions so far is of common agreement, and that is also the response of the Select Committee. I am glad to see on page 24 of the Select Committee’s report that I have a footnote—I have never been a footnote before, and I am so proud. Good Energy and I, and others, made a submission to the Select Committee about why we have to be very careful about gaming in moving forward in relation to the price cap.
My hon. Friend has clearly outlined the concerns that we have—and share with others across the House and those outside who have made representations—about the danger of people trying to use green as a way to avoid providing fair prices. Let us be clear: we are talking about the sticky customer base—those people who, year in year out, find that their energy bills go up. The CMA review and others have found how people have been overcharged for a number of years now, and there has been much discussion in this place about that. I totally understand my hon. Friend’s intent in trying to introduce “wholly” as another way to separate those who might game the system from those who are in all good faith seeking to invest in and buy 100% renewable energy.
My only problem is that I feel that we want to make this legislation as simple and straightforward as possible, given that there is also agreement that this is a temporary measure for a period, which will hopefully allow people to get a fairer Bill for their energy and not be overcharged, and in which we and the Government can look at what further reform might follow from this in the future. My hon. Friend and I have spent many hours discussing that and we think there is much that could be done—but that is not for today’s debate, Ms McDonagh.
As someone who very much supports renewable energy, not only for our electricity and power supply but for our heat supply as well, I am not sure of the evidence. I may be convinced during the passage of this Bill that a premium price for green energy stacks up. I might be wrong, but I am not sure it does stack up. I apologise to colleagues on the Committee that I was not able to be here this morning, but I have read the written submissions—in particular, those from Bulb and OVO, who outline their concerns about exempting green tariffs from the legislation. A lot has been done to contribute to today’s situation, where the sort of energy that we want, for climate change and in terms of being innovative in the sector, has seen a huge reduction in overall costs and is therefore able to compete very effectively in the market.
Claire Perry
In my mind, the right hon. Lady is not a footnote—she is a major chapter heading. I am enjoying listening to her speech, because it was largely as a result of the great cross-party consensus that we brought in the Act—and some pretty tough decisions, which she supported in her shadow Secretary of State role. That is why we are able to buy renewable energy at prices that do not require a substantial subsidy. That is why we all look forward to a situation where customers should not be charged a premium for that renewable energy source.
Caroline Flint
I thank the Minister for that intervention—I aspire to be a book. [Interruption.] A library, no less. Goodness. People will not be able to work out what the hell we are talking about in this Committee!
A lot has been done to drive investment in the renewable sector, and some of that is ongoing. My hon. Friend is quite right that the renewable obligation is coming to, if not its end, then close to it. We also have contracts for difference. We also have the renewable heat incentive for heat. A business in my constituency that produces green gas is a beneficiary of that. In lots of different ways, there continues to be support for renewable energy of one form or another. No doubt, should it get the green light, the tidal lagoon will also be receiving a contract for difference that will guarantee a price for what it produces over a number of years.
I would question my hon. Friend, and also the Minister—she has tried to tighten up the wording and, in this clause, has enabled Ofgem to step in, assess, consult and what-have-you—because I am still not convinced that there is any need for exemptions in the way they suggest. The more complicated things become, the more clarification that is required and the more points at which Ofgem is tied up finding a formula for what the price should be—we will have more discussions down the road about how often that should happen and the methodology for that—the more tasks we are giving it, which could lead to more confusion. The last thing I want, after all this, is a legal challenge that could stop the price cap being in place in time for the people we care about as they start paying their winter bills in 2018 and early 2019.
I hope we can think more about those issues. We may not resolve them today, but we should give them some more thought—I certainly will. I might be wrong about this, and I am happy to receive submissions and thoughts from others outside this place. For reasons of simplicity, and for the development of the renewable energy market and how it has been helped to get to a place where it provides cheaper energy today than our fossil fuels, it is still worth considering whether any kind of exemption is warranted in the Bill.
Alex Norris
It is a pleasure to serve under your chairship, Ms McDonagh. I will briefly follow the contributions of my hon. Friend the Member for Southampton, Test and my right hon. Friend the Member for Don Valley with one simple point.
I should say, for context, that we have obviously broken out into violent agreement—that is always good—not just on the need for the legislation, but on what it is for. It is not the end state that we seek, but a key part of getting us on the journey there. We all want the market and the providers to use this time, whether the full five years or not, to change practices so that, at the other end, the consumer gets what they need. There is a lot of enthusiasm for that.
With that in mind, as we look at each and every line in the Bill, we should think about how the individual words fall and the unintended consequences that might arise from a superfluous word or a missing word, because we know—and we would expect nothing less—that there will be conversations in the big companies about the different ways to approach the next five years. The choice will be whether to genuinely change or to game the system. We have to be mindful of that and look to close down every possible opportunity to game the system, so as to be clear that this is legislation to drive proper change. It is a short-term cap, but will lead to a long-term benefit.
The amendment does that. It takes up the cudgels from what the Select Committee said. It is proportionate, simple and easy to understand. I understand that delivering what sits behind it may be complicated, but it sends a clear signal about what this Parliament values and I support it.
Claire Perry
One little word has provoked a substantial and excellent debate. There is a genuine sense in the Committee that we all want to achieve the same thing: companies not being able to game the system, and tariffs that deliver for consumers and do what they say on the tin, so that if they say they are renewable, they are actually renewable, not just a package of greenwash. That is why I genuinely feel that the crowdsourced approach to legislation can be very good. I pay tribute to the Select Committee process, once again ably represented by my hon. Friend the Member for Stirling, who helped us to focus on the issue. I was pleased to hear several hon. Members comment that we have tightened up the wording accordingly.
We are wrestling with questions around gaming and what a green tariff looks like, and this question of “wholly” or “in part”. All those will be addressed by two processes, which I will talk briefly about. First, as the right hon. Member for Don Valley said, we have quite properly tasked Ofgem with looking at the whole issue. I think I am right in saying that it has never been asked to review the whole suite of green tariffs in the market and opine on whether they are any such thing.
A co-benefit of the whole process will be understanding what is out there, whether it is wholly, partially or not at all green, and what the price premium for some of those products is. I was a very early Good Energy customer, over 10 years ago, and—
Claire Perry
I am afraid that, unlike the hon. Lady, I came off it, because it was so expensive—I apologise if she thought we were going to have a nice bonding moment over our green tariff. By the way, having heard the evidence, particularly from some of the more nimble companies coming in, I have every intention of looking very closely at changing my tariff again. However, the point is that the world has moved on. As the right hon. Member for Don Valley pointed out, prices have dropped and there is a question as to why we should be paying a premium tariff.
I would like the amendment to be withdrawn today—albeit on the basis that we do not yet have a brilliant fact base—but the offer I would make to every member of the Committee is for my team to put together a list of all the green tariffs in the market already and perhaps to ask for some evidence for to what the price premium is, so that when we look at this issue again on Report we will perhaps all feel a little bit better informed about this part of the market structure.
James Heappey
It is useful that the Minister will go away and make an analysis of the green products that are already on the market. I wonder whether she might also, with the evidence from Octopus and Bulb ringing in her ears, go away and ask the Department to go for just one more lap on whether or not this exemption is necessary all together, or whether it might do more harm than good when it comes to promoting green energy and the way that consumers regard green tariffs.
Claire Perry
I am sympathetic to my hon. Friend’s point; he is extremely knowledgeable in this area. However, as we have been through, particularly in the draft scrutiny process, we genuinely do not want tariffs that customers actively choose to be on, and which support the welcome development of creating demand for the renewable market, to be captured, as it were. The hon. Member for Nottingham North made the point about unintended consequences, and that is why word-by-word scrutiny is so important. The BEIS Committee supported that view, and I think the legislation has been substantially improved by that process. I am therefore less inclined for the proposal to be withdrawn completely, but I want to talk a little more about the point that the hon. Member for Southampton, Test made. I have talked about publication transparency. To me, transparency—having Ofgem look at these tariffs, probably for the first time—is an important part of establishing that this is a credible part of the market.
Kerry McCarthy
I should say that although I have been a Good Energy customer for some time, we now have Bristol Energy—there is that conflict between being green and giving support locally; I think it has now introduced a green tariff. Another west country electricity company, Ecotricity—which has made a submission to this Committee very late in the day—is concerned that if the cap is introduced across the board before the green exemptions are looked at, its customers might find their bills having to go down when the cap comes in, only for Ecotricity to have to turn round and say, “Actually, we’ve got this exemption now. We want to put your bills up.” At the risk of delaying the introduction of the cap, I urge the Minister to make sure that the green exemption issue is sorted out at the same time that the cap comes in.
Claire Perry
In standing up for her local enterprise, the hon. Lady pre-empts the second point I was about to make, which is that we will use transparency, but we will also use the Ofgem consultation process to do exactly that. Ofgem has to consult—it has to review the existence of these tariffs and understand what they mean—and it will have to do that as part of creating the cap, because it is a condition of introducing the cap that those exemptions are also carefully defined.
There is an interesting question. There is the transparency issue, there is the consultation issue, but the third thing is this: is it zero, 100 or somewhere in between? It will be explicit, I think, in conducting that analysis that Ofgem has chosen a level of what it thinks this level will be. I totally understand the point that the hon. Member for Southampton, Test made about us all wanting a world in which renewable energy is not intermittent. Indeed, I opened Clayhill solar farm, the country’s first subsidy-free solar farm, partly because it has managed to achieve on-site storage, providing both a better economic return and overcoming the problem of intermittency. That is all absolutely correct.
However, we are not there yet, and I was very struck by what my hon. Friends the Members for Wells and for Chelmsford and the right hon. Member for Don Valley said. They said that we want to be in a world where we are not stifling that evolution, but instead creating a demand for those tariffs in the future. It may be that, in setting out its view on what constitutes the tariff, Ofgem will say that it is 75%, or 95%, or 50%, and we will all have a chance to respond at that point. I absolutely accept the spirit in which the hon. Member for Southampton, Test tabled the amendment, but I fear, as we talked about, that it would have the unintended consequences of driving some tariffs out of the market and creating other perverse incentives.
I would like to put on record that the issue of gaming exercises us all. I have said this to the energy companies and I will say it face to face: if they think they should be spending their energies working out ways to game the tariff, as opposed to delivering better consumer value and service, we will put them on notice that that is exactly what none of us wants to see. That is a strong message that we have all delivered.
I am happy to provide more information to inform the debate. I have listened carefully to the excellent contributions, but I hope that the hon. Gentleman sees that this one tiny word creates a series of unintended consequences that perhaps weaken the cap and that he is therefore content to withdraw the amendment.
Dr Whitehead
I take the Minister’s offer to give further and better particulars about green tariffs, including what they consist of, what the relationship between part-green tariffs and wholly green tariffs is, and what the cost is, as essentially a suggestion that the matter should at least partly be placed on the Table and might be revisited on Report, depending on what we see. It is an excellent suggestion and I very much welcome it.
Claire Perry
To be clear, I am not inviting further amendments to the Bill—far from it. My hope is that during the passage of the Bill, with the joint messages we are sending out with cross-party support, the requirements for more information and transparency that will accompany the Bill’s passage—because they have to inform the tariff calculation—can only be helpful in this consumer market, even if they are not on the face of the Bill.
Dr Whitehead
I understand that the Minister is not inviting further amendments—it is her job not to—but I can envisage a circumstance in which we have gathered all the information together and some things scream out from it that we might consider on Report. In which case, we should properly do that. On the basis of that offer, and presuming that the information would effectively be in the form of a sort of late evidence submission to the Committee and would go to all its members—
Claire Perry
My intention is that we will write to all Committee members with the information.
Dr Whitehead
That is great. It is a very welcome suggestion and wholly constructive regarding what we are trying to achieve with the amendment. On that basis, I wholly agree that it should be withdrawn. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 ordered to stand part of the Bill.
Clause 4
Notice of proposed modifications
Question proposed, That the clause stand part of the Bill.
Claire Perry
I realise that, in moving swiftly through clause 2, I did not give anyone the opportunity to comment, so I feel that I should say briefly what this clause does and why it should stand part of the Bill.
The clause sets out the first part of the bespoke licence modification that must be followed by Ofgem to implement the price cap. They are the statutory steps that Ofgem will take and they will cover the final design and level of the cap. Concerns have been expressed that if organisations wanted to try to derail the implementation of the Bill, it would be by objecting to some part of that process. The process very much mirrors powers that Ofgem already has to modify the standard supply licence. The clause sets out the technical arrangements of the timing, the timings of notice of publication, and provides the steps to be taken before the Bill is passed, which I alluded to in earlier comments, so that as much of the work as possible can be done in tandem with the Bill’s passage through Parliament.
Question put and agreed to.
Clause 4 accordingly ordered to stand part of the Bill.
Clause 5
Publication and effect of modifications
Question proposed, That the clause stand part of the Bill.
Claire Perry
Again, the clause outlines the final part of the licence modification process that Ofgem must undertake to impose the tariff cap—this is the actual modification of the licence conditions and implementation. It, too, sets out the statutory steps that Ofgem must go through. Ofgem must set out how it has taken account of representations made during the consultation specified under clause 4. As we heard in the evidence session this morning, it must set a date that the modifications will take effect from, which must be after a period of 56 days beginning on the day when the notifications are published.
The clause also sets out that the appeal mechanism is via judicial review, rather than through an appeal to the Competition and Markets Authority. We have had a conversation about that—certainly during the very good Second Reading debate—which is primarily because we want nothing to get in the way of implementing the temporary price cap. The CMA’s powers are used exclusively where there is a permanent control mechanism, but we and the Select Committee have taken substantial evidence to suggest that judicial review gives all interested parties an adequate means of address. A court has sufficient expertise to hear an appeal. A court is likely to be able to hear a matter more quickly than the CMA, which reduces the possibility of the implementation route being delayed.
James Heappey
I am keen to ensure that I understand the measure correctly. There is a 56-day period ahead of any modification being published, but presumably there is also a 56-day period for the initial implementation of the cap. Are we clear that Ofgem is content about being able to publish its cap within the five months—actually, eight weeks ahead of that five months?
Claire Perry
My hon. Friend makes a good point. I believe a very good letter was written to the Select Committee in which the timetable was set out specifically. Perhaps we can arrange for the letter to be distributed to the Committee—although I am not sure whether I have such powers over a letter to the Select Committee. Ofgem set out the timetable clearly, including all the statutory periods, with the assurance that it felt very capable of bringing the cap in before year end.
To return to the clause, in Committee we are very much of the mindset that the judicial review route, should someone wish to appeal against Ofgem’s methodology, is appropriate and would not delay implementation. That was agreed in the excellent work of the Business, Energy and Industrial Strategy Committee.
Question put and agreed to.
Clause 5 accordingly ordered to stand part of the Bill.
Clause 6
Review of level at which cap is set
Dr Whitehead
I beg to move amendment 6, in clause 6, page 4, line 31, leave out “6” and insert “3”.
I must confess that I have been following the past several clauses assiduously by reference to the draft Bill instead of to the actual Bill, although the Government had not made any changes, so I do not feel too out of sorts. However, with this clause, the draft Bill and the final Bill part ways considerably. Fortunately, I managed to realise where I was in time, so we can talk about this relatively short clause, which is on a review of the level at which the cap is set.
The clause is important because it is the clause that decides this is a cap and not a freeze. The requirement on the authority is that it regularly review the level at which the cap is set, on the basis of all the circumstances to which the market has been subject, and whether the cap should be modified or changed as a result of its review. Indeed, the clause requires the authority to publish a statement when it has done that review, as to whether it proposes to change the level at which the cap is set.
Claire Perry
The hon. Gentleman again puts forward a sensible probing amendment that it is a pleasure to think about and speak to, but I will chance my luck and try to persuade him to withdraw it.
The hon. Gentleman is right that the review is a crucial part of the Bill’s effectiveness. Is the cap set at the right level? Is the ability to change the cap clear? Have we set out the conditions under which the cap must apply? We will get on to the conditions as to what success looks like. Is the cap dynamic enough to make a difference in the market?
If I read clause 6 carefully, two words precede the hon. Gentleman’s one-number intervention. In terms of reviewing the cap, the clause uses the phrase:
“The Authority must, at least once every 6 months”.
When we had this conversation on Second Reading, I said, correctly, that the opportunity is there for Ofgem to review this cap more frequently than that, should it choose to do so. It can review it on a weekly basis or a three-monthly basis, but it must review the cap every six months. That is consistent with the reviews of the prepayment meter cap, which is already delivering savings of up to £120 a year, as we talked about, and which is what the excellent Business, Energy and Industrial Strategy Committee report recommended. I think that the flexibility the hon. Gentleman is seeking is covered by the words “at least”.
Yet the hon. Gentleman raises an important point: what happens if there are suddenly wild fluctuations in the energy market, which we want consumers to benefit from, and particularly if there is a sustained price fall? I have looked at this a bit. It is a bit like the mortgage market: unless someone is on a tracker rate, changes in the wholesale prices do not always feed into the retail prices. Indeed, these companies make an art, or a science, of hedging their supplies so that they bake in what their margins look like on a future basis. Any sustained price fall would take its time to feed through to those companies’ overall cost of energy provision.
Indeed, companies change their SVTs only once or twice a year, even though those are standard variable tariffs. We had a very interesting conversation this morning in Committee about whether that was a rather benign description—maybe we should be looking to tighten up the language a bit. These variable tariffs vary only once or twice a year. There is an argument that giving Ofgem a statutory duty to review this at least every six months provides an opportunity for the market movement to be greater than it is under the SVTs. I feel that with the words “at least” we have provided in the Bill for Ofgem to react to market movements or any other structural changes that would affect consumers. That flexibility is there.
As always, the hon. Gentleman has thought about these things carefully. As he alluded to, there is a risk that by specifying every three months, given that this is a short-term cap—it will apply for a minimum of just over two years and a maximum of just over five years—we would perhaps create an unnecessary process burden. We want Ofgem to continue to regulate this market well; we want it to continue to bring forward initiatives such as the cancellation of billing backwards for more than 12 months and the work it has announced it wants to do in the wholesale energy markets to ensure that returns are proportionate. I am persuaded that by changing the period to three months, we would create a potentially unnecessary burden that does not deliver anything more than we have already allowed for with the wording of clause 6(1).
James Heappey
I got there in the nick of time. While the Minister has been speaking, I have been looking at Ofgem’s tracker for wholesale energy prices. It is clear to me that in the first quarter of each calendar year, prices are particularly volatile and disproportionately higher than in the remainder of the year. In his evidence, Dermot Nolan said that, over six months, those midwinter peaks are ridden out. That means we should defer to his judgment that six months is the right unit, not quarterly.
Claire Perry
My hon. Friend again brings assiduous online research, which is marvellous, and his knowledge of this market, to support the point that Ofgem believes that six months is a proportionate time. The Bill does allow Ofgem—should it be required to do so by market movements, and that volatility persists over a period of time—to make the necessary adjustments. I know that I am on a winning trend, which may not last, but on that basis, I hope the hon. Gentleman is persuaded once again to withdraw the amendment.
Dr Whitehead
The intervention of the hon. Member for Wells demonstrates why I should not only have been looking at the right Bill in the last 10 minutes, but have brought my iPad with me.
Dr Whitehead
There you are—I am on my own now.
At the heart of this proposal is the rocket and feathers issue that my right hon. Friend the Member for Don Valley is famed for in her past interventions in this area, which is about the extent to which, when wholesale prices go up, energy companies put prices up pretty assiduously to compensate for the additional costs, but when wholesale prices come down, the same picture is not quite so much in evidence. For various reasons—buying along the curve, hedging in the medium term and various other things—the energy companies all say, “Oh no, we can’t possibly put our prices down, because of the positions we have taken.” It seems to work one way rather than the other.
Claire Perry
That is an excellent point, and I was thinking of exactly the same things when the hon. Gentleman was speaking. The rocket and feathers, by the way, sounds like a marvellous pub in the Don Valley that I would love to come and visit one day. That is an excellent description for what happens and, thinking it through, the existence of the cap protects against the feathers, because there will be a hard stop in the market that might accelerate the fall of the feathers or create something a little more weighty, on the same duration, or a more accelerated duration, than the current SVTs. It would be a prod to the market, to make sure that those downward prices are reflected in the price cap. On that basis, it could be very helpful to overcoming the problem.
Dr Whitehead
Indeed. As the hon. Member for Wells points out, over the recent period, there has been a pattern of volatility in the wholesale market, but not necessarily a pattern of predictability. The market tends to be rather more volatile at the beginning of the year; the level of volatility differs, but we know it is more volatile. There is the question of looking at that effect over the entire period of intervention of the cap, and how that volatility is factored into Ofgem’s duties.
I take the point that the phrase in the Bill is
“at least once every 6 months”.
After what has been said this afternoon, I hope that Ofgem will consider fairly carefully how its interventions take place. It may well be that—after close consultation with the hon. Member for Wells—Ofgem comes along and says it will review the cap more frequently at certain parts of the year and rather less frequently at other parts of the year.
Claire Perry
I hope that the hon. Gentleman will agree that the wording of the Bill allows Ofgem to effect exactly those decisions, should it think it necessary.
Dr Whitehead
I take that point. Although I prefer to legislate with absolute certainty rather than hope, in this instance we can reasonably expect that Ofgem would look at that properly, as far as the market is concerned. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Claire Perry
We have had an excellent debate, where we have been genuinely probing and testing the Bill, and we have come to a good outcome. I commend the clause to the Committee.
Question put and agreed to.
Question 6 accordingly ordered to stand part of the Bill.
Clause 7
Review of competition for domestic supply contracts
Alan Brown
I beg to move amendment 1, in clause 7, page 4, line 38, at end insert—
“(1A) The Secretary of State shall within six months of the passing of this Act publish a statement outlining the criteria that is to be used by the Authority in the review to assess whether conditions are in place for effective competition for domestic supply contracts.”
This amendment would require the Secretary of State to outline the criteria that shall be used by Ofgem when assessing whether conditions are in place for effective competition for domestic supply contracts.
I do not know if it is my upbringing in the west of Scotland, but compared to the hon. Member for Southampton, Test, I am a man of few words, so I will be really brief.
Amendment 1 and its explanatory notes lay out the case. I have prepared a timeframe for the Secretary of State to set out the criteria by which Ofgem will assess the operation of the energy market for effective competition in the marketplace, and such effective competition clearly will allow the cap to be lifted.
The amendment is important for a couple of reasons. Clearly, if we want the suppliers to change their behaviour, it is important that they know what they will be measured on. Hopefully, that will give them further incentives to change their behaviour and to make the market much more competitive and effective for consumers.
The Government’s aim is that the cap will be only temporary—perhaps lasting only two years. Therefore, it is a limited timeframe. That makes it even more important that, as soon as we can, we understand what the companies will be measured against. If a report is laid that sets out the criteria within six months, that takes away the risk of moving targets, in terms of the suppliers changing how they are operating, but perhaps not in the way we want. Obviously, we want to manage how they operate and make that most effective for consumers. The amendment is quite simple and speaks for itself.
Claire Perry
The hon. Gentleman is a man of few words, but what a very pleasant accent, if I might say so, and what a joy it is to welcome so many colleagues from north of the border with similar burrs on our side of the House. I will now try to speak exclusively about the amendment and take his example of brevity in doing so.
The hon. Gentleman is absolutely right to raise the question of the conditions for effective competition so that we can all understand when the recommendation to remove the cap is the right one, as he said, considering how the market evolves over the next few years. We all have a hope and expectation that the market will evolve rapidly; indeed, the whole principle behind the Bill is about an intelligent intervention that will help the market to reset to a more competitive environment.
We have set out these general conditions, but I feel very strongly that with an independent regulator that we all believe has the powers and knowledge to both set the cap and confirm whether competition has been restored, it is right that we do not hold it to a specific set of weightings for what competition looks like. Again, I refer to the BEIS Committee, which said:
“We believe that Ofgem have the required expertise to set and measure indicators of effective competition and make the appropriate recommendation to the Secretary of State.”
The hon. Member for Nottingham North made the point about unintended consequences; we had conversations in pre-Bill meetings about whether we would want there to be a formula that said, “It is 20% switching times and 50% price cap reduction”. All that constrains Ofgem’s ability to review and set an opinion on competition, particularly as the market evolves. We are all expecting the energy market to evolve quickly. The amendment would constrain Ofgem’s job unnecessarily. There is nothing to be gained from seeking to pre-empt Ofgem in its work. In raising this issue, the hon. Member for Kilmarnock and Loudoun is absolutely right to say that that scrutiny of what effective competition looks like will form an extremely active test of whether we can all sit around in a couple of years’ time and say that this Bill on which we have all worked so hard has been effective.
On the basis that the amendment would constrain what Ofgem want to do, I hope that the hon. Gentleman feels content with my explanation and will consider withdrawing it.
Alan Brown
Listening to the Minister, on one level I think that constraining Ofgem might not be such a bad thing if it constrains it in a way that we are happy with, because then we can have criteria that we as politicians, and consumers and suppliers, understand. On the other hand, I understand what the Minister says, in that the regulator has its own job to do. I am conscious that some of the submissions we received as part of this process express concern about the fact that nobody knows what these effective competition criteria will look like. I still have some slight concerns, but I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Whitehead
I beg to move amendment 7, in clause 7, page 4, line 39, leave out from “must” to end of line 40 and insert
“have regard to the extent to which—
(a) progress has been made in installing smart meters for use by domestic customers,
(b) incentives for holders of energy supply licences to improve their efficiency have been created,
(c) holders of energy supply licences are able to compete effectively for domestic supply contracts,
(d) incentives for domestic customers to switch to different supply contracts are in place,
(e) the barriers which prevent the customers from switching from different supply contracts quickly and easily are addressed,
(f) holders of supply licences who operate efficiently are able to finance activities authorised by the licence,
(g) holders of supply licences have eliminated practices that are to the detriment of customers in their tariff structures,
(h) District Network Operator costs and dividends are proportionate to expectations and the impact of that on domestic supply contracts, and
(i) vulnerable and disabled customers are adequately protected.”
I am afraid this may be the end of the Mr Nice Guy bit. Hon. Members must find that incredible, but it is true. This amendment is potentially very important for the integrity of the whole process of how the price cap is set up, how it works and the circumstances under which it can be brought to a close. There is no real difference between the amendment of the hon. Member for Kilmarnock and Loudoun and mine, except that his requires the Secretary of State to produce a statement to outline the criteria that shall be used by the authority in a review to assess whether conditions are in place for effective competition.
Our amendment seeks to identify what the conditions might look like. That is particularly important, because for this price cap to work clearly both ends of the cap have to be reasonably synchronised. As hon. Members will have observed when we debated an earlier clause, a number of conditions are put forward for the authority to digest when we move from the point of legislation to the point of actually putting the cap in place. There are a number of conditions in clause 1(6) to which the authority needs to have regard when it is putting the cap in place.
That is not so when the authority is considering whether to lift the cap. It is worthwhile considering for a moment what the mechanism for lifting the cap in the Bill actually is. The authority has to carry out a review—in the first instance, in 2020—to look at whether it considers that conditions are in place for effective competition for domestic supply contracts. Therefore, in principle, it can consider whether to bring the cap to an end. Once that review is carried out, roughly before halfway through 2020, the authority must produce a report on the outcome, which must include a recommendation about whether the authority considers that the tariff cap conditions should be extended and should have effect for the following year. When the report is produced, before 31 August 2020, we would expect to see a view from the authority about whether the cap should be continued. Obviously, subject to the sunset clause in the next clause, what the authority says effectively has a one-way view on what the Secretary of State should subsequently say about the cap. As laid out in clause 7(5), the Secretary of State, having received a report,
“must publish a statement setting out whether the Secretary of State considers that conditions are in place for effective competition for domestic supply contracts.”
James Heappey
I rise to speak briefly. I know exactly what the shadow Minister is trying to achieve with the amendment, and I agree with him that the cap must be a temporary measure. On Second Reading, I answered an intervention by saying that this should be a raid into the market, not an occupation. It is very necessary indeed to set out clearly the terms on which the cap will come to an end.
Having said that, my concern with the amendment is that whereas the Bill as drafted refers explicitly simply to progress with smart meter deployment—it quite reasonably leaves the regulator and the Minister to work out what progress is being made on the remainder—the hon. Gentleman’s list is so lengthy as to be overly prescriptive. Some measures in his list, such as improving efficiency in suppliers’ business models, are not the business of the regulator at all. I rather think that suppliers will be driven to find efficiency by the creation of competition, rather than needing to have it required of them. That is what the market does.
The hon. Gentleman is an enthusiastic fellow traveller on the route to a decentralised, digitised, dynamic energy system, so I wonder why his list does not include half-hourly settlement or the universal application of demand-side response, why he does not require the market to be electric vehicle-ready, why he is not concerned about transmission costs as well as distribution costs, why he does not seek signals from the regulator about the readiness of the market to manage a decentralised energy system given all the price advantages that might bring, and why he is not enthusiastic about a code review or embedded benefits, or about looking at what energy-efficiency measures have been made or at whether we are ready for a data-heavy digitised market.
As well as all those things, there is the unknown scale of the renewable deployment that might come our way, alongside the flexibility that storage and demand-side response will bring with them, and what impact that might have on price variability over the course of a year. There are so many unknowns, and the pace of change in the energy system is such that being as prescriptive as the hon. Gentleman desires at this stage would risk hindering progress in the system. It would shape the way the market worked towards achieving the end of the price cap, rather than allowing it to be disrupted in the way that I know he and I genuinely hope it will be.
Alan Brown
I understand the hon. Gentleman’s point about other factors that may ultimately influence the retail energy market, but why should progress with smart meter installation be the one thing we tell Ofgem it must measure in its review? It seems to me a bit strange to specify that criterion but say that we do not want all the other important criteria that the hon. Member for Southampton, Test laid out.
James Heappey
I suspect that the Minister is much better placed to answer that than I am, but I guess—I would support this wholly if it were the case—that we have done a lot of work with carrots when it comes to smart meters and we are starting to get into stick territory. If we want the new digitised market to really work—I know that almost everyone here is passionate about achieving that—smart meters are no longer optional: they are a necessity. To use that as a metric of success seems very reasonable to me.
Claire Perry
I want to try to address two of the main points that came up: what “good” looks like, the conditions for success and how far we should specify them in the Bill, and why progress with installing smart meters is the only explicit condition. Ultimately, this is the nub of the whole Bill. We are all here because we believe that the conditions for effective competition are not in place and that the Bill will assist the market towards that evolution. I suspect that we all believe in well regulated, competitive markets delivering the best value and service for consumers, and if we see a regulatory gap—a place where the regulator needs new powers to deliver that—it is only right that we fill it. That is what we are doing.
Once again, I have great sympathy with what the hon. Member for Southampton, Test set out. I feel sometimes that we are a bit like Eeyore and Tigger: he is always looking for the very worst outcome and I am always very optimistic about the future. Perhaps it is good that we often meet in the middle. The challenge, as my hon. Friend the Member for Wells set out, is that the list that the hon. Gentleman has put forward is very sensible. I am sure that we could all come up with further factors that we thought would indicate that the market was acting more competitively.
Alan Brown
Why would it be a box-ticking exercise if we as parliamentarians set out criteria that we think can be used, but not if Ofgem sets out the criteria?
Claire Perry
That is a valid point. I guess that by setting the criteria in the Bill we would effectively constrain the opportunities that Ofgem has. Ofgem, as a regulator, should be able to sit closer to the market and observe its evolution, and amend its processes accordingly. All of us know how even the most tortuous, tiny change to a Bill, even if it is done through a statutory instrument, can chew up an awful lot of time and reopen a debate that did not actually need to be reopened.
The hon. Member for Southampton, Test is right that we absolutely have legal powers to protect our constituents, and that is what we are doing, but what we are also doing is empowering the regulator to be perhaps more nimble and agile than politicians and even my fine civil servants might be.
I turn to the Smart Meters Bill, because it is right to say, “Why is that the only thing in the Bill?” Frankly, the reason is that we are rolling out this massive Government programme. We are talking about £11 billion of investment and £17 billion of benefit to consumers. It is now a licence condition for Ofgem. We have had the first roll-out and we are working hard on the data integration, so that the upgrades to a SMETS2 meter happen seamlessly and remotely. I fully intend to work with industry very closely this summer to start to turbocharge that process. There is huge benefit there; the conditions are in place and we want to accelerate.
We want to make sure that the obligations to be part of the evolution of a competitive market and to roll out smart meters are inextricably linked in the minds of industry. On that basis, although we have an important role to play in talking about the terms of effective competition, we expect the market to continue to evolve. It would not be helpful to constrain Ofgem’s definition now by setting out what could be perfectly sensible ideas.
Of course, there will be an opportunity to review Ofgem’s report and say what the conditions are. We have not yet talked about what the transparency of publication is for that report, but that is certainly something we can address when we discuss that part of the Bill. There is a question as to how transparent that report is made and how widely it should be circulated. As the Committee knows, I am open to ideas of transparency, because it is the way to drive the best forms of competitive behaviour. I fear I may be chancing my luck this late in the day, but I invite the hon. Member for Southampton, Test to withdraw his amendment.
Dr Whitehead
May I say something first about Tigger and Eeyore? I can see the analogy, but we have to remember that Tigger got Pooh and Piglet completely lost in their quest for the North Pole, and also consumed all Roo’s medicine in a very unhealthy way.
Claire Perry
But surely the hon. Gentleman would accept that that was a fine and wonderful adventure, and Tigger did it with great gusto?
Dr Whitehead
I was just going to say briefly that Eeyore stopped people standing on each other and falling over while trying to get Piglet out of a tree. He was very wise in certain circumstances. What I am trying to say, I hope without any further reference at all to Pooh and Piglet, is that under these circumstances we need to be a little more—I will refer to it again—Eeyoreish than Tiggerish. It is essential that we are careful about the going out of the cap, just as we are careful about its going in.
I heard what the hon. Member for Wells had to say—indeed, it would have been possible to put out a list as long as your arm of possible concerns. He is quite right. I heartily endorse a number of the concerns he raised. I am grateful to him for describing me as a fellow traveller; as he will know, in our party, being described as a fellow traveller is not always meant in the most complimentary of ways. He has set the record straight as far as that is concerned.
What I have tried to do with this particular amendment—by the way, I am not particularly precious about every last line of it—is to craft a number of considerations that should reasonably pass by the eyes of Ofgem when it is thinking about whether conditions have returned to the market or not, so that it is shaped. Indeed, if the Minister were to say, “Yes, jolly good idea, but we’re not quite sure that all the conditions are absolutely right. We’ll take it away and come back with something on Report that will set that out in a rather better way,” I would be overjoyed. It is an attempt to try to make things work, rather than to get everything right first time.
What I do know, however, is that among the flakier conditions is ensuring that Ofgem has due consideration for the roll-out of smart meters. I could see circumstances where the smart meter roll-out has gone completely down the Swanee, yet market conditions are effectively there for the removal of the cap. Indeed, from what I know about the circumstances around the smart meter roll-out, partly as a result of my involvement in the Smart Meters Bill recently, it is quite possible that the smart meter roll-out will go seriously down the Swanee.
Claire Perry
I now feel a T-shirt coming on saying, “What would Eeyore do?” I wanted to try to give the hon. Gentleman some comfort on this matter. Clause 7(1) refers back to something set out in clause 1(6)(b):
“whether conditions are in place for effective competition for domestic supply contracts.”
That means that in consulting on the cap structure, what Ofgem believes to be important will have to be explicit upfront. Also on smart meters, it says that the review “must, among other things”, so it is not the exclusive thing. In fact, I have just reassured myself, because clause 7(5) states that the Secretary of State will have to publish the statement about whether they consider the conditions to be in place. It will be very explicit about which conditions have been taken into account in establishing whether the market competitive conditions have been restored.
Dr Whitehead
I thank the Minister for her concordance-like examination of the Bill to look at those conditions, but I stand by the point that there is, with the anomalous imposition of smart meter roll-out, nothing there effectively. I would have hoped that the Minister would be able to say, “Yes, you are quite right. There is nothing there effectively and we can put something there—perhaps not exactly this—on Report”. That would have caused my worries about the out as well as the in of the price cap to recede, but apparently that is not going to happen.
I, of course, wish the Minister the best of luck with her Tiggerish wish to get smart meters absolutely right. I am sure she will give that her full attention and ensure that it works as well as it possibly can, but I am afraid that under the circumstances I will have to press the amendment to a vote on the principle of what it is about.
Question put, That the amendment be made.
Claire Perry
I rise simply to say that I think that was a useful conversation about what competition looks like. We have made excellent progress today, and I propose that clause 7 stand part of the Bill.
Question put and agreed to.
Clause 7 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Rebecca Harris.)
Data Protection Bill [ Lords ] (Second sitting)
(6 years, 1 month 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 having divided: - Ayes: 10 / Noes: 9 - Question accordingly agreed to.
The Chair
I remind the Committee that with this we are discussing Government amendments 77 to 83 and 87 to 91.
Amendment 76 agreed to.
Amendments made: 77, in schedule 1, page 124, line 24, leave out from “subject” to end of line 25.
In paragraph 8 of Schedule 1, sub-paragraph (3) contains an exception from the condition in sub-paragraph (1). This amendment would remove from the exception the requirement that the processing is carried out without the data subject’s consent.
Amendment 78, in schedule 1, page 124, line 36, at end insert—
“Racial and ethnic diversity at senior levels of organisations
8A (1) This condition is met if the processing—
(a) is of personal data revealing racial or ethnic origin,
(b) is carried out as part of a process of identifying suitable individuals to hold senior positions in a particular organisation, a type of organisation or organisations generally,
(c) is necessary for the purposes of promoting or maintaining diversity in the racial and ethnic origins of individuals who hold senior positions in the organisation or organisations, and
(d) can reasonably be carried out without the consent of the data subject,
subject to the exception in sub-paragraph (3).
(2) For the purposes of sub-paragraph (1)(d), processing can reasonably be carried out without the consent of the data subject only where—
(a) the controller cannot reasonably be expected to obtain the consent of the data subject, and
(b) the controller is not aware of the data subject withholding consent.
(3) Processing does not meet the condition in sub-paragraph (1) if it is likely to cause substantial damage or substantial distress to an individual.
(4) For the purposes of this paragraph, an individual holds a senior position in an organisation if the individual—
(a) holds a position listed in sub-paragraph (5), or
(b) does not hold such a position but is a senior manager of the organisation.
(5) Those positions are—
(a) a director, secretary or other similar officer of a body corporate;
(b) a member of a limited liability partnership;
(c) a partner in a partnership within the Partnership Act 1890, a limited partnership registered under the Limited Partnerships Act 1907 or an entity of a similar character formed under the law of a country or territory outside the United Kingdom.
(6) In this paragraph, “senior manager”, in relation to an organisation, means a person who plays a significant role in—
(a) the making of decisions about how the whole or a substantial part of the organisation’s activities are to be managed or organised, or
(b) the actual managing or organising of the whole or a substantial part of those activities.
(7) The reference in sub-paragraph (2)(b) to a data subject withholding consent does not include a data subject merely failing to respond to a request for consent.”.
Part 2 of Schedule 1 describes types of processing of special categories of personal data which meet the requirement in Article 9(2)(g) of the GDPR (processing necessary for reasons of substantial public interest) for a basis in UK law (see Clause 10(3)). This amendment adds to Part 2 of Schedule 1 certain processing of personal data for the purposes of promoting or maintaining diversity in the racial and ethnic origins of individuals who hold senior positions in organisations.
Amendment 79, in schedule 1, page 125, line 3, at end insert—
“( ) If the processing consists of the disclosure of personal data to a competent authority, or is carried out in preparation for such disclosure, the condition in sub-paragraph (1) is met even if, when the processing is carried out, the controller does not have an appropriate policy document in place (see paragraph 5 of this Schedule).”.
This amendment, and Amendment 80, provide that where processing falling within paragraph 9 of Part 2 of Schedule 1 (preventing or detecting unlawful acts) consists of, or is carried out in preparation for, the disclosure of personal data to a competent authority, the condition in that paragraph is met even if the controller does not have an appropriate policy document in place when the processing is carried out.
Amendment 80, in schedule 1, page 125, line 4, at end insert—
““competent authority” has the same meaning as in Part 3 of this Act (see section30).”.
See the explanatory statement for Amendment 79.
Amendment 81, in schedule 1, page 125, line 16, at end insert—
“Regulatory requirements relating to unlawful acts and dishonesty etc
10A (1) This condition is met if—
(a) the processing is necessary for the purposes of complying with, or assisting other persons to comply with, a regulatory requirement which involves a person taking steps to establish whether another person has—
(i) committed an unlawful act, or
(ii) been involved in dishonesty, malpractice or other seriously improper conduct,
(b) in the circumstances, the controller cannot reasonably be expected to obtain the consent of the data subject to the processing, and
(c) the processing is necessary for reasons of substantial public interest.
(2) In this paragraph—
“act” includes a failure to act;
“regulatory requirement” means—
(a) a requirement imposed by legislation or by a person in exercise of a function conferred by legislation, or
(b) a requirement forming part of generally accepted principles of good practice relating to a type of body or an activity.”.
Part 2 of Schedule 1 describes types of processing of special categories of personal data which meet the requirement in Article 9(2)(g) of the GDPR (processing necessary for reasons of substantial public interest) for a basis in UK law (see Clause 10(3)). This amendment adds to Part 2 of Schedule 1 certain processing of personal data for the purposes of complying with, or assisting others to comply with, a regulatory requirement.
Amendment 82, in schedule 1, page 125, line 35, at end insert—
“( ) The condition in sub-paragraph (1) is met even if, when the processing is carried out, the controller does not have an appropriate policy document in place (see paragraph 5 of this Schedule).”.
This amendment provides that the condition in paragraph 11 of Part 2 of Schedule 1 (journalism etc in connection with unlawful acts and dishonesty etc) is met even if the controller does not have an appropriate policy document in place when the processing is carried out.
Amendment 83, in schedule 1, page 126, line 22, at end insert—
“Support for individuals with a particular disability or medical condition
13A (1) This condition is met if the processing—
(a) is carried out by a not-for-profit body which provides support to individuals with a particular disability or medical condition,
(b) is of a type of personal data falling within sub-paragraph (2) which relates to an individual falling within sub-paragraph (3),
(c) is necessary for the purposes of—
(i) raising awareness of the disability or medical condition, or
(ii) providing support to individuals falling within sub-paragraph (3) or enabling such individuals to provide support to each other,
(d) can reasonably be carried out without the consent of the data subject, and
(e) is necessary for reasons of substantial public interest.
(2) The following types of personal data fall within this sub-paragraph—
(a) personal data revealing racial or ethnic origin;
(b) genetic data or biometric data;
(c) data concerning health;
(d) personal data concerning an individual’s sex life or sexual orientation.
(3) An individual falls within this sub-paragraph if the individual is or has been a member of the body mentioned in sub-paragraph (1)(a) and—
(a) has the disability or condition mentioned there, has had that disability or condition or has a significant risk of developing that disability or condition, or
(b) is a relative or carer of an individual who satisfies paragraph (a) of this sub-paragraph.
(4) For the purposes of sub-paragraph (1)(d), processing can reasonably be carried out without the consent of the data subject only where—
(a) the controller cannot reasonably be expected to obtain the consent of the data subject, and
(b) the controller is not aware of the data subject withholding consent.
(5) In this paragraph—
“carer” means an individual who provides or intends to provide care for another individual other than—
(a) under or by virtue of a contract, or
(b) as voluntary work;
“disability” has the same meaning as in the Equality Act 2010 (see section 6 of, and Schedule 1 to, that Act).
(6) The reference in sub-paragraph (4)(b) to a data subject withholding consent does not include a data subject merely failing to respond to a request for consent.”.—(Margot James.)
Part 2 of Schedule 1 describes types of processing of special categories of personal data which meet the requirement in Article 9(2)(g) of the GDPR (processing necessary for reasons of substantial public interest) for a basis in UK law (see Clause 10(3)). This amendment adds to Part 2 of Schedule 1 certain processing of personal data by not-for-profit bodies involved in supporting individuals with a particular disability or medical condition.
The Parliamentary Under-Secretary of State for the Home Department (Victoria Atkins)
I beg to move amendment 84, in schedule 1, page 126, line 27, leave out “a reason” and insert “one of the reasons”.
This amendment amends paragraph 14(1)(b) of Schedule 1 for consistency with paragraphs 18(2) and 19(2) of that Schedule.
The Chair
With this it will be convenient to discuss Government amendments 85, 86, 116 and 117.
Victoria Atkins
It is a pleasure to serve under your chairmanship, Mr Hanson. I am pleased to introduce this group of amendments, which relate to data processing for safeguarding purposes. The amendments respond to an issue raised in an amendment tabled by Lord Stevenson on Report in the Lords in December. In response to that amendment, Lord Ashton made it clear that the Government are sympathetic to the points Lord Stevenson raised and undertook to consider the matter further. Amendments 85, 116 and 117 are the result of that consideration.
I am grateful to Lord Stevenson for raising this issue, and for his contribution to what is probably the most important new measure that we intend to introduce to the Data Protection Bill. The amendments will ensure that sensitive data can be processed without consent in certain circumstances for legitimate safeguarding activities that are in the substantial public interest. We have been working across government and with stakeholders in the voluntary and private sectors to ensure that the amendments are fit for purpose and cover the safeguarding activities expected of organisations responsible for children and vulnerable adults.
The Government recognise that statutory guidance and regulator expectations place moral, if not legal, obligations on certain organisations to ensure that measures are in place to safeguard children and vulnerable adults. Amendment 85 covers processing that is necessary for protecting children and vulnerable adults from neglect or physical or mental harm. This addresses the gap in relation to expectations on, for example, sports governing bodies.
The Government have produced cross-agency and cross-governmental guidance called “Working Together to Safeguard Children”, which rightly places the responsibility of safeguarding children on all relevant professionals who come into contact with children and families. For example, it creates an expectation that those volunteering at a local sports club will assess the needs of children and, importantly, will take action to protect them from abuse.
Amendment 85 permits the processing of sensitive personal data, which is necessary to safeguard children from physical, emotional, sexual and neglect-based abuse. Amendment 84 makes a consequential drafting change, while amendments 116 and 117 make an analogous change to the regimes in parts 3 and 4 of the Bill. This is aimed at putting beyond doubt a controller’s ability to safeguard children and people at risk.
I thought an example might help the Committee to understand why we place such an emphasis on the amendments. An example provided by a sports governing body is that a person may make an allegation or complaint about a volunteer that prompts an investigation. Such investigations can include witness statements, which reference sensitive personal data, including ethnicity, religious or philosophical beliefs, sexual orientation and health data.
In some instances, the incident may not reach a criminal standard. In those cases, the sports body may have no legal basis for keeping the data. Keeping a record allows sports bodies to monitor any escalation in conduct and to respond appropriately. Forcing an organisation to delete this data from its records could allow individuals that we would expect to be kept away from children to remain under the radar and potentially leave children at risk.
Amendment 86 deals with a related issue where processing health data is necessary to protect an individual’s economic wellbeing, where that individual has been identified as an individual at economic risk. UK banks have a number of regulatory obligations and expectations which are set out in the Financial Conduct Authority’s rules and guidance. In order to meet best practice standards in relation to safeguarding vulnerable customers, banks occasionally need to record health data without the consent of the data subject.
An example was given of a bank which was contacted by a family member who was alerting the bank to an elderly customer suffering from mental health problems who was drawing large sums of money each day from their bank account and giving it away to a young drug addict whom they had befriended. The bank blocked the account while the family sought power of attorney. Again, the amendment seeks to clarify the position and give legal certainty to banks and other organisations where that sort of scenario arises or where, for example, someone suffers from dementia and family members ask banks to take steps to protect that person’s financial wellbeing.
The unfortunate reality is that there still exists a great deal of uncertainty under current law about what personal data can be processed for safeguarding purposes. My brief of crime, vulnerability and safeguarding means that all too often—perhaps in the context of domestic abuse—agencies will gather, sadly, to conduct a domestic homicide review and discover that had certain pieces of information been shared more freely, perhaps more action could have been taken by the various agencies and adults and children could have been safeguarded.
These amendments are aimed at tackling these issues. We want to stop the practice whereby some organisations have withheld information from the police and other law enforcement agencies for fear of breaching data protection law and other organisations have been unclear as to whether consent to processing personal data is required in circumstances where consent would not be reasonable or appropriate. The amendments intend to address the uncertainty by providing relevant organisations with a specific processing condition for processing sensitive personal data for safeguarding purposes. I beg to move.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
I rise to put on record my thanks to the Minister for listening carefully to my noble Friend Lord Stevenson. There was strong cross-party consensus on these common-sense reforms.
We all know that in our own constituencies there are extraordinary people doing extraordinary things in local groups. They are the life-blood of our communities. Many of them will be worried about the new obligations that come with the general data protection regulation and many of them will take a least-risk approach to meeting the new regulations. Putting in place some common safeguards to ensure that it is possible to keep data that allow us to spot important patterns of behaviour that can lead to appropriate investigations is very sensible and wise. These amendments will therefore be made with cross-party support.
Amendment 84 agreed to.
Amendments made: 85, in schedule 1, page 126, line 38, at end insert—
“Safeguarding of children and of individuals at risk
14A (1) This condition is met if—
(a) the processing is necessary for the purposes of—
(i) protecting an individual from neglect or physical, mental or emotional harm, or
(ii) protecting the physical, mental or emotional well-being of an individual,
(b) the individual is—
(i) aged under 18, or
(ii) aged 18 or over and at risk,
(c) the processing is carried out without the consent of the data subject for one of the reasons listed in sub-paragraph (2), and
(d) the processing is necessary for reasons of substantial public interest.
(2) The reasons mentioned in sub-paragraph (1)(c) are—
(a) in the circumstances, consent to the processing cannot be given by the data subject;
(b) in the circumstances, the controller cannot reasonably be expected to obtain the consent of the data subject to the processing;
(c) the processing must be carried out without the consent of the data subject because obtaining the consent of the data subject would prejudice the provision of the protection mentioned in sub-paragraph (1)(a).
(3) For the purposes of this paragraph, an individual aged 18 or over is “at risk” if the controller has reasonable cause to suspect that the individual—
(a) has needs for care and support,
(b) is experiencing, or at risk of, neglect or physical, mental or emotional harm, and
(c) as a result of those needs is unable to protect himself or herself against the neglect or harm or the risk of it.
(4) In sub-paragraph (1)(a), the reference to the protection of an individual or of the well-being of an individual includes both protection relating to a particular individual and protection relating to a type of individual.”
Part 2 of Schedule 1 describes types of processing of special categories of personal data which meet the requirement in Article 9(2)(g) of the GDPR (processing necessary for reasons of substantial public interest) for a basis in UK law (see Clause 10(3)). This amendment adds to Part 2 of Schedule 1 certain processing of personal data which is necessary for the protection of children or of adults at risk. See also Amendments 116 and 117.
Amendment 86, in schedule 1, page 126, line 38, at end insert—
“Safeguarding of economic well-being of certain individuals
14B (1) This condition is met if the processing—
(a) is necessary for the purposes of protecting the economic well-being of an individual at economic risk who is aged 18 or over,
(b) is of data concerning health,
(c) is carried out without the consent of the data subject for one of the reasons listed in sub-paragraph (2), and
(d) is necessary for reasons of substantial public interest.
(2) The reasons mentioned in sub-paragraph (1)(c) are—
(a) in the circumstances, consent to the processing cannot be given by the data subject;
(b) in the circumstances, the controller cannot reasonably be expected to obtain the consent of the data subject to the processing;
(c) the processing must be carried out without the consent of the data subject because obtaining the consent of the data subject would prejudice the provision of the protection mentioned in sub-paragraph (1)(a).
(3) In this paragraph, “individual at economic risk” means an individual who is less able to protect his or her economic well-being by reason of physical or mental injury, illness or disability.”—(Victoria Atkins.)
Part 2 of Schedule 1 describes types of processing of special categories of personal data which meet the requirement in Article 9(2)(g) of the GDPR (processing necessary for reasons of substantial public interest) for a basis in UK law (see Clause 10(3)). This amendment adds to Part 2 of Schedule 1 certain processing of personal data which is necessary to protect the economic well-being of adults who are less able to protect their economic well-being by reason of a physical or mental injury, illness or disability.
Louise Haigh (Sheffield, Heeley) (Lab)
I beg to move amendment 150, page 126, line 38, at end insert—
“Register of missing persons
14A This condition is met if the processing—
(a) is necessary for the establishment or maintenance of any register of missing persons, and
(b) is carried out in a manner which is consistent with any guidance which may be issued by the Secretary of State or by the Commissioner on the processing of data for the purposes of this paragraph.”
It is a pleasure to serve under your chairmanship, Mr Hanson. Amendment 150 seeks to provide a similar exemption to the one that the Minister has just laid out. As my right hon. Friend the Member for Birmingham, Hodge Hill said, we completely support the principles behind this exemption to schedule 1. As the Minister made clear, too often serious case reviews or reviews after an incident of this nature, particularly in child protection cases, show clearly that if the data had been shared more effectively—often in health cases—the child could have been protected and their life might have been saved.
We tabled this amendment because of the increase in the number of missing persons and missing children over the past few years. As the shadow Police Minister, I approach this issue from a policing perspective. It is important that all data handlers fully understand their obligations and the powers that are bestowed on them. Too often, under the existing legislation, they hide behind data protection to avoid sharing data, and we fear that that tendency will become even stronger under the Bill.
Sharing data relating to missing persons is important for a number of reasons. The demand on police services from such cases has rocketed over the past few years. Police officers spend only 17% of their time responding to crime, so 83% of police time is spent responding to non-crime demand. That includes mental health call-outs, but largely it relates to missing persons. Some police forces tell me that missing persons place the greatest demand on their time.
In the west midlands, since 2015 the number of missing person incidents has doubled to nearly 13,000 cases a year. In Northumbria—one of the smallest police forces in the country—as of this minute there are 43 men and 20 women missing. For such a small police force, that is a significant number of people to be out looking for. Last year alone, such investigations cost the police service more than £600 million. One fifth of those missing persons are children in care, more than 50% are children, and a significant proportion are elderly people missing from care. Crucially, about one third are reported missing on more than one occasion. It is those individuals we seek to address with the register.
There are various reasons for the increase, one of which is certainly better police reporting. Our ageing population means that more people are in care and are going missing from care. The police have responded to that issue in various ways, including by tagging elderly individuals who go missing from care repeatedly —we have tabled amendments to explore the issues arising from that. Cuts to other public services mean that the increasing demand, which previously would have fallen elsewhere—in particular, on local authorities—is now landing on the police. We are seeing a higher tolerance of risk across the care sector, and possibly the health sector too, and a tendency to pass the buck for these issues and other vulnerabilities on to the police, who have a very low risk threshold and nowhere to pass them on.
I believe we need a review of all agencies that are involved with safeguarding to ensure that they are taking seriously their responsibilities in this regard. When the issue relates to resources, they must make the case for those resources, rather than merely pass the problem on to the police. I have heard stories about private children’s care homes where staff may see that the child is outside their window or down the street, but because they are five minutes over curfew they ring the police and say that the child is missing. That passes on the responsibility, but has very serious implications for the police. It diverts resources from tackling crime and from responding to genuine cases of missing children and high-risk missing persons.
Estimates of the time associated with this activity suggest that approximately 18 hours of police time is needed for a medium-risk missing persons investigation. In 2015-16, that equated to more than 6 million investigation hours, or more than 150,000 officers occupied full time with that activity. Not being dealt with by the appropriate agency and not being responded to correctly has real implications for the individual. Going missing can be a precursor to various aspects of significant harm, such as abuse, exposure to criminal activity and mental ill-health. There are enough issues relating to police forces sharing data among themselves, let alone with other agencies. As a result, various criminal activities exploiting those weaknesses have developed. In the past, the Minister and I have discussed county lines at length, which is a criminal activity whereby organised criminal gangs exploit children. They take them, internally traffick them across the country, set them up in another vulnerable adult’s home and leave them to deal drugs on their behalf. That is a very profitable criminal activity, but the perpetrators have been able to evade real enforcement because of the weaknesses in data sharing and cross-agency working between police forces and agencies. The amendment will ensure that the police and all appropriate safeguarding agencies have access to the relevant data to ensure that at-risk missing people are found as quickly and safely as possible, and have their needs dealt with in the most appropriate way.
Victoria Atkins
I am grateful to the hon. Member for Sheffield, Heeley for affording me the opportunity to update the Committee on our progress in establishing a national register of missing persons, and to touch on the missing children and adults strategy that the Government are currently working on, which I hope will be published shortly. It will address many of the themes that the hon. Lady drew on in her speech, particularly the deliberate targeting of vulnerable children by county lines gangs, children who go missing—usually, sadly, from care homes—and the exploitation that occurs.
As the hon. Lady said, this is an important subject because each year more than 337,000 calls are made to police stations in England and Wales about missing and absent people. Happily, the vast majority are found within 24 hours, but 2% or thereabouts remain missing for more than a week. Anyone who has ever met the parents of children who go missing knows the heartache that those parents face, not just on an annual basis, but on a daily, minute-by-minute basis. They feel that pain constantly.
People who go missing are often the most vulnerable in society, and it is vital that those tasked with investigating their disappearance have the most accurate and up-to-date information available. We accept that the current technology available to frontline staff to deal with missing persons is insufficient. For example, the police national computer identifies only those currently reported as missing, while the National Crime Agency database includes only those missing for more than 72 hours. We know that the search must start the moment that a child or vulnerable person is identified as missing; we cannot wait for 72 hours. There is no national record of the history of missing persons in England and Wales.
The Government’s “Tackling child sexual exploitation: progress report” published in February last year set out our commitment to deliver a national missing persons register. This will enable police officers to access up-to-date data about missing people across force boundaries and take appropriate action when they investigate missing person incidents or encounter a missing person who is away from his or her home force area. The register is being established as part of the national law enforcement data programme, which will replace the police national computer and the police national database with a new national data service. The current timetable, agreed with the police, is to launch the capability for forces to record manually missing and associated found incidents from mid-2019 with releases thereafter, including automation and establishing the ability to share controlled information beyond policing to other agencies.
In terms of the way in which the register and the scheme interplay in the Bill, the processing of the personal data held on the database will take place under either the GDPR or part 3 of the Bill. Processing of the data by the police will often be for a law enforcement purpose, including the prevention, investigation or detection of a criminal offence and any sensitive processing would fall within paragraph 3 of schedule 8, which enables processing where necessary to protect the vital interests of the data subject or another individual, or under the new safeguarding condition, which we have just debated. Where the processing is undertaken under the GDPR, the conditions in respect of protecting the vital interests of the data subject, or preventing or detecting unlawful acts, may apply. Again, the new safeguarding condition may also be applicable.
Given those provisions and the very clear timetable that the Government and police have for their programme, we are of the view that the amendment is unnecessary, but I am, of course, very appreciative that the hon. Lady has raised this in the Committee. Obviously, I will keep her informed of progress on the new register.
Louise Haigh
That is fantastic news. It is a very ambitious deadline for a police IT transformation programme. I know that South Yorkshire is going through the transformation on the CONNECT programme at the moment; it is woefully behind the timescale envisaged and over budget, as every IT transformation in the history of any Government, of any colour, has always been. I wonder, therefore, given the urgency of this issue, whether it is possible for this information to be recorded on the PNC for the time being.
Victoria Atkins
I am looking at my officials and they will stop me if I am wrong, I hope. If she prefers, may I write to her? I do not think that the PNC has the capability at the moment. That is why we are having to develop this new programme, but we will write to the hon. Lady in any event. As I say, I will keep her up to date with progress. But I invite her to withdraw the amendment, please.
Louise Haigh
Given that the Minister asked so nicely, I will. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 87, in schedule 1, page 127, line 30, at end insert—
“( ) The reference in sub-paragraph (4)(b) to a data subject withholding consent does not include a data subject merely failing to respond to a request for consent.”
This amendment clarifies the intended effect of the safeguard in paragraph 15(4) of Schedule 1 (processing necessary for an insurance purpose).
Amendment 88, in schedule 1, page 127, line 39, at end insert—
“( ) is of data concerning health which relates to a data subject who is the parent, grandparent, great-grandparent or sibling of a member of the scheme,”.
This amendment provides that the condition in paragraph 16 of Schedule 1 (occupational pension schemes) can only be relied on in connection with the processing of data concerning health relating to certain relatives of a member of the scheme.
Amendment 89, in schedule 1, page 128, line 6, at end insert—
“( ) The reference in sub-paragraph (2)(b) to a data subject withholding consent does not include a data subject merely failing to respond to a request for consent.”
This amendment clarifies the intended effect of the safeguard in paragraph 16(2) of Schedule 1 (processing necessary for determinations in connection with occupational pension schemes).
Amendment 90, in schedule 1, page 131, line 14, at end insert—
“( ) If the processing consists of the disclosure of personal data to a body or association described in sub-paragraph (1)(a), or is carried out in preparation for such disclosure, the condition in sub-paragraph (1) is met even if, when the processing is carried out, the controller does not have an appropriate policy document in place (see paragraph 5 of this Schedule).”
This amendment provides that when processing consists of the disclosure of personal data to a body or association that is responsible for eliminating doping in sport, or is carried out in preparation for such disclosure, the condition in paragraph 22 of Part 2 of Schedule 1 (anti-doping in sport) is met even if the controller does not have an appropriate policy document in place when the processing is carried out.
Amendment 91, in schedule 1, page 133, line 17, leave out from “interest” to end of line 21.—(Margot James.)
This amendment removes provisions from paragraph 31 of Schedule 1 (extension of conditions in Part 2 of Schedule 1 referring to substantial public interest) which are unnecessary because they impose requirements which are already imposed by paragraph 5 of Schedule 1.
The Minister of State, Department for Digital, Culture, Media and Sport (Margot James)
I beg to move amendment 92, page 134, line 18 [Schedule 1], leave out “on the day” and insert “when”.
This amendment is consequential on Amendment 71.
The Chair
With this it will be convenient to discuss the following:
Government amendments 107, 108, 111, 113, 114, 21, 29 to 40, 43 to 46, 118 to 121, 48, 49, 53, 55, 56, 123 to 125, 59 and 71.
Margot James
Following engagement with local government stakeholders, we have recognised that the maximum time period permitted for responses to the subject access request set out in parts 3 and 4 of the Data Protection Bill subtly differs from that permitted under the GDPR and part 2 of the Bill. That is because the GDPR and, by extension, part 2 rely on European rules for calculating time periods, whereas parts 3 and 4 implicitly rely on a more usual domestic approach. European law, which applies to requests under part 2, says that when one is considering a time period in days, the day on which the request is received is discounted from the calculation of that time period. In contrast, the usual position under UK law, which applies to requests under parts 3 and 4 of the Bill, is that that same seven-day period to respond would begin on the day on which the request was received. In a data protection context, that has the effect of providing those controllers responding to requests under parts 3 and 4 with a time period that is one day shorter in which to respond.
To provide consistency across the Bill, we have decided to include a Bill-wide provision that applies the European approach to all time periods throughout the Bill, thus ensuring consistency with the directly applicable GDPR. Having a uniform approach to time periods is particularly helpful for bodies with law enforcement functions, which will process personal data under different regimes under the Bill. Without these amendments, different time periods would apply, depending on which regime they were processing under. Ensuring consistency for calculating time periods will also assist the information commissioner with her investigatory activities and enforcement powers, for example by avoiding the confusion and potential disputes that could arise relating to her notices or requests for information.
Amendment 71 provides for a number of exemptions to the European approach where deviating from our standard approach to time periods would be inappropriate. For example, where the time period refers to the process of parliamentary approval of secondary legislation, it would clearly not be appropriate to deviate from usual parliamentary time periods. The unfortunate number of amendments in this group comes from the need to modify existing language on time periods, currently worded for compliance with the usual UK approach, so that it applies the approach of the EU rules instead. I hope that this has provided the Committee with sufficient detail on the reasons for tabling this group of amendments.
Amendment 92 agreed to.
Question proposed, That the schedule, as amended, be the First schedule to the Bill.
Liam Byrne
We had a useful debate this morning about the whys and wherefores of whether the article 8 right to privacy should be incorporated into the Bill. Although we were disappointed by the Minister’s reply, what I thought was useful in the remarks she made was a general appreciation of the importance of strong data rights if the UK is to become a country with a strong environment of trust within which a world of digital trade can flourish.
I will briefly alert the Minister to a debate we want to have on Report. The reality is that we feel schedule 1 is narrowly drawn. It is an opportunity that has been missed, and it is an opportunity for the Minister to come back on Report with a much more ambitious set of data rights for what will be a digital century. When we look around the world at the most advanced digital societies, we can see that a strong regime of data rights is common to them all.
I was recently in Estonia, which I hope the Minister will have a chance to visit if she has not done so already. Estonia likes to boast of its record as the world’s most advanced digital society; it is a place where 99% of prescriptions are issued online, 95% of taxes are paid online and indeed a third of votes are cast online. It is a country where the free and open right to internet access is seen as an important social good, and a good example of a country that has really embraced the digital revolution and translated that ambition into a set of strong rights.
The Government are not averse to signing declaratory statements of rights that they then interpret into law. They are a signatory to the UN universal declaration of human rights and the UN convention on the rights of the child; the Human Rights Act 1998 is still in force—I have not yet heard of plans to repeal it—and of course the Equality Act 2010 was passed with cross-party support. However, those old statements of rights, which date back to 1215, were basically to correct and guard against dangerous imbalances of power. Things have moved on since 1215 and the worries that the barons had about King John. We are no longer as concerned as people were in 1215 about taking all the fish weirs out of the Thames, for example.
The Chair
To make matters clear to hon. Members and in particular those who are new to the Committee, the right hon. Member for Birmingham, Hodge Hill tabled a number of amendments—171 to 175 and 177 to 178—that were not selected because they were tabled only yesterday. We need to have several days’ notice before selection can be considered. Had they been tabled earlier, we could have debated and voted on those amendments now. I have given the right hon. Gentleman leeway to widen his arguments about schedule 1, and it is up to him whether he wishes to table those amendments on Report. He is perfectly in order to do so. The debate today is on schedule 1, and the points that the right hon. Gentleman has made in relation to potential amendments are a heads-up for the future or for the Minister to respond to at this point.
Margot James
The right hon. Member for Birmingham, Hodge Hill covered a lot of important ground. He mentioned the digital charter. We are bringing forward the digital charter and we do not intend for it to be set in stone. We recognise that this is a fast-changing environment and so it is deliberately something that will evolve over time. We both share the concerns that he expressed with regard to fake news and the rights and protections needed for children and young people who, as he says, make up a third of internet users. We will address many of the things he highlighted as part of our internet safety strategy, and I look forward to debating them further with him on Report.
To add to what we have already discussed under schedule 1, article 9 of the GDPR limits the processing of special categories of data. Those special categories are listed in article 9(1) and include personal data revealing racial or ethnic origin, health, political opinions and religious beliefs. Some of the circumstances in which article 9 says that special category data can be processed have direct effect, but others require the UK to make related provision.
Clause 10 introduces schedule 1 to the Bill, which sets out in detail how the Bill intends to use the derogations in article 9 and the derogation in article 10 relating to criminal convictions data to permit particular processing activities. To ensure that the Bill is future-proof, clause 10 includes a delegated power to update schedule 1 using secondary legislation. Many of the conditions substantively replicate existing processing conditions in the 1998 Act and hon. Members may wish to refer to annexe B to the explanatory notes for a more detailed analysis on that point.
Darren Jones
I want to make one point about schedule 1. Amendment 9, which was made this morning, allows democratic engagement to be a purpose under article 6(1)(e) of the GDPR—namely, that consent is not required for the processing of data for public interest or the exercising of official authority and the purposes of democratic engagement. I wonder whether the definitions of political parties and politicians under schedule 1 could be used to restrict that amendment, so that organisations other than political parties and politicians are not able to process data in the public interest for democratic engagement without consent. For example, if Leave.EU or Open Britain wanted to process our personal data, they ought to do so with consent, not using the same public interest for democratic engagement purposes as politicians or parties.
Margot James
I understand the hon. Gentleman’s concerns. The GDPR requires data controls to have a legal basis laid down in law, which can take the form, for example, of a statutory power or duty, or a common-law power. Any organisation that does not have such legal basis would have to rely on one of the other processing conditions in article 6. With regard to the amendment that was agreed to this morning, we think that further restricting clause 8 might risk excluding bodies with a lawful basis for processing. However, the hon. Gentleman is free to raise the issue again on Report.
Question put and agreed to.
Schedule 1, as amended, accordingly agreed to.
Clauses 11 to 13 ordered to stand part of the Bill.
Clause 14
Automated decision-making authorised by law: safeguards
Liam Byrne
I beg to move amendment 153, in clause 14, page 7, line 30, at end insert—
“(1A) A decision that engages an individual’s rights under the Human Rights Act 1998 does not fall within Article 22(2)(b) of the GDPR (exception from prohibition on taking significant decisions based solely on automated processing for decisions that are authorised by law and subject to safeguards for the data subject’s rights, freedoms and legitimate interests).”
This amendment would clarify that the exemption from prohibition on taking significant decisions based solely on automated processing must apply to purely automated decisions that engage an individual’s human rights.
The Chair
With this it will be convenient to discuss the following:
Amendment 130, in clause 14, page 7, line 34, at end insert—
“(2A) A decision that engages an individual’s rights under the Human Rights Act 1998 does not fall within Article 22(2)(b) of the GDPR (exception from prohibition on taking significant decisions based solely on automated processing for decisions that are authorised by law and subject to safeguards for the data subject’s rights, freedoms and legitimate interests).
(2B) A decision is “based solely on automated processing” for the purposes of this section if, in relation to a data subject, there is no meaningful input by a natural person in the decision-making process.”
This amendment would ensure that where human rights are engaged by automated decisions these are human decisions and provides clarification that purely administrative human approval of an automated decision does make an automated decision a ‘human’ one.
Amendment 133, in clause 50, page 30, line 5, at end insert “, and
(c) it does not engage the rights of the data subject under the Human Rights Act 1998.”
This amendment would ensure that automated decisions should not be authorised by law if they engage an individual’s human rights.
Amendment 135, in clause 96, page 56, line 8, after “law” insert
“unless the decision engages an individual’s rights under the Human Rights Act 1998”.
Liam Byrne
The amendments touch on what I am afraid will become an increasing part of our lives in the years to come: the questions of what decisions can be taken by algorithms; where such decisions are taken, what rights we have to some kind of safeguards, such as a good old-fashioned human being looking over the decision that is taken and the outcomes that arise; and whether we are content to acquiesce in the rule of the robots.
In a number of areas of our lives—particularly our economic and social lives—such algorithms will become more and more important. Algorithms are already used to screen job applications, for example, and to create shortlists of candidates for interview. Insurance companies use them to adjudge what premiums someone should enjoy, or whether they should be offered insurance at all. The challenge of algorithms was put best by my hon. Friend the Member for Cambridge on Second Reading: the great risk of such developments is that old injustice is hard-coded into new injustice.
That is particularly troubling when we think about the provisions and exemptions the Government have brought forward that allow the automatic processing of data in public services. Many public servants around the world are beginning to look at predictive public services and how algorithms can scan great swathes of, for example, health data and crime data, and make decisions about where police should attend, who should or should not get bail, who should be added to police databases such as the gangs matrix, and how healthcare should be targeted in parts of the country or to what kinds of families. There are great risks in algorithms taking decisions in ways ungoverned by us. As parliamentarians, we have a particular duty to ensure that the appropriate safeguards are in place.
Clauses 14 and 15 allow automated processes where they are authorised by law. That creates the obligation of giving notice and what is, in effect, an ex post facto right of appeal. The Opposition’s argument is somewhat different: it is better not to take decisions on the basis of automatic processing of data where those decisions affect our human rights.
They say that to err is human, but to really mess things up you need a computer. We all know from our casework, whether about the benefits or the social care system or any other kind of system that constituents might name, that sometimes the most terrible, egregious errors are made. We also know that sometimes it is very difficult for citizens to seek remedies for those problems. Very often, the reason they have come to see us in our surgeries is because, as they so often say to us, we are the last port of call and the last hope that is kicking around; if we cannot fix it, frankly, our constituent is about to give up. That is an unfortunate situation that we do not want to see multiply.
Brendan O'Hara (Argyll and Bute) (SNP)
I will speak to amendments 130, 133 and 135, which appear in my name and that of my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East. Our amendments seek to provide protection for individuals who are subject to purely automated decision making, specifically where we believe that it could have an adverse impact on their fundamental rights. The amendments would require that where human rights are or possibly could be impacted by automated decisions, ultimately there are always human decision makers. The amendments would instil that vital protection of human rights with regard to the general processing of personal data.
The amendments seek to clarify the meaning of a decision that is based solely on automated processing, which is a decision that lacks meaningful human input. That reflects the intent of the GDPR, and provides clarification that purely administrative human approval of an automated decision does not make that decision a human one. It is simply not enough for human beings to process the information in a purely administrative fashion, but to have absolutely no oversight or accountability for the decision that they process. We strongly believe that automated decision making without human intervention should be subject to strict limitations to ensure fairness, transparency and accountability, and to safeguard against discrimination. As it stands, there are insufficient safeguards in the Bill.
As the right hon. Member for Birmingham, Hodge Hill said, we are not talking about every automated decision. We are not talking about a tech company or an online retailer that suggests alternatives that someone may like based on the last book they bought or the last song they downloaded. It is about decisions that can be made without human oversight that will or may well have long-term, serious consequences on an individual’s health, financial status, employment or legal status. All too often, I fear that automated decisions involve an opaque, unaccountable process that uses algorithms that are neither as benign nor as objective as we had hoped they would be, or indeed, as we thought they were when we first encountered them.
We are particularly concerned about elements of the Bill that allow law enforcement agencies to make purely automated decisions. That is fraught with danger and at odds with the Data Protection Act 1998, as well as article 22 of the GDPR, which states:
“The data subject shall have the right not to be subject to a decision based solely on automated processing”.
Although there are provisions in the GDPR for EU member states to opt out of that, the opt-out does not apply if the data subject’s rights, freedoms or legitimate interests are undermined.
I urge the Government to look again at the parts of the Bill about automated decision making, to ensure that when it is carried out, a human being will have to decide whether it is reasonable and appropriate to continue on that course. That human intervention will provide transparency and capability, and it will ensure that the state does not infringe on an individual’s freedoms—those fundamental rights of liberty and privacy—which are often subjective. Because they are subjective, they are beyond the scope of an algorithm.
There are serious human rights, accountability and transparency issues around fully automated decision making as the Bill stands. Amendment 130 says that any human involvement has to be “meaningful”. We define meaningful human oversight as being significant, of consequence and purposeful. As I have said, that is far beyond the scope of an algorithm. If an individual’s rights are to be scrutinised and possibly fundamentally affected, it is an issue of basic fairness that the decision is made, or at least overseen, by a sentient being. I hope the Government accept the amendments in the faith in which they were tabled.
Margot James
The amendments relate to automated decision making under the GDPR and the Bill. It is a broad category, which includes everything from trivial things such as music playlists, as mentioned by the hon. Member for Argyll and Bute, and quotes for home insurance, to the potentially more serious issues outlined by the right hon. Member for Birmingham, Hodge Hill of recruitment, healthcare and policing cases where existing prejudices could be reinforced. We are establishing a centre, the office for artificial intelligence and data ethics, and are mindful of these important issues. We certainly do not dismiss them whatsoever.
Article 22 of the GDPR provides a right not to be subject to a decision based solely on automatic processing of data that results in legal or similarly significant effects on the data subject. As is set out in article 22(2)(b), that right does not apply if the decision is authorised by law, so long as the data subject’s rights, freedoms and legitimate interests are safeguarded.
The right hon. Member for Birmingham, Hodge Hill, mentioned those safeguards, but I attribute far greater meaning to them than he implied in his speech. The safeguards embed transparency, accountability and a right to request that the decision be retaken, and for the data subject to be notified should a decision be made solely through artificial intelligence.
Liam Byrne
The Minister must realise that she is risking an explosion in the number of decisions that have to be taken to Government agencies or private sector companies for review. The justice system is already under tremendous pressure. The tribunal system is already at breaking point. The idea that we overload it is pretty optimistic. On facial recognition at public events, for example, it would be possible under the provisions that she is proposing for the police to use facial recognition technology automatically to process those decisions and, through a computer, to have spot interventions ordered to police on the ground. The only way to stop that would be to have an ex post facto review, but that would be an enormous task.
Margot James
The right hon. Gentleman should be aware that just because something is possible, it does not mean that it is automatically translated into use. His example of facial recognition and what the police could do with that technology would be subject to controls within the police and to scrutiny from outside.
Louise Haigh
The case that my right hon. Friend raises is certainly not hypothetical. The Metropolitan police have been trialling facial recognition scanning at the Notting Hill carnival for the last three years with apparently no legal base and very little oversight. We will move on to those issues in the Bill. That is exactly why the amendments are crucial in holding law enforcement agencies to account.
Margot James
As the hon. Lady says, the police are trialling those things. I rest my case—they have not put them into widespread practice as yet.
Returning to the GDPR, we have translated the GDPR protections into law through the Bill. As I said, the data subject has the right to request that the decision be retaken with the involvement of a sentient individual. That will dovetail with other requirements. By contrast, the amendments are designed to prevent any automated decision-making from being undertaken under article 22(2)(b) if it engages the rights of the data subject under the Human Rights Act 1998.
Liam Byrne
Will the Minister explain to the Committee how a decision to stop and search based on an automated decision can be retaken? Once the person has been stopped and searched, how can that activity be undone?
Margot James
I am not going to get into too much detail. The hon. Member for Sheffield, Heeley mentioned an area and I said that it was just a trial. She said that facial recognition was being piloted. I do not dispute that certain things cannot be undone. Similar amendments were tabled in the other place. As my noble Friend Lord Ashton said there, they would have meant that practically all automated decisions under the relevant sections were prohibited, since it would be possible to argue that any decision based on automatic decision making at the very least engaged the data subject’s right to have their private life respected under article 8 of the European convention on human rights, even if it was entirely lawful under the Act.
Liam Byrne
I fear that the Minister is taking some pretty serious gambles on the application of this technology in the future. We think it is the business of this place to ensure that our citizens have strong safeguards, so we will put the amendment to a vote.
Question put, That the amendment be made.
The Chair
Does the hon. Member for Argyll and Bute wish to press amendment 130 to a Division?
Brendan O'Hara
I would like to press the amendment to a vote, or should I do that on Report?
The Chair
The hon. Gentleman can press the amendment to a vote now. If it is carried, it will be part of the Bill. If it is defeated, it will not be, and it may then be moved on Report, subject to the Speaker’s discretion. If the hon. Gentleman does not press the amendment now, it may be that there is more of a likelihood of its being picked on Report, but that is a matter for the Speaker.
Margot James
I beg to move Government amendment 10, in clause 14, page 8, line 4, leave out “21 days” and insert “1 month”.
Clause 14(4)(b) provides that where a controller notifies a data subject under Clause 14(4)(a) that the controller has taken a “qualifying significant decision” in relation to the data subject based solely on automated processing, the data subject has 21 days to request the controller to reconsider or take a new decision not based solely on automated processing. This amendment extends that period to one month.
The Chair
With this it will be convenient to discuss Government amendments 11, 12, 23, 24, 27, 28, 41 and 42.
Margot James
Amendments 10, 11 and 12 relate to clause 14, which requires a data controller to notify a data subject of a decision based solely on automatic processing as soon as is reasonably practicable. The data subject may then request that the data controller reconsider such a decision and take a new decision not based solely on automated processing.
The purpose of the amendments is to bring clause 14 into alignment with the directly applicable time limits in article 12 of the GDPR, thereby ensuring that both data subjects and data controllers have easily understandable rights and obligations. Those include giving the data subject longer to request that a decision be reconsidered, requiring that the controller action the request without undue delay and permitting an extension of up to two months where necessary.
Furthermore, to ensure that there is consistency across the different regimes in the Bill—not just between the Bill and the GDPR—amendments 23, 24, 41 and 42 extend the time limit provisions for making and responding to requests in the other regimes in the Bill. That is for the simple reason that it would not be right to have a data protection framework that applies one set of time limits to one request and a different set of time limits to another.
In a similar vein, amendments 27 and 28 amend part 3 of the Bill, concerning law enforcement processing, to ensure that controllers can charge for manifestly unfounded or excessive requests for retaking a decision, as is permitted under article 12 of the law enforcement directive. To prevent abuse, amendment 28 provides that it is for the controller to be able to show that the request was manifestly unfounded or excessive.
Liam Byrne
It would be useful if the Minister could say a little more about the safeguards around the controllers charging reasonable fees for dealing with requests.
It is quite easy to envisage situations where algorithms take decisions. We have some ex post facto review; a citizen seeks to overturn the decision; the citizen thinks they are acting reasonably but the commercial interest of the company that has taken and automated the decision means that it wants to create disincentives for that rigmarole to unfold. That creates the risk of unequal access to justice in these decisions.
If the Minister is not prepared to countenance the sensible safeguards that we have proposed, she must say how she will guard against another threat to access to justice.
Margot James
The right hon. Gentleman asks a reasonable question. I did not mention that data subjects have the right of complaint to the Information Commissioner if the provisions are being abused. I also did not mention another important safeguard, which is that it is for the data controller to show that the request is manifestly unfounded or excessive. So the burden of proof is on the data controller and the data subject has the right of involving the Information Commissioner, if he or she contests the judgment taken in this context, concerning unfounded or excessive requests in the opinion of the data controller. I hope that satisfies the right hon. Gentleman.
Amendment 10 agreed to.
Amendments made: 11, in clause 14, page 8, leave out line 10 and insert “within the period described in Article 12(3) of the GDPR—”
This amendment removes provision from Clause 14(5) dealing with the time by which a controller has to respond to a data subject’s request under Clause 14(4)(b) and replaces it with a requirement for the controller to respond within the time periods set out in Article 12(3) of the GDPR, which is directly applicable.
Amendment 12, in clause 14, page 8, line 16, at end insert—
‘(5A) In connection with this section, a controller has the powers and obligations under Article 12 of the GDPR (transparency, procedure for extending time for acting on request, fees, manifestly unfounded or excessive requests etc) that apply in connection with Article 22 of the GDPR.” —(Margot James.)
This amendment inserts a signpost to Article 12 of the GDPR which is directly applicable and which confers powers and places obligations on controllers to whom Clause 14 applies.
Clause 14, as amended, ordered to stand part of the Bill.
Clause 15
Exemptions etc.
Margot James
I beg to move amendment 13, in clause 15, page 8, line 31, after “21” insert “and 34”
This amendment is consequential on Amendment 94.
The Chair
With this it will be convenient to discuss Government amendments 14, 93 to 106, 109, 110 and 112.
Margot James
Schedule 2 allows for particular rights or obligations contained in the GDPR to be disapplied in particular circumstances, where giving effect to that right or obligation would lead to a perverse outcome. To do that, it makes use of a number of derogations in the GDPR, including articles 6(3) and 23(1).
Amendments 93, 95 and 109 permit article 19 of the GDPR to be disapplied for the purposes in parts 1, 2 and 5 of schedule 2.
When a data controller corrects or deletes personal data following a request from a data subject, article 19 of the GDPR requires them to inform all persons to whom the personal data has been disclosed. Additionally, if requested, the data controller must inform the data subject about those persons to whom the data has been disclosed. Following the introduction of the Bill, we have had further representations from a range of stakeholders, including the banking industry, regulators and the media sector, about the problems that article 19 might create in very particular circumstances.
The amendments will ensure that, for example, where a bank may have shared personal data about one of its customers with the National Crime Agency because of a suspected fraud, it will not have to tell the data subject about that disclosure when the customer changes their address with the bank. That will ensure that the data subject is not tipped off about the suspected fraud investigation.
Several amendments in the group are designed to ensure that a valuable provision of the GDPR—article 34—does not have unintended consequences for controllers who do the right thing by seeking to prevent or detect crime, assist with the assessment or collection of tax or uncover abuses in our society. Article 34 requires data controllers to inform a data subject if there has been a data breach that is likely to result in a high risk to the rights and freedoms of an individual. In normal operation, this is an important article, which we hope will prompt a step change in the way organisations think about cyber-security.
However, article 23(1) enables member states to create laws to restrict the scope of the obligations and rights for which article 34 provides in the minority of cases where it conflicts with other important objectives of general public interest. The amendments seek to do that in the Bill. Amendment 94 responds to the concerns of the finance sector that compliance with article 34 may result in persons under investigation for financial crime being tipped off. Amendment 110 serves a similar purpose for media organisations.
Article 85(2) creates scope for member states to provide exemptions from chapter 4 of the GDPR, which includes article 34, if they are necessary to reconcile the right to the protection of personal data with the freedom of expression. The amendment intends to ensure that processing data for a special purpose that is in the public interest is not prejudiced—for example, by a controller having to notify the data subject of a breach in relation to pre-publication undercover footage. Importantly, data controllers will still be required, for the first time, to report a breach to the Information Commissioner under article 33 of the GDPR. That will ensure that she is well placed to take all the necessary steps to ensure data subjects’ rights are respected, including by monitoring compliance with these new exemptions.
On the more general question of who can make use of the exemptions in schedule 2 and when, amendment 96 broadens the exemption in paragraph 7 of the schedule, which relates to the protection of members of the public. As drafted, the exemption applies to personal data processed for the purposes of discharging a function that is designed to protect members of the public against dishonesty, malpractice or incompetence by persons who carry out activities that bring them into contact with members of the public. We have identified an issue with that wording: a number of public office holders, including police staff, do not carry out activities that necessarily bring them into contact with members of the public. Amendment 96 broadens the scope of the exemption to include processing in relation to individuals who work for those organisations in a behind-the-scenes capacity.
We have also had representations from several regulators on the need to make additional provisions to protect the integrity of their activities. Amendment 97 provides the UK’s Comptroller and Auditor General, and their counterpart in each of the devolved Administrations, with an exemption from certain GDPR provisions where these are likely to prejudice their statutory functions. That will prevent certain individuals who suspect they may be under scrutiny from trying to use their rights under the GDPR, such as article 15 (confirmation of processing) as a way of confirming that their data is being processed, or from using article 17 (right to erasure) and article 18 (restriction of processing) to undermine the effectiveness of an audit.
Liam Byrne
I beg to move amendment 156, in schedule 2, page 136, line 30, leave out paragraph 4.
This amendment would remove immigration from the exemptions from the GDPR.
We are trying to provide some careful and considered constraints on the exemptions that the Government are asking for, in particular the exemptions that Ministers seek for the purposes of immigration control.
The Bill has been drafted essentially to enable the Home Office to do two things: win cases and create a hostile environment for those who are here illegally, where it has no capacity to trace and deport individuals. In conducting its work, the Home Office draws on a wide range of private providers, from G4S to Cifas. They have a mixed record, including on data protection. The carve-out that the Government seek for immigration purposes has caused widespread concern. It has drawn concern from the other place, the Information Commissioner and the Joint Committee on Human Rights.
The Minister will try to assure us by saying there are safeguards wrapped around the exemption and that there are limits on the way it can be used, but those limits are drawn so vaguely and broadly that they are not safeguards at all. They have been drafted to apply where matters are likely to prejudice immigration control. Who gets to judge the likelihood of prejudicing immigration control is not terrifically clear. In my Home Office days, we used to call that carte blanche.
Through the powers and exemptions in the Bill, the Home Office seeks to collect data for one purpose and then use it without informed consent. Where the rubber hits the road is that, crucially, the effect will be to ensure that subject access requests are basically put beyond the scope of someone seeking information that they might be able to use either in representations that we all might make to Ministers or, more importantly, in an immigration tribunal.
I want to sound a warning note to the Minister, as I hinted on Second Reading. I was brought into the Home Office as a Minister in 2006 and, after a glorious fortnight as Minister for Police and Counter-terrorism, I was moved by my boss John Reid to become Immigration Minister, where I was asked to conduct the biggest shake-up of our immigration system for 40 years.
I created the UK Border Agency; I took UK visas out of the Foreign Office; I took Customs out of the Treasury. We created a Border Agency that could run a biometric visa programme abroad, checking fingerprints against police national computers before anyone got on a train, plane or boat to our country. We introduced much stronger controls at the border, increasing those nice new blue signs, creating smart uniforms for immigration officials, and we increased immigration policing by around £100 million a year
I said earlier that to err is human but it takes a computer really to foul things up. That is a lesson that I learned with some force during my time at the Home Office. The dedicated, fantastic officials in the Home Office and the extraordinary officers who work in what was the UK Border Agency—it has since been revised a couple of times—do an amazing job. They are dramatically underfunded by the Treasury. They have been underfunded by the Treasury under this Government and, in my view, we did not get enough out of the Treasury in my day.
However, they are human and make mistakes. That is why we have such a complicated immigration tribunal system, where people can take their complaints to a first tier tribunal but very often need to seek a judicial review down the line. The challenge is that, if the Home Office wants to create a process and an administration for making the right decision, which can be defended in a tribunal and in a judicial review case, that process must be robust. When we streamlined the immigration tribunal system, we realised that we had to change, improve and strengthen the way that we took decisions in the Home Office because too many were made in a way that was not JR-proof. We were losing JRs and therefore denying justice to those who brought a legitimate claim against the Crown.
There were occasions when I lost cases because of information that was disclosed to the applicant through a subject access review. SARs are one of the most powerful instruments by which anybody in this country, whether a citizen or someone applying to become a citizen, or applying for a legal right to remain, can acquire information that is crucial to the delivery of justice. Many of us are incredibly sympathetic to the job that the Home Office does. Many of us will want a tougher regime in policing immigration, in particular illegal immigration, but I suspect every member of the Committee is also interested in the good conduct of justice and administrative justice. As someone who served in the Home Office for two years, I had to take some very difficult decisions, including to release subject access request information that I absolutely did not want to go into the public domain. Sometimes it was right to release that information because it helped ensure that justice was done in the courts of this land.
The Minister has some very strong safeguards in the Bill. There are strong safeguards that create exemptions for her where the interest is in crime prevention, such as, for example, illegal immigration. However, the power that the provision seeks, at which we take aim in our amendments, is a step too far and risks the most terrible injustices. It risks the courts being fouled up and our being challenged in all sorts of places, including the European Court of Human Rights in the years to come. It is an unwise provision. If I were a Home Office official, I would have tried it on—I would have tried to get it through my Minister and through the Houses of Parliament, but it is unwise and a step too far. I hope the Minister will accept the amendment and delete the provisions.
Brendan O'Hara
I will speak in favour of amendment 156. On Second Reading, I said that I would raise this matter again in Committee and I make no apologies for doing so. We regard this new exemption as extremely concerning. It permits the Government to collect and hold data for the purposes of what they describe as “effective immigration”.
It also concerns me that nowhere in the Bill does there seem to be a legal definition of effective immigration control. I am worried that “effective immigration control” is highly subjective and highly politicised. It exposes individuals, weakens their rights and makes them vulnerable to whatever change in the political tide happens to come along next. This broad-ranging exemption is fundamentally unfair. It is open to abuse and runs contrary to safeguarding basic human rights. I believe that the UK’s proposed immigration exemption goes much further than the scope of restrictions afforded to member states under GDPR, with all the consequences of that, which we discussed in such great detail this morning around adequacy decisions.
Ian Murray (Edinburgh South) (Lab)
The hon. Gentleman makes a powerful case against this particular exemption. He will know as well as me as a constituency Member of Parliament that one of the first things checked when someone comes to seek our advice is whether the Home Office has the correct information on an individual. Nine times out of 10, because of sheer workload, the Home Office just has it wrong. Then the visas and so on can be processed. Am I right in saying that, under this exemption, we would be unable to do that?
Brendan O'Hara
The hon. Gentleman is absolutely correct; I was just getting on to the point about the information held by the Home Office. If it cannot be checked and if it is wrong at source, it is wrong at the end of the process. As far as I can see, there are no safeguards against that. He is absolutely correct that one early error in data collection and processing becomes an irrefutable and indisputable fact by the time it reaches the Home Office. The Home Office could then base its case against an individual on that wrong information.
The hon. Gentleman is right—as constituency MPs, there is not one of us, I am sure, who is not painfully aware of wrong information being held not just by the Home Office, but by a whole range of Departments. That makes the exemption fundamentally unfair. This is an issue of basic fairness and there is little wonder it has been so loudly and roundly condemned by civil liberties groups and many in the legal profession. If we go ahead with the schedule as it stands, it fundamentally changes how we can operate and how we can help people who require our assistance.
At the moment, we have subject access requests. As matters stand, the Home Office and the subject or their legal representative have a right to access the same information, on which legal claims and challenges are based. Surely, if both sides do not have access to the same information, the fairness of any legal proceedings is inevitably compromised. Subject access requests are often the only route through which a legal professional can make representations on very complicated issues on behalf of their client. Indeed, for clients who have been victims of domestic abuse and are fleeing an abusive partner, sometimes a subject access request is all that stands between them and a successful application to remain.
This exemption will reduce legal representatives’ ability to best represent their clients and it removes a fundamental tool for holding the Home Office to account when it either gets things wrong or chooses to ignore or misrepresent the facts. The exemption is fundamentally unfair and as unnecessary as it is disproportionate. I urge the Government to reconsider.
Darren Jones
I support the amendment tabled by my right hon. and hon. Friends, because there are some harsh realities about this exemption for effective immigration control, including the harsh reality that such an exemption right does not exist under the GDPR. Indeed, it is a new exemption compared with the law that exists today under the Data Protection Act 1998.
This broad, undefined exemption really must be restricted. I declare an interest. My wife is Australian and is here on a spousal visa. I therefore assume that, as a British citizen, I too could be subject to my rights being exempted for the effective control of immigration in order to understand what my wife is up to. I should declare for the record that her staying here in the UK is perfectly legitimate. This is a wide-ranging exemption that could apply to EU citizens, non-EU citizens and, as I say, British citizens who are connected with those who are subject to immigration controls.
This is not just an issue for the Home Office; there is data across various Departments that could be of use to the Home Office for the effective control of immigration. Indeed, we have been waiting for quite some time for the Government to publish the biometric strategy, setting out how they intend to use lots of biometric data across Government Departments. We have been waiting for a couple of years to see how the Government intend to do that.
My understanding is that if all the photographs held on our passports and driving licences were collated, in essence the Government would have the power to have a virtual ID card for the bulk of the adult population in this country. How on earth would that information be used for the effective control of immigration, which would potentially be applied to so many people here in the UK?
This exemption creates a derogation for many rights: the right to information, the right to access, the right to explanation, the right to erasure, the right to restriction of processing, the right to data portability, the right to object, and all the principles set out in article 5 of the GDPR. This is an enormous derogation from rights that our colleagues in Europe think are important. Again, this relates to the risk of failing to seek adequacy in our negotiations with the EU.
I seek not only to support the amendment but to ask the Minister to clarify something. If the Government do not support the amendment, how does the exemption fit within the language of article 23 of the GDPR, which states that it can only exist
“when such a restriction respects the essence of the fundamental rights”—
which we have already noticed today are being repealed by this Government—
“and freedoms and is a necessary and proportionate measure in a democratic society”?
My assertion is that this exemption goes too far and, therefore, that the amendment tabled by my right hon. and hon. Friends is perfectly sensible. I look forward to it receiving Government support.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
We have already heard three very good speeches in support of the amendment. I will not take too long to support pretty much everything that has been said so far. As a former troublesome immigration lawyer from back in the day—in fact, when the right hon. Member for Birmingham, Hodge Hill was busy making his reforms in the Department—I do not think that I could have lived it down if I had not said a few words in support of the amendment.
We must remember that the context for all this is that we have a Department—the Home Office—where, as the most recent statistics show, half of all immigration decisions that are challenged in a tribunal are overturned, which is a record high. The Home Affairs Committee has recently expressed grave concerns about the poor quality of decision making in far too many areas and the functioning of a hostile environment, for example in the area of bank checks, where there is something like a 10% error rate. We also live in a world where the creeping reach of the Home Office’s information tentacles is almost being seen to put off migrants from accessing necessary public services such as health, creating a public health danger.
To provide a massive and almost unlimited exemption from many of the key protections, as has been described, is not only unjustified but counterproductive, because rather than fixing the fundamental problems with Home Office decision making, it will make them worse by hiding them from view and from scrutiny. The Home Office, not for the first time, is being pretty greedy with the powers that it seeks, because even if we take out the exemption, as this amendment proposes, the Home Office will still have plenty of scope—perhaps too much scope—to do what it wants to do. Recent immigration Acts have created myriad criminal offences in the sphere of immigration law, so the Home Office can already rely on other exemptions within the Bill where necessary. What is absolutely lacking is any explanation of why the exemption is needed. Will the Minister explain what it is about current data protection laws that has unacceptably hindered Home Office operations? I have seen no evidence of that at all.
Another concern is that it is not just the Home Office that will benefit from this exemption but other organisations that are involved in immigration control, such as G4S in its operation of detention centres. There is no justification for that, but there are serious risks, harms and injustices that might be created by the proposed exemption.
As we have heard, subject access requests are regularly a crucial part of representing a migrant caught up in the immigration system. They can be used to establish statuses that have not been communicated or have been lost. They can be used to establish other crucial facts that have not been known to that individual or their representatives. They can, of course, be absolutely crucial in establishing that the Home Office has made errors, as all too many hon. Members will have experienced.
Members of the Committee have been provided with a host of examples by the Law Society, the Bar Council, the Immigration Law Practitioners’ Association and others. Those are real-life examples occurring day in, day out. Quite simply, the failure to allow those individuals access to data protection rights is not only a denial of those rights but a denial of access to justice altogether. This part of the Bill desperately needs reconsideration by the Government.
Victoria Atkins
I feel I should defend all the hardworking people both in the Home Office and Border Force who do their best to do their jobs, day in, day out, to ensure that we have an effective, fair and proportionate immigration system. They have come under a bit of an attack in this debate.
Ian Murray
I do not think anybody on the Committee would disagree with the statement that the staff work incredibly hard. Would it not be a show of solidarity with those staff to give them the resources they require to do the job properly?
Victoria Atkins
The hon. Gentleman is starting the debate in very sparky form.
Victoria Atkins
I didn’t start it. The point is that, when people talk obliquely about the Home Office, it is people working in the Home Office who have to make these decisions day in, day out and who have to apply the law and do their best. I think we need to bear that in mind when we are talking about the Home Office system and how bad it is.
The provision relating to data processing for the purposes of immigration control in paragraph 4 of schedule 2 has been the subject of much debate. I would like to address some of the misunderstandings that have clearly arisen during the course of the Bill around both the purpose and scope of the provision. I hope I can persuade the Committee that this is a necessary and proportionate measure to protect the integrity of our immigration system.
Mr Alister Jack (Dumfries and Galloway) (Con)
Opposition Members have expressed concern, which I would like to emphasise, that this exemption is too wide. Can the Minister provide an assurance that that is not the case?
Victoria Atkins
Very much so. I will take it slowly because it is complicated and I want to ensure that the points raised today have been addressed. First, I was asked who decides the definition of effective immigration control in the schedule. That is an established term of art. It is used, for example, in the Immigration Act 2014. The Freedom of Information Act 2000 uses a similar term, namely
“the operation of the immigration controls”.
In the context of the schedule, we have adopted a wraparound term such as that, rather than set out a detailed list of specific immigration-related functions to which the exemption might be applied. Given the undoubted complexity of immigration legislation, there is a danger that any such list would be incomplete and would need to be regularly reviewed and updated. The term is either the precise term or similar to those already in law, such as in the Freedom of Information Act, which has been law for 18 years.
The hon. Member for Argyll and Bute seems concerned that once the Home Office system has accessed some of this information, it is lost forever and will not be revealed to the person whom it concerns. I will give case examples later, but I reassure him that the way in which we describe this exemption in the Home Office is that it is a pause on two of the data protection principles. Once the pause is lifted, because the end has been achieved—the person has been found or whatever—all those rights kick back in again, and they are able to make requests for the information that the hon. Gentleman set out. We see it as a pause, not as a long-standing and permanent exemption. It is just for the precise circumstances of enabling the immigration system and its protections.
Liam Byrne
The Under-Secretary of State will know better than anybody that there are very tight time limits over the windows within which people can ask for entry clearance officer reviews or reconsideration, either by an immigration official or, in extremis, by the Minister. How long will the pause last, and can she guarantee the Committee today that the pause will never jeopardise the kick-in of time limits on an appeal or a reconsideration decision?
Victoria Atkins
The reason for the pause is—I will give case studies of this—to enable the immigration system to operate. If someone has gone missing, requests for data will be required to find that person. Once that person is found, and there is no longer a need to apply the exemption, it will be lifted.
Liam Byrne
That is not an answer to my question. I am asking for a guarantee to the Committee this afternoon that the pause will never jeopardise somebody’s ability to submit a valid request for a reconsideration or an appeal with the information that they need within the time windows set out by Home Office regulations—yes or no.
Victoria Atkins
I am asked whether this will have an impact on someone’s application, either at appeal or reconsideration. Of course, information is obtained so that a person can be brought in. As I say, I will make it clear with case studies, so perhaps I can answer the right hon. Gentleman in more detail when I give such an example, but the purpose of this is generally to find a person. When the need, as set out under the exemption, no longer exists, the rights kick back in again. This relates only to the first two data protection principles under the GDPR. Again, I will go into more detail in a moment, but this is not the permanent exemption from rights as perhaps has been feared by some; it is simply to enable the process to work. Once a person has been brought into the immigration system, all the protections of the immigration system remain.
Stuart C. McDonald
The circumstances that the Minister describes for using the exemption are much narrower than the way the exemption is actually drawn. It seems to me that if that is the only way in which the Home Office wants to use the exemption, it could frame it in a much narrower way and possibly gain cross-party support.
Victoria Atkins
I will move on to the case studies in a moment, as I have given way several times. First, I will lay out the titles, then I will come on to article 23. Again, our analysis is that the provision fits within one of the exemptions in article 23. That is precisely the reason that we have drawn it in this way.
We very much welcome the enhanced rights and protections for data subjects afforded by the GDPR. The authors of the GDPR accepted that at times those rights need to be qualified in the general public interest, whether to protect national security, the prevention and detection of crime, the economic interests of the country or, in this case, the maintenance of an effective system of immigration control. Accordingly, a number of articles of the GDPR make express provision for such exemptions, including article 23(1)(e), which enables restrictions to be placed on certain rights of data subjects. Given the extension of data subjects’ rights under the GDPR, it is necessary to include in the Bill an explicit targeted but proportionate exemption in the immigration context.
The exemption would apply to the processing of personal data by the Home Office for the purposes of
“the maintenance of effective immigration control, or…the investigation or detection of activities that would undermine the maintenance of effective immigration control”.
It would also apply to other public authorities required or authorised to share information with the Department for either of those specific purposes.
Let me be clear on what paragraph 4 of schedule 2 does not do. It categorically does not set aside the whole of the GDPR for all processing of personal data for all immigration purposes. It makes it clear that the exemption applies only to certain GDPR articles. The articles that the exemption applies to are set out in paragraph 4(2) of schedule 2. They relate to various rights of data subjects provided for in chapter 3 of the GDPR, such as the rights to information and access to personal data, and to two of the data protection principles—namely the first one, which relates to fair and transparent processes, and the purpose limitation, which is the second one.
Liam Byrne
As I understand it, the derogations that are sought effectively remove the right to information in article 13; the right to information where data is obtained from a third party in article 14; the right of subjects’ access in article 15; the right to erasure in article 17; the right to restriction of processing in article 18; the right to object in article 21(1); the principle of lawful, fair and transparent processing in article 5; the principle of purpose limitation in article 5(1)(b); and the data protection principles in article 5 of lawfulness, fairness, transparency, purpose limitation, data minimisation, accuracy, storage limitation, integrity, confidentiality and accountability to the extent that they correspond to the rights above. That is a pretty broad set of rights to be cast out.
Victoria Atkins
Those are not the data protection principles. If one continues to read on to paragraph 4(2)(b) of schedule 2, it sets out the two data protection principles that I have just highlighted. The provisions set out in sub-paragraph (2)(a) relate to the data protection principles of fair and transparent processing and the purpose limitation. As I say, this is not a permanent removal. This is, as we describe it, a pause. There is not a free hand to invoke the permitted exception as a matter of routine.
All of the data protection principles, including those relating to data minimisation, accuracy, storage limitation and integrity and confidentiality, will continue to apply to everyone. So, too, will all the obligations on data controllers and processors, all the safeguards around cross-border transfers, and all the oversight and enforcement powers of the Information Commissioner. The latter is particularly relevant here, as it is open to any data subject affected by the provisions in paragraph 4 of schedule 2 to make a complaint to the Information Commissioner that the commissioner is then under a duty to investigate. Again, I hope that that addresses some of the concerns that the hon. Member for Argyll and Bute raised.
Contrary to the impression that has perhaps been given or understood, paragraph 4 does not give the Home Office a free hand to invoke the permitted exceptions as a matter of routine. The Bill is clear that the exceptions may be applied only to the extent that the application of the rights of data subjects, or the two relevant data protection principles, would be likely to prejudice
“the maintenance of effective immigration control, or…the investigation or detection of activities that would undermine the maintenance of effective immigration control”.
That is an important caveat.
Liam Byrne
The Minister will know that in paragraph 2(1)(a) we already have a set of exemptions that relate to the prevention or detection of a crime, including, presumably, all of the crimes that fall into the bucket of organising or perpetrating illegal immigration. Despite constant pressing during the debate in the other place and here, we have not yet had a clear answer as to why additional powers and exemptions are needed, over and above the powers expressly granted and agreed in paragraph 2(1)(a).
Victoria Atkins
I am grateful to the right hon. Gentleman for raising that issue, because it allows me to get to the nub of how we approach the immigration system. We do not see the immigration system as some form of criminality or as only being open to the principles of criminal law. He will know that we deal with immigration in both the civil law and criminal law contexts. The exemption he has raised in terms of paragraph 2 of the schedule deals with the criminal law context, but we must also address those instances where the matter is perhaps for civil law.
We know that in the vast majority of immigration cases, people are dealt with through immigration tribunals or through civil law. They are not dealt with through criminal law. That is the point; we must please keep open the ability to deal with people through the civil law system, rather than rushing immediately to criminalise them. If, for example, they have overstayed, sometimes it is appropriate for the criminal law to become involved, but a great number of times it is for the civil law to be applied to deal with that person’s case either by way of civil penalty or by finding an arrangement whereby they can be given discretion to leave or the right to remain. We have the exemption in paragraph 4 so that we do not just focus on the criminal aspects that there may be in some immigration cases. We must ensure that we also focus on the much wider and much more widely used civil law context.
It is important to recognise that the exemptions will not and cannot be targeted at whole classes of vulnerable individuals, be they victims of domestic abuse or human trafficking, undocumented children or asylum seekers. The enhanced data rights afforded by the GDPR will benefit all those who are here lawfully in the United Kingdom, including EU citizens. The relevant rights will be restricted only on a case-by-case basis where there is evidence that the prejudice I have mentioned is likely to occur.
Peter Heaton-Jones (North Devon) (Con)
The Minister specifically mentioned EU citizens. There have been concerns that the exemption will impact those EU nationals who are already here and who, as we have already heard, are contributing hugely to the UK. Can she assure us that the exemption is not targeted at them?
Victoria Atkins
Absolutely. The exemption will not be enacted on the basis of nationality. It is enacted on a case-by-case basis to uphold the integrity of the immigration system. There will be no question of EU nationals being in any way targeted by it. Indeed, we know the great effect that EU nationals and other people from other countries have had in this country, and we certainly would not be looking to target them on the basis of nationality.
Darren Jones
Is it not right to say that EU citizens will be part of the immigration system? They will be immigrants with immigration rights as part of the Brexit process. These rules could therefore apply to them, could they not? Secondly—
Victoria Atkins
I will answer the first one—yes. The hon. Gentleman asked whether EU citizens would be targeted. Once we leave the European Union, we will have our own immigration policy. There will clearly be no distinction between EU and non-EU, because everyone will be outside of the UK, if I may put it that way, very inelegantly.
Darren Jones
But they would still be subject to the right to exempt them from their data protection rights. I welcome the Minister’s comments on the time-limited nature of the intention of using the rules, but can she point me to the section of the Bill that defines that time limit, because I am struggling to find it?
Victoria Atkins
If I may, I will come back to that point in a moment. In the case of subject access requests, each request would need to be considered on its own merits. For example, we could not limit the information given to visa applicants on how their personal data would be processed as part of that application. Rather, the restrictions would be applied only where there was a real likelihood of prejudice to immigration controls as a result of disclosing the information concerned.
Liam Byrne
If someone has overstayed, they have committed a crime. Therefore, paragraph 2(1)(a) absolutely bites. We are seeking to prevent that crime. Someone who has overstayed their visa has committed a crime. It is kind of as simple as that.
Victoria Atkins
In that scenario, we may well effect their removal administratively. It does not mean that it is going through the criminal courts.
By way of a second example, take a case where the Home Office is considering an application for an extension of leave to remain in the UK. It may be that we have evidence that the applicant has provided false information to support his or her claim. In such cases, we may need to contact third parties to substantiate the veracity of the information provided in support of the application. If we are then obliged to inform the claimant that we are taking such steps, they may abscond and evade detection.
Liam Byrne
If someone has submitted false information in support of an application to the Government, and signed it, as they must, that is called fraud. That is also a crime, and is covered by paragraph 2(1)(a).
Victoria Atkins
I take the right hon. Gentleman’s point, particularly in relation to the overstayer, but as the purpose of processing personal data in many immigration areas is not generally the pursuit of criminal enforcement action, it is not clear that it would be appropriate in all cases to rely on crime-related exemptions, where the real prejudice lies in our ability to take administrative enforcement action. It may well be that in some cases a crime has been committed, but that will not always be the case.
Criminal sanctions are not always the correct and proportionate response to people who are in the UK without lawful authority. It is often better to use administrative means to remove such a person and prevent re-entry, rather than to deploy the fully panoply of the criminal justice system, which is designed to rehabilitate members of our communities. As the purpose of processing personal data in such cases is not generally the pursuit of a prosecution, it is not clear that we could, in all cases, rely on that exemption relating to crime.
Stuart C. McDonald
So far we have had some hypothetical examples about what might happen in the future, but given that we have a data protection regime in place already, it would be useful to know whether the Minister can give us examples of situations that have arisen in which the Home Office has been hindered by the current data protection regime. We have not heard anything like that so far.
Victoria Atkins
If I may, I will continue with my speech, because I have more information to give. Perhaps at the end I can deal with the hon. Gentleman’s point.
Liam Byrne
I just want to dissolve one confusion in the Minister’s remarks. The nature of the Home Office response, whether it is a prosecution through a civil court, a civil sanction or a civil whatever else, does not affect the nature of the offence that is committed. The Home Office has a range of sanctions and choices in responding to an offence, but that does not stop the offence being an offence. The offence is still a crime, and is therefore covered by paragraph 2(1)(a).
Victoria Atkins
The right hon. Gentleman is assuming that each and every immigration case that will be covered by these provisions necessitates the commission of a crime.
Victoria Atkins
I would not make that assumption. The vast majority of immigration cases are dealt with in a civil context.
Victoria Atkins
No, forgive me. I have been very generous with interventions. I am going to make some progress, and then no doubt others will intervene on me in due course.
I turn to the charge that the exemption has no basis in EU law. Article 23 of the GDPR allows member states to restrict the application of certain provisions of the regulation to safeguard important objectives of general public interest. Immigration control constitutes one such objective. We see immigration as an important matter of public interest, and the GDPR allows member states to exempt rights where that is the case. We are not alone in our belief that immigration is an important matter of general public interest. The Irish Government clearly stated that in their own Data Protection Bill. Clause 54 of the Irish Bill gives powers to make regulations restricting certain rights and obligations under the GDPR to safeguard important objectives of general public interest. The list of such objectives in the Bill includes matter relating to immigration.
Opposition Members have talked about their concerns about the fact that these provisions may be covered by paragraph 2 of the schedule. I want to reflect on the outcome of the debate on this provision in the House of Lords, which contains many noble Lords who are extremely learned in the law, have much experience of campaigning on immigration rights and so on. We listened very carefully to the concerns raised at Lords Committee stage, and as a result the Government tabled amendments at Lords Report stage to narrow the scope of the exemption so that it no longer covers the right to rectification and data portability. In response to those amendments, Lord Kennedy of Southwark said:
“The amendments tabled by the Government provide important clarification on what is exempt, limit the power in Bill and seek to address the concerns highlighted during the previous debate and today…I am happy to support their amendments.”—[Official Report, House of Lords, 13 December 2017; Vol. 787, c. 1590.]
Furthermore, in a Division on a Liberal Democrat amendment to strike out the immigration exemption, the official Opposition abstained. I wonder what has changed between their abstaining on that amendment and accepting that the Government’s amendments were sufficient, and today. Nothing has changed since the Bill left the Lords, so perhaps the right hon. Member for Birmingham, Hodge Hill can help us with why their position has changed.
I hope I have been able to satisfy the Committee that this provision is necessary and important.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Hanson. Will the Minister give a tangible example, as she has done in other cases, of where an immigration case may require exemption under paragraph 4—in other words, a case in which a crime has not been committed and therefore would not be covered under paragraph 2(2)? The cases she has mentioned so far would, on the face of it, be covered by paragraph 2(2), because a criminal act had taken place or was about to take place.
Victoria Atkins
There may be occasions when there is a person we have lost track of whose status is irregular. If we know they have a child, we will seek from the Department for Education assistance to find the whereabouts of the child. That child has not committed a criminal offence, so I would be very concerned to ensure that the Home Office, Border Force or whoever else acted lawfully when seeking that data in order to enable them to find the parent or whoever is the responsible adult, as part of the immigration system.
Louise Haigh
In that example, would the exemption not be covered under the safeguarding exemption, as brought by the Government amendment to schedule 1?
Victoria Atkins
No—the child is not missing, but the parent is; so we seek advice from the Department for Education about where the child is. It may be that cleverer lawyers than me in the Home Office will find an exemption for that, but the point of this exemption of paragraph 4 is to cover the lawfulness of the Home Office in seeking such information in order to find parents or responsible adults who may have responsibility, and either to regularise their stay or to remove them.
I encourage the right hon. Member for Birmingham, Hodge Hill to withdraw his amendment, as we believe that it is not the wholesale disapplication of data subjects’ rights, and it is a targeted provision wholly in accordance with the discretion afforded to member states by the GDPR and is vital to maintaining the integrity and effectiveness of our immigration system.
Liam Byrne
Anyone who was not alarmed by this provision certainly will leave this Committee Room thoroughly alarmed by the Minister’s explanations.
First, we were invited to believe that we could safeguard due process and the rights of newcomers to this country by suspending those rights and pursuing people through civil court. We were then asked to believe that the Home Office’s ambition to deal with these cases with civil response rendered inoperable the powers set out in paragraph 2(1)(a), confusing the response from the Home Office and the nature of the offence committed up front. Then, we were invited to believe that this was not a permanent provision—even though that safeguard is not written into the Bill—but a temporary provision. What is not clear is when those temporary provisions would be activated and, crucially, when they would be suspended.
Liam Byrne
I am happy to give way in a moment. Most of us here who have done our fair share of immigration cases—I have done several thousand over the last 14 years—know that on some occasions, the Home Office interpretation of time is somewhat different from a broadly understood interpretation of time. I have cases in which a judge has ordered the issue of a visa, and six months later we are still chasing the Home Office for the issue of the visa. I will not be alone in offering these examples.
Perhaps when the Minister intervenes, she could set out what “temporary” means, where it is defined and where are the limits, and she still has not answered my question whether she will guarantee that the implementation of this pause will not jeopardise someone’s ability to submit either a request for an entry clearance officer review or an appeal within the legally binding time windows set out in Home Office regulations.
Victoria Atkins
The key to this is the purpose for which we are processing the data. Even if there are criminal sanctions, that does not mean that we are processing for that purpose, particularly where we are not likely to pursue a prosecution. The primary purpose is often immigration control—that does not fit under paragraph 2 as he has described it—rather than enforcing the criminal justice system. That is the point. It is for the purpose of processing the data. The crime-related provisions in the Bill refer to the importance of identifying the purposes of the processing. Where the primary purpose is immigration related, it is not clear that we could rely on the crime-related exemptions. That is why paragraph 4 is in the schedule.
Liam Byrne
I am really sorry to have to say this, but that is utter nonsense. The idea that the Home Office will seek to regularise someone’s immigration status by denying them access to information that might support their case is, frankly, fanciful.
This is not a new debate; we last had it in 1983. The Home Office tried to sketch this exemption into legislation then, it failed, and we should not allow the exemption to go into the Bill, especially given that all the explanations we have heard this afternoon are about cases where paragraph 2(1)(a), or the safeguarding provisions drafted by the Government, would provide the necessary exemptions and safeguards in the contingencies that the Minister is concerned about.
Darren Jones
I feel for the Under-Secretary, because she is on a bit of a sticky wicket given the Government’s drafting, but does my right hon. Friend agree that it is concerning that I asked twice to be pointed to specifics—I asked first how the pause is drafted in the Bill, and secondly where the word “immigration” appears under article 23 of the GDPR—but on neither occasion was I was pointed to them? We ought also to draw the Committee’s attention to the report on the Bill by the Joint Committee on Human Rights, which states:
“The GDPR does not expressly provide for immigration control as a legitimate ground for exemption.”
Liam Byrne
My hon. Friend is bang on the money, but perhaps the Under-Secretary can enlighten us.
Victoria Atkins
All rights are reinstated once the risk to prejudice is removed. The wording is in line 35 of paragraph 4:
“to the extent that the application of those provisions would be likely to prejudice any of the matters mentioned in paragraphs (a) and (b).”
To reassure the hon. Member for Bristol North West, that is the end point.
Liam Byrne
I am grateful to the Under-Secretary for clarifying a point that was not at issue. No one is concerned about what rights kick back in at the end of a process. We are worried about how long the process will last, who will govern it, what rights newcomers to this country or courts will have to enforce some kind of constraint on the process and how we will stop the Home Office embarking on unending processes in a Jarndyce v. Jarndyce-like way, which we know is the way these cases are sometimes prosecuted. The Home Office is full of some of the most amazing civil servants on earth, but perhaps, a little like the Under-Secretary, they are sometimes good people trapped in bad systems and, dare I say it, bad arguments.
Question put, That the amendment be made.
“2. The function is designed to protect members of the public against— (a) dishonesty, malpractice or other seriously improper conduct, or (b) unfitness or incompetence. | The function is— (a) conferred on a person by an enactment, (b) a function of the Crown, a Minister of the Crown or a government department, or (c) of a public nature, and is exercised in the public interest.” |
“() section 244 of the Investigatory Powers Act 2016;” |
“1A. The Scottish Information Commissioner. | By or under— (a) the Freedom of Information (Scotland) Act 2002 (asp 13); (b) the Environmental Information (Scotland) Regulations 2004 (S.S.I. 2004/520); (c) the INSPIRE (Scotland) Regulations 2009 (S.S.I. 2009/440).” |
“5A. The Financial Conduct Authority. | By or under the Financial Services and Markets Act 2000 or by another enactment.” |
“12. The Charity Commission. | By or under— (a) the Charities Act 1992; (b) the Charities Act 2006; (c) the Charities Act 2011.” |
Liam Byrne
I beg to move amendment 170, in schedule 2, page 151, line 8, at end insert—
“(f) in Chapter IX of the GDPR (provisions relating to specific processing situations), Article 89(1) (safeguards and derogations relating to processing for archiving purposes in the public interest, scientific or historical research purposes or statistical purposes).”
This amendment adds the restrictions imposed on archiving by the GDPR and the Bill to the list of matters in the Bill that benefit from the Journalism, Art and Literature exemption.
The purpose of this amendment is to protect some of our important national archives. We in this country are some of the greatest collectors on earth; the tradition established by Sir Hans Sloane all those centuries ago inspired many generations that followed him. Our ability and our tradition of collecting mean that this country is now home to some of the greatest collections on the planet.
It is fantastic to see many of these institutions now rapidly digitalising those archives. I was privileged to be able to visit the Natural History Museum recently, which I think is home to something like 83 million different specimens. It is now beginning to digitalise those archives in a way that opens them up not only to our schoolchildren, but to citizens of this country and those around the world who are keen on science.
The point of this amendment is that we cannot simply preserve those archives in aspic. They must be dynamic resources; they must be added to, and our success or failure in that task has a crucial bearing on the health of our democracy and our ability to, dare I say it, reflect on past mistakes and do better. I think it was the legendary Karl Popper who once said, “To err is human, to correct divine.”
We make mistakes. It is important that we reflect on the mistakes we have made in the past, in order to do better next time around. Many of the more contemporary archives, particularly news archives, have had a crucial bearing on inquiries into historical child abuse, the injustices perpetrated at Hillsborough and at Orgreave, and HIV-contaminated blood. All those inquiries relied on records that were not necessarily historical; many were contemporary.
A range of crucial organisations entrusted with the delicate task of keeping our archives up to date are seriously worried about the provisions in the GDPR. In fact, they believe the inadequacy of the derogations and exemptions in the GDPR, as it is proposed that we draft it into law, means that they will be quickly put out of business. In particular, that will bite on thousands of smaller archives.
The point they have consistently made to us is that, although we have such great collections and archives in this country and a public interest culture around protecting some of those archives, we do not have any of the kind of legal protections that they enjoy in countries such as France. We do not have the defendable protections around archives that those abroad benefit from.
The challenge in this Bill is a lack of precision. I do not want to pretend that this is a black-and-white case. Sometimes news archives in particular will be required to draw something of a grey line, and I am afraid the Minister has to earn her pay and be the one to decide where to draw that grey line. Sometimes there will be information stored in those archives that absolutely should be subject to the GDPR provisions. But if we are in effect granting a carte blanche for people to make requests of archives that require those archives to dip deep into the historical record, correct things and go through challenging processes to ensure they are right, I am afraid it will put a number of our archives out of business, and that will damage the health of our democracy.
We have drafted this amendment with a number of aims. We want to try to create a statutory definition for organisations that archive in the public interest. We have had a first attempt at drawing that in a narrow way, so it does not infringe on material that is stored that absolutely should be subject to general GDPR provisions. We have done our best to ensure that the archiving exemptions are proportionate to the public interest nature of the material being archived. We wanted to offer an amendment worded hopefully in such a way that, frankly, it excludes Google, Facebook and others from enjoying the exemptions sought here.
This is the first place in the Bill where the debate rears its head. I am grateful to the range of museums, archives and the BBC that have helped us to craft this amendment. It should not be particularly controversial. There should be agreement across the Committee on the need to protect our great collections, yet keep some companies, such as Google and Facebook, subject to the provisions in the Bill.
We offer the amendment as a starter for 10. Obviously, we would be delighted if the Government accepted it; we would be even more pleased if they could perfect it.
The Chair
I have just had a request to remove jackets, because of the warm temperature in the room. I give my permission to do so. I call the Minister.
Margot James
Thank you, Mr Hanson. I agree with the tribute paid by the right hon. Member for Birmingham, Hodge Hill to the custodians of some of the most wonderful archives in the world. I will comment on his proposals with regard to such archives shortly, but I hope that recent debates have left no doubt in hon. Members’ minds that the Government are absolutely committed to preserving the freedom of the press, and maintaining the balance between privacy and freedom of expression in our existing law, which has served us well for so many years.
As set out in the Bill, media organisations can already process data for journalistic purposes, which includes media archiving. As such, we believe that amendment 170 is unnecessary and could be unhelpful. I agree with the right hon. Gentleman that it is crucial that the media can process data and maintain media archives. In the House of Lords, my noble Friend Lord Black of Brentwood explained very well the value of media archives. He said:
“Those records are not just the ‘first draft of history’; they often now comprise the only record of significant events, which will be essential to historians and others in future, and they must be protected.”—[Official Report, House of Lords, 10 October 2017; Vol. 785, c. 175.]
However, recital 153 indicates that processing for special purposes includes news archiving and press libraries. Paragraph 24 of schedule 2 sets out the range of derogations that apply to processing for journalistic purposes. That includes, for example, exemption from complying with requests for the right to be forgotten. That means that where the exemption applies, data subjects would not have grounds to request that data about them be deleted. It is irrelevant whether the data causes substantial damage or distress.
However, if media organisations are archiving data for other purposes—for example, in connection with subscriber data—it is only right that they are subjected to the safeguards set out in article 89(1), and the Bill provides for that accordingly. For that reason, I hope that the right hon. Gentleman agrees to reconsider his approach and withdraw his amendment.
Liam Byrne
I am happy to withdraw the amendment, although I would say to the Minister that the helpful words we have heard this afternoon will not go far enough to satisfy the objections that we heard from organisations. We reserve the right to come back to this matter on Report. We will obviously consult the organisations that helped us to draft the amendment, and I urge her to do the same. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 2, as amended, agreed to.
Schedule 3
Exemptions etc from the GDPR: health, social work, education and child abuse data
Amendments made: 111, in schedule 3, page 160, line 21, leave out
“with the day on which”
and insert “when”.
This amendment is consequential on Amendment 71.
Amendment 112, in schedule 3, page 162, line 3, leave out paragraph 16 and insert—
“16 (1) This paragraph applies to a record of information which—
(a) is processed by or on behalf of the Board of Governors, proprietor or trustees of, or a teacher at, a school in Northern Ireland specified in sub-paragraph (3),
(b) relates to an individual who is or has been a pupil at the school, and
(c) originated from, or was supplied by or on behalf of, any of the persons specified in sub-paragraph (4).
(2) But this paragraph does not apply to information which is processed by a teacher solely for the teacher’s own use.
(3) The schools referred to in sub-paragraph (1)(a) are—
(a) a grant-aided school;
(b) an independent school.
(4) The persons referred to in sub-paragraph (1)(c) are—
(a) a teacher at the school;
(b) an employee of the Education Authority, other than a teacher at the school;
(c) an employee of the Council for Catholic Maintained Schools, other than a teacher at the school;
(d) the pupil to whom the record relates;
(e) a parent, as defined by Article 2(2) of the Education and Libraries (Northern Ireland) Order 1986 (S.I. 1986/594 (N.I. 3)).
(5) In this paragraph, “grant-aided school”, “independent school”, “proprietor” and “trustees” have the same meaning as in the Education and Libraries (Northern Ireland) Order 1986 (S.I. 1986/594 (N.I. 3)).”
This amendment expands the types of records that are “educational records” for the purposes of Part 4 of Schedule 3.
Amendment 113, in schedule 3, page 164, line 7, leave out
“with the day on which”
and insert “when”.—(Margot James.)
This amendment is consequential on Amendment 71.
Schedule 3, as amended, agreed to.
Schedule 4 agreed to.
Clause 16
Power to make further exemptions etc by regulations
Question proposed, That the clause stand part of the Bill.
Stuart C. McDonald
This morning we had a discussion about some of the Henry VIII clauses contained in the Bill. In essence, I said that when we are talking about personal information—particularly, in such circumstances, sensitive personal information—there should be a strong presumption against Henry VIII clauses, with the onus being on the Government to justify why delegated legislation is the appropriate way to make changes to our data protection rules.
Throughout the passage of the Bill we will continue to challenge the Government to justify delegated powers proposed under the Bill. This clause is the next example of that arising, so in our view it falls on the Minister to explain why she seeks delegated authority to exercise certain functions under the GDPR. I look forward to hearing what she has to say.
Liam Byrne
We agree that the clause offers Ministers a rather sweeping power to introduce new regulations. Over the course of what has been quite a short day in Committee we have heard many reasons to be alarmed about equipping Ministers with such sweeping powers. We proposed an amendment to remove the clause, which I think was not selected because we have this stand part debate. What we need to hear from the Minister are some pretty good arguments as to why Ministers should be given unfettered power to introduce such regulations without the effective scrutiny and oversight of right hon. and hon. Members in this House.
Margot James
I am glad that the right hon. Gentleman feels we have had a short day in Committee. In answer to his questions and those of the hon. Gentleman, the order making powers in clauses 16 and 113 allow the Secretary of State to keep the list of exemptions in schedules 2 to 4 and 11 up to date. As I mentioned when we discussed order making powers in relation to clause 10 and schedule 1, we carefully reviewed the use of such powers in the Bill following recommendations from the Delegated Powers and Regulatory Reform Committee. We think an appropriate balance has now been struck. It might be helpful if I explain the reasons for our thinking.
Clause 16 includes order making powers to ensure that the Secretary of State can update from time to time the particular circumstances in which data subjects’ rights can be disapplied. That might be necessary if, for example, the functions of a regulator are expanded and exemptions are required to ensure that those new functions cannot be prejudiced by a data subject exercising his or her right to object to the processing.
We believe it is very important that the power to update the schedules is retained. Several of the provisions in schedules 2 to 4 did not appear in the Data Protection Act 1998 and have been added to the Bill to address specific requirements that have arisen over the last 20 years.
For example, the regulatory landscape has changed dramatically since the 1998 Act. Organisations such as the Bank of England, the Financial Conduct Authority and the National Audit Office have taken on a far broader range of regulatory functions, and that is reflected in the various amendments we have tabled to paragraphs 7 to 9 of schedule 2, to provide for a broader range of exemptions. No doubt, there will be further changes to the regulatory landscape in the years to come. Of course, other exemptions in schedule 2 have been carried over from the 1998 Act, or indeed from secondary legislation made under that Act, with little change. That does not mean, however, that they will never need to be amended in the future. Provisions made under the 1998 Act could be amended via secondary legislation, so it would seem remiss not to afford ourselves that same degree of flexibility now. If we have to wait for primary legislation to make any changes, it could result in a delay of months or possibly years to narrow or widen an extension, even where a clear deficiency had been identified. We cannot predict the future, and it is important that we retain the power to update the schedules quickly when the need arises.
Importantly, any regulations made under either clause would be subject to the affirmative resolution procedure. There would be considerable parliamentary oversight before any changes could be made using these powers. Clause 179 requires the Secretary of State to consult with the Information Commissioner and other interested parties that he considers appropriate before any changes are made.
I hope that that reassures Members that we have considered the issue carefully. I commend clause 16 to the Committee.
Question put, That the clause stand part of the Bill.
The Committee proceeded to a Division.
The Chair
The ayes were 10, the noes were nine. No—[Interruption.] I have been here a long time.
Margot James
I beg to move amendment 15, in clause 17, page 10, line 16, leave out “authority” and insert “body”.
This amendment corrects the reference in Clause 17(7) to the “national accreditation authority” by amending it to refer to the “national accreditation body”, which is defined in Clause 17(8).
Clause 17 relates to the certification of data controllers. This is a relatively new concept and will take time to bed in, but it could also be a significant step forward in ensuring that data subjects can have confidence in controllers and processors and, perhaps even more important, that controllers and processors can have confidence in each other. It is likely to be particularly relevant in the context of cloud computing and other business-to-business platforms where individual audits are often not feasible in practice.
Before they can audit controllers, certification bodies must be accredited, either by the Information Commissioner or by the national accreditation body, UKAS. Clause 17 and schedule 5 set out how the process will be managed. Unfortunately, there is a typographical error in clause 17. It refers erroneously to the “national accreditation authority” in subsection (7), when it should refer to the “national accreditation body”. Amendment 15 corrects that error.
Amendment 15 agreed to.
Clause 17, as amended, ordered to stand part of the Bill.
Schedule 5
Accreditation of certification providers: reviews and appeals
Amendment made: 114, in schedule 5, page 170, line 21, leave out “In this paragraph” and insert—
“Meaning of “working day”
7 In this Schedule”
This amendment applies the definition of “working day” for the purposes of the whole of Schedule 5. There are references to “working days” in paragraphs 5(2) and 6(3) of that Schedule.—(Margot James.)
Schedule 5, as amended, agreed to.
Clause 18 ordered to stand part of the Bill.
Clause 19
Processing for archiving, research and statistical purposes: safeguards
Amendment made: 16, in clause 19, page 12, line 2, leave out “(d)” and insert “(e)” —(Margot James.)
This amendment amends the definition of “relevant NHS body” in this Clause by adding special health and social care agencies established under Article 3 of the Health and Personal Social Services (Special Agencies) (Northern Ireland) Order 1990 (which fall within paragraph (e) of section 1(5) of the Health and Social Care (Reform) Act (Northern Ireland) 2009).
Clause 19, as amended, ordered to stand part of the Bill.
Clauses 20 to 22 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.—(Nigel Adams.)
Data Protection Bill [ Lords ] (First sitting)
(6 years, 1 month ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 10 - Question accordingly negatived.
The Chair
Welcome. The annunciators in the Committee Room are not working, so we will go by the Hansard clock on my left until they are repaired. I remind colleagues to switch off their mobile phones, and that tea and coffee are not permitted in Committee sittings.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 13 March) meet—
(a) at 2.00 pm on Tuesday 13 March;
(b) at 11.30 am and 2.00 pm on Thursday 15 March;
(c) at 9.25 am and 2.00 pm on Tuesday 20 March;
(d) at 11.30 am and 2.00 pm on Thursday 22 March;
(e) at 9.25 am and 2.00 pm on Tuesday 27 March.
(2) the proceedings shall be taken in the following order: Clauses 1 to 10; Schedule 1; Clauses 11 to 15; Schedules 2 to 4; Clauses 16 and 17; Schedule 5; Clauses 18 to 22; Schedule 6; Clauses 23 to 30; Schedule 7; Clauses 31 to 35; Schedule 8; Clauses 36 to 86; Schedules 9 and 10; Clauses 87 to 112; Schedule 11; Clauses 113 and 114; Schedule 12; Clauses 115 and 116; Schedule 13; Clauses 117 and 118; Schedule 14; Clauses 119 to 153; Schedule 15; Clause 154; Schedule 16; Clauses 155 to 181; Schedule 17; Clauses 182 to 204; Schedule 18; Clauses 205 to 208; 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 27 March. —(Margot James.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Margot James.)
The Chair
Copies of written evidence will be made available in the Committee Room shortly.
We now begin line-by-line consideration of the Bill. Mr Streeter—my fellow Chair—and I have selected the amendments for consideration today; the selection list is available in the Committee Room. Amendments that have been grouped for debate are generally on the same or a similar issue.
For the benefit of new Members on the Committee, I should say that decisions on amendments are made not necessarily in the order in which they are debated, as shown on the selection list, but rather in the order in which they appear on the amendment paper. Some of the provisions that we debate today will therefore not be voted on until a later day. I will use my discretion to determine whether to have separate stand part debates on clauses to which a number of amendments have been tabled. I am sure it will all become clear in due course.
Clause 1
Overview
Question proposed, That the clause stand part of the Bill.
The Minister of State, Department for Digital, Culture, Media and Sport (Margot James)
It is a pleasure to serve under your chairmanship, Mr Hanson. Clause 1 is a signposting overview of the Bill. It is not intended to have any effect other than to help us to navigate such a large Bill; I trust that hon. Members agree that it achieves its purpose.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hanson. Looking around the Committee Room, I see that you have an extremely unruly bunch of hon. Members to police in the next couple of weeks, but I know that you will do so with skill and care.
The Opposition do not wish to object to clause 1, which is basically the foundation stone of the Bill. We wish only to underline the Bill’s peculiarity in that it seeks to incorporate a piece of European legislation into British law without actually reproducing the legislation in question. Throughout the debate, we will hear references to the general data protection regulation—GDPR—a text that appears nowhere in the Bill. I hope that over the coming weeks the Committee will therefore focus on a series of principles for data protection. The Opposition will move amendments to enshrine those principles more firmly into our law. Beyond that, I have no objections to this foundation stone of the Bill.
Question put and agreed to.
Clause 1 accordingly agreed to.
Clause 2
Protection of personal data
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss new clause 12— Right to protection of personal data—
“(1) A person (“P”) has the right to protection of personal data concerning him or her.
(2) Personal data must be processed fairly for specified purposes as set out in the GDPR, and in accordance with the provisions, exceptions and derogations of this Act; and on the basis of the consent of P or some other legitimate basis.
(3) The Information Commissioner shall be responsible for ensuring compliance with the rights contained within this section.”
This new clause would incorporate Article 8 of the Charter of Fundamental Rights of the European Union (Protection of personal data) into the Bill.
Liam Byrne
New clause 12, which I tabled with other Opposition members of the Committee, seeks to achieve something very simple: to incorporate article 8 of the EU charter of fundamental rights into British law. It is beyond dispute that both sides of the House share the objective of ensuring friction-free trade with our neighbour, the European Union, over the years to come. The role of this Bill in enabling that trade is of fundamental significance. Something like 70% of our exports of goods and services rely on the smooth transfer of data, and we know that the European data economy will be worth something like £643 billion by 2020. Despite all the efforts of the Secretary of State for International Trade, the reality is that the EU data economy, sitting next door to us, remains one of the most important, if not the most important, global markets from which we should aspire to profit over the years to come.
One of the great risks of Brexit is that technology firms will relocate, which is already beginning to take place. Many such firms will choose to headquarter in the Republic of Ireland. It is therefore in everybody’s interest that our trade and data protection regimes allow the smooth export of digitally enabled services. I hope that is not a contentious point.
In new clause 12, we propose to incorporate into British law what is, in effect, at the cutting edge of global data protection measures. It is not a trivial or frivolous new clause. Her Majesty’s Opposition did not make it up; it was crafted with techUK—an organisation that represents 950 companies, which employ something like 800,000 people and make up about half of the UK tech industry. When techUK proposes a fundamental measure of reform, it is important that we listen.
When we leave the European Union, we will need to agree with it an adequacy agreement by which it recognises the data protection regime in this country as adequate and therefore indicates that it is permissible for us to share data across the continental borders. The question, therefore, is how do we put that adequacy agreement beyond any doubt, not just for the immediate years after Brexit but for the decades to come? We know that trade will be fundamental to the health and wellbeing of our economy over many, many years. Let us put the data sharing regime between us and the European Union beyond doubt, not just for the short term but for the long term. Failure to get an adequacy agreement could arguably be fatal to the British economy. We simply cannot consider a shred of risk to that adequacy agreement. I hope that, having looked at this amendment and appreciated some of the refinements we made in the other place, the Government will decide that they will not put dogma in the way of agreeing to it. It is too important to leave to doubt.
In the debate on clause 1, I said that this principle was all the more important, because right hon. and hon. Members are being asked to agree to a Bill that does not feature the GDPR, which it seeks to incorporate into British law. Hon. Members can look it up if they like, but the Government have not set it out in a schedule or anywhere else. The fact that the Bill does not include the GDPR makes it all the more important that the House agrees a series of principles that are good now and for the future. Principles are paramount, and in this Bill the principle of privacy is first among equals.
The question of privacy is not disputed. It is a principle that has been agreed by our own Supreme Court in a recent case that was brought by the right hon. Member for Haltemprice and Howden (Mr Davis), who is now the Secretary of State for Brexit. Together with my hon. Friend the Member for West Bromwich East (Tom Watson), he brought the case of David Davis and others v. Secretary of State for the Home Department to the High Court, which confirmed the right of privacy in this country. This is not something that is necessarily party political; this is something on which there is strong cross-party consensus. These principles will become all the more important as the EU (Withdrawal) Bill is given effect because the Bill has thousands of ideas and proposals but kills off only one piece of legislation: the EU charter of fundamental rights.
A British tradition helped shape the EU charter of fundamental rights. We are the country of the Magna Carta and we are the country that helped craft the European convention on human rights after world war two to ensure there was never a return to the horrors of the 1930s and 1940s. Our lawyers played a fundamental role in shaping the EU charter of fundamental rights, but now, in the EU (Withdrawal) Bill, the Government decide to kill off the whole thing.
In killing off the whole thing, and in particular article 8—the fundamental foundational right to privacy—we create a new risk to keeping in lockstep the data protection regime in this country and the data protection regime in the European Union. If we bring that into doubt, we jeopardise an adequacy agreement for the future. I fear that, by setting their face against this new clause 12, the Government are, in some way and for some reason, trying to preserve the illusion of harmony between our regime and the regime of the European Union in order to camouflage the flexibility that might allow it to depart from regulatory harmonisation in the years to come. To coin a phrase, they are trying to have their cake and eat it.
That is not a reasonable position. The Minister will reassure us that that is not the intention of Her Majesty’s Government today. No doubt, she will tell us there is no will to try and win a race to the bottom in the data protection regime and many of us may be sympathetic to her position, as she is quite famously a reasonable Minister. However, the Tory party is not a stable place and the worry on all parts is not only how long the Minister will enjoy her office but what will come after her and what Government will come after this Government. There will be Governments of many colours over the course of the next 70 or 80 years and in this Committee we do not want to risk leaving unfettered a future Government who may take a less reasonable position than the famously reasonable Minister. That is why we want to move the incorporation of article 8 into British law.
We currently have a Bill without a data protection instrument and without clear data protection principles. That is a high-risk situation when, today, we have a low-risk regime. Nobody is particularly troubled by the current privacy regimes; we have been operating under article 8 of the EU charter of fundamental rights for some time and, certainly, no arguments I have heard suggest that it is troublesome in any way. What is wrong with continuing with it?
When we first crafted this new clause, there were some issues to which we were alert. A number of noble peers expressed a concern that we were creating too absolutist a right, a right without balancing test and provisions. That has been corrected in the new clause presented to this Committee today. We would therefore like to press it to a vote, as we want to ensure this fundamental right is part and parcel of British law for the years to come. It de-risks an adequacy agreement for data protection for the future. We have enjoyed the provisions of article 8 for some years, and there is no reason to suggest that they may be more troublesome in the years ahead. We do not think the Government want to depart from a harmonisation of regulations in this area over the years to come so the flexibility that this Bill currently offers will not be taken up. Let us put the matter beyond dispute and beyond doubt and let us incorporate article 8 into the Bill.
The Chair
I remind Members—particularly new Members—that new clause 12 is being debated now, but will not be voted on, if Members wish to have a vote, until we have completed consideration of the Bill. Today’s debate is on clause 2 and new clause 12, but the vote on the new clause will come later.
Brendan O'Hara (Argyll and Bute) (SNP)
I rise in support of new clause 12, for two reasons. With the Bill as it stands, we see an erosion of the rights of UK citizens in a range of areas. This is particularly important because, as drafted, the EU (Withdrawal) Bill, eliminates important rights that are protected by article 8 which would otherwise constrain Ministers’ ability to erode the fundamental data protection rights that we currently enjoy.
On top of that, it is essential that, post-Brexit, the United Kingdom has an adequacy agreement with the rest of the European Union. As we have heard from the right hon. Member for Birmingham, Hodge Hill, if the United Kingdom fails to secure an adequacy agreement, I fear there will be a flight of high-tech, high-skilled jobs from the United Kingdom to other parts of the European Union.
For the UK to be able to take full advantage of this vital continued free flow of data with the rest of the European Union post Brexit, the most straightforward route is an adequacy agreement. As I have heard argued before, that decision is not as straightforward as one would hope. An adequacy agreement is not simply in the Commission’s gift to give; it is a legal judgment.
If I could point again to the data protection lawyer, Rosemary Jay, who said that the EU had to go through a legislative process, and it was simply not in the EU’s gift to do this in any informal way. The Commission has to go through a legislative process in order to give the UK an adequacy agreement. There are further complications because, with an adequacy agreement, the European Commission has to consider a variety of issues, such as the rule of law, respect for human rights, and legislation on national public security and criminal law. That being so, as it currently stands, the Investigatory Powers Act may well prove a block to achieving adequacy. The Act has already been accused of violating the European Union’s charter of fundamental rights. Eduardo Ustaran, the internationally recognised expert, has said:
“What the UK needs to do is convince the Commission—and perhaps one day the European Court of Justice—that the Investigatory Powers Act is compatible with fundamental rights. That’s a tall order”.
While I can understand that the Government are absolutely desperate to secure an adequacy agreement, the harsh reality is that, in these challenging circumstances and with this challenging legal process, it is not going to be as simple as perhaps we had hoped.
No one wants this situation to arise; it is absolutely essential that we have this deal, but, as GDPR evolves over time—as it surely will—in order to maintain that adequacy status, should we attain it, the UK will have to keep its data protection law in line with GDPR. The EU charter of fundamental rights and freedoms is absolutely central to EU data protection law. If we exclude ourselves now from article 8, the chances of achieving adequacy are seriously jeopardised, and the chances of maintaining adequacy are further jeopardised. I urge the Government please to consider the long and short-term consequences of not accepting this new clause. Without article 8, I cannot see how we will achieve or maintain adequacy, and if we cannot achieve and maintain adequacy, the consequences for UK high-tech businesses are unfathomable.
Darren Jones (Bristol North West) (Lab)
Thank you, Mr Hanson. It is a pleasure to serve under your chairmanship on my first Bill Committee.
I rise to support the comments made by my right hon. Friend the Member for Birmingham, Hodge Hill about the importance of adequacy and its link to article 8 of the charter of fundamental rights, and therefore in support of new clause 12. The Bill is pragmatic in seeking to bring GDPR principles into areas of non-EU competence and to provide a legislative parking space for GDPR if the UK leaves the European Union. However, we cannot get away from the fact that GDPR in itself has a legal basis that is anchored to the European charter of fundamental rights. In trying to copy and paste that level of protection into UK law, we must therefore also bring with it the fundamental rights to which it is attached.
Mike Wood (Dudley South) (Con)
The hon. Gentleman is selectively quoting from that analysis. As he will see, it also says that the European Court of Human Rights —I think that the case concerned Finland—held that article 8 of the European convention on human rights encompassed data protection rights that were protected in article 8 of the charter.
Darren Jones
Of course the hon. Gentleman is right that the article includes principles of data protection, but we are trying to make the Government’s job in seeking the decision on adequacy with the European Union as easy as possible. This seems an easy way to facilitate that. Clearly, there is a dereliction of fundamental rights through not copying and pasting this across into UK law. Although there are data protection principles under the European convention on human rights, article 8 states:
“Everyone has the right to respect for his private and family life, his home and his correspondence.”
That does not sound very modern or digital to me. Although rights flow from that, the charter rights on communications—specifically electronic communications— seem much more fit for the future. I welcome the Secretary of State’s comments that the Bill seeks to make our country fit for the future. Let us rely not on a world of manual correspondence, but on one of electronic communications.
The new clause is not ideological; it does not seek to rebalance power between business controllers and individual citizens. It merely seeks to replicate what is in law today: a basic and fundamental human right that seems to me and to others to be perfectly sensible. Only yesterday, I was in Brussels with the European Scrutiny Committee, meeting Mr Barnier. He talked positively about wanting to get agreement on data adequacy, given its importance—not least because 11% of global data flows come to the UK, 70% of which are with the EU. It would be a disaster for this country if we did not have adequacy, so let us make our job easier to effect that shared aim across the Floor of the Committee and with our counterparts in Europe of seeking a decision on adequacy. Let us put this new clause into the Bill, so that we maintain the position that our data subjects have today: a fundamental right, which is in the European charter of fundamental rights, and in the future will be in this Bill.
Margot James
I thank speakers for their thoughtful contributions. I share many of their concerns, as do the Government, particularly with regard to adequacy, which I will talk about in more detail. I think we are all agreed that after Britain leaves the European Union we must be able to negotiate an adequacy agreement for the free flow of data between us and the EU. That is absolutely essential.
First, the GDPR implements the right to data protection and more. It is limited in scope, but the Bill also implements data protection rights on four areas beyond GDPR. It applies GDPR standards to personal data beyond EU competence, such as personal data processed for consular purposes or national security. Secondly, the Bill applies the standards to non-computerised and unstructured records held by public authorities that the GDPR ignores. Thirdly, the Bill regulates data processed for law enforcement purposes. Fourthly, it covers data processed by the intelligence services.
There is no doubt in our minds that we have fully implemented the right to data protection in our law and gone further. Clause 2 is designed to provide additional reassurance. Not only will that be clear in the substance of the legislation, but it is on the face of the Bill. The Bill exists to protect individuals with regard to the processing of all personal data. I think this is common ground. We share Opposition Members’ concern for the protection of personal data. It must be processed lawfully, individuals have rights, and the Information Commissioner will enforce them.
New clause 12 creates a new and free-standing right, which is the source of our concern. Subsection (1) is not framed in the context of the Bill. It is a wider right, not constrained by the context of EU law. However, the main problem is that it is not necessary. It is not that we disagree with the thinking behind it, but it is not necessary and might have unforeseen consequences, which I will come to.
Article 6 of the treaty on European Union makes it clear that due regard must be had to the explanations of the charter when interpreting and applying the European charter of fundamental rights. The explanations to article 8 of the charter confirm that the right to data protection is based on the right to respect for private life in article 8 of the ECHR. The European Court of Human Rights has confirmed that article 8 of the ECHR encompasses personal data protection. The Government have absolutely no plans to withdraw from the European Court of Human Rights.
The new right in new clause 12 would create confusion if it had to be interpreted by a court. For rights set out in the Human Rights Act, there is a framework within which to operate. The Human Rights Act sets out the effect of a finding incompatible with rights. However, new clause 12 says nothing about the consequences of potential incompatibility with this new right to the protection of personal data.
Liam Byrne
The Minister is rehearsing the argument that was made in the other place before the requirements that we put into our amendments. She can see as well as me that the new clause was rewritten so that, under subsection (2), it is to be interpreted only
“in accordance with the provisions, exceptions and derogations of this Act;”.
So the idea that we are creating some kind of new and unfettered right is nonsense. We had this debate in the other place. We made refinements and they have been presented in the new clause.
If there is no dispute about the importance of adequacy and of putting it beyond risk, what is the problem with putting the question beyond doubt and dispute and incorporating the same foundation that is enjoyed in the European Union into British law?
Margot James
New clause 12 takes article 8 of the charter outside that context and creates a free-standing right. That is the potential for confusion. New clause 12 says nothing about the consequences of incompatibility with the new right to the protection of personal data. That would create, legal, regulatory and economic uncertainty. We are endeavouring not just to ensure adequacy after we leave the European Union, but to go beyond the mere requirement for adequacy, as the Prime Minister set out in her speech almost two weeks ago.
Further, how would the courts approach other legislation in the light of this new right? One has to ask how they would approach other rights. Could this new right be balanced against other rights?
Liam Byrne
It is not a new right; it is a roll-over of an existing right. I have not heard of a case prosecuted in British courts where there was a problem with balancing the right that we currently enjoy with anything else. We simply seek to roll this right over into the future.
Margot James
That brings me on to my other point: not only does this roll-over, as the right hon. Gentleman puts it, threaten to create confusion and undermine other rights, but it is unnecessary. The charter of fundamental rights merely catalogues rights that already exist in EU law; it is not the source of those rights. The rights, including to data protection, which is, importantly, what we are here to debate, arise from treaties, EU legislation and case law. They do not arise from the European charter of fundamental rights, so we argue that the new clause is completely unnecessary.
Darren Jones
The right exists in its own right in the European charter of fundamental rights. That is why European Courts refer to it when making decisions. If the Courts did not think that it was an established right in itself, they would refer to the other sources of legislation that the Minister mentioned. It therefore must, as a matter of logic, be a legal right that is fundamental; otherwise, the Courts would not refer to it.
On the Minister’s original comments about the consequences of the new clause, I think they are clear in the drafting. Subsection (2), as my right hon. Friend the Member for Birmingham, Hodge Hill said, states that processing personal data must comply with GDPR and the derogations in the Bill, and the consequences of subsection (3) are that the Information Commissioner should ensure compliance. In ensuring compliance, the commissioner will look to GDPR and the Bill to understand the consequences of a breach of a fundamental right that already exists.
Margot James
The source of the rights that we are discussing are EU legislation and case law. Those rights will be protected in UK domestic law after we leave the European Union by the European Union (Withdrawal) Bill. We have fully protected the right to data protection in our law. We have considered new clause 12 carefully, and it creates a new right. As I said, the arguments are well rehearsed, which is why we created clause 2 with the agreement of the Opposition spokespeople in the House of Lords.
The Government are determined to ensure the future free flow of data when we leave the European Union. We have heard much about the importance of, and the need for, an adequacy agreement, and I agree with everybody who has spoken on that. The general consensus is that, to achieve that, we need to faithfully implement the GDPR, and avoid the courts finding parts of the GDPR potentially incompatible with a new right. If that happened, rather than enabling the free flow of data, we would risk undermining it.
Twelve countries have negotiated adequacy arrangements with the European Union, including Canada, Israel, Uruguay, New Zealand and the United States. None of those countries was obliged by the EU Commission to put the charter of fundamental rights into their law, so I think Members can rest assured that the new clause is entirely unnecessary to achieve adequacy on our departure.
Brendan O'Hara
Does the Minister not accept that the countries she just listed were in an entirely different situation from the one that the United Kingdom finds itself in at the moment, where it is withdrawing from, rather than joining? One cannot compare like with like, because they are two entirely different situations. I believe that we are putting ourselves outside the scope of the GDPR and of achieving adequacy. The countries that she talked about took many years to achieve an adequacy agreement. The United Kingdom does not have that time. If the United Kingdom does not achieve adequacy on day one post-Brexit, does she not agree that the economy of the United Kingdom will suffer greatly as a result?
Margot James
I do not agree with the hon. Gentleman. I share his concern that we need to negotiate an adequacy agreement effectively; I am at one with him on that matter. For the reasons I have outlined, I do not believe that, if our clause is passed unamended, it will undermine that right when we come to negotiate an agreement. He made the point that those other countries are in a different position. They are already third countries in relation to us, and will be so when we leave. We will become a third country when we leave the European Union. I accept that the situation is different, but it puts us at an advantage. We are incorporating the GDPR in its entirety into UK legislation, and I assure the hon. Gentleman that we have that safeguard.
Future free flow of data is absolutely at the top of our agenda for the forthcoming EU negotiations. As I said earlier, my right hon. Friend the Prime Minister made that clear in her Mansion House speech two weeks ago. We want to secure an agreement with the EU that provides stability and confidence for EU and UK businesses and individuals, and ensures we achieve our aims of maintaining and developing the UK’s strong trading and economic links with the European Union.
Ultimately, as some Opposition Members said, importing text from the EU charter of fundamental rights is unnecessary. The general principles of EU law will be retained when we leave the EU via the European Union (Withdrawal) Bill for the purposes of the interpretation of the retained EU law. The GDPR will be retained. Indeed, the Bill will firmly entrench it in our law. The right to the protection of personal information is a general principle of EU law, and has been recognised as such since the 1960s. The withdrawal Bill requires our courts to interpret the GDPR consistently with the general principle reflected in article 8 and retained CJEU case law, so far as it is possible to do so.
Darren Jones
Does the Minister recognise that, under the European Union (Withdrawal) Bill, the application of the EU acquis—EU law—is based on legislation that existed before the point of exit? It will not continue to apply to new legislation and developments after the point of exit. The new clause needs to be in the Bill to maintain that position for the future; we must not just look back into the past.
Margot James
The European Union (Withdrawal) Bill fully protects the rights to data protection in our law. As I said earlier, we are seeking not only adequacy after Brexit, but a continuing role in conjunction with the bodies in Europe that govern the GDPR, with the idea that we continue to contribute our expertise and benefit from theirs.
Liam Byrne
I am afraid we have heard a very weak argument against new clause 12. The Minister sought to prosecute two lines of argument: first, that new clause 12 risks confusion in the courts; and, secondly, that it is not needed. Let me take each in turn.
First, there can be no risk of confusion because this is not a new right. It is a right we already enjoy today, and our courts are well practised in balancing it with the other rights we enjoy. We are simply seeking to roll over the status quo into the future to put beyond doubt an adequacy agreement not just in the immediate years after we leave the European Union but in the decades that will follow.
Secondly, the Minister sought to persuade us that the new clause was not needed, and she had a couple of different lines of attack. First, she said that the source of our new protections would be the incorporation of EU case law and legislation as enshrined by the European Union (Withdrawal) Bill. Of course, that is simply not applicable to this case, because the one significant part of European legislation that the withdrawal Bill explicitly does not incorporate is the European charter of fundamental rights. The Minister slightly gave the game away when she read out the line in her briefing note that said that the rights we currently have in EU law would be enshrined and protected “so far as it is possible to do so.” That is exactly the kind of risk we are seeking to guard against.
As noble peers argued in the other place, the challenge with incorporating the GDPR into British law is that this is a piece of regulation and legislation that reflects the world of technology as it is today. It is not the first bit of data protection legislation and it will not be the last. At some point in the years to come, there will be a successor piece of legislation to this Bill and the courts’ challenge will be to make judgments that interpret an increasingly outmoded and outdated piece of legislation. We have to ensure that judgments made in the British courts and in the European courts remain in lockstep. If we lose that lockstep, we will jeopardise the future of an adequacy agreement. That will be bad for Britain, bad for British businesses and bad for technology jobs in all our constituencies.
The challenge we have with regulating in this particular field is that sometimes we have to be anticipatory in the way we structure regulations. Anyone who has spent any time with the British FinTech industry, which Ministers are keen to try and enhance, grow and develop for the years to come, will know that FinTech providers need to be able to test and reform bits of regulation in conjunction not only with the Information Commissioner but with other regulators such as the Financial Conduct Authority. For those regulators to be able to guarantee a degree of regulatory certainty, sometimes they will need to look beyond the letter of a particular piece of legislation, such as the Data Protection Bill when it becomes an Act, and reflect on the spirit of that legislation. The spirit is captured best by fundamental rights. The challenge we have is in the thousands of decisions that our regulators must take in the future. How do we put beyond doubt or dispute the preservation of regulatory lockstep with our single most important market next door?
The Uruguayan defence offered by the Minister will reassure few people. We should not be aspiring to the Uruguayan regime; we should be aspiring to something much deeper, more substantive and more harmonious. The Minister’s proposal will create a field day for lawyers. We all like lawyers; some of our Committee members are former lawyers—recovering lawyers in some cases. Lawyers should enjoy a profitable and successful future, but we in this House do not necessarily need to maximise their profit-making possibilities in the future. However, that is exactly what the Minister is doing by creating a pot pourri of legislation, which lawyers and judges will have to pick their way through. It is much simpler, much lower-risk, much safer and better for economic growth if we put beyond doubt, dispute and question the harmonisation of our data protection regime with our single most important market. That is why we need to incorporate article 8.
Darren Jones
I have a copy of the general data protection regulation here. Recital 1 on the first page states:
“The protection of natural persons in relation to the processing of personal data is a fundamental right. Article 8(1) of the Charter of Fundamental Rights of the European Union—”.
Is it not the case, to use some imagery here, that at the moment the GDPR is built on a foundation as on page one of this fundamental right in the same way as a house is built on strong foundations? Are we now not seeking to build the same house but without the foundations? Does this risk us sinking our decision on adequacy?
Liam Byrne
My hon. Friend is right. He speaks with tremendous knowledge on this particular subject. There is a real risk that one of our most important industries will have its foundations wrecked by the inadequacies of this piece of legislation. There is no risk of confusion, there is no creation of a new and unchecked, unfettered right. We can draw no comfort from the EU (Withdrawal) Bill. There is a great risk of regulatory confusion and divergence over the years to come. I simply cannot understand why the Government would seek to put dogma and not the future protection of the British technology industry first.
This is not a trivial or frivolous issue; it has been put forward by the industry association representing half of technology jobs in this country. I hope that the Committee is persuaded by these arguments. We will seek to prosecute these arguments in a vote, at your discretion, Mr Hanson, but I hope that before we get to that point, the Government will see sense and accept the amendment.
The Chair
As I said, the vote on new clause 12, should there be one, will take place at a later date.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clause 3
Terms relating to the processing of personal data
Margot James
I beg to move amendment 1, in clause 3, page 2, line 25, leave out “personal data” and insert “information”.
This amendment and Amendment 2 enable the definition of “processing” to be used in relation to any information, not just personal data.
The Chair
With this it will be convenient to discuss Government amendments 2 to 6 and 69.
Margot James
These amendments make a series of minor and technical changes to clause 3, which covers terminology relating to use of personal data. I do not propose to go through each one in detail, because they are designed to improve clarity and consistency of language, and no more. Amendments 1 and 2 amend the definition of “processing” in subsection (4), by replacing the term “personal data” with “information”. This has no material impact on the use of the term “processing” in parts 2 to 7 of the Bill, where the meaning of “processing” is to be understood within the context of the applicable regime, but the amendments ensure consistency with terminology in other legislation.
Amendments 3 and 6 are linked; amendment 6 adds a new paragraph (c) to subsection (14), confirming that the terms “controller” and “processor” have the same meaning in parts 5 to 7 of the Bill as they do in parts 2 to 4 respectively, unless otherwise stated. Amendment 3 adds a cross-reference to this new paragraph in subsection (6). Again, these are both technical in nature. Amendment 4 ensures that references in parts 5 to 7 of the Bill to chapter 2 of part 2 will be read as including the applied GDPR under chapter 3 of part 2, unless stated otherwise.
Amendment 69 removes similar wording from clause 184, because amendment 4 means that it is no longer required. Finally, amendment 5 improves the phraseology relating to the processing of personal data in subsection (14)(b).
Amendment 1 agreed to.
Amendments made: 2, in clause 3, page 2, line 26, leave out “personal data, or on sets of personal data” and insert “information, or on sets of information”.
See the explanatory statement for Amendment 1.
Amendment 3, in clause 3, page 2, line 41, after “83” insert “and see also subsection (14)(c)”.
This amendment is consequential on Amendment 6.
Amendment 4, in clause 3, page 3, line 27, at end insert —
“(aa) references to Chapter 2 of Part 2, or to a provision of that Chapter, include that Chapter or that provision as applied by Chapter 3 of Part 2;”.
This amendment makes clear that references to Chapter 2 of Part 2 in Parts 5 to 7 of the bill include that Chapter as applied by Chapter 3 of Part 2.
Amendment 5, in clause 3, page 3, line 28, leave out “processing and personal data are to processing and personal data” and insert “personal data, and the processing of personal data, are to personal data and processing”.
This amendment is consequential on Amendment 1.
Amendment 6, in clause 3, page 3, line 29, at end insert —
“(c) references to a controller or processor are to a controller or processor in relation to the processing of personal data to which Chapter 2 or 3 of Part 2, Part 3 or Part 4 applies.”—(Margot James.)
This amendment and amendment 3 make clear that references to controllers and processors in Parts 5 to 7 of the bill are to controllers and processors in relation to processing to which the GDPR, the applied GDPR or Part 3 or 4 of the bill applies.
Clause 3, as amended, ordered to stand part of the Bill.
Clauses 4 to 6 ordered to stand part of the Bill.
Clause 7
Meaning of “public authority” and “public body”
Margot James
I beg to move amendment 7, in clause 7, page 5, line 8, leave out “a body specified” and insert “body specified or described”.
This amendment and Amendment 8 make clear that regulations under Clause 7 may identify an authority or body by describing a type of authority or body, as well as by specifying an authority or body.
The Chair
With this it will be convenient to discuss Government amendments 8, 18, 19 and 62.
Margot James
Clause 7 defines the meaning of “public authority” for the purposes of the GDPR. Generally speaking, “public authority” will have the same meaning as the definition used in the Freedom of Information Act 2000 or the Freedom of Information (Scotland) Act 2002. Those Acts list a wide range of public authorities, including Departments, local authorities and NHS bodies. As the new legislation beds in, the list of authorities imported from those Acts may need to be adapted to function properly in a data protection setting rather than a freedom of information setting. Clause 7(1) therefore allows the Secretary of State to specify in regulations that additional bodies are public authorities for the purposes of data protection legislation. Conversely, subsection (3) allows the Secretary of State to specify that certain bodies are not to be treated as public authorities, even if they are defined as such for the purposes of freedom of information legislation.
Amendments 7 and 8 clarify that the Secretary of State may describe bodies that are or are not public authorities in addition to specifying them. They are technical amendments designed to improve the terminology used in relation to the Secretary of State’s regulation-making powers. Amendments 18 and 19 make corresponding provisions in relation to part 3 of the Bill.
Amendment 62 is designed to ensure that regulations made under clause 7 will not be considered as hybrid instruments. Regulations made under the clause are already subject to the affirmative resolution procedure, and the general duty to consult before making regulations, which is set out in clause 179, also applies. In this setting, the hybrid procedure would add nothing but bureaucracy.
Liam Byrne
The amendments look like tidying-up amendments, but it would help if the Minister put on the record the extent to which they will allow the Bill to bite effectively on the nation’s schools. Obviously, schools collect a great deal of data. They often hold not only exam data but data relating to eligibility for free school meals, and most schools operate systems such as ParentPay, which means that they capture children’s biometrics. Anything to do with the protection of children’s data has to be treated incredibly seriously. The school system in this country has been balkanised—often, academies are set up as private sector entities in complex chains and have problematic governance arrangements—so I think we would all benefit from the Minister saying a few words about the Bill’s bite on schools, academies and colleges. Will she also say a little more about her plans to ensure that there are statutory codes of practice to which everyone who provides education services must adhere?
Margot James
I thank the right hon. Gentleman for his comments. Obviously, we share his concern about the protection of children. He cites important and highly sensitive personal data such as biometrics. Schools, like all bodies, must have a legal basis—the public interest or the normal course of their business—for processing personal data.
The right hon. Gentleman raises safeguarding. Later in our deliberations, my hon. Friend the Under-Secretary of State for the Home Department will introduce Government amendments to strengthen the safeguarding aspects of the processing of personal data. Schools are public authorities, and GDPR protections intended for authorities will apply, as I said. Schedule 3 provides further and specific protection on the points that he raises.
Liam Byrne
Will the Minister set on the record explicitly the fact that academies are covered in the same way as schools? An academy may be set up by a private sector organisation, set up as a charitable body, or set up in a way that is outwith the formal education system. Ofsted has raised concerns about unregulated schools, for example. Can she confirm whether organisations that provide education services—whether they are academies, charities or local education authority schools—are governed by the codes? Crucially, can she confirm that she will publish the code of practice?
Margot James
I certainly can confirm that the schools that the right hon. Gentleman has cited—academies run by private sector organisations and/or charities—are public authorities for the purposes of the Bill, and will be subject to the same protections.
Question put and agreed to.
Amendment made: 8, in clause 7, page 5, line 13, after “specified” insert “or described”.—(Margot James.)
See the explanatory statement for Amendment 7.
Clause 7, as amended, ordered to stand part of the Bill.
Clause 8
Lawfulness of processing: public interest etc
Daniel Zeichner (Cambridge) (Lab)
I beg to move amendment 140, in clause 8, page 5, line 23, after “includes” insert
“but is not limited to,”.
The Chair
With this it will be convenient to discuss amendment 141, in clause 8, page 5, line 29, at end insert
“or
(e) the exercise of research functions by public bodies.”
This amendment would ensure that university researchers and public bodies with a research function are able to use the ‘task in the public interest’ lawful basis for processing personal data, where consent is not a viable lawful basis.
Daniel Zeichner
It is a pleasure to serve under your chairmanship, Mr Hanson. I shall begin by declaring an interest: I chair the all-party parliamentary group on data analytics, the secretariat to which is provided by Policy Connect. In that capacity, I have had the pleasure of having many discussions about GDPR with experts over the past couple of years. I reflect on what a very good process it is that British parliamentarians in the European Parliament are able to intervene on such matters at early stages, to make sure that when the legislation finally comes to us it already has our slant on it. That may not be possible in future when we come to discuss such legislation.
I represent a university city, so research is a key part of what we do. It is on that basis that I tabled the amendments, and I am grateful to the Wellcome Trust and the Sanger Institute, which have given me advice on how the amendments would help them by providing certainty for the work that they do. The purpose of amendment 141 is to ensure that university researchers and public bodies with a research function are able to use what is called the “task in the public interest” lawful basis for processing personal data, where consent is not a viable lawful basis. I apologise for going into some detail, but it is important for universities and researchers that there is clarity.
As the Bill is drafted, clause 8 provides a definition of lawfulness of processing personal data under GDPR article 6(1)(e). Subsections (a) to (d) of clause 8 set out a narrow list of activities that could be included in the scope of public interest. I am told that that list is imported from schedule 2(5) of the Data Protection Act 1998, but I am also told that the drafters have omitted a version of the final and most general sub-paragraph from that list, which reads:
“for the exercise of any other functions of a public nature exercised in the public interest by any person.”
It is speculated that that may have been taken out of the list to tighten up, and to avoid a tautology in defining, “public interest”, but the worry is that taking it out has made the clause too restrictive. The explanatory notes indicate that the list in clause 8—that is, subsections (a) to (d)—is not intended to be exhaustive, but the Wellcome Trust and the Sanger Institute worry that it has narrowed the public interest terminology to a very narrow concept, which will be confined to public and judicial administration.
There was a very lengthy and very good debate in the other place on this matter. One of our universities’ main functions is to undertake research that will often involve processing personal data. In some cases, GDPR compliant consent, which may seem the obvious way of doing it, will not be the most appropriate lawful basis on which to process that data. It is therefore really important that an article 6 lawful basis for processing is available to university researchers with certainty and clarity.
The Government have included reference to medical research purposes in the explanatory notes, but the worry is that that does not necessarily have weight in law and the reference excludes many other types of research that are rightly conducted by universities. This is not a satisfactory resolution to the problems that are faced.
The amendment tries to enable research functions to be conducted by public bodies such as universities without doing what the Government fear, which is to broaden the definition of “public interest” too far. The wording retains the structure of the DPA list, from which the current clauses were imported, but it narrows it down in two ways. It specifies the purpose of processing, that is, research functions, which must be the reason for the processing and specifies who is doing the processing—the basis of it only being available to public bodies, as defined in the previous clause.
We are aware that the Government are worried about adding further subsections to the list. I think they said that it could open the floodgates in some way. However, I am told that there is not really any evidence to suggest that the current wording of paragraph 5 of schedule 2 of the Data Protection Act, which has a very broad notion of public interest, has in any way “opened the floodgates”. To give some sense of the concerns that have arisen, the processes by which university researchers seek permission to do things are quite complicated. Some of the bodies have already issued guidance. I am told that the Health Research Authority issued guidance on GDPR before Christmas. It advised that a clause on using legitimate interests should be included in the Bill.
There is confusion in the research sector, and there is a wider worry that if this is not clear, it is open to legal challenge. While some institutions will be able to take that risk, the worry is that smaller research bodies would conclude that, given the lack of clarity, it would not be worth taking that risk. I hope that the Government will think hard about the suggestion. It comes from the research institutions themselves and would give clarity and reassurance. I hope that the Minister will accept the amendment.
Liam Byrne
I want to say a few words in support of my hon. Friend and these important amendments. I think there is an acknowledgement on both sides of the Committee that if we are to prosper in the world that is coming, we are going to need to increase the amount of money that we spend on research and development and make sure that a research-driven economy reaches every corner of the country.
The world of innovation and research is changing very quickly. I think it is next year that China becomes the world’s largest science spender for the first time in several centuries. If we are to compete in this new world, we need to invest more in our R&D base. The Government have made some helpful commitments in this area. Their proposals are not quite as ambitious as the Labour amendments, but none the less all progress is welcome.
I hope that the Minister will reflect on the reality—the way in which research is conducted in our country is changing. In the past, I have called that a shift from the cathedral to the campus. Once upon a time, big firms put a lot of people in a large building and prayed for the best. Now, they are building business parks and creating ecosystems of innovation where they may have a shared research and development facility, otherwise known as a university. There may be big international companies with global reach organised around them, but there are also scores of much smaller firms. They may be as small as a couple of post-docs in a shared lab. If we look at facilities such as BT at Dashwood Park, the Crick Institute or GSK in Stevenage, we see big global companies with hundreds of smaller companies around them which are undertaking research with much greater speed and much lower risk, but with an impact that could change the world.
We cannot jeopardise the conduct of that research. My hon. Friend the Member for Cambridge is right to point out that where there is doubt about the law, or the powers and freedoms of research firms, there is a risk that such firms simply will not undertake such work in the UK, and instead will seek relationships either with global companies or, increasingly, with universities that have R&D facilities elsewhere. We want to create the world’s best place to undertake new science, and that means having a research regime that is the best in the world. We therefore need a data protection regime that helps and does not hinder, which is why the Government should accept these carefully crafted amendments.
Margot James
I recognise the expertise of the hon. Member for Cambridge in this area, and I am glad of the opportunity to debate the matter fully with him, as I am conscious that I did not address the points he made in his good contribution on Second Reading. We all agree on the importance of scientific research, and one of the things I am most proud of in the industrial strategy is the huge increase in public funding for research and development. We welcome the interest in the Bill shown by the Wellcome Trust and other organisations. They are concerned that universities processing personal data in the context of ground-breaking medical research will not have a clear legal basis for doing so. The Government recognise how important that is, but we believe that the amendment is not necessary and that there is no need specifically to mention the research functions of public bodies in clause 8.
It might be helpful if I explain what clause 8 is designed to do. If an organisation is to process personal data, it must have a legal basis for doing so under article 6 of the GDPR. The clearest basis is where the data subject has given his or her consent to the processing, but article 6 also permits processing without someone’s consent in certain circumstances, including where
“processing is necessary for the performance of a task carried out in the public interest or in the exercise of official authority vested in the controller”
Clause 8 helps to explain the meaning of “public interest tasks” by providing a list of processing activities that fall into that category. The list was always intended to be non-exhaustive, which is why we have used the word “includes”. In law, that word is always assumed to introduce a non-exhaustive list, and we have tried to make that point as clear as possible in the explanatory notes.
Additional phrasing in the Bill, such as that proposed in amendment 140, would add nothing to what is already in the clause’s interpretation under English law, and it would risk confusing the interpretation of the many other uses of that word elsewhere in the Bill. Given the non-exhaustive nature of the list, the fact that publicly funded research is not mentioned specifically does not mean that the research functions of public bodies will not be considered as “public interest tasks”, thereby providing a legal basis for universities to process personal data.
The Information Commissioner’s Office said:
“Universities are likely to be classified as public authorities, so the public task basis is likely to apply to much of their processing”.
Its guidance goes on to give “teaching and research purposes” as one such example. Hon. Members will appreciate that the list could become very long and still not be conclusive if we included everything that the Government and the Information Commissioner’s Office consider amounts to a “public interest task”. Given those reassurances, I hope that the hon. Gentleman will not feel it necessary to press his amendment to a vote.
Daniel Zeichner
I thank the Minister for her kind words—particularly about Second Reading. I think that we were all puzzled about what was going on at about five minutes to 10; I am none the wiser. I am slightly disappointed by her response, because this is not a party political discussion. We all want to get to the same place. In many ways, the discussion we have just had is not that dissimilar from the previous one about educational institutions, schools and academies. There are many grey areas relating to what universities are, and what their status and that of the research bodies associated with them is. My worry is that if we just take the Minister’s reassurances rather than amend the Bill, the uncertainty to which I alluded—it is not my uncertainty; it is what staff at esteemed research institutions say they feel—will be a problem. We should try to improve the Bill to get the clarity we need.
The Chair
The hon. Gentleman needs to indicate to the Chair whether he wishes to withdraw the amendment or press it to a Division.
Daniel Zeichner
I think we will go to a vote, Mr Hanson.
Question put, That the amendment be made.
Margot James
I beg to move amendment 9, in clause 8, page 5, line 29, at end insert—
“( ) an activity that supports or promotes democratic engagement.”
This amendment adds a reference to processing of personal data that is necessary for activities that support or promote democratic engagement to Clause 8 (lawfulness of processing: public interest etc).
Since the Bill’s introduction, it has been brought to our attention by a range of stakeholders from all sides of the political divide that there is concern about how processing for the purpose of democratic engagement should be treated for the purposes of the GDPR. As my noble Friend Lord Ashton set out in the other place, the Government believe that there is a strong public interest in political parties and elected representatives and officials being able to engage with the public both inside and outside elections, which may sometimes include the processing of personal data.
Having considered the matter further since the debates in the other place, the Government have concluded that it would be prudent to include a provision in the Bill to provide greater clarity to those operating in the area of democratic engagement. Helpfully, clause 8 already provides high-level examples of processing activities that the Government consider could be undertaken on grounds of public interest if the data controller can demonstrate that the processing is necessary for the purposes of the processing activity. As a consequence of the importance that the Government attach to the matter, amendment 9 adds to that list
“an activity that supports or promotes democratic engagement.”
That term has been deliberately chosen with the intention of covering a range of activities carried out with a view to encouraging the general public to get involved in the exercise of their democratic rights. We think that that could include communicating with electors, campaigning activities, supporting candidates and elected representatives, casework, surveys and opinion gathering and fundraising to support any of those activities. Any processing of personal data in connection with those activities would have to be necessary for their purpose and have a legal basis. We will ensure that the explanatory notes to the Bill include such examples, to assist the interpretation of what this provision might mean in practice.
The amendment does not seek to create a partisan advantage for any one side or to create new exemptions from the data protection legislation. It is intended to provide greater clarity. It is also independent of any particular technology, given that in a short time we have moved from physical post to email, Twitter, text messages, WhatsApp, Facebook and so forth.
The Government are always open to suggestions of what else could be done to ensure legal and operational clarity for political parties and elected representatives. Further work might be needed to ensure that their current activities have the legal basis required to rely on the public interest condition. The Government will shortly engage with political parties via the parliamentary parties panel to discuss the matter further and in more detail.
Liam Byrne
I was surprised and not a little troubled that the Minister did not include the opportunity of creating Member-specific apps in her list—especially those which suck out the pictures from someone’s phone without their permission. Presumably that was not included in her list because that is already illegal.
I am grateful to the Minister for tabling the amendment and for her earlier correspondence with my noble Friend Lord Kennedy. She undertook to reflect on that correspondence and bring forward amendments. She helpfully set out a list of some of the activities that may be undertaken by a political party that fall within the ambit of the amendment. She gave a pretty comprehensive list, but will she put beyond doubt whether canvassing and collecting canvass returns were in her mind when she tabled the amendment and are therefore covered by the amendment? That would be extremely helpful.
The amendment is well intentioned. The health of our democracy is important to all parties. We look forward to the conversations that she will broker through the parliamentary parties panel.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
We, too, are grateful to the Minister for tabling the amendment and for her letter to you on 12 March, Mr Hanson, which has been shared with the Committee.
From our point of view, the description of democratic engagement as a new lawful basis for processing in the public interest, under article 6(1)(e) of the GDPR, is useful. In fact, there might even be an argument for including the non-exhaustive list, which I think is due to appear in the explanatory notes, in the Bill. Will the Minister think about that? I appreciate that it has been kept in very general terms.
In her letter, the Minister asked for views on whether the basis for processing data from electoral registers is currently appropriate as defined. Those registers are supplied to parties with the main condition that they are used for electoral purposes. The Law Commission, which recently reported on the review of electoral law, expressed the view that the legislation should be more precise about what that means. Again, the list in the letter that the Minister sent to you, Mr Hanson, looks like a good starting point for that.
Margot James
I thank the right hon. Member for Birmingham, Hodge Hill and his noble Friends for their constructive participation in the development of the amendment. He mentioned the app of the Secretary of State for Digital, Culture, Media and Sport; I assure him that it is compliant in every way with current data protection law and will be compliant with the provisions of the Bill. I commend my right hon. Friend for setting a new standard in the way that he communicates with his constituents.
I reassure the right hon. Member for Birmingham, Hodge Hill that canvassing and collecting canvassing returns are covered by the amendment. That is absolutely vital. I reassure the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East that it covers campaigning activity and communications between elections, concerning issues as well as elections. As I said in my short preamble, the detail of the matter can be further discussed at a meeting of the parliamentary parties panel and it is within everybody’s rights to contribute their thoughts to panel members for those important forthcoming discussions.
Amendment 9 agreed to.
Clause 8, as amended, ordered to stand part of the Bill.
Clause 9
Child’s consent in relation to information society services
Question proposed, That the clause stand part of the Bill.
Liam Byrne
The clause is an important topic of debate because it enshrines the Government’s derogation from European frameworks in law and sets the minimum age of consent for data processing at 13 rather than 16.
That derogation was invented before social media companies arrived at their current strength and delivered the very wide and sophisticated range of tools that help ensure that children become almost addicted to social media devices. In the debate on this topic over the last two or three months there have been fresh revelations from leaders of social media firms that they forbid their children to engage in the apps that their companies deliver. We have had revelations from engineers who have worked at companies such as Facebook, Twitter and Instagram that a great deal of thought goes into how they create devices and forms of interaction that encourage that basic addiction to their apps.
We are at the beginning of what I hope is a period of re-regulation and better regulation of these firms, so that we can do away with many of the risks that affect our children. In a way, I was encouraged to see the Secretary of State’s interview with The Times on Saturday, in which he said very clearly that he would like to see better regulation of social media firms in this country before his own children are tempted to engage in this exciting online world. Many of us have children who are already engaged in this and, as a parent, I have real concerns about the freedom with which social media companies can develop and deliver these techniques, as well as their freedom to take a rather relaxed view of taking down often unfortunate and extremist content. I know that we will have this debate later, and we have tabled amendments to encourage the Government to set a deadline for reforming the electronic commerce directive.
It is important to draw a little more out of the Government about how they see the safeguards coming into place around clause 9. We have not sought to challenge the derogation the Government seek to enshrine in the Bill, but we ensured widespread support for Baroness Kidron’s amendment on the creation of an age-appropriate code. However, rather than simply wave clause 9 through, it is incumbent on the Minister to say a little about how she will ensure that there are adequate safeguards in place to protect our children from the very threats the Secretary of State lit up in lights on Saturday.
Margot James
I support the general tone of the right hon. Gentleman’s comments. I too was pleased to see the interview with the Secretary of State, his focus on the addictive nature of some of these apps and the idea that there could be within the technology a means of limiting the time children spend on them, which parents could click on. The Information Commissioner’s Office will publish guidance shortly on how clause 9 will work and what those safeguards will be. She will take into consideration an age-appropriate design, as suggested by Baroness Kidron.
Overall, where online services referred to in the Bill as “information society services” choose to rely on consent as the basis for their processing, article 8 of the GDPR sets the age below which a website must obtain the parents’ and not the child’s consent. Most websites will be captured by this additional safeguard, ranging from online banking to search engines to social media, with social media probably being the most relevant to the age group in question.
The GDPR gives member states the flexibility to set this age within a prescribed range of between 13 and 16. The Bill sets it at 13, with an exception for preventive and counselling services, for which the test is based purely on the child’s capacity to understand what they are being asked to consent to. The Government are satisfied that the Information Commissioner’s Office has adequate enforcement powers, including large fines for any offences committed in this area.
Darren Jones
The Minister said that Europe provides that the age range is between 13 and 16. In fact, the GDPR says the age for consent is 16, but that member states can derogate down to 13. I do not wish to be an annoying lawyer, but it is an important distinction. Our colleagues in Europe are saying that the age they deem to be appropriate is 16, but they are giving member states flexibility to go lower. Interestingly, article 8(2) talks about how reasonable efforts need to be taken to verify age and consent
“taking into consideration available technology.”
My view is that, on these types of issues, there should be better technology for age verification as part of using online services and, where children’s data is being used to commercialise and monetise for the purposes of advertising, there should be additional safeguards for children.
I ask the Minister only to keep an open mind in the future, so that when we get to a position where technology providers can verify the age of children—I appreciate that is perhaps currently a little difficult—if industry does not move voluntarily to this position, the Government consider regulating in that regard.
Margot James
The hon. Gentleman is right that the GDPR stipulates 16 as the minimum age for consenting to data processing without parental consent, but that it provides for member states to derogate from that. At least seven, including Spain, Ireland and Denmark, have done just that. Like us, they have proposed a much younger age of 13, so we are not an outlier on the issue.
Currently, the minimum age in this country for allowing personal data to be used without parental consent is 12, so in a sense we are derogating from that policy by setting the minimum age at 13 in the Bill. The hon. Gentleman is right to point out that it is very difficult for technology companies to implement meaningful verification mechanisms for those younger than 18, who may not have anything like a credit card or driving licence. I have no doubt that the Government will keep an open mind on the matter, in line with other developments that will take place long after the Bill is passed.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Clause 10
Special categories of personal data and criminal convictions etc data
Stuart C. McDonald
I beg to move amendment 129, in clause 10, page 6, line 19, leave out subsections (6) and (7).
This amendment would remove delegated powers that would allow the Secretary of State to vary the conditions and safeguards governing the general processing of sensitive personal data.
The Chair
With this it will be convenient to discuss the following:
Amendment 132, in clause 35, page 21, line 29, leave out subsections (6) and (7).
This amendment would remove delegated powers that would allow the Secretary of State to vary the conditions and safeguards governing the general processing of sensitive personal data.
Amendment 134, in clause 86, page 50, line 33, leave out subsections (3) and (4).
This amendment would remove delegated powers that would allow the Secretary of State to vary the conditions and safeguards governing the general processing of sensitive personal data.
Stuart C. McDonald
The amendments stand not only in my name and that of my hon. Friend the Member for Argyll and Bute, but in the names of Labour Members, for whose support we are very grateful.
There cannot be anyone in this Committee Room who does not know what a Henry VIII power is. If my email inbox is anything to go by, half the country knows what a Henry VIII clause is now, even if they did not know before the European Union (Withdrawal) Bill commenced its progress through the House. Amendments 129, 132 and 134 would remove Henry VIII powers from clauses 10, 35 and 86 respectively. To explain why those powers are not appropriate and need to be removed, I need to explain briefly what those clauses concern and why the powers are therefore too significant and wide.
Clause 10 needs to be read alongside article 9 of the GDPR, which states unambiguously:
“Processing of personal data revealing racial or ethnic origin, political opinions, religious or philosophical beliefs, or trade union membership, and the processing of genetic data, biometric data for the purpose of uniquely identifying a natural person, data concerning health or data concerning a natural person’s sex life or sexual orientation shall be prohibited.”
Such data includes some of the most sensitive information that we can imagine. Article 9 then sets out situations in which the prohibition does not apply. Some of the exceptions that it lists, such as those in which
“processing relates to personal data which are manifestly made public by the data subject”,
apply directly, so the Bill need not address them. Others need to be interpreted in accordance with EU or member state law before they can be relied on; for instance, paragraph 2(g) of article 9 states that the prohibition shall not apply if
“processing is necessary for reasons of substantial public interest, on the basis of Union or Member State law”.
Clause 10, which applies schedule 1, establishes the basis in member state law for lifting the prohibition on processing such sensitive information. For example, part 2 of schedule 1 includes 18 conditions—ranging from parliamentary and ministerial functions to preventing money laundering and detecting unlawful acts—that provide the basis in UK law for the substantial public interest exception to apply to the processing of special categories of personal data.
Clause 35 is in part 3, which is headed “Law enforcement processing”. It states that the first of the data protection principles by which law enforcement bodies must abide
“is that the processing of personal data for any of the law enforcement purposes must be lawful and fair”.
The specific conditions that must be met with respect to sensitive data are set out in schedule 8, which is similar to schedule 1. They include cases in which the processing is necessary
“for the administration of justice”
or
“to protect the vital interests of the data subject or of another individual.”
Clause 86 is in part 4, “Intelligence services processing”. It essentially does for that activity what clause 35 does for law enforcement, and it applies schedule 10. In short, we have a carefully framed set of exceptions to the prohibition on processing of this extremely sensitive information, and those exceptions provide a lawful basis for the processing of information that we normally would not dream of processing because of its highly intrusive and sensitive nature.
Liam Byrne
We support these amendments very strongly, and if possible we would like to test the Committee’s will on this. The Bill has a succession of Henry VIII powers at a number of different clauses, which in effect give the Secretary of State the power to vary and amend regulations that are incredibly important. We cannot detach this debate from the earlier debate on the incorporation of article 8. We now have a Bill that is pretty weak on the fundamental principles of law that it seeks to enshrine; the Government want to set their face against incorporating some protections that we have in the European charter of fundamental rights. Therefore, the idea that we leave out some fundamental protections of rights, but then hand over to the Minister unfettered power to make regulations as he or she sees fit, does not seem to be in Parliament’s best interest. We think that the Government need to think again.
The powers in this particular clause create the possibility that exemptions to data protection rights, which have not been considered or debated in Parliament, go through effectively at the whim of the Minister. Those powers are enshrined in clause 10, and in clauses 35 and 86; we will come on to those debates, but the powers that clause 10 proposes to grant the Minister are in effect unilaterally to vary the conditions and safeguards governing the general processing of sensitive personal data—the general data set out in schedule 1—and then to add new conditions to schedules 1, 8 and 10.
That means that we would basically give the Secretary of State the power to expand the permissible reasons to allow processing of sensitive personal data, both generally and particularly for law enforcement and intelligence agencies. That is something that has been considered extensively in the other place. The House of Lords Constitution Committee said:
“The Government’s desire to future-proof legislation…must be balanced against the need for Parliament to scrutinise and, where necessary, constrain executive power.”
The Delegated Powers and Regulatory Reform Committee said that
“it is not good enough for Government to say that they need ‘flexibility’ to pass laws by secondary instead of primary legislation without explaining in detail why”.
The Ministers slightly let the cat out of the bag when Baroness Chisholm spoke up for the Government and said that if they were to accept the Committee’s recommendations in full that would
“leave the Government unable to accommodate developments in data processing and the changing requirements of certain sectors”—[Official Report, House of Lords, 11 December 2017; Vol. 787, c. 1464.]
That includes, for example, the insurance sector. That is patently nonsense. It would not constrain the Government’s ability to introduce wise regulations in this place; it would simply constrain the Government’s ability to do that unilaterally without effective recourse to Parliament. We are seeking a very clear Government explanation as to why the Secretary of State, not Parliament, should be empowered to alter the data protection regime to keep it up to date, and that explanation needs to be all the more robust following the remarks that the Minister has made about her attitude towards incorporating the fundamental right of privacy in British law.
We think that the amendments would be sensible constraints on Henry VIII powers. There is wide consensus across both Houses that they are necessary. They will not damage or diminish the Secretary of State’s ability to keep regulation up to date. Many of us have been in this place long enough to know that it is perfectly within the Executive’s power to keep regulatory reform on track if the political will is there. We are asking for a defence of Parliament’s right to oversee, scrutinise and, where necessary, constrain the powers of the Secretary of State to regulate in this field.
Margot James
Following recommendations by the Delegated Powers and Regulatory Reform Committee, we have considered carefully the use of the Bill’s order-making powers and amended the Bill in the House of Lords to provide additional safeguards for the exercise of those powers, but Members of the Lords on all sides of the House agreed that it was essential to retain the order-making powers in the Bill as amended.
I will explain how the powers will be used in practice. Article 9 of the GDPR prohibits the processing of special categories of personal data unless one of the exemptions in paragraph 2 of article 9 applies. The exemptions include, for example, the situation where processing is necessary for reasons of substantial public interest. Schedule 1 to the Bill provides a series of processing conditions for special categories of data under article 9 and criminal convictions data under article 10. Most of those processing conditions have been imported from the Data Protection Act 1998 and statutory instruments made under that Act, but some of them are new—for example, the conditions on anti-doping in sport or processing for insurance purposes. They have been added to reflect the way in which the use of data has changed over the past 20 years.
Amendment 129 would remove the ability to amend schedule 1 via secondary legislation. That would be particularly damaging because it would mean that primary legislation might be needed every time the need for a new processing activity involving special categories of data arose. The 1998 Act was itself amended several times through secondary legislation, and it is important that we retain the flexibility to respond to emerging technologies and the different ways in which data might be used in the future.
It is interesting to note that the hon. Member for Sheffield, Heeley has tabled an amendment to schedule 1 that would add a completely new processing condition in relation to maintaining the missing persons register. My hon. Friend the Under-Secretary of State for the Home Department will touch on the merits of that proposal later, but the fact that others in the Committee are considering further changes to schedule 1 illustrates the point that schedule 1 cannot simply freeze the regimes in parts 3 and 4 of the Bill. I urge colleagues to resist the amendment.
Stuart C. McDonald
It is vital that we get the balance right: we are talking about very sensitive information and processing of that information. It is absolutely right for hon. Members to table amendments to the Bill and for them to be considered, including proposals on the missing persons register. The fact that hon. Members are suggesting changes at this stage does not mean that we are saying that we want to fix things for all time now and never suggest changes again. We are saying that we are not happy with the process whereby changes are brought about. The Minister has not explained why she believes that changes could not be brought about satisfactorily by changes to legislation from time to time. She has not explained why there would be urgent situations in which the only possibility would be a “Take it or leave it” statutory instrument. In the light of the seriousness of the data that we are speaking about and the inadequacy of the Minister’s explanation, we would like to press the amendment to a vote.
Question put, That the amendment be made.
Margot James
I beg to move amendment 76, in schedule 1, page 123, line 21, at beginning insert “Except as otherwise provided,”.
This amendment is consequential on Amendments 79, 82 and 90.
The Chair
With this it will be convenient to discuss Government amendments 77 to 83 and 87 to 91.
Margot James
Part 2 of schedule 1 sets out a series of processing activities that are considered to be or have the potential to be in the substantial public interest. That is important in ensuring that such activities can continue even in the absence of explicit consent and even where they require special categories of personal data to be processed.
I am pleased to introduce amendment 78 today. It will help businesses and other organisations ensure that boardrooms and senior management levels are truly representative of the workforce they manage and the communities they serve. In my former role at the Department for Business, Energy and Industrial Strategy, I worked closely with Sir John Parker, to whom I pay great tribute for the work that he has done in this area. I worked with him to examine how we could ensure that more FTSE 100 companies and others did more to attract talent from a wide range of racial and ethnic backgrounds.
In November 2016, Sir John published a report that showed that although 14% of the population identified as black, Asian or other minority ethnic status, only 1.5% of directors in FTSE 100 boardrooms were UK citizens from such a minority. Although significant progress has been made in recent years to improve the gender balance in the boardrooms of such companies, the severe under-representation of people from minority ethnic backgrounds cannot be tolerated in modern society. Sir John’s report included a series of recommendations to improve ethnic diversity in the boardroom. He encouraged companies to make better use of executive search firms to identify potential candidates and invite them to be interviewed for managerial vacancies.
Amendment 78 will add a new processing condition to schedule 1 to allow organisations to process personal data about potential candidates’ racial or ethnic origin and identify suitable candidates for potential board or managerial positions. The processing condition will apply only until such point as it is reasonable to expect the organisation to get the potential candidate’s consent to the continued processing of their racial and ethnic origin data. If the data subject gave a positive indication that she or he did not consent to the processing of such data, the controller would have to cease processing the data.
I hope that hon. Members welcome the steps we are taking to implement the recommendations of the Parker review. We believe that it is in the interest of society as a whole to ensure that businesses and other organisations recruit the best person for the job if they are going to compete in today’s economy. People from all backgrounds should be given equal opportunities to contribute.
Margot James
It does happen. That is not a new provision, but one that was imported from the current law. Unfortunately, some crucial words were accidentally lost in the process of importing it. The amendment reinstates them.
Schedule 1 sets out UK domestic legislation to allow the processing of particularly sensitive data in certain circumstances. The Government’s view is that the processing of such data must be undertaken with adequate and appropriate safeguards to ensure that individuals’ most sensitive data is appropriately protected. One of those safeguards is the new requirement for an appropriate policy document to be maintained in most circumstances when special categories of data and criminal convictions data are processed. That is set out in paragraph 5 and part 4 of the schedule.
Since the Bill’s introduction, we have reflected on whether there are cases where the requirement to hold an appropriate policy document is so disproportionate that, rather than improving protections, it effectively prevents the necessary processing from taking place. Amendments 79, 82 and 90 remove the requirement for a controller to have an appropriate policy document where processing involves the disclosure of special category data to a competent authority for the detection or prevention of an unlawful act, the disclosure of special category data for specific purposes in connection with journalism, or the disclosure of special category data to an anti-doping authority. Amendment 80 defines what is meant by “competent authority”. The aim of those amendments is to avoid a scenario in which an individual who never normally processes data under schedule 1 wishes to report a crime, report something of public interest to the media or report doping activities in sport and, in so doing, processes special categories of data and would have to have in place an appropriate policy document.
Amendment 76 reflects that change to the requirement to have an appropriate policy document by inserting the words, “Except as otherwise provided” in paragraph 5 of the schedule. Amendments 87 and 89 make it clear that, in the context of schedule 1, “withholding consent” means doing something purposeful, not just neglecting to reply to a letter from the data controller. That avoids a world in which data controllers have an incentive not to bother requesting consent in the first place.
Paragraph 31 of the schedule requires the controller to have an appropriate policy document in place when relying on a processing condition in part 2 of the schedule to process criminal convictions data. However, all the provisions in part 2 are subject to the policy document requirement except where noted, so there is no reason to state it again in paragraph 31. Amendment 91 removes that duplicate requirement. It is simply a tidying-up amendment to improve the coherence of the Bill.
Darren Jones
On a point of order, Mr Hanson. I think I was remiss in not declaring my interest at the start of my contributions to today’s proceedings. With your permission, I seek to rectify that.
The Chair
That is indeed a point of order. The record will show that the hon. Gentleman has now declared his interest in relation to his contributions to the debate.
Ordered, That the debate be now adjourned.—(Nigel Adams.)
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Diplomatic Service and Resources
(6 years, 1 month 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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Richard Benyon (Newbury) (Con)
I beg to move,
That this House has considered the Diplomatic Service and resources.
It is a great pleasure to serve under your chairmanship, Mr Bailey. I am grateful for and slightly awed by the array of right hon. and hon. Members present who have much more experience of this issue than I have. It is an extremely important one and I am very grateful to the Minister for being here. I hope that he will be able to address some of the points that I and others raise.
We exist at a time of the greatest turbulence and change. With Brexit, we have the resulting need to engage as never before with countries around the world. We see, never more than this week, challenges to the rules-based order. We see the rise of new powers, such as China, which is stamping its mark on the world politically, economically and militarily on a scale unimagined a few years ago. We also see the influence of political disrupters across western democracies. This is the time to challenge policy of several Governments and many decades that has led to a decline in our commitment to foreign engagement.
It has been a real privilege for me to travel as a Minister, as a trade envoy, as the leader of the UK’s delegation to the NATO Parliamentary Assembly and in other capacities, and to see at first hand the astounding professionalism of our diplomatic staff around the world. Numbers are not everything. Having a fluent Arabic-speaking middle east expert as our ambassador to Iraq with the President’s personal mobile number on his speed dial is of incalculable value. However, we have reached a critical moment in our ability to promote our interests abroad.
I had a conversation yesterday with Lord Waldegrave. He has spent time as a Minister in both the Treasury and the Foreign and Commonwealth Office and he said, in a way that was somewhat light-hearted but nevertheless heartfelt, that in his impression there has been a multi-decadal battle between the Treasury and the FCO, which the Treasury has now won—a battle between the two great Departments of state that vie for influence with No. 10 and across Government. Two decades ago, it was deemed the right thing to hive off international development to a new Department. Part of that perhaps was a good thing at the time, but I have always felt that part of it was distaste for the concept that aid and influence could ever go together. For me, that has never been a problem: of course they can, and they should.
In some areas, the European Union was seen by some as the deliverer of our overseas influence.
Sir Henry Bellingham (North West Norfolk) (Con)
My right hon. Friend talks about the Treasury and other Departments. Obviously, the Department for International Development has had successive incredible spending rounds. Does he agree that the military attaché network, which he and I have seen in places such as Africa, does a huge amount of good in terms of influence and building those relationships? Surely, in countries that are basically aid-dependent, DFID should be paying for that network.
Richard Benyon
My hon. Friend makes a very good point. Later in my speech, I will talk about defence attachés and how we can copy the way that other countries do that better.
I have travelled to parts of the world where the Union flag might exist in the corner of an island state’s flag but there is no Union flag flying over anything that could resemble a high commission, embassy or diplomatic mission. All aid to the Pacific region was delivered through the EU; I could not find one sign of recognition of the sacrifice that the UK taxpayer made to provide that much-needed aid—it all had the EU mark on it.
Well before 2010, embassies were being sold off. They were bricks and mortar whose value in terms of influence vastly outweighed their real estate value. Our missions abroad were reduced and our diplomatic service language school was closed. After 2010, some good things started to happen: the language school was reopened; embassies that had been closed were reopened. But what that really meant was that our diplomatic missions abroad were marginally broader, but shallower too. I was in Mali just as we reopened our embassy there. An excellent ambassador arrived and she took over with a staff of one locally recruited driver. According to the FCO figures, there are now three FCO personnel there.
This year, the Government will spend £2.15 billion on the winter fuel allowance—a welfare element that we all support—but that is more than the £2 billion we spend on our foreign affairs budget. Let us compare how France and Germany—two similar-sized countries, both in the EU—manage their diplomatic services abroad. France spends £4.2 billion on its diplomatic service—more than twice what we spend on ours. As a country, it has a clear view that in order to maintain its P5 status it will stay true to its spheres of influence. Our 30-year bout of post-colonial guilt syndrome in this country, which may well have abated now, never seemed to have a parallel in the French psyche. France maintains a very clear involvement and commitment to countries in north and west Africa in particular, but also across the middle east. It maintains a much more permanent presence in areas where it has a history of influence.
Sir Hugo Swire (East Devon) (Con)
I am listening closely to what my right hon. Friend is saying. I believe that even some former French colonies are represented in the French Parliament, unlike here. At the end of the day, it is worth remembering that France has Francophonie; they look with envy at the Commonwealth, which is an organisation that they are unable to replicate. They rather wonder at it. I very much hope that my right hon. Friend will mention the Commonwealth in his speech.
Richard Benyon
I certainly will. Our commitment to the Commonwealth is at the forefront of our minds, with the Commonwealth Heads of Government meeting about to take place. There are some very important Commonwealth countries that we owe more attention to. We must see this as a very important part of our foreign engagement in the years ahead. There has not been a more important time for the Commonwealth to exist, and for the Government to have a clear strategy of supporting it both economically and using all the soft-power influence we can, to ensure that this wide variety of economies and countries united by a set of values can be a key part of our foreign engagement in future.
I do not know how many diplomats France deploys in the Central African Republic, Niger or Senegal, but I bet it is many more than the two we have in Lusaka, the two we have in Gaborone or even the seven we have in Harare, according to the Foreign and Commonwealth Office annual report and accounts.
Sir Nicholas Soames (Mid Sussex) (Con)
My right hon. Friend mentions Zimbabwe; I was there recently and I noticed that the Foreign and Commonwealth Office and DFID sit together in the same building. It is clear, when looking at it, what a remarkable success that is; they each act as a force multiplier to each other. It would be just as well if that was replicated the whole way across the foreign service.
Richard Benyon
I could not agree more. I saw a similar one-post operation in Addis Ababa, where our excellent ambassador, Susanna Moorehead, has forged a team that includes representatives of DFID, the Foreign and Commonwealth Office and the Department for International Trade into one cohesive force. They certainly punch above their weight, and they are able to influence things as a result. I particularly note what my right hon. Friend said about Zimbabwe. There has never been a more important time for us to engage there. If we allow ourselves to be optimistic, there is the chance that Zimbabwe will emerge from the tragedy of recent decades.
Sir Henry Bellingham
Will my right hon. Friend also consider the influence that small missions can have? For example, in the past seven years we have opened embassies in Abidjan, Juba and Antananarivo. Although they have only one FCO-employed official and some locally employed staff, they deliver huge influence and are very warmly received by the host country. Surely we should do that more in Africa and the Pacific.
Richard Benyon
I could not agree more. As I said, numbers are not everything. Diplomats’ ability to influence and to project Britain’s engagement abroad is of course down to the skill of individuals and their capacity to get that message across. The number of countries where we do not have anyone is missing from the list of personnel in the FCO’s annual report and accounts. We need to look at that.
I said that I would come back to the point that my hon. Friend the Member for North West Norfolk (Sir Henry Bellingham) made about defence attachés. France deploys a cadre of highly professional defence attachés who are proficient in local languages and who develop their careers and are rewarded as resident experts in countries across the middle east and north and west Africa. They often attend local staff colleges. Their career involvement in the regions to which they are posted is considered a virtue. I, too, have met some outstanding defence attachés. I know that there has been a change in recent years to try to develop longer-term postings, and that we send people to staff colleges, for example. However, the French colonel I met who had a direct way in to the Minister of Defence in a particular country had that because he had been in that region for 15 years, was fluent in the language and had embedded himself in the politics of the region.
Mr Philip Dunne (Ludlow) (Con)
Developing my right hon. Friend’s theme, I too have experience of the outstanding work that defence attachés do in our NATO partner countries, such as the United States, and way beyond, in the Gulf and the far east. Their role extends further than military-to-military relationships; they also play a vital role in assisting commercial exploitation of defence capability and supporting British companies that seek to secure defence and security orders overseas.
Richard Benyon
My hon. Friend is absolutely right. The role of defence attachés in our defence manufacturing capability and our ability to market that important part of our economy is so important. I entirely support what he says.
France also has a truly impressive integrated soft power strategy. The opening of the Louvre museum in Abu Dhabi is a key indicator of that. Off the back of Government investment—not private investment, but cultural investment by the Government—flows influence that directly benefits France’s Exchequer. It is hard to compare like with like, but it is possible to argue that Germany spends about three times what we spend on its posts abroad. Even if we strip it down, it spends at least £4.6 billion, which is well over twice what we spend. We spend way more than Germany on development aid in Zambia, yet we employ about 11 people to deliver it, while Germany has around 150 people delivering its aid projects there. That is because we deliver our aid through a variety of organisations, including non-governmental organisations and international institutions such as the World Bank, whereas Germany uses a well-developed cadre of in-country experts in education, health, agriculture and other disciplines to implement its projects. At the end of the day, that means that German taxpayers get a better deal because German business is intrinsically linked to the soft power investment that its Government makes.
I am here not just to whinge, but to suggest a way forward. I want the Minister to reassure us. If he cannot, I want him to take on board the genuine concerns of people who have seen how our country operates abroad and believe that, impressive though that is, we need a dynamic shift in our ability to engage in the dangerous and highly competitive world in which we find ourselves. Can he assure us that every penny of official development assistance that can be used to develop a growing number of highly professional diplomats, defence attachés and other personnel is being used to maintain us as a relevant power in the coming decades? Can he convince me that the Foreign and Commonwealth Office understands Africa? Does he understand my concern, as someone who has travelled widely in Africa and was for some years our trade envoy in Ethiopia, the Democratic Republic of Congo and Mozambique, that our position as a favoured partner may be under threat?
In a few years’ time, a quarter of the world’s population will live in Africa. It is a continent of huge natural resources and has massive potential as a partner in trade and so many other areas, but it feels like Britain risks being left behind. China’s investments abroad are not altruistic. In many ways, what it is doing is good—I have seen new roads, electricity generation projects and vast business parks, including in Ethiopia, that are changing people’s lives and providing wealth and opportunities for female empowerment, among other things—but it has a massive benefit to China, too. There can be a similar benefit to Britain if we play to our strengths on a continent where we are still admired and where such things as our language and our time zone are distinct advantages.
Chris Bryant (Rhondda) (Lab)
The Select Committee on Foreign Affairs was in Paris the other day. We had an interesting discussion about how Britain and France can co-operate in Africa. There are countries where the former colonial power is not well regarded. We have been able to play an important role in places where France is the former colonial power—Mali, the Sahel and so on—in return for exactly the same co-operation where we are the former colonial power. Now that we are leaving the European Union, I wonder whether we need to be wise about how we manage our relations with our European allies.
Richard Benyon
The hon. Gentleman makes a very good point. Our trade envoy, Lord Risby, is doing great work in countries such as Algeria in promoting what we do. I have not heard this from him, but I imagine that he is able to have conversations that the French perhaps find it harder to have. On defence engagement, we are using the Lancaster House agreement to our benefit. We are assisting the French forces in Mali with lift—with helicopters and things like that. That partnership in the fight against terrorism—against organisations such as Boko Haram and al-Shabaab—delivers influence and benefit in a variety of ways.
My final point is that Ministers in the Foreign and Commonwealth Office require political intelligence.
Richard Benyon
Perhaps I should have worded that better. They require intelligence about what is going on politically in those countries. They need to know who is on the rise in different parties, who the new influences are and who could be the next generation of leaders. Our diplomats provide that intelligence superbly, but Parliament should hold the Executive to account to ensure that we have enough of them and that we have them in the right places.
I argue that there should be a new strategy, even if we were not leaving the EU. However, Brexit brings a new urgency to our deliberations. It is not too late to see a paradigm shift in our strategy, but influence is hard won and easily lost. We need to understand that with influence comes jobs at home and stability abroad. That is something that even the Treasury should understand.
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairmanship, Mr Bailey. I congratulate the right hon. Member for Newbury (Richard Benyon) on putting the case forward so ably, as he always does when bringing issues to the House for consideration.
Many in the Chamber are Brexiteers; some are not, but we are moving forward none the less. It is well known that I am a Brexiteer for many reasons, including so that we can be a sovereign democratic nation, decide what the rule of law is and how it should be interpreted, and set our own foreign and domestic policies to sow into our economy, instead of upholding those of other countries who have nothing but contempt for us and everything we stand for. When I was looking into the debate and getting background information about it, that is what my heart was saying, but that was not enough. We needed to know that we could survive outside Europe—the figures needed to be found and the numbers crunched. They determined that, yes, we could survive, but more than that, we could thrive as a nation in our own right once again by becoming the global Britain that we have heard so much about. How do we do that? That is why this debate is important.
The first step is to enhance the links we have now, taking the complete focus off Europe while firming up our trade partnerships there, and exploring other relationships outside that. We need the diplomatic service and resources to make that happen.
Kirstene Hair (Angus) (Con)
Is it not the case that if industries such as food and drink, which has a deep presence in my constituency, are to make the most of post-Brexit export market opportunities, we need more than ever a well-resourced diplomatic service with a genuinely global reach?
Jim Shannon
I agree. Each of us in the Chamber can speak for our own food and drink sectors. I am pleased to have Portavogie prawns and Comber potatoes in my constituency, both of which are names in their own right across Europe, and we want to see them across the whole of the world. We will build on that trade to make that happen. A number of new gin distilleries are also starting up: two have done so in my constituency in the last year and a half, and the hon. Lady probably has those as well. The sector is growing, and we want to ensure that that continues.
Chris Bryant
But according to the Prime Minister yesterday, the biggest threat we face at the moment relates to Russia. We have been proud that, over the past few years, we have managed to go to European Council meetings and get the rest of the European Union to sign up to international sanctions against Russia. At the moment, the Prime Minister is speaking to Macron and, no doubt, Merkel and other leaders around Europe to try to get the whole of Europe signed up to a common position. That will be vital to us. It will be much more difficult for us to achieve that when in future we will not get to sit at the table when common security and defence policy is agreed. How does the hon. Gentleman think that will happen?
Jim Shannon
I thank the hon. Gentleman for his “but.” It is always good to have his input. Let us be honest: we all see the common threat, which at this time is Russia, as the Prime Minister told us yesterday in the Chamber. It is across the fronts of all the papers and front-page news on the media today. Already, France, Germany and other European partners recognise the common threat of Russia. I am confident, as I hope he is, about how we can espy the common enemy, understand where the focus has to be and then move forward accordingly.
An oft-cited statistic on trade with the Commonwealth bears repeating: in 2015, UK exports of goods and services to the Commonwealth were worth some £47.4 billion, while imports were worth £45.5 billion. The right hon. Member for Newbury referred to the Commonwealth, and we cannot forget about it. It is important for us to have it in place.
David Simpson (Upper Bann) (DUP)
Does my hon. Friend agree that in all walks of life and every organisation, there comes a time when reinvigoration and renewals is needed, and the diplomatic service is no different from any other? If we are moving away from the European Union, we need to be at the top of our game and, as has been mentioned, have proper staff in place to take us forward into the next century.
Jim Shannon
Yes, we do need to invigorate. It is like a marriage: every now and again we need to invigorate it. It is important that we do so at this level, and that we do it well.
Those statistics on Commonwealth exports and imports give us a good idea. It is clear that great work is being done, but there is massive potential for more to be done. We are looking at how we can advance that. The UK’s trade is heavily focused on a small number of the 51 Commonwealth countries: in 2015, Australia, Canada, India, Singapore and South Africa accounted for 70% of UK exports to Commonwealth countries and 65% of imports from the Commonwealth. Those are massive figures, but we can build on that and do better.
How are trade links to be developed to deliver their full potential? A big key is through our Foreign and Commonwealth Office, the Minister and the embassies. I know the Minister is committed to that at every level. Our teams in the embassies do a phenomenal job. I spoke recently in a debate highlighting the great work that the FCO did in bringing the body of one of my constituents home, and praise goes to the FCO for the marvellous work it does, but that case showed clearly that it could help so quickly and bring so much relief and peace to a grieving family because there was someone on the ground to sort it out. That was because we already have phenomenal staff in the embassies doing great work.
Mr Gregory Campbell (East Londonderry) (DUP)
My hon. Friend has given one example from his constituency, but does he agree that we need to see more of what the diplomatic service does in many countries, which is work in alerting the United Kingdom Government of international security consequences and relief that can be offered in terms of Africa as well as the business of creating trade, which benefits both the recipient country and ourselves?
Jim Shannon
My hon. Friend is right. The work that the embassies do cannot and does not happen when we are busy bringing people from our embassies into our EU embassies. We cannot afford to continue to have our focus split in such a way by robbing Peter to pay Paul. It is necessary to have trading partnerships in place in Europe, but it is also necessary to have representation globally, outside of Europe. That is where our focus should and must be as of now, and particularly as of 31 March 2019.
The FCO feels the same way, which is why it has sold off part of the family silver in the form of the Bangkok embassy. I understand that prime real estate can be sold to help make the changes needed to evolve the FCO while maintaining a presence, but my fear has been succinctly put in the words of a Guardian article, which cited a former Minister saying:
“Yes, we can sell the family silver for a bit and, yes, we punch above our weight, but unless we are careful, we are about to step into the ring with people way above our weight and without any gloves.”
We must be careful about what we do—that is the gist of that article. I want to take this opportunity to impress upon Government and the Minister how essential it is that funding is given to allow the FCO to do what we ask it to do: to establish a presence, build on that presence, and ensure that the links and support on the ground are there. The right hon. Member for Newbury put down a clear marker for that in his introduction.
To take this matter to a constituency level—everything relates to back home in our constituencies—I am currently working with the Department for Environment, Food and Rural Affairs team and the Minister for Agriculture, Fisheries and Food to attempt to circumnavigate the mounds of red tape that exist between differing nations such as China and ourselves.
A business in my constituency is ready with a product and raring to go in China, yet it is being held up by the wording on a veterinary certificate. It is immensely frustrating to see how people can introduce words to become obstacles to moving forward. We have been negotiating and working on this—I praise that Minister, who is going through the same frustration—and it is clear that in such situations our Departments need the help and guidance of the FCO.
In achieving for constituents and businesses in the UK, we achieve for ourselves. When a business in Ards thrives and takes on more staff, my local economy thrives. Because of the nature of tax, Her Majesty’s Revenue and Customs also thrives, and therefore on the national level we thrive as well. To do that we need staff on the ground in those countries to help departments, and we cannot have them all sent off to shore up embassies in Europe. We must send those staff where we will need them in the future. We must be able to work both inside and outside Europe, and to do that we must have the finance and staff in place. That is where we are at present.
The point of this motion, at least for me, and most certainly my take on it, is that for us to succeed globally we must be present and effective globally. That will not happen if we scale back globally to focus on Europe alone. Hopefully the Minister will confirm that we are branching out and developing our embassies across the world, taking up global opportunities and doing all the things referred to by my hon. Friend and colleague the Member for East Londonderry (Mr Campbell). We should be helping people in other countries, but also trying to advance our export and import trade.
I understand that the Department is in a difficult position, but we need to play the long game, which I do not believe means pulling back in other nations. We must keep the gloves on and be prepared to fight for our global position, and not allow Europe to seem to be the be-all and end-all of our future aims and strategies—that is why we voted to leave the European Union. Let me be clear: I must not be misunderstood as saying that we should pull out of Europe—certainly not. Trade with Europe is important for our future, but so is global trade and we must find a way of doing both and doing them well. That will mean recruiting more and spending more now, as well as in the long term, and receiving more for all our benefits. I implore the Minister: sell no more family silver, and instead focus on polishing what we have and putting it to the best use possible.
Sir Nicholas Soames (Mid Sussex) (Con)
I congratulate my right hon. Friend the Member for Newbury (Richard Benyon) on his excellent speech in opening this important and serious debate. I will not respond to what the hon. Member for Strangford (Jim Shannon)—he is also my friend—said, other than to remind him of famous lines written in worse days: “To hell with the future and God bless the past, and may God in his mercy look down on Belfast.” I think that to characterise the situation with the European Union in the way that he did is not sensible or helpful to his constituents.
I will commence my remarks by paying tribute to the Foreign Office and all those who work there. What it now achieves on its very, very limited budget is exceptional. Generally speaking, the standard of our people and our representation abroad is astonishingly good, as my right hon. Friend made clear. I hope the House will acknowledge that, and thank those staff and praise them for their efforts.
I strongly endorse the words of my hon. Friends the Members for North West Norfolk (Sir Henry Bellingham) and for Ludlow (Mr Dunne) about military attachés. When I was Minister of State for the Armed Forces I used to interview every military attaché personally, because I believe it is a significant and important position within an embassy. As my hon. Friend the Member for Ludlow said, military attachés are part of the golden currency and their role is far wider than just the military. In places such as the Gulf, Saudi Arabia, and particularly in the middle east where the golden currency is relationships, those military attachés play a vital role that should be seen—as indeed it is—not as a sort of job at the end of a distinguished career, but as a job for someone very much on the way up. It is an important part of our diplomatic effort.
It seems yet another act of self-inflicted British mutilation that, at a time when the risks and problems abroad are ever increasing, and when through a very poor decision this country has decided to leave the European Union and make our way in a complex and difficult world alone, we should so ill resource our Foreign Office. We must put that right immediately. Contrary to what most of the tabloid press believe, this country is not a superpower, and it is inevitable that our influence—already sadly but quite clearly on the wane—will further decrease as the realities of the folly of our exit from the European Union become clear. A middle-ranking power, for that is what we are, must work very hard indeed to protect and further its interests. It must burnish and sustain its alliances, networks and friendships to keep them in good working order, and above all in good repair, ready for the day when we need them for the big stuff. Such a day is today, and the Foreign Secretary, the Prime Minister, and all those concerned will be doing all they can to bring our allies and friends alongside us in the very difficult task that we have over the next 24 hours when dealing with the Russians.
Sir Hugo Swire
To continue that theme, if we are to have any credibility, and ultimately if we are to maintain our seat as a permanent member of the UN Security Council, is it not ever more important to stamp what the United Kingdom stands for around the world, and redouble our commitment to NATO and other organisations?
Sir Nicholas Soames
I completely agree with my right hon. Friend. He was a distinguished and successful Foreign Office Minister, and he has seen all these things in action. He is completely right: we will have to redouble all our efforts, call in all our chips, and work very hard to retain our influence and position on the world stage. That is an incontestable fact.
Chris Bryant
Some people have suggested in recent months that after Brexit, instead of spending so much time on Brussels, we should spend more time on other European capitals. My feeling is exactly the opposite: to secure the foreign policy and security outcomes we want, will we not have to double our efforts in Brussels to ensure that we win arguments?
Sir Nicholas Soames
I agree, and I would say further that we will have to ride every single horse in the park, not just the European horse. We no longer have a diplomatic network in the way that we used to, because our diplomatic network has been subordinated, in a perfectly sensible way, to working within the European Union. We will have to revitalise that, and indeed there is now a great rush to hire people or move them around, to ensure that the embassies are properly equipped. My father was for a time the British Ambassador in Paris. I was in the Army at that time, and I look back on those days, before we were members of the European Union, at the sheer scale of British diplomatic efforts to achieve what we set out to achieve, which was truly remarkable. We will have to replicate that right across Europe in order to retain our position.
Sir Nicholas Soames
I will continue if I may.
These relationships with allies, friends and networks do not just drop into our lap; they require continuous and ceaseless effort, and the most serious diplomatic work. Take the example of the last few months. With our allies we continue to be engaged in an active diplomatic and other campaign to counter Islamist extremism. We have also once again entered an era of deterrence in the face of threatening rhetoric and aggressive behaviour from Russia. While military deterrence must be properly integrated with political, economic, diplomatic and other hybrid deterrence measures, credible conventional military capability remains a vital part of a strategy designed to keep the peace. It also ranks, pari passu, with the diplomatic effort required to ensure the same thing. In an environment of uncertainty, it is essential that we stand with all our diplomatic, military and other assets, ready to reassure, and if necessary defend, our allies in a manner that will force any potential opponents to think twice. As I have said, that requires not just military assets, but most especially our diplomatic reach across the world.
Jim Shannon
On the news this morning one suggestion made by one of the experts in response to Russia’s actions was that we should withdraw from the World cup in Russia, and instead hold it here in England. Does the right hon. Gentleman feel that that would be an impressive way of putting pressure on Russia to bring about change? It is perhaps a diplomatic way—well, it might be an undiplomatic way of doing it, but it is an important way.
Sir Nicholas Soames
I do not think that it is nearly serious enough for the kind of steps that the Government will need to take against Russia. Just to say a lot of dignitaries will not be sent to the World cup is nowhere near good enough. It is a pathetic response. We will need to do much better and be much tougher, so that it is understood across the full spectrum that the behaviour in question is something up with which we will not put.
It is not just a question of money, although that is vital, of course. It is also a question—and my right hon. Friend the Member for Newbury made the point extremely well—of how we marry our hard power, which is sadly considerably diminished, to our exceptional soft power, and ensure that they both work closely together in achieving our diplomatic objectives. It is frankly far too casual and complacent a habit, into which this country falls at the slightest opportunity, to assume that that happens by magic. It is my view that our exceptional and truly remarkable soft power is not well or effectively co-ordinated with our other diplomacy. Indeed, there is a view in the Foreign Office that it should be left well alone to get on with it by itself. The issues of security, development, energy, climate change and all the rest of it have to be worked through in tandem with soft power, as well as with diplomacy, the military, development aid experts and everyone else involved, so that they work together and not in competition.
I want to return to a point that my right hon. Friend the Member for Newbury has already enlarged on, and mention how extraordinarily impressed I was by our diplomatic mission in Harare—our excellent ambassador and her wonderful staff—and by the DFID staff, who are excellent. They are working together and acting as a force multiplier for the United Kingdom and for our objectives in Zimbabwe. We could not have been so successful in Zimbabwe with that extraordinary aid programme, which is brilliant, without everyone working together. It is a model for the rest of the diplomatic service. There are still places, in the lands of the ungodly, where that does not happen. It is unthinkable, to my mind, that the Foreign Secretary does not issue a fatwa to the effect that it will happen everywhere—and that right soon. It is a ridiculous waste of money and assets for the two to be accommodated separately. They should be accommodated together and work together for British interests.
I cannot believe that my right hon. Friend the Minister believes that it is sensible even to consider closing more diplomatic posts. Indeed, we must now be pretty much at the bare minimum of our representation. We need adequately to staff the smaller posts, so that we do not just have an ambassador and a locally engaged driver. It is all very well having locally engaged staff. They are marvellous and do a good job, and they are very loyal; but they are not, at the end of the day, Brits. We are after promoting our British way of life and our values. I again endorse the point that we must return constantly to making sure that people understand the values of this country as we make our sad way from the European Union. It is right that we re-establish our values as they are. That requires a good, decent diplomatic story.
I also reaffirm my unstinting support and admiration for the BBC World Service and congratulate everyone who works in that extraordinary organisation on the excellent job they do for this country. It would be a foolish short-term measure to reduce in any way the financial support to the BBC World Service, and I look to the Government to give me an assurance that that will not be the case. I endorse the views of the provost, or rather Lord Waldegrave—he is the provost of the school that my right hon. Friend the Member for Newbury went to—about the winner of the battle between the two great Departments of state, with respect to the Foreign Office and the Ministry of Defence. I always used to say—I hasten to say it was as a joke, because I actually got a letter from the Foreign Office stating that it did not work for the Russians—that the Treasury works for the Russians, given how successfully it has undermined our military effort. I wholly support my right hon. Friend the Secretary of State for Defence in the energetic and earnest campaign that he is rightly waging to increase our military spending to about 2.5% as a bare minimum.
Sir Henry Bellingham
My right hon. Friend has mentioned the BBC World Service. Does he agree that in many of the countries that he mentioned, where we need to have one family in one location, the role of the British Council is also extremely important and is a crucial way of building up our soft power, as is the role of the BBC World Service?
Sir Nicholas Soames
My hon. Friend has always been known for his natural exuberance. If he would pause for a second, he would hear the magisterial exposition that I am about to give of the British Council. Another balls-up by Bellingham.
To pre-empt my hon. Friend’s over-excitement, we have a priceless asset in the British Council. I again urge the Foreign Office to accept its vital importance. It is important that it should work extremely closely with the Foreign Office and in the general promotion of the British aim, and that the Government should continue to fund it, recognising the exceptional results that it achieves for Great Britain. I try always, when I am lucky enough to travel abroad, to call on the British Council. I cannot tell you, Mr Bailey, how much I admire the remarkable work done, in place after place where I have been, by the people who work for the British Council. It is extraordinary. They build profound relationships with people—for example, through the learning of English, which hopefully equips people to come here and study. It is part of a greater British effort, and important for that.
There is a compelling—indeed, unassailable—case for Britain to retain and develop its active diplomacy, which means it must be better resourced, and to provide the money needed to do the job properly. We are all struggling to retain a rules-based world, which is clearly in our best interests and which we have always promoted. We have, over the years, been its architect and great supporter, with our American allies and others. It is today a concept under considerable threat. Our country is truly at a crossroads. Our global influence is already coming under considerable pressure and it is essential for the further success, safety and security of this realm that our diplomacy is properly resourced, so that it can do the very good job that it currently does on a shoestring.
Sir Hugo Swire (East Devon) (Con)
Thank you, Mr Bailey, for getting round to this knight, as Sir Lancelot may have said to Guinevere. I am delighted to join in this important debate this morning. I hope that it will not be the last we shall have on the subject.
I do not seek to replicate much of what my right hon. and hon. Friends have said. I just want to pick up on one or two issues, the first of which is our physical global imprint—our estate. I hope to go from here later to a lunch to congratulate James Stourton and Luke White, who have produced a magnificent book called “British Embassies: Their Diplomatic and Architectural History”. It is an extraordinarily good book on Britain’s overseas estate. Looking through it, it is possible to have one of two reactions—to giggle in bemused embarrassment at the awful post-colonial life that our embassies represent, or feel rather proud that we possess some of the finest properties, many of which, incidentally, were gifted to us by the then Heads of State of the host countries. That is something that other countries look on with envy.
In my four and a half years at the Foreign Office, I was pleased to open some rather small embassies that had been closed, in Asunción and in El Salvador, and a consulate in Recife, and so on. It was always a source of pride to be reopening embassies, however small, rather than going around closing them. I cannot think of a single example, in retrospect, about which we can say, “Gosh, weren’t we clever to sell X embassy: we are in much better accommodation now”—Madrid being one of the great disasters. I was rather involved in the Bangkok embassy site; the rationale for the sale was that it was inappropriately located and no longer fit for purpose, although, needless to say, we had just spent some huge amount of money on accommodation on that site. I note with horror what I have picked up on my various visits—that the Chancellery building in Paris, which will be well known to my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames), whose bedroom no doubt overlooked it for many happy years, is possibly going to be sold. What a ridiculous message it would send to Paris, at the heart of Europe, as we exit the European Union, to sell our Chancellery building on the rue du Faubourg Saint-Honoré.
My right hon. Friend the Minister does an excellent job in the Foreign Office now. I do not know whether he sits on the body I sat on—the Foreign Office board, where many of these things are discussed. It strikes me, in my experience, that these things are never brought to the attention of Ministers. Perhaps they are brought to the Foreign Secretary, but on the whole they are decided by the permanent under-secretary and others—the mandarins within the Foreign Office. There is absolutely no doubt, to my way of thinking, that these are Treasury-led decisions. It is about saving money, not about looking at our global footprint and where we want to be represented.
In future, whenever there is any discussion, there is an oversight role here for the Foreign Affairs Committee, on which many hon. Members sit, to have a view on any proposed changes to the diplomatic estate globally, and not at the eleventh hour, when the decisions have effectively already been taken. I would like to see that change, and I would welcome the Minister’s view on that.
Sir Hugo Swire
I will take the hon. Gentleman’s intervention first, and then that of my right hon. Friend.
Chris Bryant
The Foreign Affairs Committee intends to do exactly as the right hon. Gentleman suggests. If I can correct one thing, I do not think the Madrid decision was made on a Treasury basis. The old building was difficult to maintain and was listed under Spanish law and all the rest of it, but we did move to the wrong place. I opened it, as it happened—the highest embassy we have in the world, I think, because it is in the highest capital in Europe and on the 75th floor, or whatever. It is virtually inaccessible to lots of people and it was a terrible mistake for us to move there. My biggest concern—
Mr Adrian Bailey (in the Chair)
Order. Interventions should be short and not speeches. I want to bring the Front-Bench spokespersons in at 10.30, so would everybody bear that in mind?
Sir Hugo Swire
I will take a brief intervention from my right hon. Friend the Member for Newbury.
Richard Benyon
I was in Panama just after we sold one of the few nice buildings in Panama City, on the main corniche, and moved the embassy residence to the suburbs. The ambassador said to me, almost with tears in his eyes, that he could have made a business case for the use of that building that would have allowed us to continue there. Does my right hon. Friend agree that such decisions are often taken with a short-term perspective, which results in a failure to understand not only the long-term business case, but the influence case?
Sir Hugo Swire
My right hon. Friend is clearly right. I see that on 21 February, in a topical question, I asked that there be a moratorium on any asset disposals until such a review is complete. That question was answered with tremendous agreement by the Foreign Secretary. Let us have a moratorium until we decide what our global footprint will be, and let us have no more selling off of properties until the Foreign Affairs Committee has some formal oversight role.
Another thing I campaigned for, which my right hon. Friend the Member for Mid Sussex touched on briefly in describing his experiences in Zimbabwe, is what I called “one HMG”. I should be interested to hear an update from the Minister on that. Over the years, many different Government Departments have crept into some of these places and have other organisations in many capitals around the world; they include the Scotland Office, the Department for Environment, Food and Rural Affairs and the Department of Energy and Climate Change. Often, the ambassador does not have much control over some of these other organisations.
In some countries—I think Nepal was one—the head of the Department for International Development was a much more senior figure than our ambassador and would not kowtow to them. It is my view that, very simply, the individual who represents the British Government abroad is the ambassador, and everybody should work for the ambassador. There should be no discrepancy in employment, accommodation and so on, and where possible, all those other agencies should be brought under the British embassy or the British high commission and co-located on that estate.
That leads me to my next point: we are still shadow-boxing about the independence of DFID. Increasingly, as a lot of the Foreign Office is funded by overseas development money, that skews things and the lines are getting blurred. I wish at some point someone would have the bravery to say that DFID belongs back with the mother ship. We could have huge economies and savings, and greater alignment of British views and values overseas, by bringing it back to the mother ship. To anyone who says, “We can’t do that; all the non-governmental organisations will get too upset,” I say that I do not think the NGOs are in any position to do anything at the moment—at least some of them—and the stock rejoinder to them is, “Look, we stand by our pledge of 0.07% of GDP. That’s our answer. How we actually apply that is up to the Government, not the NGOs.”
We are about to see a major change to the European External Action Service, the force under Federica Mogherini. I always thought it to be pretty hit and miss around the world; it seemed to me very often that the head of the EEAS was always going off to the British embassy to find out the latest intelligence, but we paid a lot of money to the EEAS and a lot of our best people were employed there, on better terms than our own people locally. That is something we want to withdraw; I would be interested to hear the Minister’s views on how many British people who currently work for the EEAS will be pulled back into the FCO and where they will be deployed.
Overall, it seems to me that a major piece of work needs to be done—a major realignment of what the UK is seeking to do abroad. That involves the World Service, the British Council and different Departments of State; it involves redefining what we mean by soft power as well as ensuring that that soft power is backed up by a sufficient military capability. It is pointless to have soft power unless we have decent armed forces which, if necessary, can support that soft power. That is a fundamental piece of work that needs to be done, and I am not convinced that it is being done cross-departmentally or that it is being done by Ministers. I believe a Cabinet Sub-Committee should be set up without further ado to bring together all these competing demands on the Exchequer, to articulate what we expect from our superb diplomatic service—the envy of the world—to ensure that it is given the tools to do the job, and to better co-ordinate all the different parts of the state to that end.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
I congratulate the right hon. Member for Newbury (Richard Benyon) on securing this debate. It is one that I seem to find myself in more and more often; I am sure the Minister is thinking, “Oh, not Docherty-Hughes again,” but I am also delighted to see the Minister in their place.
There seems to be a consistent narrative, when we debate the diplomatic service and resources, of concerns about investment from across the entire House. The right hon. Member was right that it is not just a numbers game. It is not just about numbers; they are not everything. Many of the right hon. and hon. Members here, who are far more learned and knowledgeable on these matters than I, will recognise that connectedness and relationships can also be critical in diplomacy and are equally important.
I have just returned from Washington DC with the Defence Committee, where I saw the work of the French diplomatic corps regarding some of the activities on Capitol Hill. Being a member of the European Union has not stopped them covering Capitol Hill like a rash and speaking vocally on behalf of the French Government. That is something that we have clearly forgotten about here in the UK. That is in the practical sense of their own diplomatic activity, but it is also about a recognition of how modern states engage; it is not just about the past, but about modern relationships under the international rule of law.
Clarity is also needed about how we strengthen our diplomatic networks without undermining further the institutional integrity and, importantly, the institutional memory of the FCO. While investment to create what I am led to believe will be 150 jobs to deal with the complexity of Brexit is welcome, we should have clarity that those new jobs do not undermine the capabilities of the FCO’s teams across Asia, Africa and even both of the Americas.
From my perspective, there are clear issues that the Government must consider in moving forward. First, we should recognise the relationships with our closest allies that support and enhance the rule of international law, which is critical if we are to move forward. Secondly, we should utilise diplomacy to enhance economic stability and discourage mercantilism, which undermines liberal democracy. Third—the Minister will no doubt know where I am going with this—we need to recognise the challenges that UK citizens face abroad if, for instance, they are arrested or held without charge. Many nations already have legislative frameworks under which their own diplomatic corps deal with this, but we do not. Consular support would offer clarity to our FCO teams, the families and Members. The Minister probably no doubt knows the example of my constituent, Jagtar Singh Johal, who continues to be held in India.
Fourthly, we should work with devolved Governments across the UK. For example, existing frameworks, such as the Scottish Government’s international framework, could be a useful tool in building those relationships we have in specific locations. We should recognise opportunities to strengthen the devolved Administrations’ offer, such as the work being undertaken by the Scottish Government with the Arctic Council and some of the Nordic states on the high north, where some would say we have key gaps, and also their hubs in Berlin and Paris. As I said to the Prime Minister yesterday after her statement, we should also challenge some of our closest allies, such as Spain—a NATO member—which allows the refuelling and supply of the Russian fleet. Those are the kind of diplomacy implements that we should take forward.
We should also recognise that, with reduced resources, relationships are critical. In Washington DC, I noticed representatives of another European Union country—one with a population of 3 million—covering Capitol Hill in the most extraordinary way, but without a huge embassy to go with it: Ireland. Its diaspora is so interconnected that it could teach us a thing or two.
I have been consistent on how we should deal with Russia. When I turned on Radio Scotland this morning, I have to admit that I thought that the hon. Member for Rhondda (Chris Bryant) had suddenly become a Member for a Scottish constituency. However, I did not disagree with the majority of what they had to say. The challenges are clear, and they need to be rebuffed in a coherent and cohesive manner with our allies.
How are we supposed to cover the economic challenges that China poses while wanting to cover all the other bases? The right hon. Member for Mid Sussex (Sir Nicholas Soames) wanted us to ride all those horses. Given that we are leaving the European Union, how will we meet that challenge? I understand where they were coming from: it is about how we use our economic challenge to ride the horses such as China, the political, military, economic challenges of Russia and some of the most extraordinary challenges coming out of the United States.
There are great links to be had in the Commonwealth, but there are also huge challenges in how we diplomatically face down challenges to the international rule of law, such as human rights for women, Christians and Muslims—people of all faiths—and the LGBTI community. How do we do that during the complexity of leaving the European Union? Having voted to remain myself, and representing what I would say is a working-class constituency that voted to remain within the European Union, I, and I think the majority of Scottish constituency MPs, have yet to be convinced about the Government’s approach to securing a more stable and peaceful future founded on sound diplomacy.
Finally, on an element of complexity in international law, will the Minister advise us how we will go forward in financing our diplomatic resources—people and those relationships—to make sure that we substantiate and add to the rule of international law and are not a detriment to it?
Helen Goodman (Bishop Auckland) (Lab)
It is very nice to see you in the Chair, Mr Bailey. I congratulate the right hon. Member for Newbury (Richard Benyon) on securing this timely debate. He described the context in which we live at the moment as extremely turbulent, which is undoubtedly true, both in the short term, with our relations with Russia, and also with these big, strategic changes with the growth of China. I agree with him; I saw it 15 months ago in Lusophone Africa, where the Chinese are investing a great deal more than Portugal.
As the right hon. Gentleman said, everything is about context. In 1990, as a Treasury civil servant—we have heard about the divide between the Treasury and the Foreign Office; I am afraid to say that I was a Treasury civil servant—I was sent to Prague. It was obviously a very turbulent time. The Berlin wall had fallen and the Czechoslovak Government were extremely worried that they would face the sort of energy crisis that Ukraine has suffered from, because the Russians were ramping up the prices for the oil and gas that the Czechoslovaks were wholly dependent on.
I was sent to work for a few months in the Czechoslovak Prime Minister’s office. It was a very confused and chaotic time. Havel was in the Castle, but the rest of the Government contained communist members. The first thing I did was report to the head of mission. I went off, and I sat and waited, and the meeting was delayed and delayed. It took place an hour later. When I went in, he was incredibly stressed. I asked him what the matter was, and he said that his servants were on strike and he had been trying to sort it out.
I hope that the Foreign Office has moved on since 1990 in that respect, because it is extremely important that Foreign Office officials project Britain as we are now. I could not agree more with the right hon. Member for Mid Sussex (Sir Nicholas Soames) on Britain’s place in the world today. We are a middle-sized nation, not a superpower, and it is extremely important that we behave intelligently and appropriately. Fantasising about what we were and where we have been is distinctly unhelpful. He was also absolutely right that, in order to maximise our power and influence at the moment, we need to build relationships, whether with EU colleagues, in the United Nations or in NATO. We will never achieve anything except by collaborating with other countries.
Sir Nicholas Soames
The hon. Lady is making an impressive speech, but may I disagree with her on one tiny point? Although it is important that we do not think that we are what we were, we do have this absolutely wonderful architecture and a brilliant inheritance of vast experience all over the world, in good times and bad times. Our values and everything we stand for are built on rock-firm footings. It is now our job to see that that legacy is expressed in contemporary terms, which requires a much more aggressive approach.
Helen Goodman
I will come to the soft power aspects and the institutions that contribute to that in a moment. First, I want to look at the numbers and the reductions that the Foreign Office budget has had since 2010 and is projected to have.
Chris Bryant
I slightly disagree with the right hon. Member for Mid Sussex (Sir Nicholas Soames). I do not know whether my hon. Friend noticed, but Emmanuel Macron went to India the other day and said, notwithstanding our historic relationship with India, as part of the former empire and all the rest of it, that he intends France to be India’s prime access point to the European Union in the future. We have to be very careful about not relying on the past.
Helen Goodman
If we leave the European Union, we obviously cannot be the prime access point to the European Union. That stands to reason.
I will come to the soft power assets in a moment, but I just want to say something about the numbers. The Foreign Office budget reduction is slightly unclear. Is it 16%, 30% or 40% over the 10-year period? Whatever it is, it is quite a significant amount of resource. I realise that some of the Foreign Office budget has gone into the Department for International Trade and some into the Department for Exiting the European Union, but the smallest cut that one can glean from looking at the numbers is about 16%, which is none the less extremely large. It seems to me that it is difficult for the Government to project the global Britain role while at the same time reducing resources in the Foreign Office.
Turning to our soft power assets, we are all very proud of the World Service and pleased with the British Council, and we all think that the Commonwealth is a fantastic network. There is another soft power asset, which I think we should look at alongside those assets. I am talking about our universities and higher education. We have soft power assets in this country as well as overseas.
Sir Hugo Swire
Will the hon. Lady take this opportunity to applaud the Foreign and Commonwealth Office for the Chevening scholarship programme and the Commonwealth programme? These are hugely important ways of promoting the United Kingdom domestically to an international audience.
Helen Goodman
Yes, and of course the English language is the root of much of this.
However, I disagree with what was said previously in this debate about overseas aid. The Labour Government set up the Department for International Development as a separate Department in order that we could be absolutely clear that the aid budget had aid objectives—sustainable development objectives—and we have now agreed, on a cross-party basis, on the 0.7% target. We believe that aid has been much more effective and much better because it has not been jumbled up with other policy objectives. In my opinion, the foreign policy benefits from a good aid programme are greater than can be achieved when people try to go along to the Development Assistance Committee and fiddle with the rules, saying, “Oh, couldn’t we please put the hurricane money for the Caribbean into the overseas aid programme?” No. The reason why we get credibility and support from those countries that are receiving our aid is the very high quality of the aid, so I would certainly not wish to pull those two things together again.
One thing that is not very clear in the Foreign Office annual report and accounts is how the money is spent. In particular, it is not clear how the conflict, stability and security fund, which is the share of the budget going from the aid Department to the Foreign Office, is spent. I think the Government should be extremely cautious about merging those two.
I also think we need to put a question mark over the switch from Africa, Latin America and Asia to the European Union. Perhaps the Foreign Office simply does not have enough resource, in which case Foreign Office Ministers need to go back to their colleagues in the Treasury and make the case, but it seems to Opposition Members that if we want to develop our relationships across the globe, we cannot be cutting our resource in those other parts of the world. I submit that the switch of 50 people to the European Union will probably be quite a short-sighted change.
The question is really whether global Britain is a slogan or a policy. As the Select Committee on Foreign Affairs said, there is a risk that it is becoming a slogan rather than a policy. If Ministers need to bid for more money, so be it. We do not see holding to the current limit as necessarily a hard line. We should be investing in our relationships across the globe.
The Minister for Asia and the Pacific (Mark Field)
I am very grateful to my right hon. Friend the Member for Newbury (Richard Benyon) for securing this vital debate on an issue of national importance. I pay tribute to his valuable work on the Intelligence and Security Committee. I know from experience the time-consuming but absorbing nature of its activity, albeit that, by its nature, it is rather unsung and, in theory at least, low profile.
I thank everyone who contributed during the debate; there were some excellent contributions. I shall endeavour to answer all the questions, as I have a little more time than I had anticipated. There are one or two more technical aspects on which I will write to the Opposition spokesman, the hon. Member for Bishop Auckland (Helen Goodman), if I am able to do so, subsequently.
My right hon. Friend the Member for Newbury rightly talked about the need for a dramatic and dynamic shift of resource. He touched on our Africa strategy. As he will be aware, our right hon. Friend the Prime Minister set out, at her first G20 meeting in July 2017, a new long-term vision for our partnerships with Africa, centred on supporting African aspirations for economic growth, trade, job creation and investment. Ministers across Her Majesty’s Government have worked closely together to refresh our approach in order to deliver on that vision. We are clear—I reiterate the words of my right hon. Friend the Member for Newbury—that our substantial development spend in Africa needs to be directed more broadly towards the UK national interest, as well as supporting those in greatest need in Africa.
Let me touch on the point raised just now by the hon. Member for Bishop Auckland. I agree with her fundamentally, in that I think it is dangerous for us to look on aid as intermingled with other strands of British interest. We can take, for example, the deteriorating political situation in Cambodia at the moment. We have some important long-term aid programmes in Cambodia that deal with mine clearance and are designed to work for the most vulnerable in that country. The notion that we should hold the Cambodian Government of the day, however much we might disapprove of their work, to ransom in some form in that regard would be quite wrong. Indeed, I made it very clear in my meeting with the Cambodian ambassador only a few weeks ago that we would continue, on exactly the same terms, to fulfil our aid obligations.
However, I do believe that there is at least some mileage in the view that we need to look at this issue. I have sympathy with a number of my right hon. Friends, who talked in their contributions about the idea of DFID coming back into the Foreign Office. There is a sense in which there needs to be a broader focus. Particularly in the post-Brexit world that we will be living in, we need to focus all our energies in a one-Government situation.
My right hon. Friend the Member for Newbury talked about official development assistance, which was also raised by the Opposition spokesman. It is right to say that the Foreign Office is and will continue to be a large ODA-spending Department. The Department closely complements DFID’s efforts, and we are trying to deliver on the Government’s aid strategy commitments through our own programmes—in particular, the cross-Whitehall conflict, stability and security fund and the prosperity fund, for which I now have responsibility in the Foreign Office. That also involves grants to external organisations, and our global remit means that we are designing those to deliver a breadth of programming in support of our national security strategy that other Departments simply do not have the resource to do. I believe that programmes of that sort will very evidently begin to add value by responding quickly to specific or niche requirements in volatile environments. I am talking about pursuing higher-risk programmes where political sensitivities require a different approach, but also exploring and testing options before scaling up and unlocking larger interventions by others.
It is recognised that some of the ODA and non-ODA programmes will have to be blended together, in order to secure some of the best outcomes in the future. That applies not just to Africa, but to Asia and the Pacific—an issue close to my heart and that of my right hon. Friend the Member for East Devon (Sir Hugo Swire). I accept that an unintended consequence will be that some aspects of our annual report will be rendered more opaque.
In many ways it would be a pleasure to have a much broader debate, along the lines that my right hon. Friend the Member for Mid Sussex (Sir Nicholas Soames) developed. I hope that we will be able to have further discussions both offline and on the Floor of the House in future. He is well aware that I have a significant amount of sympathy with much of what he said. We need to be realistic about where we are in the future. I will be honest: I gave considerable thought to whether I should be a Minister in this Government. I was, like him, passionately—on emotional and geopolitical grounds as much as anything else—keen that this country should stay in the European Union. Yes, in my heart of hearts, I do believe it was a mistake. However, we have to make it work. I think it is also important that people of my mind play their part within Government, rather than just beyond Government, not to frustrate that Brexit outcome, but to try and make it work as well as we can and to put that voice across.
Chris Bryant
I do not disagree with what the Minister has just said, but the key thing is how we ensure that we are able to secure the policy outcomes on defence, security and foreign affairs, in relation to places such as Russia, the middle east or Iran, after Brexit. I urge the Foreign Office to do a full review of our presence in Brussels itself, because it will need to become much more like a lobbying operation than it has ever been before.
Mark Field
I have a lot of sympathy with that view and I think there is little doubt that we will need to do that. I saw that when I attended the Foreign Affairs Council only last week, in the stead of the Foreign Secretary.
I will talk a bit about the British Council, because that was mentioned by my right hon. Friend the Member for Mid Sussex. I fully recognise the fantastic work of the British Council and its soft power potential post-Brexit. I have seen that with my own eyes in virtually all my overseas visits in Asia, and indeed even last week when I was in Paris. Funding for the British Council has increased over the spending period. There are issues, as I think my right hon. Friend is aware, about the signing off of accounts. We need to get those accounts ready, not just to impress the Treasury, but because I want to be able to make the most aggressive case for the importance of that soft power, and the British Council’s integral importance in that, when we leave the European Union, but that does require the British Council having its financial house in order. We are working closely with the Treasury to try to achieve that impact.
Mark Field
If I may, I will make some progress, as I am now running out of time, having tried to address a number of the issues.
My right hon. Friend the Member for East Devon made strong points about the issues around estates. We have discussed this in the past, but I have to say that I think all of us regret the idea that the embassy building in Bangkok had to be sold off. One rather hopes that having lost Bangkok, it will be the last of such sales. As he is well aware, a considerable amount of that money is being reinvested in improving our estates across the world. I have to say, I have not heard in any way the issue he raised about the Paris Chancellery. As for the EEAS people being sent back by the FCO, I will try and write to him in some detail on that.
I believe that a well-directed, properly funded diplomatic service is vital to delivering the United Kingdom’s overseas objectives at such a crucial time. The world today is more complex, challenging and costly than at any point since the end of the cold war. At the same time, we are striving to deliver a positive, hopeful, optimistic and, I still hope, a successful exit from the EU, while simultaneously turning our vision of global Britain into reality by increasing further our already significant international reach and influence. It is no underestimate, however, to say today that the UK faces—I agree with my right hon. Friend the Member for Mid Sussex—its greatest diplomatic challenges in decades.
This Government are absolutely committed to ensuring that the diplomatic service receives the resources it needs to support a resilient and adaptable network, with sufficient capacity to respond decisively to fresh priorities and challenges. This includes exploiting the inevitable opportunities that will arise in a post-Brexit world.
We have some 274 posts in 169 different countries and territories. The FCO’s current overseas network provides a crucial platform from which the 30 other Government Departments and agencies are able to operate. Our diplomats cultivate the deep and nuanced relationships that a number of right hon. and hon. Members have referred to, which provide critical political insight and access. This helps deliver all other aspects of Government policy around the globe. The diplomatic service must remain crucial to delivering that wide range of Government priority work, from counter-terrorism to cultural engagement, and from consular assistance to trade. I have a lot of sympathy with the direct point that was made about the importance of our ambassador or high commissioner being the leading light, irrespective of all the other aspects of the one platform set-up.
Historically, it has been impossible to deliver this at comparatively little investment. As right hon. and hon. Members will be aware, the Foreign and Commonwealth Office’s budget this financial year is only £1.2 billion, which represents just 6% of the Government’s expenditure on a major overseas Department. Once cross-Whitehall funds and non-discretionary spending, such as UN subscriptions, are removed, the remaining FCO budget is about £860 million. Delivering diplomacy at a relatively reduced slice of public expenditure in recent years has also been made partially possible through our membership of the European Union. Within the EU we have been able, hitherto, to amplify our voice in a range of international institutions. By leveraging the European Union we have been able to gain influence in countries where we have had a limited presence, such as francophone countries in west Africa. However, as our relationship beyond the European Union evolves, we must all accept that resourcing of the diplomatic service will also need to evolve to ensure that Britain’s voice and influence is not diminished.
I have responsibility for the FCO’s economic diplomacy and I recognise that sector-wide specialism in areas such as technology—whether FinTech or cybersecurity—international energy strategy, pharmaceuticals, and climate change and green finance will enable us to maximise our global impact. This will require not just bilateral co-operation, but a redoubling of our multilateral relationships, whether with the UN, the OECD or the Association of Southeast Asian Nations, to name just a few.
Mark Field
If I may, I will make progress, because I am running out of time and I really do want to cover all the points.
Needless to say, when it comes to free trade agreements, the single most important deal that the UK shall strike in the years ahead is the one we are able to agree with the EU27. More investment in the diplomatic service is essential, so that it is able to deal with the increasingly complex challenges it faces, so I am pleased that this important task has already begun. Last September, the FCO received almost £6.5 million from the Treasury to help deliver its EU exit priority work. These funds were used to create over 150 new positions across London and the Europe network. I take on board the point raised by the hon. Member for Rhondda (Chris Bryant) about the importance of Brussels in that whole set-up. These diplomats are looking to work hard to deliver a new sanctions framework to transition the most crucial third-party agreements, to mitigate the risks of our EU exit for our overseas territories, for example, and to deepen bilateral relationships.
We recognise, however, that other countries are also investing heavily in their overseas networks, as my right hon. Friends have rightly observed. Germany is increasing its budget for its ministry for Foreign Affairs by a third, to some €5.2 billion over a three-year period. The French, the Dutch and the Turks are all investing substantially. Needless to say, in Asia, a part of the world for which I have responsibility, China, India and Japan are all doing likewise. If we are to maintain and increase our global outreach and influence, we need to ensure that the vision of a global Britain is more than just a mantra. I accept that for this, we must ensure that we provide the investment that is required. The FCO will evidently require reinforcements in Asia and the Pacific if the UK’s global and security goals are to be properly achieved.
I have been heartened by the reaction of my ministerial colleagues across Government, as they have been alive to that need, but the Foreign and Commonwealth Office will continue to work closely with the Treasury to ensure that the diplomatic service is sufficiently resourced, not simply to deliver EU exit and global Britain, but to ensure that they are a success.
I will conclude, as I know my right hon. Friend the Member for Newbury wants to speak briefly. I agree that if the UK is to continue to thrive and not simply survive, it is essential that we address the resource pressures of our diplomatic service. If we are to deal with the challenges and opportunities of the EU exit, I accept that we now need to consider where further investment is needed. I am pleased that we are debating this issue today. I hope that we will continue to debate it. I look forward to working closely with all of my colleagues here, who have this issue so passionately in their heart. Finally, the Government are committed to enabling Britain to have the diplomatic service it needs, as we work to realise our vision of a truly global Britain.
Richard Benyon
I am grateful to the Minister for coming here and giving such an honest and frank assessment. It was very impressive to hear. I hope he can convey a message back that many of us are looking, over the next few months, for a major setting out of a new strategy for these extraordinary times in which we live. That is going to require looking across the many issues that we have discussed. I am grateful for his reply to us today.
Motion lapsed (Standing Order No. 10(6)).
Pneumoconiosis: Support for Former Miners
(6 years, 1 month ago)
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Ben Bradley (Mansfield) (Con)
I beg to move,
That this House has considered support for former miners with pneumoconiosis.
It is a great pleasure to serve under your chairmanship, Mr Bailey. I thank the Minister for being here to respond to the debate and colleagues for their attendance.
It is a privilege to have secured my first Westminster Hall debate on a subject of interest to many of my constituents and many in former coalmining communities across the UK. Mansfield has a proud coalmining history, which ended very recently—just a few years ago—when the nearby Thoresby colliery closed. For decades, the community was built around the industry, and we still feel many of its effects.
I applied for this debate because, although coalminers’ pneumoconiosis is not a terribly widely known illness, it is prevalent within mining communities and should receive greater attention. I have been contacted by a number of constituents and unions about this issue, which I am keen to raise directly with Ministers. I am asking the Department for Work and Pensions to work with the Department of Health and Social Care to review the diagnostic tools that are used to assess miners for signs for pneumoconiosis.
Coalminers’ pneumoconiosis is an occupational lung disease caused by the inhalation of dust from coalmines. It is often known as “black lung” and it causes thousands of death each year worldwide. Inhaled coal dust progressively builds up in the lungs over long periods, leading to inflammation of the lungs, fibrosis and even necrosis. The most common symptoms of pneumoconiosis are coughing and shortness of breath. The risk is generally higher when people have been exposed to mineral dust in high concentrations and if they have been exposed to coal dust for long periods.
Coughing and shortness of breath can, of course, be symptoms of a wide range of illnesses, which is partly why pneumoconiosis is often overlooked by health professionals and others. Even when a former miner presents to their GP with those symptoms, it is not always picked up straightaway. Most miners would recognise that a cough is inherent—part of the territory of working in those conditions—and many would not consider it a symptom of anything more than their career underground. Many therefore do not come forward early enough, and this is where the problem lies. We need to do more to encourage this conversation.
Many former miners who present with such symptoms are simply referred as out-patients to their local hospitals for standard chest X-rays. They will have had these X-rays regularly throughout their time in the industry and most will have been told that they have a clean bill of health on that basis. The trouble is that traditional two-dimensional X-ray films often do not show enough detail to diagnose pneumoconiosis, especially when the patient is in the early stages of the disease. The tell-tale sign of the disease is nodules in the lungs, which can be as small as l mm or 2 mm in diameter. When using X-rays for diagnosis, it is usually possible to pick up on pneumoconiosis only at a later stage, when large masses of dense fibrosis have developed in the lungs. By that stage, there is usually a notable decrease in lung function—in effect, it is too late.
A successful diagnosis is also less likely because of the time that has passed since the pits closed. The doctor they see now, who examines the X-ray, is less likely to have specialist knowledge of the industry and related illnesses. They are also less likely to have seen this disease before, so are perhaps less likely to spot it.
For the best results and the quickest analysis, a CT scan is the most effective diagnostic tool. CT scans show the lungs in three dimensions, which provides far greater detail and allows for a more accurate diagnosis. For many of us, it is surprising to learn that there is not a regular screening programme in place for former coalminers to pick up cases of pneumoconiosis and other lung conditions. Many former miners received their last X-ray at work. When miners retire or are made redundant, their access to regular X-rays simply stops. Former miners then tend not to receive another until they present to their GP with symptoms such as breathing difficulties or a persistent cough. Many fear that they have cancer, and are given a CT scan only to find that it is in fact pneumoconiosis.
It is important to note that the latency period for pneumoconiosis is about 10 years, but can be as long as 15 to 20 years. The lack of regular screening once a miner leaves that environment and retires is clearly a problem. I am aware of several cases in my constituency of miners who received the all-clear for pneumoconiosis after getting old-fashioned X-rays at work, but were subsequently diagnosed with pneumoconiosis after CT scans revealed evidence of the disease.
Lee Rowley (North East Derbyshire) (Con)
My hon. Friend is making an excellent point. I have personal experience of lung disease in the family. Both of my grandfathers were miners, and some of their lung issues did not come to the fore until at least a decade after they left the pit. I want to emphasise the importance of what he says: we need to ensure that there is support throughout the process and throughout people’s lives.
Ben Bradley
My hon. Friend is absolutely right. That is a prime example of why it is important that assessment is ongoing and people who used to work down the mines have access to diagnosis and treatment throughout the rest of their lives.
A few years ago, the Union of Democratic Mineworkers decided to run a test case. The UDM paid for five former miners who had recently been made redundant to have CT scans. The men had all received recent occupational X-rays at the colliery, and each had received the all-clear from those scans, but when the five men went for CT scans, two were diagnosed with pneumoconiosis. Interestingly, two of the other three men were diagnosed with other health issues, which had previously been unseen in the X-rays. Four out of five had conditions that required a CT scan to get a diagnosis. Surely it is clear that former mineworkers are at high risk of many different respiratory health problems, and that a CT scan is the most effective tool for diagnosis.
At present, the reality is that without post-retirement screening for pneumoconiosis, and with standard guidance from the DWP and the Department of Health promoting X-rays for testing, many cases are not picked up until it is too late. It is a sad truth that pneumoconiosis is often noted in a patient’s file for the first time when they receive a diagnosis of lung cancer or other advanced respiratory illness. That is clearly unacceptable.
Gloria De Piero (Ashfield) (Lab)
I agree with much of what the hon. Gentleman is saying. I just want to mention the compensation scheme. When people are deceased, if somebody other than the widow claims for compensation, it is incredibly onerous and expensive and there are many hurdles in the way. Does he agree that that process needs to be simplified and expensive hurdles scrapped?
Ben Bradley
I agree that it is important that people have access to the compensation that they rightly deserve, and that that should be as simple a process as possible. Key to that is diagnosing the condition in the first place. To get access to that compensation, they have to prove that they have the condition, which has to be diagnosed.
The issue of pneumoconiosis testing has been batted about between the Department for Work and Pensions, the Department of Health and regional clinical commissioning groups for too long. Miners are rightly entitled to compensation and access to benefits as a result of work-related illnesses including pneumoconiosis. The compensation provides lump-sum payments to sufferers and their dependants. The Government have a duty to look after those who suffer from diseases caused by their working environment. Hard-working coalminers deserve their rightful compensation and disability benefits when their working environment has left them with an incurable illness. If individuals are not diagnosed at an early stage, they miss out on not only vital healthcare but the welfare support that they deserve.
To successfully claim compensation, miners must prove that they have pneumoconiosis. Again, this is where we run into issues. The DWP also relies on X-rays to provide evidence of pneumoconiosis for compensation claims. The compensation assessments are problematic. Former miners are frequently tested with digital X-rays, but even the newer technology struggles to pick up on the true condition of the lungs. Often the image is not clear enough to confidently diagnose pneumoconiosis. In such instances, if their claim is denied by the DWP, the miner will lodge an appeal. That takes considerable time and effort, and it will draw on DWP staff time and resources as applications are processed for a second time. In order to appeal the decision, miners may undergo further diagnostic testing, including the all-important CT scan, which is an additional expense and carries an additional exposure to radiation.
The argument against the use of CT scans usually focuses on two elements. One is the cost of the scans compared to that of X-rays, and the other is increased exposure to radiation. In reality, if coalminers with suspected pneumoconiosis do not receive a scan the first time, they are often exposed to repeated X-rays over a long period and then eventually a CT scan anyway—often when their condition has deteriorated. That is more time- consuming in the long run, ultimately costs more and can involve increased exposure to harmful radiation.
In this debate, I am asking not for a radical change to the testing programme for all lung-related compensation and disability claims, but simply an acknowledgment that former coalminers are at high risk of lung conditions and that the diagnosis of pneumoconiosis, particularly in the early stages, inevitably requires a CT scan rather than an X-ray. There is a clear argument that the Department should consider CT scans as the definitive gold standard for the investigation process in pneumoconiosis claims.
There is a real possibility that thousands of former mineworkers are living with pneumoconiosis, but have no idea that they have the disease. Their occupational X-rays may have showed nothing and, even if they raise health concerns with their GP years later, there is every possibility that they will again receive only an X-ray, which does not show enough detail to diagnose the condition.
The UDM is based in my constituency. I recently met Jeff Wood, the national president, and Ian Gill, the social insurance officer, who work on pneumoconiosis claims. They explained to me in great detail a number of cases that they have personally seen where miners suffered for years without an official diagnosis. It is easy to sit in Parliament and look at issues on paper, but it is important to remember that there are real people behind those studies, and real families who would benefit from a relatively small and easy policy change.
Any former miners who have had unnecessary delays in receiving their diagnosis should receive the compensation and benefits that they are entitled to. I ask the Minister to work with the Department of Health and Social Care to bring about change and to ensure that people who are entitled to support for pneumoconiosis can access it at the earliest opportunity.
There are several clear benefits to the DWP working with the Department of Health and Social Care to replace standard X-rays with CT scans. Earlier diagnosis for patients will allow them to make the necessary lifestyle changes to improve their overall health.
Gloria De Piero
The hon. Gentleman is right to say that when producing new proposals, policies or guidelines, Ministers should consult with the trade unions—not only the Union of Democratic Mineworkers but the National Union of Mineworkers.
Ben Bradley
Of course, it is important that everyone involved is encouraged to talk to GPs and to the Government. I am sure that we can do more with that. I mention the UDM simply because it brought the issue to my attention.
We can achieve earlier access to compensation and benefit support from the DWP. There are potential cost savings for the NHS, because an initial CT scan will help to avoid repeated X-rays, GP appointments and out-patient visits, as well as helping the patient to be healthier and less reliant on those services. There will also be a reduction in the number of appeals to the DWP for compensation claims, because the evidence will be provided in the first instance, and a potential reduction in future disability claims, because sufferers will be able to take action sooner to improve their lung function and overall health before it deteriorates.
The DWP needs to take the lead on what is, of course, a work-related disease. In an ideal world, former mineworkers would be offered additional testing at their GP and local health clinics. We need national action because, once again, we face a postcode lottery in terms of the support offered to miners. Some areas fare considerably better than others.
In Mansfield, we are lucky that the unions offer support to former miners. There are also other areas of the country where former miners receive brilliant help and support. In Rotherham, the BreathingSpace community service helps people with a wide range of respiratory conditions. It provides a number of health services but, importantly, also helps individuals and families to access welfare and benefits advice. That is an example of unified working across departments, with benefits advice available in a healthcare setting. As ever, the most successful programmes are those that offer a joined-up approach.
I urge the DWP to support that joined-up approach. Ideally, the DWP and the Department of Health and Social Care will agree that a CT scan is the most effective way to diagnose pneumoconiosis. I ask the Minister to commit to a review into whether her Department’s assessments for pneumoconiosis compensation can use CT scans as the default diagnostic tool. I hope the DWP will work with the Department of Health and Social Care to make that happen. It is a relatively simple change, which should not be too hard to implement but could make a real difference to thousands of former mineworkers and their families.
I understand that the UDM recently met my right hon. Friend the Member for Portsmouth North (Penny Mordaunt) when she was a Minister at the DWP, and she expressed sympathy with its campaign. I hope the new Minister will also be inclined to give the issue the immediate attention it deserves.
It is appalling that former miners are suffering unnecessarily and missing out on the compensation and access to benefits that they deserve. There is a postcode lottery and inconsistent access to CT scans. A national system led by the DWP in co-operation with the Department of Health and Social Care could deliver more effective testing and better results. That could help to cut costs, reduce waiting times and most importantly, provide the best support to individuals at the earliest opportunity.
This is not an abstract discussion. The disease affects large numbers of former miners, including people in my constituency, daily, and their families suffer too. It is a progressive disease, but if sufferers are diagnosed at an early stage, they can receive care and support quickly, and access the compensation and benefits that they deserve. We must not let our former coalminers down.
The Minister for Disabled People, Health and Work (Sarah Newton)
It is a pleasure to serve under your chairmanship, Mr Bailey. I congratulate my hon. Friend the Member for Mansfield (Ben Bradley) on securing this important debate. In his short time in the House, he has proven to be an extremely effective constituency MP. I also acknowledge the contribution of his neighbour, my hon. Friend the Member for Sherwood (Mark Spencer), who has focused continually on pneumoconiosis and its impact on former miners in his constituency. I am pleased to see my right hon. Friend the Member for Derbyshire Dales (Sir Patrick McLoughlin) and my hon. Friend the Member for North East Derbyshire (Lee Rowley) in the Chamber, and I thank all hon. Members who have contributed to the debate.
As my hon. Friend the Member for Mansfield said, pneumoconiosis is a serious disease that is common—too common—among former miners. It is a sad legacy of their exposure to dust, particularly coal dust, while working in the mines. I reassure him that the Government are committed to supporting former miners who have developed pneumoconiosis. Through the industrial injuries scheme, we spend £900 million a year on weekly benefits to support around 300,000 people for injuries arising from industrial accidents or from specific occupationally caused diseases..
In addition, lump sum payments are available through the Pneumoconiosis etc. (Workers’ Compensation) Act 1979. In 2016-17, more than 3,000 people received payments under the scheme totalling almost £42 million. Last month, I was pleased to demonstrate our ongoing commitment to that support by proposing measures to increase the value of lump sum awards by 3% from April. The coal industry pneumoconiosis compensation scheme—sometimes referred to as the coal workers pneumoconiosis scheme—is also available and has received 91,000 claims from mineworkers and their families since it was set up.
The hon. Member for Ashfield (Gloria De Piero) raised the issue of processing applications. I would be pleased to receive details of her concerns, because the devil is always in the detail. By reviewing those constituency cases, I can consider what more we can do to improve the process. We want to ensure that people get the compensation that they richly deserve and are entitled to.
I acknowledge the suffering of individuals with the disease. Coal workers’ pneumoconiosis, which arises from the inhalation of coal dust, is one of the most commonly occurring types of pneumoconiosis. Thankfully, many ex-miners with pneumoconiosis will have the simple type, which may not be associated with any disabling effects.
If miners continued to work underground and inhale coal dust, however, they have a higher risk of developing severe disabling effects from progressive massive fibrosis, which affects lung function and causes coughs, wheezing and shortness of breath. That is why working miners are regularly screened by X-ray to identify simple pneumoconiosis early and to remove the person from further dust exposure to prevent progressive massive fibrosis.
My hon. Friend the Member for Sherwood and UDM members met my predecessor, my right hon. Friend the Member for Portsmouth North (Penny Mordaunt), to discuss a screening programme for ex-miners using CT scanning or chest X-rays to detect pneumoconiosis. At the end of last year, I consulted with national experts and the deputy chief medical officer on all the issues raised at that meeting.
Importantly, there is a big difference between carrying out medical tests on a person with symptoms and carrying out tests on a healthy person. The symptomatic person needs to know what is wrong with them to get an accurate diagnosis so they can receive the right treatment. A healthy person undergoing a screening test believes that they are healthy, and would continue to do so, facing no risks from health interventions. Because a screening programme risks harming people’s health, we demand a high level of evidence to ensure that any screening does no harm and is of genuine overall benefit to people. We have looked at all the evidence, and the view was clearly expressed by medical experts that introducing a screening process in the UK would not meet those evidential thresholds and would not be beneficial. When pneumoconiosis is identified, often no treatment is required, and when it is severe, no specific treatment is available. There is no health benefit to identifying pneumoconiosis at an early stage once a miner has left mining.
The advice that I have been given is that the potential harms from screening for pneumoconiosis by X-ray or CT scans vastly outweigh any gains. However, I am mindful of the information that has been shared in this debate, so I think it is important that I set up a follow-up meeting to explore the matter further with my hon. Friends the Members for Mansfield and for Sherwood, with the Department of Health and Social Care, and with the national health service. Other hon. Members will be welcome to come along, because I am sure they want to know that we are leaving no stone unturned and doing the best we can for former miners.
I am aware that the Industrial Injuries Advisory Council—an independent scientific advisory body that looks at how industrial injuries disablement benefit is administered and provides advice to the Department for Work and Pensions—has discussed the use of CT scans for diagnosing pneumoconiosis, including the risks of increased radiation exposure. However, in the light of the issues raised in this debate, I will approach the council anew and ask it to reconsider the use of CT scans and give me further advice, which I will be happy to share with hon. Members.
My hon. Friend the Member for Mansfield rightly spoke about raising awareness among former miners, who too often do not come forward because they assume that having coughs and colds is just part of being a miner or former miner. There is much more that we can do to raise awareness among former miners and their families and communities, and to encourage them to come forward and speak to a GP. Much work has been done in the last couple of years on improving the care pathways, and a lot more information and training has been given to GPs, so former miners who come forward now will experience a much better quality of care and a rapid assessment, either by X-ray or by CT scan, of whether they have pneumoconiosis.
I am very grateful to hon. Members present, particularly my hon. Friend the Member for Mansfield, for raising the issue. I assure them that the Government will continue to support former miners who have pneumoconiosis—not just financially, through all the schemes I have described, but by really looking at their diagnosis and health needs.
Dan Jarvis (Barnsley Central) (Lab)
Very helpfully and constructively, the Minister says that she is planning a meeting with hon. Members. Would she be content for the National Union of Mineworkers, which is based in my constituency, to be represented at that meeting? The NUM would have a constructive contribution to make to the process.
Sarah Newton
Of course. I am happy to work with anyone who makes a constructive contribution to ensuring that former miners are aware of the risks to their health and seek help at the earliest possible stage. We need to support them in getting not only diagnosis and treatment, but compensation, which we are proudly giving to people who suffer in this way. We must remember that miners contracted pneumoconiosis while making a vital contribution to the growth and prosperity of this country. It is only right that they receive our support when they need it most.
Question put and agreed to.
Victims of Crime: Rights
(6 years, 1 month ago)
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Alex Sobel (Leeds North West) (Lab/Co-op)
I beg to move,
That this House has considered the rights of victims of crime.
It is a pleasure to serve under your chairship, Mrs Main.
When I applied for this debate, little did I know how timely it would be. On Friday night, both our car and our garage were broken into. Nothing was stolen, but the damage to our property and knowing that we are vulnerable to criminals are concerns, and I redoubled my resolve to get better rights for the victims of crime.
Last week, in advance of this debate, I surveyed constituents on their experiences and two of the respondents spoke about the lack of support they had also experienced after being victims of theft from their cars. I also had much more concerning examples, where people were victims of serious incidents and there were serious gaps in provision. One constituent who had been at the Manchester Arena for the Ariana Grande concert when the tragic bombing occurred wrote to me, saying:
“Whilst I appreciate thousands were affected by this event, receiving mental health support since then has been hard work. It has taken 9 months for my daughter and I to receive any kind of support due to long waiting lists, lack of funding etc. I was never advised to contact victim support but was advised to contact survivors assistance network based in Warrington. I am in groups on Facebook and yammer where hundreds say the same thing. Those suffering post-traumatic stress disorder have been ignored unless they had physical injuries.”
Sir Greg Knight (East Yorkshire) (Con)
The hon. Gentleman is now touching on the key point. Does he agree that very often victims of crime pay a double penalty—the penalty of the financial loss, from the effect of the crime itself; and then the emotional stress resulting from what has happened?
Alex Sobel
I do, and that is doubly so when there is an event as serious as the Manchester bombing. After that incident, the Government committed to support the victims, but nearly a year later some families are still not receiving the support they need.
When I undertook the survey, a range of crimes were reported to me and often the victims did not feel that they had received sufficient support after crimes ranging from muggings to violent assault to rape. This debate is very much needed, to address the inconsistencies in the system, and I am sure that many hon. Members will also share the experiences of their constituents.
A group in society that is particularly vulnerable to crime is older people. I am grateful to Age UK for releasing a report last week on fraud relating to older people. The report found that more than two fifths—43%—of older people, which is almost 5 million people, believe they have been targeted by scammers. Only a minority of fraud victims report their experience. Among people aged 65-plus, nearly two thirds—64%—of those targeted by fraudsters did not report it to an official body such as Action Fraud, the police, a bank or a local authority. About a third of those targeted confided in friends or family, but more than a fifth admitted they did not tell anyone at all, because they felt too embarrassed. And for the minority of older people who do report fraud, support is inconsistent across the country.
Age UK has won funding from City Bridge Trust to pilot a new scam prevention and victim support service. Working in partnership with Action Fraud, a number of local Age UK groups in London will raise awareness of scams among older people and their friends and family; they will give one-to-one support to older people who are vulnerable and at risk of scams, empowering them to feel safer and more confident; and they will provide specialist one-to-one support sessions for older victims, helping them to address the financial, health and social impacts of fraud.
This is a great initiative. However, should not such support be available across the country for every older person who needs it, funded by the Government, and using proceeds of crime moneys if the Government cannot pay for it out of general taxation? Our criminal justice system must ensure that it has the rights of victims of crime at its heart.
Sarah Champion (Rotherham) (Lab)
I am very grateful to my hon. Friend for securing this debate, which is very timely. He is talking about the changing nature of crime, so does he agree that the Minister should be considering reviewing the Criminal Injuries Compensation Authority, so that its guidelines reflect the changing nature of crime?
Alex Sobel
That is a very good point, well made, and I hope that the Minister will address it in his remarks.
As I was saying, our criminal justice system must ensure that it has the rights of victims of crime at its heart. When it fails to do so, it not only affects the direct victims themselves but risks undermining wider public trust in our justice system.
The most significant reform in this regard was arguably the introduction of the victims code by the last Labour Government, which came into force in 2006. The victims code sets out the rights and entitlements of victims, making it the single most important document for victims of crime in England and Wales. It outlines clearly and precisely the level of entitlement that victims can expect from each criminal justice agency they encounter, including the police, the Crown Prosecution Service and Her Majesty’s Courts and Tribunals Service. For example, the code specifies that victims are entitled to be kept informed of developments in their case within set time limits, and that victims must be informed of any sentence handed down to the offender and what it means.
Victim Support has found evidence to suggest that there is a routine failure to uphold the victims code. The lack of compliance could be due to the victims code not being legally enforceable, or the absence of a mechanism to hold agencies to account except in individual cases, or the lack of an independent body to monitor implementation. Current monitoring arrangements rely on statutory agencies self-assessing their compliance, based on criteria determined by the agencies themselves. Effectively, these agencies are self-regulating.
There are new setbacks for victims of crime on the horizon, with the announcement that the Government plan to sell off more than 100 courts for not much more than the average UK house price. That decision piles yet more pressure on the remaining courts and risks hearings being further delayed and rescheduled, which can have a distressing impact on victims and witnesses and creates a justice system that is less accessible for people.
The Victims’ Commissioner has within their remit a duty to
“keep under review the operation of the Code of Practice”.
The current Victims’ Commissioner, Baroness Newlove, has conducted a number of reviews of the code, looking at issues such as the victim personal statement, children’s entitlements and the complaints system. A number of other agencies have also looked at compliance with the victims code in some form, including the CPS, which undertook a victim and witness satisfaction survey in 2015 and plans to repeat the research, and the criminal justice inspectorates.
Victoria Prentis (Banbury) (Con)
The hon. Gentleman has brought a very important issue to Westminster Hall this afternoon. I am particularly concerned about the effect of the problems in the disclosure system of the CPS and other agencies for victims. I have had considerable problems with child sexual exploitation in my constituency. Those victims are particularly vulnerable. Is that something that he is also worried about?
Alex Sobel
I am very glad that the hon. Lady has raised this issue. It is not something that I have personally had experience of, but I am sure that her points are really well made and I hope that the Minister addresses them in his remarks.
Finally, victims’ organisations such as Victim Support have also looked at compliance with the code by means of research that has examined different issues, including the timeliness of victim contact. However, all these reviews have been piecemeal, looking at certain aspects of the code but not at the code’s operation as a whole. There is a gap in the system, and an effective monitoring and enforcement mechanism would enable the Government to ensure that the victims code is implemented throughout the system, as well as identifying both good practice and areas for improvement.
Last year, Victim Support published research undertaken with almost 400 victims, which highlighted the failings inherent in the system. These failings include the fact that 52% of victims surveyed were not offered the chance to make a victim personal statement; that 46% of victims surveyed had not received a written acknowledgment of the crime from the police; and that 19% had not been referred to support services. So, nearly one in five of the people who responded were not even referred to support services. As things stand, too many people are being failed by the system, so things need to change.
What do victims of crime need from the Government? Victims must always feel that the justice system is on their side. When a member of the public comes forward to report a crime or to give evidence in court, they must be treated fairly and with compassion. When all is said and done, we must do our utmost to ensure that victims receive the justice they deserve.
What is needed is a victims’ law, which the 2015 Conservative party manifesto pledged to introduce; the Minister will find that pledge on page 59. In the 2015 Queen’s Speech, the Government announced:
“Measures will be brought forward to increase the rights of victims of crime.”—[Official Report, 27 May 2015; Vol. 596, c. 31.]
In 2016, the EU victims’ directive forced the Government to enhance support for victims of crime by broadening the definition of “victim”. Previously, for example, victims of drink-driving did not receive support under the victims code, and not all victims of crime were entitled to a written acknowledgment from the police.
In 2017, the Conservative manifesto again contained a commitment to enshrine victims’ entitlements in law. However, aside from a recent and welcome announcement that there will be consultation on new legislation to support victims of domestic abuse, there appears to have been little action by the Government to bring forward their victims’ law commitment. I want to see victims’ support at the heart of the criminal justice system and historic wrongs put right.
A victims’ law would seek to guarantee victims a minimum standard of service, including placing victims’ right to review on a statutory footing, not only for the CPS but for the police, too. It must be made easier to hold justice organisations to account if we are to maintain confidence in the criminal justice system. I therefore ask the Minister to introduce proposals for a victims’ law that fulfils the historic commitment.
Several hon. Members rose—
Mrs Anne Main (in the Chair)
Quite a few right hon. and hon. Members are seeking to catch my eye. I will call the Front Benchers at half-past 3. I call Kevin Foster.
Kevin Foster (Torbay) (Con)
Thank you for calling me so early, Mrs Main. It is a pleasure to serve under your chairmanship.
I congratulate the hon. Member for Leeds North West (Alex Sobel) on securing this debate on such a major issue. I will explore how victims are heard and the penalties for offenders, and how they relate to the changing nature of crime and to people actually realising that they are victims, which is a particular issue for some of my constituents.
I have always been a fan of more restorative justice. St Martin’s church in Barton in my constituency was attacked by vandals who were just over the age of criminal responsibility. A restorative path was chosen, as it was felt that the two individuals coming to the church, meeting the vicar and hearing from the churchwarden about the effect of what they had done would have a far greater impact on them than a police officer bluntly giving them a caution, or their potentially going before a youth court. The church continues to engage with the two young men and their families, trying to make them see clearly that the church is part of the community and the impact on those who were damaged.
On a wider scale, the offender management team in Torbay tries to use more restorative justice, particularly for lower-level offending that would not attract significant terms of imprisonment. Genuine restorative justice can be more effective than a blunt fine, which might disappear into a court or be added to a list of other fines being paid off via earnings or welfare benefits attachments; it can be something that might stick in someone’s memory.
It has been interesting talking to the local police in Torbay about an emerging trend, whereby people—mostly older men—with assets are targeted by ruthless individuals who look to exploit them by forming a relationship with them, even a sexual one, with the purpose of getting at their bank balance and draining their assets. When it is happening, many of these people do not realise they are victims; some might not even see it after the person unsurprisingly disappears, when the money starts to run out or when other members of the family start to get involved. How do we get people to understand the nature of being a victim today? Some people do not see it, and some fail to understand what their assets are worth—some who are starting to suffer dementia will not realise that the price of something 30 or 40 years ago is not its value today.
Sarah Champion
Does the hon. Gentleman agree that when the person involved has learning difficulties or mental health issues the crime needs to be designated as a hate crime and afforded the additional sentence for the perpetrator?
Kevin Foster
The courts should certainly consider it an aggravating factor if someone is vulnerable. However, it is a difficult line to draw for people who have not yet been diagnosed or been deemed to have lack of capacity—those who are still able to manage themselves and their finances in day-to-day life. They might have started to lose track of exactly what they are worth, or they might not have been as wealthy in their younger days but have now had a retirement golden handshake or have bought a house or another asset that is worth far more than they realise. I agree that the courts should certainly consider that as an aggravating factor, because this is almost the ultimate breach of trust: someone professing love and affection, targeting the fact that someone is vulnerable and lonely.
For me, this is also about victims coming forward. I am pleased to see some of the efforts being made regarding domestic abuse, including the Bill that is to be introduced. I will not give their name, because it is not appropriate, but someone I am very close to was a victim of domestic abuse for more than 30 years. For most of that period, they did not realise that they were a victim; they thought that that was what most marriages were like—husbands beat their wives. It was only when others started to guess what was going on that they realised that they were a victim of very serious offences. The offender has now passed away.
I am conscious that other colleagues would like to speak, so I will conclude by saying that I welcome this debate. It is important that victims are at the heart of the criminal justice system and are the ones who matter; they are not just a statement of evidence or part of a case. Justice has to be seen to be done, not just according to the law but according to the victims as well.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
I am sure all Members will recognise the feeling I am about to describe, although perhaps with a different landmark in mind: when I travel home after a long week here, I see the Humber bridge and know that that means home—I am nearly there; it is not far to go. Home should be the place where we feel the safest, where we feel secure, but sadly, for many of my constituents and many others around the country, crime and antisocial behaviour are hitting them right in the heart of their lives—in their home. I will use my speech today to raise my constituents’ concerns about antisocial behaviour. Sometimes it is dismissed as not really a big deal, but in reality it affects the lives of many people.
My constituency is a wonderful place to live and grow up in, but sadly many areas are now blighted by antisocial behaviour. In the Hessle part of the constituency, I hear many reports of children creating lots of difficulties—for example, running in front of buses and making them do emergency stops with the passengers still on them, upsetting people in the street, throwing dog dirt through pub doors, damaging car park fences, standing on signs, climbing on to walls and generally making people feel unsafe and unhappy in what is a wonderful community and place to live. An elderly lady told me that as she was walking down the street, groups of young people passing on their bikes shouted abuse at her; she is now worried about what might happen when she goes out to do her shopping.
Sadly, that is not the only area of my constituency where there are problems. I have been contacted by residents of the Great Thornton Street flats, an inner-city tower block, who are being subjected to hate crime. Some of them are having their scarves pulled off their heads. They are witnessing drug abuse and violence and even finding human faeces in the corners outside their homes. The situation is no better in Bean Street, where there is much public drug taking and antisocial behaviour. I have been told that on more than one occasion a nearby park has attracted drinkers and drug users shooting up in broad daylight.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
I apologise for not being here at the start of the debate, Mrs Main. My hon. Friend refers to hate crime and I wondered whether she was aware that some of us Muslim Members of Parliament have been victims of a hate crime on the parliamentary estate today and yesterday. I could not be here at 2.30 pm because I was dealing with the aftermath of a suspicious package intended for me, which was opened by one of my staff.
My hon. Friend talks about crime at home. Does she not agree that thousands of British people abroad who are victims of crime need a better support system? My constituent Susan Sutovic—
Mrs Anne Main (in the Chair)
Order. The hon. Lady was late. I have allowed the explanation but she is making an extremely long intervention. Perhaps the speaker will reply.
Emma Hardy
Yes, I would support that. I am so sorry to hear about the incident that my hon. Friend mentions and I sincerely hope that she and her staff are okay. It is sad to hear about the increasing amount of hate crime.
I am trying to arrange residents meetings with the police on the issues in Hessle, Bean Street and Great Thornton Street. Previously, we had success when there were problems with an awful lot of street drinkers in Spring Bank. We removed the bench where they were sitting and there have been 46 move-ons for people drinking when they should not be and creating antisocial behaviour problems. The police have been fantastic, but my fear is that all we are doing by going in with this intensive support from the police and the community is relocating the problem around the city. We never deal with the root cause of the problem or provide a long-term solution; we just move it to another place. Yes, the work on Spring Bank has been successful, but now we have a problem on Bean Street and Great Thornton Street.
Some people dismiss antisocial behaviour. While it may be a different category of crime from some of the others we are discussing, it has a massive effect on people’s lives. It is sad, because often those most in need of help are those least able to seek it. Crime and antisocial behaviour affect people of all incomes and backgrounds, but it seems that the poorest and most vulnerable are disproportionately affected. Sad to say, I do not see the situation changing; because of the cuts to the police service, dealing with the problem will only get much harder.
One of the easiest ways to help victims of crime is to stop crime and antisocial behaviour happening in the first place. A long-term solution needs investment in education, community support and youth provision. I was pleased to hear the hon. Member for Torbay (Kevin Foster) talk about the use of restorative justice. Instead of taking a one-size-fits-all approach, it looks at the individuals and the best method to stop them reoffending. More things like that should be happening, especially for younger people committing crimes. I hope that the whole House will therefore join me and my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) as we push to make youth provision statutory, which would force all councils to establish youth provision.
One parent of a child who has been involved in some of the antisocial behaviour contacted me, asking for my help. She said, “Where can my child go? What services are out there? What support can I have?” When family support services have been cut, when youth provision has been cut, and when those families are not getting the support they need when they need it, we cannot be surprised when we see an increase in antisocial behaviour. I am sorry to say that schools are facing the same cuts as well. Perhaps they cannot give as much support as they used to. From the inquiry we are doing in the Education Committee, the hon. Member for Telford (Lucy Allan) will know about the increased number of children going into alternative provision and being moved on. We need to look at the problem holistically.
Even with more action taken to prevent crime, we still need to protect and promote the rights of victims of crime and ensure that there are minimum standards a victim can expect once they report a crime or antisocial behaviour. Those standards should include a single point of contact and a single complaints system where someone can go if they want to make a complaint. One of my constituents’ main complaints is that they want the phone answered quickly when they ring 101. Too many people hang up because they are waiting 20 minutes to get through. They get so fed up that the crimes are never accurately recorded.
We need to ensure better communication with victims about the outcome of their cases. A lot of people say, “What happened? I reported this and nothing happened.” We look into it, and actually something did happen, but no one thought to tell the victims about it. We need a more powerful Victims’ Commissioner to ensure that victims can make their voices heard. For too long, victims of crime have been left without a voice. By listening to those proposals and acting proactively to prevent crime and promote victims’ rights, the Government have a chance to end the merry-go-round of constantly shifting crime hotspots.
Mrs Anne Main (in the Chair)
Before I call Bob Neill, I ask that Members are mindful that a lot of Members wish to speak in this debate.
Robert Neill (Bromley and Chislehurst) (Con)
It is a pleasure to serve under your chairmanship, Mrs Main. I will do my best to be naturally short. [Laughter.] I congratulate the hon. Member for Leeds North West (Alex Sobel) on securing this debate on an important subject.
I will start where the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) began, which is how victims are treated once a crime has been committed. Constituents in Chislehurst have suffered a spate of residential burglaries. The burglaries are professional, planned and committed with an extraordinary degree of chutzpah. In some cases, the burglars have returned to the same road on more than one occasion within a couple of weeks. The burglaries are of a serious kind: occupants of houses have been threatened—in some cases, they have been young children, and in others, they have been elderly people. The police have many pressures and it is not always possible to find much evidence at the scene. In the case of those professional burglaries, the people have escaped, but there are forensics to be done.
It is important that all police forces recognise that dealing with the victims of crime and investigating crime are not purely transactional processes. A proper duty of care for victims is important. A domestic burglary is peculiarly intrusive and a violation of people’s homes and lives. The hon. Lady fairly made a point about proper points of contact and proper updates and information, which are critical. It is important that a degree of urgency is applied to offences of this kind, even in a large police force such as the Met. There is resource within the budget. I know there are pressures, but priority should be given to dealing with those sorts of issues and keeping people informed.
I want to talk about the operation of the criminal justice system as it impacts victims. The Justice Select Committee, which I have the honour to chair, has looked at that in a number of areas. I start with the point that was made by the hon. Member for Leeds North West about delays in the court process, which are a problem. My hon. Friend the Member for Banbury (Victoria Prentis), who is a fellow member of the Select Committee, referred to that in the context of disclosure problems causing delays and adjournments, which puts great stress on victims who have come to court or readied themselves to give evidence. It is important that we work—I know the Government recognise this—with the judiciary at all levels, from the professional judiciary to the magistracy, and with the Crown Prosecution Service, because many delays arise from failure to meet the proper protocols on disclosure by prosecutors. We need to ensure that we take a whole-system approach so that such delays are reduced to a minimum.
The experience of victims giving evidence needs to be made as palatable as possible. Any witness has to expect to be properly cross-examined, and any defendant has the right to have the case against them tested, but there are parameters in which that must be done decently and without undue pressure. The Government have recognised that in the cross-examination of victims of domestic abuse. It is important that we build upon the work already done on the pre-recorded cross-examination of witnesses and the use of video links. We must ensure that the video links work, which sadly is not always the case in every court. We therefore have to ensure that the court estate and technology are up to speed. That is an important thing we need to do now.
I am glad to see the Minister in his place. I know he is very engaged with these matters, and I recently wrote to him about the position of training and mentoring for registered intermediaries. Court intermediaries provide communication support for vulnerable witnesses—many of them are victims, but there may be other vulnerable witnesses, too. There appears to have been a significant reduction in the period of training they undergo. Can the Minister offer some explanation, either now or subsequently, as to why that has happened? I accept there are pressures, but can he give us an assurance that he will ensure that the level of service provided to vulnerable people assisting in the court process to try to deliver justice is not diminished? I am sure he will be aware that the Victims’ Commissioner’s research indicates poor overall management in the governance of intermediaries and a lack of funding. They perform an important role, and I hope the issue can be taken much more seriously.
I will briefly move on to restorative justice and the victims’ law, which was referred to by the hon. Member for Leeds North West. One of the proposals that the Select Committee made was that any victims’ law should include a right not just to information about restorative justice, as is the case at the moment, but a right of access to it. Provision is extremely patchy across the country. Some police and crime commissioners—I am delighted to see the hon. Member for Rochdale (Tony Lloyd) in his place; he did a great deal as the police and crime commissioner for Greater Manchester—engage in that, but others do not. It is important that the Government perhaps do more to enforce a proper minimum standard. There is always scope for local variation to meet local needs, but a basic standard must be adhered to in all cases. If we are going to have a right, it is important that we have a means of enforcing it and some remedy if it is not actually delivered. That was reported on at some length in our Committee’s report of September 2016, which was debated in Westminster Hall in January 2017. The Government indicated that they were taking steps; we welcomed those, and urge them to do more, as more needs to be done. I hope that the Minister can confirm that work is continuing on this matter, and that the Government remain committed to a victims’ law. Can he give us some sense of when we are likely to see more proposals on that?
Finally, it is important and topical for us to consider the role of victims when Parole Board decisions are made. I will not say anything about any particular case that is sub judice, but we must examine this issue. The point about communication is hugely important. My hon. Friend the Member for Torbay (Kevin Foster) talked about restorative justice in that context. We have to have a whole-system approach. It is not just about when the person is sentenced and dealt with.
Victoria Prentis
Does my hon. Friend agree that we should look at both statutory victims and the wider collection of victims in that context?
Robert Neill
That is absolutely right. That is a most important matter. The chair of the Parole Board himself, Professor Nick Hardwick, to whom I pay tribute for his openness with us, recognises that the current rules are not as he would wish them to be. They sometimes make it hard for the Parole Board to be as transparent as it would like to be, for the benefit of either the victim or the general public. On the face of it, that is a difficult distinction to justify in some cases, so I hope that in due course the Government will look at that. It indicates to me a need for a much more holistic approach to how we look at victims throughout both the investigatory process and the criminal justice process.
I commend the hon. Member for Leeds North West for securing the debate, and look forward to the Minister’s response.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in today’s debate. I thank the hon. Member for Leeds North West (Alex Sobel) for presenting the case, and for giving us all more time than there might have been to speak on the matter. I am also conscious that you have indicated the timescale to which we all have to try to adhere, Mrs Main.
The issue of victims is incredibly sensitive and needs to be handled with care. There are many victims of physical, emotional and sexual assault who have been re-traumatised—I have said this before, in questions to the Minister in the Chamber—through the handling of their case. Many victims will not come forward, as they feel as if they are on trial themselves, and are not supported. I recently read an article on abortion by a baroness in Ireland. Although this is not the debate in which to bring up the abortion issue, I felt it was significant that she lost her baby as she was caught up in an IRA bombing. She describes herself and her child as victims, and remains traumatised to this day. Time has not healed that wound; she feels the pain of loss to this day, and will do so beyond. This is how we need to consider victims: not that something once happened to them, but that their life was irrevocably changed, and that that change has become part of their day-to-day life. They need care and help to go over that, and to deal with the aftermath.
We have a duty to victims to ensure that they are heard and supported. That was what was agreed when we passed the legislation, and voted to help to make victims feel secure and to create a system whereby crimes could be prosecuted, and victims could feel safe and able to feed into the process. Although the spirit of the current legislation agrees with that, there is no enforcement process. I ask the Minister how we move from guidelines and perceived support to enforcement.
It is little wonder that Baroness Newlove’s report in January 2015, “A Review of Complaints and Resolution for Victims of Crime”, found not very satisfactory results—that is how it was reported. It surveyed the experiences of some 200 victims and found that almost 75% were unhappy with the response they received. More than 50% found the relevant agency’s complaints process difficult to use. Have we moved on from that? Is the process easier? Is it more relevant?
A second review, “The Silenced Victim: A Review of the Victim Personal Statement”, was published in November 2015. It found inconsistencies in approach, with six out of 10 victims not recalling being offered the chance to make a victim personal statement. That also illustrates the things that we need to be addressing. I look to the Minister to see whether he can address those issues and give us the responses that we wish to hear.
To me, this says that what we set out to achieve through the legislation is not being achieved. We therefore need to make changes. First, we need to stop it being no more than a guideline or a suggestion, and ensure that it is enforceable and as much a duty in the prosecution of a case as any other aspect, such as evidence gathering.
Dr Huq
The hon. Gentleman talked about there not always being an audit trail. Does he agree with me that when victims of crime are abroad, such as my constituent Susan Sutovic, whose son died in mysterious circumstances in 2004 in Serbia, there needs to be some sort of diplomatic and legal framework to help those victims?
Jim Shannon
I thank the hon. Lady for that intervention; I agree with her. It is important that we have a framework in place. Hopefully the Minister, who I know is taking notes on the debate, will give us some response on how he sees that changing.
The care of the victim must be paramount and be seen as part and parcel of the justice system. I agree with the options presented in the Victim Support manifesto. There should be a single complaints system for victims of crime, a more powerful Victims’ Commissioner, and better communication with victims about the outcomes of their case—how often that falls down. Court compensation should be paid immediately and not linger on for months or sometimes years. Trained intermediaries should be available for all child witnesses—I know a lot of Members in the Chamber feel as strongly as I do about that. No child should be obliged to enter a court building to give evidence. There should be pre-trial therapy for all victims of sexual crimes, and a national strategy for victims with mental health issues. Like others, I feel strongly on behalf of children about how their cases are handled. Again, I look to the Minister to see what help he can give us.
It is essential that these foundations, which are not currently in place, are in place for victims. The end goal is justice for the crime and for the victim. The crime has to have the right sentence, but the victim must also feel part of the process and feel that they are not being put upon by the court system. I hate to hear of crimes that could not be prosecuted as the key witness is frightened to come forward. Knowing that a system is in place to support victims is a key component in the prosecution of crimes. Again, I look to the Minister for a response on that.
I will conclude, as I am conscious of the time I agreed with you beforehand, Mrs Main. I again thank the hon. Member for Leeds North West for introducing the debate. I thank Baroness Newlove for her hard work in making a difference to the lives and experiences of victims. It is now in the hands of the Government—and perhaps the Minister in this case—to bring forward the promised changes. I for one will be eagerly awaiting the legislation that is to be introduced.
Lucy Allan (Telford) (Con)
Thank you, Mrs Main, for allowing me to speak in this important debate. I am delighted that the hon. Member for Leeds North West (Alex Sobel) has given us the opportunity to talk about the rights of victims and some of the difficulties that they have in getting their voices heard.
I particularly want to talk about the victims of child exploitation, following revelations in newspapers over the weekend in my constituency. These victims have more difficulties than most in getting heard, and in identifying that they are indeed victims, as my hon. Friend the Member for Torbay (Kevin Foster) identified. Child sexual exploitation is not just any crime. It affects whole communities up and down the country; it is not just Telford. It is a crime about fear, manipulation, coercion, shame, control, and sometimes blame. All too often, the victims are ignored. They are victims who do not have a voice, and for whom very few people will stand up and speak. I pay tribute to the hon. Member for Rotherham (Sarah Champion) for the amazing work that she has done in this field over so many years. She has given a voice to victims, and has set a precedent for us to follow in this House.
These young girls are too often white and working-class, and have multiple vulnerabilities. That is why the perpetrators are targeting them, and why they are so often miscast as bringing it on themselves, as indulging in risky behaviour, as being promiscuous and as somehow being to blame for what is happening to them. In their own minds, they often internalise the sense that they are somehow at fault.
When a 13 or 14-year-old girl is befriended by a 35-year-old man who gives her affection and cigarettes, tops up her phone, and tells her that she is beautiful and that he loves her, sometimes she feels affection for him. She does not realise that when he asks her to share a sexual image of herself, that will lead to something worse—something that she will not want to do. The coercion begins when he says, “If you don’t have sex with me”—or, “If you don’t have sex with my friend”—“I’m going to out you as promiscuous,” or as a “sket”, as they say in Telford. That is when it becomes a crime, but at that point, a 13 or 14-year-old does not know that what is happening is rape and child sexual exploitation. If she goes to the police, what does she say? She does not say, “I am a victim of statutory rape.” She says, “I’m being harassed by this person. He’s threatened to take a picture and put it on Facebook. He’s threatened to tell my mum that I’m a prostitute.”
Too often, victims of such terrible crimes do not articulate what is happening to them, so we have to be incredibly sensitive with them. Too often, they are not heard because of their vulnerabilities. I worry that a difficult family background or drugs and alcohol or mental health issues at home mean that victims are thought of as troublemakers and just a bit too difficult. Perhaps that is why these crimes were not identified for so long. Had the girls been from a different background and able to articulate more clearly what was happening to them, or able to identify that it was a crime, perhaps we would not have the cases that we see in Telford, Rotherham and Oxford.
Sarah Champion
I want to get on the record how incredible the hon. Lady has been for those women and girls. She is giving them a voice and empowering them to be heard. I am honoured to be here listening to her speech. I am sorry this is not an appropriate intervention, but it needed to be said.
Lucy Allan
I thank the hon. Lady for her encouragement and the inspiration that she provides to me and others in speaking out on this matter.
Interestingly, each child sexual exploitation case bears some resemblance to others. They all start in the same way and progress in the same way, from something that seems quite acceptable, tame or innocent into something horrific: trading young girls for sex for money. They are traded and handed around with the threat of violence to them or their families, or the threat of exposure and shame that I talked about earlier. The victims need to know that they have not done anything wrong. They need to know that they are victims, and that a crime has been committed against them. That is why I am asking for an independent investigation into what has gone wrong in Telford. I first made the request in 2016, when there were revelations about what had happened. That request was turned down by the local authorities in Telford, who felt that there was no need at that time.
Further revelations have come to light. Nothing in the interim has changed my mind that an independent investigation will give victims a sense that they are being listened to. It will also give them answers as to why the situation went on for so long and why no action was taken. How did it happen? Why are our young girls being traded for sex in what has become a routine way? Whether it is from takeaways, taxis or betting shops, it is happening in our streets.
By not addressing what went wrong, victims are left feeling that in some sense they were at fault. It ignores what happened and perpetuates the silence. We have to break that silence and say it is okay to talk about this, and that it will not bring shame on Oxford, Telford or Rotherham or on their families. They are the victims and they need to be heard, listened to and given the protection that they need and deserve. Being questioned and questioned is an ordeal, and sometimes they feel they are not believed, but we must believe those young people and give them a sense that they will be listened to. There should not be opposition to finding out the facts and what went wrong.
There is a national inquiry into child sexual exploitation led by Professor Jay. That inquiry will not get to the bottom of why these things happened or give answers to my constituents in Telford. I urge the Minister, or anybody listening, to please put pressure on the authorities. It is for the good of our community and the victims and their families, because the families are victims too. They feel they failed their children and let them down. They suffer because their child has experienced terrible things. We must not allow these crimes to be minimised. They are not trivial. I am not talking about a girl with a 35-year-old boyfriend; I am talking about someone who is abused, exploited and sold for sex. We should not shy away from that and bury our heads in the sand.
I will draw to a close, but while the Minister is here I want to quickly mention the early release from prison of Mubarak Ali, a ringleader in Telford. He had been sentenced to 22 years—14 years in custody and eight years on licence—and he was released only five years after the trial. That caused a lot of shock, fear and anxiety among the people brave enough to come forward to give evidence, and the victim contact scheme let them down. More work must be done to ensure that victims are kept informed and can feed into the process and have the opportunity to be heard. We must listen and hear the voices of those children.
Tony Lloyd (Rochdale) (Lab)
I am grateful to my hon. Friend the Member for Leeds North West (Alex Sobel) for securing this really important debate. We have heard many important contributions. Like the hon. Member for Telford (Lucy Allan), I have had to live through the aftermath of child sexual exploitation in my area. She is absolutely right in everything she says. We must never blame the victims. We must stand up and speak out for victims of criminal behaviour. I encourage her to continue to demand that there is proper insight. In the end, all local agencies must demonstrate that they have genuinely, not formulaically, learnt lessons. They must demonstrate a different way of working that makes it more likely that we ask questions when a 14-year-old has a 35-year-old boyfriend.
I will make a few brief points, Mrs Main, because I know you are anxious to bring in the Front-Bench speakers at—
Mrs Anne Main (in the Chair)
At 15.29, so you have a while. Ms Huq may or may not wish to speak.
Tony Lloyd
I will not take long, in that case. The comments of my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) are really important. Antisocial behaviour matters. Actually, it kills in the worst situations, and even if we are not talking about those extremes it certainly makes people’s lives miserable. It destroys the quality of people’s lives and we must take that seriously. She is right. Obviously, this can be a political point, but the Government must take it on board that it has become much more difficult now for our police to investigate things that fall off the radar, which they simply ought not. It is an important issue to raise.
Like the hon. Members for Bromley and Chislehurst (Robert Neill) and for Torbay (Kevin Foster), I am a big supporter of restorative justice. I regret that I was not in the House in 2016 to speak on the Select Committee report, but I was aware of its conclusions. Restorative justice fundamentally delivers to victims the sense that their needs are being taken seriously. That is as important in prosecutions as when there is a decision not to take a case forward, which can sometimes be appropriate.
I think of the case of a woman who was a very strong advocate. Other hon. Members might have heard her speak. Her house was burgled and a new camera was taken. Sadly, her daughter was killed in a car crash weeks later and the last remaining photographs of her daughter were lost with the camera. She never saw the photographs but she was prepared to work with the perpetrator, who went to prison. That was important for at least giving her a sense of easement, although you can never reconcile yourself to the loss of a child. It also meant that that long-term burglar effectively ceased his former habit, so it worked in more than one way, but—there is always a “but”—training is absolutely important. We cannot see the process as something to be delivered on the streets, with no training. There must be supervision to ensure that standards are maintained. Importantly, there must be victim volition. The process cannot be forced on a victim, or denied to a victim who is not aware that they could demand it. I support the call for a statutory framework, and of course my hon. Friend the Member for Leeds North West argued for that.
Robert Neill
I am delighted that the hon. Gentleman is back in the House after a brief gap. I hope he will take part in further debates. Given what he has said, does he agree on the importance of the point made in the Justice Committee report, that restorative justice must always be victim-led—the victim’s choice at all times—and that there must be proper professional support right the way through? It is important that victims be given full information about what is available in their area, and that something genuinely meaningful should be in place—not simply a leaflet.
Tony Lloyd
Absolutely. The hon. Gentleman—let me say my hon. Friend for the sake of this debate—is right on both counts. The second point is fundamental in bringing about the first, because if victims do not have confidence in the process it withers. It is not just victims, in fact, because the community must have confidence, through the victims, that the decisions are not arbitrary, and will deliver something to victims and do something more generally to change behaviour. In the end, the process is about helping victims and changing perpetrators’ behaviour.
Perhaps I may now touch on the rather more aggressive side of what, sadly, happens to victims. Sometimes victims are treated horrendously within the processes. I know that the Minister is sympathetic to these points. Many years ago, I dealt with a grieving family whose son had been stabbed to death at a party. The charge was murder and the case took many months, as such cases do, to come to court. Eventually, on the day of the trial, the family were told that the murder charge could not be sustained, because the prosecuting barrister had said he could not deliver it on the available evidence. No other charge of manslaughter or lesser offences had been brought, and that meant that the two perpetrators went scot-free. The family were left devastated.
That was a long time ago and I would be happy if I could say that those were the bad old days and that things have moved on. However, they have not. Victims still sometimes find that the failure of the prosecution service to examine information in time, or the failure of the courts to process cases, means they face a long journey between becoming a victim and their case coming to court, only to find that when it gets to court they are left frustrated and dissatisfied.
Gareth Johnson (Dartford) (Con)
The hon. Gentleman is highlighting important issues to do with the CPS and the rights of victims. Does he agree that one thing that undermines victims of crime is the Crown’s inability to appeal against sentences that are simply too lenient? That can happen only in a very few cases at the moment, and victims of crime feel powerless under the current system to ensure that the appropriate sentence is imposed on an offender.
Tony Lloyd
I have a lot of sympathy with that point. The procedure could not be used in every case, but perhaps society should recognise the need to use it more widely than happens now. Sometimes the courts do get things wrong.
I do not want to go into too much detail about the next case I shall mention. A young woman was effectively kidnapped from a bar, and it was believed that she had been raped. She had certainly been sexually assaulted. She faced months of adjournments and new trial dates. In the end, the case came to court more than two and a half years from the original event. The perpetrator had been charged with rape and the prosecution counsel determined only at a late stage that it was not possible, on the evidence, to sustain that charge. Because no other charges had been laid—not kidnap or sexual assault, which are pretty serious charges—the perpetrator walked free, as in my other example. That is human incompetence, and for the victim it was outrageous. I have spoken to her, and had she known what would happen she would never have consented to the case’s going forward.
Those are cases of human error, but such human error is systemic within the present system. Prosecuting barristers often do not come to the cases until late in the process. We must do something about that. We must begin to put victims first in the criminal justice system, rather than treating them as an afterthought. We are not at that point yet.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
It is a pleasure to see you in the Chair, Mrs Main. I congratulate the hon. Member for Leeds North West (Alex Sobel) on securing the debate today and on setting out so well many of the issues within the justice system. It has been an excellent debate, with a huge degree of consensus across the Chamber about the need to improve victims’ rights on a number of fronts, for a number of reasons. I wholeheartedly agree with the concern that many colleagues have raised about the victim contact scheme. That problem needs to be addressed as a priority.
I want to mention the speech by the hon. Member for Torbay (Kevin Foster), who highlighted the case of a friend who was the victim of domestic abuse for many years without realising it. Sadly, that situation is repeated often, the length and breadth of the country, and I look forward to the Government’s bringing forward a domestic abuse Bill shortly. That will be discussed at the meeting of the all-party parliamentary group on the white ribbon campaign at 4.45, later this afternoon.
No one ever imagines that they will be a victim of crime, and if, sadly, it happens, many will be unsure of the process involved, beyond phoning the police, and unsure of what their rights are as a victim. It will obviously be a traumatic experience, and not only is it important that we have an effective set of rights for victims of crime, but it is vital that those rights be clearly and sensitively communicated in the aftermath of crime. As the right hon. Member for East Yorkshire (Sir Greg Knight), who is no longer in his place, said, too often victims are punished twice.
A recent Supreme Court ruling highlighted the way in which the system might fail victims. It stated that a police force breached the human rights of victims by failing to investigate complaints properly. That ruling has serious implications for the rights of victims. If police fail to investigate a serious violent crime effectively in the future, they could be sued under the Human Rights Act 1998.
High-profile recent cases have raised immediate concerns about victims’ rights. However, there has been concern for some time that victims may not be receiving the full breadth of support to which they should be entitled. As we have heard, in England and Wales the Victims’ Commissioner has highlighted problems with the complaints system, and inconsistency about allowing victims the right to make a victim personal statement. As the hon. Member for Leeds North West mentioned, Victim Support has also called for a new, clearly enforceable victims’ law, setting out eight proposals to strengthen the rights of victims. They include creating a single complaints system for victims, introducing a more powerful Victims’ Commissioner, providing greater protection and support to children who experience crime, and improving communication with victims about the outcomes of their case. I hope that, as the hon. Member for Leeds North West asked, the Minister will provide an update on the Government’s thinking on a victims’ law.
The rights of victims are currently set out in the code of practice for victims of crime and there is an explanation of what they should expect from the various bodies within the criminal justice system. Despite the fact that that charter is on the statute book, it seems that not all victims are being afforded those key entitlements. Failure to comply with the code of practice does not in itself make a person liable to criminal or civil proceedings. The Scottish Government take the protection and support of victims of crime seriously. The Scottish National party has long recognised the need to provide the right information and, crucially, the right support to those affected by crime. That plays a key part in a modern justice system that is fair, accessible, and efficient for everyone.
The Victims and Witnesses (Scotland) Act 2014 introduced various measures to protect and enhance the rights of victims, and it focused on providing direct assistance and information to those who experience a crime. It included new rights for victims to access information about their case, and the publication of standards of services by justice organisations. The victims code for Scotland sets out the rights and entitlements that someone can expect. Those rights are statutory, and the code sets out the minimum standard of service that someone should expect, and explains how they will be treated by criminal justice organisations. The Scottish Government recently published “Guidance for the Delivery of Restorative Justice in Scotland”, which outlines the process that allows victims the opportunity to communicate the impact of crime on their lives, in the hope that they will regain some control.
We are debating the rights of victims but—with apologies, Mrs Main—there is one issue we have not mentioned: Brexit. Currently, the UK Government have signed up to the 2012 EU directive that deals with rights, support for and protection of victims of crime. The directive aims to ensure that a consistent level of legal and emotional support is offered to victims, helping them to be fully involved in criminal justice proceedings. Thus far, the Government have failed to provide assurances that those common standards of legal and practical support will continue post-Brexit, but the UK can act unilaterally and ensure that those rights continue. We do not want a diminution of standards in the protection offered to victims in England, Wales, or anywhere else in the UK. Will the Minister confirm whether the UK will continue to participate in the 2012 directive, or make arrangements to ensure that those rights continue?
Victims’ rights should be placed at the heart of any justice system that works for all, but we must do more to support them. The Government have a duty to ensure that victims are provided with the maximum level of support and help during that traumatic period. The various legal jurisdictions in the UK can be rightly proud of their judicial history—indeed, much of the legal world looks up to our systems. However, there are warning signs in England and Wales. A modern justice system relies on being fair and accessible to all, and that includes supporting victims, so that they can play their full part in the pursuit of justice. The UK Government must step up to the mark to ensure that they get it.
Gloria De Piero (Ashfield) (Lab)
It is a pleasure to serve under your chairship, Mrs Main, and I congratulate my hon. Friend the Member for Leeds North West (Alex Sobel) on securing this debate. We have heard the varying experiences of victims of crime discussed from many different angles, but if I had to single out one contribution, I would say that the remarkable speech by the hon. Member for Telford (Lucy Allan) should not go unnoted.
All the speakers focused on one point: too often, victims are still the forgotten voice in the criminal justice system. We are rightly proud of checks and balances in our legal system that prevent innocent people from being convicted, but for the victim it can often feel as if their rights are an afterthought compared with the rights of the perpetrator. No victim of serious crime should ever feel that they are battling to be believed, yet that is still the experience of far too many people who have the courage to come forward. Victims often talk about feeling like an afterthought; they are not kept informed of key decisions about the case, or they are not given a sufficient explanation for why a case is not being taken forward. If they manage to get their case to court, the distress does not stop; instead, victims can face a repeat of the original trauma. They may be forced to face the perpetrator in court, and in some instances they are even cross-examined by them, reliving every detail of the crime. Victims do not want their rights to be put above those of the accused; they simply want fairness. Despite progress, our system is still re-victimising the vulnerable, and deterring victims from coming forward and seeking justice.
Now for the politics. The 2015 Conservative manifesto adopted the recommendations of Labour’s victims’ taskforce, and promised victims that a Conservative Government would deliver
“a new Victims’ Law that will enshrine key rights for victims”
That was three years ago. In the 2015 Queen’s Speech, the Government again promised to introduce legislation,
“putting the key entitlements of the Victims’ Code in primary legislation.”
Victims waited, but no legislation came. Twelve months later, in the next Queen’s Speech, there was no mention of a victims’ law—apparently that was no longer a priority for Government. My right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer) tabled an amendment to the Policing and Crime Bill and sought to put the key elements of the victims code in law. Ministers blocked those amendments, promising instead to produce their own strategy for victims “within 12 months”. Well, it has now been 12 months, so last month I asked the Minister where the strategy was, and I was told that it would come “after Easter”. We now hear that it could be more like summer before any recommendations are published.
Victims have waited long enough. As other hon. Friends have asked, where is the victims’ law that was promised by the Conservative Government in 2015? Why has it taken three years? Victims who have been let down time and again by the system feel that they are being let down again by this delay.
In office, the Labour Government introduced the victims code, setting out for the first time the rights of victims within our criminal justice system. It is now time to provide that code with legal teeth. Labour is fully committed to introducing a stand-alone victims’ law that would put the key elements of the victims code into primary legislation. Will the Minister confirm the Government’s intentions? Are they still committed to introducing a stand-alone piece of legislation—a victims’ law? Without power to enforce the victims code in law, it is left to the police, prosecutors, courts, and parole boards to monitor how well they comply with the code.
The Government do not collect data on the experiences of victims in the criminal justice system, or on how the code is being implemented. Last month I asked the Minister how many breaches of the victims code there had been in the last four years, and I was told that that is not monitored. I asked how long it takes for victims to receive the compensation they have been awarded—Victim Support estimates that some £17.5 million in compensation was not paid within one year of a compensation order being made—and again I was told that the Government do not monitor that. I asked how many victims of domestic violence have been cross-examined in court by the perpetrator, and again the Minister responded that the Government do not hold such information. Ministers say that victims’ rights are a priority for them, but how can that be if the Government do not even know whether the victims code is being enforced?
Victim Support can provide some of the answers. It surveyed almost 400 victims and found that asking the criminal justice system to mark its own homework when upholding the victims code leads to victims being let down at each stage of the process. The research found that six in 10 victims surveyed did not receive their rights under the code. Does the Minister agree that it is time that that was effectively monitored and upheld? We cannot simply rely on victims being aware of their rights under the code. Does the Minister agree with the Victims’ Commissioner, Baroness Newlove, who recently said:
“Why should victims always have to be fighting their corner? That’s why we need a victims’ law.”?
Time and time again victims speak of the importance of having their voice heard in the process, being able to address the court directly and to contribute to parole board decisions, but fewer than half of all eligible victims have opted in to the victim contact scheme that ensures that victims are kept up to date on their case and allows them to make statements before sentencing and parole. Presumably, many victims do not even know that such a scheme exists. More than half of victims surveyed by Victim Support were not offered the chance to make a victim personal statement.
The failure to inform the victims of John Worboys about the decision to release him on parole is the most recent and serious example of the way that victims’ views are neglected and ignored by our criminal justice system. It took a public outcry and the tenacity of the victims themselves to ensure that they were contacted for consultation on the terms of his release.
Mrs Anne Main (in the Chair)
Order. I ask the hon. Lady to be mindful that this is sub judice and any comments she may make must be carefully considered.
Gloria De Piero
Thank you, Mrs Main; I will do that.
Another key pillar of the victims code is the right to review a decision by the police or Crown Prosecution Service, such as a decision not to prosecute. I asked the Government what proportion of qualifying victims go as far as requesting a review of a decision, and I was told it happens in less than 2% of cases. Either 98% of victims are happy with decisions taken by police and prosecutors, or they are simply unaware of or unable to access that right. Last year the Government blocked Labour attempts to enshrine the right to a review in law, and to make it legally enforceable and monitored. Will the Minister confirm whether the long-awaited victims strategy will seek finally to place that right in law?
This issue does not matter only for victims. The experience of reporting a crime and going through the court process is actively deterring many people from coming forward or pursuing their case, and that is particularly serious for victims of sexual assault and domestic violence. Victims of sexual or domestic violence still lack the confidence to report an attack. They fear the ordeal that they might face in the courtroom, including coming face to face with their abuser and being forced to relive every detail of the ordeal in front of the courts, often cross-examined as if they were the one on trial. We therefore welcome the recent announcement of a consultation on the draft Domestic Abuse Bill and the Government’s consideration of extending to victims of domestic abuse special provisions, such as separate entrances and exits, screens and video links, which are currently available to victims of sexual violence. It is critical, however, that that is not only for the criminal courts; they must also be available in the family courts.
Last year, we uncovered figures showing that, since the Government’s cuts to legal aid, the number of victims of domestic violence representing themselves against their abusers in the family courts has more than doubled. Victims are facing the prospect not only of having to represent themselves, but of being cross-examined by their abuser in court. Women’s Aid has found that more than half of the domestic abuse victims it surveyed had no access to special measures and more than a third were verbally or physically abused by their former partner in the family courts. Will the Minister confirm that the Government’s plans to extend special court provisions to victims of domestic abuse will extend to the family courts as well?
I will end with a quote from Claire Waxman, the new London Victims’ Commissioner appointed by London Mayor Sadiq Khan. She summed up her own experience of the criminal justice system, saying:
“I naively believed the system was there to help victims, instead it compounds their trauma. It placed the rights of my stalker above my rights to be protected”.
Such stories are all too familiar. It is time that the Government fulfilled their promise and gave us a victims’ law.
The Parliamentary Under-Secretary of State for Justice (Dr Phillip Lee)
It is a pleasure to serve under your chairmanship, Mrs Main. It has been a pleasure to hear all the contributions this afternoon, especially that of my hon. Friend the Member for Telford (Lucy Allan). I hope I can go some way to answer all the questions, including the battery of questions that the shadow Minister just posed. If I do not answer the questions appropriately, hon. Members will get correspondence following the debate.
I thank the hon. Member for Leeds North West (Alex Sobel) for securing this debate on the rights of victims of crime. It is particularly timely given the recent focus on such matters in a number of high-profile cases. I know through my own personal experience of meeting victims of crime, speaking with support organisations and meeting many of the hon. Members present, exactly how important such rights are in the lives of victims. I am therefore grateful for the opportunity to discuss them with you today.
Victims’ rights are now a fundamental part of our justice system, and ensuring that victims receive the rights they are entitled to is a priority for this Government. That is essential if we are to enable victims to cope with and recover from crime. We must also continue to drive improvement in the broader experience of victims, which involves ensuring that criminal justice agencies provide victims with a service appropriate to their needs and respectful of them as individuals. That also requires focus on the wider performance of agencies. Victims want cases to be well managed and dealt with swiftly. Beyond the criminal justice agencies, it is important that victim support services are in a position to offer victims the sorts of support they may need to aid their long-term recovery.
Turning to the current framework of victims’ rights, we look first to the statutory victims code, which does two fundamentally important things. First, it sets out for victims exactly what they are entitled to receive from the criminal justice system. Secondly, it makes clear to the criminal justice agencies the services that they are expected to provide.
The Government want to make sure that the entitlements in the code keep pace with the changing needs of victims. After publicly consulting on the proposed changes, we revised the victims code in 2015. The revised code transposes part of the EU victims directive, which lays down the minimum standards of support that member states must provide to victims of crime.
The 2015 revision of the code broadened the definition of a victim so that victims of all criminal offences are entitled to receive support and information under the code. It also required relevant agencies outside the core criminal justice system that provide services to victims of crime to apply the victims code. Most crimes are dealt with by the police and Crown Prosecution Service, but there are other organisations with powers to investigate and prosecute. Finally, the revision entitled all victims who report a crime to receive a written acknowledgment, stating the basic elements of the criminal offence concerned.
As important as the code is, it will only deliver for victims if criminal justice agencies give effect to it on the ground. Victims’ rights must be a practical reality within the justice system, rather than just words on a page. This Government are committed to ensuring that the rights of victims are delivered throughout the criminal justice process. We have done that by improving the practical support on offer for vulnerable and intimidated victims of crime, such as protective screens in court and a video link, to ensure they are able to give their best evidence and to reduce the anxiety caused. We want to help victims provide evidence in a way that will prevent retraumatisation.
We are also determined to make the process of attending court less daunting for victims. We have established model waiting rooms at five sites in England and Wales, and are using them, and the results of a detailed audit of facilities for victims in all criminal courts, to provide the template for nationwide improvements.
More widely, we have radically transformed the way support services are delivered to victims to ensure that they reflect the needs of victims in local areas. Following consultation, the Government empowered police and crime commissioners to deliver services tailored to the needs of victims in their areas. We are allocating about £68 million to police and crime commissioners this year to provide emotional and practical support services for victims of crime.
Our enduring commitment to victims has seen the wider victim support services budget increase significantly, from around £50 million in 2012-13 to around £96 million in the current financial year. The direct benefit to victims of our support can be seen in the services now available for victims of sexual violence. Since 2010, central Government funding has enabled 15 new rape support centres to open. There are now 89 centres that the Government support directly. The centres provide counselling, support and advocacy to help victims—men and women, boys and girls—recover, as far as possible, from the effect of those terrible crimes. As part of the violence against women and girls 2020 strategy, we have made a commitment to maintain funding for rape support services at 2016-17 levels for the remainder of the spending review period.
We also know that when someone is the victim of, or bereaved by, the most traumatic crimes, they will need support from enhanced services. This year, we are providing just over £3 million to support families bereaved by murder or manslaughter. The Government have also provided specific funding to meet the needs of the victims of large-scale crimes, as we did following last year’s appalling attacks in Manchester and London.
Victims also have the right to apply for compensation under the criminal injuries compensation scheme if they are victims of violent crime. I sympathise deeply with anyone who has been caused injury by such a crime and we are determined to make sure that every victim gets the compensation to which they are entitled. To that end, in 2016-17, the Criminal Injuries Compensation Authority, which administers the scheme independently of Government, paid out around £143 million in compensation to victims of violent crime.
Despite all that has been achieved in recent years, we must never stop endeavouring to deliver support to victims more effectively. The challenge is ongoing—the needs of victims change over time, and crime itself evolves. As well as considering the development of victims’ entitlements, we need to ensure that agencies deliver those entitlements that are already in place. That is why we are exploring ways to strengthen victims’ rights through the victims strategy, which we will publish by the summer of 2018. It will consider how compliance with the entitlements in the victims code might be improved and better monitored.
We are also examining how criminal justice agencies responsible for delivery of entitlements might be better held to account. We are currently considering the legislative and non-legislative routes to delivering effective compliance for victims, and we are engaging widely as we develop the strategy, to make certain that the needs of victims are properly considered. As part of that work, we are exploring how victim support services can better reflect the changing nature of crime. Although the crime survey of England and Wales shows considerable falls in overall estimated crime, police recorded crime for violence against the person offences has increased 20%. For sexual offences, it has increased by 23%. Those figures give a valuable insight into the changing case load of the police. It is important that the services we provide reflect those changes, in order that the police are best able to help victims to cope and recover. We must keep the whole criminal justice process in mind, end to end. The issues raised in the Worboys case highlight that point. In the light of those issues, the Justice Secretary has ordered a review of parole processes, transparency and engagement with victims. A crucial part of that involves considering how we can better support and empower victims going through parole processes. We will bring forward proposals in that area shortly.
We are also looking to address the needs of victims who have to engage with other parts of the justice system. We accept that the family and civil courts can learn valuable lessons from the progress that has been made in criminal justice. We are working closely with senior judges and relevant agencies to consider how best to improve support and protections in other parts of the system. As recently as November 2017, new court rules were introduced requiring family courts to consider whether someone involved in proceedings is vulnerable, and if so, take steps to enable them to participate or give evidence.
Just last week, on International Women’s Day, the Government launched a consultation on domestic abuse. We want to hear people’s experiences to ensure that the system reflects victims’ needs. We hope to hear from a wide range of stakeholders, including survivors of domestic abuse and the organisations that support them. The consultation will shape our response to this terrible crime, which affects some 2 million victims each year. In addition to introducing a domestic violence and abuse Bill, we want to ensure a comprehensive response that not only involves all parts of Government, but builds on charities’ expertise. That is one reason why we have committed to invest a further £20 million in frontline groups.
We heard from a number of colleagues this afternoon, including my hon. Friend the Member for Torbay (Kevin Foster), the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy), my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), the hon. Member for Strangford (Jim Shannon), my hon. Friend the Member for Telford, the hon. Member for Rochdale (Tony Lloyd), and the Opposition spokespeople, the hon. Members for Paisley and Renfrewshire North (Gavin Newlands) and for Ashfield (Gloria De Piero). There were also interventions from my right hon. Friend the Member for East Yorkshire (Sir Greg Knight), the hon. Member for Rotherham (Sarah Champion), my hon. Friend the Member for Banbury (Victoria Prentis) and the hon. Member for Ealing Central and Acton (Dr Huq).
The hon. Member for Leeds North West mentioned the victims of terrorism. The unit sits with the Home Office, but the funding sits with us—the complexity of the Government is always somewhat beyond me. The Government are committed to ensuring that victims of recent terrorist attacks receive the help and support they need. This year, we are providing £3.1 million for the homicide service, which supports those bereaved by murder or manslaughter, including terrorist attacks.
My hon. Friend the Member for Torbay mentioned restorative justice, in which I am a strong believer. One of the reasons I am going to Brighton on Thursday afternoon is to support the work of the Restorative Justice Council. He also mentioned domestic abuse. As I said, dealing with domestic abuse is a key priority for the Government. I am very pleased about that and am proud to be playing my small part in it, not least because I have had a number of patients in the past who suffered from that dreadful crime.
The hon. Member for Kingston upon Hull West and Hessle talked about victims of antisocial behaviour. I suspect that that issue blights every single constituency in the country. She also mentioned some awful cases of hate crime. I share her abhorrence of such crimes.
I am flattered that the Chair of the Justice Committee, my hon. Friend the Member for Bromley and Chislehurst, has joined us. He always makes fantastic contributions based on his deep knowledge of the area. He mentioned a series of issues—in particular the registered intermediaries scheme, which actually sits with the Under-Secretary of State for Justice, my hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer). It is a vital part of supporting vulnerable victims and witnesses when they give evidence. We are currently recruiting more intermediaries, improving the training available to them and working closely with the police and prosecutors to ensure that witnesses are matched to an intermediary as swiftly as possible.
My hon. Friend also spoke about courts. He is aware of section 28 and our pre-trial evidence measures for vulnerable victims who do not want to go through the court process. He also mentioned restorative justice and the need for a victims’ law. I hope I have assured him and others, including the hon. Member for Ashfield, about the victims’ law. There is no backtracking from our commitment. My understanding is that we will have some form of legislative underpinning of the victims code. The detail is yet to be fully worked through, but it will be in the strategy that will be published by the summer.
The hon. Member for Strangford spoke passionately—particularly about victims of terrorism. He always speaks well in such debates, sadly drawing on his recent experience of the troubles. He should be listened to carefully.
My hon. Friend the Member for Telford made a memorable speech. I think child sexual abuse is the worst of all crimes. Her sterling work and her obvious passion in that area is to be commended. In my nine-year tenure in university, one of my theses—I think it was in about 1992—was on the psychology of the child sex offender. I remember that in 1992 I was sceptical about the academic literature’s claims about the incidence of physical, emotional and sexual abuse of children in our society. Sadly, it turned out to be more accurate than I could ever have imagined. The independent inquiry on child sex abuse is now encountering the scale of the problem. The Government recognise that the inquiry is going to take a long time. If there are incidents where we can intervene to try to prevent sexual exploitation, we should. It is notable that two women made speeches on that issue, and the hon. Member for Rotherham made an intervention. Having strong women in this space is a good thing. We must empower women in the communities where sexual exploitation is taking place. If those women see strong women in action, they will step forward and offer the leadership that is desperately required.
The hon. Member for Rochdale is well-known to have deep experience of criminal justice, and I respect him for that. He mentioned restorative justice. I agree with him about the importance of high-quality training, which is why I am supporting the Restorative Justice Council’s work as much as possible. He mentioned the failure of prosecution, which sits outside my brief, but his comments were well made.
Finally—I have managed to get to the end in the required time—I thank the hon. Member for Leeds North West for organising the debate and all hon. Members for their outstanding contributions. I hope we can work across the House and beyond as we continue our efforts to support the victims of crime.
Alex Sobel
I thank all hon. Members who took part in the debate. There were many notable contributions. The hon. Members for Torbay (Kevin Foster) and for Bromley and Chislehurst (Robert Neill), and my hon. Friend the Member for Rochdale (Tony Lloyd) all spoke about restorative justice. I thank the hon. Member for Bromley and Chislehurst for asking for a statutory right to access restorative justice. That is hugely important, and I fully support that call. The hon. Member for Strangford (Jim Shannon) supported my call for a new victims’ law. My hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) asked for statutory youth provision. My hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) supported that proposal and is leading the fight for it.
I pay particular tribute to the hon. Member for Telford (Lucy Allan), who raised the issue of child sexual exploitation. She bravely raised publicly the particular issues in Telford. I support her call for an independent investigation inquiry into Telford. She is surely on the side of the righteous in taking that issue forward. The shadow Minister, my hon. Friend the Member for Ashfield (Gloria De Piero), made some excellent points.
The need for a victims’ law is irrefutable. I was disappointed by the Minister’s response. He talked about physical measures, such as protective screens and video links, and £68 million of additional funding. They are welcome but not sufficient. We continually talk about a victims’ law but do not enact it, although it has been in two manifestos and the Queen’s Speech. Now is the time to move forward and set out the legislative underpinning we need for a victims’ law.
I was disappointed that the Minister did not seem to listen to the issues I raised about my constituent who, nine months since the Manchester bombing, still has not had support. The Minister suggested that that was perhaps partly due to the fact that the issue fell between the stools of two Departments. I hope those Departments get together to ensure that victims are supported.
Alex Sobel
I thank the Minister. I surely will write to him on behalf of my constituent.
Let us move forward. Let us work together to try to get a victims’ law on the statute book.
Question put and agreed to.
Resolved,
That this House has considered the rights of victims of crime.
British Nationals Imprisoned Abroad
(6 years, 1 month ago)
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Preet Kaur Gill (Birmingham, Edgbaston) (Lab/Co-op)
I beg to move,
That this House has considered British nationals imprisoned abroad.
It is an honour to serve under your chairmanship, Mr Hollobone. In late January, I attended an event organised by the Redress Trust, the international human rights and anti-torture non-governmental organisation, and the all-party parliamentary human rights group to launch Redress’s new report, “Beyond Discretion: The Protection of British Nationals Abroad”. The report uses the NGO’s experience of working with British torture survivors and their families over the past 25 years when trying to get the help of the UK Government.
Under international law, through the Vienna convention on consular relations, to which the UK is a party, all states have a right to intervene on behalf of nationals abroad to ensure that their fundamental rights are respected. It is important to recognise that that is not the same as interfering in cases. Among other protections, the VCCR allows for the freedom of communication between consular officials and a detained person, as well as freedom of access to the detained through consular visits.
Every year, nearly 6,000 British nationals are arrested or detained abroad. Of those, more than 100 tell the Foreign and Commonwealth Office that they have been tortured or ill treated while abroad. In 2016, the latest year for which data is available, the FCO delivered assistance to 118 British nationals who alleged that they had been tortured. The total number who have been tortured is of course likely to be higher, as some might not be able to report such violations, or have the chance to. One such case is that of Jagtar Singh Johal.
In October 2017, Jagtar travelled to India to marry his fiancée. On 4 November, while out shopping, he was seized by plain-clothes officers, hooded and abducted. Following a brief court hearing, he was held incommunicado by Indian police for nine days at an undisclosed location, and he was denied all access to lawyers, British consular staff and family members. On 10 November, Jagtar was secretly presented in court while his lawyer and British consular staff were, outrageously, left outside the courtroom waiting to be called. They were informed along with the media only after he had been presented before the court and had left the courtroom. Subsequently, witnesses reported that Jagtar had great difficulty standing or walking and had to be assisted by the police officers escorting him in and out of the courtroom, supporting Jagtar’s claim of severe torture.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
I am extremely grateful to the hon. Member for bringing this short debate to the House. Is not the forthcoming Commonwealth Heads of Government meeting here in London a prime opportunity for the Government to tackle the Indian Government head-on about the claims of torture of my constituent, Jagtar Singh Johal, while he was in early detention in India?
Preet Kaur Gill
Absolutely. That is a question I shall be posing to the Minister in my speech.
On 14 November, in the courtroom when Jagtar first met his lawyer, briefly, he made allegations of severe torture between 5 and 9 November. That included leg separation and electric shocks to his ears, nipples and genitals. He has told lawyers that police also forced him to sign blank pieces of paper, believed to be for the purpose of forging confessions.
On 16 November, after much lobbying, British consular staff were eventually able to meet Jagtar, some 12 days after his abduction, torture and interrogation, but two senior police officers remained in the interrogation room to prevent a private conversation. The experienced consular officer present assessed Jagtar and concluded that he was prevented from fully opening up about his mistreatment or to show signs of torture, and he was declared vulnerable. To date, unacceptably, the Indian authorities have prevented Jagtar from having private access to British consular staff. Will the Minister please offer some explanation as to why the Indian authorities have done that? What actions has the FCO taken in the past 130 days to address such an unacceptable state of affairs?
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Lady on bringing this matter to Westminster Hall for consideration. I have been asked by the hon. Member for Hampstead and Kilburn (Tulip Siddiq) to intervene on behalf of her constituent, Nazanin Zaghari-Ratcliffe, who has been imprisoned in Iran for almost two years. We all know the story, which is clear, and she has been separated from her husband Richard, who lives in West Hampstead, and her daughter Gabriella, who lives with Nazanin’s parents in Tehran. That case should never be forgotten. It is important to renew our efforts to free her and bring her home—and to bring all the other people home as well.
Preet Kaur Gill
I thank the hon. Gentleman for his intervention on behalf of Nazanin, whose case has been in the public arena for some time. Her husband is present in the Public Gallery for this debate. I shall also touch on her case, which is also extremely important.
On 21 November, in response to a parliamentary question by the hon. Member for West Dunbartonshire (Martin Docherty-Hughes), the then FCO Minister, the hon. Member for Penrith and The Border (Rory Stewart), described Jagtar’s treatment as “unconstitutional” and warned of “extreme action” against the Indian authorities. For a large part of his detention, Jagtar has been in police as opposed to judicial custody. In police custody, apart from the severe-degree torture, he has been abused and mistreated. Sleep deprivation techniques, constant verbal abuse, solitary confinement, use of handcuffs 24 hours a day, and misinformation about his family and the British authorities have been used to exploit and demoralise Jagtar mentally.
In December 2017, Redress called on the UN special rapporteur on torture to intervene in Jagtar’s case, and on the Indian Government to ensure that he is protected from further torture. Redress also called for Jagtar to be provided with an immediate independent medical examination—which he has been denied, despite repeated requests by his lawyer—and for the allegations of torture to be investigated according to international law. The next hearing for such a medical will be held sometime in March, almost four months after the alleged torture took place. Again, will the Minister please update us on the steps taken to secure an independent medical examination and any necessary medical treatment following the allegations of torture?
Tom Brake (Carshalton and Wallington) (LD)
I think the hon. Lady touched on this briefly, and might be about to do so in more detail, but does she agree with me and with Redress that if the Government provided a higher level of consular assistance, as well as some consistency and clarity about the circumstances in which they will provide it, that would help in the cases not only of those such as Nazanin and Jagtar, but those seriously injured abroad, which is another significant issue? For example, my constituent Robbie Hughes suffered a serious attack while abroad.
Preet Kaur Gill
We are signed up to the VCCR so, as the right hon. Gentleman was absolutely correct to say, we need to ensure that we use our position in the light of that to raise similar issues for injured individuals.
Jagtar’s case is extremely serious, but it has become farcical and a trial by media. He has been brought to court more than 30 times over the past four months, and he has been taken in and out of judicial and police custody. He is now being held in judicial custody until 3 April. I understand that the Foreign and Commonwealth Office has expressed concerns in writing that confidential police investigation videos of Jagtar, taken when he was under duress, have inappropriately been released to Indian TV stations by the Indian authorities. Has the Foreign and Commonwealth Office complained to the Indian authorities about Jagtar facing trial by media, which means that, if charged, he would never get a fair trial?
The British High Commission has never been able to meet Jagtar in private. Requests for private access to him have been repeatedly denied. I will go into more detail about the importance of private visits by consular officials in cases such as Jagtar’s. The VCCR states that nationals should be “free to communicate” and have access to consular officers. In cases of torture, often the authorities will be present in the room or will find other ways of monitoring and controlling interactions between consular officers and the individual. The International Committee of the Red Cross, which conducts prison visits throughout the world to ensure humane treatment, recognises that private interviews are the only way to make it possible to hear an individual’s point of view. In addition, the United Nations Committee Against Torture has called on states to
“insist on unrestricted consular access to its nationals who are in detention abroad, with facility for unmonitored meetings and, if required…appropriate medical expertise”.
In short, private visits are essential to ensure the safety of victims of torture.
Consular assistance is an important humanitarian safeguard and provides a crucial link with the outside world. Sometimes it is the only link. The UK has said that it is a priority to meet Jagtar in private, but it is unacceptable that after 130 days it has not been able to do so. As I conclude my remarks about Jagtar, I ask the Minister whether the Foreign Secretary will meet Jagtar’s family, who are concerned about the priority being given to this case.
Afzal Khan (Manchester, Gorton) (Lab)
My hon. Friend is absolutely right to ask that the Foreign Secretary meet the family. I have had many constituents contact me about this case. They are deeply concerned, because many of them visit India and they want to make sure that the proper protections are available. It would be appropriate for the Government to give higher priority to this case.
Preet Kaur Gill
As my hon. Friend suggests, lots of individuals have approached many Members, from all parts of the House, stating that they are very concerned about visiting India, given what has happened in Jagtar Singh Johal’s case. I therefore ask the Minister whether the Prime Minister will raise Jagtar’s case with Narendra Modi when she meets him next month in London, given that she spoke to the BBC and showed interest in Jagtar’s case within days of his abduction and torture.
On a broader level, I would like the Minister to give an update on the case of Nazanin Zaghari-Ratcliffe. Once again, Nazanin has had no access to consular services. She was placed in solitary confinement for eight and a half months in a cell measuring just 1.5 by 2 square metres and has been subjected to maximum psychological pressure, with the intention of demoralising her and putting her in a completely powerless situation. She has faced prosecution for the charges levelled against her in a secret and unfair trial. Her treatment has had a severe impact on her mental and physical health. As hopes for her release were dashed over Christmas, what action are the UK Government taking to ensure that she is protected from any further torture and ill treatment, and that she is released as soon as possible?
Alex Sobel (Leeds North West) (Lab/Co-op)
I thank my hon. Friend for securing this important debate. On the point about Nazanin Zaghari-Ratcliffe, does she agree that we need to review the support given to dual nationals to ensure that we offer them protection when travelling to hostile states?
Preet Kaur Gill
My hon. Friend raises a very important point about dual nationals and making sure that they have the rights they are entitled to. In Nazanin’s case, she should have had access to British consular services.
Finally, I would like to raise the case of Andy Tsege, a British national who has been arbitrarily detained in Ethiopia since 2014, when he was kidnapped and rendered to Ethiopia on the command of the Ethiopian Government, as part of a brutal crackdown on political opponents and civil rights activists. After being kidnapped, Andy was held in secret detention in solitary confinement for more than a year. He has been paraded on Ethiopian TV looking ill and gaunt. Andy is held under a sentence of death that was handed down in absentia while he was living in London, in a trial that was lacking basic elements of due process. He has no contact with his family in London, despite promises from the Foreign Secretary over a year ago to facilitate a family visit, and he is not receiving appropriate medical care.
These three individuals represent just a fraction of the number of British nationals imprisoned abroad. Although I do not call for the Government of this country to interfere in the internal affairs of another sovereign state, or proclaim that due process should not be followed, we cannot sit idly by while British citizens are deprived of some of the most basic rights that we hold dear. An integral part of being a responsible member of the global community is to conduct oneself in accordance with international rules and norms, none more so than the 1948 universal declaration of human rights, which states that human rights should be protected by the rule of law. The Government are obliged to ensure that all British citizens are subject to this protection, and I call on them to use every legitimate means to ensure that no British citizen should have to suffer such unlawful and inhumane treatment.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
I thank my hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) for securing this very important debate.
According to data released by the Foreign and Commonwealth Office, more than 5,000 British nationals were detained overseas in 2016. However, keeping in mind the time constraints, I will be unable to talk about cases such as the very high-profile case of Mrs Nazanin Zaghari-Ratcliffe. I note that Mr Ratcliffe and his mother are present in the Public Gallery as part of their long-standing fight for justice. Instead, I will focus on the case of Mr Jagtar Singh Johal, a British resident of Dunbartonshire who was arrested in November 2017 while on holiday in the Punjab in India, and who has been imprisoned since then without any charge. As we have heard today, Mr Johal has undergone experiences that gravely concern many colleagues in this House; that is proved by the number of Members of Parliament from all parties who are in attendance.
Alison Thewliss (Glasgow Central) (SNP)
The hon. Gentleman speaks of the concerns that we all have about Jagtar Singh Johal; I have had 68 emails from constituents—I have three gurdwaras in my constituency—and there is wider concern among people who wish to travel to India about how they will be treated when they go.
Mr Philip Hollobone (in the Chair)
Order. If a Member wishes to speak in a half-hour debate, it is the convention of the House that they must have the permission of the Minister who is responding. I am advised that that permission has not been given. There may have been some confusion in this process. I encourage the Member to shorten his remarks, because I am aware that the Minister has a detailed reply to give to the House.
Mr Dhesi
I thank you, Mr Hollobone, for your clarification. However, I would like to point out that I contacted the relevant individuals of the House authorities to make sure that I had permission to speak. I thank the Minister for allowing me to speak.
It is important that the British Parliament should defend the rights of all our fellow citizens, wherever they are in the world, to have the benefit of due process under law, whatever they might be suspected or accused of. This is particularly true where allegations of torture have been made by the detainee.
Mr Johal’s legal representative called for an independent medical report to ascertain his client’s claims of torture, but that request has been denied. Although consular services have been provided to Mr Johal by the British Deputy High Commissioner in Chandigarh, allegedly all visits have been supervised by the Indian prison authorities and none has been held in private. That example highlights the continued failures by the Foreign and Commonwealth Office in handling Mr Johal’s case and raising the important issues of his welfare with the relevant authorities. The UK Government’s failure to condemn the series of abuses has left all British citizens travelling abroad vulnerable. I implore the Minister to act now and press for further access to Mr Johal so he can receive the necessary support that he is entitled to as a British citizen.
The Minister for Asia and the Pacific (Mark Field)
I congratulate the hon. Member for Birmingham, Edgbaston (Preet Kaur Gill) on securing this important debate, ably supported by the hon. Member for Slough (Mr Dhesi). The Minister for Africa, my hon. Friend the Member for West Worcestershire (Harriett Baldwin), had hoped to take part in this debate as she is the Minister with departmental responsibility for this area, but at this very moment she is appearing before the Foreign Affairs Committee. It is therefore my pleasure to respond on behalf of the Government.
I will set out some general consular policy before moving on to the detention policy and the individual cases raised. I also undertake to write to hon. Members with more details where that is appropriate. The Government are proud to uphold a long tradition of offering British nationals a comprehensive, responsive consular service. Consular assistance is central to our work at the FCO. This support is not a right, I hasten to add, nor is it an obligation. Contrary to a common misconception, the Government do not have a legal duty of care to British nationals abroad. When things go wrong, our consular staff endeavour to give advice and practical support to British nationals overseas and their families in the UK, 24 hours a day, seven days a week and 365 days a year. We aim to provide support and guidance tailored to the specific context of each case. As would be expected, our staff provide professional, non-judgmental, polite and helpful support where possible.
The volume, variety and complexity of the cases we deal with is staggering. In the last financial year alone our staff overseas dealt with approximately 5,000 detentions, 3,600 deaths and nearly 3,500 hospital cases. Naturally, our support is not without certain reasonable limitations. Rightly, the FCO expects and advises individuals to take sensible steps before they travel.
Mark Field
I will not, because I have very little time to make the speech I want to make.
UK nationals travelling abroad should ensure that they have sufficient travel insurance and read the FCO’s travel advice so that they can make informed decisions about the obvious risks in certain parts of the world. We offer help appropriate to the circumstances of each case. Our overseas staff assess individuals’ vulnerability and needs based on who they are, where they are and the situation they face. Dual nationality was mentioned; I will endeavour to ensure that there is a review of precisely what impact that has and revert to the hon. Member for Birmingham, Edgbaston.
We work particularly hard to support those who are most in need of our help, and we intervene on behalf of families if British nationals are not treated in line with internationally accepted standards or there are unreasonable delays in procedures compared with the way nationals of the country concerned are treated. We are not, however, in a position to take decisions on people’s behalf, nor are we able to do everything that might be asked of us. As a matter of policy, we do not pay outstanding bills, including legal fees, as we are not funded to provide such financial assistance, nor does the FCO seek preferential treatment for British nationals. That means we do not and must not interfere in civil or criminal court proceedings, as was pointed out. It is right that we respect the legal systems of other countries, just as we expect foreign nationals to respect our laws and legal processes when they are here in the UK.
We have a clear policy that dictates how we engage in detention cases. We typically become aware of such cases when the British national involved agrees that the host Government may notify us of their detention. We then make contact or visit, where possible, within 24 hours. That did happen in the Johal case: as was alluded to, there was simply a delay in British authorities’ being made aware of his detention.
There are some 2,000 Britons in detention at any one time, the greatest number—approximately 400—in the United States of America. Our priority is always the welfare of UK nationals: to ensure that they receive food, water and medical treatment as required, and that they have access to legal advice. I know personally from dealing with the notorious cases of the Chennai Six and the group that was recently detained in Cambodia just how important that is.
The number of consular visits depends on the context of a particular case. Some have described those visits as a lifeline, and they may be the only visits a British national in detention abroad receives. Our assistance does not stop there. If a British national tells us they have been mistreated or tortured, our consular staff will, with their permission, do their best to raise concerns with the authorities and seek an investigation. To strengthen our support, we often work with partner organisations, of which the charity Prisoners Abroad is one example. Prisoners Abroad supports detainees and their families and helps to facilitate contact. If there is no family, it can help find detainees a pen-pal or send them books to read or study. It can also help with prisoners’ resettlement in the UK after release.
The death penalty exacerbates the anxiety for all those involved in consular cases where a British national is at risk of receiving or is in receipt of a capital sentence. Working to abolish the death penalty remains a key priority of the Foreign and Commonwealth Office. It is an important part of our day-to-day work and that of all our diplomatic missions in countries that still carry out the death penalty. Our message to them is clear: we believe the death penalty to be unjust, outdated and ineffective, and it risks fuelling extremism. There are currently 15 British nationals on death row around the world. Irrespective of the reason for their conviction, we do all we can to ensure that the death penalty is commuted and is not carried out. As with all countries that retain the death penalty, we hope that the Government of India establish a moratorium on executions, in line with the global trend towards the abolition of capital punishment.
Let me turn to some of the specifics of Mr Johal’s case. Only this morning, his tenacious and hard- working constituency MP, the hon. Member for West Dunbartonshire (Martin Docherty-Hughes), who is here, was able to speak to our high commissioner in India, Sir Dominic Asquith. I was asked directly why consular officials have not been given private consular access. That is a matter of great frustration. We frequently requested private consular access when Mr Johal was first detained, but as the hon. Member for Birmingham, Edgbaston will know, he has since been moved to the Nabha prison—a maximum security jail where, for security reasons, private visits are not permitted. I will write to Members who raised the issue of CHOGM, particularly the hon. Member for West Dunbartonshire.
John Spellar (Warley) (Lab)
Our understanding is that the Prime Minister of India, Narendra Modi, will come to that conference. Will the Prime Minister raise this issue directly with him, and will the Foreign Secretary raise it with his counterpart from India?
Mark Field
I will try to ensure that that is done. The right hon. Gentleman will be well aware that these things rightly often have to be done on a private basis rather than through megaphone diplomacy.
Mr Johal’s case is well known to me and to senior colleagues in the Foreign and Commonwealth Office. Our staff have been working hard to provide assistance to Mr Johal and his family in the UK ever since his arrest in India in November 2017. I have met Mr Johal’s brother twice in the past six months, along with the hon. Member for West Dunbartonshire. Since Mr Johal’s arrest, consular staff have visited him fortnightly. The Foreign Secretary spoke to his Indian counterpart about his case in November, and I raised it with the Indian Minister of State for Home Affairs on 11 January. Furthermore, various officials in our high commission have continued to raise concerns at the highest level. As Members pointed out, there are major concerns. Our high commissioner spoke to the Indian Foreign Secretary as recently as 7 March, and the basis of that conversation was relayed to the hon. Gentleman this morning.
I assure the House that we shall continue to raise this case at senior levels with the Indian authorities until the serious allegations raised by Mr Johal have been properly investigated. I recognise that this is a desperately difficult and distressing time for Mr Johal, his family and many in the UK Sikh community. I assure all hon. Members that his case remains a priority for me personally, and we shall continue to raise it with the Indian authorities as necessary.
Let me touch briefly on the case of Nazanin Zaghari-Ratcliffe. I recognise that her husband is here today. We shall continue to approach that case in the way that we judge is most likely to secure the outcome that we all want—in other words, her release. I hope the House will understand that I am not in a position to provide a running commentary on each and every development in Mrs Zaghari-Ratcliffe’s case, save that I believe there needs to be a review of what happens in relation to dual nationals. I am not convinced that anything untoward necessarily happened here, but we need to try to review that issue.
I am unaware of the facts of the case of Mr Tsege, the British national in an Ethiopian jail to whom the hon. Member for Birmingham, Edgbaston referred, so I hope she will forgive me if I say I will write to her with full details of the issues she raised.
Understandably, much of this debate has related to Mr Johal. It is important to put on the record that India, as a partner in the Commonwealth and in many other ways, has a strong democratic framework that is designed to guarantee human rights. However, it also faces numerous challenges relating to its size and development, and when it comes to enforcing fundamental rights enshrined in its constitution and wider law, not least given the power of its states. Members are absolutely right to raise concerns about human rights in India in this forum and, as I said, I am happy for them to do so via correspondence. Because we share those real concerns, the UK Government are working alongside the Indian Government to build capacity and share expertise on the promotion and protection of human rights. I hope Members will understand that that is sometimes best done quietly and privately rather than through public pronouncements.
In conclusion, I thank the hon. Member for Birmingham, Edgbaston once again for her contribution.
Mark Field
No.
I take this opportunity to thank the families and friends of British nationals detained overseas for working with us to support their loved ones through the most distressing situations. I also thank our consular officers, who at times work under great stress, for the support they provide British nationals during their most difficult times. The support by the Foreign and Commonwealth Office for British nationals in difficulty abroad is and will continue to be an absolute priority.
Question put and agreed to.
Mr Philip Hollobone (in the Chair)
Would those who are not staying for the next debate, which is an important debate about the contribution to society of social workers, please be kind enough to leave the Chamber quickly, quietly and without conversation?
Social Workers
(6 years, 1 month ago)
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Alex Burghart (Brentwood and Ongar) (Con)
I beg to move,
That this House has considered the contribution to society of social workers.
It is an honour to serve under you, Mr Hollobone, and a real pleasure for me to call this debate in Westminster Hall. I would like to record for Hansard that the room is heaving and that the Public Gallery is packed, with standing room only. Alas, I cannot, because there is an important debate on statutory instruments on the Floor of the House. A number of colleagues from both sides of the House would have wanted to be here, were that not happening.
This subject has been close to my heart for the better part of a decade. I came across the extraordinary work that social workers do on first coming to work in Parliament, about a decade ago. I confess that until then I had been largely sheltered from the world in which they work, and indeed from the people they help. In the intervening 10 years I have never ceased to be amazed by their extraordinary passion, professionalism, stamina and commitment to helping people in some of the most difficult situations in which any citizens in our country find themselves. In the words of one social worker I was speaking to the other day, it is “a bloody hard job, but it’s bloody rewarding.”
I have been lucky in my career because I have had the opportunity to visit about 50 local authorities in the past 10 years, and everywhere I have gone I have seen great innovation and determination to help improve the lives of the most unfortunate.
Mr Jim Cunningham (Coventry South) (Lab)
I congratulate the hon. Gentleman on securing the debate. I have dealt with social workers for a number of years and I agree that often they are undervalued and that when something goes wrong, they carry the blame. We often wonder why they do it, given the circumstances they find themselves in, with particularly difficult families, to say the least. They also see many things such as child abuse and pensioner abuse, for which they are on the frontline. Does the hon. Gentleman agree that society should do more to show that we value their contribution?
Alex Burghart
I completely agree; the hon. Gentleman makes his point powerfully. I have come to see social workers as the fifth emergency service, although I got in trouble for saying that many years ago—I got an angry letter from the coastguard—so I have ceased to say that. Social workers are one of our emergency services, but unlike the others, the majority of people never come into contact with them, and most people do not even know someone who has. It is therefore easy for misconceptions to grow about their role in society, the job they do and the way in which they do it. Part of the importance of this debate is to recognise the true nature of their job.
Alex Cunningham (Stockton North) (Lab)
I congratulate the hon. Gentleman on securing the debate. I know he has a deep interest in and a real passion for social work, and children’s services in particular. Has he seen Unison’s briefing for the debate? It tells us that half of social workers feel that their case load is over the limit, and they blame staff shortages for that. Also, 60% say that Government cuts affect their ability to best support vulnerable people, and most work for free for 10 hours a week. Does he agree not only that we need to train and recruit more social workers into the system, but that we need the cash to support and pay them, and that we should reward them individually with a good pay rise?
Alex Burghart
I was grateful to Unison and the British Association of Social Workers for the briefings they sent me in advance of the debate. I understand that the survey reported in the Unison briefing represents some challenges for the profession and its working environment. I will always be found looking to Government to provide more resources for vulnerable people. I would say on behalf of the Government—although I am sure the Minister can defend the Government perfectly well without me—that, according to the Library, since 2014-15 the money that has gone into children’s social work has gone up by 2% in real terms. We can always look for more, but I am glad that it is moving in the right direction.
Hannah Bardell (Livingston) (SNP)
I congratulate the hon. Gentleman on securing the debate. I had not intended to be here but I found myself with a little extra time, so I am glad to contribute. As he rightly said, many people do not come into contact with social workers, but I grew up with a mother who was a social worker in Muirhouse in Edinburgh—some may know it as the area on which the film “Trainspotting” was based—during the heroin explosion and HIV crisis in the ’80s. She went on to be a social work manager and lecture at university. So, I grew up with a great sense of social justice and the very difficult but ultimately rewarding job that social workers do. Does the hon. Gentleman agree that we should have a national day to recognise social workers—unless we already have one that I am not aware of?
Alex Burghart
I think for the people in this room, every day is national social worker day. I am sure we celebrate the work they do in our daily lives and in our jobs.
Tim Loughton (East Worthing and Shoreham) (Con)
On that point, I do not think we have a social worker day, but, as patron of the Social Worker of the Year awards, I inform the hon. Member for Livingston (Hannah Bardell) that this coming Thursday there will be a reception on the Terrace for all the winners, and she is more than welcome to come along, meet them and pay her tribute in person.
Alex Burghart
Unbeknown to us, national social worker day is later this week—what we have achieved in the debate already! Most of my remarks will be confined to children’s social work as it is the area that I know best. That is in no way to denigrate the extraordinary work that adult social workers do. Indeed, on Friday I was with some of the adult social workers in Essex, who were absolutely impressive in their determination to make things better for local people. They were full of new ideas—they have developed an interesting new programme to support newly qualified social workers, which had seen recruitment increase substantially—and I am pleased to know that vulnerable adults and elderly people in my constituency can rely on them.
As I said, I came to this subject relatively recently in my career, and I did so by accident. I had started out working on education, and through good fortune and strange circumstances I ended up working for my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), who has graced us with his presence. That was back in 2008, and at that time social workers were in particularly difficult circumstances. Their public reputation had taken a hammering following the Victoria Climbié case and soon after I started that job the awful case of Peter Connelly—Baby P—broke in the newspapers. Very unfairly, for a while social workers alone took the blame for the mistakes made in those cases. It was symptomatic of a society and a news environment that did not understand child protection in the round and was searching for the easiest scapegoats.
By the time I joined my hon. Friend—my then boss—he had already written what turned out to be a seminal paper, called “No More Blame Game,” which sought to set aside the myths that had grown up in the public imagination and to give social workers the respect, training, resources and professional autonomy they needed to do their job properly. It was my great pleasure to work alongside him and at the Department for Education in those next few years to see that programme bear fruit. The most substantial part of it was the Munro review of child protection, which was launched in 2010 and reported in 2011. It intended to put a renewed focus on frontline social work—not on national statutory guidance or defensive systems designed to protect organisations from reputational damage, but on the frontline experience of the children being helped by a professional social work body.
Mr Jim Cunningham
One of the difficulties that social workers have is that they must deal with different agencies and sometimes get the agreement of different agencies, certainly when they are dealing with child abuse. Does the hon. Gentleman agree with that?
Alex Burghart
Very much so. Part of the work that was pioneered by a number of local authorities and pushed by central Government around 2010 was a multi-agency approach. It is now very common in local authorities to see experienced social workers in an office alongside representatives from the local police force, local mental health services and a range of local agencies, so they can have those professional conversations and should not get tied up in a bureaucratic process where people push a difficult case off their desk into somebody else’s hands and hope it goes away.
Alex Burghart
Indeed. Instead of building a system that could, at its worst extent, be one of professional buck-passing, we have seen the development of collaborative working in the truest sense. Where that has happened, we know that vulnerable children and families are most likely to be getting the support they need.
During the course of our work in those days, we came across a number of obstinate problems that were holding professional social workers back. Anybody working in social work at the time will remember the integrated children’s system, ICS, which was an extremely well-intentioned central Government computer system, designed to capture data and help social workers to analyse it. The only problem was that it had not been designed in consultation with social workers; it had been designed by IT folk with other interests.
I remember—I shall never forget—sitting in an office with about 20 social workers one day and hearing with complete incredulity that it took them eight hours to fill out the form for one visit. The visit with a child and a family might have lasted 45 minutes, but it took eight hours to do the paperwork for it. The enormous burden that that placed on the social work community was incapacitating. We met social workers who were taking time off work in order to do their work. They were taking holiday so that they could get the time to fulfil their paperwork as the system required them to.
Alex Cunningham
The hon. Gentleman makes a good point about the necessity of consulting with professional social workers. Another area that the National Association of Social Workers talks about is the current adoptions system and the acceleration to get children adopted as quickly as possible. The NASW has some real concerns that the system, because it is accelerated, might not be looking after the best interests of the children. Does the hon. Gentleman agree with me that we need to listen more to social workers, particularly their concerns about adoption and the system currently in place, so that we can ensure that children get the best outcome?
Alex Burghart
The Munro review of child protection emphasised very strongly the need for a systems learning model. That means that everyone who is involved in the child protection system and in looking after vulnerable children must be able to voice their concerns and opinions and have a fair hearing. It is only by listening to different people operating in different parts of the system that we can get the most effective working of that system. For a long time, certainly on the ground in many local authorities, social workers felt that their opinions were not being heard by senior management, that senior management—particularly some directors of children’s services way back in the day—were entirely unconnected to the vulnerable population they were supposed to be serving.
We saw children’s services departments that were almost solely focused on education and saw the vulnerable children as an add-on—a small part of their business. We also met directors of children’s services who took the time to go out and go bowling with all their children in foster care, to hear their views. We have to remember that children themselves are part of the system, and it is through hearing their voices, and their views of the services and support they and their parents are receiving, that we can make the improvements that are so necessary.
We often talk, quite rightly, about a child-centred, or child and family-centred, system, but often, with those most vulnerable families, the only way of getting to that centre is to have professional social workers or teachers working alongside them in schools. More recently, since the Munro review reported in 2011, some fantastic additional changes have been brought in by the Department for Education.
Mr Jim Cunningham
The hon. Gentleman is being very generous in giving way. We should pay a little bit of tribute to the previous Minister, Mr Timpson, the former Member for Crewe and Nantwich, who lost his seat. About four or five years ago I did a lot of work with him, because he was looking at the issues not only at local authority but at regional level. He did a lot of good work because he understood the problem, and I was very impressed by him. We should give him a little bit of credit here.
Alex Burghart
Absolutely; Edward Timpson was an excellent Children’s Minister. He had a lot of respect in the sector, and rightly so. He came from a family that had first-hand experience of fostering, and he brought a huge wealth of real-life experience to his role. It is good to hear that he was respected on both sides of the House.
One of the things brought in at DFE after 2010, as I was saying, was the innovation programme, which again gave local social workers, local authorities and people working on the ground with children and families the opportunity to come up with new ideas and bid for Government money in order to prove their model. It is good to see that fund rolling on; I think only last year the Government committed a further £36 million to the initiative, which has been warmly welcomed by local authorities and social workers across the country.
At the moment the Department is putting into practice the contents of its strategy paper, “Putting Children First”—an enormous programme of social worker development, from recruitment all the way through to ensuring that more experienced social workers are up to speed with the latest techniques and theories, and that the social work community is talking to itself and learning from itself. It is a really valuable programme, which will help to upgrade the profession in the most constructive and productive way possible.
Things are tough in some local authorities; I spend enough time talking to people in children’s services to know that that is true. I also know that, even where things are financially tight, there is still great appetite for innovation and people are finding new ways of working and of helping children and families. I was talking to some social workers on Friday who had found that, simply by putting in a new package of support for newly qualified social workers, they were getting more young recruits through the door and building a vibrant, young, energetic team.
I have also been lucky enough to see how the Government’s great troubled families programme has been integrated into the main body of social work practice in some outstanding local authorities, where we have seen the development of a continuum of care, going from children’s centres open to all at one end, all the way through to the most severe child protection cases, with the troubled families programme helping those in the middle. That is the group I will talk about as I bring my remarks to a close.
One group that has been neglected in public discourse until this point is children in need—children who are not fully in care but on the edge of care; who are on social services’ radar but who do not receive all the services that somebody who is fostered or has been adopted might. It is a large group: there are about 400,000 children in need at any one time, and during the course of a year about 750,000 children are in need. Their outcomes are terrible, and are often worse than those we see for the looked-after population, as we might expect, because these are the children who are left at home in disrupted, complex families, whereas their contemporaries who have been taken into care will have, if they are lucky, the stability of long-term fostering or an adoptive placement and will see their outcomes improve.
It is extremely important that we turn our attention to that group. I believe that, as a result of our bringing our social work profession into the 21st century and helping it to develop, social workers will have the skills, the appetite and the determination to help those people. I am delighted that the Department for Education is undertaking a review of the outcomes of children in need, as we announced in the Conservative party’s general election manifesto last year.
Alex Cunningham
The hon. Gentleman is making a strong case for working with even more children, but that actually requires more people as well. I know he is impressed by the increase in money that the Government are putting in, and local authorities are also raising more, through council tax. However, does he agree that, in order to achieve the things that he wants, we need in the system more social workers with smaller workloads?
Alex Burghart
I certainly see the case that the hon. Gentleman makes. The point I was making, which is not completely dissimilar, is that the troubled families programme brings with it a large budget. I have been pleased to observe over the past few years that the proportion of families on the troubled families programme with a child in need has risen and risen, as more local authorities take that budget and apply it to those families who need it most. We have a much more responsive and particular system now than a few years ago.
We all aspire to having the most professional, best informed, most inspired and inspiration social workers anywhere in the world. I believe that we are heading in that direction, but it is not something that can be achieved overnight and it is not something that can be taken for granted. However, I am sure we all agree that, without the contribution that England’s social workers make to vulnerable children and families, the world would be a considerably worse place.
Mr Philip Hollobone (in the Chair)
I am obliged to call the first of the Front-Bench spokespeople at 5.7 pm. The guideline limits are 10 minutes for the Scottish National party spokesperson, 10 minutes for Her Majesty’s official Opposition’s spokesperson and 10 minutes for the Minister. I will invite the hon. Member for Brentwood and Ongar (Alex Burghart) to sum up the debate after the Minister has concluded his remarks. Until 5.7 pm, the hon. Member for East Worthing and Shoreham (Tim Loughton) has the Floor.
Tim Loughton (East Worthing and Shoreham) (Con)
I had not intended to speak, but such has been the eloquence of my hon. Friend the Member for Brentwood and Ongar (Alex Burghart) that I feel impelled to complement his wise words. I first declare my interest in the Register of Members’ Financial Interests, and I repeat my interest as a patron of the Social Worker of the Year awards, as is the shadow Minister, the hon. Member for South Shields (Mrs Lewell-Buck).
I congratulate my hon. Friend on securing this debate on what is an unfashionable subject that we hear little of in this place—that has been a problem for many years. Not only was he well-schooled when he arrived here 10 years ago, but his experience then included, as he has mentioned, his time working as an essential part of the Munro review, before moving on to Barnardo’s and then becoming the deputy Children’s Commissioner. He has vast experience, which he has already brought to bear in his short time in this place. I am glad that he has done so again today.
My hon. Friend mentioned social workers as the fifth emergency service. We used to refer to them as the fourth emergency service—we do not want to downplay them. Their difference from the other emergency services is that they are damned if they do and damned if they don’t. Too often, they are subject to tabloid newspaper headlines that complain if they have the temerity to step in and take a child into care, particularly if the child is from a middle-class family who one would not expect to face action. They are damned if they do not step in early enough and take a child into care who subsequently becomes a Baby P, a Victoria Climbié or one of the many other high-profile cases, which are just the tip of the iceberg.
I am sure the Minister sees this now, but in my previous role as Children’s Minister, the most depressing start to the week was going through an audit of the new cases of severe child abuse and child fatalities that had come in during the previous week and what progress they had made in the courts or whatever. I am afraid that the cases we saw in the headlines were just a fraction of what was going on, day in, day out. I think the situation is better, but there are still, and always will be, people who do terrible things to vulnerable children. Too often, it is only social workers who stand between those people and the welfare—indeed, the lives—of those children.
I am glad that my hon. Friend mentioned “No More Blame Game”, which was a really important piece of work back in 2007, before the whole Baby P issue blew up. It was all about trusting social workers, rather than just pointing the finger of blame, as I am afraid had been the default position of too many people in positions of responsibility. Time and again, I found myself reminding people, during media interviews and elsewhere, that it was not the social worker who killed that child. It was the parents, carers or others close to that child who actually did the damage. The social workers desperately tried to avoid that.
The job of the social worker is to try to detect early where a child is vulnerable and to try to make a judgment about an appropriate intervention. It is not a science. That is why one of my big mantras regarding social workers was that I wanted to give them the power and the confidence to make a mistake. There had been numerous child protection Bills since the Victoria Climbié case, and all were exceedingly well-intentioned, but their net result was to add to the rulebook—to add more regulations. By 2010, the “Working Together” manual ran to something like 760 pages.
Unison revealed that social workers were spending more than 80% of their time in front of computers filling in process forms, rather than spending time face-to-face with those children. The net result was that they were constantly ticking boxes to comply with the rules, rather than using their gut instinct, their judgment and their training and professionalism to say, “Something isn’t quite right here. I’m going to step in and do something.” Occasionally, they will be wrong—as I say, it is not a science—but usually the decent social workers, as the vast majority are, will be right to do so. However, they lacked the confidence to step in because it was all about following the rulebook and ticking the boxes. That was a huge problem with the profession that caused them to lose confidence in doing the professional job that we wanted them to do.
Our review back in 2007 was an important start in saying that we need to trust social workers. We first flagged up the need to have a chief social worker to give the whole profession gravitas—a public face; somebody who was trusted—and to make sure that social worker training was integrated with other training as well. Some of the best safeguarding I have seen is when a social worker is sat next to a GP, who is sat next to a teacher, who is sat next to a police officer, in the same room, being taught from the same manual. Hot-desking is now often the favoured way forward in children’s centres and other multi-agency safeguarding hubs, which is absolutely right.
The Munro review was important. It was the first Department for Education review launched by the new Government in 2010. It was nothing to do with education; it was actually all about child protection and social work, which was not a fashionable subject in those days. The Munro review—Eileen Munro’s work was outstanding and respected, I think on all sides politically, and certainly throughout the profession—was all about how we peeled back some of the rules that were standing in the way of allowing social workers to get on with their job and use their professionalism and instincts to make the right judgments. It was a really important review.
My hon. Friend referred to children in need. It has been estimated that the cost of child neglect each and every year in this country is some £15 billion. That is £15 billion for not getting things right. Just think what we could achieve if a fraction of that were spent on prevention and ensuring that neglect became a thing of the past, or certainly a much more minority occupation. The Munro report was therefore very important.
The rewriting of the “Working Together” document, which was slimmed down from more than 750 pages to below 100, was also very important, because it set out the basic principles and then said to the social worker, “That is what you need to achieve. Now go out and do it. Use your professional talents to decide how you execute it in individual cases and, above all, spend time snooping around. Go into people’s homes. See people face to face. Eyeball those whom you suspect may be up to no good. Speak to the children—get the child’s voice and the child’s view on this.” That was so important.
It is also important that politicians and civil servants should have experience of that. I spent a year back in 2011 being a social worker in Stockport. I was going out on cases with real social workers—and gosh, they took me to some of their most challenging cases to see it like it is. My hon. Friend mentioned the former director of children’s services in Harrow, one of the most outstanding directors of children’s services that we had, who each week would take a group of children in the care of Harrow Borough out bowling and engage with them and hear from them exactly what was going on. In the Department for Education, we set up four panels of children: one of foster-children, one of children in residential homes, one of recent care leavers and one of children who had been adopted. They came along and told us, without the carers, managers and officials there, what was actually going on. That is where I learnt some of my best information, as I did by going out with social workers on patrol, without directors and managers—their bosses. That is very important. I think and hope that in that time we re-established some of the credentials and confidence in social workers.
Alas, there is still a lot to do. Money has been protected for child safeguarding, but clearly, financial pressures are considerable at the moment. The number of children coming into the care system has continued to rise. That may be a good thing. I do not know whether we are taking too many or too few children into care. What I am concerned about is that we are taking the right children into care, at the right time, and looking after them properly once they are in the care of the state.
Alex Cunningham
I have a friend who has a leading role on a safeguarding board. She tells me that the workload has increased, particularly as there have been more case reviews and, because more children have been dying, there have had to be specific inquiries. The work is tremendously resource-intensive. Is the hon. Gentleman convinced that there are sufficient resources for people to do that work effectively?
Tim Loughton
There will never be enough resources for social work, as with so many things. Adult social care also faces serious challenges.
Tim Loughton
It is a question of priorities and of intervening at the appropriate time; that is why I was a big fan of the early intervention fund, which was set up in the Department for Education. However, getting things wrong is the most costly outcome of the lot, and previously an awful lot of money was being wasted on the system and constraining social workers, rather than letting them get on with their job. The consequence was huge vacancy rates, too many locums filling the places and a lack of continuity, and the cost was that much more. The most costly thing of all was when things went really wrong, as they did with Baby P, Victoria Climbié and the other high-profile cases. The cost of putting that right was considerable, so it is a false economy not to be doing the things to which we have referred.
The all-party parliamentary group for children, which I have the privilege to co-chair, produced a report on the state of children’s social care last year, and we are doing an update on that. What it showed, above everything, was huge disparities between outcomes and experiences in different parts of the country. For example, a child in Blackpool has a 166-in-10,000 chance of being in the care system, while an equivalent child in Richmond in London has only a 30-in-10,000 chance. Richmond and Blackpool are very different places, but are they so different that more children get taken into care? We found huge differentials around the country on a whole range of thresholds, and we desperately need to learn from that. We need to learn from social workers why those different experiences and outcomes are happening.
At the end of the day, I found that those of our failing children’s services departments—we have a large number in special measures at the moment—that were turned around most effectively were not those with some new structure, process, trust or whatever imposed on them, but those where an inspirational leader, director of children’s services, went in and trusted his or her staff. And ultimately, many of the successful, recovering children’s services authorities came through with the majority of the social workers they had started with.
I remember that one director of children’s services who gave evidence to our inquiry said that he went into the county, got his social workers together and said to them, “Name all your cases.” When it got up to about 15 or 16, they could not remember the others, so he said, “Well, that’s probably about the case load you should have, isn’t it?” and that was what he put into effect. It is now one of the best-performing—I will not name it—children’s services departments in the country and is spreading that good practice to other counties and authorities around the country.
It is not rocket science, but it would be much more difficult without the dedicated social workers whom we have in this country. We do not value them enough—I think we value them more than we did—which is why it is essential, when we have opportunities such as this, that we say thank you to social workers for the outstanding job they do despite all the challenges they face every day.
Mr Philip Hollobone (in the Chair)
If the Minister starts his remarks at 5.17 pm and I split the time between now and then, that gives both Opposition spokespeople five minutes each. I will set the clock to assist them to achieve that task.
Martyn Day (Linlithgow and East Falkirk) (SNP)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I am grateful to the hon. Member for Brentwood and Ongar (Alex Burghart) for securing the debate and for his summary of the subject. I agree with him that we have to learn from people with experience of care, and that is happening in Scotland. The Who Cares? Scotland “1000 Voices” manifesto is about a pledge to listen to 1,000 young people with direct experience of care. That is very welcome.
As we have heard, social workers play a vital role in our society by standing up for the most vulnerable children and adults and ensuring that they are safeguarded from harm or supported to live independently. The work falls into the remit of a number of Departments—Education, Health, employment, social security and potentially others such as the Home Office and Justice—and it can often be multi-agency. Similarly, social workers work in a variety of settings, supporting individuals, families and groups within the community and working in homes, schools, hospitals or the premises of various public and voluntary organisations.
Social workers frequently work unsocial hours, and in making a positive difference to other people’s lives find themselves under considerable pressure and strain. Figures supplied by Unison highlighted the fact that 80% of its social worker members experienced
“emotional distress during the day”
and almost half felt “over the limit” with the volume of cases for which they were responsible. There can be no doubt that the role is challenging at the best of times, and of course if something does go seriously wrong, it can attract a huge volume of negative media coverage, significantly adding to workers’ stress levels.
Last year, Scotland’s Social Work Services Strategic Forum found that the public actually have a more positive view of social services than social service workers and institutions perceive. Overall, people in Scotland are positive about social services’ impact on society and believe that those services perform an important public role. Indeed, 73% of the public agree that social services play an important role in supporting the most vulnerable people in communities. That is a good statistic and one that we should not tire of telling people about.
I am pleased to say that that has also been my experience. My constituency is fairly typical of the demographic challenges faced across many parts of the country. That means that the role of social workers becomes ever more important in supporting people living with dementia and their family carers. When family carers, who are often advanced in years themselves, become ill, it is often to the social work service that they turn.
The recent bad weather—two weeks ago—brought knee-deep snow across my local area. I am aware of social workers going the extra mile until the situation stabilised. There are many examples of social workers going on foot from their own home to the homes of service users living in their neighbourhoods, and providing help with personal care when the social care providers were unable to get through the snow. I am aware of staff from children’s services in the Falkirk Council area, for example, staying on for double shifts and staying overnight at colleagues’ homes to ensure that they were ready and able to be back in work the next day. As a result, all the children and young people were cared for by a consistent residential care staff, despite the snow and freezing conditions. I am grateful for their efforts and commitment to the role.
Similar examples occurred in the West Lothian Council area, where staff went above and beyond to ensure that residents who rely on them for care were supported during the bad weather. Staff turned up for shifts when not scheduled to work, to ensure care could still be provided if colleagues were unable to come in due to the conditions, and helped out in other areas. To give just one positive example, a member of staff who went to pick up a prescription for a service user was told by the chemist of other vulnerable people unable to collect prescriptions, and delivered the lot. That kind of commitment above and beyond is often overlooked.
I take this opportunity to publicly put on record my thanks to all who helped out during those difficult days a few weeks ago, but social workers play a vital—sometimes thankless—role throughout the year. The recent inclement weather conditions simply helped to highlight how essential that role has been to members of our community.
In conclusion, social workers are highly qualified and professional individuals, who contribute greatly to our society and to the protection of our most vulnerable citizens. We must therefore ensure that they are not working under undue strain, and that they are adequately resourced to support the public services and meet the demands we place upon them.
Mrs Emma Lewell-Buck (South Shields) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for Brentwood and Ongar (Alex Burghart) for securing this important debate ahead of next week’s World Social Work Day.
There is a general misunderstanding of what social workers do. As a result, they are often treated with suspicion by not only the general public, but many politicians in this place. True to type, when something is not understood by politicians, they seek to over-regulate and control it. This Government are treading that path too.
There are over 114,000 social workers in the UK. Before becoming a Member of Parliament, I was proud to be one of them, working in the field of child protection. Each of those social workers works a demanding week of approximately 46 hours in a physically, emotionally and mentally demanding job. I recall being regularly assaulted, punched, spat at, needing security escort and being held in victim support. It is therefore vital that the Government support and value the profession, but they do not.
The problems social workers face are not of their own doing or by their own design. Many people in the profession tell me that things are not getting better; things are getting worse. That should be no surprise to anyone following what the Government are doing to services and the most vulnerable in our country. Sure Starts and early years services have been decimated. We have heard a lot today about the Munro review. It is a real shame that the Government did not implement her suggested legal duty to provide early intervention services. Labour Members understand that that is vital; it is a shame the Government do not.
Disability benefits have been slashed. Public sector job losses have occurred on a massive scale. We have record levels of in-work poverty. Support and advice services are shutting. Mental health services have been stripped to the bone. Our NHS is creaking at the seams and our adult social care system is broken.
Alex Cunningham
My local authority, Stockton-on-Tees Borough Council, has suffered a 52% cut since 2010. It now spends 57% of the money it has on social care. Is my hon. Friend aware of this happening elsewhere in the country, and does she wonder, like I do, how councils are managing to deliver what they do deliver?
Mrs Lewell-Buck
My hon. Friend is spot on: this is happening in other councils right across the country; it is not confined to his own. In fact, there is a reported funding gap of £2.5 billion by 2020, with more than 400,000 people no longer able to access social care.
Children’s services are grappling with the highest numbers of children in care since the 1980s and facing a funding gap of £2 billion by 2020, as referral rates continue to rise at a staggering pace. The fact is, social work simply cannot be separated from the wider environment. Social work is interlinked with wider societal and economic issues. If one part of the system is depleted, the other is depleted, and it is social work clients who suffer.
Social workers know that all too well, because they see it every single day. Entering their eighth year of a pay freeze, 60% of social workers have stated that they feel Government austerity has had a dramatic impact on their ability to make a difference. The Government certainly have the profession in their sights. Since 2010, there has been an aggressive focus, which, as noted by the National Audit Office and a number of cross-party groups, is yielding no positive results in the reform of social work or social work assessment and accreditation, giving a clear signal that this Government feel the problems are with social workers, not the system.
With that in mind, can the Minister can shed any light on the hash that has been made of the new accreditation for social workers? After an embarrassing climbdown, accreditation will now only be of 4% of social workers by 2020, as opposed to the planned 100%. Since there is a groundswell of opposition from the profession, does the Minister not think it is about time to scrap this nonsense altogether?
Social Work England, another Department for Education initiative born out of zero discussion with the profession, has also been subject to some backtracking, after the Government thankfully failed to secure direct regulation of social workers. Will the Minister explain when the regulations will be produced for Social Work England? Clarity is needed regarding transition from the Health and Care Professionals Council, and social workers need some assurances that they will not be hit with exorbitant fees. Both of those developments signify to the profession that the Government have little faith in them and feel they need to be regulated and subjected to state control to a much higher degree than any other profession. Will the Minister please explain why that is?
In spite of all that, the profession survives. Excellent social work happens every single day in all areas of our country. Children and adults are protected from harm and their lives are improved. If the Minister really believes that our children, adults and families need the very best, he is in a position where he can actually deliver on what our profession is crying out for. I wonder if he will commit to that today and offer more than just warm words.
The Parliamentary Under-Secretary of State for Education (Nadhim Zahawi)
Let me begin by tackling the issue of funding, which has been raised a couple of times by colleagues here. We are keen to understand the sector’s concerns about funding and the demand on children’s services. We are currently consulting on the fair funding review. We have heard the sector’s concerns about the fairness of current funding for their local authorities and the challenges that children’s services in particular are facing in managing demand. The Department for Education and the Ministry of Housing, Communities and Local Government have commissioned independent research to inform the fair funding review. We are very much cognisant of that fact.
Nadhim Zahawi
I have a lot to say about Social Work England and the accreditation and assessment, so I would like to make some headway. Maybe, if I have time, I will come back to the hon. Lady.
I congratulate my hon. Friend the Member for Brentwood and Ongar (Alex Burghart) on securing this important debate. Listening to him speak, the sheer depth of experience he has in this hugely important area soon becomes clear. From the world of think-tanks, the Eileen Munro review, the charity sector, the Children’s Commissioner, and more recently as a constituency Member of Parliament, his experience is considerable and wide-ranging. So too is the experience of my predecessor, my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton). I could listen to them all day and I have been taking note of everything they say.
My hon. Friend the Member for Brentwood and Ongar focused his contribution on the work of children and family social workers and I will respond accordingly, but before I do so, I should place on record the valuable work done by those in the adult social care community. When I speak of the value to society of social workers, I very much include all social workers.
Above all else, we agree on a single unarguable point: social workers have a vital job in ensuring that vulnerable adults, children and families receive the best possible support to help them to overcome the challenges they face, and to enable them to look positively towards their future. I have only been Minister for children and families for a few months, but so far, from my visits to children’s services across the country, I have seen a dedicated and passionate workforce. My hon. Friend the Member for East Worthing and Shoreham described what is needed in one word: leadership. When we see good leadership, we see good outcomes for children. Every day, social workers deal with complex and challenging situations. The one thing they say to me is that the real magic sauce—whether it is the trust in Doncaster that has turned it around, or in Hackney, which had a turnaround—is consistent leadership: people they can refer to and teams they can work with, knowing they will be there the next day.
Social workers play a unique role in supporting people, often at the most difficult times in their lives. To do that successfully, they require a distinctive set of skills, knowledge and values. To do their job well requires compassion, empathy, analytical thinking and an understanding of the positive impact they can have in people’s lives. They work with complexity, uncertainty and conflict within a complex legal framework. They are required to use sound professional judgment in balancing needs, risks and resources to achieve the right outcomes. Done well, social work can improve people’s opportunities and quality of life, enabling them to lead the lives they want to lead.
In my constituency, I often hear from people in the social care system. It is overwhelming. To work closely, day in, day out, with such difficult and sometimes devastating cases requires exceptional passion and resilience. Members across Parliament will all be familiar with that from their surgeries. It is a job that a precious and extraordinary minority undertake and we must do all we can to support, empower and elevate the profession. As a Minister, I see this as one of my key priorities, and I will do my utmost to ensure that social workers get the recognition they deserve.
The debate is timely. As colleagues have mentioned, World Social Work Day is a week today and provides a moment to pause, reflect and celebrate the difference that social workers make. We in Government will be doing our bit to promote and champion the profession, both in what we say publicly and in how we support social workers.
All children, no matter where they live, should have access to the same high-quality care and support. That is about empowering social workers to excel even further in their practice, as well as building public confidence in the social work profession. One thing is clear: the quality of social work practice is, above all, the core of what we want to achieve. This is vital work and the reason we are prioritising social work reform. Social workers are not always given the right tools for the job, and can be held back by burdensome systems, which we have heard colleagues eloquently describe, including the horrendous time it takes to fill in a form.
My hon. Friend the Member for Brentwood and Ongar spoke with authority about the Munro review, about reducing bureaucracy and about empowering professional judgement. What he said is true, and while great progress has been made, more is to be done. Those entering the social work profession must have the best training possible. Teaching partnerships bring together universities and local authorities to improve the quality of social work degrees. Good continuing professional development is also essential, particularly at key stages of a social worker’s career such as the daunting task of moving from education to employment and when stepping up from the frontline to managing and supervising teams, and for those aspiring to be social work practice leaders. I believe that these reforms will have a positive impact for all and, most importantly, vulnerable children, families and adults in need of support.
I draw attention to two specific reforms mentioned by the hon. Member for South Shields (Mrs Lewell-Buck). The first is the new accreditation scheme for child and family social workers. Through that innovative programme, we will introduce post-qualifying standards for child and family social work expertise, based on the current knowledge and skills statements, and offer voluntary assessment against them. The introduction of the standards will mean that employers and social workers will have a national benchmark to aim for, and learning and development can be planned in line with meeting the standard. If a social worker takes the assessment and becomes accredited, they may be offered career development opportunities, including promotion. I heard it directly from social workers who are involved in the early stage. We are doing this with social workers, rather than to them.
Nadhim Zahawi
I have not got much time, but let me see how far I get because I want to talk about Social Work England as well.
We are supporting local authorities and social workers to get ready for this new system in a unique way, working with early adopters. Rather than, as in the example given by my hon. Friend the Member for Brentwood and Ongar, stuff being done to them by IT people who know nothing, we are co-creating the assessment and accreditation. We will be working with more than 150 children and family social workers. I am also delighted that Essex County Council is in discussions with the Department about becoming a phase 2 national assessment and accreditation system site from 2019.
The other major reform I want to highlight is establishing Social Work England. Focused purely on social work, this bespoke professional regulator will cover both children and family social workers and those working in adult services. Social Work England will have public protection at the heart of all its work, but it is more than just that. It will support professionalism and standards across the social work profession.
Alex Cunningham
I have two small questions. First, I agree with the need for ongoing professional development, but where will the time come from in social workers’ busy schedules to take this critical training? Secondly, does the Minister not agree that it is time that social workers got a decent pay rise?
Nadhim Zahawi
I dealt with funding at the outset. We heard from my hon. Friend the Member for Brentwood and Ongar that funding has increased since 2010.
Mrs Lewell-Buck
Does the Minister share his predecessor’s view that local authority children’s services departments do not need any more money because they are not spending what they currently have appropriately? How on earth does he think it conceivable that any difference can be made, even if money is put into the system, when ongoing Government austerity is cutting every other service that impacts on children’s social services?
Nadhim Zahawi
I have already put on record what we are doing in terms of reviewing the funding for this area.
As a social care-specific regulator, Social Work England will develop an in-depth understanding of the profession. It will use that to set profession-specific standards that clarify expectations about the knowledge, skills, values and behaviours required to become and remain a registered social worker. Finally, it will play a key role in promoting public confidence in the profession, championing the profession and helping to raise the status of social work.
It is fair to say that creating a new regulator is no easy task, but we are making great progress. In December, we launched the recruitment of the chair and CEO of Social Work England. In February, we launched a consultation on Social Work England’s regulatory framework. I think that the hon. Lady mistakenly alluded to there being no consultation, but there clearly was. The consultation sets out our approach to establishing the secondary legislative framework for Social Work England. Our ambition is to create a proportionate and efficient regulator. As part of this, we need Social Work England to be able to operate systems and processes that adapt to emerging opportunities, challenges and best practice. That means it can ensure professional regulation reflects the changing reality of delivering social work practice safely and effectively.
I shall end there in an attempt to be disciplined in the timekeeping that you asked of us, Mr Hollobone.
Alex Burghart
I thank you very much, Mr Hollobone, and all hon. Members who have taken part in the debate.
One of the resounding messages that we can send out from this place is that we all value highly the work that social workers do. It is an extraordinarily difficult job. When we contemplate the families who are helped by the expertise of this professional body, we have only to imagine what would happen if those social workers were not there. If we left those families and children in homes with extraordinarily complex mental health problems, addiction, alcohol and drug dependency and the most extraordinary and extreme forms of family breakdown, without that professional support, we could only expect the absolute worst for them.
The social work profession gives so much to society. At its most extreme, it keeps people alive, but in a sense it does more than that: it gives people a life. It helps them to overcome their barriers to work, to good health and to opportunity. Being a frontline social worker is, too often, a highly complex and difficult task, but it does not have to be a thankless one. It is incumbent on all of us to support our social workers in policy terms and in professional terms.
Written Statements
(6 years, 1 month ago)
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Spring Statement
(6 years, 1 month ago)
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The Chief Secretary to the Treasury (Elizabeth Truss)
Making a success of EU exit is a priority for the Government and the Treasury. At the Autumn Budget 2017, my right hon. Friend the Chancellor of the Exchequer committed £3 billion over the next two financial years to helping Departments and the devolved Administrations to prepare. Working with colleagues across Government to prioritise the essential programmes to realise the opportunities from EU exit, the Treasury has allocated funding to Departments as follows in 2018-19: Department £ million Cabinet Office 49.4 Competition and Markets Authority 23.6 Department for Business, Energy and Industrial Strategy 185.1 Department for Digital, Culture, Media and Sport 26.2 Department for Environment, Food and Rural Affairs 310.0 Department for International Trade 74.0 Department for Transport 75.8 Department of Health and Social Care 21.1 Food Standards Agency 14.0 Foreign and Commonwealth Office 29.6 HM Revenue & Customs 260.0 HM Treasury 24.8 Home Office 395.0 Ministry of Defence 12.7 Ministry of Justice 17.3 Northern Ireland Office 0.4 Office for National Statistics 2.0 Scotland Office 0.3 The National Archives 1.2 Wales Office 0.3 £ million Northern Ireland Executive 15.2 Scottish Government 37.3 Welsh Government 21.4
This has generated the following Barnett consequentials for the devolved Administrations:
The Government are committed to seeking a new future economic partnership with the European Union and this funding will help us to prepare for all eventualities. As the negotiations continue, we will need to reflect upon any progress and consider requirements accordingly. I will work with my colleagues across Government to ensure these allocations achieve value for money for the taxpayer. Final allocations will be made at the 2018-19 Supplementary Estimates in early 2019.
[HCWS540]
Spring Statement: Consultations
(6 years, 1 month ago)
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The Chancellor of the Exchequer (Mr Philip Hammond)
Today I set out the Government’s first spring statement, as part of the move to a single fiscal event. As described in the paper HM Treasury published in December, the new fiscal cycle provides opportunities for the Government to consult more openly at earlier stages of policymaking. This statement delivers on that commitment, it does not make tax or spending changes, but sets out some areas on which the Government will consult over the summer.
Tax and the digital economy
Today the Government will publish the following policy documents that set out our approach to adapting the tax system to meet the challenges and opportunities of the digital economy:
Corporate tax and the digital economy—an update on the Government’s position paper on the challenges posed by the digital economy for the international corporate tax framework. This sets out the Government’s proposed approach to addressing those challenges to ensure the corporate tax system is fair across different types of businesses, while protecting the UK's start-up culture and position as a global tech leader.
Alternative methods of VAT collection—split payment—a consultation on a proposed split payment model to reduce online VAT fraud and improve how VAT is collected.
The role of online platforms in ensuring tax compliance by their users—a call for evidence to explore what more online platforms can do to help their users pay the right amount of tax.
Cash and digital payments in the new economy—a call for evidence looking at the role of cash and digital payments in the new economy. This will explore how the Government can further support digital payments, ensure the ability to pay by cash is available for those who need it, and crack down on the minority who use cash to evade tax and launder money.
Business rates: delivering more frequent revaluations—a summary of responses to a consultation on the implementation of more frequent revaluations of non-domestic properties for business rates purposes, and the announcement that the next revaluation will be brought forward by one year to 2021. This means three-year revaluations will take effect in 2024.
Growth & productivity
Today the Government will publish the following consultations on changes to help boost productivity and growth across the UK economy:
Self-funded training—a consultation on improving the way the tax system supports self-funded training by employees and the self-employed. This will explore extending the scope of tax relief currently available to employees and the self-employed for work-related training costs to support upskilling and retraining.
The VAT registration threshold—as set out at autumn Budget 2017, the Government are not minded to reduce the VAT threshold. This call for evidence will seek views on whether the design of the VAT threshold could better incentivise small business growth.
Allowing Entrepreneurs’ Relief on gains made before dilution—a technical consultation on changes to entrepreneurs’ relief to ensure that it does not discourage entrepreneurs from seeking external finance for their companies.
Knowledge intensive Enterprise Investment Scheme (EIS) fund—a consultation on the introduction of a new knowledge intensive EIS fund structure with additional incentives to attract investment.
VAT, Air Passenger Duty and tourism in Northern Ireland—a call for evidence that will look at the impact of VAT and Air Passenger Duty on tourism in Northern Ireland.
In the coming months the Government will publish:
Improving business productivity—BEIS will publish a call for evidence to understand how best we can help the UK’s least productive businesses to learn from, and catch-up with, the most productive.
Delivering a fair payment culture for small businesses—BEIS will launch a call for evidence on how to eliminate unfair payment practices to small businesses.
Prompt payment by Government suppliers—the Cabinet Office will launch a consultation on making a supplier’s approach to payments to its own suppliers part of the selection process for larger government contracts.
Transferable Tax History (TTH) for oil and gas—a consultation on draft legislation to introduce a transferable tax history for oil and gas companies, to encourage new investment in UK oil and gas fields.
Petroleum Revenue Tax (PRT) deduction for decommissioning costs—a consultation on draft legislation to allow a petroleum revenue tax deduction for decommissioning costs incurred by a previous licence holder, to encourage investment in UK oil and gas fields.
Green growth
The tax system can be a lever to encourage people and businesses to make healthier, more environmentally responsible choices. The Government are committed to improving air quality in the UK’s towns and cities, and protecting the environment for future generations.
Today the Government will publish:
Single-use plastics waste—a call for evidence seeking views on how the tax system or charges could reduce the amount of single-use plastics waste, to protect the environment. This will look at the whole supply chain for single-use plastics, including alternative materials, reusable options and recycling opportunities, to consider how the tax system and charges can help drive technological progress and behavioural change.
In the coming months the Government will publish:
Red diesel use in non-agricultural, non-road mobile machinery—a call for evidence into whether the use of red diesel tax relief discourages the purchase of cleaner engines. The primary focus of this call for evidence will be on improving air quality outcomes, particularly in urban areas. Red diesel for agricultural use will be outside the scope of the call for evidence, as will home heating use and other static generators.
Reforming VED rates for vans—a consultation on reducing VED rates for the cleanest vans through creating a graduated first year rate, as is already in place for cars, to encourage cleaner choices and improve environmental outcomes.
Tax avoidance, evasion & non-compliance
Today the Government will publish:
Extension of security deposit legislation—a consultation on how to extend existing security deposit policy to include corporation tax and Construction Industry Scheme deductions for taxpayers deemed at high risk of not paying and with a history of non-compliance.
In the coming months the Government will publish:
Off-payroll working—a consultation on how to tackle non-compliance in the private sector, drawing on the experience of the public sector reform. The Government will work with businesses and individuals to mitigate the potential administrative burdens of any future changes.
Tackling Corporate Insolvency and phoenixism risks—a discussion document exploring further means for tackling the small minority who deliberately abuse the insolvency regime in trying to avoid or evade their tax liabilities, including through the use of phoenixism.
Tackling construction sector supply chain fraud—a technical consultation on draft legislation for a VAT reverse charge. This will help to eliminate the threat of ‘missing trader’ fraud in construction industry supply chains, which is where the supplier retains the VAT that it collects on its sales. The reverse charge will achieve this by shifting responsibility to the customer for paying VAT to HMRC where the customer is a VAT-registered construction business.
Profit fragmentation—a consultation on the best way to prevent UK traders or professionals from avoiding UK tax by arranging for UK trading income to be transferred to unrelated foreign entities.
Other/maintaining the tax system
Today the Government will publish:
Heated tobacco—a response to the consultation on the tax treatment of heated tobacco products.
In the coming months the Government will publish:
Gaming Duty: review of accounting periods—a consultation to seek views on bringing the administration of gaming duty more into line with the other gambling duties.
Short-term business visitors—a consultation on how to simplify the tax treatment of short-term business visitors from the foreign branch of a UK company, to ensure the UK is an attractive location to headquarter a business.
Capital Gains Tax payment window—a technical consultation on the design of the system requiring capital gains tax due on a disposal of residential property to be paid within 30 days of completion.
VAT and vouchers—a response to a consultation on changes to the VAT treatment of vouchers. This change will amend VAT law to ensure that when customers pay with vouchers, businesses account for the same amount of VAT as when other means of payment are used.
Taxation of trusts—a consultation on how to make the taxation of trusts simpler, fairer and more transparent.
Large business compliance—a response to the consultation into HMRC’s process for risk- profiling large businesses, to improve HMRC’s Business Risk Review process, reflecting and further enhancing the shift in large business compliance behaviours.
[HCWS541]
Foreign Affairs Council
(6 years, 1 month ago)
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The Minister for Europe and the Americas (Sir Alan Duncan)
The Minister for Asia and the Pacific, my right hon. Friend the Member for Cities of London and Westminster (Mark Field) attended the Foreign Affairs Council on 26 February. The Council was chaired by the High Representative of the European Union for Foreign Affairs and Security Policy (HRVP), Federica Mogherini. The meeting was held in Brussels.
Foreign Affairs Council
Current Affairs
Ministers called for urgent implementation of UN Security Council resolution 2401 of 24 February which demanded a cessation of hostilities in Syria to enable delivery of humanitarian assistance. They agreed that the High Representative would send a letter to the Foreign Ministers of Russia, Turkey and Iran—the three guarantors of the Astana Process—to ask them to work on implementation of the resolution.
Moldova
Ministers discussed the Republic of Moldova and adopted conclusions. Ministers reiterated the EU’s commitment to strengthening bilateral relations while underlining the need to continue adopting and implementing key reforms for the benefit of Moldovan citizens.
Venezuela
Ministers exchanged views on the political stalemate in the country following the suspension of the Santo Domingo talks between the Government and the opposition and the announcement of presidential elections scheduled for 22 April.
Ministers expressed their solidarity with Spain, following the decision by the Venezuelan authorities to declare the ambassador of Spain in Caracas persona non grata and agreed to continue closely monitoring the situation and to keep channels of communication open, both with the opposition and with the Government.
Middle east peace process
Ministers discussed recent developments in the middle east peace process in preparation for the lunch with representatives of the League of Arab States.
Informal lunch
Over lunch with the Secretary-General of the League of Arab States (LAS) and members of the LAS ministerial delegation on Jerusalem, Ministers discussed options for reviving the middle east peace process in an inclusive manner, with the objective of achieving a two-state solution and Jerusalem as the future capital of both states. Ministers also discussed the importance of increasing collective, international support for the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).
Ministers agreed a number of measures without discussion:
The Council adopted conclusions on Burma;
The Council adopted conclusions on Cambodia;
The Council adopted conclusions on the Maldives;
The Council adopted conclusions on climate diplomacy;
The Council adopted conclusions on EU priorities at United Nations human rights fora in 2018;
The Council adopted conclusions on human trafficking in south/south-east Asia;
The Council increased the restrictive measures against the Democratic People’s Republic of Korea;
The Council added the Minister of Industry and the Minister of Information of the Government of Syria to the list of those targeted by EU restrictive measures;
The Council adopted legal texts imposing restrictive measures on one person for his activities in support of Daesh;
The Council adopted the common military list of the EU;
The Council adopted a decision on the continuation of EU funding for the activities of the European network of independent non-proliferation and disarmament think tanks;
The Council approved an extension for the implementation of EU strategy against proliferation of weapons of mass destruction;
The Council adopted a decision on continuing to provide assistance to the provisional technical secretariat of the comprehensive nuclear test ban treaty organisation;
The Council agreed the annotated agenda for the first meeting of the EU-Cuba Joint Council;
The Council decided not to oppose the adoption of five Commission food regulations (Health)
[HCWS539]
Grand Committee
Haulage Permits and Trailer Registration Bill [HL]
Tuesday 13th March 2018
(6 years, 1 month ago)
Grand CommitteeRead Full debate Haulage Permits and Trailer Registration Act 2018 View all Haulage Permits and Trailer Registration Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 84-I(a) Amendments for Grand Committee, supplementary to the marshalled list (PDF, 61KB) - (12 Mar 2018)
The Deputy Chairman of Committees (Viscount Simon) (Lab)
My Lords, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Amendment 1
Lord Bassam of Brighton
“EU Community Licence arrangements
(1) It is an objective of the Government, in negotiating a withdrawal agreement from the EU, to seek continued UK participation in the EU’s Community Licence arrangements.(2) If the continued participation referred to in subsection (1) is achieved after the passing of this Act, no Minister of the Crown may make regulations under sections 1 to 5 or 23(2) of this Act.”
Lord Bassam of Brighton (Lab)
My Lords, you will have to bear with me; it is a while since I have had to do this.
I welcome the noble Baroness, Lady Sugg, to Grand Committee and hope that she enjoys it as much as we will. Amendment 1, in my name and that of the noble Baroness, Lady Randerson, is very simple. Its aim is to ensure that the Government have as a negotiating objective continuing participation in the EU Community licence arrangements. Those arrangements have served the UK well. One might argue that they have created a frictionless regime for borders, are easy to understand and largely ensure safe passage of UK goods across the EU 27 and from the EU into the UK.
The Minister should welcome the amendment because it is surely what the Government want to secure in their negotiations. To put it into the Bill would give the freight industry the sort of confidence that it requires and demonstrate beyond doubt that the Government are very much on the industry’s side. If anyone needed reminding of the importance of freight to our economy, they need go no further than read last night’s Hansard. I have had the benefit of reading it, and my noble friend Lord Berkeley, among others, was passionate in his arguments on behalf of the freight industry generally, but for our economy in particular, when he moved amendments on freight-related issues. In particular, his Amendment 104 to Clause 7 of the withdrawal Bill caught my eye. It has similar objectives to this amendment in the sense that any new procedures that we put in place should avoid increasing delays to freight transport. The only surefire way to achieve that is to continue the current scheme.
The volume of traffic between the UK and the EU is enormous. In 2016, as my noble friend Lord Berkeley reminded us, 67 million tonnes of unitised freight were imported or exported, of which 14 million tonnes were temperature-controlled. There are 3,000 trucks a day carrying temperature-controlled loads. In one year alone, 55 million UK customs declarations had to be made, and my noble friend says that this is likely to multiply fivefold after Brexit.
We want at all costs to avoid the queues we have seen when Operation Stack has had to kick in. That would kill our export trade and decimate our ability to move materials into the UK for industry and farming purposes. Seeking to emulate what we already have must be an objective of the Bill, and that is what my amendment achieves.
I look forward to the happy prospect of the Minister not just welcoming my amendment but agreeing to busily import it and incorporate it into the Bill. I cannot believe that the Government would want to create any doubt in anyone’s mind about their intention to be successful in their negotiations and to secure the self-same benefits for the road freight sector that we currently enjoy. I am sure that the FTA and RHA would welcome that certainty. I am confident that our farming industry would want it and that manufacturers, the pharmaceutical sector and, importantly, the construction industry would want it too.
It might be for the convenience of the Committee if I say just a few words about some of the other amendments in my name in this group. The noble Lord, Lord Tunnicliffe, and I have put our names to sunset provisions simply because, if the Government are successful, not only do the main provisions of the Bill cease to have relevance but we both feel that the clauses should cease to have a place on the statute book. These amendments are supported by the Delegated Powers Committee and the Constitution Committee; I draw colleagues’ attention to the Constitution Committee’s report that has just been published. I also support the amendment tabled by the noble Lord, Lord Berkeley, in the group. I beg to move.
Baroness Randerson (LD)
My Lords, I signed Amendment 1 because it drew attention to the fact that, yet again, we have an example of the Government trying desperately to devise a way to maintain a position that we already have. They are fighting to keep the benefits that we currently enjoy as members of the EU. Although the Government have been quite innovative in their approach—in so far as there is any detail—the situation will clearly not be anything like as good as what hauliers currently enjoy.
The formulation in the amendment is similar to that used in the Nuclear Safeguards Bill, for example, in which we urge the Government to pursue Euratom membership. The Minister will be familiar with my Private Member’s Bill on the open skies agreement; it is the same formulation. We have a perfectly good arrangement in the EU at the moment, which we will leave for something less satisfactory. This group of amendments ensures that the powers granted under the haulage permits Bill are not applicable if we stay within the EU’s Community licence regime—in other words, if we successfully negotiate to remain in some kind of positive relationship within the EU.
I draw attention to the very harsh words of the Delegated Powers and Regulatory Reform Committee on the Bill. They reflect the sort of thing that we have heard quite regularly recently, but they are rather stronger than we are used to:
“The Bill is wholly skeletal, more of a mission statement than legislation”.
The committee also points out that:
“16 of the 24 clauses contain delegated powers, all of them subject only to the negative procedure”.
We have not even got draft regulations in order to see what the Government are aiming at.
It is clear that the Bill was written in a panic at the very last minute. It is the first instance I have come across of the Government legislating while saying that they do not want to and admitting that they do not know how the system will work. That is not how British democracy should work. It is yet another example of the destructive impact of Brexit. Having admitted that they did not want to have to legislate in this way, the Government should have included in the Bill some sunset clauses or the use of only the affirmative procedure. As it stands, the Bill is not worthy of a democracy.
Lord Snape (Lab)
My Lords, I support the noble Lord and the noble Baroness in their amendment. Noble Lords will have to forgive me if I sound even less coherent than usual today. I am suffering from what everybody else would call a cold, but, being a man, I believe it is something far more serious. Nevertheless, I am still here.
I would have thought, as my noble friend implied, that the Government would be in favour of the proposed new clause. As the noble Baroness said, this is rather last-minute legislation. In a way, it is understandable, because we still do not know how far negotiations have gone where these matters are concerned. I promised myself not to make a Second Reading speech and will not, but I found it surprising during the Brexit discussion to find so many road hauliers in favour of Brexit because they were not happy with the status quo as it then was. Now, of course, they are a lot less happy at the prospect of a status quo no longer existing. The main concern, at least of those whom I spoke to, was about cabotage; there is little mention—in fact, I do not think there is any—of cabotage in the Bill, and it would be interesting to hear from the Minister whether any discussions which have taken place with the rest of the EU have concentrated on this aspect of the road haulage industry.
My noble friend and the noble Baroness mentioned the number of lorry movements from the United Kingdom to the rest of the EU; there are a hell of a lot coming the other way—I understand about three times as many. We have expressed concern about the likelihood of Kent being a lorry park if no arrangements are made in light of this amendment, but if three times as many lorries are coming into the United Kingdom as leaving, it would be possible to imagine northern France also becoming a lorry park. That is not to say that I share the optimism of those who say that there will be an agreement because these matters cause even more dislocation to our European partners than they do the United Kingdom. Again, it is difficult to tease from the Government where exactly we are in the negotiations. We await the Minister’s response to this amendment. My view is that it might be something that the Government are happy to support. If she says that, at least we will have started the Committee off on a happy note, even if it is not repeated—although I hope it will be—during our deliberations. I support my noble friend and the noble Baroness and hope that the Minister can give a sympathetic response.
Lord Berkeley (Lab)
My Lords, I, too, support all the amendments in the group, and am grateful for the kind words said about me by my noble friend Lord Bassam of Brighton and our debate last night.
The noble Baroness may be right that there are many things wrong with this Bill, but it is a great deal better than nothing. It affects only drivers’ permits and trailers. Last night in the discussion on Amendment 104, we discussed many other issues relating to cross-channel and cross-frontier freight and all the customs issues that went with them. As I think I said last night, it would be good if we had had a separate Bill for that so that we might have gone into the detail, but here we are. We had a very good Second Reading debate. My worry, which is contained in Amendment 7 in my name, is that when we discussed at Second Reading Clause 2, which is to do with the number and allocation of permits, it seemed to become quite confusing. One noble Lord—I cannot remember who—warned against the “random selection” in Clause 2(2) because it was greatly open to abuse. Perhaps that should be removed.
Lord Blencathra (Con)
My Lords, I support Amendments 6 and 11 in this group in the name of the noble Lord, Lord Tunnicliffe. I do so in my capacity as chairman of the Delegated Powers and Regulatory Reform Committee.
The first thing I need to say to the noble Baroness, Lady Randerson, is that it is a bit unfair to characterise my committee’s report as having “very harsh words”. The noble Lords, Lord Tyler, Lord Thomas of Gresford, Lord Thurlow and Lord Lisvane, and my noble friend Lord Moynihan do not do harsh. Further, if one looks at my committee’s report, one will see that we have made five recommendations, two of which say that it would be nice to have a sifting committee and two of which say that we should have a sunset clause, as proposed in Amendments 6 and 11. The first recommendation suggests that it would have been helpful if the Government had given us some examples of the type of regulations necessary. If those are “harsh words”, I think the noble Baroness is living in cloud-cuckoo-land, if I may say so.
Baroness Randerson
Can I clarify that? Having used the term “harsh”, I then used the precise words that are in the report. Anyone reading these proceedings will be absolutely clear that my definition of “harsh” is based on the words used in the report. It might be in the eyes of the reader rather than the reality of the situation.
Lord Blencathra
I thank the noble Baroness. Our report does say:
“The Bill is wholly skeletal, more of a mission statement than legislation”.
It goes on to say in paragraph 4 that:
“We appreciate that the position remains unclear for a variety of reasons”,
which explains why we think the Bill is skeletal. I hope my noble friend the Minister can give us a few examples of the sort of regulations that may be necessary.
On Amendments 6 and 11, the Government’s helpful Explanatory Memorandum says that:
“The power has been left to delegated legislation rather than included in the Bill because the terms of international road transport agreements are as yet unknown. The provisions put in place, if any provisions are needed at all, will reflect the terms agreed between the UK and the EU or other countries for the carriage of goods”.
The wording in the Explanatory Memorandum is almost identical on Clauses 1 and 3, to which these amendments relate. That is why we simply say in our committee’s report:
“Given that regulations under clause 1”—
and Clause 3—
“might prove to be unnecessary, we recommend that the Bill should contain a sunset provision, extendable if necessary, to remove the regulation-making power in clause 1 if it does in fact prove to be unnecessary”.
I congratulate the noble Lord, Lord Tunnicliffe, on tabling that amendment on behalf of my committee. I had been a bit negligent in putting it down myself, so I am grateful to him and I would be grateful if the Minister, in due course, could respond to the points made.
Earl Attlee (Con)
My Lords, regarding Amendment 1 in the name of the noble Lord, Lord Bassam, I do not think we should tie the hands of government. If we set something in stone in primary legislation, it will be to our disadvantage and our opponents’ advantage. However, I very much hope that the negotiations will result in the absolute minimum of friction, for the reasons so well explained by all noble Lords who have spoken so far. The noble Baroness, Lady Randerson, observed that there are no draft regulations in sight and that this is a framework Bill. That is not surprising, because we do not know what the negotiated agreement will look like. However, the Committee will be aware that if the Bill is passed, it will strengthen the Government’s negotiating hand.
The noble Lord, Lord Berkeley, raises an important point in his Amendment 7. I would like to see no restrictions on permits—more or less free issue—with one exception, which I am sure he will agree with. Is there any scope for denying permits to non-compliant operators if they are in trouble with the traffic commissioners or the Vehicle Inspectorate? I do not expect an answer from my noble friend the Minister this afternoon but perhaps she could write to me in due course. As I say, I am for no quantity restrictions but I do not think we should put this into the Bill because it would tie the hands of Ministers when they are negotiating Brexit.
Lord Berkeley
I understand the noble Earl’s comment in suggesting that Amendment 7 may not be a good thing to put into the Bill. But he will remember that when this was debated at Second Reading, there was much discussion of the allocation of permits. Does he not agree that there needs to be some wording to ensure that the allocation, if it has to happen—I share his views that it should not and that there should be enough for everyone—should be seen to be fair? Perhaps he has some other ideas to replace my proposed new clause in Amendment 7.
Earl Attlee
I assure the Committee that I will not be tabling amendments but I was alarmed by some of the history of permits that we looked at during Second Reading. That is something I do not want to see because it constrains the market and competition. I would much rather see permits issued more or less freely, with that one exception: that we could see it as an opportunity to make things more difficult for non-compliant operators.
Lord Campbell-Savours (Lab)
My Lords, I might be the only person in the Room who has run on one of these permits, which was some 50 years ago. I have some permit documentation, going back 30 years, in front of me now. I want to talk about what happened then and what we should avoid happening in the future.
We were carrying our own goods, exporting them and importing components. When we were exporting goods, we had to run on either non-quota or quota—non-quota was a defined group of products that we carried if we were going to an exhibition. For example, I remember going to a clock exhibition in Switzerland, and we had to get a non-quota to carry to Basle there. If we showed at the Paris Porte de Versailles in France, again we would run on non-quota permits but if we were running goods of our own manufacture, we would have to carry a permit. The undersupply of permits was a real problem.
The Minister sent us out a letter during the week in which she talked about electronic management of these systems. To some extent, that might work but I will come to a problem that might arise. The problem in the late 1960s and 1970s, when I was involved in this business, was that there were a lot of forgeries out there. Many truckers who could not get permits would forge them and, when they got to customs frontiers in Europe, bribe customs officers to get passage into another country. As I said at Second Reading, I saw this happen myself. I remember that the customs officer would almost wink and people would drop notes in an old jar standing on the counter. People knew what was going on and it was widespread. I never got involved in it myself, but I observed it. People used to get quite angry about the attitude of some customs officers. They would ask you to open the back of your truck to see what you were carrying, as if they were checking against the bills of lading—the document which indicated what goods you were carrying—as if they were to be given a tip for the pleasure of having your truck opened. It was examined, not properly but in a very curious way, with nods and winks. That went on a lot and I am worried about it.
That was one of the abuses. The next one—it was not even an abuse, as people just turned a blind eye to it—was the selling of permits. Some companies had more permits than they needed whereas others were starved of them. Someone told me on the phone the other day that the going rate, even in the 1980s, was something like £250 for a permit, depending on where you were. When they were carrying expensive goods that was a minor cost to pay, because it was transferred on to the people whose goods they were. If there is electronic control, the chances of abuse in that form are very remote.
We come back to the number of permits. If there is a shortage—and the French, the Dutch and the Belgians may argue for one—it will mean that when you load your truck in the UK you will have to drop your load at Antwerp, Amsterdam, Ostend, Zeebrugge, Calais or wherever. A French lorry will come and pick it up and get the business. At the moment, many British hauliers are able to carry right across Europe. If we do not have the permits to run in Europe, the Europeans will get the trade and all our lorries will be doing is running them across the channel, dropping them, then taking the tractor unit home. In the real world, there could be many problems. I know that this is a skeletal Bill and it may not even happen, but if it does there is going to be a lot of trouble and people are going to be angry.
Lord Snape
I do not doubt the situation outlined by my noble friend, but will it not be to the advantage of British hauliers, to a certain extent, if the system applies the other way around? If there are three times more lorries coming to the UK than going from the UK to Europe, will the British road haulage industry not benefit enormously? Judging by what he said, loads coming from the EU will have to be dropped in Dover or wherever.
Lord Campbell-Savours
I do not know. That may well be, but I want a straightforward system. I want the number of permits to be sufficient to meet the demand and not have to fiddle around with whether we reciprocate or not. I want to avoid all that.
Finally, I turn to what the permits are. In the old days, we had quota and non-quota permits. If we get ourselves into trouble in this area of negotiation, we should try and widen the description of non-quota. Earlier in my contribution, I referred to non-quota covering exhibition goods—which is what we ran. Because the rules are set so tightly if we have to go down this route, we might well be able to widen the description of non-quota to cover what would otherwise come under quota. I do not know if the Minister is with me on that. That is because the regime for non-quota permits is different from the quota regime. On the quota regime there will be a lot more restriction, because non-quota permits are not as frequently used so, if we widen the non-quota permit arrangements, some of that trade may well be transferred over to non-quota. I am sorry if I have not made that altogether clear, but I am sure that in time it will ring correct.
Lord Moynihan (Con)
My Lords, I declare an interest as a member of the Delegated Powers and Regulatory Reform Committee. I will speak to Amendments 6 and 11. However, before I do, maybe I will be allowed to allay the shock of the noble Lord, Lord Snape, who looks at me aghast at the fact that I am not at Cheltenham today, supporting, as I always do, matters sporting. There is a related sporting issue that is relevant here. Thoroughbred racing and breeding is a truly international industry, with significant routes in Europe, and a key element of the success of Cheltenham, and indeed the whole of the thoroughbred, racing and breeding industry, is the current tripartite agreement—the TPA—between the UK, France and Ireland, which facilitates 25,000 movements annually between the three countries for racing, breeding and sales purposes. It is very important that that is kept in place and that we look, for example, at electronic passports in the future to protect that industry.
Lord Snape
I never doubted for a moment, knowing the noble Lord as long as I have, that if it came to a choice between duty and Cheltenham, duty would obviously be first choice.
Lord Moynihan
I pass swiftly on from the observation of the noble Lord, Lord Snape, but I am sad that I am not in Cheltenham today—and, indeed, that I will not be there tomorrow, because I will be speaking on matters sporting, and racing issues in particular, in the Brexit debate on the relevant amendment.
I support the comments that have been made by my chairman of the Delegated Powers and Regulatory Reform Committee in the context of Amendments 6 and 11. Bills that grant wide powers to Ministers on the basis of no clear policy are difficult to scrutinise, as the Constitution Committee highlighted, and therefore present a fundamental challenge to the balance of power between Parliament and the Executive. Much of the detail of how these regimes are to be put in place is left to secondary legislation. In the absence of policy detail or the illustrative regulations—examples that my noble friend mentioned earlier—it is not at all clear to me how these powers will be used or whether they will be used. That is what led to what I believe—I speak in a personal capacity—was a constructive comment when we said that it was,
“more of a mission statement than legislation”.
I therefore hope that where there are exceptional circumstances, which in this case require the creation of criminal offences by regulations, they should normally be subject to the affirmative procedure. What can support that specifically in the context of Amendments 6 and 11 is the inclusion of sunset clauses, which would mitigate the constitutional concerns raised by the broad powers in the Bill and the uncertainty about how they might be used. That is an important constitutional issue; it is interesting that that was covered in some detail both by the Constitution Committee and the committee on which I have the privilege to sit, both of which were at one. I ask the Minister to take those into account seriously as we progress through the Bill, to make sure that there is an appropriate balance between the Executive and the legislature so that we have the opportunity in the future to have a rather more detailed look, both through sunset clauses and the affirmative procedure, at some of the key aspects of the Bill.
Earl Attlee
Supposing that the Government lay some negative instruments to deal with the outcome of the negotiations, and that they are extremely disadvantageous to our road haulage industry, it would be open to the road haulage industry to get on to noble Lords like myself and the noble Lords, Lord Berkeley, Lord Snape and Lord Campbell-Savours, who could pray against the negative instrument in the first 40 days and say no to it.
Lord Campbell-Savours
My Lords, I want to correct the record on something. I said that we ran on quota permits but we ran on non-quota permits. I just checked my notes.
Lord Tunnicliffe (Lab)
My Lords, I did not read Hansard for last night’s debate; I was there. There is no doubt about the extent of the concern expressed by Committee Members last night about permits and trade and the impact on society. I therefore support Amendment 1. Having been a negotiator, I was alerted to the concern of the noble Earl, Lord Attlee, so I looked at what it said—that:
“It is an objective of the Government, in negotiating a withdrawal agreement from the EU, to seek continued UK participation in the EU’s Community Licence arrangements”.
I have to say, as negotiating briefs go, I have rarely seen one less prescriptive. It simply expresses a direction of travel and, broadly speaking, I support it. Similarly, I support Amendment 7, which once again gives more guidance than anything seriously prescriptive from a negotiator’s point of view.
I am grateful to read the report of the Delegated Powers and Regulatory Reform Committee. I think we have an amendment for every recommendation but I will check that before the next sitting. It would be easier if we had correspondence and the Government gave in in advance. We have here what one might call a contingency Bill—that is, a Bill to create an Act of Parliament against a contingency. All the committee is saying is that it is wrong to leave powers lying about. That relates specifically to Clauses 1 and 3. On Clause 1, the report states:
“Given that regulations under clause 1 might prove to be unnecessary, we recommend that the Bill should contain a sunset provision, extendable if necessary, to remove the regulation-making power in clause 1 if it does in fact prove to be unnecessary”.
In almost identical terms, Amendment 11 refers to Clause 3. In examining Clause 2, we could not see any reason why the same logic should not apply, so we have also proposed Amendment 10, which refers to Clause 2.
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)
My Lords, I thank all noble Lords for their contributions. The proposed amendments would enshrine in the Bill an objective in negotiating the EU withdrawal agreement and, should a certain agreement be reached, Clauses 1 to 3 would cease to have an effect.
I will speak first to the amendment in the name of the noble Lord, Lord Bassam, and the noble Baroness, Lady Randerson, which seeks continued recognition of Community licences issued by the UK in the negotiations. As I outlined on Second Reading, the Government’s objective is to maintain the existing liberalised access for UK hauliers. Road haulage is at the heart of the £110 billion of trade that takes place between the UK and the EU every year. We are confident of success in the negotiations, as the continued movement of goods is in the interests of both the UK and the EU.
As noble Lords have pointed out, access is currently secured through participation in the Community licence arrangements. Outside the EU, only EEA members are currently party to the Community licence system. Although continued participation in the Community licence arrangements could be one outcome, the best way to secure mutual recognition and continued access for our hauliers will be through negotiations. I am afraid I must disappoint the noble Lord, Lord Bassam, in saying that we do not feel it would be right, or beneficial to our negotiations, to place any negotiation objectives in the legislation. As my noble friend Lord Attlee said, that would tie our hands.
The Government will take all reasonable steps to see that there are no restrictions on the movement of goods. This can take many forms, including the Community licence, mutual recognition of the operator licence or a permit-based agreement. Many international agreements that are permit-based do not restrict the numbers of permits exchanged; indeed, some of our existing agreements do not require permits at all, including our agreement with Turkey. As I said, our aim is to continue the liberalised access we enjoy today.
Lord Bassam of Brighton
Will the Minister pause for a moment? The noble Earl, Lord Attlee, said that Amendment 1 would set the objective in stone. It would not. As the noble Lord, Lord Tunnicliffe, said, it simply says that an objective of our negotiations should be essentially to retain what we currently have. What is wrong with trying to do that? How does it tie the Government’s hands? I cannot see that it ties their hands at all. The amendment simply says that that should be an objective. If it is only an objective, what do the Government feel binds them in any way?
Earl Attlee
My Lords, the answer to the noble Lord’s question is that I imagine that the noble Lord, Lord Pannick, would have no difficulty at all in convincing the courts that the matter was set in stone.
Lord Bassam of Brighton
I am not here to listen to the noble Lord, Lord Pannick, in his absence. I am keen to hear the Minister give her explanation, which is what the Committee needs.
Baroness Sugg
I will try my best, although I may not be as clear as the noble Lord, Lord Pannick. As I said, the existing Community arrangement is currently only for EU members and EEA members. When we leave the EU, we will not be either of those. What is suggested is one option, but there may well be an equally satisfactory option, such as an unlimited permit system or, as I said, mutual recognition of operators’ licences. We want to be able to keep those options open and not to be sent down the road of agreeing to the Community licence. There is no reason why a permit that replaces the Community licence could not provide the same level of access as exists currently. That could well be our negotiation objective.
On the amendment in the name of the noble Lord, Lord Berkeley, I take the opportunity to reassure him that of course the Secretary of State will take all reasonable steps to meet the demand for permits from UK hauliers. We regularly meet industry to understand its requirements and priorities, which will be reflected in our detailed negotiations with the European Union. While the amendment would not tie our hands in the negotiation, I hope that what I have said gives the noble Lord confidence that it is not necessary to include this aim in the Bill.
Lord Campbell-Savours
I would like to press the question of how these will be allocated. Clause 2(2) says:
“The methods that may be specified under subsection (1)(d) include random selection and first come, first served”.
What does “random selection” mean? How can we randomly select? Is it like a lottery? What about “first come, first served”? Is it a postal arrangement? We need more detail. I do not like this sentence being in the Bill and I think that it should be removed. If you go into negotiations with that in the Bill and a civil servant in Europe reads it, I think that I would know what to do in those negotiations.
Baroness Sugg
I understand the noble Lord’s concern. Later, we will discuss Amendment 8, tabled by the noble Lord, Lord Tunnicliffe, which addresses these issues. There is an explanation and, with the noble Lord’s permission, we will address it then.
The amendments on a sunset clause suggest that, should recognition of Community licences be secured as part of our negotiations, Clauses 1 to 3 should cease to have effect. I understand the intention and I agree that we do not wish to create delegated powers if they are not going to be used at any point in the future in relation to EU exit, but I would like to set out why this Bill has a wider application than just to our road haulage access with the EU. It should also apply to the European Conference of Ministers of Transport multilateral permit scheme and our bilateral agreements with non-EU countries.
While these non-EU agreements have, until now, been dealt with under administrative powers, now that we are introducing this Bill we think that it is important that those agreements are brought in scope, so that there is compliance and consistency in the administration, allocation and enforcement of permits with whatever agreement we reach with the European Union. There would be problems with having different legislation covering similar permit schemes. We are keen to ensure that UK hauliers can use one online system to apply and get permits for the EU as well as non-EU countries, as that would reduce burdens on them.
Lord Bassam of Brighton
Do I understand the noble Baroness right? Is she seeking to incorporate the ECMT scheme within the parameters of the Community licence? Is that part of the objective of the negotiations?
Baroness Sugg
No, not exactly. If the outcome of the negotiations is a permit-based system, whether unlimited or whatever, yes, we would use this legislation for the allocation of other permits for ECMT and non-EU countries. As I said, that is to simplify the system, have everything in one place under the regulations and allow hauliers to have just one point of access. Beyond the first regulations made under this power, they would need to be updated and amended as our international agreements, whether they be with EU or non-EU countries, change over time. We would need to retain the ability to create regulations under the Bill.
Lord Campbell-Savours
Let us take the Mont Blanc or the Brenner Pass. A truck turns up with a permit which is handed over in the office. Will there be some sort of IT connection between that customs post on the Brenner with a central data point in the United Kingdom, so that it can check whether it is a valid or a forged permit? If so, we do not need particularly sophisticated documentation, because all along the line there will be an IT check on what is seen abroad. Can the Minister give us that assurance?
Baroness Sugg
I understand the noble Lord’s point. Sadly, I cannot speak for what will happen in the EU until we have concluded the negotiations. Within the UK, that is absolutely the idea: there would be a system to check on these permits. The noble Lord makes a very good point: we will seek to minimise corruption in future, but that will be subject to negotiations.
Lord Berkeley
On the issue of fraud, I have come across people involved in the delivery of trucks. There appears to be a way you can avoid being limited in your hours by the tachograph because it does not stay with the person, it stays with the truck. That has probably been the case for 20 or 30 years. What have we learned from that and how will we prevent the same thing happening in future with these licences that my noble friend has spoken about?
Baroness Sugg
Absolutely. I agree with the noble Lord that that has happened in the past. We are working with the DVSA on how to better enforce compliance, on both this and future licensing systems, and we will continue to do so.
My noble friend Lord Moynihan mentioned the tripartite agreement between the UK, France and Ireland. We have been looking at how best to ensure that the racing industry is not affected by this Bill and is protected. However, I will take away what he said and will look at it.
Lord Campbell-Savours
Can I ask another question? I am sorry to keep coming back, but I will try to get all my questions out of the way at the beginning. What about the transfer of permits? Will there be some sort of mechanism to ensure that one haulier cannot sell a permit to another haulier? Perhaps we could have that assurance.
Baroness Sugg
I am afraid that until we know the exact system of the permits, we will not be able to give the noble Lord that assurance. Obviously, we need to avoid there being a false market for these permits. We will look at how permits are allocated and if they are limited in any way, which we hope they will not be, we will certainly consider how to avoid that. Again, the allocation system should make sure that additional permits are not allocated to people who are not using them. It is certainly something we will consider.
I hope I have addressed the need for this legislation, regardless of the agreement reached with the EU. I understand the sentiments of noble Lords in proposing these amendments and welcome the discussion it has enabled. However, as I said, we do not believe that the Community licence system is the only way to proceed and therefore do not think the Bill is an appropriate place to set out that negotiation objective. On that basis, I ask the noble Lord to withdraw his amendment.
Lord Bassam of Brighton
My Lords, it is the tradition in Grand Committee to agree to withdraw amendments, and I shall shortly do so. However, I am disappointed with the Minister’s response. I thought I gave her a rather generous invitation to accept Amendment 1.
There is something I find more puzzling still. Over the weekend I extended my reading to take in the international road freight permits policy scoping document. While it does not give us a lot more information, paragraph 1.6 says that the Bill is intended to support the Government’s aim of continuing the liberal access for commercial transport to the EU. It goes on to say that the importance of keeping essential trade flowing is recognised by the EU and is strongly in the mutual interest of both sides, and the industry is therefore confident that a deal will be secured to ensure that essential trade flows will continue without any restriction on access.
I take the argument that this is an opportunity for the Government to look at other ways in which haulage could be permitted, not just in the EU but more widely. I welcome the observation made by the Minister about the way in which they are going to try to simplify the permit scheme and, it seemed to me, bring schemes together to look for a simple way forward in the future. The beauty of the Community licence approach is that it is very simple. Once the primary point has been satisfied and you get the standard international operator’s licence in place, things flow from that. Therefore, I do not think that it is too big an ask to try to have that as an objective in the negotiations.
I will obviously undertake to read what the Minister has said in her reply, but I think it likely that I shall want to bring back this amendment, or one very similar, at Report. I do not think we have heard enough from her to persuade me otherwise, hard though she has tried this afternoon. Our haulage industry requires a bit more certainty and a sense of the Government’s direction of travel, what they have in mind and what their objective is.
If I have one fundamental objection to the Bill, it is that it is only a framework and is entirely skeletal. That much is very clear, not least from the reports that have been prepared by the Constitution Committee and the DPRRC. It is not a very satisfactory Bill, because we will end up having something skeletal as a contingency—that is what this Bill is. If we have to press the button and make it go live—to make it work and make it govern the way in which haulage operates as an industry—the Government will end up having to colour in a lot of the blanks that the Bill leaves, and will have to take rather urgent action to do that at a time when most of us, not least the industry itself, will be worrying about issues relating to Brexit.
I am grateful to the Minister for her response and to the noble Earl, Lord Attlee, for his help in attempting to clarify things for her. I am grateful for the support I have had this afternoon for Amendment 1, across the Committee. I therefore beg leave to withdraw the amendment.
Lord Berkeley
Lord Berkeley
My Lords, Amendments 2, 4 and 5 in my name come from a question I have about Clause 1: why do drivers transporting goods to Northern Ireland get singled out? We know that the Republic is going to remain in the single market and that Northern Ireland is not. I see no difference between the requirements for a permit, or anything else, for drivers going between Northern Ireland and the Republic, between Northern Ireland and the UK—I assume that there is no need for a special licence between Northern Ireland and the UK—and between Northern Ireland and continental Europe. There is an added complexity to the licensing system which is not justified. What is the difference between drivers in Northern Ireland and those in other parts of the UK going to other parts of the European Union? Finding that out is the purpose of these three amendments. I beg to move.
Baroness Randerson
My Lords, Amendment 3 in my name also deals with Northern Ireland. It is a probing amendment, seeking an explanation from the Minister. Following an “international agreement”, Clause 3 allows the creation of regulations prohibiting an operator of a goods vehicle using it in specified circumstances. This creates obvious problems for the Irish border. If an international agreement were able to prohibit the travel of goods between Northern Ireland and the Republic of Ireland, this could lead to a diminishing sense of the common identity that has developed in the years following the Good Friday agreement. It also presents a practical problem, as the avoidance of a hard border between Northern Ireland and the Republic would not be possible. We all know that the Prime Minister has repeatedly said that she wishes to avoid a hard border, but you are going to have a problem delivering that if checks are needed on the border. Whether the operator can cross the border or not, it is the checks that are the issue.
The Bill suggests that there is a sensitivity about travel between Northern Ireland and the Republic. Our amendment simply strengthens that reference. We obviously do not want to imply that there should be checks between Northern Ireland and the rest of the UK—quite the contrary. I therefore want to emphasise that the amendment is to investigate how this provision would work and in what circumstances the Government anticipate that they might have to use it. It would obviously be a lot easier for everyone if we kept to the current arrangements.
Lord Snape
My Lords, like my noble friend Lord Berkeley, I am confused about the continual references to Northern Ireland in the Bill before the Committee. Bearing in mind the years of the Troubles in Northern Ireland, is there some specific reason why the Government are—“harping on” would be the wrong phrase to use—continually mentioning Northern Ireland in the Bill?
We need to seek some clarity from the Minister about the permits as well. What information does she envisage appearing on the permit? Will the permit be in the name of the driver, the vehicle or the company? Will it be for a specific journey or a period of time? Again, following my noble friend’s amendment, why are there specific references to Northern Ireland? It is and will remain part of the United Kingdom; I do not envy those in the negotiations that will take place between the Government and the Democratic Unionist Party but, for the moment, we have to say that Northern Ireland is part of the United Kingdom. Whatever amendments we pass to the Bill will therefore apply equally in all parts of the United Kingdom. Perhaps the Minister can help us where the permit system is concerned. Will there be a difference in the permits for Northern Ireland, and exactly what information do the Government envisage setting out on those permits before they are issued?
Lord Tunnicliffe
My Lords, in speaking to the amendments in this group, I admit that to a fair degree I am not sure what the Bill says about Northern Ireland. I am not entirely sure what it will say about Northern Ireland, with or without these amendments. One thing I know about Northern Ireland is that before you say anything about it, you have to consult a lot of people to make sure you get it right. Accordingly, all I will say is that our position is to support the Good Friday agreement. We will examine what has been said so far and what the Minister says before determining our position on this group.
Baroness Sugg
My Lords, I thank the noble Lord, Lord Berkeley, and the noble Baroness, Lady Randerson, for tabling these amendments and allowing a discussion on the important issue of haulage between Northern Ireland and Ireland. I take this opportunity to reiterate that this Bill does not create a permit regime or hard border on the island of Ireland. Clarity about this issue is of great importance, given the Government’s commitment to having no physical infrastructure or related checks and controls. We must preserve north-south co-operation, of which transport is a priority area for the North/South Ministerial Council, established under the Good Friday agreement.
The regulations brought forward under the Bill may prohibit a goods vehicle from undertaking an international journey to a country outside the UK, unless they have a permit, where an international agreement has been concluded requiring permits to be carried. In relation to Ireland, we have included an additional requirement that the Secretary of State must certify that the Government of Ireland have consented to the use of permits on journeys on the island of Ireland before this comes into force. This has been included to recognise and respect the long history of co-operation with regards to transport on the island of Ireland; the Government believe it is an important addition to the Bill.
Clause 1 is drafted to make it explicitly clear that regulations requiring permits for journeys on the island of Ireland will not be introduced without that clear agreement; we have singled it out because of the importance of ensuring that there is no hard border.
Lord Bassam of Brighton
Just to clarify, if the agreement reached with either the EU or the Government in Ireland was such that they consented to a permit regime being introduced for haulage through Ireland, does that not envisage a situation where there might be a hard border?
Baroness Sugg
The clause as drafted ensures that there has to be a direct agreement between the UK Government and the Government of Ireland before any such scheme is introduced. It aims to avoid exactly that.
Lord Berkeley
Does not the question of requiring the Government of Ireland to consent to the use of permits apply to the whole European Union? In other words, are we allowed to use these permits unless the EU accepts them as a valid document? Does that not apply equally to the rest of the EU, not just Ireland?
Baroness Sugg
The permits would need to be recognised by the EU to be used. As I said, this is an extra clause to ensure that we can also have a separate agreement between the Government of Ireland and the Government of the United Kingdom before anything is put in place.
Lord Bassam of Brighton
Picking up on my noble friend Lord Berkeley’s point, does that mean that there has already been some negotiation between our Government and the EU on the possibility, or prospect, of a permit scheme having to be put in place? Are the negotiators aware that this contingency legislation has been drafted and do they see it as a practical way forward, with all other considerations put aside?
Baroness Sugg
As noble Lords will be aware, there have been many conversations between the EU and the UK on Northern Ireland and the island of Ireland. Obviously, that was addressed in the December agreement. I am afraid that I am unable to tell the noble Lord, Lord Bassam—despite consulting widely, as the noble Lord, Lord Tunnicliffe, said—whether this specific piece of legislation has been discussed with the EU in detail. I will find that out and write to him. The example we have given in Clause 1 is an attempt to provide clarity on how the prohibition of using a goods vehicle without a permit in regulations may be limited, so it does not apply to journeys on the island of Ireland. It is designed to show that there is flexibility to agree something different on the island of Ireland, which is why we believe it is important to include an illustrative example.
Moving on to the amendment in the name of the noble Baroness, Lady Randerson, the Bill allows for a range of outcomes while also meeting our commitments on north/south co-operation as set out in the joint report. We do not think that the amendment as it stands will allow us that same flexibility. As we have not yet agreed the arrangements for haulage for when we leave the EU, we want to keep that flexibility to ensure that any agreement can be implemented. The Bill does not give the UK Government the power to restrict the number of trucks crossing the Irish border; it gives us the power only to implement any new cross-border arrangements that are agreed directly with the Republic of Ireland. As I say, both the UK and Irish Governments have made clear their commitment to avoiding a hard border and preserving cross-border co-operation in any scenario. There is no question of either Government agreeing to such restrictions on cross-border haulage.
On the question asked by the noble Lord, Lord Snape, on permits and what they will show, obviously we are consulting carefully on that, but we expect it to be the name of the company—as opposed to the truck—its validity and its unique number, which is similar to what we have on the Community licence.
Lord Snape
Would that permit be worded in exactly the same way if the journey originates in Northern Ireland?
Baroness Sugg
We expect that the permits would be the same; it is just that the agreement on how the permit system is enacted would be made only if it was subject to a direct and separate agreement between the Government of the UK and the Government of Ireland.
Lord Bassam of Brighton
Would a company based in Ireland but travelling through the UK require a permit?
Baroness Sugg
If its journey would then go on to the European Union, yes, it would. However, if it was going just to the UK, that would fall under the agreement.
I understand that these amendments are designed to ensure that there are no new restrictions and to get clarity on the issue of the island of Ireland. We are committed to this goal and believe the current drafting of the Bill has that intention; as the noble Lord, Lord Tunnicliffe, highlighted, it has been extensively consulted on. However, I will take noble Lords’ comments on this—
Lord Bassam of Brighton
I am sorry about this but on the permits from within Ireland that means a company based in Dublin, for example, would require a UK government permit to travel through the UK to go to the rest of Europe and beyond. Have we consulted with the Irish Government on that issue? It seems an important consultation to undertake. What if they are not happy for us to have a permit scheme which will apply to companies based in Ireland? I do not know how many of those there are; possibly not that many, although I am sure there are a sufficient number to be a burden on their businesses. Have they actively considered that?
Lord Berkeley
Before the Minister responds, I will widen the question a little. My noble friend mentioned the example of a lorry starting in Dublin and going through the UK to the continent, and asked whether it needs a permit. That is why I tabled Amendment 14B, which we shall come on to in due course, to ask whether foreign trucks need a permit to enter the UK. Surely it does not make any difference whether it is delivering from Dublin to the UK or going through the UK to deliver to Paris, as it still needs the same licence. Is my assumption correct?
Baroness Sugg
The noble Lord is correct. We will move on to discuss cabotage, which is an incredibly important issue, whether it be for Republic of Ireland hauliers or UK hauliers. We continue to work with industry to understand its needs. We have spoken to those within the island of Ireland and to a certain extent those in the EU about the Bill. As I said, the exact arrangement on cabotage will be subject to negotiation, so I cannot provide a precise answer at this stage on exactly what that truck from the Republic of Ireland travelling to the UK and on to France will need, because it will depend on the outcome of the negotiations.
As I said, the clause is an attempt to provide clarity on the issue around the island of Ireland. I will take away noble Lords’ comments, consider them carefully and look again at the wording. The reason for this provision is to single out a potential issue and provide reassurance that there will be no hard border in Northern Ireland. Noble Lords may not agree that it does that, so I will take it away and look at it in detail. But for now, I ask the noble Lord to withdraw his amendment.
Lord Berkeley
I am grateful to the Minister for some pretty long and detailed explanations. I can see the political need for something like this. On the other hand, when one sees what has been going on in the last six months, where the Irish Government have clearly allowed the European Commission—probably quite rightly—to do all their negotiations for it as just another member state, that gives cause for reflection. I shall reflect with colleagues and, in the meantime, I beg leave to withdraw the amendment.
Lord Tunnicliffe
Lord Tunnicliffe
My Lords, I move Amendment 8 simply because I believe two things. First, we cannot contemplate a situation where there are not enough permits. If we have a permit system, we must negotiate a position where there are sufficient. That is the principal reason for my moving the amendment: to emphasise that point, to allow people to speak to it and for some of the passion of last night to come through on the back of it.
If there is a limit, it is unthinkable that it should be a matter of random allocation or “first come, first served”. How do you build the future of your business, which is to a degree capital intensive, while depending on employing staff to line up at some government office with sleeping bags to sleep overnight to be first in the queue as if it is Wimbledon, or plan your investments on the basis of how their names might come out of some hat? First, we should not contemplate a limit on the number of permits; secondly, I cannot believe that these words were put in a Bill, as it cannot be a serious suggestion to this extraordinarily important industry that it would be required to behave like that to carry on trading. I beg to move.
Earl Attlee
My Lords, I support the initial comments of the noble Lord, Lord Tunnicliffe. It would be a disaster if we had to regulate the issue of permits in the way provided for, but I hope that the Minister can reassure us that we will take all necessary steps to avoid such a situation. However, I think that it is a sensible provision in a Bill as a backstop, while recognising that it would be terrible in the way if we found ourselves in such a situation as the noble Lord described.
Lord Bassam of Brighton
My Lords, I support my noble friend Lord Tunnicliffe on this. Pretty much every year, I try to get tickets to go to Glastonbury. You go on the website at 9 am and are still there at 10.30 am, and you suddenly discover that your youngest daughter has got tickets but you have not. There is something clearly wrong about a system that does that in my family, let alone anywhere else. The notion that we might have some random process—first come, first served or whatever—is clearly something that we should not allow ourselves to sign up to.
I want to hear on the record some reassuring words from the Minister. This may be a vague Bill, a schematic Bill, a framework Bill and all the rest, but this matter needs some clarification.
Lord Campbell-Savours
My Lords, “first come, first served” implies immediately a limited number of permits, a shortage of permits and problems in the industry. I want to read the general conditions from one such permit issued nearly 35 years ago, which civil servants may find useful during the negotiations. It is quite short, but raises a number of issues. Under “General Conditions”, it states:
“This authorisation, together with the journey record mentioned below, must be carried on the vehicle and be produced at the request of any authorised inspecting officer. It authorises only the number of journeys indicated. It is not valid for national transport. It is not transferable. The carrier is required to comply, in the territory of each Member State, with the laws, regulations and administrative provisions of that State, and in particular with those concerning transport and traffic. This authorisation must be returned to the issuing agency within fifteen days of date of expiry. Before each transport operation, the holder of this authorisation is required to prepare any journey record provided for in bilateral agreements. Such journey record must be returned at the same time as this authorisation”.
So it is a fairly complicated process for the hauliers.
If it is not used within 15 days of the date of expiry, it is returned, but that permit has already been allocated to a specific journey—if that is what it says in the terms and conditions. Is that permit then written off? Does it affect the total number or permits that are allocated, or can we simply allocate a substitute permit, having declared that permit to be written off? I am asking this because, if a limited number of permits are allocated, there is going to be some argument about where they are going. I am trying to establish how we calculate the total numbers that are allocated.
I have been thinking about the earlier intervention by my noble friend Lord Snape. He talked about it being of benefit, in certain circumstances, to our haulage industry. There is a problem there, because we want to avoid that. If we are going into these negotiations on the basis that we want enough permits to supply all the demand, the last thing we want to do is starve the Irish of permits. If they need them, they should be given them, because that helps our case in the negotiations with the European Union.
Baroness Randerson
In her reply, will the Minister clarify exactly what these permits will be? The background briefing that her department issued referred to single-journey permits and multiple-journey permits. It referred to the European Conference of Ministers of Transport permit system. Having researched this, I believe that the number of permits available under that system would be absolutely tiny. Where are these permits going to come from? What is going to regulate them? Are we going to dream it up ourselves or base it on the international system? We need a bit of clarity on this.
Baroness Sugg
My Lords, I thank noble Lords again for their contributions to this debate. I assure noble Lords that this provision is not intended to allow these methods to be the only approach used, or for these to be used without the use of other criteria. We are in the process of negotiating with the EU on how UK hauliers will operate in the EU 27 after our withdrawal. As I said, we are confident we will secure an agreement which allows them to operate without restrictions on market access. If we do agree a permit system, “no restrictions” would mean unlimited permits. The exact nature of what will be in the permits will be down to the international agreement with the EU. We do not have details of that yet, but I imagine that it would follow the international information which is included on them. I will take back the point made by the noble Lord, Lord Campbell-Savours. I will look in detail in Hansard about what the exact restrictions on that permit are. I am not sure that we would repeat them in a future system.
In including this, we are attempting to be prudent in ensuring that the industry would be able to continue to operate under a range of different outcomes. It may be that, depending on our future partnership agreement, in some circumstances, the demand for permits may exceed the available number. As I said, that is not the aim of negotiations or what we are hoping for, but we have a duty to plan for that, as a contingency.
One of those outcomes could see the permit scheme we agree involving a set quota of permits. The Bill allows us to set criteria to allocate those permits, should we need to. The detail of the criteria will be setout in regulations and guidance. We have set out some examples in the scoping documents. In such a case, criteria such as the economic benefit the permit would bring would be reflected. Of course, a more sensible way of allocating permits would be the best outcome. However, if the use of those criteria—set out in the regulations—was not sufficient to balance demand versus supply, we may need to apply a further method such as random allocation to decide between applicants. For example, if we were able to clearly allocate 90% of applications because of the economic case, we could then use a first come, first served basis or random allocation to allocate the other 10%. As I said, and as noble Lords have made clear, we want to avoid a system with a limited number of permits, but we need the ability to allocate them should we find ourselves in the unfortunate situation of their being limited.
Baroness Sugg
I was coming on to that. It might be appropriate and fairer to combine a number of criteria and approaches to different types of permits. For many of our current permit schemes with third-party countries, such as Morocco and Ukraine, the number of permits is significantly greater than the take-up and this is not expected to change. In these circumstances, the optimal approach is first come, first served, which we use at the moment.
It would of course still be possible for the Government to bring forward a proposal to use these specific approaches for the EU by putting them in regulations alongside other criteria and methods. As I said, we discussed that further in the policy scoping note.
Lord Campbell-Savours
I am sorry. The transmission on the audio equipment was very bad when you were answering the question I asked. It was impossible to hear because the audio went wrong, so I repeat my question: if that sentence were not in the Bill, would it make any difference? Why not just remove it?
Baroness Sugg
As I said, we may use that system for current non-EU agreements and agreements with third countries, which we discussed before. That is the system we currently use because we have an excess of permits to demand. That could be on a random basis or on a first come, first served basis.
Lord Bassam of Brighton
I am sorry. If we are in one of those desperate situations where there is a shortage of permits compared to what we need, retaining that subsection is extremely damaging because it means that, in most circumstances, we cannot allocate on a needs basis. I should have thought that there are certain things we need to import or export that have a high degree of priority. Having that clause drives a coach and horses through that, does it not?
Lord Campbell-Savours
Before the Minister answers, can I ask her to take this away and discuss it in the department? I think she may get different advice when there has been a full discussion.
Baroness Sugg
I absolutely agree that we will need to put criteria in place in the unfortunate situation of there not being enough permits to go round. Of course we would do that; I hope I explained earlier that this would give us the ability to allocate the remainder of the permits if those criteria could not fairly decide what the allocations should be.
I entirely understand that noble Lords are concerned that the methods of allocation appear somewhat arbitrary when viewed in isolation. The intention is that when we bring forward the regulations—which will have all the criteria set out in the policy scoping notes—the industry will see that there is an objective and equitable approach. The option of including these criteria as part of the approach is an important contingency.
Lord Bassam of Brighton
The thing about regulations is that they are unamendable. You either buy the package or you reject the lot. This provision does not terribly help, because it could end up contradicting the regulations. That is why my noble friend is suggesting that the Minister might want to take it away to give it a bit more thought. I am struggling to think of a set of circumstances where these two things will work.
Lord Campbell-Savours
Can I add to that intervention? I can give the Minister another criterion. What about regional considerations, which might well be in our favour?
Baroness Sugg
The reason we put these two methods in the Bill and left other criteria and approaches for the regulations is based on legal advice. Perhaps the Committee would allow me to set it out.
Although there is no specific reference to the exercise of discretion in the Bill, all regulation-making powers and the regulations state that the Secretary of State “may make provision”, which obviously involves the exercise of discretion. Decisions on the allocation of permits will involve an element of discretion in both setting the criteria and applying them to determine which operator gets a permit. Discretion in the Secretary of State’s decision must be in accordance with public law principles, so it must be lawful, rational and procedurally fair, and decisions may be challenged by way of judicial review where they do not comply with those principles.
To be clear that the Secretary of State is able in certain circumstances to allow the use of first come, first served or random allocation, they have been included in the Bill. Where the criteria set out in regulations and guidance are not sufficient to allocate all the permits, the Secretary of State is able to use that discretion to allocate permits on a first come, first served basis. It is best included in the Bill in accordance with public law principles.
I understand the noble Lord’s point. We have had extensive discussion on this. It is based on very clear legal advice that if we were not to include it, we could not use it at any point. Although we do not want to use it for the allocation of permits, because I entirely agree that that would not be fair, I will take it back and discuss it further with the legal team to clarify. I understand why it standing alone in the Bill causes concern.
Lord Berkeley
I am grateful to the Minister. While she is doing that, could she come up with some precedents where the first come, first served principle has been used and, if it is buying tickets for sporting events, or whatever, whether it is appropriate for this?
Baroness Sugg
I certainly will. As I said, we currently use it in certain non-EU agreements, but this is obviously the first time we will be partially using it in an EU-UK agreement. Let us not forget that we are all hopeful that we will not need to include it, but if we do, it is incredibly important that we get it right in order that it is fair. I will take it away, discuss it further and see whether we can get across the same principle and ensure that we are not subject to legal challenge in a way that is more acceptable to noble Lords.
Earl Attlee
When my noble friend takes it away, can she also have a look at why we do not simply auction the permits? We auction all sorts of things: oil exploration rights, for instance. They are very valuable and they are auctioned. That seems a much more sensible way to allocate a scarce resource rather than first come, first served, which seems to have all sorts of difficulties alluded to by the noble Lord, Lord Campbell-Savours, although he shakes his head vigorously.
Lord Berkeley
The noble Earl would prefer to see a lorry load of caviar coming in rather than basic food.
Earl Attlee
I made it quite clear that I do not think we should go anywhere close to being short on permits. We are talking about disaster if we are short on permits. As we know perfectly well, the Bill’s provision is just a long-stop measure, but I am glad that my noble friend will be taking it away.
Baroness Sugg
Currently, the scoping document does not include a provision to auction. That is a new one on me, and I think there will be various views on it. We are of course discussing what criteria should be used and that is subject to consultation, so I shall be happy to feed in my noble friend’s thoughts.
As I said, I understand the issue. I will take it back to see whether there is anything that we can do. With that, I hope that the noble Lord will be able to withdraw his amendment.
Lord Tunnicliffe
My Lords, if the Minister comes back with an agreement where this subsection is needed, she will have failed, and if she fails, the use of these criteria would be unreasonable. The Minister and I have already done spaceports and lasers. She has a commendable record on bringing back compromises; I hope that she does so in this case. In the meantime, I beg leave to withdraw the amendment.
Lord Berkeley
“(3A) Before exit day, the Secretary of State must publish a report outlining the content of any agreement with the EU over the allocation of permits for UK registered vehicles to operate in the EU.(3B) In subsection (3A), “exit day” has the same meaning as in section 14 of the European Union (Withdrawal) Act 2018.”
Lord Berkeley
My Lords, I will also speak to Amendment 14B in my name.
Amendment 9 is quite simple. It would require the Secretary of State to publish a report saying what is in any agreement that has been made on the allocation of permits for UK-registered vehicles to operate in the EU. I do not need to go into it in any more detail than that. We have had a good discussion about that this afternoon, and I am sure that the Minister will welcome this. She will probably say that she is going to do it anyway, and if she is not going to, she jolly well should. However, there is a reciprocal problem that we have not discussed so far—although my noble friend Lord Snape mentioned it—which is about EU lorries coming into the UK. Amendment 14B would allow the Government to make regulations to issue permits for non-UK registered vehicles to come into the UK. This would include vehicles, as I said earlier, from the Republic of Ireland.
Does the Minister agree that there is a need to issue such licences? I hope that she does, because otherwise, EU lorries will roam around the UK freely, doing exactly what they like, presumably doing cabotage for several months before they run out of fuel. It seems unfair, and I am sure that the European Union negotiators will accept that there has to be a reciprocal arrangement. Does the Minister envisage an allocation of permits to each member state, or will there be one lot of permits to cover the whole 26 or so member states—apart from Ukraine and places like that, because they are not within the EU? If the answer is, “No, it is an EU one and that’s fine”, will the Republic of Ireland to be happy with that, and how will it get its allocation—will it be separate or together?
I can see from past experience that the French and Dutch Governments in particular may want more than their fair share, or more than what we may think is their fair share, so there is the question of how we would deal with that.
Lastly—I hardly dare go back to this question of first come, first served—but how will it be done? I cannot say much more than that, but I look forward to hearing what the Minister says. I beg to move.
Lord Bassam of Brighton
My Lords, I have a number of amendments in this group. These amendments have been laid to ensure clarity of purpose in the Government’s strategy. Amendment 12 seeks to get the Government to lay a report within a month of the Bill passing on forecasts of how the permits regime will affect the efficiency of haulage and in every year following. Amendment 13 asks that within three months of the Bill passing the Government produce a report setting out their expectations for future arrangements between the EU and the UK with regard to road haulage. Amendment 14 suggests that within three months of the Bill passing a report on the costs of the future international haulage permit scheme be published.
It is essential to business continuity that the industry knows what the Government are up to and what their expectations are, what forecasts are being made and, most importantly, what costs they are likely to incur should the scheme in the Bill need to be implemented. It is fair to say that the impact assessments published were delphic in the extreme on cost estimating. No figures were given, but there were a lot of words to suggest that there is an expectation that companies in the small and medium-sized haulage sector might seriously struggle with the cost when permits are introduced, particularly given that, on the face of it, it is going to be a full cost recovery system.
The Minister will say that it is too early and that we have not got to the point at which we need to do a lot of this, but at Second Reading she gave some indication of what the range of costs might be for individual permits. We need more information, and there ought to be an obligation on the Government to produce reports setting out forecasts and expectations for future arrangements and costs. Without those things, we will not have certainty in the industry, and the industry definitely needs certainty. From my discussions with the FTA I know that it is concerned not so much about the scheme itself as about how it will work, what the details of implementation will be, the burdens that it will place on its businesses and the likely impact on the haulage industry in the UK generally. These are not unreasonable concerns. We, as responsible legislators, ought to focus on that. I hope that the Government can come up with some answers and will commit to producing reports and assessments of the sort that these amendments describe.
Lord Campbell-Savours
My Lords, I want to concentrate on Amendment 14, which refers to cost. I will refer to documents that I have from 30 years ago, which deal with the costs at that time. What interests me is how the costs are split between various categories. Again, civil servants might find this useful. I have with me a non-quota permit for France and a non-quota permit for Italy. The price I refer to now is an indicator for one country, so obviously if a truck were passing through a number of countries the totals would be multiplied. On a single journey to France, 30 years ago, a permit was £2.80; a multiple-journey permit valid for two journeys was £3.40; a multiple-journey permit valid for three journeys was £5.10; a multiple-journey permit valid for four journeys was £6.80; and a period permit was £50. That is for one country; as I said, those figures have to be multiplied for permits for more than one country.
The office in the United Kingdom that received that money was in Westgate House, on Westgate Road in Newcastle upon Tyne. That is where everything was organised from, and as my origins are in the northern region and as that was my former constituency, I hope that if we go into this business again, which I hope we will not, permits will again be allocated from somewhere in the north of England, and in particular from Newcastle.
I have with me also the detail that is required for a permit. I want to go through it, because it is quite onerous and people should reflect on these matters before we go down this route. The form, which is from more than 30 years ago, asks for: the full name of applicant; address in full; British operator’s licence number, the traffic area in which it was issued and the date of expiry, and for Northern Ireland operators a freight operator’s licence number and the date of expiry; details of vehicle, including make, registration number and MOT plate; the maximum permissible laden weight; the unladen weight; the maximum permissible load; the date for departure from GB; countries to be traversed; date of entry into country, in this case Italy; the town and country where the goods were loaded; the town and country where the goods were unloaded; the nature of the goods to be carried; the weight of the goods to be carried; the estimated total length of journey on the continent; and whether the vehicle will cross the Italian frontier by rail or Kangarou service on the outward or return journey. That is a lot of information.
When we are in these negotiations, we should try to minimise the amount of information that hauliers are required to provide, if possible. I have talked about what would happen with frontiers; I remember occasions when trucks were stopped because a mistake had been made in the permit allocation. Under the current arrangements, that would incur demurrage charges. The former Transport Minister will know all about demurrage charges; I think I remember a debate he was involved in some time ago. Those charges can be very high: the freight operators at Dover talk about a current rate of about £250 a day. So, a hold-up as a result of a mistake on an allocated permit can be very costly. Therefore, there is a need to minimise the amount of information required.
Baroness Randerson
My Lords, I rise to speak specifically to Amendment 12, to which I added my name, but also to the group as a whole, because it covers the cost of all this to the haulage industry: the cost of UK-registered vehicles operating in the EU; the efficiency of haulage after Brexit; future arrangements for the international transport of goods; and the cost impact. I have a slight feeling of Groundhog Day. I will spare your Lordships much of the detail, but I have been through this once in the previous 24 hours, during the EU withdrawal Bill debate, when we covered some of the same territory. For the sake of variety, I will say a few different things because there are plenty of things to say.
A report came out today—hence it was not the topic of my speech last night—by Clifford Chance and Oliver Wyman. It estimates that the costs to business of Brexit in terms of customs arrangements, additional legal and bureaucratic requirements and haulage requirements in relation to customs arrangements for goods in transit will be £32.8 billion. I always measure things in relation to £350 million, for reasons that might be obvious to some noble Lords here; that figure comes out at roughly double £350 million a week. That is a very significant issue and I am delighted that the noble Lord, Lord Campbell-Savours, illustrated the situation so well with original documents. I recall that, a year ago, one of the haulage organisations—forgive me, I am delving into my memory and cannot remember which one—sent us a briefing about the costs to the haulage industry. It illustrated them by saying that, depending on the type of goods being carried, driving from the UK to Italy and back could require 64 different pieces of documentation. In this day and age, I am sure that would not be pieces of paper, but people have to fill in the forms online in just the same way. Anyone who spends as much time filling in forms online as I do will know that it is very easy to make one of the mistakes referred to by the noble Lord.
Last night, we talked about delays at the ports. Dover is a particularly stark example because of its geographical configuration and the built-up area around it. That all adds to the cost, and the issue of permits and other documentation is key to getting the lorries through Dover and all the other ports as quickly as possible.
The amendments address the impact of additional border controls and delays, the costs of which go well beyond the haulage industry. When we had Operation Stack—and Dover port is predicting worse queues than Operation Stack as a regular feature—it cost the police and council in Kent £1 million a day. All these other things add up, so it is so important that any permit system is simple, straightforward and as flexible as possible.
I also emphasised last night that we talk all the time about the cost to government, but businesses have to internalise and absorb those costs or pass them on to their customers. In the case of large companies, that might be quite reasonable over a period, but there are SMEs that have only ever exported to EU countries. They will never have dealt with custom systems before, and will not be familiar with the whole process. They will have to set up whole new departments and systems, which will be of significant cost to business and have significant impact on our industry. That applies across the board.
The Clifford Chance report picked out the impact on the car industry because car parts move across borders frequently during their production. The impact will be on car manufacturers not just in this country but in other countries bringing their cars and car parts to us.
I very much hope that the Minister will be able to assure us that the Government are doing some work on this and will soon be able to produce some hard figures. Reports have been published. They may be accurate or inaccurate, but the work has been done. Individual industries are doing that work. It would be very useful if we had some information on what the Government calculate will be the impact.
Earl Attlee
My Lords, I see merit in some of the amendments. Clearly, we need to know the outcome of the negotiation and what the impact will be. The noble Lord, Lord Campbell-Savours, mentioned demurrage, which is a good point. If you have a complex system, you can foul up. The problem for a small haulier is getting anyone to pay demurrage. It might be in the contract, but you try getting your customer to pay it for a small haulage business: you will struggle. It may be okay if you have a supertanker and your contract agreed on the Baltic Exchange, but for a little haulage deal? Forget it.
The Committee needs to consider the position of our EU partners. It is not in their interest to have a complex system either. We have the Hams Hall engine plant making BMW engines that have to go to Germany. We know perfectly well that automotive components go backwards and forwards several times, as the noble Baroness, Lady Randerson, said. It is in no one’s interest to have a complex system.
Lord Campbell-Savours
I am not sure that is the case. If you are required to give your load to someone else, because you do not have a permit to run in Germany, you lose the business. A German tractor unit will take over your load and take it to its destination.
Earl Attlee
I agree with the noble Lord that the Government will have to negotiate the UK’s position effectively, but it is in no one’s interest—neither ours nor that of the other EU states—to have a complex system that harks back 50 years. The noble Lord has illustrated the problem very well: if you have a complex system, it will be horrendously expensive, and we do much more cross-channel trade now than we ever used to. I cannot see the driver of having a complex system. We may legally have to have a permit system, but it is up to the Government to negotiate as simple a system as possible, which I am confident they will do.
Lord Campbell-Savours
I have just seen something in a non-quota document which might be of interest to Ministers. It is an Italian document stating that a permit is required for the transport of goods by means of an unaccompanied trailer or semi-trailer as well as by means of a motor vehicle with or without trailer or semi-trailer. It says that “articulated vehicle” means a tractor hauling of semi-trailer. If we really get into hard territory, we should be arguing on the gross tonnage of vehicles, because that might be a way of getting more permits. Our vehicles are 24 tonnes, 32 tonnes, 15 tonnes and 10 tonnes—I am not a transport expert; my noble friend Lord Berkeley will correct me. We may get an exemption for lower-tonnage vehicles in the event that we find ourselves in a corner on the allocation.
Earl Attlee
Of course, the noble Lord is thinking about a complex system. One might need a permit just to run vehicle registration number XYZ in Europe; it might be as simple as that; we simply do not know. The Minister will not give the indication because she is negotiating. It need not be horrendously complicated.
Lord Tunnicliffe
My Lords, this is the reports group of amendments; various reports are suggested. We have two amendments in the group, Amendments 13 and 14, but they all centre on the same issue: how is this critical, potentially catastrophic problem being solved and how much is it costing?
It is important to realise that this is not a second-order hard or soft Brexit debate; it has nothing to do with that. Whether it is a hard Brexit or a soft Brexit, if this problem is not solved, we starve. Last night, it was clear just how concerned the House is about the situation. There is an argument that, because it will cause them pain and cause us pain, the world will be rational. The trouble is that the negotiations are being led not by businessmen or exporters but by politicians. I hate to say it: in history, politicians have not always been rational. Our friends in Europe are feeling very bruised about Brexit. They should probably be cheering because they are getting rid of us, but they are not; they are upset. Their club is being challenged by our departure, so there is every possibility that they will not be rational.
The argument that the pain is the same from anything we get wrong, again, is not valid. If you put a border down the North Sea and down the channel so that nothing can cross it, the EU 27 will survive and we will not. This problem has to be solved. All that we are asking for in this group of amendments is to be told how it is happening. Whether we agree the amendment or not, I hope that the Minister will hear what we are saying, arrange one way or another to keep us informed of developments and convince us that the energy and effort that such an important issue requires are going into solving it.
Baroness Sugg
My Lords, these amendments set out requirements to report on a range of matters related to road haulage, from the allocation of permits to forecasting how a permits regime will affect the efficiency of road haulage, what our future arrangements will be for transporting goods, the cost to the road haulage industry and the permit arrangements for foreign hauliers. As noble Lords have made clear, road haulage is essential to our economy. It is an indispensable enabler of much of the wider economy, too. I appreciate that the Committee’s concerns here are how the permits system may affect the movement of haulage between the United Kingdom and the EU, and any impacts on UK hauliers and the wider economy—the direct financial impacts to industry and the wider economic effect.
The key impact for hauliers alongside the use of permits, as highlighted by many noble Lords, will be any restriction of trade and the possible friction at borders, which is why we are obviously doing what we can to reduce that. I am afraid I cannot give any further information on the wider negotiations currently taking place, and can only repeat that a future partnership is in the interests of both sides.
In implementing this legislation, we will bring forward a straightforward system that minimises any additional burdens or costs for business arising from the scheme. I previously set out that there will be no new transport checks required at borders. The noble Lord, Lord Berkeley, proposes that we produce a report outlining the content of any agreement on the allocation of permits, if they are required. When our agreement with the EU is settled, we will of course ensure that the haulage industry is properly informed and educated. As he predicted, I can say that we will publish the details of that scheme as soon as it becomes available. I am not convinced of the need to enshrine in the Bill the requirement to lay such reports before Parliament, as the information will be in the public domain.
Within the other amendments, Amendment 12 proposes that one month after the Bill comes into effect, and thereafter on an annual basis,
“the Secretary of State must lay a report before both Houses of Parliament containing a forecast of how the permits regime will affect the efficiency of haulage”,
while the noble Lord, Lord Berkeley, has tabled an amendment about reporting within three months of the Bill coming into effect on the arrangement of the allocation of permits. I will address those together.
Although I cannot provide detailed forecasts of the impacts on the haulage industry while we are in negotiations as we do not know the final deal, as I have said, we are aiming to continue the existing liberalised access we have today. Again as predicted, this time by the noble Lord, Lord Bassam, I do not believe that a requirement in legislation to produce a report containing analysis of how the permits scheme has impacted haulage is appropriate, or indeed even possible, one month or three months after the Act is passed as suggested, as negotiations may still be concluding.
However, I absolutely agree that it is incredibly important that the impact of any EU permit scheme—if that is required, and we are obviously all keen that it will not be—is assessed at an appropriate stage to take into account the application of the agreement itself, the administration of the scheme and the effect it will have on industry. If we need any new permit scheme, it is unlikely to have gone live within the timescales suggested, and we would not be in a position to provide any evaluation of its impacts. As I have said, we will publish details of the scheme as soon as they are available, but I absolutely recognise that there is a need to review the impacts. I will consider how best to do this ahead of Report and come back to noble Lords on that.
The noble Lord, Lord Campbell-Savours, made a point about information. Where possible, we aim to use existing information provided as part of the operator’s licence, and of course we will consult on all additional information needed and will aim to minimise that. He helpfully highlighted previous requirements, which certainly seem excessive to me. If we can use the negotiations to simplify the information needed on permits, we should certainly do that. As the noble Baroness, Lady Randerson, said, this should be as simple and straightforward as possible.
I turn to the amendments on foreign hauliers. The Bill is not directly concerned with the operation of foreign hauliers in this country, except to the extent that Clauses 10 and 11 allow for derogations from a permitting scheme in emergencies. With the exception of Clauses 10 and 11, the Bill is solely concerned with requirements on UK hauliers operating internationally and provides powers only for the UK Government to issue permits to UK hauliers. But in light of the amendments, and because how EU hauliers are treated in the UK is incredibly important, it is probably helpful to outline the Government’s current thinking on international hauliers operating in the UK.
As noble Lords have pointed out, foreign hauliers play an essential part in freight movements between the UK and the EU. Foreign-registered HGVs carry more than five times as much freight as UK-registered HGVs, hauling 40 million tonnes between Great Britain and the other 27 EU member states. While the UK remains an EU member state, we participate in the Community licence scheme, an EU-wide scheme that permits a haulier licensed in one member state to operate across the Union, including some cross-border and within-border trade in other member states. The arrangements we make with the EU should, of course, be reciprocal. Whether we will require a permit scheme for foreign hauliers, and how it will work, will be subject to negotiations with the EU in the same way as whether UK hauliers will require a permit in the EU.
If future arrangements require permits for UK vehicles to travel to the EU, it follows that EU vehicles would require permits to travel to the UK. If we did require a permit scheme it would be for other member states, rather than the UK, to organise the issuing of their own permits. That would not be something the UK Government did. How they allocate these will be up to them, but we will discuss this with them in detail. I would be interested to hear their thoughts on first come first served and random allocation. That is why the Bill does not address this.
Lord Berkeley
I thank the Minister for her explanation. To be clear, if each member state is to be allocating permits, what about the quantity for each state? Will there be more permits in total than we want and will we be able to limit them? How is it going to work? Will the European Commission do it? I think that would be a pretty good disaster, but it is for it to decide.
Baroness Sugg
I am afraid that the answer to that is that it is all subject to the negotiations. The noble Lord asked earlier whether we were doing this on an EU-wide or bilateral basis. We think that an EU-wide basis is the simplest way. Of course, we want to ensure that enough permits are allocated to countries, for example Northern Ireland and France, which we currently have a lot of dealings with. I go back to the point that we are hoping we will not need a permit system, but if we do it will be unlimited and allocation would therefore not be an issue. If it is limited, which it may be, then if the number of UK permits is limited, how the European Commission allocates them will be down to negotiation.
Lord Campbell-Savours
It is very important that we do not have to negotiate bilaterally because we could be held to ransom by some of the northern European states, whereas others might be more generous. If we cannot get through France, Belgium or Holland, what is the point of them in the states lower down?
Baroness Sugg
The noble Lord is quite right. We think it is best to negotiate this as an EU-wide agreement. Bilateral agreements remain an option should we need them, but we very much hope that we do not.
Lord Berkeley
Is there a precedent in the negotiations with Ukraine, or another country outside the EU? Does Ukraine negotiate bilaterally with every other member state or with the EU, and are the lorries allowed to roam freely within the EU once they have got in?
Baroness Sugg
Our current agreement with Ukraine is negotiated through the EU. I believe that Ukraine has an unlimited number of permits. I will go back and look at specific examples. Most of these negotiations are done with the EU as a bloc, as I say, not bilaterally.
Lord Campbell-Savours
Surely, the position is that if you are carrying your own goods it will come under one quota system and there should be no restriction whatever. If you are carrying other people’s goods, there might be a restriction. We should have that in mind when we negotiate.
Baroness Sugg
I agree, as I do with the noble Lord’s point on using tonnage within the negotiations, which I will pass on.
I will explain to noble Lords how the regulation of foreign hauliers is being handled in legislation. It is currently carried out under the Goods Vehicles (Licensing of Operators) Act 1995, which requires any operator, whether based in Great Britain or abroad, to carry a Great Britain operator’s licence, failure to do so being an offence subject to a level 5 fine on summary conviction. However, EU hauliers are currently exempt from carrying a GB operator’s licence because they carry a Community licence under EU law.
If EU community licences are no longer recognised when we leave the EU, we will remove the exemption for EU hauliers and regulate their access to the UK in the same way that we regulate access for non-EU hauliers. Obviously, how we do that will be subject to negotiations; again, I make the point that we hope we will not need to do this because of the open access. We will do that by setting out the conditions agreed in the international agreement concluded with each country or with the EU, including whether a permit is required.
The recognition of EU Community licences in Great Britain will be removed using the power to correct deficiencies arising from the UK’s withdrawal from the EU under Clause 7 of the European Union (Withdrawal) Bill, which, as noble Lords know, we discussed in detail last night. When that comes into force, it will enable the Government to correct EU retained law and UK legislation where reciprocal arrangements between the UK and EU, such as the recognition of Community licences, no longer exist. The new conditions—if any are agreed in negotiations—placed on EU hauliers, including carrying a permit, may then be put in place by using existing powers under the Goods Vehicles (Licensing of Operators) Act 1995, if the Government consider that this is required. The same approach will be taken in Northern Ireland legislation.
Baroness Golding (Lab)
I am concerned about horseracing. As the Minister will know, horses travel from Ireland to England, into France and back again. Will they be exempt from this kind of operation or is there another scheme to deal with horseracing and all the gear they take to a race and then to bring it back? As my noble friend Lord Campbell-Savours just said, they are other people’s property as well as the driver’s own. It does not make any sense to me to get them involved.
Baroness Sugg
This came up at Second Reading, and we have consulted extensively with the horseracing industry to ensure that it does not affect it. Our understanding is that all-in-one horseboxes—as I will call them again—are used rather than trailers, so they would not be affected by this legislation, but we are working with the industry to ensure that this will not affect it.
The reason why I set out how we deal with this in legislation is to make the point that there is a system there for us to do it through the withdrawal Bill and the Goods Vehicles (Licensing of Operators) Act, which is why we have not addressed it in the Bill, which relates solely to UK hauliers. However, as I say, we are hopeful that we will not need to use it.
Lord Berkeley
Before we leave that, I think the Minister is arguing—obviously, I will have to read the record afterwards—that we do not need these amendments because it is already covered by existing legislation. However, I would be interested to know two things. My noble friend Lord Campbell-Savours talked about the difference between owned goods in a lorry and third-party ones. Is that condition still there, and do we have to take it into account? After the noble Baroness’s intervention earlier, would it be possible to have a total list of all the different permissions that are needed to carry goods out of and into the country? I could put it down as a Written Question, but it is easier to ask it now. It would be quite interesting to have such a list of what permissions one needs. I do not suggest that the Minister answers this now.
Baroness Sugg
I will have to get back to the noble Lord on that in writing, but I will certainly do so before Report.
I will say a quick word on cabotage. The proposed new clause would enable the Secretary of State to allow cabotage for UK goods vehicles in the EU and for EU-registered goods vehicles in the United Kingdom. Cabotage is currently secured through participation in the Community licence arrangements. It may be that, depending on our future partnership agreement, permits would allow for cabotage rights and would therefore be dealt with using existing legislation, as I outlined previously—the goods vehicles licensing Act. I hope that the noble Lord will agree that this amendment is not needed to achieve what he is seeking, as we already have legislative cover on that.
On the point around owned hauliers, I will have to get back to the noble Lord in writing.
Lord Campbell-Savours
I am sorry to keep getting up, but it is not just about your own goods. Under the arrangements that I remember, it was own goods, works of art, fresh fruit and veg and exhibition goods. All that I am arguing is that it might be possible to widen those descriptions in the event that we get ourselves into difficulties.
Baroness Sugg
The noble Lord makes a valid point. I will have to go back and look at that in detail and come back to the Committee in writing.
As was covered earlier when we were discussing the reporting requirements, I agree that we must consider the impacts of leaving the EU on the haulage sector. That should cover both UK and foreign hauliers. We need to come up with a form of reporting on this; I do not believe it needs to be in the Bill, but I will consider that and come back with a proposal ahead of Report. Once again, I welcome the discussion that this amendment has enabled, and I ask the noble Lord to withdraw his amendment at this stage.
Lord Berkeley
I am grateful to the Minister. She has been very patient with the questions from me and other noble Lords. Obviously I shall reflect on what has been said. In the meantime, I beg leave to withdraw the amendment.
Baroness Randerson
My Lords, this clause refers to the payment of fees for the permits that we have been talking about. Currently, hauliers have to buy a licence to register as hauliers, but they are also able to have on request a Community licence, which will be equivalent to the permit and which is free. However, under the scheme that the Government envisage, Clause 5 gives them the power to levy fees for the permits. I want to know why the Government feel they should charge fees for something that up to now has been provided to the hauliers free of charge.
The hauliers seem to be suffering several times over. Rather than having this easy-to-access, free and on-demand Community licence, they now have to apply for a specific permit, pay for it, perhaps even queue for it if we are still talking about first come, first served—and all this when in the end they are going to have a much less convenient system.
My particular concern is for SMEs. Given that, when we discussed this informally, the Minister indicated that the amounts of money would be in the order of £50 or £55—if I recall correctly—clearly for a large haulage company operating vehicles on a daily basis, that will not be a massive amount of money and will be passed on to the customers, as is inevitable. However, this will be a significant additional cost for an SME. Can the Minister explain to us the cause of the Government’s decision to reclaim their costs, when clearly they have not done so up to now, whether they are open to persuasion that charging for this would not be a good idea and the basis on which charges will be levied?
Lord Bassam of Brighton
My Lords, the noble Baroness raised some interesting issues, some of which I touched on earlier. When I read the impact assessment, I could see that there was clearly some consideration by the Government about the potential impact on SMEs, as the noble Baroness, Lady Randerson, said. The assessment suggests that some SMEs would struggle. Clearly that worries us: we have a vibrant and viable haulage sector that works well and has served our economy well and we do not want to damage it.
I wonder what full-cost recovery really means and I wonder what extra the permit will be paying for. I saw reference in the impact assessment to a suggestion that inspections would be carried out—ones that perhaps do not currently have to be carried out—to make sure that permits are valid and do the job that they are supposed to do in terms of haulage operators being able to move across the EU 27. In particular, there was a suggestion on the trailer registration scheme that some benefits would accrue through an extra inspection regime. That may well be the case—we will have that argument another day and we have amendments that raise some of those issues—but what does full-cost recovery cover? How much is it likely to cost? What will the impact be on SMEs? What sort of inspection regime will take place? Will it mean an expansion in staff? The Minister suggested that the work will be undertaken by the DVLS, is it?
Lord Bassam of Brighton
Acronyms sometimes get the better of me. So, what will it look like? How will it feel? How will it operate? What additional burdens will it place on the businesses affected? Where will the inspections take place? I picked up the point made by the Minister that they will not necessarily be at ports, but ports may be the best place; I do not know. I have seen lorries subject to customs inspections at ports, which works very well for some operations. We need answers to all these questions.
Lord Campbell-Savours
My Lords, I want to ask a very simple question, which is slightly tangential to the amendment, about fuel dipping. Fuel dipping is where the authorities decide, for whatever reason, to test tanks to see how much diesel they are carrying. Of course, these trucks carry a lot of diesel. I do not know where I heard it, but I heard that some countries on the outer periphery of Europe fuel dip in truck tanks so they can charge duty on diesel coming into their country. During the negotiations, we should be aware of any possibility of fuel dipping by member states and make sure that it is excluded and prohibited.
Earl Attlee
The noble Lord, Lord Campbell-Savours, yet again makes an interesting and important point about fuel dipping. It is a burden on the industry. I have to confess that I made a suggestion to do with the problem of foreign trucks coming into the UK with very large tanks of fuel, running around the UK and then leaving with tanks that are practically empty so that the Treasury gets none of the benefit of the fuel. I suggested that every HGV, UK or foreign, should leave the UK with a nearly full tank of fuel, but that suggestion did not find favour because it was thought to be contrary to EU rules. However, the noble Lord, Lord Campbell-Savours, raises an important point.
The noble Baroness asked why we should charge. I come back to the point that we simply do not know what the negotiations are going to give us. We again hope for a simple system, but if we end up with a more complex system, naturally there will have to be charges—presumably cost recovery only, as it should not be seen as a profit centre. We need to remember that the cost of running a maximum-weight articulated vehicle is quite considerable—I do not know the current figures—so the cost of a permit in the overall cost of the operation will not be that significant. Whether it is an SME or a large operator, the cost per mile of an HGV is very high.
I have what might be a slightly tricky question for the Minister. We are cost recovering, but are we going to use the UK fees that we raise from our own hauliers to cover the cost of inspecting foreign trucks over here to make sure that they have a permit? If there is a 75%/25% split for contingency—where the 25% is the UK operators—25% of operators will be paying a small amount of money in but spending a lot of money on ensuring the compliance of foreign operators. Some people might have something to say about UK operators paying for the policing of foreign operators.
Lord Berkeley
My Lords, the idea is that a lot of foreign trucks are going to be inspected. It does not happen at the moment very much, and if it is going to happen in future, there will have to be a very large increase in the number of inspectors and locations for inspection. The profit margin of most of these operators is very low, so the cost of a permit, which, as the noble Baroness said, may be only £50 to £85, may be quite a lot to some people. I am more concerned that it appears that EU lorries coming into our country will not have to pay anything because they already have a permit from their own country. Are we giving them an £85 advantage just to come here? I assumed that we would be able to charge them to give them a permit, but, as the noble Baroness said earlier, they already have a permit. There is something out of balance here. I do not know what the solution is, but I hope that the Minister can look at this. Perhaps we should have our own permit scheme, or else it should be free for everybody. It does not seem fair at the moment.
Baroness Sugg
My Lords, this clause creates fee-charging powers for administering a permit scheme, which, understandably, is a key concern for the UK haulage industry. I am grateful to the noble Baroness, Lady Randerson, for giving us the opportunity to discuss the issue in detail.
The regulations under this Bill will apply to all the permit schemes that the UK has. Once we have introduced a robust legal framework for permit schemes it would be both necessary and sensible for the regulations to cover all schemes. They would therefore apply to potential permit arrangements for EU member states, existing and future permit arrangements with non-EU countries, and ECMT permits. This means that fees for permits for different countries can be consistent and consolidated in a single set of regulations.
Baroness Randerson
Can the Minister clarify something? In their examples of existing permits where there are bilateral agreements, the Government refer to both single-journey and multiple-journey permits. Multiple-journey permits are clearly a lot less bureaucratic, but single-journey permits are a lot less expensive. Do the Government have an image of which way they are going on this or whether they are going to have single and multiple-journey permits if required?
Lord Campbell-Savours
I am flying blind now—I should really know the answer to this question. When a British haulier travels in France now, I presume they pay a fee on the motorway. French motorways are very expensive. When a French haulier arrives in the United Kingdom, do they pay any charges for the use of our roads? I think not. If that is the case then we might like to raise this issue if we have any trouble with the French—particularly with the hauliers—in the course of the negotiations. It might not only be France; it might be that some other countries in Europe like to charge for the use of their motorways, such as the Italians, and I am sure that there are others as well. The Swiss get their share too—whenever I go through Switzerland they take me for a ride for 40 francs for my car alone.
Baroness Sugg
I thank the noble Lord for that intervention. UK hauliers will pay a charge on a toll road in France in the same way as anyone else.
We are looking into the HGV levy and how to use it better. It may be a method of addressing this issue and I will certainly consider that. I think there is still a toll road on the M6, so obviously that has happened in one case in the UK. However, there are not currently plans for the Government to introduce tolling systems.
On the types of permits, which the noble Baroness, Lady Randerson, raised, there will be many options, including, but not limited to, single journey, annual bilateral—ECMT have both of those—and annual multilateral. Exactly what permits we have will be subject to negotiations.
Returning to the HGV levy, foreign hauliers currently pay the levy and so make a contribution to the roads, but, as I said, we are looking at that in detail and I shall send noble Lords more information on it.
We have aimed for the clause to be clear on what fees may be charged for, which allows us to consolidate all the regulations on existing permit fees in one place rather than them being split across a number of regulations. This will give greater clarity to operators and hopefully will be simpler to follow and allow better scrutiny for Parliament.
We think we need to charge a small application fee to recover the cost of processing the application—that will be payable by all applicants—and an issuing fee to recover the administrative costs of issuing the permit will then be payable by successful applicants only. There should not be a single fee, either for application or issuing, because unsuccessful applicants would bear some of the cost for issuing permits or vice versa. Hauliers should pay for what they use rather than paying the same costs irrespective of whether or not they have a permit—should they be needed, which we all hope they will not.
We want to introduce separate application and issuing fees. There is a precedent within the haulage sector for charging fees in this way as its operator licensing regime has both the application and issuing fees made in the regulations under the Goods Vehicles (Licensing of Operators) Act 1995.
I apologise because at this stage I am not able to provide the Committee with specific figures of what the fees for permits will be. It will depend on the number and types of permits required by hauliers, which journeys are exempt and the cost of administering a permits scheme—if there is a permit scheme, which of course will be subject to the negotiations. We want to keep fees as low as possible and in the region of the existing permit fees. The noble Baroness referred to a few examples. The annual ECMT permit which allows any numbers of journeys costs around £133 and a single journey bilateral permit costs £8. However, as the noble Baroness, Lady Randerson, pointed out, we need to take into account how that will affect small and medium-sized hauliers.
On the capability for the checking of these permits within the UK, there will obviously be a need, should we have a permit system, for them to be checked. As part of the spending statement today, the DfT has received £75.8 million to deliver its EU exit programme. That will include reconfiguring DVSA and looking at that in detail. Again—I apologise for repeating myself—until we know the outcome of the negotiations we are not going to know by how much the capability of DVSA needs to increase and we will have to wait to see the exact costs.
The DfT is working with the Treasury to determine the appropriate level of fees. This will be included in the regulations to allow scrutiny by Parliament. As I say, we are doing everything we can to keep the cost low. It is a key consideration for UK hauliers and we are working closely with them as these plans develop. We will be working closely with small and medium-sized enterprises as well in order to keep these costs as low as possible. I hope that explanation demonstrates why we have a fees clause in the Bill and exactly what we will be using it for. I hope that the noble Baroness will agree that the clause should stand part of the Bill.
Lord Berkeley
If a truck has to be checked statically in a car park somewhere, that will be quite expensive. The DVLA no longer has the system of excise duty licences on cars; that is checked by number plates. Is there a way of adopting a similar system for trucks—even for foreign ones? I know they have different number plates, but it would be much easier and would give a much more comprehensive range of checks.
Earl Attlee
What about the HGV levy system and the technology behind it? It uses ANPR to enforce it, so I should have thought that it would work automatically.
Baroness Sugg
The noble Lord and my noble friend make important points. Of course, we want to use IT systems whenever we can both to minimise the burden for hauliers and for Government to check on these things. The permit system may not be allocated to a specific truck; it could be allocated to a haulage company. That may be difficult, but we are exploring it. The current system is that the DVSA outside the port will pull over a truck and check it on the side of the road. That is one of the options that we are exploring. If there is a way to do it that is less expensive and more efficient, we will certainly do that.
Lord Berkeley
That is very interesting. I thought the permit would be allocated to a truck. If it is not, there seems to be more potential for fraud—by photocopying, for a start.
Baroness Sugg
The reason we do not think the permit will be allocated to a specific truck is to allow for flexibility, should there be a limit on the number of permits. It will enable hauliers to move them between trucks, so they are not restricted to only one truck going back and forth to Europe. On fraud, we are designing a system to try to ensure that it will be allocated to a specific company. It may give us the number of trucks that could use the permit. We could check the licence plates and other things. We are working through the issues on that. I hope that that explanation will satisfy the noble Baroness.
Baroness Randerson
I thank the Minister for the amount of detail she has given on this. Certainly, it is sufficient that I will have to look at the record and quite possibly come back with some more questions. I am very grateful for the amount of further information she has given us.
House of Lords
Railways: East Coast Main Line
(6 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Beith
To ask Her Majesty’s Government what arrangements they propose for the continuation of train services on the East Coast mainline.
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)
My Lords, the Government are currently reviewing two options for the continuation of services on the east coast. Our priority is the continued running of the line for passengers. The first option is to allow Stagecoach to continue operating the service under a very strictly designed short-term contract. The second is for the franchise to be directly operated by the Department for Transport through an operator of last resort. We will choose the best option that protects the interests of passengers and offers value for money.
Lord Beith (LD)
My Lords, the fact that we are on the third failed franchise is down to incompetent franchising, fanciful overbidding by operating companies and a failure of the publicly owned Network Rail to deliver the track and overhead improvements on which the bids were based. What is the plan now? Are there only two options or more than that—a rerun franchise competition, a new type of franchise combining track and train operation, a nationalised operator or a sweetheart deal for Stagecoach/Virgin to run the trains without taking the risks? When will we know?
Baroness Sugg
My Lords, we expect to make an announcement on the two options in the coming months. From 2020 there will be a new east coast partnership as part of our reform of track and train to ensure that they work together better to deliver the services that passengers need.
Lord Cormack (Con)
My Lords, my noble friend may know that Lincoln, which has an appalling service from London, has been faithfully promised five direct trains a day as from 2019. Can she give me a confident assurance that that promise will be kept?
Baroness Sugg
My Lords, we are in discussions with Stagecoach to ensure that the needs of passengers and taxpayers will be met in the short term while laying the foundations for the introduction of the east coast partnership in 2020. We expect to provide additional services between Lincoln and Harrogate, Bradford and London from May next year.
Lord Beecham (Lab)
My Lords, as a reluctant passenger on Virgin trains I refer to my interests—doing so, in this case, is almost as slow as the train service. Will the Minister look at the laughably misnamed TransPennine Express and the service it purports to offer between the north-east and the north-west. Will she also look at the need to radically improve the rail connection between the north-east and the north-west and not simply rely on some future date when maybe a new national train line will surface?
Baroness Sugg
My Lords, I will certainly look at that in more detail. We are working closely with Transport for the North to understand the priorities of the north and where best to invest. We are committed to improving journeys on the trans-Pennine route. We are bringing in state-of-the-art trains, longer carriages and more frequent services to give passengers the services they want. We are going further. We plan to spend around £3 billion to upgrade the key route between Manchester, Leeds and York to give passengers faster and more reliable journeys.
Lord Palmer (CB)
My Lords, does the Minister agree that reaching yet another impasse is very worrying for all of the staff who work on the east coast main line? They have now had about half a dozen different employers, and it is very demoralising for them.
Baroness Sugg
My Lords, of course I understand the position of the staff. It is important that they have confidence in their jobs, and that is why we are looking through two options for the continuation of services up to 2020, and why, from 2020, we will be introducing the new public/private partnership.
Lord Shutt of Greetland (LD)
My Lords, we are promised that on 20 May we will have the biggest timetable change in 10 or 15 years—this is a mere 67 days hence. I looked at the east coast website this morning, and there is no detail about this timetable. Is the change dependent on whoever gets the franchise, or will we have the timetable that Virgin Trains may have speculated it could run from 20 May?
Baroness Sugg
My Lords, the timetable is not dependent on the decision made between the two options. I understand there has been a delay to the timetable, for which I apologise. The operator and Network Rail are working through the options and are looking to publish it as soon as they possibly can.
Lord Popat (Con)
My Lords, will the Minister please tell us what will happen to the premium payments from future operators of the east coast franchise?
Baroness Sugg
My Lords, whichever option for running the franchise to 2020 is chosen, the Government will continue to receive premium payments. As I have said, from 2020 there will be a new public/private partnership on the east coast. That will be subject to a competitive process and will include appropriate contributions paid by the private partner to the Government. The Government will continue to receive premium payments but I am afraid I am not able to give an exact figure at this time. It is important to reiterate that this is a successful and profitable line, and it will continue to deliver revenue to the Government.
Lord Snape (Lab)
My Lords, does the Minister accept any responsibility for this latest farce on the east coast main line? Does she not think that accepting an outrageous bid, which suggested an 8% growth in passengers every year of the franchise, was ridiculous to start with? Bearing in mind that the Treasury has frozen fuel duty for coming up for eight years, while insisting that rail fares go up in accordance with the RPI, does the Minister not feel that the Government’s so-called green policy is rather shot to pieces?
Baroness Sugg
My Lords, of course there were some errors in the granting of this franchise, and the suggestion concerning passenger numbers was indeed incorrect. We have learned some lessons and introduced new measures to deter overbidding, and have improved our financial modelling and stress testing. With this added testing, the department can forecast bids which are likely to default and exclude them in the future. On fares, the Secretary of State for Transport has underlined our aspiration to move from RPI to CPI but we must manage this transition properly and take into account staff costs, which are a third of operating costs.
Baroness McIntosh of Pickering (Con)
Will the Minister join me in congratulating the east coast operator on taking brand new trains into service in 2019? These are built locally to a very high specification, and will reduce the journey time to London considerably.
Baroness Sugg
My Lords, I certainly join my noble friend in congratulating east coast on this, which again will not be affected by the decision on who is to run the franchise. As my noble friend has said, the Azuma trains are due to start being introduced on the east coast network from the end of this year, and I am sure that passengers will enjoy the benefits.
Lord Foulkes of Cumnock (Lab)
My Lords, I too am one of the passengers who the Minister referred to in her first Answer. I have travelled on this line when it was run by GNER, now by Virgin, and in between when it was publicly owned. That period produced by far the best service. Would it not be much quicker, cheaper and better for the Government to decide now that the service should continue as a publicly owned, efficient railway?
Baroness Sugg
My Lords, I am afraid that I have to disagree with the noble Lord. We are currently going through the process of analysing which is the best option for passengers going forward. On his point about the service being better under DOR, I am afraid that we received 20% more income when it was run as a franchise, with higher satisfaction rates.
Apprenticeships: Levy
Lord Blunkett
To ask Her Majesty’s Government whether they intend to make adjustments to the Apprenticeship Levy to facilitate the improved working of that programme and to reverse the fall in apprenticeship starts, including the redistribution and effective use of any current underspend.
Lord Blunkett (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I draw attention to my interest as set out in the register.
Viscount Younger of Leckie (Con)
My Lords, we continue to monitor apprenticeships’ market performance, including levels of starts and spend. We have made radical reforms to the way we develop, deliver and fund high-quality apprenticeships, and further major changes have the potential to be destabilising. However, we are prepared to make adjustments when and where they are required in order to deliver our ambitions and support quality apprenticeships.
Lord Blunkett
I thank the noble Viscount for that Answer, but I am genuinely at a loss as to why the Government are so resistant to the calls being made by those who are committed to the apprenticeship levy and to quality apprenticeships for changes that would reverse the 26% drop in the last quarter in starting apprenticeships and utilise the underspend so that small and medium-sized companies and associated colleges could undertake the necessary work, perhaps in the future top-slicing sufficient funds to reach out beyond the larger enterprises, thereby helping both individuals and our economy.
Viscount Younger of Leckie
I hope that I can reassure the noble Lord that the Government have awarded £490 million to providers across the country to deliver apprenticeship training for smaller businesses from January 2018 to April 2019. Today, we have announced that in April we will be making available an additional £80 million for starts with SMEs which will support up to an extra 40,000 apprenticeships. Also, in terms of flexibility, from April levy-paying employers will be able to transfer up to 10% of the annual value of the funds entering their digital accounts to other employers, including SMEs.
Baroness Redfern (Con)
My Lords, the success of SMEs is critical to the UK economy, as is a thriving apprenticeship system. For our SMEs, a central fund enables the Government to fund 90% of the training programme, which the Minister has alluded to, leaving only 10% of the costs to be covered by businesses themselves. Unfortunately, there is still a poor level of understanding of the levy and how it can be spent among employers. Does the Minister agree that, although there has been a drop in apprenticeship starts, calling the new system a failure is not only a huge simplification but writes off the new apprenticeship system before it has even had a chance to embed? What apprenticeships need right now is positivity and action.
Viscount Younger of Leckie
My noble friend is right to say that we must not lose sight of what we are actually doing here, which is why we have introduced these reforms. It is the largest government reform of apprenticeships that has ever been made. The key point here is that we are putting quality at the heart of our reforms. We need to look at how the system is operating and provide some flexibility in the system, which is the gist of the original Question asked by the noble Lord, Lord Blunkett.
Baroness Garden of Frognal (LD)
My Lords, a recent report showed that the UK skills shortage is leading to an estimated £7.3 billion annual loss in sales to SMEs, equivalent to approximately 250,000 jobs. The Minister has already mentioned some help to be given to SMEs, but what is the apprenticeship levy doing to help SMEs meet the acute skills shortage?
Viscount Younger of Leckie
I have already mentioned the transfer arrangements. Up to 10% can be transferred by employers to SMEs to help them take on apprentices. In addition, we have a marketing programme under way—I highlight the “A” pin on my lapel in support of National Apprenticeship Week which took place last week, and there was a lot going on on the radio also. I think that we will find that the fall we experienced last year will change and that employers will be taking up more apprenticeships.
Baroness Butler-Sloss (CB)
My Lords, are the Government checking the effectiveness of individual apprenticeships to make sure that they are actually working properly for the benefit of the apprentice?
Viscount Younger of Leckie
Absolutely, and I can reassure the noble and learned Baroness that the Institute for Apprenticeships is responsible for quality and standards. It is the institute’s sole job to work closely with employers to ensure that the quality of each apprenticeship is high, which can take some time, and that the apprenticeship itself is what employers want, thus helping to increase skill levels in this country. That is our aim.
Lord Knight of Weymouth (Lab)
My Lords, there has been a 30% year-on-year fall in apprenticeship starts by under-19s. That should be no surprise because, despite this being a great applied qualification, the pipeline is being strangled by the EBacc squeezing out applied learning from the curriculum. STEM is becoming S and M in schools, as technology and engineering are being taken out, leaving only science and maths. When are our schools policy and our skills policy going to align?
Viscount Younger of Leckie
I have mentioned to the House before that we have a National Careers Service up and running. It is essential in giving proper careers advice that employers in particular can go into schools and address, and hopefully garner, the interest of pupils. We are trying to address the skills shortages. STEM skills and occupational sectors, including the digital side, are well represented in our move from frameworks to greater standards and to increasing the skills level in our country.
Lord Forsyth of Drumlean (Con)
My Lords, does my noble friend know that the Economic Affairs Committee has been looking at this issue for almost the last year? We have had employers openly admit that they are using the levy to fund training that they would have done anyway. Is it appropriate that the apprenticeship levy should be used to fund people doing MBAs at business schools and so on? Surely the resources should be concentrated on level 3, and in particular on young people, to give them the skills that they need in the workforce.
Viscount Younger of Leckie
My noble friend is absolutely right. I had not heard about this, and I will certainly follow up on the points that he has raised. The whole point of the apprenticeship scheme is that it is employer driven; it is what employers will need. The standards and quality are set by the Institute for Apprenticeships. We believe it is working well, but I will look into my noble friend’s points.
Lord Watson of Invergowrie (Lab)
My Lords, the noble Viscount the Minister should be aware that young people from low-income families are underrepresented in the apprenticeship programme. Some 13% of school children received free school meals last year; only 10% of young people starting apprenticeships had been on free school meals. One reason for that is that the Government still do not classify apprenticeships as approved education or training, with the result that the families of young apprentices lose the right to claim child benefit and tax credits. Last month at Oral Questions, I highlighted this structural barrier to the noble Viscount and asked him to speak to ministerial colleagues in the Department for Work and Pensions to try to make it more attractive for young apprenticeships to start. Has he done that, and if not why not?
Viscount Younger of Leckie
I can reassure the noble Lord that I have indeed done that. If he has not received a reply, and I am sure he should have, I will follow up immediately and make sure of that. Yes, it is true that some apprenticeships are on the minimum and I have no doubt that is a bit of a struggle. Having said that, many employers are paying more than the average, which is £6.70 an hour, rather than the £3.50 an hour that is now going up to £3.70.
Child Sexual Exploitation: Grooming Gangs
(6 years, 1 month ago)
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Lord Pearson of Rannoch
To ask Her Majesty’s Government what assessment they have made of the national scale of the “grooming gang scandal”, including sexual exploitation of non-Muslim children by Muslim men, as emerged recently in Rotherham, Rochdale, Oxford and elsewhere; and what steps they are taking to enable the prosecution of those in the police and local authorities who have failed to prevent it.
Lord Young of Cookham (Con)
My Lords, the government-funded Centre of Expertise on Child Sexual Abuse is working to build a more informed picture of the scale of these crimes, and preventing them is a priority for the Government. The Independent Office for Police Conduct is currently conducting investigations into 33 police officers of varying ranks for potential criminal offences and breaches of the standards of professional behaviour, linked to the Rotherham case.
Lord Pearson of Rannoch (UKIP)
My Lords, I fear that reply is shamefully inadequate, because these girls are usually raped several times a day. If we accept the views of our lead police officer for child protection, of Rotherham’s MP and of the recent Jay and Quilliam reports, we are looking at millions of rapes of white and Sikh girls by Muslim men, only 222 of whom have been convicted since 2005. Will the Government ask our Muslim leaders whether the perpetrators can claim that their behaviour is sanctioned in the Koran, and to issue a fatwa against it? Secondly, will the Government encourage a national debate about the various interpretations of Islam? Can we talk about Islam without being accused of hate crime?
Lord Young of Cookham
My Lords, child sexual exploitation is a vile crime and it is not exclusive to any one community, culture, race or religion. Political or cultural sensitivities should not get in the way of tracking down offenders and preventing future abuse. I say to noble Lords that we should be careful about our language in this matter, not least because I am about to repeat a Statement on inflammatory letters inciting a “punish a Muslim” day on 3 April. We need to be careful about how we approach this.
There is nothing in the Koran that encourages the sort of activity the noble Lord has referred to. In any case, the Koran would be trumped by the law of the land. Islam, like all world religions, does not support, advocate or condone child sexual exploitation. Indeed, respect for women is inherent in its faith. As my noble friend Lord Ahmad of Wimbledon has just told me, one of Islam’s phrases is, “Paradise lies at the feet of the mother”.
As for encouraging a debate on Islam, the Government are supporting an initiative by British-based Islamic leaders of all denominations to dispel the poisonous interpretations of Islam peddled by al-Qaeda and Daesh. We are taking a number of other initiatives to minimise the exposure of children to sexual abuse from whatever source.
Lord Maginnis of Drumglass (Ind UU)
My Lords, I believe many people will be grateful to the Minister for clarifying that point, but is there not a contradiction in our own society, where we fail? I ask about a questionnaire sent out by Brighton and Hove City Council, asking children as young as six or seven, or their parents, for their gender perception. If we are allowing this type of information to be collected, for what purpose? It is to condition people as they grow up. Will the Minister look at our so-called liberalism, which enables this to happen and prevents the police getting on with their duties?
Lord Young of Cookham
My Lords, that goes slightly wider than the specific Question. I am aware of the debate taking place on transgender issues and the whole debate about at what age, if at all, children should be allowed to express their own sexual preference. This is not a subject on which I am an expert. I am very cautious about entering into it, but I will certainly draw what the noble Lord has just said to the attention of the relevant Ministers at the DfE.
The Lord Bishop of Oxford
My Lords, I am enormously grateful for the Minister’s Answer to the Question. I had the great privilege to be the Bishop of Sheffield for seven years during the child sexual exploitation scandal in Rotherham and I am now the Bishop of Oxford. I spent a great deal of time in Rotherham following Professor Jay’s report and registered the shock across all sections of the community, including, of course, the Muslim community there, who were as deeply appalled by what had happened as the rest of the community. I vividly remember visiting some parents at a mosque in Rotherham and hearing how their children were insulted by the rest of the community in words I will not repeat in this House. Will the Minister affirm the condemnation with which these scandals are greeted across the Muslim communities in each of these towns and cities?
Lord Young of Cookham
There is only one word I can say to the right reverend Prelate: amen.
Lord McConnell of Glenscorrodale (Lab)
My Lords, the experience of these young girls is not to be used to encourage religious intolerance, but it is still extremely serious. Yet again this week there have been calls for a proper investigation into what happened in Telford from the local MP, a Conservative, and from Sarah Champion, who has of course championed the victims in other parts of northern England. Why is an investigation not to be launched into Telford? This seems an extreme case of these extreme violent acts against young girls.
Lord Young of Cookham
I have read the reports of what happened in Telford—disgraceful cases that took place, I think, between 2007 and 2009. The case called Operation Chalice concluded in 2012 with a number of convictions. Since then I understand that both the police and children’s services have improved the way they operate. However, the option is open in this case for the Independent Inquiry into Child Sexual Abuse, chaired by Alexis Jay, to look at what happened in Telford and at the institutional responses to the child sexual exploitation that took place in that borough.
Public Services: Corporate Governance of Businesses
(6 years, 1 month ago)
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Lord Haskel
To ask Her Majesty’s Government what steps they are taking to ensure a high standard of corporate governance at businesses that provide essential public services.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, the Government’s corporate governance reform package will strengthen the United Kingdom’s corporate governance framework. Secondary legislation to be brought forward will require reporting on how company directors take their employee, supplier, customer and other stakeholder interests into account when carrying out their duties. It will also require quoted companies to publish and explain the ratio of their CEOs’ pay to the average of their United Kingdom employees.
Lord Haskel (Lab)
My Lords, I hear what the Minister says but this is the second Question we have had this afternoon about public services. Does this not indicate that the system of fines and regulation is just not working? Will the Government introduce a new purpose-driven classification to be adopted by companies which are privately owned but publicly guaranteed, because we have to ensure continuity of their essential public services? It must be a classification that ensures a standard of behaviour that is responsive to the public and ensures that company policy and company metrics are aligned to the public interest and not just to shareholder value.
Lord Henley
My Lords, we have always made it quite clear that the importance of public services will come first. In terms of the affair of Carillion, which I think the noble Lord was alluding to without mentioning its name, my right honourable friend the Secretary of State made the situation clear in his initial responses. We have also made it clear that we need to see some degree of reform of corporate governance. That is why we brought forward that reform package and why the Financial Reporting Council has been consulting on its revisions to the code; when those come forward we will take that on further.
Lord Naseby (Con)
Is my noble friend aware that the current Lord Mayor of London has launched a campaign to restore trust in corporate governance and businesses throughout the United Kingdom? In that context, will he join the Lord Mayor of London and extend it beyond that franchise to possibly involve the Institute of Directors, the CBI, the TUC and trade bodies throughout the United Kingdom? As I am sure my noble friend is aware, there is a problem with public trust in the corporate world. Will he make sure that Her Majesty’s Government are absolutely in the vanguard of ensuring that that trust is restored?
Lord Henley
I am grateful to my noble friend for that response and I am aware of the Lord Mayor’s campaign. In fact, I was present—if I remember the precise event—at the launch of that campaign by the Lord Mayor. My right honourable friend the Prime Minister has also always made her views clear about the importance of corporate governance and reforms thereof. That is why we have brought forward this package and why, as I said, the Financial Reporting Council is consulting on it.
Lord Fox (LD)
My Lords, the role of the shareholder is very important in maintaining corporate governance, but increasingly the share registers of Britain’s companies are dominated by passive shareholders who do not have the capacity to oversee the corporate governance of the companies they own. Will the Minister explain who, in the absence of the shareholder, is the prime overseer of the board to maintain corporate governance?
Lord Henley
My Lords, as I said, the code and its revisions will be important, but it is also important that shareholders play their part in this process. We have considered that and it is why we have already brought forward certain reforms to increase shareholders’ knowledge. For example, shareholders can now see when companies have significant shareholder opposition to directors’ pay. The Investment Association’s public register was launched in December and a number of investors—that is, shareholders—are already using this information as a tool to inform their voting in the upcoming reporting season. If we can improve shareholders’ knowledge, that will improve what they can do in controlling their companies.
Lord Watts (Lab)
My Lords, would it not be a good idea to have representatives from the workforce on these boards to break up the old boys’ network that exists on a lot of boards? That way we would get some proper public accountability.
Lord Henley
My Lords, we think it is very important that the voice of those working for companies should be heard on the board. In the Corporate Governance Reform Green Paper we made it clear that companies should have flexibility to choose how best to engage with their employees, and there are a number of different ways they can do that. They can have an independent director who represents employee views, an employee advisory council or a director directly from the workforce. There are a number of options. It is certainly something that should be looked at.
Lord Stevenson of Balmacara (Lab)
Does the Minister agree that one of the reasons we are now experiencing a bit of a run of scandals on outsourced public services is the lack of information available to public authorities which have to control them? Will the corporate governance changes which the Minister responded to give the Financial Reporting Council greater powers to regulate companies and to take action before things go badly wrong? It asked for those powers after the BHS collapse two years ago. When will we see the results of the lessons learned exercise on Carillion and the actions required by government, according to the Secretary of State, to strengthen,
“the oversight … of the public sector in terms of contractors”?—[Official Report, Commons, 30/1/18; col. 657.]
Lord Henley
The noble Lord is right to draw attention to the role of the Financial Reporting Council. We believe it has a range of powers that allow it to sanction, for example, individual auditors and accountants and to audit firms. In implementing our reforms, we certainly want to give further consideration to whether the FRC has the appropriate powers, resources and status to operate effectively.
Unpaid Work Experience (Prohibition) Bill [HL]
Tuesday 13th March 2018
(6 years, 1 month ago)
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Lord Holmes of Richmond (Con)
My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the order of commitment be discharged.
Supply and Appropriation (Anticipation and Adjustments) Bill
Tuesday 13th March 2018
(6 years, 1 month ago)
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Secure Tenancies (Victims of Domestic Abuse) Bill [HL]
Tuesday 13th March 2018
(6 years, 1 month ago)
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Baroness Lister of Burtersett (Lab)
My Lords, as someone who has been heavily involved in this Bill, I should like to say a few words of thanks. I thank the Bill team and the members of the noble Lord’s private office, who have been unfailingly helpful throughout the process. I suspect that they will not be too unhappy not to be seeing my emails in their inboxes any more.
I thank noble Lords around the House who have been so supportive, particularly my noble friend Lord Kennedy, but also the noble Baroness, Lady Hamwee, and the noble Lord, Lord Shipley. I thank too the noble Baroness, Lady Evans of Bowes Park, whose assurances during the passage of the Housing and Planning Act eventually led to this Bill. She probably had a hand in this Bill seeing the light of day. Last but not least, I thank the Minister and, at the risk of torpedoing his ministerial career, emphasise how he has been a model of an open and engaged Minister committed to making this Bill the best that it can be.
I give the final word to Women’s Aid, which has been briefing us so well at every stage of the Bill. Straight after Report, Women’s Aid emailed me to thank noble Lords for the amendments made then, saying that these had really improved the Bill and ensured that this legislation can work effectively for survivors whose housing security is at risk from an abusive relationship. Thank you. I hope that we can maintain as constructive a relationship when it comes to debating the forthcoming domestic abuse Bill.
Lord Kennedy of Southwark (Lab Co-op)
Before the noble Lord winds up, I should like to pay tribute to my noble friend Lady Lister of Burtersett for her hard work and determination in getting this Bill here today. I thank the noble Lord, Lord Shipley, and others for their work. I also thank the noble Lord, Lord Bourne of Aberystwyth. I always enjoy our exchanges, here and outside the Chamber. He is a very good man who is sincere in what he does and I value our conversations about his work. He played a big role in getting this Bill in. We thank him very much as well.
Lord Shipley (LD)
My Lords, from these Benches, I add our thanks to the Minister for being so helpful in the passage of the Bill. It is a better Bill because of the work that was undertaken both in this Chamber and outside it. I thank the Minister for that. The House should pay tribute to the noble Baroness, Lady Lister of Burtersett, for all her hard work in explaining the background to this and thank too those advising her. We should also pay tribute to my noble friend Lady Hamwee for her hard work in pressing on this Bill.
As the Minister knows, it is one thing to enact a Bill. It is another for it to be implemented smoothly. The Minister has paid close attention to the need for adequate training by local housing authorities. He has also paid close attention to the issue that was raised at Report by the noble Lord, Lord Kennedy of Southwark, in relation to GPs charging victims of domestic abuse for the medical evidence that they need to secure a further tenancy. I am hopeful that that matter will be resolved in guidance.
Finally, to recall Second Reading and Committee, this Bill concerns only the public sector. It does not concern housing associations, which are now in the private sector. I hope that the Minister will ensure that housing associations follow the good practice that is now about to occur with the public housing stock.
The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I thank very much the noble Lords who have spoken: the noble Baroness, Lady Lister of Burtersett, and the noble Lords, Lord Kennedy and Lord Shipley. I also thank the members of the Bill team. Often the civil servants do not get their due accolades, but they deserve to. Parwez Samnakay, Frances Walker, Jane Worthington, Jane Everton, Lizzie Clifford and, from my own team, Ed Clark have all worked incredibly hard, engaging with Peers, making things happen and working long hours. I am very grateful.
I pay tribute to the noble Baroness, Lady Lister, whose work this Bill largely is. It was her initiative to raise this with my noble friend Lady Evans of Bowes Park. Certainly my leader—the boss—deserves credit for making sure that this happened but it was the noble Baroness, Lady Lister, who was really pushing and has been pushing in a constructive way ever since. I pay tribute to what she has done.
I also extend thanks to the noble Baroness, Lady Hamwee, and to the noble Lord, Lord Kennedy. I very much enjoy our engagement. He is a model of what an opposition politician should be—if only he did not support Millwall, but nobody is perfect. I thank the noble Lord, Lord Shipley, as well for constructively engaging in this. I hope that these same key people will be there when we look at the next development in relation to domestic abuse. There is much that unites here and very little, if anything, that divides us. I look forward to that.
I also pay tribute to Women’s Aid and, indeed, to everyone working in this sector—Refuge, Imkaan and others—for the work they have done. In short, all parties and all parts of the House can take a bow with this piece of legislation, which has engaged us all in a very positive, sensible and pragmatic way. I am most grateful for that. Thank you.
Hate Crime
(6 years, 1 month ago)
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Lord Young of Cookham (Con)
My Lords, with the leave of the House I will now repeat an Answer to an Urgent Question given by Victoria Atkins in the other place yesterday.
“As you will appreciate, the letters described in the Question are part of an ongoing investigation, and as such I am not in a position to comment on them. However, the Government condemn the content of these letters as clearly abhorrent, with no place in decent society. The Government take hate crime and Islamophobia extremely seriously, and the UK has a robust legislative framework to respond to it.
Freedom of speech, freedom of worship, democracy, the rule of law and equal rights define us as a society. The Government are determined to promote these values actively, working in partnership with and alongside Muslim and indeed all faith communities to demonstrate that what we have in common is the best defence against extremists who would seek to divide us.
Our hate crime action plan, published in 2016, sets out our comprehensive approach to tackling hate crime. We have a strong legislative framework to tackle hate crime, including offences of inciting racial and religious hatred, and racial and religiously aggravated offences. The legislation provides equal protection under the law for all ethnic and religious groups. We have sources of expert advice on the nature and causes of hate crime through the Anti-Muslim Hatred Working Group and the Independent Advisory Group on Hate Crime.
We have committed £2.4 million over three years to help protect places of worship that have been subject to, or are vulnerable to, a hate crime attack. We also committed a further £1 million, following the terrible Finsbury Park terror attack in June last year, to help protect places of worship and associated community centres that are vulnerable to attack on racial, religious or ideological grounds. So far we have funded 45 mosques under both schemes.
We have also funded Tell MAMA to record anti-Muslim hatred incidents and to support victims. From this year, we have made it mandatory for police forces to disaggregate religious hate crime data held by the police to reveal the true scale and nature of the problem, which we are determined to tackle”.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, these disgusting letters have, quite righty, caused revulsion in our communities and been condemned. I pay tribute to community and faith leaders, charities and others for what they have done. They and others will not let us be divided. Domestic extremism needs to be dealt with. Can the noble Lord reassure us that the Anderson review recommendations to the Joint Terrorism Analysis Centre will start to produce the threat assessments for domestic extremism? Can he reassure the House that the police have the resources they need? He will of course be aware that the police got less than half of what they asked for to deal with terrorism.
Lord Young of Cookham
On the first question, of course we want to take those recommendations forward, and perhaps I could write in more detail to the noble Lord on that. On the question of police resources, I am aware of the exchanges that took place in the other place yesterday. After speaking to all forces in England and Wales, the Government have provided a comprehensive funding settlement that will increase total investment in the police system by around £450 million in 2018-19. Overall public investment in policing will grow from £11.9 billion in 2015-16 to around £13 billion in 2018-19. We believe that the settlement enables police and crime commissioners to increase their direct funding by up to £270 million. It is then up to chief constables to decide how best to deploy officers in their force to effectively serve and engage their communities and to build trust and confidence. The Government have made it absolutely clear that this is one of the priorities that police forces must engage in as they deploy those resources.
Lord Paddick (LD)
My Lords, these letters are right-wing terrorism and incitement to terrorism. They are the unlawful use of violence and intimidation, especially against civilians, in pursuit of political aims, and we should call it terrorism. Taking up the point made by the noble Lord, Lord Kennedy, about police resources, in the other place the Minister was asked whether the police had sufficient resources to deal with these incidents. The Minister replied:
“Of course, we have increased them …We ask the police whether they have the resources that they need, and the Home Secretary acts accordingly”.
In this House last week, the noble Baroness, Lady Williams of Trafford, said:
“The police told us last year the number of additional police officers needed to do their job. We feel that in the budget they can attain this year they will have those police numbers—and more—to do the job that they do”.—[Official Report, 8/3/18; col. 1249.]
However, the Police Chiefs’ Council, in response to the most recent budget settlement, said:
“While the extra funding to tackle terrorism is welcomed, counterterrorism policing is considering tough choices as their settlement equates to a less than 2% increase on current spending at a time when demand has grown by 30%”.
Can the Minister say how these statements can be reconciled?
Lord Young of Cookham
My Lords, the noble Lord has been a policeman and is now a politician. He will know that the figures to which he has referred can be looked at from two dimensions. The police have their own perception. The Government have the one that I just set out: that there has been a real-terms increase in resources available to the police. On top of the resources that we are putting into the police, it is also important to put on the record that we are taking forward our plans for tackling hate crime. There are a number of other initiatives that we have taken in order to tackle far and extreme right-wing activism, for example. There is the Anti-Muslim Hatred Working Group and its achievements. We have also funded Tell MAMA, which I mentioned a few moments ago, with £1.9 million. We are putting £1.2 million into Remembering Srebrenica and we are putting £2.4 million over three years into the security of all faith establishments, including mosques. There are a number of other initiatives, including £900,000 to support community projects, so on top of the resources for the police—and we can disagree about what perspective is put on those—there are other initiatives that we are taking to tackle hate crime.
Baroness Warsi (Con)
My Lords, it gives me no comfort or pleasure to say this, but for the sake of completeness I would like to put on record some details of the letter that has now been received by households across the United Kingdom, including those of some Members of Parliament. This is a letter that gives out points for punishing a Muslim. A few examples are: points for verbally abusing a Muslim, pulling the headscarf off a Muslim woman, throwing acid in the face of a Muslim, beating up a Muslim, torturing a Muslim with electrocution, butchering a Muslim with a knife—and it goes on. This needed to be put on record to describe what is happening in 2018.
I received a long message from a friend. At the end of it, she said:
“I urge you, Sayeeda, please do not go out on 3 April. It is Punish a Muslim day”.
I will, along with many other Muslims, be going out on 3 April because we will not be intimidated in this way. The facets of hate crime—children being bullied in playgrounds, women being assaulted on our streets, the media destroying reputations, the low-level and the high levels of Islamophobia that are now prevalent in our society—add up to what I call in my book the Seven Sins of Islamophobia, showing the way in which even the respectable now rationalise bigotry.
Will the Minister urge the Prime Minister to go further on this issue? I am delighted that the initiatives that he referred to—the cross-government Working Group on Anti-Muslim Hatred, Tell MAMA, Remembering Srebrenica—are all initiatives that I spearheaded in government, and which I am grateful are still being run by the Government. At what point, however, are we going to step this up and face down the awful scourge of Islamophobia—which, unfortunately, is increasing year by year?
Lord Young of Cookham
I applaud the courageous words of my noble friend and her statement that she will not be intimidated. She will know better than I do that many of the Muslim community are being intimidated by this leaflet when it arrives; they do not know where it came from or how the sender got their address. That is why there is a serious police investigation to find the source of the leaflets, and I urge anybody who receives one to report it and, as my noble friend suggested, to contact Tell MAMA.
The Government condemn the content of these letters. As I said in the Statement, it is abhorrent and has no place in a decent society. I know that the Prime Minister, who as Home Secretary took a number of initiatives in partnership with my noble friend, will want to reflect on the exchanges in the other place yesterday and today to see whether we can build on some of the other initiatives that my noble friend referred to and whether there is further action that we can take in order to counter hate crime in this country today.
Baroness Hussein-Ece (LD)
My Lords, I also thank the noble Lord for his response and pay tribute to the noble Baroness, Lady Warsi, for all the work that she did. This is deeply tragic and upsetting, and it is clear that it is part of a larger campaign to vilify, divide and terrorise Muslim communities in this country. It is something that we must never give in to. I certainly will not be bowed by threats. I have had death threats purely because I come from Muslim heritage; I was told on social media that my head would be chopped off and put on a spike outside Parliament, and the police were involved. But I will not give in, and I am sure that many people will not. However, there are very vulnerable people in our community.
I say also that the media have to take responsibility for the constant drip-drip of vilification in their headlines and the finger-pointing at Muslims generally that we have seen gradually reaching fever pitch in this country. Programmes give time to peddlers of hate crimes. There are lurid headlines and finger-pointing, which I mentioned. Indeed, the Minister had to correct a Member of this House and point out that the sort of language that we are hearing from politicians has no place in this society.
I have one question. The Government mentioned the Prevent strategy. Do the people who take part in it have the expertise to deal with far-right extremism of this kind? We know that the strategy deals with Islamophobia, but do they have that kind of experience? How confident is he?
Lord Young of Cookham
The hate crime action plan that I referred to a moment ago is going to be refreshed this year, and we will take on board the points that she and other noble Lords have made. I will make one final point: yesterday there was a Commonwealth service in Westminster Abbey, where all faiths were represented and a script from every religion was read out. That is the sort of country that we are and should remain, and we should put the issues that the noble Baroness and others have referred to in the perspective of this broader picture.
The Lord Bishop of Newcastle
My Lords, on behalf of these Benches and, I am sure, on behalf of the Church, I want to say that any attack on a person or community on the basis of their faith or their race is abhorrent and has no place in a decent, civilised society. As a Christian leader I stand in solidarity with my Muslim friends and with all those in and outside this building who have been directly affected or are fearful and anxious. In the light of the Government’s forthcoming integration strategy, will the Minister please comment on what practical action the Government intend to take to strengthen the relationships at grass-roots level, where it matters so much, between Muslim and other religious communities and to reassure us that the necessary resources will be committed to make that meaningful?
Lord Young of Cookham
The Muslim community will be reassured by the words of solidarity that the right reverend Prelate has just outlined. On the question of the integration strategy, if there were to be a Statement on the strategy in the very near future, it would be made by my noble friend sitting next to me—and he will have taken on board the requests as to what should be in its contents.
United States Tariffs: Steel and Aluminium
(6 years, 1 month ago)
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The Minister of State, Department for International Trade (Baroness Fairhead) (Con)
My Lords, with the leave of the House, I shall now repeat a Statement made by my right honourable friend the Secretary of State for International Trade in another place. The Statement is as follows:
“Mr Speaker, on Thursday 8 March, President Trump announced that the United States would impose a tariff of 25% on steel imports and a 10% tariff on aluminium imports after a period of 15 days, with the final day being 23 March. Canada and Mexico, with which the United States is renegotiating the North American Free Trade Agreement, have been exempted from the tariffs, subject to the successful conclusion of the NAFTA negotiations.
For the products within the scope of the investigation, in 2017, the US accounted for 7% of UK steel exports and 3% of UK aluminium exports. In addition, the UK accounted for 1% of US steel imports and 0.1% of US aluminium imports, in tonnage, at a value of £360 million and £29 million respectively. The President outlined that there is scope for further countries and certain products to be exempted from the tariffs.
From a UK perspective, as Members of this House know, the UK and the US are strong partners and allies, and the US-UK economic and security relationship is crucial. The US is our largest single-nation trading partner, accounting for a fifth of all exports, worth more than £100 billion a year. It is also the top destination for outward direct investment by the UK and the single biggest source of inward investment into the UK. We have a long-standing and special relationship with the US. However, that does not mean that if we disagree with something, we will not say so, and we do disagree with the US decision to implement tariffs on steel and aluminium imports based on national security considerations.
Such unilateral trade measures have weak foundations in international law and are not consistent with the Department of Defense’s own judgment in an investigation that was conducted on the basis of national security. There is undoubtedly a problem of overcapacity in the global steel market, but our strong view is that a global problem requires a global solution, not unilateral action. The UK has worked hard to address the issue of overcapacity. The Prime Minister called for a forum of G20 members to tackle this issue, which my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy attended in Berlin in November. The forum agreed comprehensive policy solutions. Most recently, the Prime Minister raised it during her visit to China, which is the world’s leading producer of steel and aluminium products. The UK will continue to work within the rules-based international trade system to tackle this problem.
Since the President asked the Department of Commerce to launch the investigation into the national security impact of steel and aluminium imports last April, the Government have made clear to the Administration on repeated occasions the potentially damaging impact of tariffs on the UK and EU steel and aluminium industries. The Prime Minister has raised her concerns directly with President Trump. I have spoken on several occasions to the Commerce Secretary and to the US Trade Representative about the investigation, including this afternoon. I spoke again today to the director-general of the World Trade Organization, Roberto Azevêdo, and I regularly speak to the EU Trade Commissioner, Cecilia Malmström. Several of my Cabinet colleagues have raised this issue with their opposite numbers. The Government have worked closely with the EU as part of our unified response. In addition, I assure right honourable and honourable colleagues that we have been in regular contact with the UK steel and aluminium industry throughout. I spoke to Gareth Stace at the weekend and again this afternoon.
There are two routes to petition the US for exemptions from the tariffs. The first, overseen by the US Trade Representative, will exempt countries with which the US has a strong national security relationship and which agree alternative means to address the threat to US national security from the relevant imports. The second, overseen by the Department of Commerce, will evaluate product exemptions if it is deemed there is no domestic US alternative and there are national security considerations, but only after a request for exclusion is made by a directly affected party located in the United States.
The Department for Business, Energy and Industrial Strategy will be assisting UK industry in working with US customers to build their cases for the exemption of individual products. I will be travelling to Washington this week for face-to-face meetings with the US Trade Representative, Ambassador Lighthizer and Commerce Secretary Wilbur Ross, as well as leading members of Congress. I will be making the case for the UK, as part of the EU. We have a strong defence and security co-operation relationship. As close allies in NATO, permanent members of the UN Security Council and nuclear powers, close co-operation between the UK and the US is vital to international peace and security.
As the House is aware, our current membership of the European Union means that the European Commission will be co-ordinating the EU response, and we have been clear that we will continue to adhere to the duty of sincere co-operation. The EU response is focused on three possible areas. First, the European Commission is preparing to introduce immediate duties on the US, ahead of a WTO dispute. The EU has shared a draft list of proposed items for duties and we expect it to publish this list early next week. Secondly, the EU can apply a safeguard measure of its own to protect the steel and aluminium industries from being damaged by an influx of exports to the EU caused by the displacing effect of US tariffs. Thirdly, the EU can pursue a dispute at the WTO. We are currently evaluating all aspects of these responses together.
We are clear that it is right to seek to defend our domestic industries from the direct and indirect impacts of these US tariffs, protecting both jobs and industrial capacity. We will also press for any response from the EU to be measured and proportionate. It is important that the UK and the EU response works within the boundaries of the rules-based international trading system. Over the coming days, we will be working closely with British industry and the EU to seek swift clarification and mitigation. I commend this Statement to the House”.
My Lords, that concludes the Statement.
Lord Stevenson of Balmacara (Lab)
My Lords, I thank the noble Baroness, Lady Fairhead, for repeating the Statement. This is my first opportunity to debate her at the Front Bench, and I am looking forward to working with her on the international trade Bill when it reaches your Lordships’ House.
We have, over the past year, heard regular statements about problems affecting our steel industry, although this announcement of tariffs on steel and aluminium imports, blatantly aimed at protecting US producers, must rank as one of the worst because of its implications more widely for free trade.
The House of Commons Library briefing paper on the steel industry in the United Kingdom 2016 suggested that the steel sector accounted for £1.6 billion of UK economic output, which is about 0.1% of the UK economy and 0.7% of our manufacturing activity. It has about 600 businesses, and 32,000 people are employed in the sector. The UK is the 18th-largest steel producer in the world, the fifth-largest in the EU after Germany, Italy, France and Spain. Approximately 15% of 350,000 tonnes of steel was exported directly to the United States in 2017.
We should extend our concern and support to the employees of British steel firms and their communities, which must be very worried about this questionable and ill judged unilateral decision by the USA. What assessment have the Government made of the impact of this decision on jobs in the steel sector and the economic hit that will be felt, particularly in communities outside London?
I have three further questions for the Minister. First, this announcement was not unexpected. It followed a series of pledges from President Trump to take what he calls “tough and decisive action” on perceived threats to the US national interest and to domestic producers as a result of international trade competition from overseas. It is very much in line with his “America first” platform. When did the Government become aware that President Trump was going to impose tariffs on imported steel and aluminium? What representations did the Government make to the White House prior to the announcement, and what assurances were sought that these tariffs would not be applied to UK exports?
Secondly, earlier this year, President Trump announced tariffs on imported washing machines and solar panels to give a boost to US producers in these sectors. President Trump also imposed a 30% tariff on imported solar cells, and last year the Department of Commerce sought to impose tariffs of up to 292% on imported narrow-body, medium-range jets until the US International Trade Commission accepted the arguments made by Bombardier and others and overturned that decision. What other sectors of the economy are the Government concerned about? What representations are they currently making to ensure that the UK will be able to export to the United States in the near term without facing unfair tariffs? For example, the President has mentioned additional protection for intellectual property. Given the strength of our creative industries, have the Government taken up that issue in particular?
Finally, the Secretary of State announced the establishment of a US-UK Trade and Investment Working Group in July last year, a group that has met twice since then. Given that the President has said he would welcome a trade war and thinks America would win it, what discussions have been had about steel, aluminium and the other new tariffs at these meetings? What assurances have been sought from the US Government about exemptions for UK exports in any free trade agreement that might be in consideration post Brexit?
Lord Purvis of Tweed (LD)
My Lords, we too are grateful to the Minister for repeating the Statement. Just at the time that we are loosening our ties with our largest single integrated market in the European Union, we see the next bilateral largest market in the United States moving towards a protectionist tone. Over recent months we have been repeatedly counselled by Ministers that we should look at not just the rhetoric of the United States President but at the actions. Now it is quite clear that there are repeated actions which are contrary to the interests of the British economy. The announcement of the Secretary of State today and of economic advisers last week are clear.
When I was in Buenos Aires as an observer at the ministerial conference of the WTO, the US left without a communiqué being signed. These worrying trends are clear to see. Last year, the Secretary of State, Dr Fox, said, while in the US, referring to the UK/US relationship:
“Firstly, we must lead by example, and work to encourage our trading partners across the world to support, and adhere to, the rules-based global trading system”.
Will the Minister therefore confirm that it is the view of Her Majesty’s Government that this action by the President is clearly contrary not only to how strong allies with a so-called special relationship should act but to international law?
We also know that in the presidential proclamation the President said that there would be a mechanism for reviewing the decision on impairing US national security if the countries concerned showed that their actions would not impair that national security. However, in recent discussions with the US, the EU and Japan could not discern on what basis these issues would be considered. What is Her Majesty’s Government’s view on these blackmail conditions that President Trump would seek to impose on allies for there to be adjustments to, or the removal of, these tariffs?
We have heard reference to the working group, which I have raised in this Chamber before. Did officials on the working group inform us that there was a likelihood of these tariffs being imposed on the United Kingdom? The Secretary of State indicated that he was due to visit the US and had no doubt planned to discuss the progress of the working group. What status does the working group now have given that we are clearly in a trade dispute?
Finally, we and our allies around the world continue to believe in free trade, even if the United States does not. How will we seek redress within the WTO mechanisms? Will the Minister reassure the House that we will be in precisely the same position as the European Union if we appeal for redress under the WTO mechanisms? This trend of protectionism cannot be in the interests of the United Kingdom. Clearly, our interests lie in standing shoulder to shoulder with our European Union allies on this issue.
Baroness Fairhead
My Lords, regarding the core of the problem, which is global excess in steel capacity around the world, we have been clear as a Government, and my right honourable friend the Prime Minister has been absolutely clear, that this is the wrong way to approach a global problem. The right way to approach it is the way we have been encouraging: through summits, where we have discussions about the measures countries will take to manage the problem in a balanced, global, multilateral way. We have been clear that we do not think this decision is in line with our approach, and we do not agree with it.
We are trying as a Government to work as part of the EU—as you know, we have a duty of sincere co-operation, which we fully expect and intend to fulfil. The first aim will be to stop this happening at all, through a process of negotiation and engagement. There have been multiple examples of engagement, from the Prime Minister to the President and the Secretary of State for International Trade, all the way through government. We will also work with the EU to look at the protections we can put in place if our aim cannot be achieved. My difficulty in addressing the comments of the noble Lord, Lord Stevenson of Balmacara, about the effect on jobs, is that we do not know what the state of the negotiations and engagement will be, what exemptions can be achieved and therefore what the effects will be on which products. It is too early to say.
However, we will absolutely be supporting UK steel and aluminium companies, through multilateral bodies, trying to ensure a global playing field, and, through various initiatives, ensuring that the EU is working at the global summit on 28 specific recommendations to address capacity. We believe that that will help our steel and aluminium industries.
We are also working with the steel industry. I mentioned that we have met with Gareth Stace, the director of UK Steel, and we are working within BEIS to ensure that UK steel companies which think they will be affected present their cases as actively as possible in the US, so that companies there ask for exemption for their products. We are encouraging trade unions and industry to work with us; we find that in the US there is significant support from both Republicans and Democrats in Congress for open and free trade.
The noble Lord, Lord Stevenson, asked how much of a heads up we had about this. There have been noises in the press about potential statements. It was broadly mooted before a meeting in Sofia, where my right honourable friend the Minister of State for Trade Policy in the DIT was present. It was discussed in broad terms then but, until an executive order was put in place on 8 March, it was speculation.
Before we leave the EU we clearly cannot be in any formal negotiations, so the trade and investment working group is discussing options only. It has been making progress and is due to meet, as planned, next month, so that work is continuing. I believe the noble Lord, Lord Purvis of Tweed, asked specifically about that. We welcome the US in saying that they look forward to a free trade agreement when the UK is in a position to negotiate one.
In terms of the EU and the safeguards, this Government remain absolutely committed to the WTO. We believe in the principles of free trade but in a rules-based, multilateral environment, and we will continue to support the WTO. We believe that our role here is to make sure that the benefits are seen and that we do not raise the temperature of the debate, and to engage with the EU and industry on behalf of the UK but as part of the EU.
Lord Rooker (Lab)
I remind the Minister that the Secretary of State, whose Statement she has just repeated, has in the past, when talking about trade deals with the United States, mentioned agricultural products. Last week, President Trump—in one of his tweets; not in an official government statement—also linked agricultural products with the very issue of steel and aluminium. Can the Minister give a categoric assurance that the UK Government will not sell out the UK agricultural industry in order to get a deal over steel and aluminium?
Baroness Fairhead
Regarding the idea that this is in the national interest, we have been clear that the EU assessment is a safeguard. We are trying to stop this happening in the first place and trying to get exemptions. We are taking this forward through engagement, and we will need to create a list of measures with the EU that we will take on a proportionate basis if we do not progress. My sense is that the best thing we can do is to work on global steel capacity multilaterally. I think that that was the view of this Government and your Lordships’ House, who believe in that rules-based environment.
Viscount Hailsham (Con)
Does my noble friend agree that our response from within the European Union is more effective than it would be from without the European Union?
Baroness Fairhead
It is difficult to argue that one way or the other. I know that the UK has specific national security relationships with the US. We have had a long and enduring relationship on defence, strategy and economic growth, and therefore we have a significant position on our own. I cannot calibrate the difference but I know that we are part of the EU, and on this matter we will be working alongside the EU and following the duty of sincere co-operation.
Lord Hannay of Chiswick (CB)
Does the Minister accept my view that it is very welcome that the Government are taking such a forthright attitude towards these measures taken by the United States—measures which seem to have no foundation whatever in the rules-based World Trade Organization order under which we have all lived so profitably for the last 70 years? Will she say quite unequivocally that we support all Cecilia Malmström’s efforts to get an exemption both for products and for the European Union as a whole, and that our support for her efforts is unequivocal? When the Secretary of State goes to Washington later this week, will he make it clear that we are supporting Cecilia Malmström’s efforts on our behalf? If the Minister will forgive me for correcting her, it is not only a question of sincere co-operation; we are part of a common commercial policy, and that means working to get an exemption for the whole European Union.
Finally, taking retaliatory measures is obviously extremely unpalatable, and taking a dispute settlement to the World Trade Organization is not something that we would have wished for. We are faced with a President of the United States who seems to think that trade wars are a good thing, but he had better learn some time that they are not.
Baroness Fairhead
I thank the noble Lord, Lord Hannay, for his remarks. We are engaging with the Trade Commissioner, Cecilia Malmström, and the Secretary of State will be acting on behalf of the UK but as part of the EU. We are working to stop this happening—job one will be to stop this happening; job 2 will be to get exemptions where we can—and the Secretary of State will be speaking on behalf of the EU and UK industry. I would welcome help from anyone in the industry and the unions who has an interest in this because there is a real issue here. We need to make sure that the benefits of free trade are fully realised, as we have seen in this country. A rules-based international system has lifted 1 billion people out of poverty and we do not want to set our face against that. The Secretary of State will be speaking to Cecilia Malmström later today ahead of his visit and he will feed back after his visit, so we are connected.
Lord Campbell of Pittenweem (LD)
My Lords, in the light of the events that we have been discussing, how long can the Government credibly advocate an enhanced trade deal with President Trump after Brexit? President Trump is one of the most volatile and capricious presidents in the history of the United States. He has taken actions which are contrary to the rules-based system and even today has sacked Secretary of State Tillerson for his independence of thought and, in particular, for his expressions of sympathy and support for the United Kingdom in relation to the events in Salisbury. How can we possibly put our trust in President Trump?
Baroness Fairhead
I thank the noble Lord. We have had a long and enduring relationship with the US and, in the past, when protectionist measures were applied—for example, in 2002—they were eventually rowed back and the relationship continued. It is important that we continue to demonstrate the benefits of free trade. The number of jobs expected to grow in the UK steel industry versus the number that might be lost in downstream industries indicate that potentially, this is not a good move in the US. A recent think tank report said that there could be a net loss of around 146,000 jobs in the US if this was put in place. We need to argue for free trade. We have a long and enduring relationship and the UK/US economic, national and defensive co-operation will endure long term into the future.
Lord Cormack (Con)
My Lords, I congratulate my noble friend on the way she is handling this delicate and tricky matter. I hope that she will be involved in some of these negotiations and, if she is, that she will reinforce the fact that we are working with friends and neighbours in the European Union and that this ought to be an object lesson to everyone who has the interests of our country at heart.
Baroness Fairhead
I thank my noble friend for his supportive words. Although officially I am not in the Trade Policy Unit—I am concentrating on exports—I obviously have interactions with it. It is likely that I will visit the US in a few weeks’ time and I will continue to represent the importance for us of addressing the excess steel capacity in the world, which is the root cause of the problem. We have made good progress along those lines. Where we see other countries behaving improperly, we are able to initiate anti-dumping or anti-subsidy measures. In the UK alone there are 45, which have proved to be effective. We will continue to fight but it is important that we do so within a rules-based system.
Lord Adonis (Lab)
My Lords, I congratulate the Minister on her appointment, and we wish her well in her trade export work. We commiserate with her, however, for having to repeat that Statement from the Secretary of State for International Trade, which was a catalogue of name calling and impotence. If he had the influence he claims with his great long list of American friends, whom he will be lobbying over the next week or two, we would not have had these tariffs in the first place.
I have two questions. First, is the Minister in any way optimistic that President Trump will lift the tariff he has announced? Secondly, does the Minister not think that this situation gives the complete lie to the argument for leaving the European Union on the basis that Britain’s global trade will somehow compensate for the loss of trade with the European Union that we will suffer? In addition, does the Minister not agree that the Prime Minister’s choice of words in her Mansion House speech—she said that it is now an object of policy on the part of Her Majesty’s Government that we will have less market access to the European Union—looks ever more unwise with each tweet and utterance from President Trump?
Baroness Fairhead
I thank the noble Lord for his welcome. I do not agree with his sense of impotence regarding the Statement. To begin with, there are a whole range of things we are doing for global steel capacity. We are part of the EU and work within that framework. We are engaging on behalf of UK industry with the US and EU, and our hope is that we can negotiate. We are looking at exemptions—I would not like to give you the probability of which, if any, we will get, but we are certainly pushing very hard for that. We need to continue to engage and represent the UK as part of the EU in this regard.
Lord King of Bridgwater (Con)
While the Minister is absolutely right that we must act in full conjunction with the European Union, there is no question but that we have a very special relationship—in whatever way that is described—with the United States. Although the noble Lord, Lord Campbell, has said that we cannot possibly trust the President of the United States, he is the President and it is very important that the Secretary of State makes effective representations to him and his colleagues to ensure that we avoid what could otherwise be an extremely difficult situation.
Baroness Fairhead
I absolutely agree with my noble friend Lord King. Very strenuous representations will be made. We think these tariffs have a very weak legal basis, and the EU deems that this will enable some countermeasures and, possibly, safeguards to be put in place. We need to engage with this very important friend and ally to make sure we get above this and move on to the agenda of building wealth right across the world, and make sure that we have a sensible global approach to global problems.
Viscount Waverley (CB)
My Lords, when the Government consider which debating points to put before the United States, and to President Trump in particular, they might wish to remind him of his policy of putting America first. Will the Minister put on record, with supporting evidence, why these measures are detrimental to all US businesses?
Baroness Fairhead
There are studies available. I mentioned a US trade body which represents downstream industries that think they will be negatively affected and that the net effect on US jobs will also be negative—its study is already a public document. We are trying to avoid protectionist measures that stop the further development of economic trade and of developing countries. The latter could provide a ratchet effect and bring us all up together.
Lord West of Spithead (Lab)
My Lords, the Statement explains at length how the Americans have made an assessment of the strategic requirement for a steel industry. That begs the question of why we have not made such an assessment. Do the Government believe that there is a strategic requirement for a viable steel industry in this country?
Baroness Fairhead
There is a question around whether it is a strategic national interest element, as the noble Lord mentioned, but we would question the President’s argument for it. I think that a lot of people would also question the figure of 80%. In terms of this country, we believe in open and free trade and that we should be protecting our industry to make sure that the sector is not the victim of bad practice, which is what the rules-based regime does. We are also trying to support our industry by making sure that we adjust for any requirements that we put on it. For example, the Government have compensated the UK steel industry to the tune of more than £200 million for the additional costs linked to the climate change levy and the renewables targets. We believe that we should allow open and free trade and that we should protect robustly our businesses so that they are able to compete on a level playing field, and we will support them in any way we can to do so.
Lord Lawson of Blaby (Con)
My Lords, I congratulate my noble friend on her new responsibilities and on the way she has been answering these questions. This action by President Trump should not come as a surprise given that, so far as I recall, it was part of the manifesto, as it were, on which he was elected. Nevertheless, it is wholly deplorable and should be condemned. But is it not the case that we will be able to use the special relationship to which my noble friend Lord King and others have referred only once we leave the European Union? As long as we remain within the European Union, overseas trade is an EU competence and all we can do is support the European Union in the efforts that it is making. After we have left, it will be a different story.
Baroness Fairhead
I agree with my noble friend Lord Lawson that when we are an independent trading nation, we will be able very directly to use the relationship we have with a key ally. That said, given that we believe so strongly in global free trade within an international rules-based system, and given that we are part of the EU and have a duty to co-operate, we will use our special and deep relationship with the US to help the EU overall in progressing this with the US by trying to ensure that we have the best possible chance of eliminating the tariff or getting significant exemptions.
Lord Adonis
My Lords, does the noble Baroness agree that it is a complete fantasy if the noble Lord, Lord Lawson, thinks that we will be in a stronger position to negotiate with the United States when we do not have the weight of Europe behind us and we are acting entirely independently? Further, does she not think that that is a controlled experiment which can only do enormous harm to the country and that we would be better off not engaging in it in the first place?
Baroness Fairhead
We should be happy that we have a long, enduring and strong relationship with a very important partner and all our efforts should be concentrated on addressing where we do disagree, because where that is the case we will say so, and in this case we have done so. Equally, however, the numbers I have seen on our trade with the US show that we have $1 trillion-worth of mutual investment in each other’s economies. We should be taking that forward and using it to make sure that global trade really prospers around the world.
Smart Meters Bill
Tuesday 13th March 2018
(6 years, 1 month ago)
Lords ChamberRead Full debate Smart Meters Act 2018 View all Smart Meters Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 5 February 2018 - (5 Feb 2018)
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, the rollout of smart meters is a key enabler for the transformation of our energy system. Smart meters are a critical part of the platform for the development of a smart grid and demand-side measures. Smart meters will facilitate greater flexibility in the production and consumption of energy by providing better information and improving communication between consumers, suppliers and network companies. In particular, they will improve the ability to shift demand to match supply, allowing us to make use of excess renewable electricity when it is available and use less electricity at peak times when it is more expensive. They will also improve distribution network companies’ understanding of and control over the use of their networks, allowing more power to flow through the existing wires without reinforcement, improving reliability and safety as well as reducing costs.
The development of a world-leading smart energy system, which delivers secure, cheaper and cleaner energy, is an important part of our industrial strategy. The vision of a smarter energy system, built on a platform of smart metering, is a prize worth striving for. The smart metering programme is one of the most significant infrastructure projects our country has seen. Over 50 million gas and electricity meters are expected to be installed in over 30 million homes and small businesses. The Government are committed to ensuring that all homes and small businesses are offered smart meters by the end of 2020, and considerable progress has been made. The enduring national data and communications service has been built, tested and launched. The Government have also established much of the regulatory, policy and technical framework necessary for this programme to be a success.
Energy suppliers are now actively installing smart and advanced meters, backed by Smart Energy GB’s national consumer awareness-raising campaigns. By September 2017, over 8.6 million smart and advanced meters were operating in homes and businesses across Great Britain. Rates of installation are also increasing, with around 400,000 being installed each month. Households and small businesses can start saving energy and money as soon as their smart meters are installed. Indeed, smart meters are expected to take £300 million off domestic energy bills in 2020 alone, rising to £1.2 billion a year by 2030. These are not small sums of money, and it is right that the Government continue to oversee and monitor the rollout to ensure that it delivers effectively, bringing benefits to GB consumers.
The costs of the rollout were debated extensively in another place, and the Government have listened to the concerns raised. Along with the regulator Ofgem, we closely monitor progress and costs to ensure that the significant benefit case, estimated at £5.7 billion net benefits, is secured. It is worth highlighting to the House that, following those debates and as part of our broader commitment to transparency, we agreed to publish a further update of the cost-benefit analysis for the programme in 2019. The Bill received broad support at Third Reading in another place, as would be expected for a well-established programme that has its origins in the Energy Act 2008 and was considered further when its powers were amended in the Energy Act 2011. I hope that we can continue the same constructive debate that has characterised the Bill’s passage to date.
Let me turn to the Bill itself, which has three measures. The first measure in the Bill extends by five years the Government’s powers to direct the rollout of smart meters, which are due to expire in November 2018. The most important of these is the power to modify energy licence conditions and industry codes, for the purposes of supporting the smart metering rollout. The Government have used their powers to put in place minimum common technical standards and consumer safeguards, including in relation to data access and privacy. Extending these powers to 1 November 2023 is necessary to maintain coherence in the rollout of smart meters and ensure that relevant activities are co-ordinated. This could include situations where new technical solutions are required to address any residual challenges to full smart meter coverage to ease industry-wide delivery challenges. In addition, the Government will look to take opportunities to maximise benefits from smart meters once installed.
The second measure will enable the establishment of a special administration regime for the smart meter communication licensee—currently the Data Communications Company, or DCC—to ensure the continuity of the smart meter communication service in the unlikely event of the licensee’s insolvency. The DCC is a licensed private sector entity and provides the national communications infrastructure for smart metering. The DCC enables energy suppliers and networks to collect energy consumption data remotely and securely, supporting them in delivering the full benefits of smart metering. Meters operated within the DCC will also be fully interoperable, enabling consumers to switch their energy supplier and keep their smart services. The special administration regime for the smart meter communication licensee is similar to that for energy networks and energy suppliers. The provision of a special administration regime has also been adopted across other sectors, including rail and water. The DCC’s financial arrangements are constructed so as to make the risk of insolvency low. However, the special administration regime is a sensible precaution, with the aim of ensuring continuity of the DCC’s services and so protecting consumers and industry from the impact of any hiatus in service provision.
The third measure relates to the delivery of half-hourly electricity settlement by Ofgem. Half-hourly settlement is a key enabler of the move to a smart energy system and will help deliver benefits to consumers and the energy system by providing incentives on energy suppliers to develop and offer innovations such as time-of-use tariffs, which will enable customers to use energy when it is cheaper, reducing their bills and the costs of the future energy system. This will also help the energy system become more resilient as we move towards an increasingly low-carbon generation mix. Ofgem is currently working with industry and consumer groups to assess the costs, benefits and market design options for market-wide half-hourly settlement. It intends to take a decision on whether and how to implement it, informed by an impact assessment, by the second half of 2019. This third measure will provide Ofgem with new powers that would allow it to deliver these reforms more swiftly and smoothly than under existing processes by allowing it to directly modify relevant industry codes and documents.
In summary, smart meter rollout will deliver a much-needed digital transformation to our energy system, providing the platform for a smarter, more flexible energy system that supports innovation in new, smart products and services. For consumers, smart meters provide the foundation for smarter living, creating opportunities for the emergence of innovative products and services, and taking us to a future where, for example, smart appliances such as dish-washers and fridges use energy when it is cheapest and to help reduce peak demand and energy system costs; energy networks know who has been affected by a power cut; and new tools support assisted living. Access to detailed, accurate energy consumption information will also support the delivery of tangible and immediate benefits to households and small businesses across Great Britain. I beg to move.
Lord Grantchester (Lab)
My Lords, smart meters are a necessary and vital part of national infrastructure to provide secure energy supplies to consumers in a more efficient, cost-effective way. They will allow households to benefit from innovation in the energy market. The measures in the Bill extend the powers of the Secretary of State to amend regulations to roll out smart meters from 2018 to 2023. The Bill introduces a special administrative regime for the Data Communications Company—the DCC—as a precautionary measure to protect consumers in any event from insolvency in the critical DCC infrastructure. The Bill will enable half-hourly electricity readings via smart meters to be used in energy bills, necessary for rewarding consumers and allowing them to use energy in more cost-effective ways, ensuring a more efficient system.
The Minister is correct in saying that it is largely a technical Bill, limited in its scope to issues in the smart meter programme. I thank him and his Bill team for making so much time available to meet me and other Members of your Lordships’ House: it has been extremely helpful. On these Benches, the Bill remains relatively uncontroversial: Labour agrees with the measures in the Bill, agrees with the importance of smart meters and with the need to roll out their use as judiciously as possible. Nevertheless, there are a few buts and a few wider points to be made about the flaws in the smart meter rollout system, the inadequacy of the communications arrangements and the disruption caused between the introduction of SMETS 1 and SMETS 2 meters.
The first point of contention is: why has the programme taken so long? The powers granted to the Secretary of State to implement and direct the rollout of smart gas and electricity meters go back to the Energy Act 2008. They now need extending from 2018 to 2023. Why did the DCC go live only in November 2016? The Minister may contend that everything is on track, the industry is committed and energy suppliers remain legally obliged to complete the rollout by the end of 2020. He may point to the fact that the smart meter data access and privacy framework was introduced in December 2012, which determines the level of access that energy suppliers, networks and authorised third parties can have to energy consumption data and determines the purposes for which these can be used. The Government have committed to concluding a review of this framework by the end of this year.
While it is understood that the Secretary of State needs time beyond 2018 to implement any conclusions from this review, it is nevertheless likely to be understood that the initial end date slipping beyond 2020 to 2023 is the real reason behind this extension. This view is reinforced when we hear of delays brought about by issues concerning the setting up of the DCC and the hesitancy brought about by the muddle between SMETS 1 and SMETS 2 meters, when the Government had to withdraw their early rollout obligation to install 1,500 SMETS 2 meters, or 0.025% of total meter points, whichever was the lower, by 1 February 2017. I believe that only about 100 SMETS 2 meters have been installed to date. Perhaps the Minister can update us.
SMETS 1 meters do not offer the same consumer benefits as SMETS 2 meters, with significant loss of smart functionality on any change in energy supplier by consumers. It is hard to understand why the Minister’s department has taken insufficient account of the consumer perspective around the importance of interoperability of smart meters. In changing suppliers, the consumer is not thrilled to learn that the SMETS 1 meter goes back to being a conventional meter, especially having paid the cost of implementation.
With the provision in the Bill to bring in half-hourly settlement, Ofgem is considering options for access to consumers’ half-hourly data to develop the data access regime and will be consulting on this, supported by a privacy impact assessment. This brings an added challenge to the understanding of what the offer should be in order for the consumer to agree to accept a smart meter.
The extension of powers in the Bill—a further five years from 2018 to 2023—is an indication that the Government fear that they might not meet the deadline of the end of 2020 to complete the rollout. The figures support this conclusion. As of February 2018, only 8 million SMETS 1 smart meters have been installed at homes and businesses. The target is 53 million gas and electricity meters at 30 million domestic and small non-domestic properties, with only two years to go to the deadline. Which?, the consumer organisation, has calculated that suppliers would need to be fitting 250,000 meters a week, equivalent to 24 every minute, around the clock, every day. The Government must state whether the 2020 target is still realistic and whether offers being accepted will lead to fulfilment within the timeframe. What probability has the programme of meeting this objective?
The next issue these delays give rise to concerns costs. Consumers are reminded that, even though most benefit accrues to the industry—of some £8 billion, rather than to consumers, who will benefit by some £6 billion—overall it must be said that there will be a net benefit of some £11 billion. Consumers are fearful that the potential cost impact of delay will wipe out the forecast net benefit. It is necessary that the National Audit Office updates its reports of 2011 and 2014 and reassesses the current economic case for the rollout of smart meters. Furthermore, it should look at whether the Government are on track to achieve their target to roll out smart meters by 2020 and are maximising the chances that smart meters will achieve their intended long-term benefits and advantages.
The main body of the Bill—nine out of 14 clauses—introduces the special administration regime for the DCC to ensure that the service continues should it get into funding or insolvency difficulties. Anxiety is rightly raised by Clause 7, which includes a provision that charges can be raised to make good any shortfall to meet the expenses of the DCC’s administration. It is not clear from the Bill or the Explanatory Notes why customers and users should foot this bill, especially when they have already borne the cost of the rollout in their energy bills. The DCC is a wholly-owned subsidiary of Capita plc which, it must be borne in mind, has recently issued a profit warning. Members of your Lordships’ House will recall that profit warnings were a precursor to the demise of Carillion. In Committee, we may wish to examine and test whether the safeguards in the Bill are adequate. The ownership of the DCC remains a concern.
Several concerns have also been raised about the smart metering implementation programme. I have already mentioned the smart meter problems between SMETS 1 and SMETS 2. Derek Lickorish, director of Secure Meters Limited, has said that as many as 20% of smart meters are operating in “dumb” mode because they have lost their smart functionality as customers have switched energy suppliers. Will the Minister confirm the steps being taken later this year to enable SMETS 1 meters to operate as SMETS 2 meters without a change of meter and an added cost? Does the Minister agree that this would remove the greatest barrier to the uptake of smart meters and greatly enhance the rollout programme?
There are further issues concerning the need to license meter asset providers—MAPs—and possible supply chain issues in the supply of meters. Issues also extend to the impact of half-hour billing options, which are the subject of three clauses in the Bill, allowing Ofgem to modify industry codes. The Government also need to have an answer to the transparency issues around the amount being raised for the rollout programme through customer bills, the monitoring of savings and the benefits being adequately transmitted to consumers. The Government need to be aware of unintended consequences of switching of demand around the clock and the waste issues around the disposal of obsolete meters.
In highlighting some of the issues around the smart meter rollout programme, we must not allow them to cloud the main objective that must be reached, which is that Britain’s energy efficiency and public interaction to achieve this will be enhanced through smart meters and the development of a flexible energy system supporting innovation in smart products and services. We support the Bill.
Lord Teverson (LD)
My Lords, last Sunday evening my family were watching “Call the Midwife”. It was raining outside, as it often is in Cornwall. We have a number of outside sockets. The television suddenly stopped, much to my relief, as I am not a great fan of that programme—I am sorry to offend the Minister. Unfortunately, the further downside for me was that I had somehow to fix the electricity. This became my task, so I went out and I had to search for a torch. Then I had to find my way under the stairs, where there is a cupboard. I had to put the torch on. The meter, a dumb meter, is some two or three feet further away. I had to look at all the switches, and finally I managed to get the electricity back on.
How I wish that I had had a smart meter so that I could have got on to my iPhone and knocked a switch so that light was restored to Thornparks House down near Tregony in Cornwall. Alas, this was not the case. However, this underlined to me how important this programme should be. It is supposed to be an £11 billion programme. That is £11 billion of what I see as upgrading of domestic and commercial infrastructure and communications channels in the United Kingdom. That is why it is important.
How is it that in these days, when we use iPads and smartphones and with all the technical ability that we have, we still have so many people with these dumb electricity meters? My meter has, I think, never been read by anybody apart from me in the past 10 years because no one can get access to it from the outside. How is it that we still have this dumb technology when everything else has changed so much? The Minister will gather that I am a fan of this programme, but from now on the supportiveness of my speech goes downhill.
When I first joined this House 12 years ago in 2006, it happened to be the year that the smart meter operational framework was produced. I have always been interested in energy and one of my first visits—on the way up from Cornwall—was to a smart meter manufacturer in Winchester. They were the people who told me how great this technology was, what a fantastic future it should lead to and how obvious it was that it should be adopted, not just in terms of ease but of information and future distributed energy systems. It was quite clear. I became not just a fan, but a strong advocate. However, where are we now?
The noble Lord, Lord Grantchester, has gone through a little bit of the current position. My numbers may not be exactly the same, because they vary by source, but there are some 47 million meters in this country. There are 27 million properties, so a number, particularly commercial properties, have several meters. We have approximately 9 million SMETS 1 meters, which means that we have 39 million still to do. At 1 million a quarter, which roughly ties up with the Minister’s figure, that takes us to 2028. By that time, I suspect that I shall no longer be a Member of this House, but I sincerely hope that we are able to meet that timetable. We also have about 100 SMETS 2 meters, most of which I understand have been installed on close friends and family of the producers as guinea pigs to see how these meters work. Last time I heard, they do not work particularly well. In fact, in the main they are fairly non-functional.
We should, however, give the Government their due. They have put back the final date for SMETS 1 installation from July this year to October and we have a 2020 target. The noble Lord, Lord Grantchester, maybe with his tongue in his cheek, asked the Minister whether it was possible to meet this target. Clearly it is not, so for goodness’ sake let us admit it, get back from la-la land into the real world and allow the industry, consumers and everybody else, including the Government, to plan this sensibly.
As I said, it is an £11 billion programme. That is massive in terms of future charges to electricity consumers. At the centre of this we have DCC, a Capita organisation. I understand that it has recently changed its management quite substantially. I certainly hope so. I looked through a list of just how late it had been, and I think there had been six postponements since 2014. We finally had it go live in November 2016, some years after it originally happened.
One thing I learned when I was very young was that, as a relative said to me, people who put lots of initials after their names are probably the ones you want to avoid, because they are trying to impress you and probably do not have the substance—I am sure noble Lords keep their peerage title in front of their name but have nothing behind. I stretch that example to reports and projects that are full of acronyms. When I went through all the background work to this, I was concerned: SMETS 1, SMETS 2, DCC, PPMID, CAD, IHD, CGI, SMSO, SMDA, SMOF, GCME, ESME, GBCS, SAR and of course MAPs, which are meter asset providers, which I will come back to later on. It seems to me that this process—this structure—is so difficult to understand and has been put together in such a difficult form, with a mixture of public and private, that it is designed to fail.
So far, I regret to say, it has been unable to deliver, despite in many ways the context being so simple, in that all you need is a bit of technology in your house—not necessarily under the stairs—which tells a monitor what you are doing in terms of electricity and maybe later allows you to participate in smart energy through a distributive grid as well. All that it then has to do is communicate usage in some way to a data hub, and all that data hub has to do is communicate with the electricity or gas supplier. That is all that is required, and yet 12 years later, where are we? We are a small way through a programme that we desperately need.
The Minister mentioned costs to some degree. I think the whole DCC budget to deliver this between 2013 and 2021, which goes on to consumers’ bills, has gone up from £1.3 billion to £2 billion. Its project management costs have gone up from £107 million to £374 million, and its set-up costs for subcontractors from £131 million to £948 million. DCC may be out of control, but government management of the process has clearly also been quite ineffective. In terms of timing, DCC has been late in going live by some two years, while SMETS 1 has been put back from July to October. At the moment, SMETS 2 meters are not working and have no supply chain, so if we stick to the October 2018 date for stopping the installation of SMETS 1 smart meters, can the Minister explain to me what happens to all the installers between October and when we actually get SMETS 2 meters going? We have thousands of skilled people out there fitting 400,000 of these meters a month, but I cannot see how they are not all going to be out of a job in October. We then lose the skills, so how do we get the rest of the programme in, not just by 2020 but by whenever we manage to do it?
One of the things that has to be core to this whole programme is interoperability. I understand SMETS 1 meters are reasonably interoperable, but as I think the noble Lord, Lord Grantchester, said, if you change supplier—which government, we in Parliament and people interested in energy want people to do—there will be instances when you get stuck with a meter which is either dumb or has to be replaced by the new supplier, at an additional overall cost to the consumer, if not individually. That is not right. What will happen to all the SMETS 1 meters? Are they going to be stranded assets? I do not see how that will work.
Turning to meter asset providers, I am not greatly into the argument about whether they should be licenced or not. Again, the noble Lord, Lord Grantchester, brought this up; I am sure that it is an important issue. To me, the real issues relate to energy prices and meter finance. I may have been fairly naive, but I thought that the energy supply companies would probably finance them themselves. How naive can you get? Of course not: they do not do that; they get them off balance sheet and lease them, yet the lease costs of these machines have been extremely high and are still high. That will reflect, once again, on consumer prices. It is something that needs to be considered and possibly changed.
I have many questions to ask the Minister, but first I congratulate the Government on having the half-hour metering to make sure that we can actually push forward much greater use of smart meters for smart grids, and particularly for demand-side management—all of that area. However, they are going to have to be a lot cleverer in terms of explaining to the public that demand-side management is not compulsory but voluntary, so that we do not have the Daily Mail headlines about people being forced to turn their heating off, or whatever.
I have not yet been told that the Government have solved the problems in relation to multi-occupational buildings. Are they anywhere nearer to solving them? On the compatibility and interoperability issues, the north is on a different communications system from the rest of the country and, as I understand it, it is incompatible with the remainder. Are all the 9 million SMETS 1 meters going to end up being stranded assets, and what do we do with them? Is this system now future-proof? I get the impression that it is not; that to really have an intelligent system, we are going to have to upgrade again. When are we going to have to do that? What policy action can we do centrally to bring down that rental cost of meters that is going to affect energy companies and that will inevitably be passed on to consumers? How will that be changed? For goodness’ sake, how are we going to manage DCC better in the future? This seems to be an organisation that started late, has been complacent with public money, has had hugely overshot budgets and just requires much better management for the future. Lastly, the 2020 target date is just not possible. What is the real target date for that, and do we have a chance of actually meeting it?
Lord Broers (CB)
My Lords, I wish to speak only briefly. First, I strongly support the Government’s commitment to offer smart meters to all households and small businesses. I believe that the potential for realising significant reductions in energy use through the use of smart meters will, as claimed by BEIS, be realised. Ultimately, the meters will allow users to monitor how they are using electricity and gas, thereby learning how to minimise their consumption.
Secondly, I urge the Government to press ahead as quickly as possible to ensure the supply of smart meters that are capable of monitoring individual appliances, together with lighting, heating and cooling systems. Batteries and energy sources should, of course, also be included. It should not be necessary to wait for appliances to be fitted with their own transducers to communicate with the smart meters, as they can be connected with existing smart plugs—which are all over the place—that are capable of monitoring the power used by an individual appliance and communicating this to a smart meter. This can be done by using a personal area wireless network such as Zigbee, which is a low-power, low-data-rate proximity wireless network designed especially for small-scale projects such as this. It has been around for a long time.
It will only be after all systems consuming or generating power are monitored that the full benefits of smart meters will be realised, as it will then be possible, for example, to see where power has been used and generated over a month or even a year, and optimise consumers’ own personal situations. I urge the Minister to ensure that meters capable of this extended monitoring are installed as soon as possible, but at the same time recommend that this should not delay the installation of SMETS 1 meters, as these will allow us to realise the gains in efficiency that the ability to monitor consumption on a half-hourly basis allows. In conclusion, I add my support to the noble Lords, Lord Grantchester and Lord Teverson, in calling for the Government to just get on with it, please.
Baroness Manzoor (Con)
My Lords, I strongly support the Bill and I thank the Minister for so elegantly laying out its three aspects. He will be pleased to hear that I will not restate them, but it is worth restating that the purpose of the Bill is that every household and small business in the UK will be offered a smart meter by 2020—although of course there is no obligation for anyone to accept that offer.
I am viewing the Bill through the prism of a consumer. To that end, I was interested to note that, according to research undertaken by comparethemarket.com, one in five people did not want a smart meter. The Government will therefore have to undertake some more effective ways of communicating to the public what smart meters can and cannot do, particularly if they want to hit their target by 2020. As has already been stated, 53 million meters will need to be rolled out and then rolled on to the new national communications network. As the noble Lord, Lord Grantchester, said, that equates to 24 meters a minute. It is also of concern that some of the largest suppliers of energy say that the rising cost of the smart meter programme is one of the main reasons for the rise in customers’ energy bills.
To ensure transparency in bill costs, energy companies should have a duty to further break down their billing costs to the consumer. Billing costs could show what cost is due to energy generation; what proportion of the bill is due to distribution; what proportion is due to overhead costs such as billing, smart meters and customer services; what proportion is for installation and management costs for smart meters; and what proportion is for any data requests from users. I would like the Bill to incorporate such a duty of transparency, thus enabling customers to make more informed choices, aiding competition and helping to bring energy costs further down. If such a duty is not put in the Bill, will the Minister give consideration to including one in regulations?
Consumers’ perceptions have not been aided by the functional issues experienced with the first generation of smart meters—the SMETS 1s, as has been said—which have left some consumers concerned about having a smart meter installed. Users of SMETS 1s have had problems keeping the benefits of their smart meter when they switch energy suppliers. This is because the SMETS 1 meter became defunct, or dumb, as it could not connect to the new national communications network. This meant that SMETS 1s could not talk to the consumer’s new energy supplier.
I understand that the second generation of smart meters, the SMETS 2s, have overcome this problem, but the issue of operability of SMETS 1 meters still needs to be addressed. Will they be replaced, or can they be upgraded to enable compatibility with the new communications network? What action are the Government taking to inform customers that operability problems have now been resolved—if they have—and that the SMETS 1 meters will not be installed by energy suppliers unless they are fully functional on the new communications network? And who will pay for the upgrade?
The Government estimate that smart metering will deliver net benefits to GB of £5.7 billion, equating to £300 million off domestic energy bills in 2020 and £1.2 billion a year by 2030, and the Minister has restated that. Breaking that down, it is expected that individual households will save on average approximately £11 a year on their energy bills by 2020, rising to £47 in 2030.
Smart meters should also address the imbalance in information between suppliers and their customers, because customers will be able to see the level and cost of the energy that they are using in real time and use that knowledge to change to a different tariff or supplier or better plan when they use their energy, thus enabling budgeting. This is particularly important for low-income households and those who use prepayment meters. The smart meter does not need topping up and these customers will no longer have to leave home to buy top-ups for their meter.
As well as allowing consumers to make informed choices, smart meters should put an end to estimated bills because consumers and the energy suppliers know the uptake of usage down to half-hour intervals. To ensure that this benefit is fully realised, it is important that energy suppliers then do not encourage customers to pay via annual payment plans—otherwise, customers receive estimated bills with potentially large credit balances left at the end of the year.
There have also been stories in the press about a few smart meters malfunctioning by sending out the wrong usage readings to their energy supplier. Can my noble friend the Minister say how likely it is for a smart meter to be dysfunctional, and what happens when the usage reading is inaccurate? What redress does the consumer have? There have also been reports that because the smart meter technology works via the internet—we have already heard this from the noble Lord, Lord Teverson—there are connection problems in places such as high-rise flats or in some rural communities where coverage is poor. Despite this, I understand that the Government expect more than 99.25% of premises and homes to be covered by the national communication network. Can my noble friend confirm that this figure is accurate, and are there any plans to ensure that the communications network gives 100% coverage?
Despite some teething problems, the principle behind smart meters is important. Not only does it allow the companies to assess in real time the energy uptake by the nation and plan accordingly for it but it is likely to aid the future development of innovative smart products, as we heard from the Minister, such as dishwashers, smart kettles, fridges, washing machines and indeed other new services. But with such smart technology comes dangers to security. Can my noble friend say a few words on what safeguards have been implemented to ensure that the new communications network is safe from unintended interference and sabotage? How will DCC keep customers’ data safe, and how long will customers’ records be kept?
To conclude, the benefits and flexibility of smart meter usage can be fully realised only if there is effective training of those who install them, and if customers are trained in how to use these meters and the new technology effectively. Smart meters and such technology are our future and we should fully embrace their benefits. The Government need to ensure that customers can access the cheapest tariffs and ensure that smart meters work for everyone: customers, the energy companies and our environment.
Lord Whitty (Lab)
My Lords, like the noble Lord, Lord Teverson, and my noble friend Lord Grantchester, I am a bit schizophrenic about this Bill. On the one hand, I welcome some of its provisions, but on the other I look at the history of the rollout of the smart meters programme with deep depression. It has had mixed results, to put it mildly.
On the other hand again, some of the benefits of smart meters have been realised and a significant proportion of consumers have changed their behaviour as a result, so that gives us some cause for hope. I also have some fairly substantial strands of sorrow and anger about this, some of which goes back to proceedings on the Energy Bill 2008. This, I am afraid, is the “I told you so” bit in my speech. I took quite an active part in those proceedings and told the then Government of my concerns. Some of them have already been mentioned; they relate to the very limited interoperability of the first generation of smart meters, which meant that the ability of consumers to switch was greatly restricted and they were left with stranded assets—and smart meters were pretty dumb in many respects.
I also mentioned the inadequate relationship between this massive £11 billion programme of installing smart meters and actually getting them into every household in the country. That programme should have been accompanied by more general advice, direction and help on installing energy efficiency equipment in the home.
I also was deeply perturbed by the basic premise of the delivery of the smart meters programme: requiring that it be carried out by the supply companies. That led to behaviour based on self-interest and to inefficient delivery. It would have been far better if the state itself—although I could not really have expected this of even the coalition Government, and certainly not this one—or the network companies had proceeded street by street, instead of every building in every area having to have a meter installed by different suppliers.
The way in which different suppliers have done it has varied significantly. I thought at the time that the central strategic decision to give responsibility of delivery to the supply companies was the wrong one, although it is probably too late to change that now. It has also helped to increase consumer distrust in the programme itself, over and above the natural resistance of some consumers to new technology.
I was also perturbed and somewhat baffled by the exact responsibilities and status of DCC. I remember asking the then Minister to explain exactly what this body would be. It was only after we had finished with the Bill that the contract was given to Capita, which alarmed me even more. Following the Carillion collapse, the Bill must ensure that, if Capita similarly collapses, which looked possible a week or two ago—I of course hope it will not—provision is made for dealing with its insolvency. Its performance, as noble Lords have pointed out, has not been that great, but the possibility of its insolvency undermines this whole process. The cost of that is going to fall, once again, on the consumers, who, through their bills, are already paying for the programme as a whole.
That is the end of the “I told you so” part of my speech—but I did tell you so. Some fairly wrong strategic decisions were taken at the beginning of this programme. Partly as a result of that, we are of course behind on the timetable.
On a more positive note, however, we are now moving to the next generation of smart meters. I hope we can do so rapidly, and that there will be no performance problems. The Minister should spell out clearly the timescale. A concomitant point is that we will need at some point to replace the first generation with a second and a third generation. Otherwise, some 8 million to 9 million people will effectively have fairly dumb meters which, although they can induce some change in behaviour, will not do the full job that the cutting-edge technology could deliver. Therefore, we need to speed up the process. I would like the Minister to spell out somewhere in this Bill the process for the retrofitting and replacement of the first generation, as well as the timetable for introducing further metering in the next generation.
More positively, some significant research has shown that even some of the dumber smart meters have enabled people to take a greater interest in their energy consumption and make related decisions on light bulbs, switching off washing machines and changing the time at which they operate appliances, thereby saving energy. So the outcome may well eventually be very positive. The downside, though, is that there has also been some negative reaction to smart meters. I hope we will be able to overcome that.
I very much welcome the move to half-hourly billing. That brings its own problems in terms of privacy and security but I hope that we will find a way to reassure consumers in that respect. Once we move to half-hourly billing, consumers could well get on top of making serious improvements in their energy efficiency behaviour and the energy performance of their homes. I am very much in favour of that so long as the privacy downsides are addressed in the Ofgem regulations.
I still have problems with how this programme is being delivered in premises in multiple occupation that have multiple suppliers, in both the social housing and the private sectors. There has been some progress on the relationship between smart meters and prepayment meters, but the phase we are discussing ought to turn that into something much more positive because some of the most vulnerable consumers are prepayment consumers and smart meters should help them. We have some good examples of that. We need to build on those and make this process more systematic.
I have mentioned the situation with DCC. I recognise that the Government had to move on that. It was a bit of a panic move which did not reflect the original concept of the Bill, but it was probably necessary. However, it underlines what my noble friend Lord Haskel said at Question Time about the reliance on single, near monopolistic outsourcing companies for the delivery of key elements of our infrastructure. I hope that we will address that in broader terms as well as in relation to this specific programme.
I still think that there is an insufficiently close relationship between the installation of smart meters and other energy efficiency measures. However, we should perhaps look at the totality of energy efficiency interventions as we move away from the ECO, as we have known it, and consider all the current programmes so that we can maximise energy efficiency house by house and company by company.
So far there is a very mixed picture with a lot of downsides. We have the opportunity to move to the next stage in a more positive vein. However, while the Bill introduces some useful provisions, in particular half-hourly billing, they are not sufficient to ensure the full delivery of the programme and the full step-change in our energy efficiency performance which those of us who supported the concept in the first place looked for.
Baroness Maddock (LD)
My Lords, the Minister said in his opening comments that this is a small technical Bill and, as is his wont, painted a very rosy picture. As we have heard, some of it is rosy but some of it is not quite so rosy.
It is difficult not to be too repetitive because noble Lords around the House agree that the Bill contains some positive measures and some negative measures. I think that very few people would disagree that smart meters will make a large contribution to our national energy infrastructure. We have heard, and we know, that they can assist consumers and energy suppliers to use energy more efficiently and to reduce costs on both sides. However, as others have said, we somehow fail to carry to fruition many energy and energy efficiency programmes in an efficient, timely and cost-effective way. The smart meters rollout is no exception and that is why we have this Bill before us today.
As others, including the Minister, have said, the Bill extends the Secretary of State’s powers to develop, amend and oversee regulations concerning the licensing of smart meters for gas and electricity usage. Presumably, we are discussing this issue because not everything has gone well in this area. The Bill sets up a new special administrative regime for the national smart meter communications and data service provider—in short, the DCC.
In the event of insolvency, the noble Lord, Lord Whitty, highlighted many moons ago that there was a problem. Was this considered? We now know it was considered in the original discussions in 2008 but, nevertheless, we went along with it. We now have problems, and we have seen recently that dealing with it has been very slow.
The Bill also introduces new powers to modify industry codes and instruments directly to deliver a market-wide, half-hourly settlement that uses the smart meter data. There is agreement around the House that this would be a good thing but only, as my noble friend Lord Teverson said, if the meters work. The clause dealing with this came rather late in the day in another place. Will the Minister explain why? The original plan was that every household and small business in the UK would be offered a smart meter. We have already heard from others that the plan was for 2020; the Government now need proposals in this Bill giving them until 2023, and doubts have been raised this afternoon about whether they can do it by then. We have heard all sorts of statistics about how many meters will have to be put in every week to make this happen. Other concerns raised this afternoon concern data protection and privacy. The noble Lord, Lord Whitty, gave us more detail on that.
We have also heard concerns about the installation and selling of this equipment to consumers. I have a particular gripe—I get rung up about smart meters and I realise that I am also being told we need to switch suppliers. I am not very good at doing this, but my husband has done it. I am concerned that, if I have a smart meter, I might not be able to have SMETS 1 and I may not be able to switch my supplier again; therefore, I am not prepared to say yes to the installation. When you have a conversation about this with someone representing the supplier, trying to persuade you, they do not seem to understand what you are talking about. There is a big issue about how people talk to consumers when they are trying to persuade them to have a smart meter.
We have also heard about costs. We know that around £11 billion will be spent and there have been projections of a net benefit of £5.8 billion. But, as others have highlighted, rollout is happening more slowly, so it is not clear that the cost benefit will work out as projected. The National Audit Office is reviewing the programme and plans to report this summer, looking specifically at whether the programme is on track and whether the economic case is still the same. I will not repeat how many meters have been put into houses; the big issue is that, while SMETS 1 installation has gone ahead, albeit not as fast as we would like, SMETS 2 is very slow. I have not done as much detailed digging as my noble friend Lord Teverson; the figures he put forward this afternoon are pretty frightening.
Good smart meters can play a part in helping those who find it difficult to pay for their energy—as the noble Lord, Lord Whitty, mentioned. I am vice-president of National Energy Action, a charity that campaigns on fuel poverty, and I am grateful for its briefing. It is supportive of the programme, realising that it has good potential for helping people in fuel poverty. One thing it is particularly concerned about is the role of Ofgem in monitoring and enforcing minimum standards under the installation code of practice, because this is fundamental to the successful rollout. At the moment, there is little information about how or when individual suppliers are rolling out this technology or about their approach to engaging with customers, particularly vulnerable customers—I have talked about people like me—to ensure that they capture the benefits of more accurate billing, which the noble Baroness, Lady Manzoor, referred to. Nor is there much information about how they are helping people to get more of a handle on how they use their energy.
NEA would like to see Ofgem publish the annual rollout plans of individual suppliers and details of how many meters are installed annually. This could be broken down between SMETS 1 and SMETS 2 and the number of smart meters operating in pre-payment mode for those who find it really difficult to pay their energy bills. This could be done each quarter in line with other Ofgem E-Serve quarterly reporting. This information is not commercially sensitive and it would enable bodies such as NEA to offer bespoke advice to customers about when they can expect to benefit from their smart meters.
NEA also stresses that data protection should not be a key reason why more geographic-specific information cannot be put in the public domain. There are concerns and questions about data and data protection, which the noble Lord, Lord Whitty, talked about, but we ought to be able to use the information without people’s data being used in the wrong way. If we developed a GIS-based map of where smart meters have been installed, that would be a great help to organisations all around the country—for example, to charities such as NEA. They could follow up the installations, amplifying the benefits and helping people by providing more extensive behaviour-change advice and support. It is clear that not all installers are providing this help—some are but some are not.
There is one acute concern about installations. We need to know that when an engineer leaves after putting in a smart meter, the heating still works. They might have said that a gas appliance was unsafe and turned it off. Obviously we want things to be safe but at the moment no government policy is in place to help people—particularly vulnerable households—to change a boiler, as used to be the case under the ECO. I had an exchange with the Minister about this back in the autumn because people were not able to replace their boilers—a situation that has got even worse during this cold winter. When I asked him about it, the Minister’s answer was, “Well, of course, we really believe in energy conservation now, and that’s where all the money is going”, but that does not help the person whose boiler needs to be replaced in the winter. We need to do both. From a sedentary position my noble friend says that it is more efficient.
NEA spends a lot of time talking to consumers and that is why it is so concerned about some of the issues that are not going as smoothly as they should. There is also an issue around price caps and pre-payment meters. The meter price cap is very closely linked to the smart meter rollout and to SMETS 2, and I hope that the Minister will be able to tell us a little more about that.
We have heard that Clauses 11 to 13 create powers to oversee the smart meter programme, but I have already highlighted that Ofgem is finding this quite difficult. However, it has now been asked to deal also with the half-hourly settlement. As others have said, this is a good thing because not only does it enable suppliers to offer different prices at different times of day—we have heard about other things that can help people to use their electric products more efficiently in the home—but it can assist in developing, nationwide, a more demand-led energy supply system. The noble Lord, Lord Whitty, my noble friend Lord Teverson and I have raised this issue in successive energy Bills in this House. At one time it seemed that the Government did not understand that at all but they have cottoned on to it now and it is a welcome addition to the Bill.
Many people still do not have meters but research has shown that people who have them have changed their behaviour and are quite satisfied. In one survey, 75% of people said that they would recommend the meter to someone else; and 80% claimed that they were saving energy through their behavioural change.
If this is to continue we need to make sure that SMETS 2, the cleverer meter—so called—rolls out properly. People need to be able to change their supplier because we have two government policies working against each other—persuading people to have a meter, persuading them to change—and the two do not go together.
I welcome the Bill, as do many other noble Lords, but I am disappointed because it has highlighted many problems that perhaps could have been avoided. We keep falling into the same trap on several issues: we are bad at cost-benefit analysis and adjusting as time goes along; and we are bad at understanding human behaviour, which I appreciate is difficult. We assume all kinds of things about human behaviour which turn out not to be quite right. We need to be better at handling different scenarios.
I hope the Minister can assure the House that the programme will go forward in a more rosy way—I am sure he will; he usually does—and that he can reassure the House on some of the issues that have been raised today. There is common ground across the House and I look forward to his reply.
Baroness Featherstone (LD)
My Lords, this has been a good debate and a master class in damning the Government with faint praise.
In the future our energy supply, transmission and storage—everything—will change. The future will be different from the past. The big six will no longer be the big six but, we hope, just six among the many. There will be on-grid and off-grid, feed-in and feed-out. The customer will be at the heart of managing their own usage or contribution, and there will be savings of energy and in the energy cost to customers. This is an energy revolution and smart meters are a vital part of that future.
However, as many have said across this House, before they went downhill, smart energy needs to be smart. That is the lament and sorrow of the Bill because things have not happened in the right way: not the smart meter, because the first one was not interoperable—I will be grateful when I do not have to say “interoperable” too often; not the data collection; not the rollout; not the selling; and not the installation. There were delays to completing the rollout; costs which might result from delays to the system; issues around the financial security of DCC and the financial status of its parent company, Capita. It was helpfully pointed out by the noble Lord, Lord Grantchester, that there has been a recent profit warning. There were concerns over whether appropriate data protection and privacy would be provided; connectivity concerns; issues around installation visits; concerns about doorstep selling; problems with the disconnection and disposal of old meters; and problems around inaccessible homes. Between them, Members across the House have raised all those issues.
On the hoped-for benefits, in the other place the Secretary of State, Greg Clark, said that a third of the savings come from potential reductions in the use of energy, just over 40% come from the suppliers’ costs saving—not having to read meters and so on—and that he expects those savings to be passed on to the customers in their bills. I am concerned that this was put as an expectation rather than an instruction. What will the Government do if this expectation is not met? I do not think we should leave this to expectation. We should be able to assure the customer and the client that these savings will be passed on, particularly since, as many across the House have pointed out, they are paying for the whole system.
Another key issue is the extent to which data will be private. We need absolute clarity over who owns that data and for how long, who may have access to it and how it will be protected—and not just clarity but assurances on how such information might be used and by whom, and how an individual can control, with absolute confidence, access to it. Will the proposed review of data usage be widely drawn and will it be published?
Is the Minister aware that some people with disabilities have concerns about this system? As we know, people with disabilities already pay more because of higher fuel consumption, as they are quite often at home all day. I talked to one of my noble friends only today who was very concerned she would be made to feel guilty if she could not use or calibrate a smart meter to use power at a different time of day because her needs were at critical times. Could the Minister speak to that? The Minister also raised the issue of smart energy awareness. Perhaps some of those campaigns could target those with disabilities and the most vulnerable.
Looking outside of that range of issues still needing attention, the Government want the Bill to have a narrow focus on three key things. The first is the extension of existing powers, which of course they want—and need to rectify all the things that have gone wrong. I shall not reiterate all those issues other than to say that 8.5 million first-generation meters have been installed and the Government are hoping to see the rollout of SMETS 2 meters, which do not have the interoperability problems of the older meters. In a private letter to energy companies, the Government said that systems designed to handle the newer meters were not ready and so they moved back the deadline for rolling them out from July to October. That means that more than 1 million extra first-generation smart meters will be fitted in homes, despite, as others have said, the devices being criticised for going dumb when customers switch. With the deadline moving from July to October, hundreds of thousands of people will receive the older devices. Therefore, SMETS 2 and the DCC are critical, and this sort of delay, along with all the issues to do with dealing with the installation of meters in your own home, with variable fitters and information, is damaging.
One of the challenges, as mentioned by my noble friend Lady Maddock, is that the reputation of smart meters is suffering because of all the problems that have arisen, which is damaging people’s willingness to adopt the new system. The extension of the Government’s powers and the delay to the rollout of SMETS 2 are concerning. It appears the Government are extending the period because of original targets being missed and they are worried there will be further issues for which an extension of powers will be required. Will the Minister confirm that this is the rationale for the extension of powers? Will he also confirm that their extension until 2023 is not connected to a potential overrun of the 2020 deadline for the rollout of the new meters—although a number of noble Lords have put a question mark on that deadline?
The second part of the Bill concerns the introduction of,
“a special administration regime for the national smart meter communication and data service provider … ‘DCC’ … in the event of its insolvency”.
I am unsure whether we have 100 SMETS 2 meters installed or 80—or 250, as was discussed in Committee in the other place. If the number is that small, there has to be a question about how robust and how well tested the function of the DCC is at that level. That does not seem an adequate supply of data to test that system. Coming to the DCC itself and the concerns over Capita’s financial status, what checks are the Government carrying out on Capita? In addition, does the role of the special administration regime exist as of the passage of this Bill or only when there has been trouble, or can it kick in in advance of any collapse in the system? What are the protections for the consumer in this event? If a special administration regime has to be put in place because there has been a failure on the part of DCC or Capita, what can official scrutineers and the public expect in the way of transparency and information about what has happened? Can the Minister give an assurance that we parliamentarians and the public at large will not be kept in the dark about why a special administration regime has been put in place? Obviously, a further concern has to be that the costs will be passed on to the consumer. Can the Minister explain why the consumer should be in any way liable for such a failure? Would any of the costs pertaining to such a failure fall to the consumer? Would it be the whole cost or part of it? In responding, it would be helpful if the Minister could set out the costs and savings to consumers and other players so that we can see who is benefiting and who is paying, and whether we think that is fair.
I turn to the provision of new powers for Ofgem to directly modify industry codes and documents to deliver a market-wide half-hourly settlement which uses smart metering data. Noble Lords across the House have welcomed this because it is the future. The idea is that incentives are placed on suppliers to meet their customers’ demands in each half hour of the day, and smart metering is intended to produce accurate half-hourly reports to get a better settlement and thus drive innovation and the efficient use of energy. However, suppliers can already choose to settle with consumers on a half-hourly basis via an elective half-hourly settlement, but Ofgem believes that it will have to make all suppliers do this to get the best results for customers. That, as I understand it, is a decision that Ofgem will take in the second half of 2019 and will be subject to a cost-benefit analysis, which I was pleased to hear the Minister say will be published.
However, the strange part is that it was introduced in the other place through a government amendment. That is of great concern. Why did the Government know only at the end of the process that such an analysis would be needed? One does kind of expect that, given that this is a complex new system, the Government would have known in advance that an analysis was necessary. Perhaps the Minister can explain its late appearance.
Lastly, I want to reflect on the contribution made by my noble friend Lord Teverson. I am glad he will not have to fix the electricity under the stairs any more. He recognises, as have other noble Lords across the House, how important this programme is. He said that the acronyms were suspicious. Perhaps the Minister can allay our suspicions, although I have to say that the acronyms are not as bad as they were when I was a Minister in DfID. My noble friend Lady Maddock pointed out that some of us think that parts of the Bill are rosy, but then referred to the rest of it as having rosacea, or words to that effect. She spoke for those in fuel poverty and expressed her concern about the role of Ofgem under the code of practice and the approach being taken towards vulnerable people. I would welcome it if the Minister could pay special attention to responding to those and other points raised in the debate.
Lord Lennie (Lab)
My Lords, I should start by making a declaration—or perhaps a confession. I am a smart meter user. I accepted the offer made by the company. It is a SMETS 1, so it is not doing me much good in terms of reducing my consumption or the cost—but at least I have one. That, I think, may be unique among Members of this House, but not so much so among the wider public. I also thought until yesterday that we might be able to have a debate which did not involve the European Union. However, having seen E.ON’s and RWE’s proposals, we are reminded that this is not taking place in a vacuum and that E.ON will now become the major provider for the customers of electricity while RWE is getting back into green research and the provision of electricity—reversing a decision that was taken before our decision to come out of the European Union.
I thank all noble Lords who have taken part in the debate. I share with everyone their support for the Bill—with reservations, and unfortunately it is those reservations which are going to take up most of my time. I thank in particular my noble friend Lord Grantchester for his analysis at the start of the debate. It has saved me a lot of time because he has already done the work. I shall try to avoid any repetition during the course of what I have to say. I also thank the Minister for the meetings and briefings we have had about the proposals prior to this debate. They have been very helpful in our preparations.
The Bill has three stated interrelated purposes. The first is extending the powers of the Secretary of State in regulations for smart meters. The second is introducing a special administrative regime, the SAR, with a Data Communications Company, the DCC, to ensure that service continues in the event of their insolvency. The third is to introduce new powers to allow Ofgem to facilitate half-hourly settlements.
First, the extension of powers that are currently due to expire on 1 November 2018. The Bill seeks a further five-year period, until 2023, during which time the completion of the rollout of the smart meters and their claimed benefits will have become evident. That is the plan. What are the chances of this and what benefits will consumers see? The rollout requires companies to have offered every household and small business, and there are 40 million to 50 million of them, a meter by the end of 2020. The offer of the smart meter 1 has been slowed down, while the smart meter 2 is in some kind of preparatory phase and is being tested for workability and interoperability. So the chances of meeting the 2020 deadline are fast receding, unless the Government announce some huge increase of capacity to achieve their intention. The benefits to consumers are deemed to be so positive that they will take little persuasion—but, in this House and in other places, the consumer seems less trusting of the benefits than the Government seem to think. The record tells a different story.
Thus far, the second-generation SMETS 2 have been installed in only 70, perhaps 100, households out of a total of 50 million. If the SMETS 1s can be upgraded to SMETS 2 capability, it will account for some of the increase—but it will still need three times the current rate of approach, interchange and offer of these meters to achieve the 2020 deadline.
The benefit for the customer is that he or she will be in control of their pattern of energy usage, with real-time information being provided and an end to estimated billing. That is true: the smart meter tells you how much you have spent today. At any point in time, it will give you a scare. You have spent £5, £10 or whatever it is you have spent today. It does not tell you anything about what it is that is consuming that money. The DCC will be provided with a half-hour readout of the overall usage of our electricity consumption in order to benefit its purchasing power and allow it to more accurately purchase electricity to meet our needs, each half-hour of the day, as I understand things.
That should lead to a reduction in the price it pays at certain times in the day. That will then be passed on to the consumer in reduced billing. Someone talked about half-hour billings; I do not know if that is going to come about any time soon, but we will certainly know when it is cheaper to run certain types of electricity consumption. In order to make those changes, the customer has to be sure of the benefits or they are not going to change anything. They are going to carry on doing what they do at the time they prefer to do it. The chances of the lower-end pre-paid customer changing their habits, given the other pressures that there are in their life, are more remote than for those who perhaps have more time on their hands, can study these things and can make adjustments to habits that have been ingrained for some years, as they go through life, with family, children who move away and so on.
How will the Government force the energy companies to pass on savings that they will make to the customers? There was some talk in the energy committee in the other place that the Government will make sure that this happens, but how do they intend to enforce it? The Energy Minister in the other place quoted Richard Nixon, who said:
“If you’ve got them by the balls, their hearts and minds will follow”,—[Official Report, Commons, Smart Meters Bill Committee, 23/11/17; col. 73.]
but if you have not, they are not going to. That is about the size of it. I am not sure that the squeeze is happening quite where it needs to happen. Do the Government anticipate a change of heart among the energy companies towards their customers? That is unlikely. They are private businesses; they are in business to make a profit. That is their right and that is what they are set up to do. Their shareholders are their principal guides and they expect a return. It is hard to see where the customer fits into the squeeze there might be on the price of electricity to suppliers. The Government need to think through how the customer benefits are to be realistically delivered.
Another thing concerning the change in our pattern of usage of night-time electricity for white goods is that there are increased risks that the Government should be aware of. Household fires are more likely with unsupervised white goods. Nuisance neighbour noise disputes will be on the increase as energy powers machines at night, particularly in places where people live one on top of another, in blocks of flats and so on. So the attractions of changing patterns of usage of electricity may not lead to the greenfield nirvana the Government seem to believe in.
One of the things that might have been possible—maybe the Minister will comment on this—was the Government taking responsibility for providing the customer with tariff information. Would it have been possible under SMETS 1? Is it possible under SMETS 2? SMETS 3 could possibly, if it has not been thought of before, inform customers about their best possible energy price sources. It is hard enough right now to know exactly where my best deal is, comparing tariffs within one supplier, let alone across a range of suppliers, with six major companies and a number of other minor providers. It is a complicated matter. Could the Government introduce this into the SMETS system and pass on the information to customers? That would be a real benefit and a real selling point for the meters being accepted by more customers.
I turn to the DCC. The Government intend the regime to take back control should the company go into administration. A special administration regime is to be established. The provocation for this lies somewhere between the recent failure of Carillion, an oversight in the original setting up of the DCC and doubts about the performance of Capita, the current DCC operator. If the DCC fails, the customer will foot the bill. The risk of failure is said to be extremely low. However, the impact would be high. Could the Government provide some analysis or report to reassure us that the DCC’s remote chances of failure are so unlikely that no one can see it happening? What happens if the DCC decides to walk away from the contract? Are there penalties? What are they? Might the Government be left high and dry, not by the failure of the company but by the company no longer wishing to provide the service because it does not believe it will meet the 2020 deadline, let alone those beyond it?
These are some of the questions. We support the Bill. It is deficient in some areas and these will be explored more as we go through Committee and Report, but I would be grateful if the Minister could answer some of the questions raised so far.
Lord Henley
My Lords, on the last or second to last point made by the noble Lord, Lord Lennie, he looked forward to a world with a SMETS 3 or 4 that might be able to assist a customer in finding a new supplier and direct him in that way. I think we are already there. I imagine that the noble Lord reads the Guardian more often than I do, but the Guardian of 11 March was talking about one company that is developing some sort of dongle that can be plugged into one’s meter and will automatically switch one to the best supplier according to the programme one puts in. One can put in, “I want the greenest supplier” or “I want the cheapest supplier” and one could find oneself having a different supplier from month to month, possibly two or three times a year. The future is good. I refer the noble Lord to that article to see just what is happening out there and what smart meters, as they are at the moment, could possibly lead to.
I have to say that, listening to the debate, I felt that it was a fairly Eeyoreish performance, even by the standards of this House. The noble Baroness, Lady Featherstone, was politer—she referred to it as a masterclass in faint praise. The noble Baroness, Lady Maddock, was, as always, very kind to me: after making her Eeyoreish speech, along with her colleagues and all other noble Lords, she said that she expected something more optimistic from me, “Because the noble Lord always is very optimistic”. I think there is nothing wrong with being optimistic when one has technical developments that are going to bring great benefits to everyone. They are going to bring benefits to the consumer, as I made clear in my opening speech, but they will also bring benefits in terms of reducing our overall consumption and in many other ways.
Like the noble Baroness, Lady Featherstone, I was very amused by the picture of her noble friend Lord Teverson under the floorboards or somewhere—I am not quite sure where he was; it was rather a confusing picture, but he was in the rain with a torch. All I can do is refer the noble Lord to Hilaire Belloc’s “Lord Finchley”. The noble Lord will remember that Lord Finchley came to an untimely end because he tried to do these things himself. In future, the noble Lord can get someone else to look at these things, but smart meters will solve the problem for him.
Others, such as the noble Lord, Lord Whitty, and me, took us back to 2008. I was very grateful to him for doing that and for saying that back in 2008 he was giving warnings, in his Cassandra-like way, and now he could say, “I told you so”. The great thing is that he can say “I told you so” to everyone here, in that the 2008 Act, as the noble Lord and others on the Benches opposite will remember, was passed under a Labour Government. The 2011 Act that I referred to was passed under the coalition Government. I think that we had a Liberal Democrat in both the business department and the energy department during that time, so their fingers must have touched this at some point. Now, in 2018 we have a Conservative Government, so perhaps, like Peter Simple’s Dr Heinz Kiosk, I can just say, “We are all guilty!”, if something has gone wrong. I think, from the degrees of optimism I have listened to in the course of the debate, that there is a general acceptance that smart meters are going to be able to do something that has not been available before and that, as I said, that will bring great advantages to us.
A very large number of questions of a fairly detailed sort have been raised and I will try to address a number of them. However, I think that what a debate of this sort also shows is that even a Bill such as this—a Bill that is broadly welcomed on all sides, that has been through pre-legislative scrutiny, that has had a very useful trip through another place since that pre-legislative scrutiny and that is now here—will benefit from what your Lordships can do in Committee. I look forward to that Committee and hope that we can tease out just where the problems are so that I can give appropriate assurances on matters that are relevant to noble Lords and, if necessary, make amendments, but I do not think that that will be necessary. As the noble Lord, Lord Grantchester, put it, this is a largely technical Bill dealing with three small matters, but its title allows us to discuss the generality of smart meters, smart metering and how we get the rollout completed. I hope that in the course of this debate, Committee and further stages we can continue that process and provide the proper assurances.
This afternoon, I propose to answer a few of the questions to the best of my ability. I think it would be useful if I write another letter to all noble Lords who have taken part in this debate and place a copy in the Library, setting out a more detailed answer of the sort that one cannot properly give to some of the more detailed questions and very sensible suggestions made by my noble friend Lady Manzoor. I give that assurance that I will send that detailed response to all noble Lords.
In the meantime, I shall answer a few of the questions that have been asked. The first, and most important, is to give some sort of assurance that we believe that it is still possible, despite the numbers which the noble Lord, Lord Grantchester, quoted from Which?. The numbers probably appeared in the Daily Mail as well, for all I know—that was another publication that was mentioned. We believe that we will be able to get there in due course. The rollout to date has been growing. Around 400,000 smart meters are being installed every month. That has to get up to a bigger figure if we are going to get to the end in the three years that are available. I do not think that is representative of the next phase of the programme when most suppliers will be installing smart meters with greater numbers of installers and more types of customers across Britain. We will certainly continue to collect data—this was something that the noble Baroness, Lady Maddock, asked about—on the rollout, getting independent, official, quarterly statistics on progress by the large suppliers, and we will make sure that they are published quarterly, as I think they have been since September 2013. In addition, a summary of the annual rollout progress for the calendar year is published every March, so we should have that in due course. I do not know whether it will be before Committee, as no one has yet given me a suggested date for the next stage of the Bill.
Lord Teverson
As I said, I think it is impossible to get to that. Can I just be clear about the commitment? It is to offer everybody a smart meter. Are the Government clear with the suppliers about what “offer” means and that it is not just an email saying, “Do you want a smart meter”? Are we clear about the target? Not everybody wants one. Is that a potential get-out clause in this target?
Lord Henley
The noble Lord knows that we are not going down the route of saying that everyone will have one, but we hope everyone will see the benefits of them and that everyone will be offered one, and I hope that offer will be more than just the email that the noble Lord suggests. It is difficult to persuade people to change. Some months ago we discussed the ease with which one can change one’s electricity supplier. However, because of inertia, few people do. The easier that it becomes and the more benefits that there are, the more people will switch supplier. The same applies to smart meters: people will adopt them as they see the benefit. We shall continue to push suppliers to do what they can, because of the benefits. That is not only those benefits to consumers that we all recognise, but those to the country through reducing our overall electricity consumption by evening it out and those other benefits identified.
Lord Grantchester
I thank the Minister for giving way. It is the responsibility of Ofgem to report on the companies’ taking all reasonable steps to offer consumers a smart meter.
Lord Henley
The noble Lord is absolutely correct. I apologise for not making that clear. There will be information available from Ofgem.
On rollout, I agree with points made that there is more that we can do to engage with customers in moving to smart metering. This is important and we shall certainly do more. As noble Lords will know, we have required the establishment of Smart Energy GB. This is an independent not-for-profit organisation leading the centralised programme to raise national awareness alongside activities to drive behaviour change and help consumers to benefit from smart working. The situation is changing. I think that the noble Baroness, Lady Maddock, quoted figures about satisfaction rates, but on awareness of smart metering, this has increased from some 40% to over 80% in three years and has driven demand for millions. Research shows—I believe that this is a figure that the noble Baroness quoted—that some 80% of consumers who have smart meters would recommend them to friends and family.
The question of safeguards, safety of data and related issues, is a concern of my noble friend Lady Manzoor, the noble Lord, Lord Whitty, the noble Baroness, Lady Maddock, and others and it is something to which we shall come back in due course. National smart meter infrastructure has been developed from the outset in consultation with experts from industry and government including the National Cyber Security Centre, which is part of GCHQ. The smart meter security model establishes physical, regulatory and operational security controls backed by independent security assurance arrangements. For instance, critical commands will only be accepted by the smart meter if they are issued by the responsible energy supplier and authenticated through strong encryption. Moreover, they have to be countersigned independently by the DCC.
The Government have also put in place a strict data access framework that protects consumers’ privacy. This is important. I think that this was at the heart of some remarks of the noble Baroness, Lady Featherstone. Households will have control over who can access their detailed energy consumption data and for what purposes, except where this is required for regulated purposes—that includes billing.
I am beginning to run out of time. I shall write in greater detail. The final point that I shall address now is that of the noble Lord, Lord Broers. He highlighted the importance of more work to ensure that a promise of a connected home was delivered. The noble Lord will be aware of a joint BEIS-Ofgem smart systems and flexibility plan that was published in July 2017. That reaffirmed that smart meters are the foundation of a smart meter energy system. It included a commitment to work with industry to develop standards for smart appliances that will allow consumers to provide flexibility and benefit from demand-side response.
I appreciate that I was asked many more questions and that there is much detail that will need to be gone into. What I hope to do is to write a letter as soon as possible to all those who took part in the debate detailing all those points that need to be covered. The important point is that we can then sit down—or stand up—and discuss these matters in detail in Committee, make sure we have the Bill right when we send it back to the Commons and make sure that we can look forward to broad, sunlit, happy uplands. As I said, I will continue to be the optimist rather than one of the series of Eeyores I have heard speaking on this occasion. I look forward to a bright future for smart meters, whether that is SMETS 1, SMETS 2 or even SMETS 3 as mentioned by the noble Lord, Lord Lennie.
Northern Ireland Finances
(6 years, 1 month ago)
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The Parliamentary Under-Secretary of State, Northern Ireland Office and Scotland Office (Lord Duncan of Springbank) (Con)
My Lords, with leave of the House, I will now repeat a Statement made by my right honourable friend the Secretary of State for Northern Ireland in the other place. The Statement is as follows:
“With permission, I would like to make a Statement about Northern Ireland finances. Last week, I laid a Written Statement in which I explained that the pressures on public services meant that it was imperative for the Government to take steps to provide clarity to enable planning in Northern Ireland for 2018-19.
With great reluctance, and in spite of my strong preference for a new Executive to set a budget, I set out in this Statement the resource and capital allocations which I considered to be the most balanced and appropriate settlement for Northern Ireland departments. I did this following intensive engagement with the Northern Ireland Civil Service—NICS—and consultation with all of the main Northern Ireland parties.
In the continued absence of an Executive, I have an obligation to take these and any other measures that are necessary to keep Northern Ireland functioning. But I will only take such measures where they are essential and limited in nature, and are part of a clear and consistent approach by the Government. This approach is based on a number of principles. First, we remain steadfast in our commitment to the Belfast agreement. All that we do will be with the purpose of protecting and fulfilling the agreement. But, secondly, we will take those decisions which are necessary to provide good governance and political stability for Northern Ireland, consistent always with restoring the Executive and local decision-making at the earliest possible opportunity. Thirdly, we will continue to implement our obligations under the agreement and its successors where possible, always working for the good of the community as a whole. Finally, we will continue to work with all the Northern Ireland parties, and with the Irish Government as appropriate, to remove the barriers to restoring the Executive and a fully functioning Assembly.
The principles at the core of the agreement and the political institutions it establishes continue to have our full and unreserved support. That means that we will uphold the principle of consent, consistent with this Government’s support for Northern Ireland’s place within the union and with maintaining the constitutional integrity of the United Kingdom. We believe in devolution and the imperative for local decision-making by local politicians. We support power-sharing on a cross-community basis, based on mutual respect and recognition. We will continue to support and facilitate north/south co-operation, including as we leave the EU, while always preserving the economic integrity of the United Kingdom. We will continue to work closely with the Irish Government in full accordance with the three-stranded approach. We will continue to act fairly and govern in the interests of all parts of the community in Northern Ireland.
The necessary steps, which I have taken and will continue to take, are consistent with all of these commitments. In addition to the steps I set out last week, there are several associated measures required to further secure public finances which I will be taking forward. As well as cutting costs, securing efficiencies and beginning to take the steps to transform public services, it is right to look at how income can be increased to protect the public services on which the people of Northern Ireland depend. I will therefore introduce legislation to set a regional rate, which will increase domestic rates by 3% above inflation. This will make an important contribution to sustainable finances in the long run, with the additional funding addressing urgent pressures in health and education. I also intend to act to extend the cost-capping of the current renewable heat incentive scheme in Northern Ireland, which the Assembly had put in place over a year ago. It would not be acceptable to put finances at risk by simply allowing that cap to lapse. I therefore propose to extend it for a further year from 1 April, the minimal possible step to protect the public purse. I will also confirm the final spending totals for the Northern Ireland departments for the 2017-18 financial year in legislation to set supplementary estimates.
I also believe that the time is right to address the ongoing public concern about MLA pay in the absence of a functioning Assembly. I thank Trevor Reaney, who was instructed by my predecessor to produce an independent view and recommended a 27.5% reduction to MLA pay. I will seek to introduce legislation to take a power to vary MLA pay. Further to that, I am minded to reduce pay in line with the Reaney review recommendation, but I would welcome full and final representations from the Northern Ireland parties before I make a final decision.
These measures—which I take reluctantly, but which are necessary in the absence of a functioning Executive and Assembly—will deliver the stability and the decisions to enable forward planning for the financial year ahead. But I am clear that they cannot provide the local input and fundamental decisions which are needed to secure a more sustainable future for Northern Ireland. My powers as Secretary of State for Northern Ireland are limited. The scope of this House to pass legislation on the devolved issues which matter for Northern Ireland is limited. This rightly reflects the devolution settlement which is in place and to which this Government are committed. But it does mean that, in the continuing absence of an Executive, there are fundamental decisions in Northern Ireland which cannot be taken, scrutinised and implemented as they should be.
This has been the situation for 14 months already and, in the continued absence of an Executive, it would be irresponsible for us not to consider how we might provide for different arrangements until such time as the devolved institutions are back up and running. Alongside this I also continue to keep under review my statutory obligation to call an Assembly election.
I would welcome the views and proposals of the Northern Ireland parties and others on how such arrangements—providing for local decision-making and scrutiny on a cross-community basis—might be achieved in the continued absence of an Executive; and how any such arrangements might work alongside the other institutions of the agreement. Let me be clear that this in no way affects my commitment to the Belfast agreement, nor my commitment to continue to work to remove the barriers to the restoration of devolution. As the 20th anniversary of the Belfast agreement approaches, I am clearer than ever that Northern Ireland needs strong political leadership from a locally elected and accountable devolved Government. That remains my firm goal. I commend this Statement to the House”.
Lord Murphy of Torfaen (Lab)
My Lords, I thank the Minister for the Statement, and agree with him on the need to restore the devolved institutions in Northern Ireland, especially as it is about four weeks away from the 20th anniversary of the signing of the Good Friday agreement. The commitment of the Government to the underlying principles of that agreement is very much to be welcomed.
I understand the need to set a budget and agree that it is wholly inadequate for civil servants, however good—and, indeed, they are all good—to decide the spending priorities in Northern Ireland. Can the Minister tell us a little bit more about the consultation process that has occurred with the political parties and others in Northern Ireland, specifically on the regional rate and on the allocation of resources to the different departments in Northern Ireland? In particular, will he tell us about the consultation on the Bengoa proposals on the health service in Northern Ireland, and where we are on that important matter?
The Minister raised the difficult—perhaps even controversial—issue of the salaries of Members of the Legislative Assembly. Does he envisage a time limit on the consultation with the political parties in Northern Ireland? During the course of his Statement, he mentioned that there would be a need for legislation to implement parts of the budget and to vary the salaries of the MLAs. Can he give the House an indication of when such legislation might be before us? Lastly, does he accept that this budget-setting exercise is not a road to direct rule, and that robust and meaningful talks on setting up the institutions in Northern Ireland will begin very shortly?
Baroness Suttie (LD)
My Lords, I too thank the Minister for repeating yesterday’s Statement. However, there is a slightly wearying sense of déjà vu about it, and one cannot help but wonder at what point these sticking-plaster solutions will cease to be viable. Clearly, however, a return to direct rule is something that we all wish to avoid, and we continue to believe firmly that power-sharing devolution is vital to local democracy and representative decision-making. In that regard, the Secretary of State’s reassertion of the Government’s commitment to both the Good Friday Belfast agreement and to re-establishing functioning devolution in Northern Ireland is very much to be welcomed.
We on these Benches recognise the pressures on public services, meaning that these measures are essential to ensuring that the people of Northern Ireland do not suffer in the provision of vital services, and to ensuring that education and healthcare services can function and that peace and stability can be maintained by the PSNI. The Police Federation has warned that the 0.3% increase in the Ministry of Justice budget will inflict real damage on the PSNI. The PSNI is currently spending £125,000 a day on overtime to fill gaps in its workforce capacity. Can the Minister confirm that ensuring that the PSNI is able to carry out its work effectively remains a key priority for the Government? The Civil Service in Northern Ireland, as the noble Lord, Lord Murphy, has said, continues to do sterling service in keeping the system functioning but, without the direct input of Northern Ireland Ministers, much-needed long-term strategic planning for Northern Ireland becomes increasingly difficult.
In the Statement on 20 February, in reply to my question about the introduction of an independent mediator to chair the all-party talks and to attempt to bring new impetus to the drive to re-establish an Executive in Northern Ireland, the Minister said nothing was ruled out. Can he give an update on whether that is still an option that is being actively considered? Can he also outline what other initiatives are being actively considered to break the current impasse in the talks?
I note the ongoing discussions on MLA pay and the Reaney review. What representations has the Secretary of State had on this issue from political parties in Northern Ireland? In the Statement the Secretary of State says,
“it would be irresponsible for us not to consider how we might provide for different arrangements until such time as the devolved institutions are back up and running”.
Can the Minister confirm that this would involve options allowing Members of the Assembly to play an active role in ensuring that Northern Ireland’s voice is heard clearly in the Brexit negotiations?
Lord Duncan of Springbank
I thank the noble Lord and the noble Baroness for their contributions. It is important for us to stress again at the outset that we are all united in our belief that the Belfast agreement itself must be the foundation upon which we build all our progress. I think we are all of the same view. I am aware that we are experiencing a recurring sense of déjà vu—we certainly are with some of my Statements—but it is our ambition to secure the reformation of a functional and sustainable Executive in Northern Ireland.
I think it is important for me to answer the questions directly as they have been raised. On the question from the noble Lord, Lord Murphy, on how we came to the figures within the overall budget, he is right to stress that we have put a great deal of pressure and stress upon the Northern Ireland Civil Service, but it has been very important in determining departmental needs. That has been the first building block. The second is that, as he will be aware, a budget briefing was published just before Christmas. The Northern Ireland Office has reflected very carefully upon the responses that were received in the light of that briefing from the main parties of Northern Ireland, and they have been borne in mind. In addition, my right hon. friend the Secretary of State for Northern Ireland has undertaken a fairly extensive engagement with individual stakeholders —teachers, doctors, nurses, and police officers—to understand the challenges faced on the ground. It is important to reflect on how important that is.
The figures we are talking about are substantial, and I believe they will make a substantial difference. We have £80 million of support for immediate health and education pressures, £30 million to support programmes to address issues of mental health and severe deprivation, £100 million for ongoing work to transform the health service in line with broad-based consensus fostered by the Bengoa report, and a £200 million allocation in capital spending for key infrastructure projects.
That gives a sense of the scale of the investment. There is also a recognition, as we build that budget—we have spoken of this before—of trying to plot a trajectory from the point at which the previous Executive fell, and then trying to plot across. We have had to take that as a basis and build on it, and that is why £4 million has been allocated to prepare the ground for transformation and £100 million set out for health transformation, recognising again that these are part of the critical elements that are identified by departmental heads in the Civil Service and the main political parties.
On the question of MLA pay, I stress again that my right honourable friend the Secretary of State for Northern Ireland would like the views of others to make sure that in her determination and deliberation she can deliver exactly what is required. I am mindful of the point made by the noble Baroness, Lady Suttie, about the potential roles for the MLAs themselves—even without being part of a functional Executive. As I said in a previous Statement on a not dissimilar topic, we have not ruled anything out, and would welcome the thoughts of the noble Baroness, Lady Suttie on that point, to help us in our thinking. As for when we can anticipate the legislation, if I may be slightly non-specific, we will bring forward necessary legislation imminently to deliver against the budget as we have set it out.
The noble Baroness, Lady Suttie, raised the PSNI. Again, I can be very clear and specific and say that it remains a key priority of the Government, and we will do all we can to preserve that and deliver against it.
As to the question of an independent mediator, noble Lords will be aware that we are in an interregnum—the talks have ended but are not over—and that period of reflection has given all of us an opportunity to work out what additional aspects of engagement should be brought to the table. I am becoming a little repetitive, but I will say again that we are ruling nothing out. Anything we can do to take this forward must form part of that.
We also hope that the parties involved in the talks will take advantage of this period to reflect not just on what they wish to deliver for the parties themselves but for the wider communities they represent. That will be essential. If the talks are to deliver an outcome that is sustainable, meaningful and restores local government to Northern Ireland, we need to be able to depend on them. There are too many important issues unfolding right now, not just in our House, but affecting everyone in Northern Ireland. It is time that we heard those voices in an Executive and an Assembly.
Lord Maginnis of Drumglass (Ind UU)
My Lords, I am grateful to the Minister for repeating the Statement, and particularly grateful for the hands-on methodology that he has adopted since he became Northern Ireland spokesman in this House. It is refreshing.
I have two issues. Is the Secretary of State aware of the barely disguised efforts of Taoiseach Varadkar and foreign spokesman Coveney to interfere directly in the internal affairs of Northern Ireland? This callous activity goes as far as encouraging Sinn Féin not to progress the current talks towards a solution or the implementation of an effective power-sharing Executive. I furnished the Minister with that report from the Irish Times previously.
On the need for an urgent interim methodology, if, when an aspect of direct rule is required—and many of us think that it is required—I would press that a considerable number of those who achieved the Belfast agreement sit in this House. There are others here who have, when the Executive was functioning, been effective and experienced there.
I suggest, having been ignored—I might even say boycotted—by previous Secretaries of State, that the current Secretary of State, Secretary Bradley, will not allow herself to be intimidated but will look to those who have years upon years of experience, from 1994 until now. They have 24 years’ experience and may just be able to give some common-sense guidance.
Lord Duncan of Springbank
I thank the noble Lord, Lord Maginnis, very much for his trenchant intervention. The noble Lord is right to point out that, sitting in your Lordships’ House are a number of architects of the Belfast agreement, and that the knowledge contained within these four walls should be drawn on now as we begin to enter this phase of maximum danger, when we need to be able to deliver an outcome that works for the people of Northern Ireland.
I am reminded again of the remarks by the noble Lord, Lord Empey, on these issues the first time I stood here at the Dispatch Box. He said that it is very easy to walk down the steps of Stormont; it is very hard to walk back up. Of course, he was alluding to the challenge of direct rule.
We hope to—and we will do all we can to—bring a rapprochement, by whatever method we can, to the parties who are needful in delivering this particular serious outcome. In addition, I note that the noble Lord, Lord Maginnis, passed me information that I have taken away, and we will certainly look at that in greater detail. I may come back to that on a later occasion.
Lord Reid of Cardowan (Lab)
My Lords, I welcome the very definite commitment in this Statement again to the Belfast Agreement and to the principles that underpin it. It is worth reiterating that at every opportunity in view of some of the voices off, which I do not think have been particularly helpful. I ask the Minister to very much bear that in mind when it comes to the seemingly innocuous phrase:
“It would be irresponsible for us not to consider how we might provide for different arrangements until such times as the Executive is back”.
I am not opposed, nor would any Member of this House be opposed, to discussing how to move things forward, but I think, with the benefit of hindsight—some people, such as the noble Lord, Lord Empey, might say “with foresight”—that some of the changes we have made from time to time to the mechanics of the operations of the Executive have not always been conducive to encouraging the coherence and the spirit of the Good Friday agreement. There are risks and dangers in that innocuous phrase.
Lord Duncan of Springbank
I thank the noble Lord, Lord Reid, very much for again bringing his knowledge to the discussion. He is absolutely right to speak of the voices off and the noises off. We have to turn them off; it is unhelpful right now. We need to focus on what we believe we require, which is securing again the Belfast agreement at the heart of the restored institutions in Northern Ireland. I am happy to emphasise that again whenever I am called on to do so.
Again, it is telling that the noble Lord is willing to reflect on his own time in office. It is rather like lifting the bonnet of a car. I have no idea what happens under there. You start tinkering at your own peril. It is amazing what harm you can do when you have less experience of what is under there. That is not to say that we need not be careful about how we move forward. None the less, we should be progressive. The reason my right honourable friend was very clear in her Statement is that we need to recognise that, at this time of challenge, we must have a means of securing those voices in the essential and ongoing discussions. Noble Lords will be aware that in the next few days we shall return to a number of the devolved elements of the withdrawal Bill. When we talk about these essential issues here in our House, I am again minded of the deafening silence from the Executive, which does not sit, and the Assembly, which cannot speak. I am mindful of the warning from the noble Lord but at this moment we need to find ways to secure progress. As I have said, I do not believe we can take anything off the table.
Lord Bew (CB)
My Lords, I thank the Minister for repeating the Statement and thank him for the trenchant defence he has once again given this afternoon of the 1998 Belfast agreement. It is vital that he does so and that others recognise and listen to what he has to say.
I wish to press him on a point of detail in the Statement. I declare an interest as a former teacher in the two universities in Northern Ireland. The Secretary of State’s Written Statement of 8 March says that there is an increase in real terms in the education budget. However, on the current figures, there is no way of working out what is happening in that regard in the higher education sector as against the rest of the education sector. I do not wish to be churlish about this because this budget is tremendously important. The £10.4 billion is crucial to Northern Ireland and is a clear benefit of the union to the people of Northern Ireland. Tomorrow we will hear a lot about the European Union. I think its contribution is 1% of that, and that quite a lot of that 1% is recycled United Kingdom money.
I am grateful for this budget but we need a little more clarity on it, if possible. The Secretary of State’s Statement says that later in the year there will be more detail on it. I urge against the idea that giving us that kind of detail is a move towards what is now called in the lexicon “full-fat” direct rule. I think this could be done without raising these theoretical or ideological problems. I wish to press the Minister on this as there is great concern about it. For example, as regards higher education, there are many rumours in Northern Ireland that the Government are setting their face against postgraduate funding in the universities in Northern Ireland and envisage introducing major changes there. We cannot tell anything about that from the Secretary of State’s Written Statement. The noble Lord, Lord Murphy, also referred to issues on which the Government could give us a little more information. I hope they will do so later in the year.
Lord Duncan of Springbank
I thank the noble Lord, Lord Bew, very much for his intervention. I am trying to avoid full-fat anything at the moment and am looking for the semi-skimmed approach as far as I can. The noble Lord made a legitimate and appropriate request. I believe we will be able to furnish him with the appropriate information very soon. It is absolutely essential that the people of Northern Ireland are able to see how the money is crafted and allocated. I would much prefer to be wholly scrutinised by an Executive founded and operating sustainably in Belfast but, in the absence of that, I believe your Lordships’ House also needs to be able to scrutinise this issue adequately. I believe information will imminently be provided that will allow us to do that very thing.
Lord Browne of Belmont (DUP)
My Lords, I welcome the budget Statement. It enables the hard-pressed public services in Northern Ireland to continue to operate and gives the Stormont departments certainty for the next financial year. I particularly welcome the £410 million extra new money for Northern Ireland as part of the confidence and supply agreement with the Democratic Unionist Party. It will provide much-needed support for health, education and infrastructure and will benefit all the communities right across the Province.
While I welcome the Secretary of State’s willingness to look at arrangements to provide for local decision-making and scrutiny on a cross-community basis, does the Minister agree that it is vital that the Government intensify their efforts to restore devolved government to Northern Ireland so that decisions can be made by locally elected and locally accountable Ministers?
Lord Duncan of Springbank
I thank the noble Lord for his intervention. The £410 million will do good across the communities. I believe that it will be spent wisely and will address a number of the challenges that have been experienced in Northern Ireland, which will be good to see. However, I want to be very clear that we need to be in a situation where these matters are addressed at a local level—not just in terms of the allocation but, more importantly, in terms of scrutiny. There must be full transparency and full confidence in the manner in which this money is constructed and allocated, and spending overseen. We must have great confidence in that; it will go some way to restoring confidence in governance in Northern Ireland, not just in what we are trying to do to bring about a stable and sustainable Executive.
Baroness Blood (Lab)
My Lords, I will ask the Minister a brief question and a direct one: We welcome the extra money going into Northern Ireland, especially around health and education, but who will make the decision about where that money will go? Last year, in James Brokenshire’s Statement, £50 million of the confidence and supply money was given to mental health. To this day, not one penny of that £50 million has been spent, simply because there is no local Minister to sign it off. Will we be tied by the same regulations, for instance around the infrastructure money? Who will make up their mind who will get the money and where it will go? Will it come direct from Westminster? What is the position?
Lord Duncan of Springbank
I thank the noble Baroness for her intervention. Money allocated and unspent does not do any good. It is as simple as that. We must be in a position to ensure that the money allocated is spent. We believe this is best achieved through the departmental structure that exists in Northern Ireland. The determination of the overall scale of spend has already been achieved through direct consultation with civil servants in Northern Ireland. They will be responsible also for the delivery of that money into the various, clearly set out projects. It will be necessary not only for the money to be spent but for it to be transparent and clear. The people of Northern Ireland must be able to see that and recognise what good the money is doing to meet challenges that are now well established and well recognised. The noble Baroness will be aware of several of these challenges in the areas of health and education. But I stress again that the money and responsibility will rest with the departments. We will ensure that it is spent in a transparent manner that will give confidence to those who see the money and, hopefully, see the good it will achieve.
Lord Empey (UUP)
My Lords, surely the Minister accepts that there is a need to do things differently. We have come to a series of Statements of this nature over the last 14 months and there is little or no prospect of any immediate resumption of devolution. In fact, people are now talking in terms of “post Brexit”. Members will know the effect of a vacuum in Northern Ireland and who is likely to fill that vacuum—and it is not going to be the good guys. The reality is that the principal parties of government—whatever the ebb and flow of the agreement that never was—have run the institutions into the ground. That is the fact. Mention has been made of confidence and supply money. Will the Minister tell us when this will be approved by Parliament? At the moment it is effectively an undated cheque, and the departments need to know when they will be able to take it into account.
A second point raised concerned the RHI cap. While that catastrophe has yet to completely unfold, a lot of people out there legitimately took the Government of Northern Ireland at their word and got these boilers installed, and some are now facing financial ruin. Their bankers were encouraged by ministerial letters from Mrs Foster to lend them money to get these boilers, and now the premiums they were getting on the original business plan have been slashed. So those people are in severe difficulty and I ask the Minister to bear that in mind.
I turn to the alternative arrangements, which I think we were all interested in. I thank the noble Lord, Lord Reid of Cardowan, who I think is the first senior politician even to hint that some tweaks and changes made over the years have not necessarily worked out as planned. Can the Minister tell us exactly to what extent the Government have an open mind on these matters? There are a lot of ideas around the House that could be fashioned and used, and I believe we are willing and able to help in working towards a constructive solution—but I repeat that a vacuum is the worst possible situation. It leaves the pitch open for players to come back on when we thought we had them suppressed. This is a golden opportunity for these people and we should all stand up against them.
Lord Duncan of Springbank
The noble Lord, Lord Empey, has made three useful points. I note again that the noble Lord, Lord Maginnis, spoke about the fact that there are a number of architects of the Belfast agreement in your Lordships’ House—although in some respects they are not architects but mechanics. We have not built an edifice that just has to stand; it is an engine that has to work.
In response to the third point raised by the noble Lord, Lord Empey, we have an open mind and we need to think afresh about anything that can help us to move this matter forward. Of course, we recognise that we are facilitators of the dialogue. We cannot insist on or thrust forward what we wish to see happen—but we hope that, by providing a safe space in which to negotiate, we can bring it about.
In response to the noble Lord’s first question, the confidence and supply component of the budget will be dealt with as part of the overall allocation. As I said in response to the noble Lord, Lord Murphy, that is imminent—so I hope we will be in a position to discuss that seriously very soon.
With regard to the wider question of boilers and the RHI scheme, I stress again that my right honourable friend the Secretary of State for Northern Ireland is very aware of the challenges that it represents and will be very careful in taking the matter forward.
Viscount Brookeborough (CB)
My Lords, perhaps I may ask a question about the policing or Department of Justice budget, which may be £36 million. How much of that will go to front-line policing, bearing in mind what the noble Lord, Lord Empey, said about the various problems with filling a void? There is another point. Policing is not just about crime that is being committed today and nor is it just about terrorism; it affects every community and every person. The fear of crime is a very big issue—but I do not mean simply that individuals are afraid of crime. It is the Government’s responsibility to protect the community. Without a doubt, the level of resources for policing has gone down and that adds to the feeling of hopelessness in the community: “We have not got an Executive—and sometimes local policing is not very effective”. We used to have a lot of community policing, which was all part of the Patten proposals—I declare an interest in that I was on the Northern Ireland Policing Board at the time—but we really do not have that now. We have mobile police stations, but that is not community policing. It is not keeping your finger on everything and it does not reassure the population. The lack of certainty from a government point of view has a very big effect on people’s outlook.
Lord Duncan of Springbank
The noble Viscount, Lord Brookeborough, makes an almost philosophical point about the purpose of a police force and about the fear of crime. In many respects, the best possible police force is the one that you never see because you never need to, as it works so effectively that you are safe, secure and sound without ever seeing any intervention. I stress again that my right honourable friend the Secretary of State for Northern Ireland is very aware of this challenge. I do not know the answer to the noble Viscount’s specific question; if he will forgive me, I will write to him setting out the proportion of the police budget that is for front-line services.
Viscount Younger of Leckie (Con)
My Lords, I regret that the time for Back-Bench questions is over.
Syria: Protection of Civilians in Afrin
(6 years, 1 month ago)
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The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, with the leave of the House, I will repeat a Statement given by my right honourable friend Alistair Burt in the House of Commons yesterday. The Statement is as follows:
“I would like to update the House on the situation in Afrin. We are closely following developments in Afrin and wider north-western Syria. Over the weekend, Turkish and affiliated forces have continued their territorial gains and are now approaching the town of Afrin itself. We are concerned about recent reports of rising civilian casualties.
The Government have called for de-escalation and the protection of civilians, while recognising Turkey’s legitimate interest in the security of its borders. We will continue to push for a reduction in violence and for consideration of the humanitarian needs of the population in the affected areas. The Prime Minister has raised the need for protection of civilians and proper humanitarian access with the President of Turkey and the Foreign Secretary has done so with the Foreign Minister. The Turkish Government have assured the Foreign and Commonwealth Office that they are working to prevent civilian casualties.
UK-funded partners have been delivering humanitarian assistance in Afrin, including health and protection services. Some of these activities have been suspended due to the current hostilities, but our partners continue to meet needs where they are able and are pre-positioning supplies to help meet the needs of those fleeing the area. This includes health supplies, blankets and food. UNICEF, other UN organisations and the World Health Organization have temporarily suspended all activities in Afrin due to the recent military action.
As the Foreign Secretary said in his Statement of 26 February, we are concerned about the humanitarian consequences of the operation in Afrin. We urge all parties to respect the law of distinction between civilian and military targets, facilitate access for life-saving humanitarian aid, and allow freedom of movement for those caught up in the violence, in accordance with international humanitarian law.
The Syria conflict will soon be in its eighth year. The UK continues to make every effort to achieve our goals in Syria: defeating the scourge of Daesh and achieving a political settlement that ends the suffering and provides stability for all Syrians and the wider region. There ultimately needs to be a transition to a new, inclusive, non-sectarian Government that can protect the rights of all Syrians, unite the country and end the conflict. But we are pragmatic about how that might take place. Syria’s future must be for Syrians to decide.
As the second largest bilateral humanitarian donor in Syria since 2011, the UK is at the forefront of the humanitarian response and is providing life-saving support to millions of people. Since 2012, across Syria and the region, UK support has delivered 26 million food rations, 9.8 million relief packages, 8 million vaccines and 10 million medical consultations. Last year alone we provided clean water to over 5 million people, and contributed to the formal primary and secondary education of over 700,000 children affected by the crisis.
However, ultimately the only way to end the conflict is through a negotiated political settlement. The Foreign Secretary has emphasised, including to his Turkish counterpart, the importance of a political solution and the defeat of Daesh. This must continue to be at the forefront of international efforts and we are concerned about the possibility of the diversion of Kurdish fighters from this crucial fight. We remain committed to working closely with Turkey and other allies to find solutions in Syria that provide stability and bring to an end this terrible conflict”.
I commend this Statement to the House.
Lord Collins of Highbury (Lab)
My Lords, I thank the Minister for repeating the Statement.
As we have seen over the weekend, the Kurdish community across the United Kingdom is watching, and it needs to be reassured that the United Kingdom is doing everything it can to try to alleviate the terrible humanitarian crisis that is developing. Time and again, those fighting in Syria are consistently failing to take precautions that protect civilians. As the Secretary-General of the United Nations said to the Security Council on 12 March:
“Syria is bleeding inside and out. There should be only one agenda for all of us: to end the suffering of the Syrian people and find a political solution to the conflict”.
Alistair Burt, the Minister of State for the Middle East, said the best opportunity for peace and security is,
“to support the Geneva process … and to work as hard as we are diplomatically to get the parties to find a better answer to the conflict”.—[Official Report, Commons, 12/3/18; col. 677.]
What is the Government’s latest assessment of the Geneva process? Does the Minister believe that there will be a political solution and that Daesh will be defeated when Turkey sees its priority as stopping the Kurds rather than getting a political solution? The Statement says that the protection of civilians must be balanced with,
“Turkey’s legitimate interest in the security of its borders”.
We must be clear that the incursion is neither legitimate nor justified and has no basis in international law. According to reports—and as the Minister himself said—Turkish forces are right now advancing on Afrin, and there are real concerns that when they enter there will be widespread atrocities as they seek to root out those they call terrorists.
The Government said that although we cannot get close to Afrin, the UK is doing its best to make sure that United Nations agencies and others active in the area have supplies available if people are able to leave. Will the Minister update us on the efforts to work with our allies, especially the EU, to enable people to leave? In addition, can we do more than simply urge all parties to respect the law of distinction between civilian and military targets? Surely one way is to make it clear that no one can act with impunity in breach of international humanitarian law. Human rights monitors can act as one of the greatest deterrents against civilian atrocities and can ensure that perpetrators of abuses are held to account.
Alistair Burt said that the Government intend to hold the Turkish Government to account for the representations they have made about preventing civilian casualties. What specific steps will the Government take to do that—that is, just how do we hold them to account? The Government say Afrin is an area where the UK is not present on the ground, from where it is difficult to get information out, and where UN workers are not able to operate. Therefore, what steps are the Government taking to achieve a more unified multilateral approach with our EU partners in order to urge Turkey to allow access for humanitarian aid and independent monitors? Finally, what steps are the Government taking to quickly restore full humanitarian access to Afrin so that the UK and other partners can get aid in and ultimately save lives?
Baroness Sheehan (LD)
My Lords, I too thank the Minister for repeating the Statement. The UN Security Council Resolution 2401, announced on 24 February, was jointly negotiated with the Russians and was greeted with relief as it allowed for a ceasefire in order to deploy humanitarian aid convoys to all besieged areas, including eastern Ghouta. However, it was apparent straightaway that the Syrian regime’s concession of a five-hour ceasefire window was a mockery of any so-called humanitarian gesture, as it allowed scant time for supplies to be loaded on to lorries, the necessary permissions to be sought and put into place, and for the aid to be delivered where it was needed. On top of that, medical supplies were removed from lorries, leaving civilians without necessary and essential supplies. This has been the appalling situation since 25 February. Finally, yesterday, the US permanent representative to the UN, Nikki Haley, made a statement condemning the action of the regime, adding that the US could be forced to act unilaterally. I am puzzled as to the timing of today’s Statement to both Houses. Is it in response to the US’s statement yesterday, and if so, do the Government share the view that the ceasefire was a failure, and does it imply our acquiescence in the US’s sabre-rattling? Can the Minister at the very least articulate the Government’s view of Nikki Haley’s threat to take action?
We are all shocked by the situation in Afrin. Reports of the shelling of villages and residential areas are deeply troubling. Violence in the Afrin region escalated after the Turkish Government announced on 20 January the start of a military offensive codenamed “Olive Branch”, which in my view is a macabre choice of name. Between 22 January and 21 February the Kurdish Red Crescent reported 93 civilians killed, including 25 children, in attacks by the Turkish military. A further 313 civilians were wounded, including 51 children. Meanwhile, Kurdish YPG forces shelling in Azaz have allegedly killed four people.
The use of artillery and other imprecise explosive weapons in civilian areas is prohibited by international humanitarian law and all parties should cease such attacks immediately. I hope that the Government have conveyed that message to Turkey in the strongest possible terms. The Kurds have been key allies in our fight against Daesh and I think that all noble Lords will be appalled by the attacks that they are now facing. The Minister will be aware of UN Security Council Resolution 2254, in 2015, which states that the only sustainable solution to the current crisis in Syria is through an inclusive and Syrian-led political process that meets the legitimate aspirations of the Syrian people. Does the Minister therefore agree that such a process must involve Kurds in Syria? Finally, the Kurdish region has already accepted around 2 million refugees and internally displaced people. What assessment have Her Majesty’s Government made of the impact that the Turkish military operation will have on this group?
Lord Bates
I thank the noble Lord and the noble Baroness for their questions. Let me start with the Geneva peace process, which has been referred to, as well as UN Security Council Resolution 2254, to which the noble Baroness, Lady Sheehan, referred. It called for inclusive talks which we believe offer the only possible long-term solution. Staffan de Mistura, the UN Secretary-General’s special envoy for Syria, is working hard and effectively against a background of incredible difficulties and complexities to try to get those talks started again. There have been a number of rounds in Geneva and there will be future rounds, but in particular as a result of the Astana and the Sochi processes coming to an end, this is in effect the only show in town. We have to make sure that all of the parties to the conflict become parties to the peace by urging them to progress through the process.
The noble Baroness referred to the statements made yesterday by the US permanent representative to the United Nations, and of course she will be aware that a change of personnel has been announced, with Secretary of State Rex Tillerson being replaced by Mike Pompeo. We now wait to find out whether that will bring about any change in the dynamic here. Both the noble Lord and the noble Baroness were right to point out that this is a global crisis and we need to work multilaterally. We have to be quite honest in these situations about the limitations we face as regards acting independently on the ground. We must work with our EU colleagues, our NATO allies and, crucially in this context, with the UN Security Council.
The noble Lord, Lord Collins, asked what we are doing at the Security Council. Of course, UNSC Resolution 2401, also referred to by the noble Baroness, Lady Sheehan, is for a 30-day ceasefire period from 7 March. We have not given up hope of that and we still want to hold the parties to it. It was agreed so that humanitarian aid could reach millions of people who are in desperate need. In these situations, it is very easy to be frustrated at being powerless in the face of such incredible injustice and human suffering. In such circumstances you need to take every opportunity you have, and we would certainly regard UN Security Council Resolution 2401 as an opportunity. UNSCR 2165, which was very much pushed by the UK at the UN Security Council, also represented an opportunity to allow humanitarian access into Syria to provide relief, without the permission of the Syrian Government.
As I have mentioned, there has already been contact between the Foreign Secretary and the Turkish authorities. We have urged them to embark on de-escalation. We believe it is right that they do, and we can do nothing other than to keep pressing and urging them. We very much recognise what the noble Lord, Lord Collins, said about this diverting attention from the fight against Daesh. For all of those reasons, we must persevere through an incredibly difficult and complex situation, with the lives of the civilians in those benighted areas and our responsibility to them uppermost in our minds.
Lord Robathan (Con)
My Lords, the horror and the tragedy of the situation throughout Syria and in Afrin are beyond speaking about. I should say that I am proud of the British Government’s humanitarian efforts and that we are the second aid donor there, and I hope our aid is successful.
I would like to ask two questions of the Minister. The first is: what, if any, legal basis or excuse do the Turks claim for their invasion of this part of Syria? It seems to be an astonishing, illegal act. Secondly, and perhaps more importantly—and I am not pretending there is an easy answer to this—there is the situation regarding NATO. Throughout the Cold War, Turkey was a stalwart ally against the Soviet Union. We now have difficulties with Russia and yet, for the first time in the 70 years of the alliance’s history, on the one side we have Turkey attacking Afrin and on the other side, looking straight at them, we have American assisting troops. Is that not the case? If it is, we should all be hugely concerned about our future security. I am not pretending it is easy, but what action can NATO take in this situation? The Minister talked about the United Nations. What action can the EU take to support NATO?
Lord Bates
My noble friend is right to point to the complexity of the situation that we face there. He invites me to make the case for Turkey. I do not particularly want to do that but, by way of explanation, it would take a different view of the linkages between the PYD and the YPG to the PKK, the Kurdish terrorist organisation that is proscribed both in the UK and in Turkey. Turkey sees the links there. From that perspective, it also has to be said that Turkey is host to the largest number of refugees from Syria of any country—some 3 million—and all accounts are that the way in which it looks after those refugees is exemplary. We can explore those issues, but we certainly do not believe that there is a justification for this. That is why we have called for the de-escalation, and we will encourage all other NATO allies to do the same.
Lord Soley (Lab)
My Lords, the Minister will have a lot of sympathy because we all recognise the complexity of this and the frustration that we have at the failure of international policy, not least because of the policies of Russia over recent years—a point I have made before. But there is a different issue, which my noble friend Lord Collins raised, about the policy regarding the Kurdish situation and Turkey. It has always been a concern that Turkey, as a close NATO ally, as has been pointed out, has an ongoing problem with the Kurds. It is certainly not helping itself by what it is doing now; it will make it far worse to solve. I ask the Minister again, as my noble friend Lord Collins did: are the Government trying to get a policy on the relationship between Turkey and the Kurds? It is not for us to intervene, but it is for us to say that the problem with the Kurdish minority in Turkey will be made infinitely worse by what is happening now in Syria.
Lord Bates
As I said, we do not draw the parallel that the Turkish Government does between the PYD and the YPG. We believe that they have been courageous fighters against Daesh and have been very effective in that role. We do not recognise the links. Those points have been made. We have made the point that the battle against Daesh, which is crucial for stability in the region, is far from won and that this is a diversion of essential resource from that effort. This might not directly answer the point the noble Lord raised, but in the current context it is probably as far as I am able to go.
Lord Hylton (CB)
My Lords, this Statement is almost two months too late. The Turkish attack began on 20 January, supported by Leopard tanks and by militias containing many members of al-Nusra and ISIS. The attack was completely unprovoked. It has killed and wounded hundreds of people and displaced thousands of civilians. Turkey could have protected its border and its security by negotiations; it did not even attempt such a thing. Will Her Majesty’s Government condemn this brutal and vicious attack, which may well prolong the Syrian civil war? Will they re-examine Turkey’s right to remain a member of NATO and the Council of Europe?
Our Government rightly say that the Syrians must decide their own future. How can they possibly do so when Russia, Iran, Turkey and the USA have their own forces inside Syrian territory, and Israel makes constant air attacks whenever it feels a need to do so? It is surely not enough to boast about our aid for Syria since the war began. Will our Government become more realistic and press for the removal from Syria of all foreign forces, including volunteer fighters, money and weapons?
Lord Bates
I appreciate the noble Lord’s frustration. I know that he has visited the region and seen for himself in Aleppo the horrendous situation on the ground when these sieges take place. But, on the limited options we have as to what we can do, I do not think it is fair to discount the aid effort—the £2.46 billion that has gone there to provide relief. It is important.
We can work in three ways. One is humanitarian, providing emergency relief, and that is what I talked about in the Statement. The second is diplomatically, and I have outlined some of the ways in which we have been trying and continue to try to do that, with Turkey directly, through the UN Security Council and encouraging resumption of the talks. I have to say that there is also a military dimension to this: we have been part of the global coalition which has sought to attack the scourge of Daesh in that area, which is a massive cause of the instability that we see. So it is not just one, it is all. What I am trying to communicate to the noble Lord is that we are, to the best of our ability, trying to exert the maximum leverage we can in each of those areas, with great difficulty.
Lord Roberts of Llandudno (LD)
My Lords, when David Cameron was Prime Minister he made a pledge that by the year 2020 we would accept 20,000 Syrian refugees. The figure I have heard is that by 22 February this year we had welcomed 10,538. So we are half way there but we are also three-quarters of the way since the pledge was made. I ask the Minister whether we can really open that door: we still have nearly 10,000 promises yet to be fulfilled. I suggest also that when that promise—that pledge—was made, nobody envisaged that four years on there would still be this slaughter, this total catastrophe, in Syria. Can we get away from thinking that the 10,000 promise was a target or a ceiling, and work according to need instead, such as in Idlib and all these other places? This past fortnight I believe that about 900 people have been killed, including at least 100 children. Can we somehow spur the Government on to get that pledge fulfilled and if necessary—and it is necessary at the moment—go beyond it?
Lord Bates
I thank the noble Lord, first, for recognising that David Cameron’s pledge, and Her Majesty’s Government’s pledge, of resettling 20,000 refugees is on track to be delivered. Of course, there are other dimensions to this. What we faced when we were having those debates was the equally horrendous situation in the eastern Mediterranean, where people were often being smuggled and exploited by people smugglers into making perilous journeys across into Greece. Through the EU facility for refugees in Turkey, which was a €3 billion facility to which we contributed €328 million, we were trying to help in that area. Of course, again, we are providing help in the areas around Syria—in Jordan and Lebanon as well. So I hope the noble Lord will at least accept that we are working, again, on three different levels: in the region, through the Turkish facility; in the refugee camps with the UNHCR; and fulfilling our obligation to bring refugees here. We will continue to keep that under review.