Grand Committee

Wednesday 9th May 2018 Grand Committee

Wednesday 9 May 2018

Arrangement of Business

Wednesday 9th May 2018 Grand Committee

Announcement

15:45

[The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)]

My Lords, I remind your Lordships that if there is a Division in the House, the Grand Committee will adjourn for 10 minutes.

Crime and Courts Act 2013 (Deferred Prosecution Agreements) (Amendment of Specified Offences) Order 2018

Wednesday 9th May 2018 Grand Committee

Considered in Grand Committee

15:45

Moved by

[Baroness Vere of Norbiton]

That the Grand Committee do consider the Crime and Courts Act 2013 (Deferred Prosecution Agreements) (Amendment of Specified Offences) Order 2018.

[Baroness Vere of Norbiton (Con)]

My Lords, the order before the Committee today amends Part 2 of Schedule 17 to the Crime and Courts Act 2013. This sets out the range of offences where a deferred prosecution agreement, or DPA, may be considered. The intention of this schedule has always been clear: to allow the Crown Prosecution Service, or CPS, and the Serious Fraud Office, or SFO, to consider using a DPA to tackle serious economic crime committed by corporate entities. The order before the Committee today is simple: it corrects an anomaly with regards to making misleading statements and practices in financial transactions.

The schedule of crimes at Part 2 of Schedule 17 to the Crime and Courts Act 2013 currently includes a reference at paragraph 22(e) to Section 397 of the Financial Services and Markets Act 2000. It deals with misleading statements, practices and impressions in financial transactions. This provision was repealed and updated by the Financial Services Act 2012, which introduced new offences dealing with the same conduct under Section 89, on misleading statements; Section 90, on misleading impressions; and Section 91, on misleading statements regarding relevant benchmarks and misleading impressions as to the value of investments and interest rates that apply to a transaction. The order before the Committee today replaces the previous repealed offences under Section 397 of the Financial Services and Markets Act 2000 with the three current measures to ensure that the SFO and the CPS remain able to consider using a DPA to tackle such behaviour if they wish. At the moment, they cannot do so given the anomaly in the legislation. All of the current protections, including the need for a court to approve the order, will continue to apply in full.

As this is a matter of correcting a technical oversight, I hope it will not detain the Committee too long. But before commending the order for approval, I will set out some further details and provide the background to the deferred prosecution scheme and why the Government are taking this action.

Schedule 17 to the Crime and Courts Act 2013 sets out the scheme for deferred prosecution agreements. A DPA is a court-approved agreement between an organisation—not an individual—and a designated prosecutor who is considering prosecuting the organisation for a specific type of economic crime. These crimes are listed in Part 2 of the schedule. Under the scheme the organisation is charged with the offence, but upon a court declaration that the DPA is in the interest of justice and that its terms are fair, reasonable and proportionate, the indictment will be suspended for the duration of the agreement—usually two or three years. Upon the expiry of the DPA the proceedings are discontinued. The prosecution proceedings can be reinstated only if the DPA is terminated by the court before expiry because of a serious breach of the terms of the agreement.

There are no mandatory terms of a DPA but they are likely to include a financial penalty, disgorging any profits made from the offence, co-operating with investigations into the conduct of individuals, and the implementation and external monitoring of a compliance programme. Importantly, a DPA is not an alternative to individual criminal charges. If individual wrongdoing can be proved—for example, bribery—such charges can be pursued in addition to a DPA with the company.

DPAs are an appropriate and useful tool for addressing corporate economic and financial crime. A DPA is premised upon high levels of co-operation on the part of the offending company, which signals a willingness to address governance failures going forward. It allows companies to make redress for wrongdoing while also taking steps to safeguard against any future misconduct. DPAs are therefore a key means of encouraging the inclusion of economic and financial crime prevention as an integral part of corporate good governance. Where courts judge them appropriate, they are a means of allowing corporate entities to make full redress for crimes committed while avoiding collateral damage—for example, the company going into liquidation and laying off thousands of employees. Four DPAs have been agreed since the measures came into effect in 2014.

To reiterate, this order effects a technical correction of an anomaly required to allow DPAs in respect of offences dealing with misleading statements and impressions in financial transactions—it replaces like with like. Without today’s order, a designated prosecutor cannot enter into, and a court cannot approve, a DPA premised upon offending involving misleading statements and misleading impressions in respect a range of financial products. By introducing today’s order, we are ensuring that the CPS and SFO could consider applying for a DPA in these cases should they so wish. I beg to move.

[Lord Thomas of Gresford (LD)]

My Lords, this is a perfectly acceptable amendment to the schedule to remove the anomaly that now exists. It is a moment, however, to consider the value and use of deferred prosecution agreements. As the noble Baroness pointed out, only four such agreements have so far been approved by the court, and only three of the judgments in those cases have as yet been published. However, those cases have made it possible to find some clear principles that should be applied. Sir Brian Leveson, President of the Queen’s Bench Division, put it this way: a deferred prosecution agreement,

“is a reward for openness”.

The first essential is co-operation with an investigation. The sooner a company comes in and self-reports, the more it has to be rewarded for. The SFO will look at what work has already been done to investigate, how thoroughly it has been done and how data has been dealt with—in a way that does not tip off potential suspects leading them to delete that data altogether. Secondly, the company must be committed to reform. This may mean removing senior staff responsible for the criminality and instituting changes in procedures. The SFO must be in a position to go before a judge and argue that the default position of a prosecution can be displaced in the specific case and that a deferred prosecution agreement is justified. The judge has to give his approval to this.

In the Rolls-Royce case, which is the largest of the cases so far, the judge commented that his first reaction to what was put before him had been that if the company was not to be prosecuted,

“in the context of such egregious criminality over decades, involving countries around the world, making truly vast corrupt payments and, consequently, even greater profits then it is difficult to see that any company would be prosecuted”.

Rolls-Royce had not self-reported, but it co-operated. It was its co-operation that enabled the SFO to take the matter before the court. What the company did report, when tasked with it, was far more extensive and of a different order to what may have been exposed without the co-operation that it provided. I hope that the committee of this House carrying out post-legislative scrutiny of the Bribery Act, which has just been formed, will give an opportunity to examine DPAs and how they should be used with great care.

[Lord Beecham (Lab)]

My Lords, four agreements in between four and five years does not strike me as a particularly impressive figure. I appreciate that the Minister may not be able to answer several questions today, but perhaps she can answer them subsequently by letter. How many cases were considered but not proceeded with? On the four cases to which she referred, what financial penalty was imposed on the relevant companies? In addition to such financial penalties, were proceedings taken against individuals, which is clearly a separate matter? On the companies that were subject to the provisions, what changes may have been made within those companies, assuming things have gone wrong not necessarily with the companies’ full understanding at the time? How many cases have been investigated and not proceeded with, and was such a decision made because there was no case to answer or for other reasons—for example, lack of financial capacity in the company to pay any penalty?

What is the present caseload of the relevant department for these arrangements? Are any cases currently under consideration and, if so, roughly how many? How long will it take for such matters to be resolved? In other words, is there likely to be rather more than an average of one a year in future? If not, are the Government satisfied that the regime is proving effective, and what further steps might be taken to make more use of the provision now that it will be brought up to date?

[Baroness Vere of Norbiton]

I thank both noble Lords for their contributions today and for broadly welcoming the order. I thank the noble Lord, Lord Thomas of Gresford, for his insights into the use of DPAs and the Rolls-Royce case, which was indeed rather large. As he pointed out, there is now an ad hoc committee on the Bribery Act. Obviously, it is not for us to consider its terms of reference, but I am sure that it will look into these things. The Government continue to support the use of DPAs when appropriate.

Turning to the points raised by the noble Lord, Lord Beecham, he will be aware that I cannot say anything about the current caseload or casework going through the system at the moment, but I am very happy to write to him, as I would not want to mislead him. I am fairly sure that we can get the answers to a number of questions, and I will copy the answers to all noble Lords, because it would be good for noble Lords to understand how many DPAs have been used.

We should not necessarily assume that there have been too few or too many DPAs. They obviously have to be used only in appropriate cases. We may be able to draw conclusions from the information we get, but the Government continue to support their use. They can be very good for justice, fairness and jobs.

The order addresses a small but important statutory anomaly which is preventing future use of DPAs for this type of corporate offending. I therefore commend it to the Committee.

Motion agreed.

Crime and Courts Act 2013 (Commencement No. 18) Order 2018

Wednesday 9th May 2018 Grand Committee

Considered in Grand Committee

15:58

Moved by

[Baroness Vere of Norbiton]

That the Grand Committee do consider the Crime and Courts Act 2013 (Commencement No. 18) Order 2018.

Relevant Document: 25th Report from the Secondary Legislation Scrutiny Committee

[Baroness Vere of Norbiton (Con)]

My Lords, the order will allow courts in England and Wales to impose what is called a stand-alone location monitoring requirement as part of a community sentence when it is considered to be proportionate and necessary to do so. In other words, an offender’s whereabouts could, for its own sake and for a specified duration of the sentence, be monitored through an electronic GPS tag fitted to their ankle. The offender’s location would be tracked by satellite using technology similar to that of a satnav or Google Maps. The tag will record the offender’s position and send that data at frequent intervals to a monitoring centre via a mobile network. The location data will be retrospective and monitoring will not be in real time.

The Criminal Justice Act 2003 already allows electronic monitoring to be used as part of a community sentence to manage a curfew or compliance with another requirement of the sentence, such as an exclusion zone. In practice, it has only been used in community sentences to monitor curfews through radio frequency technology; the GPS-enabled tags that are necessary to monitor an offender’s location are not currently widely available. That will change when the new electronic monitoring service that is being developed goes live in 2019 and GPS tags and the monitoring technology become widely available. The new service will begin on a date to be confirmed in the summer, following the conclusion of commercial discussions with providers.

This order, commencing a provision in the Crime and Courts Act 2013 to allow for a stand-alone location monitoring requirement to be imposed, provides courts and probation practitioners with an additional tool to help to manage offenders in the community. The approach that we are taking has been, and is being, piloted in specific geographical areas, commenced through a no procedure statutory instrument. This allows the Ministry of Justice and, separately, the London Mayor’s Office for Policing and Crime—MOPAC—to pilot the use of location monitoring. The Ministry of Justice pilot concluded in March this year and the smaller pilot being run in London by the Mayor’s office will come to an end in September 2019.

Findings from the independent evaluation of the Ministry of Justice pilot that concluded in March will not be available until the summer. Nevertheless, feedback from probation practitioners and offenders engaged in both pilots suggest that standalone location monitoring is a valuable tool. We believe that it will provide offender managers with information that allows more insight into offender behaviour, allowing for constructive conversations to take place to reduce the risk of reoffending, aid rehabilitation and help those they supervise to lead law-abiding lives. Let us say, for example, that a probation officer is dealing with a domestic abuse case where the offending behaviour is linked to gambling or alcohol. The location information may show the offender frequenting alcohol or betting shops and this would enable the probation officer to have a sophisticated and evidence-led conversation with the offender about their behaviour and take appropriate steps to address it.

Stand-alone location monitoring may also help to deter offenders from taking part in criminal activity through the prospect of discovery or by giving the offender an excuse to distance themselves from those with whom they might commit crime. In effect, this can offer offenders a fresh start away from the influences of crime. In some cases, it could also provide enough assurance to enable courts to impose a community sentence as an alternative to custody, leading to many of the benefits of rehabilitation that offenders may get from being with their loved ones or through employment in the community. Prior to the introduction of the new electronic monitoring service, the Ministry of Justice will take into account the lessons learned from the pilots and provide information to sentencers and those that advise them, such as legal advisers and probation court teams, on how to target the new location monitoring capability.

I recognise that during the passage of the Crime and Courts Bill that led to the 2013 Act, concerns were raised in your Lordships’ House about the potential for location monitoring to infringe civil liberties. Let me reassure the Committee that before imposing a stand-alone location monitoring requirement, the court must consider issues of proportionality and necessity, including any interference with Article 8 of the European Convention on Human Rights: the right to respect for private and family life. They must also have due regard to the five statutory purposes of sentencing: punishing offenders; reduction of crime; protection of the public; reform and rehabilitation of offenders; and the making of reparation by offenders. As they do now, the courts will continue to assess the suitability of any requirements for the offender, the seriousness of the offence and whether a community disposal is justified or imprisonment is warranted.

With regard to the processing of the offenders’ data in accordance with the Crime and Courts Act 2013, when commencing the legislation, my right honourable friend the Lord Chancellor and Secretary of State for Justice is required to publish a code of practice that sets out the expectations, safeguards and broad responsibilities for the collection, retention and sharing of information gathered on such orders. The necessary code was published in February this year, prior to laying this order before Parliament and after consultation with stakeholders including the police, probation, the Information Commissioner’s Office and the Investigatory Powers Commissioner’s Office. It has been written with the provisions of the Data Protection Bill in mind and its content will be reviewed once the Bill becomes law. In addition, all offenders who are given an electronic monitoring requirement will receive an induction when they are fitted with a tag to explain what is required and a fair processing notice setting out what will happen with their data.

Standalone location monitoring will provide courts with one more tool to help manage the risk of offenders in the community. The pilots have indicated the operational value that can be derived from location monitoring. When targeted appropriately, it should help rehabilitate offenders, reduce the risk of reoffending, protect the public and, in some cases, provide enough assurance to the court to impose a community sentence as an alternative to immediate imprisonment. I therefore commend the draft order to the Committee and beg to move.

[Lord Thomas of Gresford (LD)]

My Lords, I suggest that it is unwise to introduce this commencement order before the result of the pilots is known. I gather from what the Minister just said that the first pilot ended in March but its findings will not be available until the summer and that there is still a pilot operating within the City of London.

We are familiar with electronic monitoring. It has been used to date to ensure compliance by an offender with the terms of a community order, a suspended sentence or a licence to enable a prisoner to be released. Standalone monitoring of this sort is a significant step further. The proposal is to use GPS tracking to monitor an individual’s movements, not against the prohibitions that will be set out in a court order or on release on parole, but generally. It is therefore highly intrusive, as I think the Minister acknowledged in what she said. It goes beyond what is necessary for rehabilitation or the protection of the public.

That point is perhaps emphasised even more by what we were told: that the monitoring will not be in real time—I think I understood that—but be retrospective. In other words, it is not an immediate form of surveillance but means that a probation officer will look back to see what his client has been doing rather than keep a watch over him. It is perhaps less objectionable if it is not immediate surveillance, but it may be rather more effective to use the resources that will be involved in this new system for rehabilitation rather than for tracking offenders in this way.

If this statutory instrument were brought forward after completion, evaluation and publication of the pilot projects—because we have no idea of the results of those pilot projects—it would be possible to assess whether the right balance has been struck. What are the Government going to do to bring those results before Parliament and give us notice of them? Will they give an undertaking not to seek the approval of both Houses before that is done? Otherwise we are faced with the verdict first and the trial afterwards. We want to know what the trial says so that we can comment on it and see whether this statutory instrument should be opposed when it is brought before the House.

[Lord Beecham (Lab)]

My Lords, we have some experience of monitoring of this kind of a rather unfortunate nature—I am thinking of G4S and its very poor record in bygone years. I wonder, first of all, who is to be carrying out the job: is it going out to tender or are people already lined up for it? Who has conducted or is conducting the trials at present? What is the cost involved in the work that is being undertaken? Is it a matter for the individual authority, probation service or whatever to commission this? What system will there be to get feedback at a national level about the success or otherwise of the scheme as it goes forward?

Presumably the Government will wish to be satisfied with the trials and that the system is working but, of course, we have to take a longer view about its working, not simply that it is mechanically working but that, in time, it is yielding the results that the Government seek for helping people to, if I may put it this way, stay on the straight and narrow and live a responsible life. That will take presumably some time. How long has the current exercise of trying out the system been going on for? Can the Minister enlighten us a little about where that has taken place, how many people have been put through it and with what result? I am certainly not minded to oppose the process but, given the rather unfortunate past regarding similar arrangements, I think there is a need to look very carefully at what is happening and to get a report back in the not-too-distant future. Can the Minister indicate whether there will be an annual review and report of how the scheme is working? That would be helpful both at the national and appropriate local levels, so that we can see the system is working both mechanically, as it were, and in terms of its intentions to help people stay out of difficulty and obey the law. Will there be oversight of that kind and, ultimately, reports about how the system is working in practice?

[Baroness Vere of Norbiton]

My Lords, I thank the noble Lords, Lord Beecham and Lord Thomas of Gresford, for their contributions. They raised a number of issues that I think are pertinent to the order that we are discussing. As I hope I mentioned in my opening remarks, feedback has already been received from the pilots that have already finished, and indeed the one that is ongoing, that the system does work and is useful for the task that has been set for it. The main feature now is for the Government to learn what they can about how the pilot operated and how to put that into the operations of the new system when it comes online next year.

A summary of the conclusions of the pilot will of course be made available. It is important that we look at this because, as the noble Lord, Lord Thomas of Gresford, pointed out, this is not surveillance and it is not real time, which would be far too resource-intensive. It is information that can be gathered and which allows probation officers and others to have a more informed conversation with the offender. The offender knows that they are being monitored. We believe that it will aid rehabilitation and it is my wish and my hope that it keeps some offenders out of prison, because in some cases that is certainly not helpful.

The noble Lord, Lord Thomas of Gresford, also mentioned the issue of timing. I am well aware that the results of the pilot are not available to us now, but we do know that the system works. We also know, as we spent most of yesterday discussing, that we are about to receive a tsunami of secondary legislation. It is therefore the department’s opinion that, if we lay this order before Parliament now, we can be confident that it will go through and become operational and that this is appropriate before Parliament’s mind turns to matters of a European Union nature and we are deluged with SIs from other areas. It also means that if we have an early decision in your Lordships’ House, that will give us plenty of time to liaise with the stakeholders—there are many in this system—and make sure that our plan for delivery is absolutely watertight.

16:15

The noble Lord, Lord Beecham, asked about the suppliers. I think I mentioned in my opening remarks that commercial discussions will be going on over the summer but we obviously know who the suppliers will be, subject of course to the conclusion of those commercial discussions. The first lot is for the electronic monitoring system itself, which will be going to Capita. Then we have Airbus, which will be mapping the data from the tags and then supplying it to the monitoring system. G4S will be providing the hardware, which I saw a prototype of this week; it looks entirely robust and fit for purpose. The last of the four lots is Telefónica, which of course is a mobile phone operator and will be providing resilient mobile telecoms for the network to enable transmission of data. That is where things are in terms of the suppliers.

I did not go into a great amount of detail about the pilots and I am happy to share a few details now with the noble Lord, Lord Beecham. The MoJ pilot was commenced in October 2016 and concluded in March 2018, so it ran for 18 months. It was carried out in Bedfordshire, Cambridgeshire, Northamptonshire, Nottinghamshire, Hertfordshire, Leicestershire, Staffordshire and the West Midlands—so, over a broad geographic spread, which gives us some comfort about the robustness of the system. It concluded that there were subjects from a variety of backgrounds, including those on prison licence, community sentences and court bail. At this time, in total for the MoJ pilot and the MOPAC pilot, there have been 661 cases. More will obviously be added to that number as the MOPAC pilot reaches its conclusion, which it will not do until next year. I feel that the pilot has been and continues to be robust. I must also mention that the MOPAC pilot is in north London and east London, as it is run by the Mayor of London’s office.

Having answered as many questions from noble Lords as I possibly can, I hope that the Committee will agree to commence this legislative provision. It is proportionate and a sensible step to take.

Motion agreed.

Child Safeguarding Practice Review and Relevant Agency (England) Regulations 2018

Wednesday 9th May 2018 Grand Committee

Considered in Grand Committee

16:18

Moved by

[Lord Agnew of Oulton]

That the Grand Committee do consider the Child Safeguarding Practice Review and Relevant Agency (England) Regulations 2018.

[The Parliamentary Under-Secretary of State, Department for Education (Lord Agnew of Oulton) (Con)]

My Lords, these regulations are essential to implement the safeguarding reforms set out in the Children Act 2004, as inserted by the Children and Social Work Act 2017. I welcome the work of the Secondary Legislation Scrutiny Committee in drawing these regulations to the attention of the House as an instrument of interest.

These reforms aim to improve the protection of children. As noble Lords may recall, they were based on the findings of the 2016 Wood review, which found widespread agreement that existing multi-agency working arrangements should be replaced with a stronger, more flexible statutory framework. Alan Wood also recommended a learning-focused system of reviews to replace serious case reviews. The Act enables the establishment of the Child Safeguarding Practice Review Panel. The panel will identify and commission reviews of serious child safeguarding cases which are complex or of national importance.

I am glad that, following a recruitment exercise conducted in accordance with Cabinet Office procedures, Edward Timpson has agreed to take on the role of panel chair. Following his advice and that of a skilled and representative assessment panel, we last week confirmed five appointments who will bring a range of experience to support him in this important work.

The Act also requires the three safeguarding partners —police, clinical commissioning groups and local authorities—to work together to make arrangements to safeguard and promote the welfare of children in their area. As part of this, they must determine the agencies with whom they intend to work. They must also identify and commission reviews of serious cases which raise issues of local importance.

These regulations will enable these provisions to operate effectively. The regulations set out the criteria which the panel must take into account when deciding whether to commission a national review. The panel must also set up a pool of potential reviewers. This arrangement will support our aim of improving the speed and quality of reviews. The panel may, however, select other reviewers if no one in the pool is available or suitably experienced. The panel may also remove potential reviewers from the pool.

As the panel cannot let its own contracts, the Secretary of State will hold the contracts with reviewers. Therefore, these regulations require the Secretary of State to appoint or remove reviewers from national reviews based on the panel’s recommendation. The regulations also specify details of the panel’s supervisory powers during a national review and of its final reports, including publication. Requiring public availability of reports for at least three years will ensure that national-level learning can be spread throughout the system, the key purpose of these new provisions.

The regulations also cover local reviews—the responsibility of the safeguarding partners. As for national reviews, the provisions cover review criteria, the appointment and removal of reviewers, reports and publication. Like the panel, safeguarding partners must make decisions on when it is appropriate to commission a local review, taking local review criteria into account. This includes any advice from the panel on whether a local review may be appropriate. The regulations support the timeliness and quality of local reviews. The safeguarding partners must monitor the progress and quality of local reviews and may seek information during the review to enable them to assess this. The regulations also specify some details that final reports must include and require reports or findings to be available for at least one year.

The regulations set out a list of agencies with which the safeguarding partners may choose to work. The Government first published the list in indicative regulations during the passage of the Bill. Safeguarding partners should select agencies relevant to their local areas. The list of those selected may change from time to time, although we expect schools always to be involved. The safeguarding partners should consult the agencies selected, and the published arrangements should include a list of those agencies. Duties on relevant agencies apply only to agencies included by the safeguarding partners in local arrangements. The Government consulted on these regulations and the associated statutory guidance last autumn. Consultees were largely positive, although some clarifications were made to the regulations as a result.

The panel will begin work on 29 June 2018, when the transition to the new multi-agency arrangements will also commence. Safeguarding partners will have 12 months to prepare and publish their arrangements, including selecting relevant agencies, and a further three months to implement them. Provided that the regulations are agreed, we will publish the final version of the statutory guidance Working Together to Safeguard Children within the next few weeks. This will support the new arrangements and complement these regulations.

I thank all those who have contributed to work on these reforms, including noble Lords present. These regulations will support more flexible joint-working arrangements, as well as promote better and more timely learning from reviews, and I commend them to the House. I beg to move.

[Lord Storey (LD)]

My Lords, the protection of children is perhaps one of the most important things that we should be doing. We welcome the safeguarding practice panel; if noble Lords do not mind me saying so, what an inspired choice Edward Timpson is as its chair. His work on the Children and Families Act was second to none.

I want to raise a particular issue that I hope the Minister will address: self-employed tutors. Unlike tutors employed by agencies, they are not legally obliged to apply for a Disclosure and Barring Service, or DBS, check. Accountants, vets, even traffic wardens are required to have such checks, despite the fact that their jobs do not involve regular access to children, yet private tutors who regularly work and are involved with children do not. In a Commons Oral Question, the Parliamentary Under-Secretary of State for Education said:

“It is ultimately the responsibility of parents to assure themselves about the suitability of any private tutor they might choose to employ before they engage them, for example by seeking and checking references, and asking to see a copy of any Disclosure and Barring Service certificate”.—[Official Report, Commons, 19/3/18; col. 12.]


As it stands, self-employed tutors cannot apply for a DBS check. Instead, they can apply for a subject access request, containing similar information, for a fee of £10, but they are not legally obliged to do so. I hope that the Minister will use this opportunity to deal with this rather strange anomaly. Either we insist that all tutors, whether self-employed or employed by an agency, have the correct requirements or, as a second-best option, they can apply for the certification, as suggested by the Parliamentary Under-Secretary.

[Lord Watson of Invergowrie (Lab)]

My Lords, I thank the Minister for introducing these important regulations. We recognise the paramount importance of child safeguarding, which should never be compromised, no matter the circumstances. We further recognise—in doing so, we are confident that we reflect public opinion—the need for a revamp of the system of serious case reviews following a number of deeply disturbing cases in recent years, compounded by the often inept handling of reviews into how such crimes were allowed to occur.

Many of those concerns were articulated during the passage through your Lordships’ House of the Children and Social Work Act and I do not intend to revisit them. Revised regulations and a new system of reviews was necessary and, in clearly outlining the requirements for such reviews at both local and national levels, these regulations perform an important function—no less so the requirements being placed on the relevant agencies to ensure the kind of joined-up action that was often absent in the past.

That said, it is difficult to avoid the conclusion that this is another incursion by central government into what is properly a local government responsibility, yet more resources are being found to establish yet another ministerial body—or are there? Just what resources, in the form of new money, will be made available is less than transparent. Yesterday, when these regulations were considered in another place, the Parliamentary Under-Secretary of State, Nadhim Zahawi MP, said:

“The funding should be sufficient to cover all elements of the arrangements. We do not expect the new arrangements to cost more than existing structures”.—[Official Report, Commons, First Delegated Legislation Committee, 8/5/18; col. 5.]


That suggests that the Government do not treat this serious matter seriously enough to commit to additional resources, should they be necessary. The existing system was not performing adequately, hence these regulations. To suggest that this revamp, and the appointment of a new body, will not add to costs is surely not realistic.

We know that the former Children’s Minister, Edward Timpson—he of the shoe shop family—will chair the new Child Safeguarding Review Practice Panel. I echo the words of the noble Lord, Lord Storey, that, with his record, he is a man in whom we have some confidence to carry out the task effectively. He will bring experience and authority to the post and we wish him well. However, he will be a busy man because he was also appointed last month as chair of the Children and Family Court Advisory and Support Service. He will receive £500 a day as chair of the panel, and his members, £400 plus expenses. Those rates do not sound unreasonable but if I have a concern, it is over the number of times that the panel will be required to meet and the number of panel members that it will require. I suggest that the cost remains an unknown, but perhaps the Minister can give us the Government’s thinking on this and how much, in rounded figures, it is expected to cost. As I said, it is not realistic to think that establishing a new body will not involve additional costs.

16:30

In terms of the regulations, Regulation 4 is important, because it talks about potential reviewers. But it does not say who will be in the pool, just the process for appointing and unappointing. It says nothing about required experience and/or professional qualifications, and nothing about required training and quality assurance or professional supervision for the task. I am aware the Minister mentioned that five panel members have been appointed, and the Minister in another place was kind enough to list these people yesterday.

Of the five, I would say that four are very clearly qualified for the job on the basis of the information that follows their names. One I am less sure of, and it causes me some concern because there is no one from local government in terms of education. I cannot find the designation of the other member of the panel, but I think it was the chief executive officer of an academy trust. She may or may not be well qualified by dint simply of being part of an academy trust, but I am concerned that there is no representation from a director of education or a senior educationalist from the maintained sector. To me, there seems to be an imbalance, and I hope the Minister will tell me that the five panel members appointed are the first tranche rather than the final figure, because of the point I have just made, as well as the point I made earlier—that the workload is going to be considerable and that number of individuals, with their other responsibilities, will be insufficient to carry out the task.

I do not wish to say much more. The panel and its chair have very important work to do, and we hope it will quickly establish itself and help to restore some of the faith in the appropriate examination of child abuse cases that the public have, to a significant extent, lost in recent years.

[Lord Agnew of Oulton]

I am most grateful to the noble Lords for their comments and questions on these regulations. I can address some of the points raised. The noble Lord, Lord Storey, raised an important point about the role of tutors and how they should be checked. I will write to him on that, as it is a technical matter.

The noble Lord, Lord Watson, raised several other points and I will try to address those. In terms of funding, it is important that the local areas have the flexibility to fund the arrangements that they design. The safeguarding partners should agree the level of funding secured from each partner, which should be equitable and proportionate, and the contributions from each relevant agency to support the local safeguarding arrangements. The funding should be sufficient to cover all elements of the arrangements. Any requirements for the national panel will be funded from the centre. We do not predict that there will be additional costs because we are hopeful that this will remove a lot of the overlap that there is in the system at the moment.

I am pleased that there is strong cross-party support for the appointment of Edward Timpson. He is very experienced in this area, but I take note of the noble Lord’s point about him being overstretched. The exclusion inquiry that he is looking into at the moment is a relatively short inquiry and should be completed within a few months, so I do not think that there will be significant overlap.

On costs, the fees and expenses of the members and chairs will be published and will be in line with the rates paid to other, similar expert panels.

The panel member that the noble Lord, Lord Watson, referred to is from an academy trust. We would also consider someone from a local authority who has experience at senior level. Both the Chief Social Worker and Mark Gurrey will bring that as well to the team.

[Lord Watson of Invergowrie]

I accept the local authority involvement regarding those named, but I was particularly talking about local authority education, because there has been some concern expressed that education has been left out of the loop, as it were, in terms of those involved. For education to be introduced only in the form of what appears to be a businessperson from an academy trust—I do not know her experience beyond that—without anyone from the maintained sector is a concern. Can the Minister answer the question that I posed earlier, that the figure of five on the panel is just the opening number and that it can be—and probably will need to be—increased?

[Lord Agnew of Oulton]

My Lords, I agree that we should keep an open mind on the size of the panel. We have made clear through the statutory guidance that all the published local safeguarding arrangements must set out how relevant agencies, including schools and education providers, will be engaged with the multiagency working. The multi-academy trust member that we referred to, Dr Susan Tranter, has had experience as a head teacher and has had long service in the education sector, so she is not just an administrator but someone who has been involved in education.

These regulations underpin important safeguarding changes, as we discussed. They will give the safeguarding partners a framework to identify who is most appropriate to work with in order to support the safeguarding of children in their area and will give force to these decisions. The new child safeguarding practice review panel will be high profile, operate independently of government and promote genuine change in the safeguarding of children. The new arrangements for local and national child safeguarding practice reviews will enable the clear identification of any improvements that should be made to safeguard and promote the welfare of children. National reviews will also identify improvements at the national as well as local level, and the panel will follow up progress on implementation. The regulations enable these changes to function as intended and I sincerely hope that noble Lords will be willing to support them.

Motion agreed.

East Suffolk (Local Government Changes) Order 2018

Wednesday 9th May 2018 Grand Committee

East Suffolk (Modification of Boundary Change Enactments) Regulations 2018

West Suffolk (Local Government Changes) Order 2018

West Suffolk (Modification of Boundary Change Enactments) Regulations 2018

Considered in Grand Committee

16:40

Moved by

[Lord Bourne of Aberystwyth]

That the Grand Committee do consider the East Suffolk (Local Government Changes) Order 2018, the East Suffolk (Modification of Boundary Change Enactments) Regulations 2018, the West Suffolk (Local Government Changes) Order 2018 and the West Suffolk (Modification of Boundary Change Enactments) Regulations 2018.

Relevant Document: 25th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I beg to move that the draft West Suffolk (Modification of Boundary Change Enactments) Regulations 2018, the draft West Suffolk (Local Government Changes) Order 2018, the draft East Suffolk (Modification of Boundary Change Enactments) Regulations 2018 and the draft East Suffolk (Local Government Changes) Order 2018, which were laid before the House on 19 March 2018, be considered.

These instruments, if approved by Parliament and made, will on 1 April 2019 establish two new councils: East Suffolk Council and West Suffolk Council. East Suffolk Council is made up of two existing councils: Suffolk Coastal District Council and Waveney District Council. West Suffolk Council is made up of Forest Heath District Council and St Edmundsbury Borough Council.

The instruments also provide for elections to these new councils to be held in May 2019 and each fourth year thereafter. This includes providing electoral arrangements—the warding arrangements that would be used for the first elections should the Local Government Boundary Commission for England be unable to conclude in time the electoral review which is expected it will undertake. In addition, they make transitional provisions, including for a shadow authority and shadow executive to prepare for the new councils during the period from when the order is in force until April 2019.

We have brought forward these instruments in response to locally-led proposals from each of the areas concerned. All of the existing principal councils in each area support the proposals and, as statute requires, have given their formal consent to the regulations. In line with the Government’s 2017 manifesto, we are committed to consider any locally-led proposals for district mergers and, as we told Parliament in November 2017, we will assess proposals on the basis that they will improve local government and service delivery, create structures with a credible geography and command a good deal of local support.

The Government are satisfied that these two merger proposals fully meet these criteria. In the case of East Suffolk, the merger is the next logical step to the many shared arrangements which the two existing councils in the area have today. It will improve local government in the area. It will achieve greater efficiency and resilience. It will secure for the future on-going savings totalling more than £20 million since 2010, as well as yielding further savings which the council estimates as £2.2 million per year.

The area of the new combined East Suffolk Council is a coherent geography with a population of around 240,000. This area is, in fact, the same area as the old county of East Suffolk that existed from 1888 until 1974. Finally, we are satisfied that the evidence shows that there is strong local support for this proposal, with a survey suggesting that 72% of residents would support the merger.

Turning to West Suffolk, the two merging councils already operate largely as one council. The merger completes and secures this and the benefits it brings. It will therefore improve local government in the area, securing for the future on-going savings of £4 million a year as well as yielding further savings which the council estimates as £850,000 per year. As in the case of East Suffolk, the new area recreates a traditional long-established area, that of the county of West Suffolk that existed prior to 1974, but with a population today of almost 180,000. As with East Suffolk, this proposal for a new West Suffolk has strong local support.

It may assist the Committee if before concluding I say something about the processes which have been followed by the councils and the Government and which have led us to conclude that these proposals do, indeed, meet the criteria and are worthy of implementation. In each case the councils concerned submitted their proposal after undertaking what we believe was a sound and full consultation exercise involving extensive local engagement and open consultation.

In the case of East Suffolk, in formulating their proposals, East Suffolk councils undertook a programme of engagement with residents and stakeholders from September 2016 until December 2016. The programme included: an independent, proportionally representative phone poll; a media campaign including press releases and promotion on social media; information packs for town and parish councils; an open consultation via a dedicated webpage and an online survey to collect comments on the proposals; formal communication to stakeholders; presentations and talks at resident and business forums and public events; and a frequently asked questions document updated with any common questions or concerns.

The independent poll commissioned to find out local residents’ views suggests that 72% of residents were in favour of the proposals to form a new single district council, with 22% raising concerns. All of the local institutional stakeholders, such as the NHS, the county council, major business groups in Suffolk and all the neighbouring authorities, are also in favour.

16:45

In the case of West Suffolk, the programme of engagement with residents and stakeholders took place from May 2017 until the end of August 2017 and included: an independent, proportionally representative phone poll; a media campaign including press releases and promotion on social media; information packs for town and parish councils; an open consultation via a dedicated webpage and an online survey to collect comments on the proposals; formal communication to 162 stakeholders; presentations and talks at resident and business forums and public events; and staff briefings for front-line employees. The opinion research commissioned to find out local residents’ views suggests that 70% of residents were in favour of the proposals to form a new single district council. As was the case in East Suffolk, 22% of residents raised concerns. All of the local institutional stakeholders, such as the NHS, the police, the county council, major business groups in Suffolk and all the neighbouring authorities are also in favour.

In both cases, where any concerns were raised, the councils made efforts to address each of the issues, and, where contact information had been provided, responded directly to explain how the concerns would be addressed. These responses were collated and published on the councils’ dedicated webpages.

Having considered all the material submitted to us, we do not share the view of the Secondary Legislation Scrutiny Committee—much as we hold it in the greatest respect—which reported that there appeared to be inadequacies in the consultation processes which relate to the instruments. Rather, we believe that the councils carried out a considerable exercise in consultation and made every effort to obtain a good appreciation of local opinion—and, in fact, achieved this. We are reinforced in our view by the support in both areas of many of the elected representatives, including all the MPs, for this proposal. Those elected locally to represent their area are clearly in a good position to know what local people are thinking.

Once the proposals were submitted, the next step was for my right honourable friend the then Secretary of State to announce how he was minded to proceed. In both cases, he announced that he was minded to implement the proposal. There then followed a period for representations. In the case of East Suffolk, a total of 25 representations was received: 20 in favour, one neutral and four against. None of the representations that were in opposition raised points which had not been raised and addressed in the consultation undertaken by the local authorities. I would add that these representations include five received outside of the timescale and beyond the 20 received during the representation period. We refer to those received on time in the Explanatory Memorandum, which, if Parliament approves the order, will be updated to include those responses received later. In the case of West Suffolk, all seven representations received were supportive of the proposal, including the local NHS, the county council and business groups.

It was following these processes that my right honourable friend the then Secretary of State decided to bring forward the secondary legislation which we are considering today to implement these two merger proposals. For each proposal, there are two instruments before us. In each case, the regulations modify the provisions of the Local Government and Public Involvement in Health Act 2007 in its application to the case concerned. The regulations are made under provisions of the Cities and Local Government Devolution Act 2016. These regulations modify the 2007 Act provisions to enable a locally led and supported merger proposal to be implemented without the need for a time-consuming boundary review, which can be undertaken only at the discretion of the Local Government Boundary Commission for England. I should add that the Boundary Commission sees no difficulty with the approach we are taking and is expected to undertake a full electoral review to re-ward both new areas before the elections in May 2019. In each case, there is an order to be made under the modified provisions of the 2007 Act, which provide for the new councils, their elections and transitional arrangements.

In conclusion, these instruments establish two new councils that are widely supported. I have full confidence in the local areas to implement the mergers by April 2019 and allow the good people of Suffolk to elect their new councils in May that year. On that basis, I commend the regulations and orders to the committee.

[Lord Tebbit (Con)]

My Lords, I rise to speak on items six and seven, pertaining to west Suffolk. I speak as a resident and ratepayer of the St Edmundsbury Borough Council. This is a rather unusual piece of legislation in that it is catching up with reality. It seems to be about turning de facto into de jure. Its roots lay in the fairly recent past. They were conceived by the leader of St Edmundsbury Borough Council, John Griffiths. The opportunity arose to sell the council offices in the middle of Bury St Edmunds for them to be converted into flats and for new offices to be built on the edge of the town. The building has more room, is better planned, is environmentally up to date and is very smart indeed. It houses the council officials of both St Edmundsbury and Forest Heath. Most of those posts are already held in common by one official. In effect, there is already a substantial shadow administration. In a way, we are officially legitimising what has already been done. In old-fashioned terms, these two authorities have been living in sin for years, and this legislation will effectively make them man and wife, as one concept.

[Baroness Scott of Needham Market (LD)]

My Lords, I also speak as a Suffolk resident of almost 40 years, although not of either of the areas covered today. I am a former district and county councillor in Suffolk so I have a keen interest in this.

I have always advocated unitary government for Suffolk, perhaps going back to the old, two-council days before 1974, or possibly 1973, with serious devolution to the towns and parishes which want it. I felt that way because I truly believe that service delivery would be better if we brought together planning and transport, for example, under one council. Local people would not have to sort out which council does what. As a councillor, I know that that is a significant issue. The financial savings that can be made from creating unitary councils have been well established across the country where this has been done.

Opposition to my view has always been on the grounds of saying, “Well, district councils are important because they’re small and they’re local and the wards are small. Everybody knows everyone and they’re close to the people”. I buy that; I can see that argument. However, it seems that in merging these councils—I am talking about councils as opposed to their back-office functions—big wards will be created and the council offices will, in many cases, be moved away from the area they represent. The advantages of districts are lost without the benefits of unitary government. Bins will still be emptied by one council and the waste disposed of by another, for example.

I remain concerned about that. I accept the point that Suffolk councils have been in the process of merging their back-office functions to save costs for some years now. That is entirely sensible. However, my council in mid-Suffolk, having done that with the neighbouring authority of Babergh, has now gone completely mad and moved its joint offices to the middle of Ipswich. There is no local connection there. If you are going to defend three-tier local government on the grounds of local connection, you have to show local connection.

I am worried that all this is being driven by the parlous state of local government finance in this country, rather than some sort of rational, thought-out plan. It feels as though people who live in Suffolk are somehow not being properly engaged with—I will come back to that—or brought along in the process. It was interesting that the Secondary Legislation Committee shared some of those concerns. I appreciate the trouble that the Minister has gone to to allay those. Nevertheless, there is still a lot of work to do—to be charitable—to convince people in Suffolk and in town and parish councils that the proposals will work.

To give what I think is an important piece of context, the report that went to Waveney and Suffolk Coastal District Councils on 14 March 2016 stated:

“The potential benefits and pitfalls of unitary local government have been well rehearsed previously”—


through LGR—and,

“have not been reproduced here. It is uncertain whether the new Secretary of State will be open to such discussions … Similarly, this could not be done in any format without … an impact upon Suffolk County Council. It is assumed at this stage (and without any discussion with the County Council) that this would be strongly resisted”,

by the county council. In other words, in East Suffolk at least, this was kicked off in 2016 without really knowing what the Secretary of State or the county council thought.

With regard to the support to which the Minister referred, the problem was that nobody ever had a say about the benefits of unitary councils—which I think, had it been put as an option, would have been more significant—but that did not take place because a unitary authority had been ruled out.

This continues to be a model. On 21 March this year, the leader of Suffolk County Council announced that he had commissioned a report from ResPublica to look at options for local government in Suffolk over the coming years. This afternoon, the local press are reporting that he has suspended this work, saying that it is because his opponent in a leadership bid is opposed to it. I have no idea whether the second part is true but it shows, given the importance of local government to Suffolk and the services that it delivers, that it deserves better than this.

[Lord Tebbit]

Before the noble Baroness sits down, would she make it plain that she is speaking primarily about East Suffolk? We in West Suffolk have been enjoying the benefits, or disbenefits, of the change now for a long while. We have been just living together and getting to like it.

[Baroness Scott of Needham Market]

I am very pleased to put a cloak of respectability over the noble Lord and the area in which he lives. I hope that he sleeps more soundly as a result. Yes, I was citing the report that went to East Suffolk, but there is a general point. I would have preferred a much more strategic look at the whole county and how services are delivered so that we can all feel that councils are genuinely representing us. I think that that is exactly where we will be in five years’ time, but that will probably have cost us a lot of time and money.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, first, I should draw the attention of the Grand Committee to my declaration of interests: I am a vice-president of the Local Government Association. I am not a resident of Suffolk, although I have friends there and visit often. It is a wonderful place to spend time.

I am clear that there is local support for the order. I know that the Minister has addressed the issue raised by the Secondary Legislation Committee, and I am happy with that. I have talked generally about consultation: we must ensure that our consultation processes actually involve talking to local people to get their views; we do not always do that. I am not saying that about this case.

I agree with the noble Baroness, Lady Scott of Needham Market. I think that local government in England is a little confused. If you go to one place, there is a unitary council that does everything for the whole county. In the next place, you will have four or five tiers of local government doing the same job. There is an issue there. That is not the case in other parts of the country. In some parts of the country, you can have a metro mayor and a combined authority, the PCC, a county council, a district council and the parish council, all delivering different services to you. In another place, you have just a unitary council or a unitary district. I know that the Minister will say that we like it being bespoke and everyone can do as they like, but you could equally argue that it is a bit confused and a bit of a dog’s breakfast in some parts of the country.

In principle, I am not against what is suggested here, bearing in mind the points I made.

17:00

[Baroness Pinnock (LD)]

My Lords, I do not want to add to the comments made by anybody who knows something about Suffolk, like my noble friend Lady Scott of Needham Market. I just remind the Committee of my interests as a councillor in Yorkshire and as a vice-president of the Local Government Association. The comment I want to make is that I have attended a number of these sessions where, as a Committee, we have considered mergers or boundary reviews and, in every instance, the existing local councils involved make claims about the savings that will be made and services that will be more efficient and that residents will be happy with the general situation. My question is: do the Government or the Ministry of Housing, Communities and Local Government do a review post hoc to test whether this is in fact the case? We always accept these claims at face value, and we have a very specific claim here about the savings that will be made. No doubt that is the intention of the councils involved, but my experience of what council officers claim and what actually happens is that they can often diverge. If such reviews do take place, I would really like to have access to them and, if they do not, I suggest that they are undertaken, partly because the funding savings that will be made are very specific. Councils always also make claims about efficiency of service provision, which may well be the case, but does anybody ask after the event whether it is the case?

I share some of the concerns expressed earlier, among all the comments that have been made, about the confusion of local government now and whether we are losing the “local” from local government. The area where I am a councillor, for example, serves 450,000 residents—it is a unitary, metropolitan council—and my ward serves 13,000 electors, so some 17,000 residents. This is compared with some local authorities where the wards will be considerably smaller. We have to ask the question about whether there is a democratic deficit for people in some parts of the country. How local is local government? There is, I think, a debate to be had between getting scale and service provision and losing the local touch, which democracy requires if it is going to work well. With those comments—well, questions—I will end what I have to say.

[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords very much indeed for their contributions in relation to these issues affecting Suffolk. I will deal with the contributions in the order that they were made, if I may. I turn first to my noble friend Lord Tebbit, with his personal experience of St Edmundsbury Borough Council—an excellent council in a lovely part of the country. My noble friend quite correctly said that this is de facto catching up with de jure, because this has been the position for a long while. I also remind all noble Lords that these proposals are locally led. This is not a government imposition of what we would like to see; this is something that is locally led so, in relation to the local democracy element, that is very important.

I am very happy as the Minister for Faith to be presiding over this union, this coming together, of these two parties—

[Lord Porter of Spalding (Con)]

I am sorry, but somebody will have to clarify whether I can speak. I was not here at the start of the debate, so I did not know that the Committee agreed to take the instruments en bloc. I intended to get here as quickly as I could, so I thought I could at least speak on the second pair when they were reached.

[The Deputy Chairman of Committees (The Countess of Mar) (CB)]

My Lords, the rules say that if a noble Lord is not present at the beginning of the debate he cannot take part in it.

[Lord Bourne of Aberystwyth]

I would be very happy to see my noble friend Lord Porter afterwards, if he has particular points, and to cover those in detail, if that would be helpful.

I am very happy to preside over the union of the two parties that have been living in sin, as the noble Lord put it. It all seemed to be going well until the noble Baroness, Lady Scott, got up to object—it reminded me of a scene in Jane Eyre or possibly Far from the Madding Crowd—but happily not in relation to the one union that was very close to my noble friend’s heart. She subsequently clarified her concerns about some of the issues.

Babergh and Mid-Suffolk were very close to an agreement in relation to a locally led proposal. It was not to happen, but that was a local matter, and as a department or a Government we have quite rightly not attempted to impose anything on them. So these are locally led proposals. On the unitisation issue, I shall not get sucked into Suffolk politics and matters pertaining to that great county as I do not know all the issues. Once again, however, it is open to authorities within Suffolk to come forward with locally led proposals if that is what they want.

I was not up to speed with the latest development on the review of the county council. I know the county council initiated it of its own volition without the involvement of the other areas, but if something were to come forward at a future juncture, of course we would look at it.

In relation to East Suffolk as well as West Suffolk, from the evidence we have of the consultation, these proposals are strongly supported by residents. All the districts concerned, including Waveney and Suffolk Coastal in the case of East Suffolk, are strongly in support of these proposals, which comes back to the locally led point.

That brings me to the noble Lord, Lord Kennedy. He and I have at the very least a nuance of difference in our approach here. Despite his very respectable Labour pedigree, the noble Lord has a slight Stalinist tendency to favour a standard approach for every council in the country, which is not necessarily what local councils want. These are locally led proposals. The same is true on a different canvas in relation to the mayoralties. They are not necessarily the same, but they are locally supported and bespoke.

[Baroness Scott of Needham Market]

Does the Minister accept that one of the problems, the one we are all grappling with, is that these proposals do not have any sense of originating from the people, so when people show support or do not do so they are showing support or otherwise for something that has been handed to them? It is the same now with many of the other structures of local government. We all share a deep commitment to local government structures and we want to be confident that they enjoy public support. This is not a political point. It is about local democracy.

[Lord Bourne of Aberystwyth]

I do not dissent from the general point that leadership means that proposals have to come from somewhere. I am keen to make the point, and perhaps to restate the point to overstate the point, that these are locally led proposals from local leaders. Of course they are not going to come from individual residents, but the evidence we have from the consultation, which the Secretary of State will have borne in mind when looking at these proposals, was that there was strong local support for them.

I take the point that there has to be a government policy, but the Government, of whom I am proud to be a part, are keen for there to be diversity and bespoke deals. The noble Lord probably takes a different view of this, but it is not a view that the Government subscribe to. We have a broad policy of saying these things have got to be locally led. We will look at them and scrutinise them to ensure that they are locally supported and represent value and so on, but local democracy is the key point.

[Lord Kennedy of Southwark]

I take the Minister’s point. I am conscious that in other parts of England there are other places where there are differences among what councils want. Oxfordshire is an example where there are very different views about what is wanted in the future. Do I take it from what the Minister said that if councils do not want things to happen, they will not happen?

[Lord Bourne of Aberystwyth]

That is essentially true. These have to be locally led. If they have not got local support, they will not happen: that is absolutely the essence of what I am saying. That does not mean that there has to be 100% support—

[Noble Lords]

Oh!

[Lord Bourne of Aberystwyth]

Well, for district mergers, there has to be 100% support from the councils. What I am saying is that there does not necessarily have to be 100% support from the local MPs, for example, and that has not been the case. I am sure the noble Lord will appreciate—

[Lord Kennedy of Southwark]

Excuse me, but I am conscious that, in Oxfordshire, there may well be a view that they want a unitary authority. But Oxford City Council does not want that and is very clear about it.

[Lord Bourne of Aberystwyth]

I am making the point in relation to district councils, as it is district councils we are looking at. There are other considerations in relation to unitary authorities but, in relation to district councils, there has to be unanimous support from the authorities concerned, as there was in these cases. It happens that, in these cases, they have support also from the surrounding authorities, not all of which are in Suffolk itself.

Lastly, I will turn, if I may, to the point made by the noble Baroness, who also has great experience of local government. We are looking at Suffolk, but she will understand from the point of view of Kirklees the need for that local dimension. We have the local dimension here, as demonstrated by the feelings of the people in the area. That is the point I wish to emphasise.

In both cases, it is about recognising—once again I will adopt the words of my noble friend Lord Tebbit—a move from the de facto to the de jure. In both cases, there has been close co-operation. In both cases, for understandable reasons, it is intended that branch offices will be kept open while headquarters will be, in one case, in Bury St Edmunds, and, in the other case, in Melton, on the outskirts of Woodbridge. So there will be no change in that regard, but it is moving very sensibly from the de facto to the de jure, which is what they want. With that, I commend the regulations and the orders to the Committee.

Motions agreed.

Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018

Wednesday 9th May 2018 Grand Committee

Considered in Grand Committee

17:13

Moved by

[Lord Bourne of Aberystwyth]

That the Grand Committee do consider the Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, the regulations being considered were laid before the House on Thursday 15 March 2018. The private rented sector is an important part of our housing market, housing 4.5 million households in England. Houses in multiple occupation, or HMOs, form a vital part of the sector, often providing cheaper accommodation for people whose housing options are limited. However, HMOs sometimes pose greater management challenges than single household accommodation, and some of the occupiers of HMOs are the most vulnerable people in our society. That is why mandatory licensing of HMOs was introduced in 2004 for properties with three or more storeys that are occupied by five or more people.

Since its introduction over a decade ago, mandatory licensing has been successful in raising standards and enabling local authorities to tackle overcrowded conditions and poor management practices. However, over the past 10 years, the private rented sector has doubled in size, which has led to increasingly small properties being used as HMOs.

As these smaller HMOs were not subject to mandatory licensing, some rogue landlords have been able to avoid local authority detection and enforcement by letting HMOs with fewer than three storeys. Poor practice by these landlords has led to negative harmful impacts on some local communities through the accumulation of rubbish and waste, as well as noisy and anti-social behaviour outside HMOs. It is to address these problems that the Government have extended mandatory licensing to properties of fewer than three storeys. We have already laid the Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order on 23 February 2018; it will come into force in October 2018. We are working with local authorities on producing guidance to ensure they are able to meet this date.

17:15

In addition to extending mandatory licensing, the Government are creating two new mandatory HMO licence conditions to address problems which are common in these types of properties. These conditions are on national minimum sizes for rooms used as sleeping accommodation and a requirement to comply with council refuse schemes. These new mandatory conditions are the subject matter for debate before the Committee today. It may be helpful for noble Lords if I outline briefly each mandatory condition in turn. I will begin by setting out the proposed requirements for minimum room sizes for sleeping accommodation.

By amending Schedule 4 to the Housing Act 2004, the regulations will require local authorities to include a new condition within licences. This would require a landlord to ensure that the floor area of any room in the HMO is not less than 6.51 square meters, if used as sleeping accommodation by a person over the age of 10 years. This minimum room size is just that: a minimum. It is simply a standard below which a room cannot be used as sleeping accommodation. It is not intended to be the optimal room size. Local authorities will still be able to set minimum sleeping room sizes above that minimum, which reflect the layout, space and amenities in the HMO in question. These can of course be greater than 6.51 square meters when used by one person over the age of 10 years. This will be important, since local housing authorities will need the discretion to set a room size that reflects the conditions of housing stock within their local areas. However, it is important that there is a clear minimum room size in HMOs. The introduction of this condition will ensure a consistent minimum that is applied nationally, across different types of HMO in the sector, and clarify a standard that we would already expect landlords to comply with.

The regulations also clarify minimum sizes for rooms used as sleeping accommodation by children under 10 years of age and by two persons aged over 10. A landlord will have to ensure that any room used as sleeping accommodation by a person under 10 years is not less than 4.64 square meters in size; if a room is to be used as sleeping accommodation for two adults, it must not be less than 10.22 square meters. In granting licences, local housing authorities will have to specify the maximum number of persons who may occupy the specified rooms as sleeping accommodation. It will be a local decision as to whether a room is appropriate to be occupied by three or more adults as sleeping accommodation.

Non-compliance with the minimum room sizes is a serious matter. If a landlord knowingly breaches the condition, that landlord will be liable on conviction of a criminal offence. Conviction on indictment could result in an unlimited fine; alternatively, a civil penalty of up to £30,000 may be pursued. We know that most landlords are honest and trustworthy. There is no intention to criminalise landlords who do not deliberately create overcrowding or to displace tenants without warning. We have introduced transitional arrangements to give landlords time to comply with the new requirement and rectify overcrowding specifically to protect tenants who may otherwise be jeopardised by bringing these regulations in over too quick a timescale.

Local housing authorities must allow a reasonable period for the landlord to meet the requirement. This will be a period of up to 18 months before it considers prosecuting the landlord for breach of the licence condition. The landlord must be notified of the breach and the length of time they have to meet the requirement. Those HMOs which are already licensed will have to comply with the condition only when their current licence expires, and at the first renewal after 1 October 2018.

Turning to the household waste disposal facilities part of this order—the second new mandatory conditions that these regulations create—a new mandatory condition will need to be included in HMO licences requiring the landlord to comply with their local authority refuse storage and disposal scheme.

The purpose of this condition needs some explanation. People living in separate households in HMOs tend to generate more rubbish than is seen in single-household properties. While tenants should be responsible for properly disposing of their rubbish, they need adequate and accessible receptacles to do so. Making this a mandatory condition of licensing means that local authorities will have proactively to require landlords to provide waste disposal facilities in circumstances where there is a scheme. It will also provide councils with the necessary enforcement powers if landlords are not complying with waste disposal schemes.

We anticipate that the vast majority of landlords will already be in compliance with the new conditions since the minimum room aspects of these regulations simply clarify existing space standards under Section 326 of the Housing Act 1985. We consulted extensively on the introduction of minimum room sizes for sleeping accommodation along with the requirement to comply with council refuse schemes in 2015 and 2016. These regulations should therefore come as no surprise to local housing authorities or landlords. For those landlords not in compliance with minimum room sizes, there is a transition period.

I am very much of the opinion that these are necessary conditions to beef up the HMO regime and I commend these regulations to the Committee. I beg to move.

[Lord Shipley (LD)]

My Lords I remind the Committee that I am a vice president of the Local Government Association. The regulations have my entire support. This is a very welcome change. I have one question for the Minister, which I have raised on previous regulations. It takes a very long time to effect change—it is three years since the initial consultation took place in May 2015—and I wonder whether things might be speeded up a bit. We have to consult carefully on the regulation to get the right outcome, nevertheless it does seem to take a very long time.

It has to be right that local authorities can regulate the minimum size of rooms that may be occupied as sleeping accommodation. It has to be right that the local housing authority can specify the maximum number of persons who may occupy a specified room for the purpose of sleeping accommodation in that licenced HMO. It has to be right that local authorities can make schemes in respect of refuse storage and disposal that a landlord would have to implement. In all those respects this regulation has to be right.

There was a time when the definition of HMOs was adequate. They were of three or more storeys and were occupied by five or more persons forming two or more households. That was for many years a standard definition that stood the test of time. The difficulty now is, as the Minister said, that the private sector has grown to the point where it represents one in five household tenures in the UK, and standards have slipped. We have HMOs which, as the Explanatory Memorandum makes clear, are under the radar, and something has to be done about that.

I understand that there has been some debate about a reasonable minimum size for sleeping accommodation. As the Minister made clear, 6.51 square metres for one person over the age of 10 is a minimum size, not necessarily a desirable size. Indeed, it is actually very small. If you calculate that in your own mind, it is not very big at all. I understand that there are some residential landlords who would like all the accommodation in an HMO, which might include communal accommodation, to be calculated as part of the minimum amount. It seems to me that sleeping accommodation, which is the private space of an individual in an HMO, has to be of a reasonable size for someone to do things other than just sleeping. Therefore, I find 6.51 square metres small. I do not think it reasonable to say that we should include communal accommodation and reduce the amount that is required under the law for sleeping accommodation.

With reference to paragraph 7.9 of the Explanatory Memorandum, I wonder whether the period of 18 months’ grace is too long. For a while, I felt that once this has been approved, giving landlords a year, or perhaps nine months, would be adequate. Given the fact that it may prove complicated for local authorities to identify, investigate and agree with landlords what will happen, a period of 18 months is probably justified. When he replies, can the Minister explain the basis for the 18-month period as opposed to any other?

These regulations are very welcome. They help us to solve a problem. Where standards in the private rented sector are declining, they give local authorities powers to act to protect the interests of tenants. They should therefore be commended.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, these are important regulations before the Grand Committee. I, too, declare my interest as a vice-president of the Local Government Association.

I do not know whether any noble Lords here have ever lived in an HMO. I certainly have not. My honourable friend in the other place, Melanie Onn, and I were work colleagues in the Labour Party; she lived in an HMO as a young homeless person and she will tell you what conditions were like there. She has some knowledge about this. These regulations are important and I am very happy to support them; they certainly go in the right direction, but there is a lot more to do.

I have also been out in Newham on a number of housing raids. Of course, Newham has a licensing scheme, but the standard of accommodation some people are expected to live in is absolutely shocking. The regulations are a step in the right direction, but we must never lose sight of the poor accommodation that we have and expect some people to live in. I support improved rights and protections for renters; the regulations will go some way to improving the rights of some of the most poor and vulnerable people in our communities.

We have had discussion of the national minimum room standards. As the noble Lord, Lord Shipley, said, the room allocated to someone in an HMO is not just a bedroom. Other than the shared bathroom and kitchen, you need a bit more space to put a bed and a wardrobe in. This must be taken into account when concluding that the proposed minimum standard for a single occupier should be 6.51 square metres or 10.22 square metres for two people. Those sizes will be further compromised if young children are there as well.

Some local authorities may seek to provide larger minimum space standards in their licensing schemes, which is good. However, we need to consider carefully that these rooms are not just bedrooms. They are your bedroom and living room. They are the room where you put all your property. Everything you have in life goes into this one room. I certainly think that we have to look carefully at size there.

The Minister mentioned fines for letting out rooms that are smaller than the minimum, which is good. However, we must make the point that we can have all the regulations we like, but it becomes an issue when we cannot enforce them. The other issue with HMOs, particularly when they are very small or even illegally let, is the danger of overcrowding and overcluttering, which creates a fire risk and other problems that people get into in insufficient spaces.

Ultimately, we need to think also about issues such as the impact on mental health. You have to remember that people are letting one room and are sharing the building with people they do not know. Often, they will lock the door to their room at night, and that is not a great way to live your life. These are some of the most vulnerable people and there are real issues here, in particular for their mental health.

That leads on to the wider problem of a housing market in crisis, which we have talked about many times in this House and elsewhere. The standard and quality of some of the accommodation that people live in is shocking and we need to do much more about that.

I have to mention the dreaded Housing and Planning Act 2016, which offered little respite to people in this housing crisis. We need always to be on top of this. I support the regulations because they are a move forward, and I thank the Government for that, but we need to do much more. I am not sure if the Minister has been out to look at the situation, but I can recommend that he do so with Newham Council. He would find it shocking—I was last out with the council in February. For people to be living like that in HMOs in 2018, in one of the richest countries in the world and one of the richest cities in the world, is truly unbelievable. I am very happy to support the regulations before us today.

17:30

[Lord Bourne of Aberystwyth]

My Lords, I thank both noble Lords who speak on these issues on behalf of their parties. I thank them for their general approach, which is consistently responsible and, at the same time, questions aspects of the policy, which I fully understand.

I will deal first with the points made by the noble Lord, Lord Shipley. One thing that the noble Lord, Lord Shipley, the noble Lord, Lord Kennedy, and I have in common is that we always want these things to happen more quickly than appears deliverable. I understand, therefore, where the noble Lord is coming from when he talks about how long these things sometimes appear to take. We have touched on the fact that both noble Lords carry out visits to communities at the sharp end to see what is necessary, and similarly I have been to Sheffield and Luton and seen some of the problems that exist there, which are by no means unique. Tomorrow, I am in Leeds and Hull, and on Friday I will be in Bradford, and I expect to get similar messages there.

I thank the noble Lord, Lord Shipley, for what he said about the broader definition of HMOs that we have already brought in to take into account properties of three storeys and below. As a Government and as a country we have to be fleet of foot to change our definition in the light of new circumstances so that, as he said, things do not go under the radar. I accept that 6.51 square metres is relatively small, but, my gosh, he and I know that it is a massive improvement on some of the things that are happening now. As he rightly said, we must make sure that we focus on enforcement to make sure that these and other regulations are properly enforced.

The noble Lord, Lord Shipley, asked whether the 18-month period is appropriate. When I saw it, I also thought it seemed to be a long time. However, one needs to remember that this is not, primarily, to protect landlords. If anything, it is to protect tenants, some of whom I accept are currently sleeping in a space that is too small. However, we do not want those tenants to be forced out by a landlord saying that he has to do so because it is the law. The transitional period takes into account landlords to a degree, but, much more so, tenants as well as local authorities. Probably, 18 months is about the right period.

The noble Lord, Lord Kennedy, mentioned Newham Council, which I know does much good work. I will, when possible, visit Newham to see what is happening there. He made the justifiable point that this issue has far-reaching implications for mental health, a point which, I must confess, I had not homed in on. He is absolutely right. In a sense, I lived in a HMO as a student, but that is a very different experience from living in a HMO as an adult, particularly with children, and I understand what the noble Lord is getting at. It is not a desirable position in many situations. It may be appropriate for people on a transitional basis but it is not how most people would opt to live; I fully accept that. However, given that some people are in that position, we have to make sure that there are appropriate regulations.

I again thank the noble Lords for their comments and for their general support. I commend these regulations to the Committee.

Motion agreed.

Domestic Renewable Heat Incentive Scheme (Amendment) Regulations 2018

Wednesday 9th May 2018 Grand Committee

Renewable Heat Incentive Scheme Regulations 2018

Considered in Grand Committee

17:35

Moved by

[Lord Henley]

That the Grand Committee do consider the Domestic Renewable Heat Incentive Scheme (Amendment) Regulations 2018 and the Renewable Heat Incentive Scheme Regulations 2018.

21st Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, the draft Renewable Heat Incentive Scheme Regulations 2018 were laid before the House on 23 March 2018, and the draft Domestic Renewable Heat Incentive Scheme (Amendment) Regulations 2018 were laid before the House on 7 February 2018. Just to save the noble Lord, Lord Stevenson, some trouble, I can let him know that the common commencement date rules do not apply to this type of regulation as they have no impact on business, so he need not raise that.

[Lord Stevenson of Balmacara (Lab)]

I am grateful to the Minister for raising the point before I had time to do so, but I just point out to him that that puts the score at 8-1 against.

[Lord Henley]

I am grateful to the noble Lord. As I said earlier on, I will endeavour to improve; I know that the noble Lord will keep a record on these matters.

The purpose of the draft orders is to implement reforms to the renewable heat incentive, or RHI. The reforms will deliver changes that will strengthen the focus on long-term decarbonisation, offer better value for money for taxpayers, increase protection for consumers and further support supply chain growth in the renewable heat sector. Heat accounts for around half of the UK’s energy use and one-third of total carbon emissions. Increasing the share of heat derived from renewable sources is a critical challenge, both to meet our renewable energy targets and to deliver the Government’s long-term carbon goals. Building a vibrant renewable heat sector is a key objective of my department’s clean growth strategy and the industrial strategy. The RHI is the main programme to deliver those goals over this spending period. Before the RHI started, only 1% of our heat came from renewable energy sources; that figure is now around 7% of total heat.

This type of tariff-based support for renewable heat is the first scheme of its kind in the world. Inevitably, there are lessons to be learned, and these reforms are a response to some of the lessons from the early years. The National Audit Office published a review of the RHI in February this year, which we were pleased to receive. Many of its comments related to issues covered by the draft regulations, which I hope will go some way towards addressing some of the issues raised by the NAO, which were also noted by the Secondary Legislation Scrutiny Committee. The draft orders will deliver a series of important reforms that will help us to deliver a more strategic mix of technologies and improve value for money over the next three years until the scheme closes in March 2021. I will highlight the main ones.

We will increase the tariffs available for biogas and biomethane technologies while introducing new restrictions on the feedstock that those plants use. That will encourage the increased use of food and agricultural waste and will reduce the use of energy crops, making better use of farmland for food production. Alongside changes already made last year, this will rebalance deployment away from biomass in favour of heat pumps, biogas and biomethane, which will all play a much stronger role in the scheme over the long term.

Another important change is that we will bring in tariff guarantees that will allow RHI applicants to secure their place on the scheme in advance of construction. This will support investments in larger plants that deliver better value for money. We will cap the amount of heat covered to 250 gigawatt hours per year to protect the scheme budget.

In the domestic scheme, take-up to date has been dominated by owners of larger homes. To promote wider uptake, we will introduce the assignment of rights. This will allow third parties to finance renewable technology and to be repaid directly from the RHI. Crucially, that will open up access to the scheme for those without up-front capital to pay for a new heating system.

Following consultation last year, we will limit the eligibility of certain heat uses. These provisions will remove most instances of wood-fuel drying and waste processing or drying. In addition, we will remove the use of heat for drying digestate in anaerobic digestion facilities as an eligible heat use. We consider that these processes are poor value for money and that many would not exist without RHI support. We will also remove support for heating swimming pools on the non-domestic scheme, unless the pool is for commercial or municipal use.

We are also introducing changes to allow more than one heat pump to use a common or shared ground loop. This should facilitate greater deployment of that important technology. The introduction of electricity metering for heat pumps across both schemes will allow participants to better monitor the efficiency of their plant and build confidence in the technology.

Following consultation, another change will be to increase the power efficiency threshold of combined heat and power technology from 10% to 20% to reduce the risk of overcompensation and to encourage plants to run more efficiently. There is also a whole series of mainly administrative changes to tighten cost control, reduce the risk of gaming and improve Ofgem’s delivery of both schemes, including by tightening its enforcement powers.

The Renewable Heat Incentive Scheme Regulations 2018 also consolidate all previous revisions to the original regulations, as recommended by the Joint Committee on Statutory Instruments. The RHI plays a central role in the Government’s programme to decarbonise heating. These regulations are an important step in refining the scheme and I commend them to the Committee. I beg to move.

[Lord Teverson (LD)]

My Lords, in general, I welcome this secondary legislation, in that the National Audit Office report from February certainly needed some reaction from the Government on the way that the scheme operates. Just to put it in a bit of context, the audit report included some very interesting figures: between 2012 and 2017, there have been some £1.4 billion-worth of payments, which should lead to commitments of some £23 billion. To me those sound like big numbers but, as we know from smart meters, they are absolutely piffling. There have been 78,000 installations already and there were expected to be 500,000 by 2020. It is estimated that we have got to about a fifth of that original target. To give the Government their due, they have responded to reality in this area and moved some of those targets.

Although the Minister made a strong point about this being a major contributor to our carbon targets, the point I want to make is that, in many ways, it is a small drop in the ocean of what we need to do to meet our carbon budgets in future. The renewable heat incentive is certainly nothing like sufficient to meet those budgets in the heating sector, nor was it ever meant to be. That sector is so important, but it is one in which we still have so few solutions for meeting our targets. In electricity generation, we are well on our way; in transport, we at least have the solutions on hand; but in space heating, we do not yet, and the RHI is never going to get us there. There are big challenges for this scheme.

I was quite surprised to see in the audit report that Ofgem, which is the manager of the scheme, had not really managed to tackle some of the gaming issues and was uncertain on the overpayments side. I guess that all auditors have to find something. Certainly, the report praises the GB scheme in comparison with that in Northern Ireland, where clearly the scheme got completely out of control and caused the political difficulties that we now have there. However, it is estimated that we still have some £3 million-worth of overpayments.

17:45

The noble Lord mentioned biomass heat pumps and anaerobic digestion. One of the things I have installed in my own house, at my own expense, is solar thermal. I do not know whether this will be an area that is targeted in the future. Solar energy for electricity generation has been so successful, and I cannot see why it is not something we should be able to better promote through this scheme.

The issue I would like to raise with the Minister is this: I can think of particular anaerobic digestion operators in the south-west that are really concerned about the amount of feedstock that is available to the industry. On anaerobic digestion, I understand that food waste available to existing AD plants is declining and that gate fees have been declining over some considerable time and in some cases are negative. Under these regulations and future plans, what are the Government doing to make sure that the stream of food waste that can go to anaerobic digestion will be available? I do not know whether this is on the Government’s horizon, but one thing I would like to see is a complete ban on food waste going to landfill and much better food waste collection by local authorities. Are there any Government plans in this area?

It has been pointed out to me that the new tariff guarantee procedure could be used to make sure that, when that process goes through, there is a sufficient waste stream available to the new AD facilities to ensure that the contract can be met over the 20 years. Further, I welcome the assignable rights; that is a very positive move forward.

One thing I had not realised, which came out in the sub-committee I chair, is that the renewable heat incentive scheme is part of an agreement on the proceeds of the EU Emissions Trading Scheme. Some of that, in a sort of hypothecation, has to be ploughed back into certain energy schemes, and I understand the RHI is part of that contract. I wonder whether that, and the Government’s views about the RHI, will change once we are out of the EU—although I understand from Minister Claire Perry that we are going to remain in the EU ETS during the transition period. However, I would like to understand whether that affects the long-term funding of the scheme—which of course is funded by taxpayers, as opposed to the electricity schemes, which are funded through consumer bills.

[Baroness Featherstone (LD)]

The delay to the laying of these regulations has been hard for the industry. We will not stand in their way; however, perfect they are not.

I am sure the Minister will understand the need to keep a watch on their effect as they come into being as there may be unintended consequences—some of which I shall run through. I seek the Minister’s assurance that the Government will keep them under review and make further changes and revisions where needed. I shall put forward a raft of suggestions in that vein.

One of the shocking aspects of the RHI is how far short of the expected targets it has fallen, as mentioned by my noble friend Lord Teverson. I was watching the Public Accounts Committee session on the RHI and was astonished at the BEIS response to questioning from the committee on the fact that the original target for number of installations was 513,000 by 2020 but, as was mentioned, only 78,000 had been installed by December 2017, as stated in the NAO report.

The BEIS response was even more shocking because it was that this meant we had saved money and that was a good thing. BEIS prayed in aid unsubsidised companies which were doing brilliantly. The Government would reach their targets for emissions reduction and renewable energy production anyway, so it did not matter. I thought that was a concerning approach to the desperate need to decarbonise heat.

The NAO report demonstrated that the ambition of the Government in this regard has been scaled down from their original ambition. The proportion of renewable heat that will not be eligible for RHI has gone up by 270% and the lifetime emission reduction resulting from the RHI has gone down by 44% compared to the original ambition. The Government are not on track at all to reach their fourth and fifth carbon budget targets, and they will be missed. We were all celebrating when we signed the Paris agreement, yet there has been no step change in actions to match the step change needed to meet our commitments, particularly on heat. In terms of our debate today, there is a cliff edge coming in 2021, so will the Minister say what is the Government’s plan? What is going to happen when the scheme ends? The Government have said that they will bring forward lots of studies this year and report on their review in the summer of 2018, which is nearly upon us. Can the Minister be explicit in his response and tell us what we can expect to see and when we can expect to see it?

As the Minister said, there has clearly been a lot of gaming to get subsidies that are not in the spirit of this agenda. Can he tell me how many companies have been caught gaming the system? In the committee, it seemed that most of the checking is done at the point of accreditation and there is relatively little in terms of inspection and audit. If we need regulations changed to clamp down on this, perhaps the Government should also be looking far more strictly at their compliance regime.

I want to address one of the changes in these regulations that have been brought in to address some of the gaming that was mentioned; the drying of wood. It is obviously not the intended purpose of the subsidy, and companies which game the system should be ashamed of themselves, but shame clearly is not working. I totally understand and support the Government’s desire to make changes that will exclude this type of gaming, which unfairly means that those who play by the book find themselves at an economic disadvantage, and margins are extremely tight.

However, there are potential unintended consequences of the new regulations about feedstock rules, and I should like the Minister to address this issue. The regulations in relation to AD rightly want to encourage the use of non-crop feedstock. That means that there will be a greater need for feedstock processes, such as pasteurisation or hydrolysis, to make sure that digestate is safe to lay across the land. It also means that a wider range of feedstock will be used. This is not my specialist subject, but removing potential bugs from the digestate, meeting the requirements of the Environment Agency and reassuring end users that the digestate is okay to spread to land seem pretty important.

As we rightly shift to non-crop feedstock, this will become a bigger issue and the need for these processes will increase, so companies doing the right thing may find themselves penalised economically for doing so under the new rules. Going forward, all RHI projects will use some waste feedstock, and the change to waste eligibility potentially rules out these uses. If the RHI subsidy is not allowed for plants using these processes, projects may be unable to go ahead. The original consultation referred only to withdrawing support from drying “industrial or municipal waste”, and it is a good move in these regulations to remove the ability to game in that way. Is it intended that the policy should also capture pasteurisation and/or hydrolysis in AD plants with the exclusion process for waste? If that is the Government’s intention, how will it work if only a proportion of the input feedstock is waste? Does it mean that even a tiny amount of waste feedstock would render all heat generated ineligible for support? Could the amount of support paid be adjusted based on the proportion of waste feedstock used?

There is a call from some in the industry for flexibility in the system, as there is a difference between AD projects that use heat for pasteurisation or hydrolysis as opposed to blow-drying wood. To indicate some of the financial implications, although each plant is different, this one is an example of potential financial implications on set-up. Funding projects with a current long-term investor requires returns of minimum 8.5%; it would need to be more like 9.5% to 10% on the open market. For an average plant, therefore, the overall cost to build is £12 million. The RHI heat income that would be lost if the changes are interpreted as “no RHI paid on heat for pasteurisation or hydrolysis if any waste is used” means that £880,000 would be lost over a project’s lifetime, taking 0.4% off the project’s returns. Given that these projects are only just achieving the required level, a project that is just about fundable now would not be funded as the return would fall to only just over 8%.

I know that is very detailed. I obviously want to give the Minister time to think about this, but these issues have been raised by the industry. The Minister is getting sympathetic looks from my noble friend on my right. My point is that this is detailed and close, but when margins are close, this is important. We want to encourage these people to set up new plants, not discourage them. This needs looking at and we need to keep an eye on it because it puts people out of business. As small as it seems, it is hugely important.

[Lord McNally (LD)]

I intervene to say that this matter illustrates the importance of these committees, where the industry and Members are able to put on record real concerns that both Ministers and the learned people behind them can take on board for the future.

[Baroness Featherstone]

I thank my noble friend.

[Lord Henley]

My Lords, I intervene just to say that I caught the noble Baroness’s noble friend’s eye and he was looking faintly sympathetic towards me. The noble Baroness is making some very valuable points, some of which I will be able to respond to. In relation to the point being made by the noble Lord, I will write to the noble Baroness in much greater detail and make the letter available in the Library, as she knows I always do.

[Baroness Featherstone]

I know that the Minister will always write to me. He writes to me often. I will leave that issue for him to ponder and, I hope, address in his response; I am happy to have in writing whatever he cannot address now.

I want to move on to other issues that need addressing or reviewing as soon as possible in the regulations. I thank Energy UK for drawing my attention to the assignment of rights, for which we are all grateful. Will the Government extend similar rights to small and medium-sized businesses and, if so, when? The changes to support household customers with high up-front costs are excellent, but small and medium businesses need a similar provision. The Secondary Legislation Scrutiny Committee report was clear that a comprehensive review of the RHI is needed and that BEIS needed to be,

“rigorous and ongoing if the deficiencies of the past are to be redressed”.

To be sure that money is being spent appropriately, this needs to happen before the end of 2018 to make sure that what is yet to be spent is spent efficiently. Moreover, it is extremely important to introduce a long-term low-carbon heat incentive going into the future, beyond the cliff edge.

The NAO pointed out the scheme’s failure to be cost-effective and essentially said that that was down to poor monitoring and targeting. Can the Minister tell us how the Government will address the NAO’s concerns in monitoring and ensuring the appropriate targeting of the RHI in future?

Energy UK has helpfully published a report that lays out a way forward for the industry, the Government and Ofgem in terms of actions and decisions needed in order to decarbonise heat. Given the gap between where we are and where we need to get to on decarbonising heat—I was going to go into fracking but I will spare the Minister that—I suggest that the Minister not only reads that report by Energy UK but acts on the very good advice that is in it.

18:00

[Lord Stevenson of Balmacara]

My Lords, I thank the Minister for his excellent introduction to these regulations and other speakers who have contributed. It is a truism to say that these regulations are an important part of decarbonising the economy and reducing greenhouse gas emissions in line with our international commitments and targets. The key question has to be whether these regulations before us will help us in our drive to achieve the Government’s stated aims, which include a,

“focus on long-term decarbonisation, promotion of technologies with a credible role to play in that transition, and offering better value for money for taxpayers”.

I couple that observation with a question to the Minister: does he agree that the evidence before us—which, as has just been said, is not complete by any means—seems to show that we have been less successful in reducing carbon from heat in this country than we have been in decarbonising electricity generation? It may be that that is a lesson that we need to learn and expand upon during this process.

The noble Baroness, Lady Featherstone, has just said that we are approaching a cliff-edge. Not only is this scheme time limited, but we have had very little information on how the Government are going to drive this policy through to 2030 and beyond and, indeed, on whether they are focusing sufficiently on decarbonisation or are falling into the trap of choosing some current technologies over others, which experience tells us is not the way to go. We need to go single-mindedly for the higher carbon-generating technologies and stick with that before we start playing around with too many other options that may well not be as efficient in getting us to the target.

Turning to the regulations, we do not disagree with the proposed changes. There have already been delays that have been far too long, revisions and seemingly endless consultations. The most important thing is to get on with delivering progress in renewable heat generation. However, we have to bear in mind, as the NAO report, which has already been mentioned, has brought into clear focus, that this reset of where we currently are translates into a very severe overall reduction in ambition. Can the Minister give us some indication of the longer-term plan that the Government have for renewable heat, and of what exactly the plan will consist? The ambition, which I thought all parties shared, of a substantial decarbonisation of heat cannot be achieved on the RHI alone. Indeed, as has been mentioned, these regulations are going to end, and will be closed to new entrants in March 2021. This is very short-term target and few, if any, new projects can be expected to be devised, tested and financed, or even introduced, in that timeframe. So, while we welcome what is being done, the Government need to answer some key questions: what is going to happen next and when will it happen? Where is the research on different heat-demand scenarios? What is the future for hydrogen, which recent reports have talked up? What changes will be needed in the grid, for example, if there is a large- scale uptake of heat pumps, and who will pay for that? What is the proper role of bioenergy, given its sometimes adverse impact on the natural environment? All we know is that the Government intend to publish a full report on the evidence by summer 2018, which is not, frankly, enough, and is, of course, already too late.

We have, as the Minister said, the benefit of a NAO report, which was picked up by the Secondary Legislation Scrutiny Committee. The key point that emerges from that is that the amount of renewable heating funded by the RHI will have reduced to 65% by 2020, and the lifetime carbon emission reductions achieved by the RHI, in terms of the current ambition compared with the original starting ambition, is a reduction of 44%. This is a substantial downgrading, which is very disappointing. As a country, we surely deserve better.

I have some specific questions for the Minister, some of which have been raised already. On the assignment of rights, which we agree is important, surely it is important for both domestic and non-domestic RHI, but the regulations restrict it to domestic. Can we have an explanation of why that is the case? On tariff guarantees, the regulations are sending the wrong signals; people need certainty, and making these TGs subject to closure if the guarantee amount is exceeded in any particular period is obviously helpful in capping the costs, but will be disastrous because they leave investors and operators uncertain about the likely financial return they will obtain from their investment. We welcome the geothermal element in the non-domestic scheme, but the funding identified seems very ineffective and insufficient. Can this be looked at again? Finally, I am surprised at the outturn position of 20% adopted on the CHP efficiency threshold, as 71% of the consultation responses disagreed that the level should be returned to 20%. The argument goes that CHP, because of its variable outputs, does not work on the basis of a known level of electricity certainty. By setting the level at 20% as if it were achievable across the board without exception, the scheme potentially undermines the viability of good CHP schemes that cannot operate entirely on that basis. I would be grateful for a comment from the Minister on that.

I look forward to the response from the Minister, but I echo what has just been said by the noble Baroness, Lady Featherstone: if he wants to add to his letter-writing, I am sure that we can wait for that.

[Lord Henley]

My Lords, as always, I make the offer of a letter to all noble Lords who took part in the debate, because obviously I will not be able to pick up all the points. I am grateful for noble Lords’ general welcome for the regulations and our response to the NAO report.

The noble Lord, Lord Teverson, talked about this being a drop in the ocean given the large sums of money that are involved—we all know that a billion here and a billion there soon adds up to quite a large sum. Take, for example, AD, which was mentioned by the noble Lord, Lord Teverson, and the noble Baroness, Lady Featherstone. We know that AD will never solve all our problems, but it can deal with a certain amount of waste. As was pointed out by the noble Lord, Lord Teverson, the important thing with any AD plant is to make sure that you have adequate waste as feedstock for the future. We do not want people producing waste for the sake of waste just to go into a plant. We want to use only genuine waste or, on occasion, to top it up with a certain amount of crops that are grown for that purpose. Principally, however, plants would be designed to deal with waste.

In my former life as a Defra Minister, I saw quite a number of AD plants taking in waste from very different sources. Where they were attached to a supermarket, one would see bucket loads of old yogurts or whatever else had gone past its sell-by date being tipped in. That was a good way of using it, and we want to devise schemes that will, as the noble Baroness rightly said, prevent that waste going to landfill. I saw excellent small schemes also. I remember one used by a salad producer, which took the waste from its own products—the stalks from tomatoes are actually rather difficult to break down—and used it to produce both heat and power to grow more tomatoes in due course, and used the digestate that comes out in the end to fertilise those tomatoes. It was, wonderfully, almost a closed loop. There are terrific advantages to AD, but, as we all know, it will not solve all the problems.

RHI will be an important step in helping to reduce carbon emissions and—I say this to the noble Lord, Lord Teverson—make progress towards the legally binding renewable energy targets that we have. As I made clear, we will certainly look very carefully at ensuring that there is suitable waste feedstock and that the scheme ensures current and future supplies to anaerobic digestion. If the noble Lord has a local problem in the south-west, it is important that he, and those in that world, brings it to the attention of the department when it is reviewing this matter. I assure the noble Baroness, Lady Featherstone, that my right honourable friend Claire Perry and the department will look constantly at these matters to make sure that there can be further tinkering to get it right.

The noble Lord, Lord Teverson, asked about solar thermal. My understanding is that it is eligible for both schemes, so it is already supported by RHI. If he wants to look at that for his own domestic arrangements, he is welcome to do so.

As I said, I very much welcome what the noble Baroness, Lady Featherstone, had to say. I made it clear that we will keep these matters under review. I cannot give a precise date for when and how my right honourable friend will respond. I will certainly respond to some of the noble Baroness’s more detailed questions, particularly those relating to electrolysis and other matters, most of which I shall make a complete hash of if I try to respond to them now. I think all those taking part in this debate would be far more grateful for a written response.

The noble Baroness is right to raise the whole question of detecting abuses and gaming—something touched on by other noble Lords and which the NAO was wary of. As she pointed out, with any changes that we make, there are always potential unintended consequences, and we keep that under review. It is a large and varied scheme, and the non-domestic scheme in particular has huge variation in size, heat and use and the technology used between projects.

Despite all those challenges raised by the NAO, the department—the former Department for Energy and Climate Change, which noble Lords on the Liberal Democrat Benches will know well because it was one of their great Secretaries of State who sat in that department, which is now within BEIS—is working with Ofgem and, I think, developing a better approach to identifying gaming. We will certainly respond to the NAO in due course.

The noble Lord, Lord Stevenson, also welcomed the changes, and I am again grateful. He particularly welcomed the assignment of rights, but was concerned that it might lead to a lack of access to loans or other finance for a number of businesses and that that could be a barrier for them. I can only say that we have no plans to widen the assignment of rights beyond the household sector at the moment, but we would always want to keep all matters under review.

[Lord Teverson]

What is the logic to that? The issue for small and medium-sized businesses is exactly the same as for domestic users: it is about high capital outlay, which is equally difficult for SMEs as for private, domestic householders. This has really got in the way. The Government have a great solution there now for the domestic sector; if the principle is being breached, I do not see why it is a difficulty to extend it to the SME sector.

[Lord Henley]

I appreciate what the noble Lord says about there being no logic to it. It is just that there is no evidence at the moment that lack of access to loans is a barrier to business. If the noble Lord thinks otherwise and can produce evidence, it can be looked at.

As I said, the order has largely been welcomed, and I am very grateful for that. These changes are necessary as a result of the NAO report. I think that we would all agree that there have been considerable successes this year. It is only part of the whole scheme of trying to decarbonise the system—again, we wish to pursue that even further.

I want to pick up on one final comment from the noble Baroness, Lady Featherstone. If I could persuade her and some of her Liberal friends of the benefits of what she referred to as fracking and of pursuing greater domestic production of gas—of which there is potentially a great deal in this country—in that it improves both our chances of a degree of decarbonisation and our energy security, I would feel that I had achieved a very great thing. That will no doubt come in the future. In the meantime, I will give way before I finally put these regulations to bed.

[Baroness Featherstone]

Without going into a detailed back and forth discussion on fracking, I simply want to add to the point I made about the Paris agreement. Bringing on stream another fossil fuel at this point might be a distraction from a real solution to our problems in the future.

[Lord Henley]

I do not believe that it would be a distraction. It would have considerable benefits for the United Kingdom, bearing in mind what is available to us here. I hope one day to persuade the Liberal Democrats of the virtues of that approach. We might get there.

Motion agreed.

European Organization for Astronomical Research in the Southern Hemisphere (Immunities and Privileges) (Amendment) Order 2018

Wednesday 9th May 2018 Grand Committee

Considered in Grand Committee

18:17

Moved by

[Lord Ahmad of Wimbledon]

That the Grand Committee do consider the European Organization for Astronomical Research in the Southern Hemisphere (Immunities and Privileges) (Amendment) Order 2018.

[The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, I am sure that I speak for myself and the noble Lord, Lord Collins—perhaps more for him than for myself. I am sure that he saw a captive audience at the back of the room; he was very impressed by the fact that we would have someone looking in. That was quickly diminished because, as noble Lords can see, the captive audience is made up of my officials.

I welcome the noble Lord, Lord McNally, and my noble friend Lady O’Cathain to the debate. It is good to hear that this issue has interest in it. The order is interesting. As the noble Lord, Lord Collins, will no doubt remember, the order was laid before the House on 29 March. It amends the European Space Agency (Immunities and Privileges) Order 1978 and the European Organization for Astronomical Research in the Southern Hemisphere (Immunities and Privileges) Order 2009. I am sure that those orders are well-known to my noble friend Lady Goldie.

I start with the importance of the space sector. The European Space Agency and the European Organisation for Astronomical Research—also known as the European Southern Observatory, or ESO—are both important to the UK. We contribute more than £20 million annually to the ESO budget, for a share of just over 16%. We also contribute more than £300 million to the European Space Agency, making the UK the fourth-largest contributor. We are one of only six countries to host a European Space Agency, at the European Centre for Satellite Applications and Telecommunications in Harwell, Oxfordshire. This centre is a vital part of our strategy to develop the UK space sector—an area I know well from my time as a Minister at the Department for Transport. This is an important sector for the development of the UK economy in the future. The centre provides a focal point to showcase UK capability and partnerships. Working in partnership with the ESA, we are planning to develop an extension to our Oxfordshire campus which will house a meeting and exhibition space and a new conference centre. This will provide benefits not only to the space sector but to all sectors involved in the use of satellites, which currently contribute £250 billion to the UK economy. The space sector offers significant research and economic opportunities for the United Kingdom. British academics and businesses working in the sector are recognised internationally as leaders in the field and are in a strong position to take advantage of those opportunities.

I turn to the details of the order as it relates to each organisation. I turn first to the European Space Agency, established by a convention in 1975. The United Kingdom acceded to the convention and joined the agency the same year—although we had been collaborating with other European countries in this field for some decades before that. In 2013 we welcomed the European Centre for Space Applications and Telecommunications to Harwell in Oxfordshire. This order amends the European Space Agency (Immunities and Privileges) Order 1978, which afforded privileges and immunities to agency staff and high ranking officers. The revision confirms the immunities and privileges to which staff are entitled and the number of high-ranking officers that the UK will recognise.

Specifically, it confers the status of high-ranking officer on the head of the Harwell centre, and also provides for the ESA director-general and a maximum of seven further members of staff working at the centre to be considered high-ranking officers. This means that they are entitled to certain privileges and immunities, including exemptions from social security contributions. They are not, however, entitled to immunity from suit or legal process, except for actions carried out during their official functions or inviolability of residence. These high-ranking officers play a significant part in shaping ESA policy, and are world leaders in their field. The presence of high-ranking officers at the space centre in Harwell strengthens our capability and credibility and is crucial for the growth of the UK space sector and for attracting inward investment.

I want to reassure noble Lords that the privileges and immunities afforded to officers of the agency are limited to those that are required for them to conduct official activities. They are in line with those offered to officers of other international organisations of which the UK is a member.

If I could perhaps pre-empt questions before they are asked: leaving the European Union will have no direct impact on the UK’s membership of the European Space Agency. The ability for UK staff to work effectively for the organisation before and after the UK’s departure from the European Union is controlled by our adherence to legislation that accurately reflects the convention and its protocol and the privileges and immunities it affords to staff.

I now turn to the European Organisation for Astronomical Research in the Southern Hemisphere. The Committee may recall that some of the provisions of the order that relate to that organisation were debated in this House early last year. That earlier version of the draft order exempted only high-ranking officers of ESO from social security contributions. Having reconsidered the position, my department came to the view that we can properly exempt all members of staff from these contributions. We regret that this issue was not addressed fully during the debate on this order on 30 March last year. Rather than continuing with the 2017 draft order and amending it in short order, we have decided it would be better to lay this further amending draft order and to include in it the new provisions in relation to the ESA, which were not contained in the 2017 draft order. I beg to move.

[Lord McNally]

My Lords, I address the orders, which I welcome and see as perfectly sensible for international organisations. I have two particular points. Yesterday, we debated in the House how Parliament will deal with the tsunami of SIs that are coming our way as a result of Brexit. As the Minister has just done in his conclusion, I draw attention to the fact that these orders contain three apologies for errors in previous orders and two corrections. This is a fairly simple, straightforward endorsement of the workings of multinational organisations in our country and abroad. There were five mistakes in one SI. With the best intentions in the world, we have to look at the real problems we will have in dealing with statutory instruments and the need for accuracy and effectiveness.

I can see a little scepticism in the room about me talking about the space industry. That is one of the great things about being in the House of Lords. I served as one of the main spokespeople for the party on the Space Industry Bill. We greatly enjoyed taking it through, but I immediately started getting letters that began with, “As an expert on the space industry”. I am not an expert but I should declare that my son, James, is a space engineer working in Munich for a Franco-German company.

My views are all my own and they impinge on the way in which the Minister introduced these orders, with reference to the space industry. I agree with the Minister that the prospects of the space industry are among the most exciting that face us. I am very proud that, under the coalition Government, the noble Lord, Lord Willetts, and Vince Cable did a lot to reinvigorate the space industry. I am reading Ken Clarke’s memoirs at the moment. He talks about the 1980s, when he was in the DTI, and how he and most of his colleagues had little interest in the space industry as a growth industry for the future.

Now, it is the exact opposite. There is tremendous excitement and a great deal of potential there. The Government have done a lot of good things since 2015 to carry the industry forward. I understand that the legislation covering the European space industry and other international commitments relating to space has nothing to do with our membership of the European Union. As I said, my son works in a Franco-German company; he works with Poles, Italians, Germans and the French as well as Brits. It stretches credulity not to imagine that an organisation such as that, which depends so much on international co-operation, will find it more difficult outside the EU to partner.

Space ports are a good example. When Europe looks for its space port, I wonder whether the Scottish, Welsh or Cornish bidder will have a better chance than the Portuguese when Europe makes its decision. It is the same with Galileo: we have already seen the removal of one of the Galileo preparatory units from Portsmouth back to mainland Europe. We have to face the fact that what is a very exciting industry will have some question marks over it, because of the decision on our membership of the EU. I once saw a very interesting documentary about what is going on down in Chile—although the ESO headquarters are in Munich, not where my son works, its main work is of course down in Chile. The documentary showed that it is exciting and right at the cutting edge of space exploration.

My only words to cloud this optimism is that I remember very clearly where I was 50 years ago, when man landed on the moon. Those of us who were alive then could not imagine that, 50 years later, we would have made so little progress in space exploration. On the other hand, my father, who was born in 1899, used to talk about how, as a boy growing up in Liverpool, he remembered seeing the first aeroplanes flying and what happened to flight in the 20th century. What I learned from the Space Industry Bill is that the space industry is probably where they were in the early 20th century and that it could make similar amazing progress. Along with that, the progress regarding satellite technology, deep space probes, the mining of asteroids and so on are on the agenda of our scientists and could make a massive difference to the century ahead.

I support the passage of the regulations, but I just give those two gypsy warnings about the difficulty of dealing with the SI tsunami that we face and the problems of making our space industry viable outside EU partnerships. Again, some of us are old enough to remember Blue Streak and other adventures into space and that going it alone did not work.

[Lord Collins of Highbury (Lab)]

My Lords, I know it is late in the day, so I will try not to bang on too much. I must admit, I did not expect to be making this speech again; as one of my brothers in the trade union movement used to say, it is déjà vu all over again. I do not know whether the Minister has had the opportunity to read the Lords Hansard from the last time we had this order but, if he has not, I will remind him of some of the contributions that I made. One mistake I made the last time we debated this order is that I managed to speak without saying the words, “the European Organisation for Astronomical Research in the Southern Hemisphere”. I realised this because, when I was searching for my last contribution using the Hansard search facility, it did not bring up my contribution, as I had managed to not say those words. So, for the record, I have said them now, so that just in case we have to return to this subject again, I know I will be able to find it.

I appreciate the contribution made by the noble Lord, Lord McNally, and I share his sentiments completely, and those of the Minister, about the importance of this. It is, strictly speaking, a sort of HR issue. This is about how we are going to treat employees of this organisation in accordance with an international treaty. I do not object to that—it is quite proper and should be done.

The concern I have is that this relates to a convention from 1962, according to the noble Baroness, Lady Goldie. We may be talking about other issues, but the protocol that we agreed to in the 2009 order—which took effect in 2012—and which we were talking about last March, was discovered to be defective in June 2014. There was a considerable period of time when this error went unnoticed but we now have to return to the subject. Last time we discussed it there were 40 employees: 38 in Chile and two in Germany. What is the score now? How many people are we talking about? What has been the impact of this error? Have people suffered a detriment? What is the cost to those individuals? If there has been a cost or a detriment to these individuals, what is the Foreign Office doing to address that? Will there be some form of retrospection?

When the Minister, Sir Alan Duncan, wrote to me, he acknowledged the parliamentary time that had been taken up and he regretted that it had been wasted. I accept that errors and mistakes happen, but this order has had a rather unfortunate journey, and I think we need an explanation. We need an assurance that things will be put right, and that the error has not resulted in people suffering a detriment. It may be that over this period of time, people have gone into and out of employment, which may complicate matters even more. I do not want to put too many onerous questions to the Minister. We have had a busy day already and are at the final hurdle but I hope that he will be able to answer me. The noble Baroness, Lady Goldie, was unable to answer me last time but I am hoping that the Minister will be able to on this occasion.

[Lord Ahmad of Wimbledon]

My Lords, I am very grateful to the noble Lord, Lord Collins, and the noble Lord, Lord McNally, for their contributions. As we have agreed, being part of the European Space Agency brings real opportunities for British industry. Our scientists and engineers collaborate with their European colleagues at the European Space Agency to deliver important advances. Let us not forget that in 2018—the “Year of Engineering”—the inspiration that the European Space Agency provides is even more significant.

The amendment order puts in place the necessary immunities and privileges to allow the European Space Agency to operate effectively in the UK. It also aligns domestic law with obligations we have to our European colleagues at the European Space Agency, with whom we share an interest in increasing our knowledge of space. As both noble Lords have said, it also corrects errors in the order relating to the European Organisation for Astronomical Research in the Southern Hemisphere —it comes off the tongue so smoothly that I am sure we will all remember it for future reference. There may be a test in a year’s time—hopefully not in the Chamber. Just as we benefit from our association with the European Space Agency belonging to this organisation, also known as the ESO, opens up a galaxy of opportunities for our scientists_. I notice that my officials have used real space terminology. The UK’s commitment to both the European Space Agency and—here we go again—the European Organisation for Astronomical Research in the Southern Hemisphere remains unchanged.

I have already referred in my opening remarks to the regret that we have. Let me assure the noble Lords, Lord McNally and Lord Collins, that as the noble Lord, Lord Collins, just said, the journey which this order has been on has been turbulent. I understand totally their concern at the errors which were made in the order. The process is important. Let me assure the Committee that my department takes this issue very seriously. After the previous time this order was debated my noble friend Lady Goldie, who took that debate, followed up on it and we put right many of the clearance processes and revised our internal procedures for such orders. Although I cannot guarantee that there will be no error in any order in future, I can say on the record that our processes should pick up an error before orders are laid before Parliament. I totally empathise and align myself with the sentiment that we need to get this right.

The noble Lord, Lord McNally, talked about the tsunami of SIs which awaits us. It is important to ensure that in the approach we take when we lay orders in your Lordships’ House, and in the other place as well, the work is done and our processes reflect the importance that is attached to these issues.

The noble Lord, Lord Collins, asked about the staff. For clarity, let me say that the provision would apply only to those who are UK staff or UK nationals working in the UK. In this case, there are 42 employees who are UK nationals and ESO staff but none is currently in the UK. All are in Germany or Chile. We would therefore need to interrogate individual employee records since, as the noble Lord said, people may have moved locations. When he raised this issue with my noble friend previously, we said that we would put right any wrong in this respect. I can reassure him that, as I said, there are currently no such UK nationals employed in the UK. On the last occasion, the Government also undertook to treat sympathetically—I think my noble friend used that word—any approach made by any employee caught up in such a situation. I can confirm on the record that we have not been approached by any individual in that regard, but I assure the Committee that we will keep a watch on this. If there are any implications, I will certainly share them with the noble Lords concerned.

I hope that I have given reassurance to the noble Lords, Lord Collins and Lord McNally, about the importance of the procedure that should be deployed on statutory instruments in general, and specifically on this order. I hope that this is the end of it on this legislation. The noble Lord, Lord McNally, talked of how people are inspired and said that his son is employed in the space agency. We learn a lot from our children. After a conversation about space, I may have two aspiring astronauts: a six year-old called Mansoor and a four year-old called Faris. I am not embarrassed to admit that when my four year-old said, “Daddy, how many planets are there in the solar system?”, I responded with the figure nine. He said, “No”. I named them and he went, “Daddy, Pluto is not a planet. It’s a dwarf planet”.

We live and learn from our children, from our elders and seniors and from noble Lords. In doing so, we all align ourselves with this important industry and we want to inspire not just the current generation, as taken up by the son of the noble Lord, Lord McNally, but future generations. Maybe at some point in time when my six year-old and my four year-old understand the concept of statutory instruments, I shall share this chapter of their father’s life with them as well. I am grateful to noble Lords for their contributions.

Motion agreed.

Committee adjourned at 6.44 pm.

House of Lords

Wednesday 9th May 2018 Lords Chamber

Wednesday 9 May 2018

15:00

Prayers—read by the Lord Bishop of Chester.

Retirement of a Member: Earl Baldwin of Bewdley

Wednesday 9th May 2018 Lords Chamber

Announcement

15:06

[The Lord Speaker (Lord Fowler)]

My Lords, I should like to notify the House of the retirement, with effect from today, of the noble Earl, Lord Baldwin of Bewdley, pursuant to Section 1 of the House of Lords Reform Act 2014. On behalf of the House, I thank the noble Earl for his much-valued service to the House.

Brexit: North-East of England

Wednesday 9th May 2018 Lords Chamber

Question

15:07

Asked by

[Baroness Quin]

To ask Her Majesty’s Government whether they intend to undertake further work on the impact of Brexit on the economy of the north-east of England.

[The Minister of State, Department for Exiting the European Union (Lord Callanan)]

My Lords, we are committed to getting the best possible deal for the United Kingdom, a deal that works for all parts of the UK, including the north-east. The Government are undertaking a wide range of analyses, looking at the implications of UK withdrawal from the EU. We continue to engage with businesses and industry bodies from all sectors of the economy and all regions and nations of the UK in order to inform our negotiations.

[Baroness Quin (Lab)]

My Lords, only a year or so ago the Brexit Secretary was saying that he could get a deal that would deliver exactly the same benefits as those we enjoy under EU membership, yet we now know from the Government’s impact assessments, which they sought to hide from us in February, that the picture is very different. The north-east, in particular, is forecast to be the worst hit, taking an 11% hit to its economy even under the Government’s preferred approach and, if we exit without a deal, incurring an 18% hit. These figures have been backed by the London School of Economics, Birmingham University, the Durham University Business School and others. So the question is very simple and straightforward: does the Minister accept his Government’s assessment of the situation and the consequences of his approach to Brexit on the region of the country that both he and I belong to?

[Lord Callanan]

Of course, I share with the noble Baroness ambitions for the north-east of England. I thought she was being unduly pessimistic. She might have recognised that unemployment in the north-east is down to 5.2%, the lowest rate for 40 years. The north-east economy is doing extremely well. It is an exporting area: exporting to Europe, yes of course, but also to other parts of the world. We are committed to getting the best possible deal for frictionless trade. The analysis that she referred to was an incomplete analysis. Importantly, it did not analyse the type of deal we are seeking, which is a full and comprehensive free trade agreement, the most ambitious anywhere in the world, with the EU.

[Viscount Ridley (Con)]

My Lords, does my noble friend welcome the proposal from Ben Houchen, the Conservative mayor of Teesside, for a free trade zone in that area, and other exciting ideas that are being developed for the north-east?

[Lord Callanan]

It is an excellent idea put forward by Conservative colleagues in the region who are setting the agenda for the north-east becoming a global manufacturing hub exporting to all parts of the world. I think it is an excellent proposal and we are looking at it very closely.

[Lord Shipley (LD)]

My Lords, is the Minister aware that a few days ago the Business Secretary spoke in the north-east of England and said that he favoured,

“a soft Brexit that does not hurt businesses in the region”.

He advocated a trading relationship free of tariffs and free of frictions. Does the Minister agree with the Business Secretary? Will he tell the House how the Government plan to achieve this outside the single market and a customs union?

[Lord Callanan]

Of course, the Business Secretary comes from the north-east of England, as does the noble Lord. I totally agree with him that we want an agreement that brings the lowest possible tariffs—if possible, no tariffs at all—and frictionless free trade. That is good for the north-east, as it is for all parts of the United Kingdom.

[Lord Spicer (Con)]

My Lords, we have been pouring money into the north-east ever since Lord Hailsham went up there in his cloth cap and I fought Emanuel Shinwell in the 1960s in Easington, and yet nothing much seems to change. Surely that can only get better after Brexit.

[Lord Callanan]

Things are getting better for the north-east of England. I cited the unemployment figures. I would have thought that the Labour Party, as the party that is traditionally supposed to be concerned about these issues, would have welcomed—I will repeat it—the lowest unemployment for 40 years. It is a record that the coalition Government and the Conservative Government should be proud of. The area is booming under a Conservative Government.

[Lord Davies of Stamford (Lab)]

My Lords, whenever the Government attack on the economy, they always cite the employment figures. They seem to have forgotten their elementary economics. Employment is a lagging indicator, reflecting demand for labour in the past. If they looked at current and leading indicators such as growth and investment intentions, they would see a very bleak picture. As the Minister no doubt knows, growth is less than 0.5%, whereas it is 3% on average in the European Union. The most recent CBI Investment Intentions Survey showed that 48% of companies had cut back their investment intentions from two years ago and only 2% had increased them. These are very serious matters. Do the Government not look at these matters and think that they are in some way responsible for the decline in the British economy as a result of their disastrous Brexit policies? If not, what is the cause of this divergence between our economic experience and that of the rest of the European Union?

[Lord Callanan]

My Lords, I make no apologies for talking about our record levels of employment in a region of which I am proud to be a part. I am sorry that the noble Lord does not seem to recognise that. Unemployment is continuing to fall. There are record levels of investment. Last year, Nissan announced a new £57 million investment in the region, to last for 25 years. It said it was going to continue to produce cars in the region for many years to come. The region is booming; it is doing well. Unemployment is falling, and I am sorry that the Labour Party does not want to recognise that.

[Lord Newby (LD)]

My Lords, the Minister sought to rubbish the figures given by the noble Baroness, Lady Quin, on the basis that they represented an incomplete analysis. Can he tell the House whether the Government have produced a complete analysis and, if so, what does it show?

[Lord Callanan]

I did not rubbish the noble Baroness’s figures. They are contributing to the debate. I said it was an incomplete analysis and did not model the preferred economic outcome that we are seeking. We are continuing to conduct a range of economic analyses of all exit scenarios for all parts of the United Kingdom, and we will share all the appropriate analysis with Parliament when we have negotiated a final deal.

[Lord Lawson of Blaby (Con)]

My Lords, is my noble friend aware, apart from the fact that the short-term economic forecasts put out by Project Fear have already been proven to be false, that serious academic studies have shown that medium and long-term economic forecasts are not worth the paper they are written on? Is he aware that I was Chancellor of the Exchequer at the time that Nissan had to decide where it was going to put its European headquarters? I remember the discussions very well, and Nissan was not at all concerned about our membership of the European Union. It was concerned about the quality of the workforce, our regulatory system and, above all, our tax system. It decided to come to this country, which has been a huge success for it.

[Lord Callanan]

The people of the north-east of England will be profoundly in debt to the noble Lord and of course to Baroness Thatcher for the role that they played in bringing Nissan to the north-east in the first place. The Labour Party might want to disparage that, but it was another tremendous achievement for the region, carried out under a Conservative Government. As a resident of the north-east, I am grateful to the noble Lord, as are many other people. I am sorry that opposition Peers want to laugh at him for that.

[Lord Grocott (Lab)]

Will the Minister join me in saluting the wisdom and shrewdness of the people of the north-east who, generation after generation, have sent huge numbers of fine Labour MPs to the House of Commons and who voted 58% to leave the European Union?

[Lord Callanan]

I can agree with the noble Lord’s latter point, but am maybe not so keen on his former one.

Manifesto to Strengthen Families

Wednesday 9th May 2018 Lords Chamber

Question

15:15

Asked by

[Lord Farmer]

To ask Her Majesty’s Government what assessment they have made of the policies recommended in the Manifesto to Strengthen Families, published on 6 September 2017; and what steps they plan to take in response to those recommendations.

[The Parliamentary Under-Secretary of State, Department for Education (Lord Agnew of Oulton) (Con)]

My Lords, it is crucial that we seek to ensure that all children grow up in stable, nurturing families. As my noble friend knows, this is a wide-ranging, cross-cutting area. This Government have a broad set of policies to support families, including our childcare and early years offers, through to the DWP’s programme on parental conflict. We are considering the manifesto’s recommendations and will respond in due course.

[Lord Farmer (Con)]

My Lords, I thank the Minister for his reply. I know he is enthusiastic about family support. He spoke about it in his maiden speech during the debate on it. In my efforts to rally support for a strengthening family strategy, I have had several conversations with Ministers and civil servants who have expressed frustration at the lack of clarity about who leads this vital agenda. They are concerned that they are stepping on to other Ministers’ territory, which is preventing any real progress being made. When will the Government appoint a Cabinet-level overlord who can co-ordinate family policy across government?

[Lord Agnew of Oulton]

My Lords, as I mentioned, the Government are actively considering the recommendations set out in my noble friend’s manifesto. In my preparation for this Question, I spoke to an official in Downing Street who had had at least six conversations with my noble friend. Officials are treating this very seriously. The model of a specific brief—such as an equalities brief—being attached to a Cabinet Minister is a good one and deserves careful scrutiny. We shall continue to engage with my noble friend on this issue. I know he has also recently met my honourable friend the Minister for Children and Families Nadhim Zahawi and discussed elements of the recommendations with him.

[Baroness Lister of Burtersett (Lab)]

My Lords, we know that the stress created by poverty and hardship can undermine families. Can the Minister explain what the Government’s policy of abolishing benefits—tax credits and universal credit for children after the second child—will do to strengthen families?

[Lord Agnew of Oulton]

My Lords, since the coalition and this Government took office, we have focused on the more disadvantaged families. For example, the troubled families programme is budgeted to spend £920 million helping nearly 290,000 families in most need. What is interesting is that the number of children defined as children in need has declined by 14% after they have been involved in this programme for 12 months.

[Baroness Tyler of Enfield (LD)]

Will the Minister say what specific steps the Government propose to take to support the mental health and well-being of children affected by high-conflict parental separation, particularly those who have experienced or witnessed domestic violence and abuse?

[Lord Agnew of Oulton]

My Lords, this Government have committed £1.4 billion to the mental health of families and children. We know that this is extremely important. Parental conflict is three times more likely to occur in poorer families than in those who are better off. This is why we are focusing on this area.

[The Lord Bishop of Chester]

My Lords, prior to publication of the manifesto, the previous Prime Minister declared that a family test would be applied to all government policy. Would this not require not just a Cabinet-level overseer but for each department to have someone responsible for applying the family test? Does that exist?

[Lord Agnew of Oulton]

My Lords, the family test was introduced in 2014. It includes five questions. I will not go through all of them but I will mention a couple just to illustrate what we are trying to do: first, what kind of impact might the policy have on family formation; and, secondly, what kind of impact will the policy have on families going through key transitions such as becoming parents, getting married and so on? So the test is already operating on a voluntary basis. We are cautious about making it statutory because that would very much remove flexibility in how it was used.

[Lord Watson of Invergowrie (Lab)]

My Lords, the document in question seems to yearn for a return to an age when the nuclear family was ubiquitous. Social norms have moved on a bit in the past 50 years, and to advocate, as the document does, tax benefits for married couples alone unfairly stigmatises not just single parents but the children in such families. The manifesto of the noble Lord, Lord Farmer, also advocates family hubs. These already exist; Labour created them with the Sure Start programme, and by 2010 there were some 3,600 children’s centres, reaching almost 3 million children and their families. Those figures are now halved as the result of a succession of budget cuts. Will the Minister explain how that squares with the Conservatives’ claim to be the party of families?

[Lord Agnew of Oulton]

My Lords, we recognise the value of family hubs. We have perhaps slightly shifted the emphasis with, for example, the introduction of 15 hours’ free childcare for the most disadvantaged children in this country. In the last two years participation has gone up from 58% to 71%, and 500,000 children now benefit from it. We believe that is a very effective mechanism to work alongside children and family hubs.

[Baroness Finlay of Llandaff (CB)]

My Lords, do the Government recognise the need for an alcohol strategy as part of maintaining family integrity, given the figures showing that when there is dependency there is physical abuse in over one-third of families, which falls to 10% during recovery programmes, while mental health issues in other family members presenting to clinical services fall from two-thirds of families to one-third when there are adequate programmes in place?

[Lord Agnew of Oulton]

My Lords, we recognise the damage that alcoholism can do to families. We estimate that there are some 200,000 children living in households where alcohol dependency is a problem. We have launched a number of initiatives: the DWP has announced a £4.5 million innovation fund aimed at local authorities to support them in implementing evidence-based interventions; there is a £1 million fund for the voluntary sector and not-for-profit organisations to take forward projects to build capacity nationally; and there is a £500,000 fund for the expansion of an existing helpline to increase the support available to children with alcohol-dependent parents.

Asylum Seekers: Students

Wednesday 9th May 2018 Lords Chamber

Question

15:22

Asked by

[Baroness Hamwee]

To ask Her Majesty’s Government how many young asylum seekers have been required to cease studying as a condition of immigration bail, following the recent introduction of new provisions; and whether that condition will be applied to all asylum seekers.

[The Minister of State, Home Office (Baroness Williams of Trafford) (Con)]

My Lords, we have management information figures but these are not robust. I assure noble Lords that the new immigration bail provisions are not designed to be used to prevent children and asylum seekers studying. The Home Office is proactively looking to identify cases where this has been applied inappropriately, and will issue a new bail notice to the individual.

[Baroness Hamwee (LD)]

My Lords, I am grateful for that Answer. The Minister will know it is widely believed that there is a blanket ban at present on asylum seekers accessing education, although an assurance was given during the passage of the legislation that it would be used merely to specify where education was accessed. In any event, what is the objective of applying this condition? Is a ban on study necessary? What does it achieve?

[Baroness Williams of Trafford]

My Lords, I must stress that there is not a blanket ban and it is not mandatory to impose a ban on studying. The cohorts of people who might be prohibited from studying are adult immigration offenders—for example, overstayers who are not asylum seekers; adults whose appeal rights have been exhausted, other than care leavers receiving local authority support; adults being deported; foreign criminals who have not made an asylum claim; and all adults for whom a deportation order is signed and enforceable.

[The Earl of Listowel (CB)]

I do not know whether the Minister can help with a historic problem, which I hope has improved. I was listening just a year and half ago to care leavers who had been unaccompanied asylum-seeking children; the majority of them were not able to access education, and they were turning to the black economy to continue living here. If the system was not effective in removing them, they were unable to access proper care-leaving services, so they were falling through the cracks. How is that being addressed now?

[Baroness Williams of Trafford]

My Lords, I stress to the noble Earl that anyone under the age of 18 in the UK has a right to study. That covers asylum-seeking children and children who are dependants of migrant workers. The following people can also study: care leavers, to whom the noble Earl alluded, former unaccompanied asylum-seeking children without standing claims, appeals or ongoing litigation concerning their asylum application, and any adult asylum-seekers without standing claims and/or appeals.

[Baroness Garden of Frognal (LD)]

My Lords, what the Minister says does not quite seem to accord quite with some of the tales that have been coming out. There have been some really sad and shameful stories of young people who have been totally affected by this ban on education. What, if any, inquiries are made of the individual before deciding to impose this condition on them?

[Baroness Williams of Trafford]

Because of the nature of the Question of the noble Baroness, Lady Hamwee, I can say that there may be cases that have fallen foul of a study restriction. As I said, it is not mandatory to impose a restriction on study, and it should be imposed only where appropriate. We are proactively looking at cases that might have been affected and are issuing new immigration bail notices.

[Lord Christopher (Lab)]

My Lords, I am not clear about the thought process involved in this. There may be a case to argue in individual cases, but what is it? What is the thought process that makes someone decide that Bill Smith should stop studying?

[Baroness Williams of Trafford]

My Lords, I outlined to the noble Baroness earlier who might be in the cohort, and who might have to stop studying, but it is up to the First-tier Tribunal to impose the immigration bail conditions on an individual. It is certainly not mandatory to impose a condition against study.

[Lord Harris of Haringey (Lab)]

Can the Minister tell us how many young people caught up in the backwash of the Windrush scandal have been denied student loans because of uncertainty about their residency position in this country?

[Baroness Williams of Trafford]

I cannot give the noble Lord that information. As I have said to the House previously, the Home Office is proactively looking at anyone of the Windrush generation who might have been inadvertently caught up in the issue we have been talking about over the last few weeks. I am sure that those figures will ultimately come to light, but I do not have them here today.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, the Minister’s contribution today is obviously different from some of the cases we all know about of who might have been caught up in this restriction. What is the Government’s timescale to sort out this issue?

[Baroness Williams of Trafford]

As I said earlier, officials are proactively looking at these cases that might inadvertently have been caught out where the imposition of study bans have happened as a result of immigration bail. The answer is that it is immediate and I hope that this issue will be sorted out very quickly. In addition, new guidance has also been issued.

[Lord Tomlinson (Lab)]

When the Minister was replying to the noble Lord, Lord Christopher, she referred to cohorts of students. Can she tell us how that word creeps into the answer, as it implies that there is some group of students for whom there is a collective exclusion?

[Baroness Williams of Trafford]

My Lords, the noble Lord might like to check Hansard. I was referring not to cohorts of students but cohorts of individuals who might be prohibited from studying.

[Lord Roberts of Llandudno (LD)]

When an immigrant child reaches the age of 18, they lose their protected status. What efforts are there to make sure that every young person reaching that age is fully aware of their legal obligations and their opportunities? Many of them are on the verge of going to university but could be deported. What are we doing to make sure that does not happen?

[Baroness Williams of Trafford]

My Lords, an immigrant child could fall into several categories. I am sure, given his history, that the noble Lord is talking about an asylum-seeking child. Any asylum-seeking child coming up to the age of 18 will have their case looked at again.

Syria: Idlib

Wednesday 9th May 2018 Lords Chamber

Question

15:30

Asked by

[Lord Hylton]

To ask Her Majesty’s Government what steps they are taking to seek to prevent further fighting and loss of life in the Syrian province of Idlib.

[The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, we agree on the need to prevent a military assault by the Assad regime on Idlib, which would risk a humanitarian disaster. We have discussed the situation with Turkey and the United Nations, as the international actors best placed to facilitate dialogue and humanitarian assistance. We call on all parties to comply immediately with the ceasefire mandated by UN Security Council Resolution 2401.

[Lord Hylton (CB)]

I thank the Minister for his reply. Does he agree that the situation in Idlib is potentially explosive because of the number of militants, including al-Nusra, who are already there? Is there an existing agreement between the regime, Turkey and Russia about that province? Will it be possible to transform any agreement into a permanent truce with disarmament, supervised by the United Nations?

[Lord Ahmad of Wimbledon]

Taking the noble Lord’s second question first, the UN resolution provides for the very result he has alluded to. The United Nations has that basis, because it was a resolution that was passed by the Security Council with unanimity. He referred to agreements that may have been reached by the regime and other players within Idlib. That is not something that we would comment on, but I stress that one of the key players in that context is Russia, which is also a signatory to that UN Security Council resolution.

[Lord Cormack (Con)]

My Lords, it is highly probable that Assad will remain in power after this bloody, brutal and long civil war. Is it not time for Her Majesty’s Government to have some diplomatic representation in Damascus and to be talking to people? For goodness’ sake, we talk to many people internationally whom we do not like. Surely what is important is peace.

[Lord Ahmad of Wimbledon]

We can all relate to the final point of my noble friend. Sometimes we all have to talk to people we do not like. I accept that principle. In the context of Bashar al-Assad, the position of the Government is clear. We believe in a transition away from the Assad regime to bring about the kind of resolution we want to see in Syria, which is one of unity, keeping the country intact and ensuring there is proper representation. On his question about a diplomatic mission, I repeat an answer I have given consistently: we do not have any plans to open a mission in Damascus. Within the Geneva accords there are of course representatives of the Assad regime, and we continue discussions with them as part of the overall settlement we hope we can reach on Syria in Geneva.

[Lord Collins of Highbury (Lab)]

My Lords, the key element of this is establishing peace talks that have no preconditions, so we can get all the players around the table. Aside from that urgent need, we also have a situation in Idlib where the Syrian Government are saying that everyone is a terrorist. There are terrible crimes against humanity taking place because the civilian population, as a consequence of this war, has gone from 1.5 million to 2.6 million people. The people who are being bombed are the civilians, which is against international humanitarian law. How will we hold people to account for these terrible crimes?

[Lord Ahmad of Wimbledon]

I agree with the noble Lord that what is required is a comprehensive settlement that has all partners around the table. I thank Her Majesty’s Opposition for also alluding to that. The need for the Geneva talks to succeed is important, because everyone is represented there. On his other point, again I agree totally with the noble Lord. We must ensure accountability for those who are perpetuating these crimes. As I have said before and say again, let us not forget who began this civil war and who has committed the atrocities that we currently see to their greatest extent in Syria. To accept that this person somehow has a future unifying role and representative voice—of course I refer to Bashar al-Assad—is not something I subscribe to. It is important that we see the transition we all desire in Syria.

[Lord Wallace of Saltaire (LD)]

My Lords, we know that there are a number of militant groups active in Idlib, and that there have been recent reports of unexplained violence—car bombings and so on—within Idlib. Are the Government talking to some of those in the Gulf who have previously sponsored these groups, and to other Middle East countries, about what we do about the future of those militants now holed up in Idlib as part of moving towards a settlement? We know that, as with the remnants of al-Qaeda, those people are not going to change their mind very easily, and they have to be dealt with and resettled somewhere.

[Lord Ahmad of Wimbledon]

As the noble Lord will know, one of the major extremist terrorist groups that has been operating in Syria is Daesh. In that regard, the universal coalition against Daesh of 70-plus countries has seen the defeat of that particular organisation. That sets the precedent for how you can defeat extremist and terrorist voices. I assure the noble Lord that we are speaking to all players within and across the region to ensure that we can reach the settlement that we all want to see.

[Lord Dobbs (Con)]

My Lords, this is a very difficult area, but what is the point in refusing to talk to the Assad regime? How on earth can we expect to have influence if we simply do nothing but throw bombs at them? We talked to Stalin, we talked to Mao Tse-Tung and we talked to Idi Amin, a man who kept human heads in his refrigerators. The art of diplomacy means dealing with some very difficult people over some very difficult issues. At the end of the day, salving our consciences should not be the main question—it is the ability to save as many lives as possible and restore stability to Syria as quickly as possible.

[Lord Ahmad of Wimbledon]

I assure my noble friend that I agree with him on his final point—of course, that has been the intent of the Government consistently on Syria, in terms of the humanitarian support worth £2.71 billion that we have provided. On his first point, as I said earlier—and perhaps I should re-emphasise it—this is about a transition away from the Assad regime. However, his representatives are present in Geneva, which is why we need to ensure that, yes, his representatives, as well as those of the Syrian opposition and all international players, are heard in discussions, so that we can reach the resolution that we all want to see, which is peace and unity in Syria.

Intergenerational Fairness and Provision Committee

Wednesday 9th May 2018 Lords Chamber

Regenerating Seaside Towns and Communities Committee

Rural Economy Committee

Bribery Act 2010 Committee

Motions

15:37

Moved by

[Baroness Evans of Bowes Park]

Intergenerational Fairness and Provision

That it is desirable that a Select Committee be appointed to consider the long-term implications of government policy on intergenerational fairness and provision, and that the Committee do report by 31 March 2019.

Regenerating Seaside Towns and Communities

That it is desirable that a Select Committee be appointed to consider the regeneration of seaside towns and communities, and that the Committee do report by 31 March 2019.

Rural Economy

That it is desirable that a Select Committee be appointed to consider the rural economy, and that the Committee do report by 31 March 2019.

Bribery Act 2010

That it is desirable that a Select Committee be appointed to consider and report on the Bribery Act 2010, and that the Committee do report by 31 March 2019.

Motions agreed.

Iran Nuclear Deal

Wednesday 9th May 2018 Lords Chamber

Statement

15:38

[The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, with the leave of the House, I shall now repeat a Statement made today by my right honourable friend the Foreign Secretary in the other place. The Statement is as follows:

“With permission, I will make a Statement on the future of the Iran nuclear agreement, officially known as the joint comprehensive plan of action. The Government regret the decision of the United States Administration to withdraw from the deal and re-impose American sanctions on Iran. We did our utmost to prevent that outcome: from the moment that President Trump’s Administration took office, we made the case for keeping the JCPOA at every level. Last Sunday, I travelled to Washington and repeated this country’s support for the nuclear agreement in meetings with Secretary of State Pompeo, Vice-President Pence, national security adviser Bolton and others, and my right honourable friend the Prime Minister spoke to President Trump last Saturday.

The US decision makes no difference to the British assessment that the constraints imposed on Iran’s nuclear ambitions by the JCPOA remain vital for our national security and the stability of the Middle East. Under the agreement, Iran has relinquished 95% of its low-enriched uranium, placed two-thirds of its centrifuges in storage, removed the core of its heavy water reactor—thus closing off the plutonium route to a bomb—and allowed the International Atomic Energy Agency to mount the most intrusive and rigorous inspection regime ever devised, an obligation on Iran that lasts until 2040. The House should not underestimate the impact of these measures. The interval needed for Iran to make enough weapons-grade uranium for one nuclear bomb is known as the breakout time. Under the deal, Iran’s breakout time has trebled or even quadrupled from a few months to at least a year, and the plutonium pathway to a weapon has been blocked completely.

For as long as Iran abides by the agreement—the IAEA has publicly reported its compliance nine times so far—Britain will remain a party to the JCPOA. I remind the House that the JCPOA is an international agreement, painstakingly negotiated over 13 years—under both Republican and Democratic Administrations—and enshrined in UN Resolution 2231. Britain has no intention of walking away; instead, we will co-operate with the other parties in order to ensure that while Iran continues to restrict its nuclear programme, its people will benefit from sanctions relief in accordance with the central bargain of the deal. I cannot yet go into detail on the steps we propose to take, but I hope to make them available as soon as possible, and I spoke yesterday to my French and German counterparts.

In his statement on 12 January, President Trump highlighted important limitations of the JCPOA, including the fact that some constraints on Iran’s nuclear capacity expire in 2025. Britain worked alongside France and Germany to find a way forward that would have addressed the President’s concerns and allowed the US to stay in the JCPOA, but without reopening the terms of the agreement. I still believe that that would have been the better course, and now that our efforts on this side of the Atlantic have not succeeded, it falls to the US Administration to spell out their view of the way ahead. In the meantime, I urge the US to avoid taking any action that would hinder other parties from continuing to make the agreement work in the interests of our collective national security. I urge Iran to respond to the US decision with restraint and to continue to observe its commitments under the JCPOA.

We have always been at one with the United States in our profound concern over Iran’s missile tests and Iran’s disruptive role in the Middle East, particularly in Yemen and Syria. The UK has acted to counter Iran’s destabilising behaviour in the region, and we will continue to do so. We remain adamant that a nuclear-armed Iran would never be acceptable to the United Kingdom; indeed, Iran’s obligation not to “seek, develop or acquire” nuclear weapons appears—without any time limit—on the first page of the preamble to the JCPOA.

Yesterday President Trump promised to work,

“with our allies to find a real, comprehensive, and lasting solution to the Iranian nuclear threat”.

I have no difficulty whatever with that goal; the question is how the US proposes to achieve it. Now that the Trump Administration have left the JCPOA, the responsibility falls on them to describe how they, in Washington, will build a new negotiated solution to our shared concerns—a settlement that must necessarily include Iran, China and Russia as well as countries in the region. Britain stands ready to support that task, but in the meantime, we will strive to preserve the gains made by the JCPOA. I commend this Statement to the House”.

My Lords, that concludes the Statement.

15:43

[Lord Collins of Highbury (Lab)]

My Lords, I thank the Minister for repeating that Statement. Of course, as every independent inspection has confirmed, the nuclear deal is working; Iran is complying in full, so to suggest otherwise is simply false. On the back of the success of this deal we also have a platform to make real progress on the issues the Minister referred to: in particular Iran’s ballistic missile programme, its regional activities and its human rights record. In the other place Boris Johnson said that the US has decided that there is another way forward. I welcome the Minister’s commitment to get from the US exactly what that way forward is and what it means for international peace and security. The Minister also referred to the fact that there are signatories to this international agreement. One of the sad things about this is that the opinions of those in Iran who shout, “Never trust the West” will be reinforced by this decision.

Alistair Burt said on the “Today” programme that the UK strategy was to de-escalate and hold to the agreement, as the Minister said. However, that requires Britain, the EU, China and Russia to act in concert. Can the Minister tell us exactly how we will work in concert with them to urge Iran not to respond in kind to this confrontational act, but to work with all the signatories to the international agreement? Not least, how will we work with partners in the agreement to ensure that firms trading with Iran do not face financial penalties? We need to ensure that this agreement holds; we can only do that by working collaboratively with every signatory. I hope the Minister will be able to tell us just what the Foreign Secretary is doing to work with our EU allies, Russia and China.

[Baroness Northover (LD)]

My Lords, I too thank the noble Lord for repeating the Statement and welcome the fact that it is refreshingly frank and clear. On these Benches we share the widespread and huge concern over Donald Trump’s decision. We share the view that the JCPOA—to quote the Statement—remains “vital for our national security and the stability of the Middle East”. It is indeed ironic that the agreement with Iran is being jeopardised at exactly the same time as attempts are being made to de-escalate matters in North Korea. The Iran nuclear deal was hard-fought for; I pay tribute to our fellow Member of the House of Lords, the noble Baroness, Lady Ashton, for her determination in seeing this through when others thought it was not possible. I am glad this is an area in which we are in lockstep with our European partners. Will the Minister say more about how we will make sure that Germany, France and the United Kingdom speak with one voice, and that China and Russia are in lockstep as well? If we are to stop Iran from walking away, that is surely vital.

Does the Minister agree that this situation plays into the hands of the hardliners in Iran, as the noble Lord, Lord Collins, has indicated? What assessment has been made of that? Does he agree that this is an incredibly dangerous time in the Middle East, with so many countries involved in Syria as well as a series of key anniversaries coming up? Could he confirm that the Government believe Iran was indeed in full compliance with the agreement and that this is indeed the view of the International Atomic Energy Agency? Does he agree that, if the United States or Israel had any evidence to the contrary, they needed to report that to the International Atomic Energy Agency?

What action is being taken to liaise with the US Administration, who clearly include some returning hardliners as well as most who have no influence whatsoever over the President? What discussions are occurring with Iranian officials? What plans are being made to tackle Iran’s potential development of nuclear weapons should the JCPOA collapse? Is there any clarity over whether UK companies would face legal proceedings in the United States if they remain involved in Iran—and what is being done to support them? What happens if they are in consortia with American companies or American parts in their supply chain? What happens if Iranian oil is removed from the global market? How are we addressing the impact of that? Can the Minister also comment on Saudi Arabia’s role? What assessment is being made of the risk that, should Iran pull back from this deal, Saudi Arabia will wish to proceed with its own nuclear programme?

This is a crisis where, once again, we see the enormous importance of our EU partners. Does the Minister agree that it is vital that this continues?

[Lord Ahmad of Wimbledon]

My Lords, I thank the noble Lord, Lord Collins, and the noble Baroness, Lady Northover, for their support for the Government’s position. I assure them both that the Government remain very committed to this agreement and to working with international partners to ensure that it is sustained. As I said in repeating the Statement, it has reaped benefits, particularly by stopping the development of nuclear weapons in Iran.

I shall take some of the questions in turn. I assure both the noble Lord, Lord Collins, and the noble Baroness, Lady Northover, that we will continue to work very closely on the E3 front with our partners in Germany and France. In that regard, as I said in repeating the Statement, my right honourable friend the Foreign Secretary has spoken to their Foreign Ministers. All noble Lords will have seen that the Prime Minister, my right honourable friend Theresa May, the President of France and the Chancellor of Germany issued a joint statement immediately after the announcement. How that plays out in Iran is important. It is very easy to say that you are against the West, but the West is a broad group of nations, of which we are one. I often hear the words “Islam against the West”, but I am a Muslim of the West. Does that make me a contradiction? No, it does not. The point is that we cannot speak too generally on this matter.

We have seen unity among the E3. When President Macron and Chancellor Merkel visited the United States, they consistently raised their wish to see the US remain a part of the nuclear deal, and it is extremely regrettable that it has not done so. As I said, it now remains for the US to clarify further the requirements that it wishes to see, but the framework of the deal must remain. In that respect, the noble Baroness asked a specific question about compliance. As was pointed out in the Statement, on nine occasions, the last being in February of this year, it was reported back by the appropriate agencies that there was compliance, and that continues to be the case.

The noble Lord asked about dealings with Russia and China. Through various organisations, including the United Nations, we will continue to have conversations in this regard, but they remain equally committed to this agreement as the stability of the region depends on it.

The noble Baroness asked about dealings with Iran. I can inform the House that earlier today my right honourable friend the Foreign Secretary spoke to Foreign Minister Zarif to assure Iran of our continued commitment. I am sure many noble Lords heard President Rouhani’s statement. We often hear about the different voices in Iran but President Rouhani has underlined Iran’s commitment to stay within this deal.

The noble Lord and the noble Baroness both asked about the implications for British companies, particularly those with United States counterparts. The Office of Foreign Assets Control in the US, which looks at how sanctions regimes apply, has already issued guidance to the financial services sector and we are currently evaluating that. As an initial step, we have issued immediate guidance to UK companies about reviewing their legal position with lawyers to ensure that they are compliant. At this juncture, I can share with noble Lords that there is a deferment date of between 90 and 180 days before the sanctions that the US imposes unilaterally become applicable. However, I will endeavour to keep your Lordships’ House informed about the implications of this decision, particularly for companies that may currently be investing or looking to invest in Iran and have international obligations.

15:53

[Lord Jopling (Con)]

My Lords, the Minister will no doubt have had his attention drawn to the rather surprising reports in the Israeli media that in recent weeks there has been an unexpected visit by a senior member of the Saudi royal family. As far as I know, that has not happened for a long time, if ever. Are the Government concerned that a new alliance between the United States, Israel and Saudi Arabia might be planning much more aggressive actions against Iran than we have seen previously?

[Lord Ahmad of Wimbledon]

There is speculation about different associations. What is required in that region is a degree of taking stock of what this decision means. We call on not just Iran but all the players in that region to take heed of the need to ensure stability as a priority and to show due restraint. I have made it very clear that Iran has complied with its obligations under the treaty, but the United States has raised particular concerns about the sunset clauses. However, we remain very much committed. We have seen the results and the benefits of the treaty. For other players in the region—my noble friend mentioned several countries—it is also important to reflect on what has been achieved thus far, and the importance of remaining firm on the principles of the treaty and ensuring that we can work with Iran for continued stability in the wider region.

[Lord West of Spithead (Lab)]

My Lords, we stand on the brink of a disaster in the region. There is no doubt that, prior to the JCPOA, Israel was within days of carrying out an attack on what it thought were all the nuclear facilities in Iran. It is highly likely that if this falls apart, which it could, Iran will start work on a nuclear weapon again. What happens then? I am sure Israel will not allow that, and will attack—and if it attacks, people will assume that America is part of it and that we are part of it, and goodness knows what will happen in the entire region. Have we thought through what could happen, and what actions we need to think about taking? Inevitably, in a military sense, we will be pulled into this if that happens.

[Lord Ahmad of Wimbledon]

I think everyone is concerned about the stability of the region. Let me assure the noble Lord that we have raised our concerns with both Iran and Israel to ensure that there is a de-escalation, and no further escalation, in this conflict—which, as the noble Lord points out, will not only destabilise the region itself but have much wider implications. Let us be clear: a regional conflict is in no one’s interests. We recognise Israel’s national security concerns, but we also implore Israel to show due restraint, and Iran, too, to show restraint in its extended influence in various conflicts in the region, notably in places such as Yemen and Syria. What is needed now is restraint across the board, and we will continue to work with all parties to ensure that that prevails. The noble Lord highlights the very challenging situation that we are currently confronting.

[Lord Hannay of Chiswick (CB)]

My Lords, will the Minister accept a view from me personally: my congratulations to the Government on the role they have played in the lead-up to this lamentable decision by the US Administration? I do not believe we should mock what happened to the representations we made. They were properly and well made, both in the press and directly. What conclusions do the Government draw about a US Administration who have treated their three closest European allies with contempt, and have not felt the need to say a single word of remorse, when taking that decision, for ignoring the expressed views of their main allies? What conclusions do the Government draw from that?

[Lord Ahmad of Wimbledon]

I thank the noble Lord for his comments about the efforts that the United Kingdom Government made. As I said, my right honourable friends the Prime Minister and the Foreign Secretary made both calls and, in the case of the Foreign Secretary, a visit, to Washington to ensure that the US stayed part of the Iran deal. On the noble Lord’s second point, about the way the US has conducted itself with its European allies, of course it is deeply regrettable that the case made not just by the United Kingdom but by Germany and France did not get the result that we desired. However, I stress that the US and the United Kingdom remain important and strong allies. We have said clearly to the US that, while we recognise its concerns and the issues around the sunset clauses, it is now for the US to come forward and present what it believes to be workable solutions, while stressing and ensuring that the nuclear deal on the table remains intact.

[Lord Howell of Guildford (Con)]

My Lords—

[Lord Davies of Stamford (Lab)]

My Lords—

[The Earl of Courtown (Con)]

My Lords, it is the turn of the Conservatives.

[Lord Howell of Guildford]

My Lords, as my noble friend the Minister says, the task now is to persuade the American Administration to work on a new replacement agreement which embraces issues such as ballistic missiles and other destabilising and sinister activities by Iran. We all understand that. When we get on that path—as I hope we do—will he encourage his colleagues to point out two things to the Americans? First, if sanctions are reintroduced on a larger scale they will be immediately undermined by the Chinese, who already supply substantial amounts to Iran. They will soon supply substantial amounts of arms as well, quite aside from the wider dangers that the noble Lord, Lord West, has pointed out. Secondly, under American law the American Government are constrained from taking early and immediate actions and measures which lead to a substantial destabilisation of oil supplies in the oil market. This would certainly happen if Iran had to cut its exports from 2.9 million barrels a day down to fewer than 1 million barrels a day, and the result in oil markets would be chaos.

[Lord Ahmad of Wimbledon]

I agree with my noble friend’s suggestion. It remains our position and that of our European partners, the French and the Germans, whatever proposals the United States wishes to put forward. Of course we will continue to work with the United States but, equally, it remains important that the nuclear deal stays on the table and that Iran is part and parcel of that.

On the issue of the United States and sanctions, my noble friend again makes an important point. The US has now confirmed that there will be a wind-down period before the sanctions take effect of either 90 or 180 days depending on the specific sanctions. The detail of how this will be impacted is still to be seen. My noble friend’s point on China is also well made.

The nuclear deal took a long time. It went through different iterations. It took both the Democrats and the Republicans in the United States and, as was acknowledged, the noble Baroness, Lady Ashton, and others—I put on record my thanks to them—played a sterling role in bringing it to the table. It was a difficult deal to get done. Was it perfect? No, but it worked. It was having results. That is why we and our European partners remain committed to making it work by ensuring that Iran continues to remain part of the deal. The consequences of pulling away from the deal are all there and clear to be seen.

[Lord Davies of Stamford]

My Lords, there are a number of deeply disturbing and worrying aspects to this matter. The most powerful country in the world has broken an international agreement, and that is deeply destabilising for everyone. The cause of moderation in Iran and the position of Rouhani personally may have been undermined, which would not be in the interests of stability either. Particularly seriously, there is now a major rift between the United States and its European allies. The Government have taken exactly the right line on this, though the decision to send Boris Johnson to Washington, a man who is generally regarded as a slightly ludicrous figure—his previous intervention in Iran was certainly disastrous—was a tactical mistake. Can the Minister tell the House how it is going to be possible to prevent British or other European companies from being, in practice, so intimidated by the threat of fines from the United States Treasury as to de facto observing the US embargo whatever the British Government’s wishes on the matter might be?

[Lord Ahmad of Wimbledon]

My Lords, my right honourable friend the Foreign Secretary expended a great deal of energy focusing on whatever negotiations could take place and conducting last-minute meetings with various members of the Administration over this past weekend. I pay tribute to his efforts to seek an agreement and that should be recognised by your Lordships’ House.

On sanctions, as I said earlier, we have looked at the announcement from the United States and are evaluating its implications. The noble Lord raises a valid point about the threat of sanctions and the fear of what that may mean for companies operating in Iran. That is why the initial advice we have given is for companies to take legal advice on their individual cases as to the nature of what this would mean. Whether it will have an impact on their business boils down to a commercial decision they will need to take, having evaluated the risks in front of them. We will continue to look closely at the situation and if further advice is needed it will be provided on the Foreign Office website at the appropriate time.

[Lord Campbell of Pittenweem (LD)]

My Lords, I do not wish to repeat much that has already been said, but there are two matters that I would like to draw to the attention of the House. First, this was a deliberate breach of Resolution 2231 of the Security Council of the United Nations. It also occurs at the same time that the embassy of the United States is being located in east Jerusalem, contrary to international law. Will the Government impress upon our American colleagues that it is very difficult to maintain a special relationship dependent on shared values if there are serious breaches of international law that is respected, on the other hand, by the United Kingdom?

[Lord Ahmad of Wimbledon]

The noble Lord makes important points. The robustness and application of and adherence to UN Security Council resolutions are part of ensuring the vital international rules-based system that we all subscribe to. That is a point that we continue to make to our colleagues, our friends and our allies—that is, the United States. I think that we continue to have a very deep, meaningful and strong partnership with the United States on a raft of different issues, and we continue to wish to see direct engagement from the United States. That is important, not just for our bilateral relationship but for the security and stability of various regions in the world. Therefore we will continue to engage in a very positive vein on this issue.

In the same context, we look towards the United States, our strong ally. We will work constructively and co-operatively with it to address the wider concerns, be it on the issue of ballistic missiles or sunset clauses, ensuring that the nuclear deal stays live.

[Viscount Hailsham (Con)]

Would my noble friend assist the House in this regard? If the United States seeks to impose sanctions on UK firms trading with Iran after it has reactivated the sanctions regime, would the United States then be in breach of any international treaty, law or rule? If so, what does the United Kingdom propose to do about that?

[Lord Ahmad of Wimbledon]

Again, my noble friend raises an important and pertinent point. As I have already alluded to, our immediate advice to UK companies impacted as such has been to take specific legal advice on their individual cases. The full implications of how these sanctions will translate is still being evaluated. Once more detail is available we will share that with the companies, as appropriate; but I cannot stress enough that any company in the United Kingdom that feels or believes it is impacted should take legal advice now.

[The Lord Bishop of Chester]

My Lords, I wonder whether the greatest danger here is that the approach of President Trump is completely counterproductive, in precisely encouraging the more hard-line and reactionary elements in Iran. Given that there has in fact been some good movement in the past year, with President Rouhani being re-elected against the more hard-line candidate and some changes on the legal front in the last six months, the danger is that this is going to provoke a deep anti-American, anti-western reaction that is precisely contrary to our fundamental thrust, which should be to promote the moderate elements in Iran. If so, what can we do—quite apart from the issue around the treaty—to promote the more moderate elements in Iran, which have a real traction when it comes to elections?

[Lord Ahmad of Wimbledon]

The right reverend Prelate raises an important element within the context of how the American withdrawal from the deal will be perceived in Iran. We have taken a very progressive, constructive and vital step forward, through the showing of strength of E3 unity. The President of France and the Chancellor of Germany, together with our Prime Minister, have issued a joint statement in that regard. As I said earlier, that translates the fact that not all the West shares the opinion of the United States in pulling away from the deal. It is important to communicate that effectively, as my right honourable friend the Foreign Secretary did today to Foreign Minister Zarif, and we continue to make that point consistently in all our dealings with Iran. On there being different voices within Iran, we saw President Rouhani step forward and give his commitment. We will continue to support all efforts to keep Iran within the deal and all international efforts to ensure that the deal itself remains alive.

[Lord Mitchell (CB)]

My Lords, the Minister said that the agreement has worked, but has it? It might have worked for the nuclear agreement, but has it worked for sanctions? Hundreds of millions of dollars are now in the hands of the Iranian Government. It has not gone to the people at all. It has gone into causing mischief in Syria, Lebanon and Yemen. Hundreds of thousands of people have died in those countries. I would be interested in the Minister’s comments.

[Lord Ahmad of Wimbledon]

I share the noble Lord’s concerns. I was quite specific on which elements of the deal have worked. I also said that the deal is not the perfect deal. There are limitations on it, some of which have been highlighted by the US in stating its reasons for withdrawing from it. That said, we still believe it to be an important part of ensuring that Iran does not progress down the route of acquiring nuclear weapons.

The noble Lord alluded to Iranian influence in the wider region. Again, we strongly condemn Iran and call on it to pull back. It has shown its hand in places such as Lebanon and Yemen, with support for the Houthis, and it continues to do so in Syria. This is not helping the situation in the wider region. It is destabilising. It is important that Iran recognises that its interventions in other parts of the region are viewed as far from helpful; they are extremely destabilising to the region and to peace generally. I assure all noble Lords that we continue to make this point very strongly to the Iranian authorities, its President and Foreign Minister on all occasions that we have these discussions. Iran has been destabilising in the region. That has to be recognised.

On our continued support, everyone would regret the fact that the Iranian people themselves need support. They have embarked on a difficult journey that is far from complete. It is important that we continue to show our support for them in the hope that we will see the kind of representation we all desire in Iran itself.

[Lord Browne of Ladyton (Lab)]

My Lords, I thank the Minister for repeating the Statement. I commend the Government for standing four-square behind the JCPOA and I associate myself with the remarks of the noble Lord, Lord Hannay. But with all due respect, businesses that are conducting perfectly legal business with Iran need more than advice. The Foreign Secretary said today in the other place:

“We will do our utmost to protect UK commercial interests”.


On 24 April, in the context of a Private Notice Question asked by the noble Lord, Lord Campbell of Pittenweem, I asked a very specific question about this issue, asking what the Government intended to do in the light of developments at the Bill Foreign Ministers’ meeting to bolster and support our businesses, which were already concerned about the reimposition of US sanctions and secondary sanctions. I was not given an answer, but I was given an assurance that I would be written to. I await that letter; I am content about that. But surely the time has now come for us to tell businesses more than that they should take some legal advice and await further advice. We need to give them some specific indication of the extent to which the Government are willing to go to protect their interests from the devastating effect of these potential sanctions.

[Lord Ahmad of Wimbledon]

On the noble Lord’s first point, I will ensure that there is a response, although that response no doubt will reflect the decision just taken. As I said earlier, the United States itself has issued specific guidelines in this respect, which we are currently evaluating. What I said about taking immediate legal advice was just that: immediate and initial advice. We will follow this up.

Of course we remain committed. We believe in strengthening trading ties with all countries across the world, but in this case we have continued to encourage commercial ties with Iran to try to build and progress that country to a more progressive future. We will look at this very carefully. Let me assure UK companies that are impacted that we are looking at the situation closely. The advice was issued only yesterday. We want to make sure we are evaluating it fully to ensure that we can subsequently give whatever advice and level of support we can after we have fully considered the implications. This is not just about telling businesses to get legal advice, but the first step must be—and I was in business for 20 years—to talk to your lawyers to make sure what you are doing and currently trading is in the context of international law and adherence to whatever sanctions regime might prevail.

My noble friend earlier raised an important point about the implications of the United States decision for international law. That also has to be evaluated, but let me assure all noble Lords that we are looking at this very carefully. It is a very sensitive issue, but the interests of British companies are going to be protected.

Automated and Electric Vehicles Bill

Committee: 1st sitting (Hansard): House of Lords
Wednesday 9th May 2018 Lords Chamber

Committee (1st Day)

16:15

Clause 1: Listing of automated vehicles by the Secretary of State

Amendment 1

Moved by

[Baroness Randerson]

1: Clause 1, page 1, line 6, at end insert “including vehicles manufactured and purchased outside Great Britain,”

[Baroness Randerson (LD)]

My Lords, I am very pleased to see that we have, after several weeks’ delay, reached the Committee stage of this Bill. As I said in the previous debate, I welcome it. I was reminded, however, of its very narrow scope when I tried to devise some amendments which seemed to me useful and straightforward but seemed to the clerks, quite rightly, to be out of the scope of the Bill.

I understand the Government’s desire to deal with insurance as the low-hanging fruit of automated vehicles first of all. As we are told, however, that these vehicles will be on our roads in two to three years—and indeed as they are widely being trialled across the world and in parts of Britain—the Government, I fear, are going to have to run very fast to catch up on this issue given the pace of development of technology. I know that the Law Commission is looking at other aspects beyond insurance, at such matters as criminal responsibility and the wider issue of pedestrian and driver behaviour, but there is a serious danger of being overtaken by events. In moving Amendment 1, I want to concentrate our minds on the issue of vehicles manufactured and purchased or simply manufactured outside Britain and the importance of their being properly and fully reflected on the Secretary of State’s list.

The amendment’s intention is to ensure that this list is fully robust. Up to now, our insurance system has coped with imported cars simply because a car is a car. Whether a car is manufactured abroad and imported here prior to sale or manufactured and sold abroad and then imported into this country for use, either temporarily or permanently, this list has to be clear and comprehensive. How do the Government intend to ensure that the list is truly comprehensive? The world is a very big place, and we have a large number of people living in this country with links to other countries who might choose to import cars from abroad. There are also many hundreds of thousands of cars—indeed, millions—being driven on our roads that were manufactured abroad.

Amendment 2 stresses the importance of the Secretary of State’s list being aligned with definitions used in other countries—indeed, that goes for the whole Bill. The insurance industry has produced what it calls the 10 commandments, or 10 points, that a vehicle needs to adhere to in order to be considered automated. The United Nations Economic Commission for Europe, or UNECE, deals with global transport issues in relation to safety and is currently discussing international definitions of automation. I am told that the Department for Transport is taking a leading role in this.

The Society of Motor Manufacturers and Traders is concerned that the Secretary of State’s list should follow the internationally accepted criteria as spelled by UNECE and should not be just a UK-specific definition. For this reason, it is keen that this legislation should use the internationally accepted levels used across the world within the industry. These standards were established by the Society of Automotive Engineers International and are apparently used everywhere across the world.

The Government intend the Bill to apply to levels 4 and 5, but, as written, it could apply to some vehicles at level 3. I want to draw attention to a recent court case in which a man was prosecuted for driving a Tesla S down the M1 near Hemel Hempstead while sitting in the passenger seat—there was no passenger in the driver’s seat. He was on autopilot. That is described by Tesla as a suite of driver assistance features including traffic-aware cruise control, which assists with acceleration and deceleration, and auto-steer. Although the reports I read did not specify it, I imagine that the vehicle also has automated emergency braking, because that is quite common in a range of cars. That is level 3, but it meets the definition in the Bill at Clause 1(1)(b), that vehicles are,

“capable, in at least some circumstances or situations, of safely driving themselves”.

Clearly, the argument here is whether that was safe, but I fear that the Government might find themselves involved in a great deal of protracted court procedure on the definition of “safe” After all, level 3 cars are certainly on our roads.

If I go into a little detail about the difference between the levels, the Committee will see how narrow that difference is and how the Government’s definition in the Bill could be misleading. In level 3, the vehicle controls all monitoring of the environment. The driver’s attention is still needed, but can disengage from safety-critical functions such as braking. Many level 3 cars currently available require no human attention to the road at lower speeds. At level 4, a vehicle tells its driver when it is safe to be automated and when not. The vehicle is capable of steering, braking, accelerating, monitoring other vehicles and the road, and responding to traffic. It can determine when to change lanes and signal but it cannot cope with traffic jams. That is sometimes referred to as the, “mind off” level. At level 5, a steering wheel is optional—there is no need for a steering wheel—no human intervention is required and you do not need brakes or pedals. It is a totally new design of car.

I have gone into that in some detail because I fear that the Government’s definition of automated vehicles as being,

“capable, in at least some circumstances or situations, of safely driving themselves”,

is oversimplified. They need instead to rely on internationally accepted definitions. The reason the Society of Motor Manufacturers and Traders is concerned is that the levels are so well established and widely used across the world and within the industry that even if technology advances further, as it probably will, all they will do is add a level 6. It is rather inconsistent of the Government. I understand that they want some all-embracing definition that is not subject to change, but in the second part of the Bill, for example, which relates to electric vehicles, the Government are happy to refer to “fast and rapid charging”. That is the same kind of technological term currently in use—the current jargon.

I believe, and the Society of Motor Manufacturers and Traders also suggests, that this could lead to a blurring of definitions. It could lead to legal challenge and the Government could spend a lot of time defining what is safe. Amendment 33, in the name of the noble Lord, Lord Tunnicliffe, also deals with the definition of safe driving. I welcome it especially because it touches on the crucial issue of hacking: I am sure we will come back to that in later debates. I beg to move.

[Lord Tunnicliffe (Lab)]

My Lords, I shall speak to my Amendment 33 and comment briefly on the amendment of the noble Baroness, Lady Randerson. The debate today will cover several areas, but one of them will be safety and I shall speak more about that later. My amendment covers safety, and lights particularly upon hacking. This is not a controversial Bill as I see it: virtually all the amendments are probing amendments and I hate to say it to the Minister but I think the speaking part on this occasion will be principally hers rather than mine.

Clause 7 sets out the terms for when a car is deemed to be driving itself, or in automated mode. However, it makes no mention of what happens if the vehicle is designed or manufactured faultily, or if it is hacked due to a failure by the manufacturer to install adequate software safeguards. While we all welcome the opportunities that this new technology will bring, we also have to recognise that it will bring new risks. A lot of these risks will be around the software used and therefore may be harder to pick up than in a conventional vehicle. This is a good opportunity to put in safeguards to give protection around this area now, rather than later down the line.

The amendment tightens up this area of the Bill by setting out when an automated vehicle is capable of driving itself safely. This would give the driver protection with regard to liability if it was proven that there was a manufacturer’s fault or the vehicle had been hacked. The purpose of the amendment is to get a general debate started in relation to this area, particularly on the hacking element.

16:30

[Lord Lucas (Con)]

My Lords, with regard to Amendment 1, the noble Baroness, Lady Randerson, and I are in complete accord that the Bill is far too narrowly drafted. We have here a sizeable opportunity for the United Kingdom and one that is part of our industrial strategy, yet we are introducing a very narrow Bill for a very fast-moving technology, which will, as the noble Baroness pointed out, likely be outdated within a year or so, when we could be passing something which gives the Government a much broader remit to introduce rules and regulations to enable them to continue promoting this technology for some years to come.

I very much hope that we will manage to get agreement around the Committee that, if the Government do not table their own amendments to broaden the Bill, we will send it back to the other place with some widely agreed amendments which do that. It is enormously important that we take this opportunity because legislative opportunities are few and far between. It is unusual for this House to insist on the Government having more powers than they propose to take, but this is an occasion when we should consider that. I look forward to conversations with the Benches opposite to see if we can agree some way of doing that. I would be even more delighted if the Government were to come forward with their own proposals, but they have not yet shown any signs of doing so.

I hope that the noble Baroness will not press Amendment 2, because I think there is a large opportunity for level 3 vehicles as a replacement for trains on what are currently railway tracks. Let us imagine a large number of vehicles that will fit about eight people each running in place of trains; whether that is on the rails, which has advantages in terms of cost—both the energy cost of running a vehicle and the cost of maintaining the highway—or on a smooth surface on rubber tyres, which has advantages in terms of braking capability, meaning that you can run vehicles more closely together, seems an issue for the technicians.

If you used that space currently occupied by Southern Rail, in my case, on which the Government—because they own it—manage to run infrequent services at an average speed of 45 mph, for automated vehicles travelling at very safe intervals, perhaps two seconds apart, with individual vehicles stopping only at stations that the occupants wanted to stop at, probably travelling at 70 mph or 80 mph between stops, you would get a much better service. We would be able to get the Brighton main line back to the sorts of speeds they were used to in the 19th century; we might even be able to exceed them. For me, stuck down at the end of the Eastbourne branch, the service would be immeasurably better, both locally along the south coast and up into London. You would be able to reopen the second route from Brighton to London; the main route is frequently cut because of the age of the line and the difficulty of maintaining the tunnels—indeed, we are enduring two weeks of complete blackout this summer so that some work gets done on the tunnels.

There are all sorts of reasons why using level 3 vehicles—current technology—on the space currently occupied by Southern Rail would give everybody a much better service. You would not have to go for a scheduled train. There would be a vehicle there when you wanted to leave. There would probably be one leaving every minute. They would be faster and more reliable—because an individual vehicle, particularly if it is on rubber tyres, can just steer round your average cow which is what appears to cause the most frequent problems. You would not have these eternal delays caused by some minor obstruction on the line because that problem would no longer exist.

The advantages of this technology are known to the Government, Network Rail and other authorities. What we have all thought of as the disadvantage of being stuck with Southern Rail suddenly becomes the opportunity to have a really large network of autonomous vehicles, way ahead of anything else in the world and at a scale the rest of the world cannot match. It would provide a much better service than commuters and users get at the moment, probably at a lower cost, and a base for autonomous vehicle technology to work from in this country. I think it would prove enormously attractive to international business since it is very unlikely to be replicated elsewhere.

This is level 3 technology. You do not need anything more. You have a space where humans are not admitted. You do not need the sorts of capabilities a vehicle has to have to travel on the roads. Indeed, you might make these vehicles such that, when they got to a station, a human could take over and drive on. This technology might work. All sorts of things might work because you could try them as little add-ons to a large system. It would be much more efficient than what the Government are having to do at the moment—a whole series of minor experiments in little, confined areas, trying out different bits of technology without being able to integrate them properly. This is a really big opportunity, but it requires that we list and license level 3-capable vehicles because, even at this level, we need a proper amount of control over what is going on.

I like the amendment tabled by the noble Lord, Lord Tunnicliffe. We will have to be really cute in making sure that the software on these vehicles is up to date. One vehicle approaching another will have to know what software the other is using and, therefore, how that vehicle will behave in case of difficulty—such as a wheel falling off—so that they become predictable. To allow random collections of software, randomly updated, is just not going to work in an autonomous world.

As the noble Baroness, Lady Randerson, remarked in the course of her speech on Amendment 1, this Bill needs to be broader so that the Government can have the sort of powers they will need to regulate a fast-expanding industry, using as yet unknown technology. We need to give the Government flexibility. It is important that they have the tools necessary to make this industry succeed. I very much hope that this is something the Government will recognise in this Bill.

[Lord Hunt of Chesterton (Lab)]

My Lords, I was on the Science and Technology Committee and we discussed automated vehicles. After our session, I met some industrialists—people making and selling cars—in the context of automated vehicles. One of the things it was suggested that the Secretary of State might consider—it would come under Clause 1, referred to earlier—is that people purchasing vehicles, particularly those that are partially or wholly automatic, should understand the properties of the vehicle. There were some examples this year or last year when someone had a blackout and the vehicle took over control and moved them. So it seems that already some of these level 3 properties are not well understood by the people buying the cars. For some people, as I understand it, once you have paid by credit card or hire purchase the car arrives at your front door and off you drive. Even Tesla makes you have 95 minutes of training before you buy and use one of its cars. This is an area covered by subsection (1)(b) that the Secretary of State should be considering very strongly.

[Lord Borwick (Con)]

My Lords, I should first make an unusual declaration of interest: namely, an investment that does not exist at this moment but which will almost certainly be made in the next few days. I will have an equity interest in the Penso group of companies and become its chairman. Penso is a manufacturer of very high-tech carbon fibre parts for the automotive, aerospace and rail industries, and produces the Vito London taxi for Mercedes in Coventry. The investment is likely to complete in the next few days, making the interest declarable as its product is very relevant to the lightweight future of electric cars. I should explain that none of my amendments seeks to confer exclusive benefits on the company and that I am moving them because I believe them all to be in the public interest.

Unfortunately, the grouping of the amendments in today’s debate is slightly unusual and many groups contain amendments that do not naturally fall together. Some of my later amendments overlap with, and propose different ways of achieving the same ends as, the amendments of the noble Baroness, Lady Randerson. I apologise if the Minister has to repeat the same points in different sections.

Although I support the noble Baroness’s Amendment 1, we may yet hear from the Bill team that Amendment 2 is just not the way in which they wish to go with this definition. I must say that I believe that that is a mistake, because, although the Society of Automotive Engineers standards may change and the Government normally like to be in complete control of the definition, the choice here is between a vague definition that could be interpreted in different ways by different lawyers and an international standard developed by the SAE and adopted worldwide. Chinese vehicle producers will adopt the SAE regulations, as will producers all over the world. There seems therefore to be a great deal of merit in sticking to the worldwide standard rather than inventing our own because we believe that our choice of English will be so elegant that we can achieve it.

There are other ways of achieving the definition from those used in the Bill, and I will come to them in my later amendments. However, were the Government to change their mind and support the noble Baroness’s Amendment 2, I would immediately support it as well.

[Lord Berkeley (Lab)]

My Lords, I support the first amendment of the noble Baroness, Lady Randerson. It is important that we keep the scope of the Bill as wide as possible. The noble Lord, Lord Borwick, mentioned manufacturing in China. I suspect that by the time many of these cars and technologies have come on to the market, a very large proportion of the equipment will come from China anyway. There has to be some world standard—I am not sure which; we will come to that later—otherwise we will be in dead trouble. I also share the noble Lord’s concern about Amendment 2.

I was interested in the comments from the noble Lord, Lord Lucas, about turning railways into roads. We heard this before, about 30 years ago.

16:45

[Lord Lucas]

It was not about turning railways into roads; it ends up with turning roads into railways. It is just a different method of moving people on railways.

[Lord Berkeley]

I am grateful for the noble Lord’s explanation. It depends on whether the road is as defined in Clause 1(1)(a),

“roads or in other public places”,

on whether or not it will be a railway.

I want to point out that autonomous railways are happening at the moment. The centre section of the Thameslink railway is effectively driverless. It does not go very far—from Kings Cross St Pancras to Blackfriars—but it does not need a driver. Of course, a driver is there, but that is the state of technology on the mainline railways, and the underground railways and metros have done it for a long time. Whether the same number of passengers could be taken by these autonomous pods up a railway, road or whatever, compared with a 12-car train every two minutes with people standing is a debate we can have. But I am not sure that I would support widening this Bill to get that far.

I have also been studying a few issues related to the content of the Bill, and recently met the author Christian Wolmar who has written a book, Driverless Cars: On A Road To Nowhere. I recommend that the Minister and other speakers to read it; I am not going to give it away today. Without necessarily supporting what he says, there are issues relating to the human reaction to automation that are quite useful to study, including how close a vehicle can get to the one in front, and all the things we spoke about on Second Reading, which I shall not repeat today. It may take rather longer than some noble Lords think for all this to come about. We are certainly right to debate it now and to concentrate on common standards.

I certainly support my noble friend Lord Tunnicliffe. I think he was speaking to Amendment 8, which I did not know was in this group, but he made a good speech and I certainly support it.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, at the outset of this debate today on automated vehicles, I think it is helpful to set out what this Bill is trying to achieve. The provisions within the automated part of the Automated and Electric Vehicles Bill extend compulsory motor vehicle insurance to cover the use of automated vehicles when operating in automated mode, so that victims of an accident caused by an automated vehicle while driving itself will be covered by the compulsory insurance in place on the vehicle. The insurer would be initially liable to pay compensation to any victim, including to the driver who had legitimately handed control to the vehicle. The insurer then would have the right to recover costs from any liable parties under existing UK common law and product liability law.

The Bill therefore requires the Secretary of State to publish a list of automated vehicles which are,

“designed or adapted to be capable, in at least some circumstances or situations, of safely driving themselves”.

The purpose of this power is to allow manufacturers, owners of vehicles and insurers to know if the extension to compulsory motor insurance in this legislation applies to their vehicle. This will provide certainty to the automotive and insurance industries, as well as clarity to the public. The scope of the Bill applies to highly and fully automated vehicles only—that is, vehicles for which, when driving themselves, there is no monitoring or controlling role required of the driver.

This is broadly equivalent, as the noble Baroness, Lady Randerson, said, to levels 4 and 5, as defined by the Society of Automotive Engineers—the SAE—and does not apply to vehicles with lower levels of automated technology or utilising advanced driver assistance systems, no matter how sophisticated. It does not apply to level 3 vehicles, and the Tesla vehicle the noble Baroness mentioned would not be covered. We will come to this point later, but level 3 cars still require monitoring by a driver, so they are not fully automatic and are not covered by the Bill. It also only applies to automated vehicles that are or might lawfully be used on roads or in other public places in Great Britain.

I acknowledge the point made by many noble Lords on the narrow scope of this Bill. It was designed with a specific purpose in mind, and I look forward to hearing the views of noble Lords from across the House on the amendment from my noble friend Lord Borwick introducing more powers for the Government.

Regarding the first amendment of the noble Baroness, Lady Randerson, on the inclusion of vehicles manufactured and purchased outside Great Britain, there is already a long-established process, along with guidance on the GOV.UK website, which covers the permanent use of foreign-registered vehicles in the UK. As part of this process, any vehicle which drives on UK roads must already be type-approved. For temporary use of vehicles on our roads, through the Motor Insurers’ Bureau we operate a Green Card scheme—an international certificate of insurance to make sure that victims of accidents involving foreign-registered vehicles are covered. We think this process would be the same for automated vehicles and, therefore, do not think the amendment is necessary at this stage because all vehicles manufactured and/or purchased outside Great Britain will be covered by the existing text.

The Bill does not define automated vehicles by SAE levels, as proposed by the noble Baroness, Lady Randerson, in Amendment 2. This is because the SAE levels are generalised industry categories describing a broad capability, which could change over time. The type approval of an automated vehicle, the criteria of which have not yet been agreed, will not be carried out according to SAE levels of automation. Noble Lords may find it helpful to note that the UNECE working parties that set the international standards by which vehicles will be type-approved and used have rejected the SAE definitions because they do not meet the level of precision needed for regulation. Instead, they simply set out broad definitions.

The categories set out by the SAE are under continual revision. A direct link to the levels creates problems if the definitions move away from what is needed for the proper functioning of the Bill. I want to be clear: we are not rejecting the SAE levels. They are helpful, but they do not—the UNECE agrees with us here—meet the level of precision needed for type approval and regulation.

[Lord Berkeley]

Could the noble Baroness explain what she means by “manufactured in Great Britain”? She is aware of all the Brexit debates about certificates of origin, and that bits and pieces and components go right across the world and back again. What exactly do we mean by “manufactured in Great Britain”? Is it just the name on the front?

[Baroness Sugg]

Happily, the Bill covers vehicles manufactured in Great Britain and abroad: it covers any vehicle. I am afraid I do not have an exact definition, but I imagine that it is when the majority is manufactured in the UK. As I say, the Bill will cover all vehicles, wherever they are manufactured.

On Amendment 33, I am in complete agreement with the noble Lord, Lord Tunnicliffe, that we must ensure that all new automated vehicles are safe and secure for use in Great Britain. We have many amendments to come on that. We are working at the United Nations level to develop international requirements for vehicle manufacturers on both vehicle safety and cybersecurity. These standards, which are still being developed, will then form the basis of the type approval process which automated vehicles, like conventional vehicles today, must pass before they can be sold for safe use on British roads or in other public places, or get on to the Secretary of State’s list for insurance.

Based on the international UNECE standards, which the UK is actively contributing to, and our evolving domestic regulatory programme, we expect it to be very clear which vehicles, including their software, can safely operate in automated mode. We do not think it appropriate at this early stage to set too precise criteria.

[Lord Hunt of Chesterton]

You are still not explaining how people will understand and be informed of this. Is there no regulation for that? As I understand it, even manufacturers are conscious of this being uncontrolled. When you buy such a car, you do not know what kind of information you will have and how you are going to be taught about it. As I mentioned, British cars are being provided with little information, unlike the Tesla car. Even for that complicated car they apparently need an hour and a half or whatever it is for training. Is anything being done about that?

[Baroness Sugg]

As the noble Lord rightly says, for level 3 partially automated cars there is a training system in place before the vehicle is used. For levels 4 and 5 that is something we are working on. We have not seen these vehicles yet, but I agree it will be essential to ensure that people who use these vehicles are able to use them safely. That is part of what we will be looking at, as we put together the regulations.

We think that we need to maintain flexibility to ensure that all the vehicles relevant to Clause 1 can be identified and included in the list, so that we can give insurers the clarity over which vehicles require insurance.

On hacking, we are working with the UK security agencies, including the Centre for the Protection of National Infrastructure, and the new National Cyber Security Centre, to engage directly with industry, raising awareness and promoting best practice. Cybersecurity, including for automated vehicles, has been identified as a top priority in the national security strategy. Of course, it is essential that all parties involved in the manufacturing supply chain, from designers and engineers to retailers and executives, are provided with a consistent set of guidelines that support the industry. As part of this work, we developed, consulted with industry, and published in August last year the Principles of Cyber Security for Connected and Automated Vehicles, a guidance document for the automotive industry on good cybersecurity. Those principles are now informing the work that we do at UNECE level on the taskforce on cybersecurity, which is developing standards, practices, directives, and regulations concerning cybersecurity and their applicability to the automotive industry. We have also set up an automotive information exchange to promote sharing of intelligence and best practice for effective cybersecurity.

I very much agree with the intention of the amendment, but we think that both the safety and cybersecurity requirements of automated vehicles will be covered in future regulations, once agreed at this international level. I hope that, given those arguments, the noble Baroness feels able to withdraw her amendment.

[Lord Tunnicliffe]

The Minister made a very important statement at the beginning, so I want to make sure that I heard it correctly. I think that she said that the responsibility of the Secretary of State would be to list the vehicles that could safely be driven automatically or would safely drive themselves automatically on the roads. Does that mean that the Secretary of State will effectively be certificating these vehicles as being safe?

[Baroness Sugg]

The vehicles will be certified through the type approval process, following what has been agreed at international levels. That is what will decide whether or not those vehicles are safe. Once that type of approval process has happened, those vehicles will then go on the Secretary of State’s list, which is purely for insurance purposes, so that insurance companies and purchasers of vehicles can understand whether those vehicles require automated vehicle insurance. So it will be a separate process to the list on exactly how those vehicles are certified, which is what is subject to ongoing conversations at international level. We do not yet have those standards, but we are working towards getting them, which will certify whether a vehicle is safe. Given that, I hope that the noble Baroness feels able to withdraw her amendment at this stage.

[Lord Hunt of Chesterton]

What is the timetable for this to be done?

[Baroness Sugg]

I am afraid that we do not have a specific timetable. Obviously, technology is developing all the time, and we do not yet have the technology available for type 4 and type 5 vehicles. We are working closely, as I say, at United Nations level, and are also working as part of that with both vehicle and software manufacturers to be able to define those standards. Given that we do not yet have the technology, we are not yet able to define the standards, so I am afraid that it will slightly depend on how things progress. However, we play a leading role in this and, as soon as these international standards are set, we will then be able to use them for our type approval for standards within the UK and declare it legal and safe for those vehicles to be driven in the UK.

[Baroness Randerson]

I thank noble Lords and the Minister for her comments, and particularly thank the noble Lord, Lord Borwick, for his support on the need for a more precise definition.

In response to the noble Lord, Lord Lucas, I clarify that I have specified levels 4 and 5 because that is what the Government have said that the Bill applies to. If the Government want it to apply to level 3 as well, that is fine. The principle is the need for a clearer definition; the use of levels rather than the definition is what I am suggesting.

The noble Lord, Lord Berkeley, asked how long it would take to get used to automated vehicles. If you drive a minibus, it comes as a bit of a shock to find that you are sort of on top of the car in front of you, in comparison with driving a car, when you expect to have a bonnet in front of you. We are getting used to new ways of driving. As I have mentioned before to noble Lords, I have an electric car, and that is a totally different style of driving. We will get used to it more quickly than perhaps some people think.

17:00

The Minister said that at level 3 a car still requires monitoring by the driver. But it also does at level 4 in some driving situations. You can go from cruising nicely down a motorway to being in a traffic jam, where a level 4 car would need to be monitored. You could quickly go from one situation to another. The Government need to go away and think about the definition they have supplied us with and check it out, stress-testing it in a number of situations.

The Minister said that the levels may change. The motor industry assures me that the levels will not change. The cars will change and technology will advance, but the levels reflect those levels of advance. The Minister also said that UNECE has rejected these levels. What has it said? Does the Bill precisely mirror its definitions? If it has now reached a conclusion to its discussions—they must be fairly recent, because that was not the information I was given last week—it must have produced precise definitions, and we need to shadow that.

I assume that other countries are also tackling this through similar legislation. What definitions are they using? To go back to Amendment 1, in the Secretary of State’s list we need to use the same definitions otherwise a car could be considered automated in Australia and non-automated in Britain. That goes back to my original point that we all have all known that a car is a car is a car, but in future we may be arguing about whether an automated car is an automated car.

[Lord Lucas]

My Lords, can I argue against crisp definitions? We do not yet know what will happen. Maybe we can evolve a system where the ordinary car we use at home can switch into fully automated mode for, say, travelling around the railways, and then when it is not part of a railway, it will come off. Sometimes it is a car and at other times it is a rail vehicle. If we are to take a lead in this industry, we will need to continuously shape and reshape definitions. We do not want to be hamstrung by what we can think of now. I agree that we ought to share definitions around the world, but they ought to be based on technology as it evolves. It ought to be fast moving. We ought to equip ourselves with legislation which can move as the industry moves.

The noble Lord, Lord Berkeley, asked me whether there would be capacity constraints. No, there would not be; if you transfer to rubber wheels, you can manage much higher traffic densities because you do not have the braking distance problems, and you can fit with the current level of autonomous safety. I am not saying that one could manage high-speed lines, but Southern rail is all low-speed. The fast services on the London to Brighton line manage 45 miles per hour. If, with autonomous vehicles, you are managing to go 70 or 80 miles per hour, just by doing that you are doubling the capacity. Therefore there are no capacity constraints on using these routes for autonomous vehicles. It will probably be managed by Network Rail because you need the consistency, predictability and safety constraints that go with rail services. However, we are talking about much smaller vehicles and different technology—about providing a basis for the whole of autonomous vehicle technology to evolve. Under those circumstances, you have to move definitions to keep up with the technology.

Level 3, as I read the definition, seems to provide a pretty good base: there are times when the vehicle can be autonomous but then it gets to a point where it says: “Hang on, I can’t be autonomous here, I need the driver to take back control”. That seems to be the sort of technology you might well try to put on a rail service so that, without having to get to levels 4 and 5, you can provide room for individual vehicles to travel on the service and provide the connections that people want beyond a railway station. We do not know yet; we have not got there. We have to allow the Government the breadth of definition that will allow us to experiment and to lead the field.

[Baroness Randerson]

The noble Lord talks about looking at the future and says we have not got there. With all due respect, we have got there. I have been in a driverless car—technologically, they exist. They are being trialled in parts of this country and indeed across the world. However, the noble Lord is right that we are crystal ball gazing over exactly how they will be used. In what circumstances will we use them? Will we all own our own little pod or will we summon up a pod to collect us and take us to work, or whatever, whenever we wish it? There is a great deal of debate here; undoubtedly the initiative has already been taken by taxi companies, for example, in this area.

However, I return briefly to Amendment 1 and the points made about definitions. I am not slavishly devoted to levels 3, 4 and 5—or 4 and 5. If the Minister says this has been rejected, that is contrary to what I was told, but I am happy to go with what has now been accepted. The definition needs to be precise enough for this not to end up in a lot of court cases. I say that because the whole of this part of the Bill is about insurance; we all know that insurance is always mired in legal definitions, so the Government need to be on firm ground. Having said all that, I am happy to withdraw my amendment.

Amendment 1 withdrawn.

Amendment 2 not moved.

Amendment 3

Moved by

[Baroness Randerson]

3: Clause 1, page 1, line 8, leave out “or adapted”

[Baroness Randerson]

My Lords, removing the two words “or adapted” would mean that the Secretary of State’s list would not include vehicles manufactured for conventional driving and adapted for autonomous mode. Those involved in the motor industry regard the concept of adapting vehicles as extremely dangerous. The technology companies—the people who write and design the software for cars—also regard it as very dangerous. The point they make is that their software is specifically tailored to individual car design. The fact that their technology works safely in one car does not mean that it can be shoe-horned into another model, even a similar model.

The clause as written would include individual adaptations by enthusiasts, which would be a very uncertain path to go down. Indeed, if a car manufacturer decided to adapt a current level 3 model—for example, the Tesla S, to which I referred earlier—to a level 4 car, I am absolutely sure that Tesla, in line with standard motor industry practice, would call it the “Tesla S Elite” or something similar. It would be a different model and therefore it would not be an adaptation in the meaning set out in relation to the Secretary of State’s list. What I am really pointing out here is that the concept of “adapted” vehicles would narrowly include those adapted on a one-off basis by individual enthusiasts, and therefore it would not seem reasonable to expect the Secretary of State and the Department for Transport to have the expertise to know whether that was safe.

I want to refer briefly to Amendment 29, which is in this group and stands in the name of the noble Lord, Lord Tunnicliffe. A big section of it is very similar to the amendment tabled by Labour in the Commons to the Vehicle Technology and Aviation Bill. I congratulate the noble Lord on having managed to get this amendment accepted. I could not think of a way of doing it, but he has done very well.

Amendment 29 addresses crucial issues associated with the proper repair and maintenance of automated vehicles. In particular, it goes into detail on the need to establish properly accredited training schemes for those who repair and maintain them. Rather like the repair of electric vehicles, the process is totally different from traditional vehicle repair. I spoke at Second Reading about the need for a process similar to the old CORGI gas safety scheme. That was a highly respected, universally acknowledged scheme and came about as a result of the Government working with the industry. We need the Government to work with industry in the same way on automated vehicles, and I am very grateful that the noble Lord has raised it in his amendment. I beg to move.

[Lord Tunnicliffe]

My Lords, I shall speak to Amendment 29 in my name. I accept the noble Baroness’s congratulations on behalf of my staff—which is one quarter of a very able lady—who managed to get this past the Public Bill Office. The proposed new clause would protect insurers against accidents caused by vehicles repaired by unauthorised technicians. It would also require the Government to establish a scheme for the authorised inspection, repair and maintenance of automated vehicles by licensed and accredited technicians.

The automotive industry already relies on hundreds of thousands of individuals who support work on and maintain vehicles. As the technology develops, so too must the skills of those working on them. We are already aware of an existing skills gap in the industry. As the technology develops, that gap may well worsen but, as it stands, the Bill does not address a worsening skills gap. If we do not start planning for this now, we will be left with a huge hole in the support structures for these new vehicles.

I am of the generation where I was privileged at the age of 17 to buy a car for seven pounds and 10 shillings. The car was seven years older than me. It tended to go only about 10 miles before having to have its plugs cleaned and so on—which made courting my wife a bit difficult at times. But we were of a generation when the skill of looking after automotive technology was very straightforward, and widely understood by a large section of the population. Now I drive a Prius, and I would not dare touch anything on it. Not only is it unduly complex, but it could be very dangerous, with the very high voltages involved and so on. There is nothing I could do to that car that would do anything other than worsen its performance.

17:15

That has happened in two or three generations. We have gone from a relatively straightforward skill widely shared among the population, from which the industry, almost like cottage industries, could draw, to vehicles which, when they are on the road, will be very specialised and require very specialised skills. Noticing the noble and gallant Lord over there, I would say that those vehicles will be more akin to modern military aviation than to the sort of basic engineering that cars used to represent.

We believe, as do a number of stakeholders, that the Government should introduce an accreditation scheme for technicians to work on future vehicles. If they are not proactive, the UK will not be able to support growth in these new technologies. So will the Minister look at bringing in such a scheme, not only to address the skill shortage but as a wider set of protections for insurers against unauthorised repair and maintenance of such vehicles, as set out in the new clause?

[Lord Berkeley]

My Lords, I support Amendment 29 in the name of my noble friend Lord Tunnicliffe. He is right about the need for such an authorised inspection regime, and in his worry about unauthorised repairs. The Committee may or may not be aware that a lot of trucks, and probably many modern trains and other big pieces of plant and equipment, are already remotely monitored. Where I live in Cornwall, outside the front door of the house is a 200-tonne gantry crane that operates on rubber tyres. It was manufactured in Italy and erected in Cornwall, and if the driver does the wrong thing, or the wrong person drives it, the people in Italy know exactly what is happening and they will stop it: they will prevent it operating. If it tries to lift 300 tonnes when it is capable of lifting only 250 tonnes it will be stopped, so that the equipment does not get severely damaged. That is very common, so my noble friend’s amendment is absolutely right. I hope that the Minister will see the need for some kind of scheme to cover at least the specialist equipment that will be in the vehicles.

I worry about Amendment 3 and the suggestion by the noble Baroness, Lady Randerson, about the word “adapted”. She said that adapting a vehicle would probably be done in a back yard somewhere, by somebody who probably would not know what they were doing, and could therefore be dangerous. That is certainly a worry. But the word “adapted” would also cover current vehicles adapted for people with certain disabilities—for example, if someone cannot use a brake pedal so there has to be a brake behind the steering wheel. I know we are talking about a different technology, but the word “adapted” will be difficult. I suggest to the noble Baroness that, if Amendment 29 were accepted, all vehicles, whether specialist, adapted or not, would have to be covered by the authorised “inspection, repair or maintenance”, so it would be better to go down that route rather than inserting the word “adapted”, as she suggests in Amendment 3.

[Lord Craig of Radley (CB)]

My Lords, I too have some difficulty with the word “adapted”. I understand that modern technology is more difficult to handle than when the noble Lord, Lord Tunnicliffe, and I were pulling our Austin 7, or whatever it was, apart. Nevertheless, you cannot totally slam the door on any form of cottage or other industry which was set up in order to help individuals to produce an adaptation of a particular vehicle. I do not support this amendment in the way in which it is drafted.

[Lord Maxton (Lab)]

My Lords, I too have some difficulty with this because I drive, I must confess, a Skoda. I am told that a brand new Skoda is built to my specifications when I order it, not before. It is not produced on a line but only when I order it and, therefore, each adaptation is my instruction to the manufacturer. Whether or not that is an adaptation I do not know, but we have to bear it in mind when considering this amendment.

[Lord Borwick]

My Lords, while I respect the opinions of the noble Baroness, Lady Randerson, the way that the automotive industry works is through a large number of companies of various sizes, some of which believe they have the only solution that makes a positive change to the industry. They may approach a big car company and try to persuade it that their creation of a level 4 vehicle software is better than that produced by Ford or General Motors. I do not think they will succeed, but they will want to try it out—and that process will involve adapting an existing vehicle. That would be much harder than it is at the present stage if the amendment suggested by the noble Baroness were accepted.

It is a reality of life that the world is filled with brilliant engineers who have their own suggestions. Some of them are nutters and some of them are geniuses, and it is only by trying out their suggestions that you can work out which one is which.

[Lord Maxton]

The noble Lord will remember that, when we were considering this issue in the Science and Technology Committee, it was suggested that one of the first uses of a fully automated vehicle would be in agriculture, with it going up and down a field. A story was told of a van suddenly appearing at the back of a field and the farmer going up to two men and asking, “What are you doing here?”. They said, “We are from Germany, and we are here because the big end on your combine harvester is about to go”.

[Lord Borwick]

The point is well made. It is an immensely complicated industry and, effectively, prohibiting adaptions would send it backwards.

On the issue of maintenance of these vehicles, there is a host of health and safety regulations which should cover many of the points raised. It is indeed extraordinarily dangerous to start dealing with high-voltage DC cables on the inside if you are not trained to do so. However, because of my interest in electrical vehicles in the past, I have gone through the training, the basic lesson of which is to stay as far away from it as you possibly can. It is extraordinarily dangerous, and I entirely support the training of people as proposed by the noble Lord, Lord Tunnicliffe.

[Lord Lucas]

My Lords, if we imagine a future with a lot of autonomous vehicles around, one of the things that such a vehicle needs to do is predict how other autonomous vehicles will react in particular circumstances—that is, if faced with a sudden unexpected obstacle, the priority will be to veer to the left, say. That knowledge can come only on the basis of a shared understanding of the software that each of them has and of the capabilities in terms of awareness of the local picture and the wider picture that are built into the vehicle. To allow those things to be tampered with by back-street garages and amateur electricians seems to me to go against the whole advantage of moving towards autonomy. Therefore I very much support what the noble Lord, Lord Tunnicliffe, is aiming at. I think we need really clear control of the quality of maintenance.

I can see what the noble Baroness, Lady Randerson, is aiming at in removing “or adapted”; we do not allow people to adapt Boeing 747s in a random sort of way. They might do it to trial things and have a bit of their own airspace to wander around in while they are doing it, but we should be really cautious in allowing widespread adaptation. Every adaptation introduces another complication that every other autonomous vehicle would have to be aware of. Adaptation should be confined to test areas and test tracks, and what appears on the public scene should be a well-understood, well-documented vehicle—and not too many different kinds, please.

[Baroness Sugg]

My Lords, I will first address Amendment 3, tabled by the noble Baroness, Lady Randerson, regarding the removal of “or adapted” from Clause 1(1). It may be that in the future vehicles could be adapted to be capable of driving themselves safely. It could also be the case that some future vehicles are designed to be ready for full automation at some point after their sale but not yet fully capable.

I do understand the concern around this, as we have not yet seen such vehicles in the marketplace, but, given that we cannot predict how these vehicles will evolve, it is important to ensure that we do not prematurely preclude such technology—or, as the noble and gallant Lord, Lord Craig of Radley, put it, slam the door on potential innovation. Happily, it would not be up to the Secretary of State or, indeed, the Department for Transport, to decide whether an adapted vehicle was safe. Whether it was a vehicle adapted by an enthusiast in their back yard, or with a software update from Tesla, it would be subject to the same type of approval process before it could be legally used on our roads. So I can reassure noble Lords that a vehicle with any such adaptation would be on the Clause 1 list—and therefore have insurance, and be on our roads legally—only if the adaptation was considered safe.

On Amendment 29, the noble Lord, Lord Tunnicliffe, is of course absolutely right to be concerned that automated vehicles meet appropriate safety standards and that the inspection, repair and maintenance of an automated vehicle is done in an authorised way. Motorists with these new vehicles will clearly expect the same level of knowledge and customer service they have come to expect for conventional vehicles. However, we believe that at this stage it is too early to develop a full training, licensing, and accreditation scheme for automated vehicles, or to legislate on how automated vehicles are inspected, maintained and repaired.

As I have said, the Bill is focused on ensuring a sensible insurance regime, and we do not believe that it is the right time to legislate further on maintenance in the manner outlined by the noble Lord, Lord Tunnicliffe, given that the UNECE harmonised technical safety standards have not yet been agreed for these vehicles. As I said in debate on previous groups, these conversations around safety standards are ongoing, with the UK actively participating in these important discussions.

[Lord Tunnicliffe]

Might the noble Baroness meet us half way by giving us an assurance that at an appropriate time such a scheme will be developed?

[Baroness Sugg]

I am happy to give the noble Lord that assurance. I think that, in order for the UK to remain a leader in the development and deployment of AV technology, we will of course need the right skills. If we are to secure an automated future we will need them in ongoing repair and maintenance as well as in design and technology.

We are working with the relevant technology and professional bodies on this issue, alongside the DVSA. We are also working with the Automotive Council on improving skills in the sector by developing new trailblazer apprenticeships and targeting areas where there are skills shortages, as well as co-ordinating work across the sectors. As the professional body for the automotive industry, the Institute of the Motor Industry is well placed to help the Government understand the challenges of ensuring that automated vehicle maintenance and repair is carried out in a professional and safe manner. We hold regular meetings with the IMI, at both official and ministerial level, to discuss the potential models of regulation that we will need for AV skills testing.

As I said, I understand noble Lords’ concern in this area. As the technology develops and matures we will consider such an accreditation scheme and what, if any, government intervention would be needed to ensure that we have enough skills to make sure that the industry can develop. We fully expect there to be other pieces of regulatory and legislative reform in due course as part of our wider programme.

While I can reassure noble Lords that the work on training and accreditation is progressing well, I am afraid—I feel I will be saying this a lot today—that, as the Bill concerns an insurance framework, we do not feel it is an appropriate place to include such an amendment. But I hope that the reassurances I have given on the work that is ongoing in this area, and that in due course we will be looking to implement such a scheme, will allow the noble Baroness to withdraw her amendment.

17:30

[Baroness Randerson]

My Lords, I accept that my Amendment 3 is a very simple and straightforward device. It was an attempt to approach one aspect of the safety issue. Amendment 29 is a much more complex and comprehensive approach. If Amendment 29 or something like it were adopted, there would be no need for Amendment 3.

I was trying to begin to talk about safety and to raise the issue that if you allow adaptations, the Secretary of State will have to devise a way to apply a wide and rigorous range of safety tests. Currently, if you build your own car in a garage you can test it pretty straightforwardly and take it on the road. You could be stopped by a policeman and you could take it to a garage and it would or would not get its MoT on a series of straightforward yes or no tests with no doubt about it. But, if we are talking about adaptations to autonomous vehicles, the danger in these adaptations will almost certainly be in the software, which it is very much more difficult to test. We have only to look back at the Volkswagen scandal. Volkswagen installed the so-called defeat device in the software of its diesel cars that kicked in only when it detected that it was being tested. It was therefore able to mask the true extent of emissions. That is a very complex operation. To test software we would have to go through very lengthy, all-situations style testing to make sure that a vehicle is truly safe. It is not just a case of putting your foot on the brake and saying that it stops quite quickly and it is fine.

[Lord Berkeley]

Would the noble Baroness be tempted to press the Minister to have a meeting on these issues before Report and come back with a much shorter text than Amendment 29 with the intention of covering these issues? I think that would give many noble Lords who have spoken in the debate quite a lot of comfort.

[Baroness Randerson]

The noble Lord, Lord Berkeley, puts forward a very good idea. I know that the Minister is always very generous in providing opportunities to discuss issues. We already have two issues that we need further information on. I am sure that there will be other amendments later where we will need a meeting or, at the very least, a fairly lengthy letter—but it would be better to discuss it.

I readily acknowledge that the approach taken by the noble Lord, Lord Tunnicliffe, is a more thorough approach to the issue of safety. With that, I beg leave to withdraw my amendment.

Amendment 3 withdrawn.

Amendment 4

Moved by

[Lord Borwick]

4: Clause 1, page 1, line 9, leave out “, in at least some circumstances or situations,”

[Lord Borwick]

My Lords, we have here a portmanteau group of about three different subjects which have in common that they are all proposed by me, but that is about it. I will start with Amendments 4, 5, 6 and 7. These address the alternative to using the SAE definitions that the noble Baroness, Lady Randerson, and I think are probably the right solution to the problem.

The first amendment deals with the phrase,

“in at least some circumstances or situations”.

As has been mentioned, the Science and Technology Committee did a very good study on autonomous vehicles, let down, in my mind, only by the fact that we were not allowed to entitle it “Goodbye, Mr Toad”. This was supported by a large number of people because the phrase encapsulates one of the greatest advantages of autonomous vehicles: bypassing bad driving. In the future automated vehicles will drive better than human beings.

The phrase,

“in at least some circumstances or situations”,

will certainly open discussions as to whether some downright unusual vehicles such as agricultural autonomous vehicles will fall under that description. I fear that in the Secretary of State’s opinion, they will not, and somebody will undertake a judicial review as to whether the Secretary of State was right. The net result will be wealthier lawyers rather than a clear definition.

Similarly, the meaning of the word “safely” is very unclear. One man’s “safely” is another man’s “dangerously”. Putting such ambiguous words into legislation opens up the possibility of somebody’s saying, “That autonomous vehicle was involved in an accident; it therefore cannot have been driving safely. If it was not driving safely, it should not have been on the list, and is therefore not covered by the insurance that it was thought to be covered by”. I hesitate to say that putting in the word “safely” is dangerous, but it opens the possibility of a bunch of litigation which is unnecessary because the clause works without it.

I know that the word “safely” is part of the Government’s attempt to differentiate between what we would call level 3 and levels 4 and 5. It comes from the Government’s determination not to use those terms. If the Government were to change their mind on that, the need for subjective words such as “safely” would disappear.

Amendments 31, 32 and 34 deal with the meanings in Clause 7 of “being controlled” and “driving itself”. The Bill states that,

“a vehicle is ‘driving itself’ if it is operating in a mode in which it is not being controlled, and does not need to be monitored, by an individual”.

There is a lot of uncertainty as to what phrases such as “be monitored” mean. Amendment 34 tries to identify that more clearly. On Amendment 32, there is again some uncertainty as to what “an individual” means. Does it mean an individual who is licensed to drive that vehicle? Does it mean an individual who is capable of driving, with a driving licence, or one who is not drunk or fast asleep? There is a lot of uncertainty in these words. The Minister may say that the wording will be sorted out in the detailed regulations, but it could be changed to deal with such problems at the start.

On Amendment 35, “roads” has not been defined in the Bill and could easily be defined to tie up with the Road Traffic Act 1988 so that a creative lawyer does not come up with an alternative definition for their own benefit. I hope that all the amendments are helpful in clarifying the meaning of these phrases. I beg to move.

[Baroness Randerson]

My Lords, I went through the process of devising amendments with a lean approach to the wording. Once again, the amendments take a more comprehensive approach to the same issue I raised regarding the definitions. I understand the point made earlier by the noble Lord, Lord Borwick, about there being some overlap in the grouping of amendments. That is because this is a highly technical Bill and the aim of the amendments is not always obvious. In this case, the aim is clearly the same as the one I was approaching, and it underlines the point I made when speaking to my first group of amendments: that definitions will be central.

Many years ago, I was a justice of the peace. I sat through many motoring cases at a basic level in the magistrates’ court where clever lawyers spent ages examining the definitions of simple words. There were many cases where people avoided apparently obvious judicial process because of a definition. The Government need to look again at the definitions used in the Bill.

[Lord Rees of Ludlow (CB)]

My Lords, we should welcome these attempts to clarify the wording of the Bill, but I suspect that it is a more or less hopeless task to agree on it. I am surprised that the noble Lord, Lord Borwick, did not want to change,

“does not need to be monitored”,

because that is a subjective question. For example, if you are in a taxi, are you happy if no driver is there? If you are flying in a plane, it will be on autopilot most of the time, but are you happy if there is no pilot there who can take over and is monitoring? The question whether one feels the need to have someone there monitoring is ambiguous. To say that there is no need for someone to be monitoring is going to be very subjective. For that reason, I suspect it will be a very long time before level 4 or level 5 automation will be perfectly acceptable.

17:45

Another complication concerns the word “individual”. If driverless cars are to be able to cope with driving on ordinary roads, such as country roads where things are changing all the time, then in order that they should not use a computer more powerful than their engine, they are going to have to communicate with other driverless cars and build up enough data and information in that way: they are not individuals, they are communicating with a cluster of other cars. I make these points because they are technically relevant and indicate the subjectivity of trying to decide whether there is a need for monitoring.

[Lord Berkeley]

My Lords, I want to speak briefly to Amendment 35. Having a definition of “road”, as suggested by the noble Lord, Lord Borwick, is essential. I know there are lots of different definitions of roads within the various road traffic Acts, but I happened to come across a case a few years ago where somebody who was driving a 4x4 on a road which did not appear to be a road within the definition of the road traffic Acts was arrested and charged with drink-driving. He was convicted in the end and it is quite clear, which I did not understand before, that that offence can occur anywhere—in a field, a factory, or anywhere else—because it is not particularly a road traffic offence: it is being drunk in charge of a vehicle. I do not know whether that will be reflected when we get to who is in charge of these vehicles, but it demonstrates the importance of having a definition of “road” where such legislation will apply.

[Lord Lucas]

My Lords, I think there is a difficulty with what my noble friend’s Amendment 4 proposes. There is no reason to suppose that we will not have vehicles that are dual-capable—capable of being driven by people and driven autonomously—maybe as part of the evolution to a fully autonomous system. I do not suspect that a farmer will want their Land Rover to be autonomous for a long time in the future, except when it is on a roadway and switching between two modes may become quite important. Therefore, a vehicle that is capable of switching between the two modes, and is therefore not always autonomous, will be an important part of the evolution to autonomous vehicles.

I also suspect that once a vehicle is autonomous, it will not ever be truly not in someone’s charge. If you have a set of vehicles which are essentially public vehicles—small buses, which are just picked up on the street and you take one to wherever you are going—some kind of alarm system will be necessary. There will probably be some oversight in case of a known problem: you will want to say, “Right, all vehicles within a particular radius shall slow down or stop because there appears to be some problem developing here”. Defining who is in charge of a vehicle where those capabilities exist will be quite problematic. This comes back to my wanting the Government to give themselves the flexibility to adapt the regulations as circumstances change, our knowledge improves and systems move.

The picture the Government paint of a Bill every year is just not feasible: government does not work that way. This sort of backwater gets a Bill every four years if we are lucky. We absolutely have to reckon that this Bill has to last the rest of this Parliament and probably the first year or two of the next. There is not the space in a Government’s life for off-centre Bills on a regular basis. The Bill is underpowered for the mission it sets out to achieve.

[Baroness Sugg]

My Lords, as I mentioned in the debate on the first group of amendments, the scope of the Bill applies only to highly and fully automated vehicles; that is, vehicles for which, when driving themselves, there is no monitoring or controlling role required of the driver. I appreciate my noble friend’s efforts to clarify the language in the Bill in this series of amendments. I will try to help with the definitions, although, as the noble Lord, Lord Rees, said, these terms are highly subjective.

On Amendment 4, it is anticipated that the first automated vehicles to reach the UK market will be able to be used in automated mode only in specific circumstances or situations. These could include instances where vehicles have been geo-fenced, and are therefore able to operate only in specific, defined areas, or systems that would operate only on motorways and other high-speed roads, or indeed in the way my noble friend Lord Lucas described earlier. These vehicles may not be capable of driving safely in all situations, so we believe it is essential that the wording,

“in … some circumstances or situations”,

remains within the Bill so that such vehicles can get on the Secretary of State’s list and get insurance.

[Lord Maxton]

The Minister keeps talking about “vehicles” and not “cars”. Vehicles are already being used in agriculture. They do have to go on roads, however; for example, to go from one field to another. Is that part of the definition?

[Baroness Sugg]

I know that this issue came up in the noble Lord’s committee. It is something we are looking at. Again, we will probably equate it to the existing situation with agricultural machinery: only if it needs to be lawfully insured at the moment will it need to be lawfully insured as an automated vehicle.

On Amendment 5 and the proposal to remove “safely” and Amendment 34 to define “monitoring”, as my noble friend said, the Bill uses “safely” to distinguish between vehicles with high or full automation, which are covered by the Bill, and conditionally automated vehicles, which are not. Conditionally automated vehicles need the human user to monitor their driving at all times. Highly and fully automated vehicles do not need such monitoring in automated mode: they can operate safely without it.

That is why we think we need “safely” in the definition in Clause 1 that highly and fully automated vehicles are,

“capable, in at least some circumstances or situations, of safely driving themselves”.

The definition of “driving itself”, given in Clause 7, is,

“in a mode in which it is not being controlled, and does not need to be monitored, by an individual”.

So the Bill covers vehicles that have been designed to be able to drive themselves—safely, with no monitoring needed, in at least some situations. Without “safely”, we think that the Bill would cover—incorrectly—vehicles in which the driving tasks are shared conditionally. However, I have listened to the arguments made in this and earlier debates and will look at the definition in the Bill and see if there is anything we can to do clarify it further.

On Amendment 6, it is certainly our intention that only vehicles that are considered safe at the time at which the list is made or updated are included. I will consider the arguments made today and see whether we can make a clarification here.

On my noble friend’s Amendments 7, 31 and 32 regarding control, we think there are risks in using more specific terms at this stage, given that we cannot predict how the technology will evolve. I ask noble Lords to take account of this point throughout today’s debate. It is important to utilise broad language at this stage. We have used general terms to reflect the policy intent in establishing the compulsory insurance framework. As the scope of the Bill applies to vehicles for which, when driving themselves, there is no monitoring or controlling role required of the driver, we do not feel that we need to further define “control” at this stage.

On the subject of roads, my noble friend Lord Borwick raised an interesting point in Amendment 35 —he was backed up by the noble Lord, Lord Berkeley—regarding the definition of “road” in the context of Section 192 of the Road Traffic Act. I think we can clarify this further to make it explicit in the Bill. I will look at tabling an amendment on that ahead of Report.

I have attempted to clarify the definitions here, but following the points made in this and earlier debates, I will look at the definition in Clause 1 to ensure it is clear that only vehicles that can be lawfully used in self-driving mode will be included in the list.

In response to the point made by the noble Baroness, Lady Randerson, in the previous debate, I will follow up this session with a detailed letter, as well as a meeting ahead of Report to discuss the issues further. Given these reassurances, I hope that my noble friend feels able to withdraw his amendment.

[Lord Borwick]

My Lords, I thank my noble friend the Minister for her comments. Clearly, a lot of conversations should take place between now and Report, and they should include a wide variety of Peers who have expressed an interest in the Bill. I look forward to those discussions. In the meantime, I beg leave to withdraw the amendment.

Amendment 4 withdrawn.

Amendments 5 to 7 not moved.

Amendment 8

Moved by

[Lord Tunnicliffe]

8: Clause 1, page 1, line 10, at end insert—
“(1A) The Secretary of State must consult on and publish the criteria that they will use to determine whether, in their opinion, a motor vehicle is designed or adapted to be capable, in at least some circumstances or situations, of safely driving itself without having to be monitored by an individual.(1B) The Secretary of State may not change the criteria under subsection (1A) until they have consulted vehicle manufacturers, insurers and other such persons as the Secretary of State considers appropriate.”

[Lord Tunnicliffe]

My Lords, before moving Amendment 8, I would like to reflect on the comment made by the noble Lord, Lord Lucas, that this backwater of transport gets a Bill only every two or three years. I think the Minister and I are locked in our fourth transport Bill in as many months. If you extrapolate from that, we will be here for ever.

Amendment 8 improves the Bill because it requires the Government to consult on and publish criteria for the definition of “automated vehicles” that will be used by the Secretary of State. The current drafting of Clause 1 puts the onus on the Secretary of State to define, in his or her opinion, what constitutes an automated vehicle without having to consult the sector. The Bill will be vastly improved if there is a requirement to consult and publish the criteria by which an automated vehicle is defined. It would also prevent the Secretary of State changing the criteria without consulting vehicle manufacturers, insurers and other such persons as the Secretary of State considers appropriate.

It is crucial for manufacturers, vehicle owners and insurers to know whether they are making, buying, loaning on or insuring an automated vehicle, and whether the scope of the legislation applies to their vehicle. There are concerns that the Bill, as currently drafted, leaves the Secretary of State with total discretion as to what is an automated vehicle. The amendment therefore provides greater clarity and will help the Government by ensuring that relevant persons and organisations would be sufficiently involved, allowing that to inform the Secretary of State’s list of automated vehicles. The additional clarity provided by the amendment would help create a more reassuring environment which encourages the development and uptake of automated vehicles.

I will just touch on the whole area of safety. I have spent a life in safety-critical environments. The first thing that does is give one an aversion to the word “safe” because it is used in a binary sense: things are either safe or unsafe. In practice, nothing is absolutely safe. In my experience, most regimes are developed by one of two routes. One is the “crash and regulate” route, which has served aviation quite well. Hundreds of aeroplanes crashed in the early days, and we have now got to a situation where regulation refined by those experiences has produced the safest aviation environment in history. The motor industry has also essentially been a “crash and regulate” environment. Crashes have occurred, other incidents have occurred, regulations have been developed and safety has generally improved decade on decade. But in other areas the Health and Safety at Work etc. Act 1974 criteria have been used; that is, pursuing the objective of reducing risk to as low as is reasonably practical. That is a much more philosophical approach.

I hope that in developing these criteria the department, in its participation in international discussions, looks at both approaches, particularly the philosophical, proportional approach. When we move into this automated phase, it will be like the beginning of motoring all over again. We will be in an entirely different environment. For decades, we have relied on eyes and ears to be our interface senses; in this situation, we will be trusting a whole new series of senses, and the possibility of multiple interface failures has to be very high. I hope the department will take this seriously and actively develop its skills in looking at this whole safety environment so that we can play an important role in getting the right regulatory regime for automated vehicles. I beg to move.

18:00

[Lord Lucas]

My Lords, I shall speak to Amendment 10. This amendment follows on nicely from Amendment 29 in the name of the noble Lord, Lord Tunnicliffe. We had a useful discussion on that. The noble Lord, Lord Tunnicliffe, made an excellent case for why we need a properly organised maintenance regime. My noble friend the Minister agreed and said that we would commit to legislate in due course. Why do we not legislate now? When we legislate for something such as a maintenance regime in a fast-moving area—as this will continue to be—we give the Government powers to create one under regulations. We do not specify it or try to pin it down with a lot of detail, because it is too fast-moving an area, too new and too unknown.

The only way we can ever legislate for something such as an Amendment 29 regime is by giving the Government the ability to create regulations. I do not see any reason why we cannot do that now. When the Government get to the point where they consider a maintenance regime is needed, there could be other primary legislation in the queue. It may take a year or two to get a slot, a year to get the Bill through Parliament, and then there is the whole process of producing and consulting on the draft regulations. It may take the Government two or three years to get to the point where they have a maintenance regime in place. If we give them the power in this Bill to create a maintenance regime if and when they think it is needed, the whole process will be much shorter.

This is an industry where we ought to be caring enough about the economy and the future of this country to be giving the Government a lot of flexibility in what they do. If we get to the point of autonomous vehicles being on our roads, we can anticipate that we will need to say something about their ability to deal with level crossings. I do not think that we would ever try to deal with that sort of thing in primary legislation. If we are going to give the Government that sort of power in secondary legislation, why not do it now?

It is absolutely clear that we are going to have to deal extensively with the way in which data is handled and shared. Again, whenever we choose to legislate, it will be in a fast-moving, fast-changing, unpredictable set of circumstances. We will give the Government reasonably broad powers to keep updating the regulations without primary legislation being required at each turn. I believe that we can frame those regulations now.

We are going to have to produce regulations that restrict the ability of autonomous vehicles to drive in particular ways in particular circumstances. Those will keep changing as the capabilities of autonomous vehicles improve, as our experience of them improves, and as the way in which we as a society choose to deal with them improves. We are never going to try to deal with that sort of thing through primary legislation. Let us make this a fast-moving, adaptable Government, in a crucial area for the economy, by giving them the power now. We know that we want up-to-date software. We have already covered that today. Let us give the Government the ability to make sure that that is the case.

We know that we have to provide for human/autonomous changeover. It is unclear what that will look like. It will continue to change and adapt as technology moves. Let us give the Government the power now to deal with those things. When we look at our practice in this House, we know that we are not going to pin the Government down with primary legislation. We know that we are going to give them a sensible set of powers to create secondary legislation. There is nothing we need to know more than we do now in order to draft the required legislation. I hope that the Government will take these powers voluntarily—but, if not, I think we should be prepared to insist that they have them. The Government will then be much more responsive to the needs of the economy in terms of pushing this forward and putting ourselves into a position where international companies choose to do part of their autonomous vehicle development here because the environment is right and adaptable.

I understand—and one can judge from the admirable brevity of the Minister’s replies—that this is not in current contemplation by the department. That is why we may need to insist on an amendment or two. In conversations between Committee and Report, I hope that we may be able to agree what such an amendment might look like. We must put ourselves in a position where we are seen internationally not as an environment where change is slow and difficult because it requires primary legislation but rather as one which is quick and adaptable because we have already made the necessary provisions.

[Lord Craig of Radley]

My Lords, I am speaking to my Amendment 11 is in this group—a probing amendment, again on the subject of safety. I noticed that the Delegated Powers and Regulatory Reform Committee considered a Department for Transport memorandum which stated that,

“the Secretary of State will need to have regard to whether vehicles or types of vehicles have met international or domestic standards on the safe functioning of automated vehicles that will need to be met before the vehicles can lawfully be used on the roads”.

It went on to say about safety requirements that they were,

“likely to be recorded in a vehicle’s registration document”,

and,

“could therefore be identified either by type … or by reference to information in the registration document”.

Does that not overlook other essential safety requirements, such as the one I mention in my amendment—an MoT of the vehicle after so many years since new? Will the addition of greater and greater computer control and software mean that the current three years since new and yearly MoT thereafter will still be sufficient?

My amendment, and the much more comprehensive considerations mentioned by the noble Lord, Lord Lucas, and by other noble Lords about safety requirements, suggest that, for a vehicle that is included on an approved list, there will be additional safeguards to consider before it can be legally insured for on-road use. I instanced an MoT as just one example of a safety issue that may have to be considered for the vehicle to be listed. Alternatively, can the Minister confirm whether existing or additional safety regulations may be required and are to be introduced in parallel with the Bill before a fully automated vehicle is insured for on-road use?

It is perhaps worth mentioning at this point that some test of competence might be required of the owner-occupant of a driverless vehicle. How might this bear on the issue of insurance cover for the individual in or in charge of the vehicle? I noted that a recent report, which the noble Baroness, Lady Randerson, mentioned, suggested that, even if the vehicle is travelling under automated lane control, for example, as is possible today, the driver’s seat has to be occupied and the occupant is responsible for retaining ultimate control of the vehicle, maybe without even briefly letting go of the steering wheel. From the Minister’s opening remarks, though, I now understand that this level of vehicle automation is not to be covered by the Bill. How then are the insurance arrangements for these types of vehicle to be taken care of—or are they already taken care of by existing legislation?

The departmental memorandum that I mentioned says that the Secretary of State’s decision is administrative in nature and so could be open to judicial review. In respect of introducing new technology, this could be a troublesome legal minefield, as the noble Lord, Lord Borwick, has already mentioned. So I should be grateful to hear from the Minister about her department’s thinking on these safety issues.

[Baroness Worthington (CB)]

My Lords, I support Amendments 8 and 10 and the associated Amendment 22. I feel that I need to declare my interest as I am an employed member of the Environmental Defense Fund Europe, an advocacy group that promotes solutions to climate change and air quality.

While I am speaking to this part of the Bill, it is fair to say that my interest lies in Part 2, but I feel that the Bill ought to be seen in its entirety as a tool that the Government can use to reach their aspirations to see a huge transformation in the transport sector. We are anticipating and looking forward to the publication of the government strategy, Road to Zero. We hope it is a road to zero, not a road to nowhere; I hope it contains ambition. We hope the narrow parts of the Bill are stepping stones and that additional policies and consultation will be launched with the document, which we hope we will see before Report.

Amendment 8 in the name of the noble Lord, Lord Tunnicliffe, covers a very important aspect. I hope and suspect that the Minister will be able to reassure us that the consultation will indeed be forthcoming in the documents that we expect from the department. It is really important that we have that debate about how we are helping the Secretary of State to ensure that he or she is drawing on the very best information available, as this is quite a complex and technical area. There must be wide consultation on definitions in order for this list to be relevant and useful for every part of the community, including the insurers but also the users of the cars.

On Amendment 10 and the associated Amendment 22, many of us have been playing a game with the clerks in order to enable us to have a debate that is broader than the clauses before us. The short title of the Bill appears very wide but when it comes to it we are allowed only a very narrowed-down debate. I have put my name to Amendment 10 just to be able to talk about standards for autonomous vehicles. I understand that the nature of our debate, because it is linked to insurance, means that it has been mainly about the fear of accidents and safety, but there is an important additional element to autonomous vehicles, which is their environmental value. If we do not consider this at the outset then there is a chance that, no matter how well meaning we are in encouraging the use of autonomous vehicles and transport as a service more generally, we could see a period when these vehicles are overlapping with existing vehicles and we see more congestion, higher quality impacts and indeed greater impact on climate change.

I have a question for the Minister. Clause 1 of the Bill says:

“The list may identify vehicles … in some other way”.


When considering the list, could we interpret that as meaning we will have additional information about the environmental impact of these vehicles? There is an assumption that autonomous vehicles will be cleaner—and indeed that they will be electric, which would speak to both parts of the Bill—but there is no requirement or necessity for that to be the case. In the setting of and consulting on standards for these vehicles, could we include from the outset environmental standards that mean we do not have unintended consequences? Through our efforts to boost this industry, see inward investment and create jobs and financial flows, we do not want inadvertently to encourage lots of highly polluting vehicles using as many cheating devices as software engineers could come up with, in delivering the service through autonomous vehicles. We saw this in our drive to try to increase the efficiency of vehicles that has led to a big push to diesel.

18:15

That is why I support the amendment. As I say, I ask the Minister to give us some words of reassurance that more is to come. As the noble Lord, Lord Lucas, has mentioned, this is a slightly underpowered Bill for the task that it is undertaking. I doubt that this is the last time we shall come to this topic—I hope it is not—but legislative time is limited, so if the Government were able to broaden the scope in the time remaining in this House, I would certainly support that and I know many other noble Lords would too. I look forward to maybe discussing with the Government what is possible in the time remaining.

I will stop my comments there. I apologise that I cannot stay until the end of the debate this evening, but I will be here for the second day of Committee.

[Lord Borwick]

My Lords, I have been surprised by the Bill and the discussions on it because it is fairly unusual to find circumstances where there is the kind of debate that will happen on the next set of amendments about “must” and “may” regarding what the Government can do. Normally the Government suggest that the wording should be that they “may” do something while Back-Benchers push for it to be that they “must” do something. Here we have entirely the reverse of that problem. Similarly, when my noble friend Lord Lucas proposes that the Government should have the right to regulate on safety standards—I have a similar amendment coming much later—normally it is a matter of the Government wanting to have the powers to regulate and the Back-Benchers suggesting that they should not. Here again we have the reverse of that standard, but this is a new industry and perhaps we have new ways of legislating for it.

The points that my noble friend Lord Lucas and the noble Baroness, Lady Worthington, make are entirely right: we need standards. However, I think so many things are happening with this that the power to make regulations should be wider than just in respect of standards. That is why I have tabled Amendment 30, which will be dealt with towards the end of our debate today. I support my noble friend’s amendment as far as it goes. I think my amendment is slightly better than his but we can deal with that problem later.

[Baroness Sugg]

My Lords, I fully appreciate that we will see fast-moving technological developments in this area in future. With that in mind, I understand the intent behind noble Lords’ amendments on safety criteria and standards. It is going to be critical to ensure that automated vehicles are safe for effective deployment on UK roads. As the noble and gallant Lord, Lord Craig, rightly points out, their safety will also need to be maintained throughout the vehicle’s lifespan, as is the case for conventional vehicles today.

There is a long-established process in place for setting vehicle standards, which we have touched on before. The UNECE’s World Forum for Harmonization of Vehicle Regulations is tasked with creating a uniform system of regulations for vehicle design in order to deliver high levels of vehicle safety and environmental protection and facilitate international trade. These UN regulations, of which there are over 140 in number, contain the provisions for vehicles, their systems, their parts, their equipment related to safety and environmental aspects. So they provide the legal framework, allowing member countries such as the UK to establish harmonised international-level UNECE regulatory instruments concerning motor vehicles and motor vehicle equipment. They include performance-oriented test requirements as well as the administrative procedures. The latter address the type approval of vehicle systems, parts and equipment, the conformity of production and the mutual recognition of the type approvals granted by member countries.

The standards by which automated vehicles will be approved safe for sale and use are still being discussed internationally at this UNECE working group, where the UK plays a leading role. We expect them to follow the way in which conventional vehicles have been judged safe to use. I will certainly look carefully at the words of the noble Lord, Lord Tunnicliffe, to help inform our approach in those negotiations. We work with bodies such as the International Organization of Motor Vehicle Manufacturers, which participates in these discussions in a consultative capacity. We think that this is likely to form the basis of the type approval process which automated vehicles, like conventional vehicles today, must pass to be sold for safe use on UK roads.

Based on international standards and our evolving domestic regulatory programme, we expect it to be very clear which vehicles, including their software, can safely operate. The vehicles approved as safe by type approval will then go on to the list, so that our domestic insurance framework is clear which vehicles need which insurance products. The Clause 1 list of automated vehicles will not be the mechanism by which automated vehicles are regulated in relation to safety and security. That will be governed by future laws and technical standards, which we expect to be developed with the appropriate level of scrutiny and consultation, just as current road traffic laws and vehicle standards are developed.

On the important point raised by the noble Lord, Lord Tunnicliffe, about consultation, these changes to domestic legislation, including road traffic laws and vehicle requirements, will generally undergo public consultation and have impact assessments carried out. They are subject to parliamentary scrutiny when amending legislation is laid in the House. Throughout the development of our policy in this area, we have consulted closely with industry. Given the understandable interest in this new area, we fully expect there to be full consultation when we see the regulations appear for automated vehicles. So I agree with the intention of the noble Lord, Lord Tunnicliffe, to consult on the standards that will be set for automated vehicles. That is something that we plan to do, but I am again afraid that I cannot agree that this Bill, which relates to insurance provision only, is the right place for it.

I fully expect that future regulations for automated vehicles will cover many of the points in Amendment 10, including environmental issues, but we think that legislating in any way further, in the absence of the more detailed knowledge of the ultimate international design standards, risks us regulating ineffectively, potentially creating barriers to the use of this technology in the UK and therefore impeding innovation.

As the new technologies reach the point of market readiness, we will be able to set and define the standards, both internationally at a UNECE level and, depending on the outcome of the international discussions, domestically as part of our ongoing regulatory programme. As I have said, we fully expect this to be subject to full consultation.

[Baroness Worthington]

I wanted to ask the Minister whether she thought there was value. I understand that there will be lots of ongoing discussion, but there may be value in taking some enabling powers now so that we can move forward quickly. This is quite a competition among many nations, and it would be a great shame if we were to lose this parliamentary opportunity to take some enabling powers now.

[Baroness Sugg]

I agree with the noble Baroness that this is a fast-moving industry, and we absolutely want to position ourselves at the front of it. As my noble friend pointed out, I am in an unusual situation of being offered powers to Government. This is a narrow Bill, which I acknowledged at the beginning. We have been trying to ask only for powers which we know how we will use in the future. We have an amendment from my noble friend coming up on that, and it has been interesting to hear people’s views. At the moment, the Bill is focused entirely on insurance, but I will be interested to hear views from everybody around the House ahead of Report.

In Amendment 11, the noble and gallant Lord, Lord Craig, is right to be concerned that vehicles must meet the appropriate safety standards, both before they are sold and to ensure their ongoing roadworthiness. They are important issues that will require attention from the Government, and we certainly expect safety throughout the vehicle’s life to form the basis of future regulation. We do not yet know, because of the technology, the timescale to expect for regular vehicle checks. As the standards have not yet been set, I am afraid that we are unable to introduce those detailed regulations at this time and in this Bill.

[Lord Craig of Radley]

On that point, the Minister says that the Government cannot introduce regulations at this time. Will it be primary legislation to do that, or does existing legislation give them the opportunity to produce regulations as and when required?

[Baroness Sugg]

Under the construction UNECE regulations, which are how we deal with conventional vehicles, we are able to introduce regulations, which is a potential future for automated vehicles. We have asked the Law Commission to do a far-reaching review on our regulatory framework for automated vehicles. That is designed to promote the safe development and use of automated vehicles, identify areas in the law that may be barriers to the use of automated vehicles, and propose potential solutions. One of those barriers was that we did not have an insurance framework, and those vehicles could not be insured. That is the purpose of the Bill. We are working with the Law Commission to understand where we need to make further primary or secondary legislation. As and when appropriate, the Government will come forward with legislative and regulatory proposals, and will absolutely consult on the detail.

I turn to the role of the insurer and my noble friend Lord Lucas’s Amendment 22. It is the policy intent of the Bill that it mirrors existing processes as closely as possible without making complex legislative changes to the existing framework. A vehicle is insured if there is in force, in relation to the use of the vehicle on a road or other public place in Great Britain, a policy of insurance that satisfies the conditions in Section 145 of the Road Traffic Act 1988. It is the contractual obligation of the insured person to provide accurate information to the insurer. Failure to do so may result in the policy being voided.

I understand that there is concern that we are proposing an insurance framework before we have agreed the safety standards, and before we are sure how we will regulate for those, but as I said, the Bill is designed to enable insurers to begin developing new insurance products, in response to a request from the insurance industry. We want those insurance products to be developed now so that it will encourage further investment and research in automated vehicles in the country—something I am sure noble Lords are in favour of.

I hope that these words have assured noble Lords that there will be comprehensive safety standards, which will be informed by consultation, to ensure that only automated vehicles that can be used safely will be placed on the list. Again, I am afraid, as the Bill is solely considering a list in relation to the insurance framework and not these safety standards at this stage, I hope the noble Lord feels able to withdraw his amendment.

[Lord Lucas]

My Lords, before the noble Lord deals with his amendment, may I say that I am sad that I was right that the Government are determined to keep the Bill within its current scope? They are missing considerable opportunities in regard to my noble friend’s description of what the Bill would do: enable the insurance industry to develop new products, and enable us in this aspect to be ahead of the game and part of the international conversation. She talks about the advantage of legislating now, but the Government will not legislate now in other areas where they could simply and where I think the House would be inclined to give them quite wide powers to get on in this area. I am disappointed that the Government are taking this action. If I find opportunities beyond today to do something about it, I look forward to taking them.

[Lord Tunnicliffe]

I thank all noble Lords who have taken part in this debate. I shall study the Minister’s response with great care, and I look forward to possible contacts between now and Report, and will decide whether to table further amendments then. In the meantime, I beg leave to withdraw my amendment.

Amendment 8 withdrawn.

Amendment 9

Moved by

[Lord Borwick]

9: Clause 1, page 1, line 17, leave out “must” and insert “may”

[Lord Borwick]

My Lords, as I mentioned a moment ago, in tabling these amendments, I felt that the legislation imposes an unnecessary and potentially damaging duty on the Secretary of State that he or she “must” produce a list. Governments hate being told that they must do something. It is normally a case of taxpayers “must” do something, but rarely Governments.

It seems ironic that Back-Benchers are offering amendments to say the Government “may” do something, but the Government themselves are insisting that they must. What if, through some administrative or IT failure, the Secretary of State did not produce a new list every time there was a single addition? I am assured by the Bill team that the mechanics of this list are such that there will be automatic updates with subsequent publication, and that the DVLA will act on behalf of the Secretary of State to ensure that it is not the imposition I suggest it might be. However, I still believe it important to note that, if lists are produced, they should include the vehicle registration. This is why I propose a detailed new clause in Amendment 12.

18:30

Insurance companies need to be able to check, against the list, whether an insurance application is for an autonomous vehicle. This insurance is likely to be cheaper than for normal vehicles, so fraudulent applications need to be easily identified and caught. While I can concede that a list must be maintained, I would suggest that a discretionary power—the use of the word “may” in my amendment—will allow the Secretary of State to take steps to impose fines upon manufacturers and other producers of autonomous vehicle kit that do not register vehicles appropriately under Clause 1. I believe that the Government need to be told by manufacturers that they have produced a new autonomous vehicle, and that is why I have suggested Amendment 12.

The advantage of Amendment 9 changing “must” to “may” is that it gives the Government the opportunity to be flexible that my noble friend suggested earlier that they needed. “Must” is a red rag to a lawyer; it suggests that, because the Government have not done something, there is some liability knocking around that they can attach a claim to. I am therefore worried about this requirement that the Secretary of State “must” produce a list and that it “must” include this or that. It would be much better for the Government just to take the power and decide in the future to what extent they want to produce this list. I beg to move.

[Lord Berkeley]

My Lords, I entirely agree with the noble Lord, Lord Borwick, about “must” and “may”. It is interesting that the Government like to put “must” on its own. I am sure the Minister will have a view on that.

I have a short comment on Amendment 12, which is in this group. I support it. The Minister may say it is too early but, if you are going to have a written notice under proposed new subsection (2), surely the documentation, certificates or anything relating to not only the vehicle but the software, control system and everything else should be included.

[Baroness Sugg]

My Lords, I am sorry to disappoint my noble friend on further regulatory powers in the Bill. As I said, I would be interested to hear views from noble Lords from across the House on further regulatory powers later but, at this stage, we are just not ready to make further regulation. That is why we have not asked for the powers.

The purpose of the list in Clause 1 is to allow manufacturers, owners of vehicles and insurers to know if the extension of the compulsory motor insurance in this legislation applies to their vehicle. The aim is to provide certainty to the automotive and insurance industries, as well as clarity to the public. As I have said, the list itself is not a mechanism to approve which vehicles are safe to use. This will be determined by future regulation, most likely based on international standards. The list in Clause 1 is simply to inform the insurance industry which vehicles require automated vehicle insurance.

My noble friend Lord Borwick’s Amendment 9, which replaces “must” with “may”, would imply that preparing, updating or publishing this list might be at the Secretary of State’s discretion. We believe it is right that the Bill imposes a duty on the Secretary of State, who “must” ensure that the list, comprising any vehicle that may lawfully be used when driving itself on roads or other public places in Great Britain, is published and kept up to date. If the list is not updated, people may obtain the wrong type of insurance, leading to difficulties for victims in securing compensation quickly and easily. As I said, this aims to provide certainty.

In order for the Bill to deliver the insurance framework that it is intended to—this is after consultation with the insurance industry—it is important to maintain the list as a duty on the Secretary of State. Perhaps this is something we can discuss further before Report.

Amendment 12 concerns the duty of a manufacturer to notify the Secretary of State. I understand my noble friend’s intention but, at this stage, it is not appropriate to legislate in this regard. There are already existing processes in place when registering a vehicle or notifying changes regarding a status of the vehicle, and we are working with the DVLA on how to replicate these processes for automated vehicles. We have yet to complete that work, so we do not feel it is the right time to legislate in this regard. I hope that, given this explanation, my noble friend is able to withdraw his amendment.

[Lord Borwick]

My Lords, I beg leave to withdraw that amendment.

Amendment 9 withdrawn.

Clause 1 agreed.

Amendments 10 to 12 not moved.

Clause 2: Liability of insurers etc where accident caused by automated vehicle

Amendment 13

Moved by

[Lord Borwick]

13: Clause 2, page 1, line 22, leave out paragraphs (a) and (b) and insert—
“(a) damage is caused by an automated vehicle when driving itself,(b) the vehicle that caused the damage is insured at the time of the accident, and”

[Lord Borwick]

My Lords, we have reached halfway through the list before us today. This is a discussion about the difference between accidents and damage. I feel that, sometimes, the legislation as drafted moves fluently between the words “accident” and “damage”. I fear that that is open to misinterpretation, as an opportunity, by lawyers in the future.

It is critical that “caused” be defined in this Bill. A lack of a test of cause of an accident or damage to a person or vehicle will lead to years on end of appeals in cases. The Bill therefore has the opportunity to provide for a measure against a reasonable standard. The focus should be on what or who caused the damage, rather than the accident causing the damage. By doing this, the Bill could be a world leader in clarifying such a test, as has never been done before. We must accept that the public are nervous about this new technology, and the Bill should clarify what happens before, during and after an accident. It will clearly demonstrate that we have the citizen at the forefront of our minds.

The problem of leaving “caused” undefined is that, in so many processes, the Ministry of Justice is trying to reduce the amount of litigation. As has been mentioned by the noble Baroness, Lady Randerson, the magistrates’ courts are filled with motoring cases of liability for damage caused by somebody’s unreasonable behaviour. If we are careful with the drafting, we could help reduce that litigation in future. Therefore, I beg to move these amendments.

[Baroness Randerson]

My Lords, I wish to speak to my Amendment 17. I am grateful for the support of the noble Lord, Lord Borwick, on this. The key issue is what sort of standards we can expect from automated vehicles. We are told, as has already been said, to expect far higher standards and few accidents. The estimate is an 80% reduction in the number of road traffic accidents once automated vehicles are fully established. After all, we know as humans that even very good drivers sometimes have a bad day, and we are not all very good drivers, but automated vehicles should always be on the ball. However, undoubtedly there will still be accidents, especially during the lengthy transition period, when some cars have drivers and others do not. There are even worrying tales of some pedestrians, in areas where automated vehicles are being trialled, playing chicken by testing how close you can get to the cars by stepping out in front of them, to see how quickly they will stop.

Legal advice we have received indicates that under the Bill as drafted, the insurer would be liable when an accident happens, even if damage is not caused or the damage caused is not the fault of the automated vehicle. My Amendment 17 would lower the standard by which the automated vehicle is judged to that of a reasonable driver. This, of course, removes the double standard the Bill would create—that an automatic vehicle is always safer than a manually driven car. It would therefore lower the burden on insurers.

I am not entirely sure about the term “reasonable” driver; I wondered whether “competent” might be a better word, but I was assured that “reasonable” is an accepted legal term and would be understood. I have tabled this simply as a probing amendment because we need clarity from the Government. After all, millions of insurance policies will rely on this Bill and the structure it creates. The Government have written the Bill expressly to prepare the insurance market for AVs, so it is vital that we have clarity on how the Government view the system they plan to create.

The amendments proposed by the noble Lord, Lord Borwick, in this group, replace “accident” with “damage”. This is an issue of technical legal terms, on which I would welcome clarification as well. I am very pleased to see that he has tabled his amendments.

[Lord Borwick]

I should perhaps earlier have declared my interest as chairman of the advisory board for the Gateway autonomous vehicle in Greenwich project, which has done a lot of work on the subject that the noble Baroness, Lady Randerson, mentioned—the habit of pedestrians testing autonomous vehicles. They found that in time, that habit reduces, not because the relevant pedestrians are squashed by the autonomous vehicle but because they get bored with the test. They might try it once, as a teenager, but they do not bother to try it again: it is a boring process. Boring a teenager is not something we should use as the basis of a safety standard, but it is a powerful factor in this matter. I very much support the amendments in the names of the noble Baroness, Lady Randerson, and myself.

[Baroness Sugg]

My Lords, my noble friend’s Amendments 13, 14, 15, 16, 18 and 24 seek to clarify the definitions of “damage” and “accident”, terms which are already in common use in road traffic legislation and case law. It may help if I set out how we have intended the provisions in this Bill to work. They are intended to mirror the existing conventional vehicle compulsory third-party insurance framework, found in the Road Traffic Act 1988, for automated vehicles. However, the Bill’s read-across with the Road Traffic Act has to be adjusted at times to allow for the lack of a driver when an automated vehicle operates in automated mode, which means that the Bill makes use of the word “accident” as a way of introducing the word “damage”, which in turn is defined in the Bill in a way that mirrors the meaning of “damage” in the Road Traffic Act 1988. Again, as I said, the aim of the Bill is to provide consistency with conventional vehicles in the 1988 Act.

“Damage” is defined within Clause 2 as,

“death or personal injury, and any damage to property other than … the automated vehicle … goods carried for hire or reward in or on that vehicle or in or on any trailer (whether or not coupled) drawn by it, or … property in the custody, or under the control, of … the insured person … or … the person in charge of the automated vehicle at the time of the accident”.

As I highlighted earlier, the policy intent of the Bill is that it mirror existing processes as closely as possible without making complex legislative changes to the existing framework. I appreciate the challenge from my noble friend in testing the Bill’s wording, but we believe that the task of mirroring the existing processes in the 1988 Act is best done by the wording as it currently stands.

18:45

On Amendment 17, the process of determining and apportioning liability in the event of an incident will remain the same as now, with the courts ultimately making judgments based on the facts. That will include taking account of evidence as to whether the human driver or the automated vehicle system was in control at the time of the accident, and related issues. I recognise that this is a new area, but our courts have a long history of making complex judgments in the determination and apportionment of liability, including following the introduction of new and emerging technologies. For this reason, we believe they are best placed to make judgments in that area, but of course, it is an incredibly complex one. As part of the Government’s wider continuing regulatory programme for automated vehicles, it may become necessary to legislate further when we know more about the technology, and it could be that the Law Commission makes recommendations in that regard.

We absolutely do not want to add to the concern of the legal system and want to make sure that the Bill is as clear as possible, given that many thousands of insurance policies will be based on this framework, as the noble Baroness said. We believe that the language as it stands is the best way to replicate the conventional vehicle in the Road Traffic Act. I hope I have helped to clarify the situation but, again, this may be an issue to discuss further ahead of Report—the exact definitions and how we use them in this Bill. Based on that, I hope that my noble friend feels able to withdraw his amendment.

[Lord Borwick]

I beg leave to withdraw the amendment.

Amendment 13 withdrawn.

Amendments 14 to 18 not moved.

Clause 2 agreed.

Clause 3: Contributory negligence etc

Amendment 19

Moved by

[Lord Borwick]

19: Clause 3, page 3, line 3, after “begin” insert “or continue”

[Lord Borwick]

My Lords, Amendment 19 addresses the problem at the back-end of subsection (2), where it says,

“allowing the vehicle to begin driving itself when it was not appropriate to do so”.

The problem may be that it might have been right for the vehicle to start off on a nice sunny day in London, and it then drives to Scotland, where it is snowing, and it is no longer appropriate. However, it was appropriate at the start of the journey, and it would certainly be right for the driver to allow the vehicle to begin driving itself at that time—but not right for him to allow it to continue to drive. That would be a simple change in the wording, which I have put in Amendment 19.

In Amendment 20, I address the question of what “not appropriate” means, when we could use the phrase “avoidable and unreasonable”, which I think is much more in keeping with legal custom than the word “appropriate”, because it can be argued as to what it means. Those are my two amendments in this group, and I leave to the noble Lord, Lord Tunnicliffe, Amendment 21. I beg to move.

[Lord Tunnicliffe]

My Lords, I will speak to my Amendment 21 in this group. The Bill as currently drafted means that the insurer or owner of an automated vehicle is not liable where the event was caused by a person allowing the vehicle to drive itself where it was not appropriate to do so. However, it does not define when it is or is not appropriate to do so. This amendment requires the Government to provide regulatory guidance for when it is and is not appropriate for a person to allow an automated vehicle to drive itself.

It would clearly not be appropriate in some circumstances for vehicles to drive themselves: for example, early automated vehicles might be deemed safe to use only on motorways and not on some urban roads. Another example would be that a software issue might arise so that using the automated function at that point would be inappropriate. Clause 3(2) is not clear enough in its intentions. Does it even apply to fully automated vehicles or bimodal vehicles? We need more clarity on this.

One of the primary purposes of Part 1 is to provide a framework to give insurers, manufacturers and potential users greater clarity, providing confidence and encouraging progress on automated vehicles. However, it is still not clear from the Bill what the Government have in mind about when their use would be appropriate. We are asking for regulations to be brought forward to better define those circumstances, because we cannot afford to have confusion here. People must be clear about where their obligations lie. If we are to see the growth in the industry we all wish for, we do not want to leave this issue hanging over it.

[Lord Berkeley]

My Lords, I will make what I hope is a helpful suggestion to my noble friend in connection with Amendment 21. The most appropriate authority to make these regulations would be the Office of Rail and Road. It is responsible for safety on the railway; it should be responsible for road safety, but we have not got there yet. Maybe the noble Lord, Lord Lucas, would support me on that one. However, I hope that is a helpful suggestion.

[Lord Lucas]

My Lords, given Network Rail’s safety record over the last 10 years, I would absolutely support that recommendation.

[Lord Young of Cookham (Con)]

My Lords, as we deal with a set of amendments dealing with handover, it is perhaps appropriate to give my noble friend a break, and I move over from the passenger seat. However, I assure the Committee that my noble friend remains in control.

The transferring of control of an automated vehicle between a human driver and the automated vehicle’s system will be an important factor in ascertaining how a vehicle safely and appropriately operates on UK roads. Straightaway I reassure the noble Lord, Lord Tunnicliffe, who spoke to his Amendment 21, that of course we recognise the need to put in place a proper regulatory framework to ensure both the safe deployment and safe use of automated vehicles—I will say a bit more about that in a moment.

It is likely that the first automated vehicles to reach the market will be able to be used in automated mode only in specific circumstances or situations, with vehicles capable of full automation arriving further into the future. My noble friend Lady Sugg said a little more about that when we debated Amendment 4. For example, she said that these circumstances could refer to vehicles that have been geo-fenced—able to operate only in a very specific, defined area—or to systems that would operate only on motorways and other high-speed roads. It is likely that these vehicles will be designed to allow handover only in these very specific circumstances: for example, from the driver to the vehicle when the vehicle enters that geo-fenced area, and from the vehicle to the driver when it leaves, in a safe manner and when appropriate to do so.

It is anticipated that the relevant international regulations at UNECE level will reflect these limited use cases and handover process. It is possible that these regulations will contain requirements for the vehicle to be able to detect where it is so that the system cannot be used in other situations. These standards and regulations will be likely to form the basis of the type approval process which automated vehicles, like conventional vehicles today, must pass to be sold for safe use on UK roads or in other public places. They would then be covered by Clause 1.

At the moment, the powers we have are sufficient. We can use existing powers in the Road Traffic Act 1988 to revise existing, or create new, road vehicle construction and use regulations to transpose or reinforce new iterations of the global regulations as they appear. However—I repeat what we have said before during this debate—global regulations for automated vehicles have not yet been decided, and so it is not clear what changes in our domestic framework would be needed at the present time. It would be premature to ask for primary powers in a Bill that is just about automated vehicle insurance without more detailed knowledge of the ultimate design standards to which these vehicles will be held, or without knowing the outcome of the Law Commission review of the existing legal framework —which, again, my noble friend mentioned.

As regards handover of the driving to an automated vehicle, my noble friend Lord Borwick has proposed a different test from that in the Bill: that the handover must not be “avoidable and unreasonable”. These two words would be applied conjunctively by the courts, and the result would be that a person could be found to be negligent only provided “avoidability” and “unreasonableness” were both shown to be present. The Bill’s test makes for a lower threshold on the insurer by placing a stricter burden on the driver not to hand over in situations when it would be inappropriate to do so. While the technological and wider regulatory framework here is still very new and developing, it would be prudent to set a strict standard and relax it if appropriate once more is known. Therefore, in the Government’s view, the original text of the Bill should stand.

To insert “or continue” into Clause 3, as proposed in Amendment 19, would in effect legislate for the possibility of the user having some residual role in the driving task after the handover to self-driving mode is completed. When a vehicle leaves a geo-fenced area or comes off the motorway, it is anticipated that there will be a safe handover back to the driver, and the details of this will be covered by international safety standards. However, my noble friend’s amendment does not fit with the Bill’s definition of an automated vehicle, because this requires no monitoring while the vehicle is driving itself. I hope this explanation reassures him that his amendment is not necessary.

While, as I have already said, I am sympathetic to the intent of the noble Lord, Lord Tunnicliffe, in Amendment 21, we think that we do not need these powers, as the definition of when it is appropriate for the vehicle to drive itself will be covered elsewhere in regulations. I hope that, given that assurance, the noble Lord will feel able not to press his amendment.

[Lord Tunnicliffe]

Can the Minister expand on where else in regulations these powers will be available?

[Lord Young of Cookham]

I think I said when I was speaking to the amendments that at the moment the powers we have are sufficient. We can use existing powers in the Road Traffic Act 1988 to revise existing, or create new, road vehicle construction and use regulations to transpose or reinforce new iterations of the global regulations as they appear. However, as has been the case with other regulations we have debated, on safety and other issues the Government will bring forward the appropriate legislative framework in due course if we do not already have powers under existing primary legislation.

[Lord Berkeley]

My Lords, the Minister has mentioned the Law Commission report several times. Can he give any timetable for when the Law Commission will report on various issues? I am not just thinking about this one. One report on railway level crossings was completed about five years ago. I know that you are supposed to wait two years after a report has been produced before it is introduced into legislation. However, if one waits three, four or five years, the report’s conclusions may get out of date. I remember threatening the last coalition Government with putting the whole Law Commission report on level crossings down as amendments to a suitable Bill—it would have been about 50 pages long, but that was not the problem—in order to get the coalition Government to do something. My impression is that, because of all the Brexit legislation, everything has come to a grinding halt. I am not necessarily suggesting that the Minister will be able to answer my detailed question, but if he or a colleague could write to me on that, I think it would be a useful subject for discussion later.

[Lord Young of Cookham]

I understand that the Law Commission work on the issue that we are debating now is a three-year programme. I am not sighted on the level crossing review, but either I shall write to the noble Lord or, perhaps later on, during one of our debates, we can update the exact timescale of the Law Commission review of the existing legal framework for automated vehicles. Obviously, automated control is not in operation.

[Lord Borwick]

I thank my noble friend the Minister for his comments. I think it would be useful between this stage and Report to talk more about the nature of “continue”. There will still be a duty, either on the vehicle to monitor itself, or on the passenger to monitor it; that person will be aware of conditions changing, and there will undoubtedly be differences as a result of a snowstorm occurring. I think the drafting could use some improvement—I am not sure mine is exactly the right phrasing—but I look forward to discussing it with my noble friend. In the meantime, I beg leave to withdraw the amendment.

Amendment 19 withdrawn.

Amendments 20 and 21 not moved.

Clause 3 agreed.

19:02

House resumed. Committee to begin again not before 8.02 pm.

Learning Disabilities Mortality Review

Wednesday 9th May 2018 Lords Chamber

Statement

19:02

[The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord O’Shaughnessy) (Con)]

My Lords, with the leave of the House, I will repeat the Answer to an Urgent Question given yesterday by my honourable friend the Minister for Care on the Learning Disabilities Mortality Review Programme annual report.

“The Government are absolutely committed to reducing the number of people with learning disabilities whose deaths may have been preventable, and have pledged to do so with different health and care interventions. The Learning Disabilities Mortality Review Programme was established in June 2015. It was commissioned by NHS England to support local areas in England to review the deaths of people with a learning disability. Its aims were to identify common themes and learning points, and to provide support to local areas in their development of action plans to take forward the lessons learned.

On 4 May, the University of Bristol published its first annual report of the LeDeR programme, as it is known, covering the period from July 2016 to November 2017. The report included 1,311 deaths that were notified to the programme and set out nine recommendations based on the 103 reviews completed in this period.

The Government welcome the report’s recommendations and support NHS England’s funding of the programme for a further year at £1.4m. We are already taking steps to address the concerns raised, but the early lessons from the programme will continue to feed into our work, and that of our partners, to reduce premature mortality and improve the quality of services for people with learning disabilities”.

19:04

[Baroness Thornton (Lab)]

I thank the Minister for repeating that briefing. He may find that the decision about the date of the publication was actually that of NHS England and, frankly, publishing it on the Friday before a bank holiday is either incompetent or shameful. However, seven years after the Winterbourne View scandal and five years since the avoidable death of Connor Sparrowhawk, the findings of this review show a much worse picture than previous reports about the early deaths of people with learning difficulties. One in eight of the deaths reviewed so far show there to have been abuse, neglect and delay in treatment and gaps in care. Women with a learning disability are dying 29 years younger, and men 23 years younger, than the general population; 28% of the deaths reviewed had occurred before the age of 50, compared with just 5% in the general population. This is a terrible situation.

I would like to ask the Minister two questions. First, almost one in 10 of the people who have died have been in out-of-area placements, without the support of family, friends, or any local, familiar community support. The Government have repeatedly said that such placements must be avoided, so will the Minister tell the House what action is being taken to ensure that government statements and guidance on this matter are being followed? Secondly, will the Minister expand on the last part of the Statement, and tell us what action the Government are taking to address the alarming gap in life expectancy of people with learning difficulties?

[Lord O'Shaughnessy]

I thank the noble Baroness for her questions and agree with her that it is a troubling report; it paints a troubling picture of the shockingly poor outcomes that people with learning disabilities have in terms of their mortality and morbidity. I would not disagree with her about that picture and I will come to the actions we are taking to try and address it.

On the publication, I agree with her that the timing was less than ideal. The department did not have sight of it; it was an independent report commissioned by NHS England. We are investigating that, but I agree it was not done as it should have been and we will endeavour to ensure that this does not happen again. On the areas of policy that she referred to, on out-of-area placements there is a programme called Building the Right Support, which is trying to increase the amount of care delivered in community settings, bringing people with learning difficulties, disabilities and autism out of in-patient care to more suitable care in the community. The intention is to reduce the use of in-patient beds for people in mental health hospitals by 35% to 50% between March 2015 and March 2019. It is an attempt to locate much more of that care in the community.

The noble Baroness also asked about other actions we are taking to improve outcomes. I want to focus on the annual health checks that are now available for adults and young people from 14-plus years. That is happening every year. We know the use of these checks is increasing; it has increased by 17% year on year up to 2017-18. There is a real ambition to raise that further by 64% in 2018-19 compared to 2016-17. We know this group does not always feel equipped to come forward and bring health issues to the notice of the health system. It needs extra support; it needs people to be on their side, checking in with them to make sure their issues are addressed. I think this is one way in which we will make some difference.

[Baroness Jolly (LD)]

My Lords, I declare my interest as chairman of a learning disability charity that provides services for 2,500 adults in England. This report makes for uncomfortable reading for anyone involved in the sector and it should shock the general public. We are judged by how well we as a society care for those who are weak and vulnerable. On this count, we have failed. Each year, the deaths of 1,200 people with learning disabilities are avoidable. The standard of their care is not fit for purpose. There are not enough learning disability specialist nurses in the NHS and support staff are no longer being funded to support people with a learning disability in a healthcare setting.

I have three questions for the Minister. Do either the Department of Health and Social Care or Health Education England collect figures on how many health professionals attend training in dealing with people with a learning disability? What guidance is given to staff about the provision of written material in an accessible format? Finally, once admitted, learning disabled patients lose their funding from the local authority so they have no one who knows or understands them and they are left frightened and alone. Does the Minister believe this should be the case?

[Lord O'Shaughnessy]

I thank the noble Baroness for raising excellent questions. We know that there is a need for more specialist nurses, and indeed that is one reason for the expansion of the number of nurse training places. The education and training of staff is a focus of the recommendations of this report and, equally, of the Mencap report. If noble Lords have not read that, I commend it too. Because it is a very good point, I will look into whether we are tracking the number of people who access training. Certainly there is now, and has been since 2016, an education and training framework for the care of people with learning disabilities. I believe that there is also one to follow for adults with autism, and that is welcome. However, as the noble Baroness says, it is about making sure that the staff use that training.

On the noble Baroness’s point about advocacy, I did not realise the funding issue that she raised existed. I will take that back and investigate it. I know that NHS England, the LGA and the Association of Directors of Adult Social Services have put out joint guidance on advocacy for this group of people, but I will investigate the funding point and write to her.

[Baroness Hollins (CB)]

My Lords, I declare my interest as the chair of a social enterprise that creates communication resources for people with learning disabilities. My own research more than 25 years ago uncovered very similar shocking inequalities. The noble Lord has responded to a question about education but is it not now time for there to be mandatory education for all healthcare professionals? This is not a specialist matter. Does he agree that such training should be co-delivered by people with learning disabilities in order to reduce the fear and lack of understanding among health professionals when it comes to making reasonable adjustments? What action will be taken now?

[Lord O'Shaughnessy]

The point that the noble Baroness makes about the involvement of people with learning disabilities in this process is critical. I did not respond to a question from the noble Baroness, Lady Jolly, about communications with people with learning disabilities. Having written a manifesto in the past and having had it translated into the Easy Read format, I know that this is critical. I know that there are attempts to make sure that communications are made in that format where it is helpful to do so.

On the noble Baroness’s question about training, we have a really good template which my honourable friend Caroline Dinenage mentioned in the other place yesterday, and that is dementia training. It is tiered, with tiers 1 and 2, and it has been rolled out very broadly across the health and care sectors with great success. Therefore, I think that we have a template for doing this, and I know that my honourable friend is taking that forward. It was a specific recommendation in the report by the University of Bristol. My honourable friend committed to take forward with NHS England all those recommendations, and that is what we will endeavour to do.

[Baroness Finlay of Llandaff (CB)]

My Lords, given that the report recommends that there should be a named healthcare co-ordinator, yet there is a serious shortage of experienced learning disability medical and nursing staff and it will take some time for trainees to feed through the system, have the Government considered discussing with the GMC and the Nursing and Midwifery Council ways of attracting back into the service older, currently retired professionals who might have a great deal of wisdom and might be motivated to work in a specific area, act as a person’s advocate and provide on-site teaching in conjunction with the person? They could take on the role of communicator and navigator to develop a strategic pathway for the person with learning difficulties or disabilities, and they could also have a role in teaching people about the signs of sepsis, pneumonia and so on, so that there are early alerts.

[Lord O'Shaughnessy]

The noble Baroness makes an excellent point. Clearly there is a need to recruit healthcare co-ordinators. One positive thing that I would highlight is a recommendation in the report from the University of Bristol regarding the sharing of health action plans between health and care agencies. That is already happening and is one positive step. Her idea about bringing back into the profession more experienced professionals to act as advocates is a very good one. A concerted effort is being made to do that through the Return to Practice programme. I do not know whether there is a specific strand relating to people with learning disabilities but I will take that away and investigate it.

On her point about signs of sepsis, pneumonia and other diseases, which are among the causes of this early mortality, some good progress is being made. NHS England is creating new pathways in those areas specifically designed for people with learning disabilities, and I believe that it will be publishing some of them this year.

Renewal of G4S Contracts

Wednesday 9th May 2018 Lords Chamber

Statement

19:14

[The Minister of State, Home Office (Baroness Williams of Trafford) (Con)]

My Lords, with the leave of the House, I will now repeat an Answer to an Urgent Question given by my right honourable friend Victoria Atkins MP:

“The Government have agreed a short-term continuation of G4S’s contract to run the Gatwick immigration removal centres while further work is carried out to identify a long-term manager. The Home Office will launch a further, full competition later this year after the outcome of two independent reviews.

The contract for the management of Brook House and Tinsley House, which was due to expire this month, was put out for tender in November 2016. However, after careful consideration of the bids, it was decided that G4S would continue with the contract for a further two years. This will provide sufficient time to reflect on the two independent reviews’ conclusions, conduct a new procurement exercise and mobilise the successful provider. As with any procurement process, the Home Office has undertaken a robust evaluation of all bids, supported by a comprehensive due diligence process.

I recognise that the Government have taken this decision against the backdrop of the BBC “Panorama” programme on Brook House, which was broadcast in the autumn of last year. The previous Home Secretary made it clear at the time that the behaviour on display from some G4S staff was utterly unacceptable and set out our expectation that G4S would take urgent action to address the serious issues the programme uncovered. G4S has put in place a comprehensive action plan and this has quickly delivered improvements at Brook House. My right honourable friend the Immigration Minister has met G4S to review progress and visited the two Gatwick centres on 18 January.

Detaining those who are here illegally and who refuse to leave voluntarily is key to maintaining an effective immigration system, but, regardless of status, all immigration detainees must be treated with dignity and respect. Please be assured that we will always demand the highest standards from those we entrust with the safety and welfare of those in detention”.

19:17

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I thank the noble Baroness for repeating the Answer to the Urgent Question given by her honourable friend the Member for Louth and Horncastle in the other place yesterday.

We were all shocked at the appalling abuse at Brook House uncovered by the “Panorama” programme. As the noble Baroness said, regardless of status, all immigration detainees must be treated with dignity and respect. I agree with that entirely. However, I do not think that a further extension of two years can in any way be presented as a short-term continuation of the G4S contract to run the Gatwick immigration centres. Can the noble Baroness tell the House whether any other options to this extension were considered—and, if not, why not? If they were, what were they, and why was it still felt that this was the best option? Further, can she tell us what measures the Home Office has put in place to ensure that there will be no repeat of the appalling abuse of detainees during this two-year extension? It is clear that whatever measures were in place before failed. The abuse was brought to light only by the “Panorama” programme and those involved should be congratulated on the work they did to expose the abuse at Brook House.

[Baroness Williams of Trafford]

I cannot disagree—in fact, I do not think that anyone would disagree—with the noble Lord that watching the “Panorama” programme was very uncomfortable. It was shocking, and I do not think that anyone would disagree with that. He asked why the contract was extended for two years and whether other options were considered. The two-year extension to May 2020 was to allow for the reprocurement of services. It is not an unusual amount of time when such a reprocurement is being undertaken.

The procurement and the longer-term contract will be for the provision of the operation, management and maintenance of Brook House and Tinsley House and the pre-departure family accommodation at Tinsley House, as I pointed out. It is to allow the Home Office to consider any relevant conclusions from the independent reviews by Stephen Shaw and Kate Lampard. The Home Office has received the Stephen Shaw report, and both are due to be published in the summer. All bidders in the current competition were told of this decision on 4 May.

The noble Lord rightly asked what the Government are doing in the light of the shocking findings by “Panorama”. Since the programme aired, the Home Office has worked closely with G4S to ensure that it responds vigorously and at pace to the issues highlighted by “Panorama”. The former Home Secretary, and Ministers Brandon Lewis and Caroline Nokes, have met G4S senior managers regularly to review progress, and that oversight will be maintained. We have set out very clear expectations for G4S in responding to the issues at Brook House highlighted by “Panorama”, and we are currently satisfied that G4S has responded well. It has appointed a new manager and dismissed nine members of staff; enhanced staffing levels with recruitment and training plans in place; introduced body-worn cameras for staff to provide more transparency and assurance around procedures there; refreshed and promoted its whistleblowing procedures, with additional training provided at the centre by the Jill Dando Institute; put in place an improved drugs strategy; and, as I mentioned, commissioned the independent review by Kate Lampard, which will report this summer. I think I have now answered all the noble Lord’s questions.

[Lord Paddick (LD)]

My Lords, I thank the Minister for repeating the Answer. The Government’s explanation for releasing this information on the Friday of a bank holiday weekend—because the decision was made during purdah—begs the question: why was it made during purdah? Can the Minister explain how granting a two-year extension to G4S to run these facilities, despite the undercover BBC report, is consistent with the fact that the new Home Secretary no longer wants a hostile environment for illegal immigrants? Whoever gets the contract, is this not what happens when people are detained not knowing how long they are going to be detained, and with more than 160 people a year being detained for four months or more? Surely an absolute limit on immigration detention, as exists in most civilised countries, would provide the incentive the Home Office clearly needs to resolve these cases quickly one way or the other.

[Baroness Williams of Trafford]

I thank the noble Lord for his questions. He asked why there is a two-year extension, especially when G4S was the subject of the “Panorama” programme. I hope I have outlined to the noble Lord, through my answer to the noble Lord, Lord Kennedy, what the Government’s expectations of G4S will be in this period—and the full reprocurement will provide a solid basis for further progress on all the issues I have outlined. We will continue to monitor the progress and the performance carefully. The conclusions, in due course, of Kate Lampard’s review and Stephen Shaw’s wider follow-up review will provide further opportunities to learn the lessons and embed good practice, both at Gatwick and across immigration detention more widely.

The noble Lord made the point about the hostile environment, and I have said several times since the new Home Secretary has been in post that that is not a term he wants to see, because of the connotations. He is more interested in a compliant environment, with people complying with immigration rules. As for people not knowing how long they will be detained, we are clear that people are detained for as short a time as possible. It must be noted that 92% of people in detention are not there for more than four months. Indefinite detention is against the law: it is not something that we do. Therefore, people are in detention for as short a period as possible.

[Lord Berkeley of Knighton (CB)]

My Lords, does the Minister accept that at the root of this problem is, possibly, not having a rigorous enough selection process for staff? The make-up of staff—for example, their attitude to immigration—is vital. I know that it is difficult to find the right staff, but it is absolutely essential if we are to change the culture of how we look at people in detention.

[Baroness Williams of Trafford]

I totally agree with the noble Lord about the rigorous selection of staff. He will have heard me saying that nine staff have been dismissed in the light of the programme. However, going forward, it is not so much about those nine staff having been dismissed as about the staff who will be employed. My right honourable friend the Home Secretary has also talked about a humane environment. Humanity is at the heart of this: these are people, and they must be treated properly and humanely. I also talked about the whistleblowing procedures and the internal whistleblowing policy, which have been refreshed and reinforced. The engagement between case workers and detainees is a very important relationship that must be treated sensitively. The new arrangements will also strengthen our capacity to oversee the contract effectively. I totally agree with the noble Lord’s point.

[Lord Judd (Lab)]

My Lords—

[Lord Scriven (LD)]

My Lords—

[Baroness Manzoor (Con)]

Order. It is Labour’s turn.

[Lord Judd]

My Lords, does the Minister agree that this whole horrible saga has once more raised the strategic question of how far commercial culture can satisfactorily replace the tradition of public service, with its concentration on people? Has there not once again been too much concentration on targets and systems? We are dealing with people in crisis. It is difficult to imagine the turmoil and trauma that they and their families are going through. However firm our policy—and I am certain that it has to be firm—does the Minister not agree that we must have people in place who understand human relations and the predicament of the people with whom they are coping?

[Baroness Williams of Trafford]

The noble Lord always speaks with great humanity on such matters. It is probably fair to say that public outsourcing is not necessarily all good and private outsourcing is not necessarily all bad. What is important is that the service delivered meets the highest standards. The noble Lord is absolutely right to say that human beings are at the centre of this issue and that some of them will be traumatised when they come into detention, so it is all the more important that they are treated sensitively.

Higher Education and Research Act 2017 (Consequential, Transitional, Transitory and Saving Provisions) Regulations 2018

Wednesday 9th May 2018 Lords Chamber

Motion to Regret

19:28

Moved by

[Lord Hunt of Kings Heath]

That this House regrets that the Higher Education and Research Act 2017 (Consequential, Transitional, Transitory and Saving Provisions) Regulations 2018 do not provide sufficient independence for the Office for Students (OfS) from Ministers; do not enable the OfS to engage effectively with students, student unions and the National Union of Students; do not enable the OfS to protect the institutional autonomy of universities, or the autonomy of the OfS board; and overemphasise the marketisation of higher education (SI 2018/245).

[Lord Hunt of Kings Heath (Lab)]

My Lords, these regulations relate to the establishment and operation of the Office for Students, the new regulator of higher education institutions. The OfS has replaced both HEFCE and the Office for Fair Access, which as a result of the regulations ceased to exist on 1 April this year, with the OfS taking on their statutory functions. I do not seek to challenge the passage of these regulations, but I welcome the opportunity to debate the establishment and future of the OfS at a time of major turbulence in our higher education system. We have seen the tripling of fees, the introduction of loans and the ending of maintenance grants promoted by a Government driven by a neoliberal ideology which places such faith in markets to the detriment of everything else.

What has been the outcome in practice? There is no competition in fees; students are leaving university with debts of around £50,000, a large majority of whom will not pay them in full; we have the most expensive undergraduate courses in the world; there has been a complete collapse in part-time provision; and a reduction in home-based postgraduate students. There is a huge uncovered gap in the public finances. The Education Policy Institute calculates that the contribution of student loans to net government debt is forecast to rise from around 4% of GDP today to over 11% in the 2040s.

Nor is it clear in what direction the OfS is going to take higher education. It is ironic that alongside the Government’s genuflection to free market ideology with the creation of the OfS, it brings with it the tools of what could be a heavy-handed regulator. It is an intention we have seen all too clearly in the character of the last Education Minister. One moment he was extolling the virtues of the market and new private providers; the next, threatening the same institutions with draconian punishments if they did not do what he, as the Minister, wanted. I fully accept that intervention in the pay of vice-chancellors might be justified in the public sector, but it sits rather uneasily in the competitive market that Mr Johnson was so keen on.

My key concern is whether Ministers, instead of promoting scholarships, encouraging research or a concern for truth, have as their goal turning the UK’s higher education system into a market-driven one at the expense of both quality and the public interest. This is not a broken system that needs shoring up and intervention; it is the second most successful higher education system in the world with four universities ranked in the top 10.

I imagine the Minister will refer to the regulatory framework for the OfS published in February this year. It certainly makes interesting reading and there are some positives. First, I am glad that it starts with an affirmation that our universities provide a world-class higher education sector. I am also glad that at page 15 it states that the regulatory approach is designed to be principles-based and that the imposition of a narrow, rules-based approach, with numerical performance targets or lists of detailed requirements, would risk leading to a compliance culture that would stifle innovation and prevent the sector flourishing. Spot on.

If the Minister wants to see a regulatory system that has all the wrong characteristics, look no further than the NHS, which seeks to combine the legal framework of a competitive market with intense micromanagement by Ministers and a plethora of regulatory bodies all pulling in different directions.

I welcome the statement, again on page 15, that once the regulatory framework is established its implementation will reduce bureaucracy and unnecessary regulation. My reservation is that in that framework I did not see what contribution the OfS would make to enhance the world-class status of our universities. Indeed, I could not see what the added value of the OfS was meant to be. I hope the Minister is able to explain that. The framework document seems to have an excessive belief in creating a market to drive competition, but nowhere have I seen evidence to suggest that this will enhance the sector overall.

The most depressing characteristic of the framework is that the language of the market is used so much. The use of the word “provider” is objectionable. No longer are Oxford, Cambridge, Imperial, Sheffield or whatever to be regarded as universities or higher education institutes—they are to be called providers. Why on earth are we not using “university” or “higher education institute”? If it is because the Government’s legal framework is designed to allow tin-pot little institutions to be suddenly called universities, I cannot think of a worse reason for introducing market ideology into a sector which has shown itself to outshine country after country. The one thing I would ask the Minister to do is expel the use of the word “provider”. It is a typical government approach to markets they do not understand, and which threatens to reduce the integrity of our university sector.

I come now to the OfS and its independence. It has to be seen as an independent institution if it is to have credibility and inspire confidence among the public, students and universities. It has had a poor start. It was clearly complicit in the shambolic and over-political approach taken by Ministers to the board appointment process. It was not a good start by its chairman. The appointment of Mr Toby Young and his subsequent resignation was followed by an investigation by the Public Appointments Commissioner. He identified a number of problems, including all-male appointment panels, failure to provide information to the commissioner in good time and—this is the key point—risking the independence of the board by a too partisan approach to appointments. He found that the governance code was not followed, itself a breach of the ministerial code.

This is important because the composition of the board remains highly controversial even now. There is no active further education sector representative on the board, there is no one from the NUS and there is no voice for staff. The appointments process has been symptomatic of a Government who are clearly trying to use the OfS to pursue a deeply ideological agenda. At the moment the chairman seems to show no signs of resisting the Government’s intervention in the activities of this body.

On access and participation, which is the subject of this statutory instrument because of the changes it makes, the recent end-of-cycle report from UCAS offered concerning statistics, stating that young people from the most advantaged backgrounds are still 5.5 times more likely to enter a university with the highest entrance requirement than their disadvantaged peers. Les Ebdon, the outgoing director of Fair Access, said in response last month that,

“people with the potential to excel are missing out on opportunities”.

This is an unforgiveable waste of talent.

Within the new OfS structure we are to have a Director for Fair Access and Participation, but will that person have enough clout within the OfS to make a real impact on this problem? Will that person have a direct line to Ministers, and not simply report to members of the OfS board and the chief executive? Importantly, can I take it that that person will be directly available to parliamentarians?

The term Office for Students—which is slightly Orwellian—suggests that it is focused on outcomes for students. That we will see. However, a recent Treasury Select Committee report noted that without adequate information, an efficiently functioning market will struggle to develop. Prospective students face the unenviable task of determining whether to participate in higher education based on increasing quantities of university marketing material coupled with a lack of proven, reliable metrics for judging the quality of courses. Can the Minister say what the intentions of the regulator are in this regard?

I refer the Minister to Universities UK’s submission to the current review of post-18 funding, which made some very good points. First, it says that while students understand the general long-term benefit of entering higher education, they are much less certain of how that translates into benefits that relate to them personally and how benefits vary according to the choices they make; secondly, that government, in partnership with universities, should provide more targeted information to prospective students on the cost and benefits of higher education; and thirdly, that universities could develop their value-for-money statements to better explain how pricing decisions for undergraduate courses are arrived at. Those should explain how the university uses income from tuition fees and other sources of income to fund the student experience and other activities, such as research.

Finally, I come to private providers. In the Government’s desperation to promote new private providers, they are already playing fast and loose with the term “university”, handing it over without proper scrutiny or oversight. Every time the title “university” is given to a new provider, without ensuring that it provides a good education, that not only risks students and taxpayers being ripped off, but potentially damages the integrity and reputation of the whole system. The initial conditions of registration are designed so that providers do not need a track record in delivering higher education; nor do they need evidence of financial performance.

Those of us with some experience in the education sector know what happens when you do not have sufficiently strong entrance qualifications. I fear that we are going to see a train crash here. I come back to my original question about why the Government are putting the international reputation of our universities at risk. The health of those institutions is of crucial importance to the UK. Clearly, we need to do nothing that would put that position at risk. The OfS has a clear role in mitigating that risk, but it must respect the institutional autonomy of universities and resist the temptation to micromanage every corner of university life. Obviously, I wish it well, but I believe that its performance needs to be kept under close scrutiny. This debate is a good start. I beg to move.

[Baroness Garden of Frognal (LD)]

My Lords, statutory instruments are never the most exciting things to debate because there is very little we can do to them. However, I thank the noble Lord, Lord Hunt, for raising this, because it gives us an opportunity to raise concerns about the benighted Higher Education and Research Act and to ask the Government to clarify their position.

The noble Lord has expressed concern about many of the issues, which I share. The report of the Commissioner for Public Appointments into the OfS revealed a blatant cronyism in the appointments process, which was influenced heavily by the Prime Minister’s own special advisers. Apparently, special advisers at No. 10 blocked several nominees for the “student experience” role on the OfS board because they had been previously involved with student unions or had expressed opposition to the Prevent strategy. The report concludes that,

“the decision on whether or not to appoint one candidate in particular was heavily influenced, not by the panel but by special advisers”.

It concluded that there was a “clear disparity” in the treatment of different candidates, and parts of the process,

“had serious shortcomings in terms of the fairness and transparency aspects”,

of the code governing public appointments. That was a complete failure of process that ignored due diligence procedures.

We know that Toby Young was, until March, CEO of the New Schools Network, which received several sizeable grants to provide advice to sponsors setting up a free school. Ministers say that that support is now under review, and the Liberal Democrats have been calling for a reassessment of whether the award of those contracts followed due process. His appointment to the board was rescinded, but it should never have been allowed to get that far, both on his credentials and on the offensive views he had expressed.

I absolutely concur with the noble Lord that, given the large number of HE students who take their courses in FE colleges, it is really disappointing that the board did not appoint anyone from the FE sector. It is a highly valuable and important part of our education system, which is all too frequently overlooked and underfunded. Having a representative on the board we see as not only desirable but essential.

The appointments process has undermined confidence in the board of the OfS. Universities no longer see it as independent of Ministers and its fitness to regulate the sector must be called into question. The OfS must operate in a way that is proportionate, risk- based and truly independent of government. It must also have regard to its statutory duty to uphold institutional autonomy. The Minister will well remember the concerns voiced in this House over universities’ autonomy.

19:45

The regret Motion reiterates the lack of confidence in the OfS, but also reflects wider concerns raised by Labour, Liberal Democrats, Cross-Benchers and, indeed, by Conservatives during the passage of the then Higher Education and Research Bill. For example, the Government may still use the teaching excellence framework to vary fees from 2020. That may promote a multi-tier university system where poorer students are deterred from going to higher-rated universities. New providers will be able provisionally to award degrees from day one and have full degree-awarding powers after three years. Without proper scrutiny, that could erode academic standards and threaten the reputation of UK universities. The OfS must have a constructive relationship with the QAA as the designated quality body to ensure that the integrity of the use of university title is maintained. On the TEF, it is important that the independent reviewer is appointed soon, with enough influence that the Government will listen and enough time to incorporate findings into the TEF as it progresses. On subject-level TEF, there are considerable concerns about the time that will take and the quality of the information. Will all the academic time it will take make a real difference to institutional practices or to student decision-making?

The OfS has a “deeply ideological agenda”, which is reflected both in its appointments and its duty to promote competition between providers. I entirely agree that the term “provider” is not one that sits comfortably in the world of universities. Indeed, many universities thrive because of collaboration rather than competition. It may take a narrow perspective on value for money, based on employability, ignoring many other factors important to students, such as quality of provision and individual aspirations. There are issues with how the student panel will contribute to the regulator’s strategy in practice—and, indeed, where has the term “scholarship” gone in all this debate?

Under the new framework, the OfS loses two key powers that HEFCE and OFFA possessed, namely to intervene when providers are in financial difficulty, and to negotiate directly with universities when approving or rejecting access and participation plans. What will happen to those powers? The new OfS regulatory framework does not come into effect until the beginning of the 2019-20 academic year. However, because HEFCE and OFFA ceased to exist in April 2018, the Government have transferred the powers of HEFCE and OFFA to the OfS and UKRI for the remainder of the 2017-18 academic year and the entire 2018-19 year. The Government said that that will offer HE providers a transitional period where they continue to be regulated under the old framework but can prepare their registration with the OfS ahead of the 2019-20 academic year.

In that transition period, the OfS will regulate HEFCE-funded providers—sorry, I cannot help using the word “providers”; it crops up so often, but does not sit comfortably—with the department continuing to regulate alternate providers until 2019-20, at which point power transfers to OfS. The OfS will prepare HEFCE and OFFA’s accounts for their last financial year of operation; enable the Parliamentary Commissioner for Administration to continue to investigate complaints made against HEFCE and OFFA before they were closed; and amend charity law so that the OfS, rather than HEFCE, regulates the charitable status of HE providers.

That is all happening in a short timescale for decisions which will radically affect our higher education sector—a sector held in worldwide esteem, which we can ill afford to undermine. I ask the Minister: does the OfS have the staffing and the skills to carry out all these tasks? We hear the advice of Universities UK that an independent review of the OfS should be undertaken in September 2022. It may be necessary to bring that forward if there turn out to be more challenges for this highly influential body that need sorting out. Our universities are already deeply concerned about the damage that Brexit might inflict—the potential loss of EU staff and students, which is already happening, and access to Erasmus, Horizon 2020 and the world-renowned research that we have achieved in collaboration with our European neighbours. To inflict further damage through any ill-thought-through proposals in this legislation would be unforgivable. I hope the Minister can reassure us that no hasty measures will be taken before all the implications have been assessed and that the Government will consult at every stage with universities and will always have the best interests of our great universities at the heart of their decisions.

[Lord Judd (Lab)]

My Lords—

[Viscount Hanworth (Lab)]

My Lords, the scrutiny of these regulations, which are consequential on the Higher Education and Research Act 2017, provides an opportunity to take another look at the developments in the governance of UK universities and to consider where they are taking us. The education Act of 2017 encapsulated a modern view of the purpose of universities that is greatly at variance with a conception that prevailed for most of the 20th century. In the traditional view, which accompanied the expansion of universities that began in the 1960s, universities’ purpose was to create an educated population and to give it full access to our cultural and intellectual heritage, with no limit initially on the number of participants. Anyone who was capable of profiting from a university education should have been able to do so.

Nowadays, it is generally agreed among members of the Government and senior management of universities that universities should be regarded as institutions for training the workforce and for making discoveries for pursuing developments that might stimulate economic growth. The universities Act of 2017 attempted to direct the activities of universities to these ends via a plethora of regulations and initiatives that fall under three headings: the research excellence framework, the REF; the teaching excellence framework, the TEF; and latterly the knowledge exchange framework, the KEF. Work is under way to develop metrics to enable the Government to judge the successes and failures of institutions in each of these three areas and to award the available funds to support their activities accordingly. There has been a hypertrophy of university administration, which has arisen largely to service the demands of Governments. In most institutions, administrators now outnumber the academic staff.

The declared objectives of Governments have been mutually antagonistic and largely counterproductive. To recruit sufficient numbers of students in the increasingly competitive open market environment created by the present Government, UK universities are indulging in what has been described as an amenities arms race. They have been spending exorbitantly on student union buildings, swimming pools, sports centres and student accommodation. Things have had to give way to enable these developments. The university to which I am affiliated as an emeritus professor has declared the objective of reducing its salary bill by 20% to provide the funds for capital investments.

It is clear that there has been a conflict of objectives in the context of the teaching excellence framework. The assessments are based largely on measures of customer satisfaction. The provision of student amenities is liable to enhance this satisfaction. The reduction in the numbers of permanent teaching staff and their replacement by casualised teachers has provided some of the necessary funds. The casual workers are mainly drawn from among the postgraduate students but they include a growing number of post-doctoral teaching fellows on temporary contracts. This is bound to affect the quality of the teaching.

The research excellence framework involves a quinquennial competition among university departments to determine where they should be ranked in terms of their research output. Once more, the effect has been dysfunctional. These assessments are based on a so-called peer review by senior academics. Departments can guess what sort of research will be most favoured by closely examining the adjudicators’ research output. Innovative research and interdisciplinary research in particular tend to be discouraged.

The principal effect of the research excellence framework has been to compel academics to maximise their published output. They have learned to write several papers for the price of one good idea by contriving never completely to finish a research paper. In this way, there will be something left over on which to base a subsequent paper. A small voice used to remind me, whenever I became enthused by the prospect of a new research avenue of enquiry, that I could not afford to indulge in speculative research. My mission instead was to write papers. Only when I had produced a sufficient number of papers was I free to pursue the research.

The research excellence framework has also militated against the objective of doing applied research of a sort that might lead to industrial innovation. Such research is liable to be sponsored, in part, by an industrial enterprise. For that reason, it is often subject to industrial secrecy. An academic who seeks promotion through the excellence of their publications would be advised to steer away from such applied research, which might not see the light of day for many years. This is one way in which the research excellence framework comes into direct conflict with the objectives of the knowledge exchange framework, which aims to encourage the practical application of academic research. One cannot impose these contradictory requirements upon academics without driving them to despair. Nor can academics evade these demands, which are being placed upon them at the behest of the Government by university administrators. Vast amounts of time are liable to be spent in meeting the demands of the various assessment exercises, to the detriment of teaching, research and the transfer of knowledge.

The mantra of the present Government is to induce market competition into the university environment. University life is already very competitive. Hitherto the competition has been largely academic. Now there is intense competition to win research grants, since their acquisition is liable to be an important factor in achieving promotion. A young statistician in my department was able to make rapid headway on the basis of a grant from the Medical Research Council to pursue a very ordinary epidemiological investigation, which would not have incited any interest among his more cerebral colleagues. His preferment created intense jealously. Maybe that is too personal a story to dwell upon, but there is a point to be made. Applied research of this nature is best conduced in research establishments that are devoted to the relevant lines of inquiry, be they in medicine, pharmacology, telecommunications, aviation or whatever.

Britain was once endowed with many splendid research establishments within the public sector. These had strong relationships with universities, as well as with industry. Many of them were abolished in the 1970s and 1980s. It is wrong to expect universities to fill the gap that has been left, which is what the knowledge exchange framework is intended to force them to do.

I believe that the Government’s policies towards our universities are self-defeating. They are liable greatly to diminish the quality of our universities and their status in the world of learning.

[Lord Judd]

My Lords, I am very glad that I gave way to my noble friend because that was a very important speech. By the same token, I applaud my noble friend Lord Hunt’s speech. He reflected my own misgivings very powerfully. I should declare an interest because I have been, over many years, involved, and still remain involved, in the governance, in the widest sense, of some of our university institutions.

We applaud the standing of British universities. We cannot reflect enough on how that standing and admiration across the world has been achieved. It has certainly not been achieved with the language of “providers”, or of “customers” instead of “students”. In other words, it has not been involved in the context of an overriding commitment to market ideology. It has been achieved because of a long-standing and continuing commitment to scholarship, to learning and to the concept of the value of education as an end in itself, not as a means to an immediate end.

20:00

In the long run, the well-being of humanity, not to mention that of the individual student, and incidentally the well-being and success of our economy depend upon originality. In that context, original, pure research is crucial. It depends upon the scholarship of those who are teaching and leading the universities, but it has always also depended upon the concept of the ideal, to which I hope we can return—I do not give up on this because I think if we do we are in trouble—of the university as a community of scholars in which students and scholars are together in the exciting enterprise and challenge of this learning and scholarship experience.

It is against those considerations that we have to judge and assess how the new arrangements are working. I am sure we shall need to hear reports from the regulator soon, and we shall need to be confident that the regulator can speak to the wider public and also to government as well as the system itself. It is also why it is so important that the reviewer for TEF is soon appointed so that the reviewer can get on with the job of assessing how relevant the system is and how well it is working in the context of the objectives of education, about which I have just given my own views.

I think there is a confusion at the moment in talk about education and in writing about education. It is a confusion between training and education or scholarship. Training is not necessarily, in the widest, fullest sense, education. Training is preparation for a particular function. Of course we need training. We need training systems second to none and adequate to meet the challenges of our time, which are very great. Education remains about the wider context of scholarship, the widest concept of excellence, the wider concept of what society is about.

These are the considerations which are preoccupying me, and I will look very earnestly at how the new system is operating in order to judge whether it is up to the task. In the immediate situation, I simply cannot understand, whatever my misgivings, which should be self-evident, about the board and its role, how a board is expected to do a job adequately and properly if it has no representation from the academic community and no representation from the students. This is quite simply ridiculous.

[Lord Storey (LD)]

My Lords, I am grateful to the noble Lord, Lord Hunt, for giving us this opportunity to consider progress made and to mull over some of the issues. Over the course of the past six months or so, I have put down several Questions to the Minister on higher education matters, and I want to come to some of those. I am grateful always for his detailed replies.

Of course, the Office for Students did not get off to a very good start with our Foreign Secretary’s confidant being appointed to that board. The board has the title of Office for Students but does not seem to have students at the heart of what it does. It should have included somebody from the NUS and someone from further education.

Fear not for vice-chancellors, because the former chief lobbyist for vice-chancellors was appointed to the board. As one vice-chancellor recently put it, no doubt with a smile on his or her face, “For us, this is far better than having a former vice-chancellor on the board. We now have 130 vice-chancellors as our regulator”.

Six months ago, “Panorama”, which we have heard mentioned in the previous Statement, reported on some of the problems of higher education, particularly those of private colleges. I was quite hopeful that the Office for Students would deal with some of these issues. I have not been reassured. As for the responsibilities, it talks about a “light touch” in monitoring and self-regulation. It says:

“Further changes will make it quicker and simpler for new providers to enter the market, with an expectation that greater competition may mean some providers will exit”.


I do not want a light touch on some of these issues.

I have had several emails from various individuals who have attended a college. I am not going to name the college, but I want to give a flavour of this, and I am quite happy to hand these over to the Minister. One student says that the college charges money from students to forge their attendance record and to make assignments for them; the college makes fake timetables and uses names of its full-time staff members on the timetables in their ignorance and uses fake assessment schedules where names of staff members are used as assessors without their knowledge. The college charges students a proportion of their total student loan grant available to students in one year as a token of the college’s services to students, fakes pages and records on student assessments and uses the name of the Ministry of Defence and the RAF et cetera on its website in order to facilitate its dirty business. And so it goes on.

That really is not good enough. We talk about having the finest higher education system in the world, but practices like that do not help our reputation, and we need to do something about that. It cannot be just a light touch here and a light touch there. Proper action has to be taken.

I will turn to a few issues that I have also raised, such as essay mills. I moved an amendment on that to the Higher Education and Research Act and was assured that, if we could not get this under control, we would look at legislation. I was grateful for the Minister’s reply. He said—and I think it is important to put it out there—that he expects the Office for Students to encourage and support the sector to implement strong policies and sanctions to address this important issue in the most robust way possible. That gives me hope. Now that we have said that, we can come back in 12 months or so and see whether that has happened.

One of the issues we talk about is degrees of private colleges particularly being validated by our universities. Again I put a Question down about how the Government ensure that a consistent and professional level of external examiners appointed for degrees are validated by universities but not delivered by those universities. The Minister’s replied that these institutions are subject to a rigorous, risk-based approach to quality assurance. That did not happen at Greenwich College. Its degrees were validated by Plymouth University, which allowed the practices to go on. When those degrees were validated, I did not see that institution being subject to a rigorous, risk-based approach. Again, I hope that the Office for Students will tackle this issue properly. My noble friend Lady Garden and I have met the new chief executive of the Greenwich School of Management, which was the subject of that programme and where some of the most appalling practices were highlighted, and we were reassured by the approach that it is putting in place. We have been invited to visit the college in the summer.

Responsibility for equal opportunities is also conferred on the Office for Students. It is equal opportunities in its widest sense: equal opportunity of access for students from disadvantaged backgrounds and equal opportunities for young people with special educational needs. Some fantastic work is going in terms of special educational needs. I came across a student who had completed her first degree at Leeds University and was going on to do a master’s degree. She had mild cerebral palsy and some other issues as well. That university has been stunning in the support that it has given her. Sometimes, when we moan about things, it is right and proper that we highlight good practice as well. Perhaps the Office for Students can take good practice and ensure that other universities highlight it as well.

I shall now give some examples of bad practice—again, I have put a Question to the Minister about this. Let us imagine that a student from a deprived community manages to get to a top London university. They get a first; their family is so proud of them and the ceremony to award their degree comes about. Suddenly, that young person from a deprived community is charged £45 for each ticket for their family—that is on top of having to pay for their gown and their photograph. That is absolutely disgraceful. We are talking about a top London university. It should not happen. When I wrote to the vice-chancellor, I was told that it did not even have a bursary award to support students in such a situation.

When we were talking about TEF, I remember being concerned that we might see universities going down the road of schools and hanging out banners equivalent to those saying, “Ofsted regard us as an outstanding school”. The prediction came true, because I was driving past Hope University in Liverpool and nearly crashed the car when I saw banners hanging outside the university—incidentally, Hope University is the only ecumenical university in Europe—declaring: “Hope has got a gold standard”, with leaflets given out here and there.

At Second Reading of the higher education Bill, the Benches opposite were packed out. I think that I was the only person who did not declare an interest—there were vice-chancellors, former vice-chancellors, chancellors and masters. They are not here now. I thought at the time, “It’s a pity we haven’t got a student standing up, because we need to listen to students”. For students, universities are about getting a job, getting an experience and getting a qualification. I hope that the Office for Students will be plugged into students and will hear what students want loud and clear, because that is what it must be about.

20:15

[Viscount Younger of Leckie (Con)]

My Lords, I thank the noble Lord, Lord Hunt, for tabling this Motion. It is clear from it that the regulations are not in themselves at the heart of what troubles noble Lords and that, as the noble Lord said, this debate is intended instead to go somewhat broader on a number of issues, many of which have been raised previously in this House, not least during the passage of the Higher Education and Research Act, or HERA as it is known. Indeed, we spent about 110 hours debating the Act in both Houses, had more than 1,300 amendments and made at least 31 major concessions. Nevertheless, I welcome the opportunity again to touch on the issues raised in the Motion.

I want to put on record as a reminder what the regulations will enable. In particular, they enable the Office for Students and UK Research and Innovation to exercise the statutory functions previously exercised by the Higher Education Funding Council for England, which we know as HEFCE, and the Director of Fair Access to Higher Education. This will be for a transitional period between 1 April 2018, when HEFCE and DFA ceased to exist, and 31 July 2019, after which the new regulatory system under HERA will be fully functioning and the old system will in essence fall away for good. The transitional period allows for a smooth progression to the new system of regulation introduced by HERA, so minimising any disruption in the sector. The consultation on the OfS regulatory framework explained how this transition would work and the proposals were met with general approval by those responding.

Let me now address the four key issues that the noble Lord, Lord Hunt has raised. I want to spend some time on them, despite the Benches opposite being not exactly full for this debate as the noble Lord, Lord Storey, pointed out. On the first issue, the independence of the Office for Students from Ministers, I remind your Lordships that the House voted for the OfS to be an operationally independent statutory body, responsible and accountable for a much broader suite of functions than was its predecessor, HEFCE. Let me be quite clear: in regulating all registered higher education providers, it is the OfS, and not the Secretary of State, that determines and publishes the registration conditions applicable to providers, the registration categories and its own regulatory framework. The Secretary of State’s powers to attach terms and conditions to OfS grant funding and to give directions to the OfS are limited. The OfS is required only to have regard to guidance from the Secretary of State and not to follow it. However, I think that noble Lords will agree that it is important that the OfS has obligations to report to the Secretary of State, and these are set out in HERA. I reassure the noble Lord, Lord Judd, that the OfS also has obligations to produce annual reports and accounts, and these are publicly available.

A recent example will help me illustrate the reality of the OfS’s independence. While the department started off the consultation exercise on the conditions and regulatory framework, working with the then future OfS chair, CEO and Director for Fair Access and Participation, once the OfS was established in January 2018, it did not simply adopt the proposals outlined in the consultation document produced by the department. The published framework differed from the consultation draft in some significant respects. For example, taking into account responses to the consultation, the OfS decided to drop the registered basic category of the register which the department had proposed. I hope that this small example helps to reassure noble Lords that the OfS acts, and will continue to act, independently from Ministers.

On the second issue raised by the Motion, I might begin by laying out exactly how the OfS engages with students. The Office for Students’ approach to regulation and its statutory duties, as set out in the regulatory framework it published in February, is bold, student-focused and risk-based. It is consistent with its statutory duties, which, again, this House voted for.

We expect all members of the OfS board to engage with students to ensure they really understand the issues that they face and have these as considerations when making decisions and exercising their functions. HERA ensures that there is to be at least one OfS member with experience of representing or promoting higher education students’ interests, either individually or generally. However, I am pleased to say that the OfS went one step further: it should be a further reassurance to the noble Lord, Lord Judd, that it has set up a student panel where all 13 members are either students, prospective students or recent graduates. This membership includes current undergraduate and postgraduate students, part-time and international students, prospective students at GCSE and sixth-form ages, and a representative from the NUS. This provides a direct channel into the OfS itself, bringing a diverse range of views and perspectives. It is also worth noting that the current student representative on the board is also a full member of the student panel.

It bears repeating that HERA sets out the requirements to be met in appointing OfS members, and the desirable criteria for the make-up of that membership that the Secretary of State must consider. These statutory requirements were all subject to a rigorous parliamentary debate in this House about whether particular representation was necessary to enable the board of OfS members to operate effectively. Parliament concluded that there should not be a requirement for specific representation from every single part of the sector. Instead, the criteria to which the Secretary of State must have regard include experience of providing higher education, and from a broad range of different types of English higher education providers. We consider that the current OfS membership meets these criteria.

I recognise that the appointments process for OfS members has not necessarily been as smooth as one would have hoped, a matter raised by the noble Lord, Lord Hunt, and the noble Baroness, Lady Garden, with some further criticisms. I reassure your Lordships that the department has looked carefully and seriously at all the recommendations of the Commissioner for Public Appointments, and we have already made improvements to the DfE diligence processes in line with the Commissioner’s advice. To further ensure the robustness of these processes, we have established a DfE nominations committee, to ensure adherence to the Government’s code on all future public appointments. I will also update noble Lords on the couple of appointments still to be made. The competition for the OfS member with student experience is to be launched shortly, as the current appointment is on a short-term basis only. We will run a separate competition for the vacancy left by the resignation of Toby Young later in the year.

The noble Baroness, Lady Garden, has raised on a few occasions, including today, her wish for a representative from the further education sector to be on the board: I know that the noble Lord, Lord Hunt, raised this as well. We encourage such representatives to apply when the competition is launched. We also, of course, continue to communicate with the Commissioner for Public Appointments on these appointments.

I move on to that old chestnut of institutional autonomy: the noble Baroness, Lady Garden, should be reassured that I remember it. It was debated at length during the progress of HERA through both Houses of Parliament, but it bears repeating: after amendments by your Lordships, HERA brought in the most robust statutory protection for institutional autonomy that has ever existed in our modern higher education system. It placed new and explicit protections for the freedom of English higher education providers. I do not think anyone disagrees about the importance we place on institutional autonomy and academic freedom, and this is reflected in the duty of the Office for Students, in carrying out all its functions, to have regard to the need to protect the institutional autonomy of English higher education providers. That duty also applies to the Secretary of State when issuing guidance, giving directions by regulations and determining terms and conditions of grants to the OfS. This means that the Secretary of State must have regard to the need to protect the institutional autonomy of English higher education providers when exercising any of these functions.

The final issue within the Motion refers to the overemphasis on making the higher education sector more of a market. I would like to put this in a slightly different way. Students are surely better protected when we make them aware of their rights in relation to their education, including their rights as consumers. I use this word with some caution because I know from previous debates that this is a term that does not best please a number of noble Lords, including the noble Lord, Lord Judd, but I use it nevertheless. I make no apology for what the noble Lord refers to as “marketisation”. Surely the House will agree that students should rightly expect the best quality and robust standards in their higher education study and experience, and equally be protected from concerns about governance and financial stability. The OfS sets clear expectations about how providers should go about this, through conditions of registration. For example, the OfS has now introduced a registration condition for student protection plans, to set out what students can expect to happen should a course, campus or institution close, to ensure that students can complete their courses or be compensated if this is not possible.

I turn to questions raised during this short debate, particularly from the noble Lord, Lord Hunt, and the noble Baroness, Lady Garden, who spoke about the word “provider”. Let me say that not all higher education providers are universities. “Provider” includes universities, but the terms are not interchangeable. There are special protections attached to the use of university title and providers have to meet tests in order to call themselves a university. The noble Baroness, Lady Garden, asked whether the OfS has the expertise necessary to undertake the vast number of tasks that it has been set or that we gave it. The OfS combines the expertise of its diverse board, its student panel and its staff with the experienced leadership of its chair, Sir Michael Barber, and its CEO, Nicola Dandridge. It is well placed to perform its functions, we believe, during the transition period and beyond.

The noble Baroness, Lady Garden, spoke about the TEF external review and the subject TEF. I reassure the House that the TEF review is going to take place and, of course, I have said from this Dispatch Box that we need to move to a subject-level TEF. By extending the test to the subject level, the Government aim to help prospective students compare the different courses on offer across institutions. This will shine a light on course quality, revealing which universities are providing excellent teaching and which are perhaps coasting or relying more on their research reputation.

I would also like to raise myself the issue of essay mills, raised by the noble Lord, Lord Storey. I know he has raised it on other occasions in this Chamber. I start by saying, and I am sure the whole House will agree with me, that cheating of any kind at any level is completely unacceptable, particularly to the department and to the country. We have given the new regulator, the OfS, the power to take appropriate action where this is happening, including fines, suspension from the OfS register or, ultimately, deregistration of the provider—the highest possible punishment. We have given the OfS the power to impose fines when it is fully operational. The Government have already taken action to ensure that universities know their responsibilities and have instructed leaders across the sector, including the NUS, the QAA and UUK, to create new guidance, which was published last year, as the noble Lord may know, setting out their roles when it comes to cheating. However, we are reviewing its effectiveness, particularly because of the seriousness of this issue. The Department for Education has ensured that the parliamentary passage of the Bill did not rule out legislating in the future: that is a measure of the seriousness with which we take it.

I listened carefully to the speech of the noble Viscount, Lord Hanworth, who spoke about what he called an amenities arms race. We believe that investing in the student experience via new facilities and by other means is a good thing, but rest assured that the TEF and the regulation provided by the OfS still puts the greatest stock on teaching quality and provision.

Finally, I think it is worth reflecting on what has happened since the Higher Education and Research Act received Royal Assent. As planned, the OfS was up and running from 1 January 2018 and officially launched on 1 April 2018. In the meantime, the designated quality body and designated data body were announced after recommendations by the OfS. The OfS published its regulatory framework and registration conditions on 28 February and the Secretary of State’s guidance was issued shortly before that date. The OfS has established and convened the aforementioned student panel to advise on strategy and activity. The OfS is now registering providers with early student recruitment cycles, and on Monday 30 April published its strategy and business plan for 2018-19.

To conclude, clearly there are strong views still on all sides of the House. I am thinking particularly of the noble Lord, Lord Hunt. I will review Hansard to be sure that I have covered many of the points he made. Understandably perhaps, he used a broad brush to cover a range of issues, including tuition fees. He will know that the post-18 review is looking at the funding of tuition fees. I will look carefully at what noble Lords have said, and indeed what I have said, and if a letter is merited, I will certainly write to noble Lords and leave a copy in the Library. I hope that I have reassured noble Lords about the reasons for this order and on the questions they have raised. I hope that the noble Lord, Lord Hunt, will withdraw his Motion, but of course that is entirely his decision.

20:30

[Lord Hunt of Kings Heath]

My Lords, I am grateful to the Minister for his full response, and to other noble Lords who have spoken. As the noble Baroness, Lady Garden, said, at the heart of this is our concern about the autonomy of our universities and the independence of the OfS. These become ever more important because marketisation increases the risk of perverse incentives being put in place, as well as the temptation to do so.

The Minister, commenting on what my noble friend Lord Hanworth said about the amenities arms race, said that you have to ensure that students have a good experience. I agree, but he said that when the reviews of students’ attitude to their university are done, which then feed into the teaching quality, often it will be the amenities that they judge. If those amenities are developed at the expense of investment in academics and the casualisation of those academics, with all the insecurities that that brings, it is a matter for some concern and at least debate.

My noble friend Lord Judd talked about the international standing of our universities, which he said depended on scholarship, learning and education as goods in themselves. I have seen nothing to suggest that the OfS has any understanding of those values, which is why we are so concerned.

The noble Lord, Lord Storey, raised the important question of these new private colleges—call them what you will—which are to be given university title and allowed into the sector without appropriate scrutiny of whether they are capable of taking on the awesome responsibility they have been given. So far, from what I have read of the OfS approach, the risk seems to be that colleges such as Greenwich will actually come under a lighter-touch regulation than institutions which have provided wonderful excellence over decades or hundreds of years. That is the charge that I put to the Government: why are these wretched private institutions to be given such an advantage when they come into a sector that is universally recognised as brilliant? The Minister has not answered that question. As for the gold star for Liverpool Hope University, the Minister forgets that it would have to be “Liverpool Hope Provider”.

I am grateful to the Minister for his very full response, which is always appreciated. He said that the OfS will be operationally independent and the Secretary of State’s powers of intervention are limited. The OfS has to show that it is independent. The chairman could have shown he was independent by resisting the intervention by special advisers in the appointment of Mr Toby Young. He did not. That is why his own position and judgment are in question and why he has an awful lot to do to show that he can carry out his job effectively. People are put to the test. He was put to the test. I do not think he succeeded.

Of course it is important to engage with students and the students’ panel is welcome, but it is no substitute for having somebody on the board of the OfS who can actually represent the views of the NUS. It remains a big issue for the credibility of that body.

On the core issue of marketisation, the Minister said that surely students have the right to good information. I totally agree and anything we can do to provide that information is to be welcomed; Universities UK’s evidence points to the direction. But students’ right to information does not equal a market or marketisation. That is why “provider” is such a pejorative term. For the sake of a few tin-pot organisations that are going to be allowed into the sector, we eradicate the concept of university and call them all providers. At the least that shows rather limited thinking.

At the end of the day the OfS has our good will. We hope it will do a good job. But we remain concerned that the Government’s intent is, in effect, to damage the university sector, with huge consequences for our country. I beg leave to withdraw the Motion.

Motion withdrawn.

Automated and Electric Vehicles Bill

Committee: 1st sitting (Hansard - continued): House of Lords
Wednesday 9th May 2018 Lords Chamber

Committee (1st Day) (continued)

20:36

Clause 4: Accident resulting from unauthorised software alterations or failure to update software

Amendment 22 not moved.

Amendment 23

Moved by

[Lord Borwick]

23: Clause 4, page 3, line 12, leave out paragraph (b) and insert—
“(b) the manufacturer of the automated vehicle (or owner or registered keeper retrofitting or modifying the vehicle to become an automated vehicle) failing to ensure that latest safety-critical software was automatically installed before that vehicle was moved from a parked and deactivated position.”

[Lord Borwick (Con)]

My Lords, as we go through this Bill, it is remarkable how many amendments overlap each other. It was not necessarily apparent at Second Reading, but we have all from our different directions come out with the same answers. One of them is in the update of safety-critical software.

This Bill seems to have taken some time to go through another place and then to arrive here. Since we first heard about it, it has changed its name on various occasions. It has had aviation included and then taken out. During this period—which I have variously heard has been two or five years—things have changed. The Bill is written as if it is the job of the insured person to update the software. That might have been true five years ago, but nowadays the software is updated automatically. We are, after all, talking about an automated vehicle—the software should be updated automatically.

I believe that the drafting, as we have it, of Clause 4(1)(b) should be changed to the wording in Amendment 23. It is perfectly easy to programme the software so that the vehicle will demand itself to be updated and will not move unless it is done. Given that this is safety-critical software, we ought to make certain that this vehicle itself has enough ability to know whether it is up to date. It can easily do that with modern software systems. So making certain that the vehicle updates itself before it moves from wherever it is in a parked and deactivated position will be perfectly easy. Nowadays, with the design of the Tesla vehicle, all the updating is done automatically—sometimes without the knowledge of the owner or driver. It is easy for the manufacturers to do and a much more modern way of looking at it than the drafted wording in this Bill. I beg to move.

[Lord Tunnicliffe (Lab)]

My Lords, I rise to move Amendment 25 in my name and—

[The Deputy Chairman of Committees (Lord Geddes) (Con)]

The noble Lord should speak to the amendments.

[Lord Tunnicliffe]

You are quite right. I am a pedant as well, and proud of it. I shall start again.

I rise to speak to Amendments 25 and 28 in my name. The first concerns insurance, which is what the Bill is supposed to be about. As the noble Lord, Lord Borwick, has said, because of the time this Bill has been in gestation, the language is not perhaps as we should like. It has effectively defeated me. If you look at Clause 4, for instance, we have:

“an insured person … an insured person who is not the holder of the policy …someone who is not insured under the policy in question”,

and then we have, simply, “that person”. I got lost working my way through it.

What this amendment tries to do is to protect the innocent party. What we need from this Bill is that, when an innocent party is injured or their property is damaged by an automated vehicle, they get the money without quibble and all the legal battles take place between the insurance company and whomever may be responsible for the event. It may be that the Bill, as drafted, achieves this. I shall be happy if the Minister tells me that, provided she accompanies it with a plain language explanation as to how the clauses and subsections get us to that point. I do not think this Bill is going to win a crystal mark for clear English.

The purpose of this amendment is to protect the victim or damaged party. We must be clear that the insurance system put in place for automated vehicles is designed in such a way that it does not cause any delay or question over the payment of compensation to the victim, if there is any dispute between the insured person and the insurance company over responsibility for the accident. As the technology becomes more complex, so too could the decision about who is to be held responsible. I understand that this Bill aims to set out the liability of insurers for automated vehicles. So I am seeking clarity from the Minister on this point to ensure that the victim of any potential accident is at the front of our minds when we are discussing these issues.

I shall now speak to Amendment 28. Under the current drafting of the Bill, people would be able to drive their automated vehicle on the roads without having the latest updated software, which could lead to safety risks. The clause would require the Government to introduce regulations requiring automated vehicles to be up to date in order for their automated functions to be used. If a vehicle had a serious mechanical fault that could endanger the driver and others, we would not allow it on our roads. It makes sense that an automated vehicle would similarly present an increased safety risk if its operating system were not updated.

Without the new clause, people would be able to take an un-updated vehicle on to our roads, either by accident or on purpose. Insurance companies could surely factor the increased risk into premiums, which would be higher as a consequence. Most people with smartphones or computers are likely to have software that prevents them from being used until it is updated. There does not seem to be any reason why a similar mechanism could not be included in automated vehicles. By preventing un-updated vehicles from being used, we would achieve safer roads and cheaper insurance.

The primary benefit of AVs is that they reduce the likelihood of human error, yet one of the few areas where scope for human error remains—the responsibility for ensuring that software is updated—would not be addressed even though it would not be difficult to do so. The new clause would address that.

20:45

[Baroness Randerson (LD)]

My Lords, it seems that the Government have not thought widely enough about the issue of how software operates these days. Certainly, as the noble Lord, Lord Borwick, said, there is an element here of the concepts being slightly out of date.

My car’s software is automatically downloaded. We became aware a few months ago that it had been updated and now, no matter where we went, it told us that we did not have enough electricity to get there—which is taking range anxiety to its extreme. The problem is that, two visits to the repair shop later, they still have not been able to fix the problem. I would be pretty upset if this were an automated car and people said it was my fault when clearly I had faulty software.

It is also important to remember that, even though software might be automatically downloaded, individuals still have a responsibility, and that responsibility is not to interfere with it. It is not beyond imagination that software on automated cars might impose a maximum speed of 90 miles per hour so that you could not go any faster. It would not be impossible for someone who was pretty clever at interfering with software and writing their own to override this. Clearly there needs to be something in the Bill that expresses the fact that owners, drivers and users of these vehicles should not interfere with the software.

My point is that the Government need to rethink this, about a year or 18 months on from when it was originally thought about, and look at it from the modern perspective of the issues that we are all aware of now in relation to software.

[Lord Berkeley (Lab)]

My Lords, these are interesting amendments. When my noble friend Lord Tunnicliffe was speaking to Amendment 25 and mentioned the word “victim”, I began to think, “Well, who is a victim? Can a car be a victim, or only a person?” I think it is too late tonight to start a long debate on that, but perhaps the Minister could think about that some time.

I turn to Amendments 23 and 28. My worry about Amendment 23 is: what happens if the manufacturer has gone bust? In other words, the manufacturer does not actually have to be the person who supplies updates; it can be anyone. My gut feeling is that my noble friend Lord Tunnicliffe’s Amendment 28 is better because it just says that the vehicle may not be operated unless the application software relating to the vehicle’s automated function is up to date. I think that would cover what Amendment 23 covers but in a better way.

What nobody has mentioned tonight, which the noble Baroness touched on, is what happens if the software does not work and you are stuck on a motorway or in a one-way street and cannot move the car? Again, I think that is a debate for another day, but I hope the Minister will have some response to the points made by many noble Lords, particularly about who updates the software.

[Lord Lucas (Con)]

My Lords, I entirely agree with my noble friend Lord Borwick that software updates should be the responsibility of the manufacturer. They are capable of updating it, and of making it automatic that it is updated. I agree with the noble Baroness, Lady Randerson, that systems need to be better than they are at the moment. I note that my iPhone issued by this House is automatically updated with software. About two weeks ago it deleted all my telephone contacts and it resists all efforts by all our excellent people in this House to restore it to normality, because Apple takes no responsibility for this, of course. It just produces the update and there is no recourse to make the thing work properly.

In the case of automated vehicles we absolutely need to have recourse to the manufacturers, and they need to know that that is where liability for these things rests. It is their responsibility to make sure that their fleet of vehicles on the roads is up to date and functioning as expected. This reflects back into other aspects of the Bill that we have already discussed, as to who should be allowed to make modifications and how the whole fleet of autonomous vehicles should communicate with each other.

I am also happy with Amendment 25; it is an excellent thing. I would only point out in the drafting of Amendment 28 that it refers to “public roads” whereas the Bill refers to “public spaces”. With reference to a conversation I had earlier with the noble Earl, Lord Lytton, that presumably includes the airspace above public spaces, so the Bill includes your future Amazon drone wandering along six feet above the pavement to drop your parcel over your gate. I see nothing in the Bill that excludes airborne vehicles—or indeed waterborne vehicles—so I presume that both are included in that definition of public spaces. I do not know which definition of public spaces is being referred to. The ones I can find in legislation are pretty vague and not really related to this subject, but I would assume that at the same time as thinking we are dealing with road vehicles, we are also dealing with ones that could be airborne—at least within reasonable reach of the ground.

[Lord Borwick]

My Lords, I think I rather agree with the noble Lord, Lord Berkeley, about Amendment 28, tabled by the noble Lord, Lord Tunnicliffe, being better than my Amendment 23. It is better because the point about manufacturers going bust had not occurred to me—so putting it into the passive is a much better way of doing it.

Amendment 25 seems to be approaching a sort of strict liability basis, with the automated vehicle’s insurer responsible even if that vehicle was not responsible in any way for the accident. I refer him to the accident that was reported a couple of days ago with a Waymo vehicle in which another car went into it. It was absolutely not the fault of the automated vehicle; it was hit by a manually controlled car. In that case it would seem to be particularly unfair that the insurer of the automated car had to pay out and then recover from somebody else. That was an entirely innocent case where the automated vehicle was totally not responsible for the accident.

A lot of this will come out in due course as we learn more. It is a problem at this stage that we have to legislate to get the insurance right in an industry that is developing.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, the provisions in the Bill will ensure that victims of an accident caused by an automated vehicle that is driving itself will be covered by the compulsory insurance in place on the vehicle. It is the intent that the victims of such accidents will get quick and appropriate compensation.

In Amendments 23 and 28 my noble friend Lord Borwick and the noble Lord, Lord Tunnicliffe, raise the important issue of safety-critical updates to vehicles. It is not the function of the Bill to provide software standards or requirements for automated vehicles. The Bill provides an insurance framework so that victims have quick access to compensation in line with existing practices, and is just one element of a wider regulatory programme to ensure that people and businesses in this country can benefit from the safe introduction of automated vehicles.

The purpose of Clause 4 is to deal with the relationship between the insurer and the insured person in certain circumstances. This addresses the point of the noble Baroness, Lady Randerson. It exists specifically to deal with the insurer’s freedom to exclude liability in the small number of potential situations where the owner needs to act to install a safety-critical software update and knowingly chooses not to install it, or the owner makes unauthorised software alterations, thus putting themselves and others in harm’s way. The clause is designed specifically to deal with that. It mirrors the situation for the compulsory insurance of conventional vehicles, where a driver would not be protected if they drove a vehicle that they knew was unsafe or not roadworthy.

[Lord Tunnicliffe]

Perhaps the Minister could help me a little here. If a vehicle is not insured today, and a pedestrian is harmed, say, who had no responsibility at all, my understanding is that they will get an instant payout from some sort of collective fund. Is that correct? If it is, is it the intention of the Bill to have a similar situation, including possibly defective software?

[Baroness Sugg]

I am pleased that the noble Lord has allowed me to address this point, because it goes to defective software. As the noble Lord said, it would be a legal requirement that all automated vehicles must be insured, but there will be instances when vehicles are driven illegally, as we see today. I will take this opportunity to clarify that the Motor Insurers’ Bureau will continue to play the same role as it does now with uninsured and untraced drivers, so that victims involved in collisions with uninsured automated vehicles will have quick and fair access to compensation, in line with conventional insurance practice. This arrangement is not currently covered in legislation nor included in this legislation; it is covered through an agreement between the Secretary of State and the Motor Insurers’ Bureau. We are discussing what changes are needed to that agreement to sufficiently and appropriately incorporate automated vehicles within the existing process.

On software updates, Clause 4 anticipates that vehicle manufacturers will want to ensure that their vehicle systems are as safe as possible for consumers. As my noble friend Lord Borwick said, we expect that most updates will be done automatically and will be the responsibility of manufacturers. This is something that manufacturers acknowledge. Vehicle safety standards, which include software, as I have mentioned before, are still being discussed at the UNECE level. The requirements for system updates form part of the international discussions on the standards that will ultimately form the basis of the type-approval process that the vehicles must pass before they are sold in the UK.

There will be robust standards in place before these vehicles arrive to market, which will include the updating of safety-critical software. I can reassure noble Lords that vehicles will have to meet these standards before they are made available on the market. I fully appreciate the noble Lords’ intention to ensure that automated vehicles’ software is up to date, so that they are functioning safely—but, as with our previous debate on standards, we do not think it is right to act unilaterally at this time.

All noble Lords, including myself, are in the same place on this. We expect that vehicles will not be deemed safe to use, and therefore will not be placed on the list and covered by insurance, unless the safety-critical software is in place. It is a complex issue; we still do not know exactly how the software is going to work. We see some good examples from Tesla and Apple, but this is part of extensive conversations at an international level, with manufacturers and other countries, to understand how best to deal with this.

Amendment 25, tabled by the noble Lord, Lord Tunnicliffe, requires the insurer to pay out first and then recover from the liable party. I hope that I can say this in plain English. Subsections (3) and (4) of Clause 4 already work with Clause 2, where the insurer has a first-instance liability to pay the injured party. I believe that Clause 2 is clear on that, and where the liabilities of insurers are when the accident is caused by an automated vehicle. I think that the current wording fulfils the intention behind the noble Lord’s amendment.

21:00

As I have said, the policy intent of the Bill is to mirror as closely as possible the existing framework for conventional vehicles. The insurer would be initially liable to pay compensation to any victim, including to the driver who had legitimately handed control to the vehicle. The insurer would then have the right to recover costs from the liable party under existing common and product law. I think that that is covered.

My noble friend Lord Lucas asked about drones. I do not actually think that they will be covered by the Bill, because of the definition in Clause 1(1) that it is,

“a list of all motor vehicles that … are or might be used on roads or in other public places in Great Britain”.

I cannot preclude the fact that there may be some kind of drone in future that may be able to travel on public roads and then move into the air, but this Bill specifically deals with motor vehicles, and we have yet to see such a drone.

On software updates, we believe that it is too soon to legislate in these areas, and we do not believe that this Bill is the right place for it. However, I reassure noble Lords that the conversation is ongoing at an international level, because we are all aware that we do not yet have a solution to it and we want to make sure that we set standards in the right place. On liability, we believe that the provisions in the Bill already provide for the policy intent behind Amendment 25. Based on that, I hope that my noble friend will be able to withdraw his amendment.

[Lord Borwick]

My Lords, I beg leave to withdraw the amendment.

Amendment 23 withdrawn.

Amendments 24 and 25 not moved.

Clause 4 agreed.

Amendment 26

Moved by

[Lord Lucas]

26: After Clause 4, insert the following new Clause—
“Right of insurer to data and control
(1) An insurer may require, as a condition of insurance, that an automated vehicle transmits to the insurer when requested, at specified intervals or in real time, such data as the insurer may specify.(2) An insurer may require, as a condition of insurance, that an automated vehicle behaves in a fashion specified by the insurer on receipt of electronic instructions from the insurer.”

[Lord Lucas]

My Lords, I beg to move Amendment 26, which has at its heart the flow of data between a driver and the insurer—but, more particularly, between an automated vehicle and the insurer. It suggests that the insurer should have the right to require data flows to be made in ways that are specified by them to support the contract for insurance. I am particularly thinking of data that might flow at the time of an accident so that the insurer can capture the full dataset at that point rather than risking it being destroyed, perhaps by a later fire or some other consequence of the accident. But we might also get a situation in which insurance flexes with the state and use of the vehicle. To go back to an aspect of my earlier Amendment 10, data flows are an important part of how we consider our relationship with automated vehicles.

[Lord Borwick]

My Lords, Amendment 27 is a probing amendment, triggered when I first read this Bill, which happened at about the same time as the very first fatal accident in America from a Tesla vehicle, when it was it was speculated in the press that Tesla would not release the data from the vehicle because it had proprietary value to Tesla. In fact, as I understand it, Tesla released the data in due course. However, I could imagine circumstances in which the owner or manufacturer of an automated vehicle believed that the less which was found out about this accident, the better for them.

One of the greatest advantages to the insurance industry of the automated vehicles is the enormous quantity of data that will be available from them. Not only will there be the product of six or more cameras facing every single direction but all the other information picked up about speeds can and will be stored in the vehicle as it goes by. Maybe the industry would be grateful if the Minister could confirm that to delete such data would be the offence of perverting the course of justice. However, in the meantime I wanted to propose the amendment.

Amendment 30, the next one in this group, is on the question of regulations, which has already been touched on in earlier debates about standards. However, I believe that the range of aspects of automated vehicles that we have discussed this evening is very great, and there is clearly a lack of knowledge on the part of noble Lords such as myself, not just about the sheer detail of this but about the industry and what is coming on. So many different things are happening, and each of them is an outstanding opportunity for the country. We need a legislative background that can cope with completely new circumstances, not only prohibiting things that are brand new and thoroughly bad but permitting things which are brand new and have not been invented yet.

On the suggestion that we can revert to new primary legislation, given the number of years it has taken to develop this legislation and the constant pressure on legislative time in both Houses, it would be wise for the Government to take regulatory powers to come up with new regulations to deal with new matters. Therefore, these limited new regulatory powers are proposed in Amendment 30.

[Baroness Randerson]

My Lords, I take this opportunity to ask the noble Lord, Lord Lucas, for a little more information about his intention with regard to this amendment on transmission of data. One can see advantages to that flow of data, and one knows that it would naturally take place, because technically it can take place. However, there are huge issues about privacy. I am not entirely sure that I would want—to grasp an example from the air—information to be in someone else’s hands about the fact that I go swimming every week, so that suddenly a department store starts trying to sell me swimsuits every day of the week. I do not want that unnecessary invasion of my privacy. There could be very much more sensitive issues. I could be visiting a hospital and wanting to keep my medical condition private—that kind of thing. There have to be rules about what this data is used for, how it is kept, and so on. Is it the Minister’s view that current legislation on data and privacy going through this House would cover that sort of issue, or will we need other legislation to cover it? Does the noble Lord, Lord Lucas, envisage a sort of situation akin to the black box that some drivers use now to reassure their insurance company that they are driving safely and within speed limits, and so on, which, in return, keeps their insurance premiums down? I am interested in that point.

Finally, I will make a comment about Amendment 30. I am not usually keen on giving the Government delegated powers but there are some sensible limits on this here. I understand that we are envisaging a future; we cannot predict every requirement accurately and we cannot wait around on every occasion for primary legislation—so, as far as that goes, it seems a sensible proposal to me.

[Lord Lucas]

I share the noble Baroness’s admiration for my noble friend’s Amendment 30, which puts things in a very simple and clear way and is well worth having in the Bill. As far as the insurance amendment is concerned, I was looking for a way within the narrow confines of the Bill of illustrating the need for the Government to go further now. Even dealing with the subject of insurance, there are matters that need to be discussed now which we may need to bring into secondary legislation to enable things to operate properly. We should make provision for these things to be done in the Bill. I do not have answers to the questions that the noble Baroness has asked. I imagine that, in an automated world, having a dump of the data for the quarter of an hour before an accident and through as far as the machine keeps recording would be a useful way of establishing what happens during an accident; it really ought to be something we are thinking about, even in the narrow confines of this Bill.

I turn to what my noble friend said about motor vehicles. I presume the Bill will somehow, through the atmosphere of legislation, pick up the definition of motor vehicle from Section 185(1)(c) of the Road Traffic Act 1988:

“a mechanically propelled vehicle, intended or adapted for use on roads”.

However, I think the Bill uses motor vehicle in a slightly different sense, as vehicles that,

“are or might be used on roads”—

that is okay so far—

“or in other public places”.

Clearly, we have a different definition of motor vehicle here from the one in the Road Traffic Act. Therefore, we are somewhat adrift; we are dealing with things that might be used in public spaces and therefore presumably might interact with footpaths, crossing all sorts of land; they could include the sort of thing that mows golf courses too, which might very well go automatic, or the farming equipment my noble friend was referring to. If you have a footpath across the land and one of these vehicles is trundling across it, it is occupying a public space at that point; we are encompassing a wide range of vehicles beyond the definition in the 1988 Act. This might be something worth resolving at some stage.

[Lord Young of Cookham (Con)]

My Lords, the co-pilot is in charge of this group of amendments. As my noble friend Lord Lucas said, our transport networks are becoming increasingly digital. The regulation of the collection, sharing, use and deletion of data will be vital. Several stakeholders, including the insurance industry, have highlighted the need to ensure access to automated vehicle data, not least because it will help determine who is liable in the event of an accident, as my noble friend has just said.

While we certainly recognise the potential value and use of data, especially for vehicle insurers—and the need to look at the subject of data generated from automated vehicles—as with many previous amendments we do not consider that now is the correct time to start making provision for access for insurers, as suggested by my noble friend in Amendment 26. Nor do we believe that this is the right time to consider new offences regarding the deletion of data, as suggested by my noble friend Lord Borwick in Amendment 27. However, I shall seek to give both noble Lords some reassurance.

It is likely that the international UNECE regulations underpinning the type approval system, which allows vehicles to be sold in the UK, will require the use of a data collection and storage system in automated vehicles. In response to my noble friend’s Amendment 26, it is of course important that insurers have access to the data they need in order to establish liability for any accident. I hope that he finds that reassuring. However, to balance the needs of industry and consumers, we still require detailed engagement on which parties will require access to this data and how it should be shared. It is clear that some data collected by automated vehicles, such as location information, may constitute personal data and will therefore need to be handled appropriately—a point made by the noble Baroness, Lady Randerson. Therefore, there is a need to balance the personal privacy of automated vehicle users with the public good, and this is an area that will most likely need to be resolved internationally to help ensure consistent standards.

21:15

I assure noble Lords that the Government, like others around the world, are investing heavily in automated and connected technologies that will assist in providing evidence of what minimum data recording and sharing requirements might be needed. At a very minimum, the vehicle should store information about who or what was in control of the vehicle at the time of a collision. I hope that that addresses Amendment 27, in the name of my noble friend Lord Borwick. Further work must be carried out on an international level before we start introducing legislation for offences, but I hope that he will be reassured by the fact that officials from the Department for Transport are working within the UNECE to ensure that international vehicle standards support connected and autonomous vehicle technologies, including on data recording, storage and retention.

On my noble friend’s specific concern, we will of course need to give proper consideration to the need to avoid data deletion, and this is something that will be discussed as part of our ongoing work. The deletion of data could already be unlawful depending on the circumstances and if the accident is subject to legal proceedings.

The Department for Transport will continue to participate fully in these international fora, equipped with the views of the UK manufacturing and insurance industries and with evidence from UK trials currently taking place and the first automated technologies that are coming to market.

With regard to data in general, I reassure the noble Baroness, Lady Randerson, that the House has recently debated the Data Protection Bill, which is currently in another place. That Bill will modernise the data protection laws in the UK to make them fit for purpose for our increasingly digital economy and society. It will ensure that modern, innovative uses of data can continue, while at the same time strengthening the control and protection that individuals have over their data. It is those terms, along with the international standards for vehicle data, that we will have to consider when we legislate domestically—but now is not the time to do so.

Turning to proposed new subsection (2) in Amendment 26 on the right of the insurer to control the behaviour of an automated vehicle, we do not think that it would be appropriate for insurers to set the behaviour of automated vehicles. The commercial drivers underpinning insurance decisions may not accord with the wider interests of society as a whole. I hope that noble Lords will agree that this is most appropriately carried out internationally through the UNECE, primarily through Working Party 29, the world forum for the harmonisation of vehicle standards, but also through Working Party 1, the Global Forum for Road Traffic Safety. Where appropriate, this will be legislated for domestically as part of our ongoing regulatory programme.

I assure noble Lords that vehicles that appear on the Secretary of State’s list will be able to drive themselves safely. We will act to ensure this through our active role in the international negotiations shaping these standards and through the development of our domestic road traffic laws and guidance as part of our ongoing regulatory programme.

I appreciate the helpful and well-intentioned Amendment 30, tabled by my noble friend Lord Borwick, proposing a delegated power to create further legislation for automated vehicles. However, I am mindful of the Government’s ongoing need to be clear and transparent about delegated powers to ensure proper parliamentary scrutiny and of the reservations in many parts of the House about Henry VIII-type powers. At this stage the Government are unable to say how the power proposed by my noble friend would be used. However, I have listened carefully to the arguments from all sides of the Committee and will consider this again ahead of Report.

As part of the continuing regulatory programme relating to AVs, it will no doubt become necessary to legislate further when more is known about the technology. The Law Commission may make recommendations in this regard. Perhaps I could just say a word in response to questions that have been raised consistently through our debates about what happens next. We already have the power, through the Road Traffic Act, to amend our vehicle construction and use regulations, along with updating rules and guidance within the Highway Code, to support the development of AVs.

At this stage we do not know what other powers we will need, which is why the Law Commission is carrying out a far-reaching review of our regulatory framework with respect to AVs. This is a three-year project, launched on 6 March this year. It will produce a scoping report, as the first stage in identifying and consulting on future areas of regulation, towards the end of 2018, and this will inform the Government’s next moves. So although I understand and appreciate the intention behind the amendments, we do not consider that they are appropriate for this Bill—and against the background of the assurances I have given, I ask my noble friend to withdraw his amendment.

[Lord Lucas]

My Lords, I am grateful to my noble friend for that reply. I will assume that included in it, but not vocalised, was a promise to write to me about the definition of motor vehicles. I like my moments of pedantry as well as the next man, and I would be interested in pursuing that subject in correspondence.

On the main points, I am delighted that my noble friend found at least half a warm word for my noble friend Lord Borwick. I think there is a real opportunity here that, with a little persuasion and some crafting of the amendment, we might, unusually, find ourselves supporting the Government in giving themselves some powers that they do not yet know how to use, within this limited area, because it would have such a potentially positive effect on the economy of the UK. I beg leave—

[Baroness Randerson]

Before the noble Lord sits down, is he aware that there are now reasonably big drones delivering goods? They trundle along pavements and across level crossings and so on, appearing to behave a bit like pedestrians. I have been thinking about what the noble Lord is saying, and he is raising a good point. What is the difference between a drone delivering an Amazon parcel and a driverless van delivering an Amazon parcel? The only difference is probably the size, so there will have to be some definition of a cut-off point—unless we are going to insist that drones are insured, in the same way as vehicles.

[Lord Berkeley]

Before the noble Baroness sits down, may I ask her whether she really thinks that drones trundle along pavements?

[Baroness Randerson]

I have indeed seen them. There are experimental systems that are wheeling along pavements.

[Lord Berkeley]

On wheels?

[Baroness Randerson]

Not in Wales, no—in London. We are not that advanced in Wales.

[Lord Lucas]

The noble Baroness raises a very valid point. What we seek to regulate is autonomous automated vehicles that are likely to interact with people. That will include delivery drones, whether they are flying or trundling on the pavement. It would be quite useful in parts of London to be able to go amphibious and drop into the Thames for a bit, run up the river and then back on to the bank. We are talking about things that will interact with the public. I hope we are looking at a wide definition here and not just talking about things that are supposed to confine themselves to the road. One of the virtues of automated vehicles is that they do not have the same need to do that as other things, and they might well turn out to be quite versatile. I look forward to learning in correspondence where we are on the definition, and I beg leave to withdraw the amendment.

Amendment 26 withdrawn.

Amendment 27 not moved.

Clause 5 agreed.

Amendments 28 and 29 not moved.

Clause 6 agreed.

Amendment 30 not moved.

Clause 7: Interpretation

Amendments 31 to 35 not moved.

Clause 7 agreed.

Amendment 36

Moved by

[Lord Tunnicliffe]

36: After Clause 7, insert the following new Clause—
“Review of Part 1
(1) By September 2019, the Secretary of State must lay a report before Parliament assessing the effectiveness of the system for defining and insuring automated vehicles introduced by Part 1 of this Act.(2) The report must consider—(a) the impact on the insurance industry,(b) the impact on the cost of insurance premiums for automated vehicles,(c) the impact on the uptake of automated vehicles, and(d) the levels of disagreement between manufacturers and insurers on liability.”

[Lord Tunnicliffe]

My Lords, we all agree that in the future automated vehicles have the potential to improve personal transport arrangements as well as air quality, which is crucial given the dire state of the environment and its impact on health. Solving questions of how automated vehicles can be insured is essential and we welcome the fact that the Government are setting out how to do that. However, it is important to assess how measures work in practice, not only in legislation. It is particularly important that the Government should ensure that regulations are working as intended and should monitor unexpected impacts, which are always there, before attitudes and practices become entrenched and before automated vehicles become common on our roads.

Although the list in the amendment is not exhaustive, given the focus of Part 1 of the Bill it makes sense for a report to consider the impact that measures have on the insurance industry, on the cost of premiums for policyholders, on the uptake of automated vehicles and on disagreements between insurers and manufacturers on liability. This will be a fast-moving area and—who knows?—we may have to revisit areas of this Bill in the future as advances in technology take place and the advances impact on how these vehicles are insured.

It is important that Parliament is kept informed of the effectiveness and impact of the legislation to make sure that we keep it up to date as new technologies in this area are developed. I beg to move.

[Baroness Sugg]

My Lords, the Government are taking a step-by-step approach to our regulatory programme in relation to automated vehicles. Where the evidence base exists for regulatory change, we will act so that the UK public and businesses can benefit from innovative new vehicle technologies as soon as they arrive to market. As we noted when we initially consulted with the public and industry in 2016, each of these steps, taken through either primary legislation, secondary legislation or guidance, will be subject to a process of scrutiny and ongoing review.

On the automated vehicle insurance measures, as part of this regulatory programme we will continue to engage with the DVLA and other motoring agencies, the insurance industry and other relevant stakeholders to make sure that the system works effectively as the new insurance framework is implemented, and that we are still meeting our intended policy objectives to provide a compulsory insurance framework for automated vehicles.

As noble Lords will be aware, we have produced a detailed impact assessment looking at the potential direct economic effect on the insurance industry from introducing these measures. As my noble friend has just explained, the Centre for Connected and Autonomous Vehicles has asked the Law Commission to undertake a far-reaching review of the UK’s legal framework for automated vehicles. This may consider a wide variety of areas of law, including the liability and the insurance provisions set out in the Bill.

Unlike with many other amendments we have discussed today, I will not be arguing that the Bill is the wrong place for this amendment. However, it asks for a report by September 2019, which would be too early to consider whether the scheme is effective. It is not anticipated that there will be many—or even any—vehicles to which the insurance provisions apply. However, I understand and share the noble Lord’s intention to ensure that the system that is in place is working effectively, and ahead of Report I will consider whether there is anything further we can do in this area. With that in mind, I hope that the noble Lord will feel able to withdraw his amendment at this stage.

[Lord Tunnicliffe]

My Lords, I thank the Minister for her response. There is a wider point, which perhaps I should have made before—though I think she is erring towards agreeing with me—which is that it seems possible that the first fully automated vehicles could be ferrying children to school in, say, five, 10 or 15 years’ time, without this issue coming back to this House at all, by virtue of the wide powers that many of the road traffic and other Acts have to do things by order, for example. Therefore I hope that we will be able to find some sort of reporting compromise that ensures that this House and, ideally, Parliament in general are kept informed of developments in this exciting and innovative area. I beg leave to withdraw my amendment.

Amendment 36 withdrawn.

House resumed.

Secure Tenancies (Victims of Domestic Abuse) Bill [HL]

Wednesday 9th May 2018 Lords Chamber

Message from the Commons

The Bill was returned from the Commons agreed to.

Nuclear Safeguards Bill

Wednesday 9th May 2018 Lords Chamber

Message from the Commons

The Bill was returned from the Commons with an amendment. The amendment was ordered to be printed.

House adjourned at 9.30 pm.