Tenant Fees Bill (Fourth sitting)
Tuesday 12th June 2018
(5 years, 10 months ago)
Public Bill CommitteesRead Full debate Tenant Fees Act 2019 View all Tenant Fees Act 2019 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 12 June 2018 - (12 Jun 2018)
The Committee divided: - Ayes: 9 / Noes: 7 - Question accordingly agreed to.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Chair
Before we begin, will everyone ensure that all electronic devices are turned off or switched to silent mode? Tea and coffee are not allowed during sittings. We now resume line-by-line consideration of the Bill. We start with clause 5, which we debated as part of an earlier group of provisions. I therefore cannot allow a separate stand part debate, but will put the question on the clause forthwith.
Clause 5
Treatment of holding deposit
Question put, That the clause stand part of the Bill.
The Chair
We have also debated schedule 2 as part of an earlier group and therefore I cannot allow a separate debate on it.
Schedule 2 agreed to.
The Chair
For the sake of clarity, I point out that amendments 22 to 44 were all consequential on the proposal to remove schedule 2 from the Bill. As schedule 2 has been agreed to, those amendments automatically fall and cannot be moved.
Clause 6
Enforcement by local weights and measures authorities
Question proposed, That the clause stand part of the Bill.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
It is a pleasure to serve under your chairmanship, Mr Sharma. I look forward to our making speedy progress today.
The Bill proposes a number of enforcement measures that offer a strong deterrent to irresponsible agents and landlords and, in doing so, protects tenants from unfair letting fees. Clause 6 places a duty on local weights and measures authorities—that is, trading standards authorities—to enforce the ban on letting fees and requirements relating to holding deposits. Trading standards have an important role in enforcing existing legislation on letting agents—such as the requirement on agents to display their fees transparently. With their existing local knowledge of the industry, trading standards are the clear choice to enforce the ban on letting fees. Indeed, 69% of respondents to the Government consultation agreed that trading standards should enforce the provisions of the Bill. We have also spoken to trading standards officers, who agree that enforcement of the Bill aligns with their responsibilities to enforce other legislation relating to fair trading and consumer protection.
Trading standards authorities are responsible for enforcement in their own local areas. Where a breach occurs in the area of more than one trading standards authority, a breach is considered to have occurred in each of the relevant local areas. Trading standards must have regard to any guidance issued by the Secretary of State or lead enforcement authority. The investigatory powers available to a local trading standards authority for the purpose of enforcing the Bill are set out in schedule 5 to the Consumer Rights Act 2015.
Daniel Zeichner (Cambridge) (Lab)
Will the Minister explain to the Committee what assessment he has made of the capacity of trading standards departments to implement the measures that he is discussing, and what additional resources he intends to give them to make that possible?
Rishi Sunak
I am very happy to answer the hon. Gentleman’s question briefly now, as I am sure that we will come to it when we consider the various amendments and clauses that deal particularly with capacity and resources. In a nutshell, we believe that the Bill and the enforcement measures in it will be self-financing with the fees that can be charged by local enforcement authorities and trading standards authorities; on top of that, they will receive seed funding in the first year of up to £500,000.
As I was saying, the investigatory powers are set out in schedule 5 to the 2015 Act.
Melanie Onn (Great Grimsby) (Lab)
The Minister just mentioned charges. Is he referring to the fines?
Rishi Sunak
Yes; I meant the fines that will be charged of up to £30,000 for a second offence and £5,000 in the first instance.
To return to the investigatory powers, they are laid out and provide the ability for trading standards authorities to investigate, inspect and enforce the provisions; they enable them to carry out their enforcement activity.
I hope that the clause will stand part of the Bill.
Melanie Onn
It is a pleasure to serve under your chairmanship, Mr Sharma.
As we have heard and read in the evidence from the likes of the Local Government Association, the Chartered Trading Standards Institute and the Chartered Institute of Housing, there are significant concerns about the enforcement powers being conferred on the local weights and measures authorities around the country. For the avoidance of doubt, we are talking in this clause about local trading standards teams. As I have mentioned before, they have a wide and varied remit. They enforce laws on behalf of consumers on matters such as age-restricted products; agriculture; animal health and welfare; fair trading, which includes pricing, descriptions of goods, digital content and services, and terms and conditions; food standards and safety; intellectual property, including counterfeiting; product safety; and, of course, weights and measures.
Trading standards cover more than 250 statutory duties, including providing businesses with advice. The CTSI says that the service is already overstretched and underfunded, with just £1.99 per head being spent. The situation has been recognised by the National Audit Office, which has said that there is a direct threat to the consumer protection system’s viability as a whole, yet here the Government seek to add another layer of responsibilities, technicalities and duties to those of the service without giving due consideration to the implications of the request, and simply assuming that their assessment that the scheme will be fiscally neutral after two years will come to pass. That seems a rather carte blanch approach to me—a “close your eyes, cross your fingers and hope for the best” kind of plan. It is not robust and it is not a process modelled on the evidence of the experts who operate in the roles, day in and day out. There is time for the Minister to correct this.
Our constituents will mostly know trading standards for tackling rogue traders. My constituency being a port town, we have a very active trading standards department, which regularly discovers dodgy goods that people try to smuggle in, including recently some dangerous counterfeit cigarettes, filled with anything up to and including asbestos, for sale cheap on the black market, with a street value of around £8,500. Trading standards are often the first in a position of authority to come across goods linked to organised crime and criminal gangs, and they provide essential eyes and ears within local communities.
Is the Minister confident that the addition of these tenant fees enforcement powers to trading standards’ responsibilities, with only pin money for start-up and roll-out, will not impact on its already essential role protecting consumers? How can he be sure, and what steps will he take to ensure that that is the case going forward? We heard of cuts to trading standards departments of 40% to 50% at a local level.
Across the country, the Chartered Trading Standards Institute tells us that there has been a cut of more than 50% of skilled officers. Does the Minister seriously think that trading standards will be able to effectively implement these new powers? If so, how? What priorities should trading standards officers have? If faced with tracking down an influx of poisonous fake spirits, surveilling for evidence to prosecute the sale of knives to under-18s or taking action against a landlord requiring a £150 prohibited fee from a tenant, which would he suggest the officers pursue as urgent?
If the Minister concedes that the loss of money is likely to be less urgent in its nature than the matter of illegal spirits or the selling of knives to teenagers, at what point does he anticipate that an officer ought to get around to looking into the issue of the prohibited fee? Given the restrictions on time and staffing levels, is not a TSO, rather than acting in an individual case, far more likely to deal with a single landlord facing multiple allegations of charging prohibited fees? It will be dealing with the big fish, rather than the small fry, that will be a reasonable and proportionate use of staff time. Has the Minister thought about the practicalities of enforcement? Has he compared it with how enforcement of housing matters is currently dealt with, or even tried to plug some of those gaps?
In order for the London Borough of Newham’s landlord licensing scheme to be effective, it had to bring together several different agencies, including the police, the UK Border Agency and specialist housing officers, and had to invest in systems to accurately identify those properties that were incorrectly licensed. While it has drawn in significant revenue for the Treasury and the council, it took a laser-focused determination from the political leadership in Newham to get their processes up and running to tackle landlords operating outside the regulations. Can the Minister guarantee that the same will happen to trading standards departments around the country, when it could be said to be somewhat of a Cinderella service? How will he monitor that, and what will his measure of success be?
The Local Government Association said in its evidence that, given the reduction in capacity of trading standards across many authorities, there should be flexibility for local areas to determine whether the ban is enforced by local trading standards or private sector housing teams. Does the Minister agree? The LGA went on to say that the Government had ignored the findings of the working group, which concluded that there should be enforcement of mandatory client money protection by local authorities, rather than trading standards. Is the Minister content to ignore the working group’s findings?
Has the Minister listened to the CTSI when it says that a self-financing enforcement model would potentially create a disincentive to provide regulatory compliance? That certainly seems to be the case with the current system around the display of fees. The fine acts as neither a disincentive for the businesses nor an incentive for the enforcement teams. The LGA pointed out that the Government’s theory that funds generated by fines will increase when non-compliance increases does not add up if companies close themselves down, only to re-emerge under a different name or structure in order to avoid a fine.
The CTSI also says that the costs of providing advice and guidance to a company that is subsequently compliant are not factored into the Government’s calculations. Of course, there was the issue raised by CTSI in our evidence session regarding the differences in the burden of proof and the framework of enforcement. The enforcers, in this instance the trading standards officers, will be required to prove offences beyond all reasonable doubt. What does this mean in practice for people—for families—who are already likely to be afraid about not securing the property that they want to live in and perhaps are under pressure to secure it because they have given notice on a prior residence, or are being thrown out of a property that they already reside in? Will this substantial basis of evidence encourage people to come forward, to make a complaint and seek redress? Let us remember that they are already in a significantly less advantageous position than the landlord or the lettings agent. They are not the experts in renting and even less so are they experts in the most recent legislative changes.
It goes back to the point I made earlier: the reality is that enforcement officers are far more likely to try to build up a stronger case with multiple complainants than deal with breaches on a single case-by-case basis. Does the Minister consider that this is serving tenants’ best interests? The remedy would not be sufficient in financial terms for the local authority, nor will the legislation be seen as fit for purpose by those it is intended to protect. Is he really content to preside over this? The CTSI says that most consumer rights breaches and the Estate Agents Act 1979 are obtainable on a balance of probability test. Why does he not consider amending the Bill to reflect this modest yet effective change? If it is the case that the higher the evidential requirement, the more work is involved and the more risk there is for the local authority, and the less likely it is that the Act will be easily enforceable, should he not just do the right thing and make the amendment now? I say that because one of the biggest frustrations of my constituents is around laws that are not enforced. Whether it is parking restrictions, dog mess or fly-tipping, they expect the rules to be fully and fairly applied. Where they are not, the blame comes back on an unfairly overstretched local authority, trying to do its best against the financial odds—financial odds that I know the Minister has recognised in previous comments that he has made.
I do hope that the Minister will take my comments on board. These are the views of royally chartered organisations, which work within the current legislative framework and can anticipate the difficulties of seeing this legislation in operation. It is only through proper enforcement with enforceable regulations that we can hope to see this law do everything the Minister has set out for it to do; otherwise, I am confident that it will be left wanting.
Rishi Sunak
There are in general three broad questions or buckets of comments. First, whether trading standards are the right institution to take on this task; secondly, prioritisation of resources for the things that trading standards have to do; and thirdly, a specific question about the burden of proof required for the penalties that are in place in this legislation. I will try to answer each of those three questions directly.
First, regarding whether trading standards are indeed the right body, which the hon. Lady questioned, there is unanimous agreement among leading industry bodies that trading standards are the logical choice. Indeed, the Chartered Trading Standards Institute itself, which the hon. Lady referred to, said that trading standards
“are well placed to enforce the ban”,
thanks to their local knowledge of landlords and letting agents.
Melanie Onn
Would the Minister accept that in the evidence we heard there was a reference to trading standards working closely with housing officers in particular, to better inform their local knowledge in an area that they may not have information relating to, because the trading standards authority has said that in terms of tenants they currently receive a small number of complaints in this area.
Rishi Sunak
I am generous in giving way, but in this occasion I may have been too generous, because I was just about to make that point. It is exactly because we recognise that in different areas there are different situations that we do not want to mandate a top-down approach. We have encouraged close co-operation. I do not want to pre-empt our debate on the next clause, which talks specifically about the powers for district authorities to enforce the provisions in the Bill. Also, on the particular question raised about client money protection and who ought to be the body enforcing that, 74% of respondents to the consultation said that that enforcement should primarily be by trading standards. It is important to note that trading standards can, under this legislation, discharge their responsibilities to the local housing authority, should they feel that is most appropriate for their area. I hope that addresses concerns on that point.
Melanie Onn
I thank the Minister for his response. The suggestion that there has been unanimous agreement across professional bodies on TSOs does not stand up to the evidence we heard. In all the submissions we had in writing, concerns were raised about the level of training available for trading standards officers, the level of experience they have in this area and their expertise, and they may well be better assisted by other organisations.
Rishi Sunak
I would be grateful to know if the hon. Lady is aware of an industry body that does not believe that trading standards should be the enforcement agency for this legislation. If she could name that industry body, who else does it propose should be the enforcement body?
Melanie Onn
I am commenting based on the evidence we heard last week. We heard from the CTSI and the LGA, which both raised those concerns. It is not about not having trading standards involved, because they clearly have an area of expertise, but there were concerns about their level of expertise, experience, training and resources.
The issue of resources was repeatedly mentioned in the evidence we received in writing and verbally. I appreciate the points the Minister made about resources and about looking to Torbay as the standard bearer for all enforcement and revenue-raising operations. I presume that we will look to Torbay in the future as the arbiter of whether this legislation is working.
On the burden of proof, the Minister says that nobody raised issues about that in the Select Committee’s pre-legislative scrutiny. However, it has come to light more recently. The high level of the burden of proof is something that we have heard about and that industry bodies have raised as a concern, given what they are used to dealing with as trading standards officers. It would be an error for the Minister to dismiss those comments lightly.
Daniel Zeichner
My hon. Friend is giving a very good speech. I think we were all in the evidence session the other day when we heard from the CTSI, which made it very clear why it is so important that we get this right. My experience in this place in the last three years is that we have seen successive pieces of legislation that we are pretty sure are not going to get enforced. Does my hon. Friend agree that if they do not get enforced, there is no point in having them, and that undermines public trust in what we are doing? It is really important that this legislation is enforceable.
Melanie Onn
I thank my hon. Friend for making that point, which goes to the heart of this. There is no point in doing this if the legislation is not enforced or does not do what the Minister intends—namely, rebalance the relationship of power between tenants and landlords. Enforcement is key, because if rogue landlords do not fear that the fine or the potential banning order will reach them, why would they bother to worry about whether they are operating within the legislation?
Helen Hayes (Dulwich and West Norwood) (Lab)
On the Select Committee, we went to see the licensing scheme in Newham in action. One important feature of that scheme is that the council undertakes proactive enforcement work against properties it suspects are being let by landlords who have not yet registered. It is an important part of the resourcing requirement that councils need to make the scheme as effective as possible, but that has not yet been taken into consideration. Will my hon. Friend comment on that?
Melanie Onn
My hon. Friend makes an incredibly important point about being proactive and about the intention of trading standards officers or others to undertake that initial work, rather than just relying on the enforcement element of the legislation. I hope the Minister has heard those points, takes them seriously and receives them in the manner in which they are intended. We will not be pressing this matter to a vote, but we reserve the right to return to it on Report.
Question put and agreed to.
Clause 6 accordingly ordered to stand part of the Bill.
Clause 7
Enforcement by district councils
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
The clause places a duty on local trading standards authorities to enforce the ban on letting fees and the requirements relating to holding deposits. It gives district councils the power to enforce the provisions if they choose to do so.
Local housing authorities enforce other measures in private rented sector legislation, such as the provisions related to banning orders for rogue landlords and agents. We very much encourage close working between district and county councils in non-unitary authorities to ensure effective enforcement. That is why we are giving district councils that are not trading standards authorities the power to enforce this legislation. That will ensure that local housing authorities are able to take enforcement action should they become aware, while undertaking their other duties, of a landlord or agent breaching the provisions of the Bill.
District councils must have regard to any guidance issued by the Secretary of State or the lead enforcement authority. The investigatory powers available to a district council for the purposes of enforcing the Tenant Fees Bill are set out in schedule 5 to the Consumer Rights Act 2015, which the clause amends.
Melanie Onn
The Government included the clause following the Bill’s pre-legislative scrutiny. We understand that the devolution of powers between different tiers of local government is in the interest of promoting collaborative relationships with a range of stakeholders, but will the Minister explain how a district council will enable or access these powers?
The Bill provides district councils with the same powers as a weights and measures authority. The Government’s response to the Housing, Communities and Local Government Committee’s report on the Bill says that a district council may choose to be an enforcement authority, but the Committee’s recommendation refers to a weights and measures authority being able to delegate its powers to other tiers of local government where appropriate. Will the Minister explain what process he envisions district authorities having to go through order to be able to undertake enforcement roles in this context?
If weights and measures responsibilities are held at a county council level, and if additional funding for staffing or training has been directed there, but a district council wishes to undertake its own enforcement measures, will there be a requirement for that funding to be cascaded down? Or do the Government expect that funding bids will be made at the outset by those authorities that wish to be enforcers, and that there may then be overlap in the bidding and awarding of such funds?
The Committee’s report contained evidence that any system based purely on hypothecated funds would provide a challenging environment for councils, as it would not provide for up-front or proactive work. It is in the interests of local authorities, tenants, landlords and letting agents that fines are a last resort; it is the early work that will prove the most important.
Rishi Sunak
With regard to district councils enforcing the Bill, there is no special process that they need to go through; they have the same rights and powers as trading standards authorities, so they do not need any special permissions. They can get on and do that should they see fit.
With regard to the hon. Lady’s last point, just like trading standards authorities, an authority that enforces against the contravention of the Bill will of course keep any fines that are levied, which will help to fund that enforcement.
Question put and agreed to.
Clause 7 accordingly ordered to stand part of the Bill.
Clause 8
Financial penalties
Melanie Onn
I beg to move amendment 2, in clause 8, page 5, line 13, leave out “£5,000” and insert “£30,000”.
The Chair
With this it will be convenient to discuss amendment 3, in clause 8, page 5, line 16, leave out from “exceed” to the end of line 17 and insert “£30,000”.
Melanie Onn
We welcome the spirit of clause 8. We must seek to hit landlords and letting agents who act badly where it hurts if we are to change realities for tenants. However, the need to strengthen the financial penalties in the clause is twofold. First, we must always ensure that the penalty fits the seriousness of the breach and acts as a deterrent. Secondly, we need to recognise that, if the Government’s plan is for the regulation to become self-funding, fines need to be able to fund the enforcement of the legislation.
To make my point on this, I draw the Committee’s attention to the evidence given by the experts last week. Isobel Thomson from the National Approved Letting Scheme said:
“We carried out a survey of 42 local authorities in June last year, looking at the enforcement of the Consumer Rights Act 2015. Of those 42 local authorities, 93% had failed to issue a single financial penalty against a letting agent in the previous two years.
What are we going to be faced with with the fee ban? Enforcement really needs to come to the fore. The Government have mentioned that there will be a lead enforcement authority. We need to know who that is, how they are going to gear up and how they are going to be resourced. That is what I would like to see.”—[Official Report, Tenant Fees Public Bill Committee, 5 June 2018; c. 4, Q1.]
The NALS evidence is absolutely clear: without the resources for enforcement, there are concerns that the letting fees ban could have very little impact. That surely cannot be what the Government want to see.
There are others who fear that the lack of resources could prove a real impediment to the legislation functioning as intended. When I asked the LGA’s Councillor Blackburn what he felt could be done to strengthen the Bill so that it achieves its aims, he was quite clear. He detailed how the financing of the Bill was an issue:
“At the moment, £500,000 is promised to assist in the up-front costs of setting these schemes up. The average local authority trading standards budget is £671,000 a year, so that £500,000 spread across 340 local authorities is unlikely to fill the gap that exists. That is extremely important.”
There is also a capacity-building issue within the trading standards profession. As it is, 64% of trading standards authorities are reporting that they have difficulties in recruiting and retaining people, and that issue needs to be looked at nationally. The LGA stands ready to assist in that process and will work with the Chartered Trading Standards Institute, but there is a demographic time bomb in there as well, about the average age of trading standards officers…because of the overall financial pressures on local authorities, it is not seen as a long-term, safe career, if I can put it that way.”—[Official Report, Tenant Fees Public Bill Committee, 7 June 2018; c. 34-35, Q58.]
Rishi Sunak
After careful consideration of all the feedback received during the consultation and engagement process, the Government are of the view that the level of financial penalties provided in the Bill is the right one. Furthermore, the approach to financial penalties aligns with that in other housing legislation. Most would agree that a £30,000 fine for an initial breach of the ban, as the amendment suggests, is excessive and could cause significant devastation.
Melanie Onn
Can the Minister explain the circumstances in which he anticipates a £30,000 fine will be imposed against an initial offence?
Rishi Sunak
My understanding of the amendment tabled by the hon. Lady is that that is what it proposes—an initial breach of the ban would be £30,000.
Rishi Sunak
In the Government’s version, it would be £5,000, and that is what we are discussing. My understanding of the hon. Lady’s amendment is that the financial penalty for an initial breach would be £30,000 rather than £5,000. We propose to leave it at £5,000. I am happy to take an intervention if she wants to clarify.
Rishi Sunak
No—okay.
The Government’s aim has been to provide a sufficient deterrent for an initial breach of the ban that still allows landlords and letting agents who may inadvertently commit a breach not to be disproportionately penalised. We therefore resist amendments 2 and 3.
As hon. Members have noted, breaches of legislation related to letting agents, such as the requirements to belong to a redress scheme and to be transparent about letting fees, are subject to a fine of up to £5,000. However, we have listened to concerns that a £5,000 fine may not be enough of a deterrent for some agents and landlords, so clause 8 proposes a financial penalty of up to £30,000 for a further breach of the ban.
Importantly, that upper limit is consistent with the higher rate of civil penalties introduced in April 2017 under the Housing and Planning Act 2016. Given that the repeated charging of fees is a banning order offence, we firmly believe that the level of penalty needs to be consistent with the legislation under that Act, which brought banning orders into force.
It is too early to argue that the higher level of financial penalty at £30,000 has not been successful in offering a more significant deterrent to non-compliance. In the evidence that Alex McKeown of the Chartered Trading Standards Institute gave last week, she said that she believed that £30,000 would act as a “significant deterrent”.
Richard Graham (Gloucester) (Con)
There is a slight note in the debate of some who see landlords and agents as villains and enemies to be bashed at every conceivable opportunity. For many of us, however, the issue is about how we construct a partnership that gives tenants more rights and that provides a better sense of fairness in the relationship, but which ensures that there is a strong and functioning market and that we do not go back to the 1970s when the Opposition created a situation in which there was very little provision of private sector housing, of which we know that we will need a great deal more.
Rishi Sunak
I thank my hon. Friend for another thoughtful and measured comment. He is absolutely right: we are not in the business of demonising particular groups of people; we are interested in having a fair and functioning market. The balance that that requires has been a focus throughout all the deliberations on the Bill.
Melanie Onn
Would the Minister accept that the principle of the fines is not to demonise anybody, but to act as a successful deterrent?
Rishi Sunak
Indeed, I was quoting the evidence from the Chartered Trading Standards Institute that said that £30,000 was a significant deterrent.
Melanie Onn
If the CTSI says that £30,000 is a suitable deterrent, does the Minister think that that should be the minimum?
Rishi Sunak
Again, I fear that I have been too generous in giving way. I was about to make the point that it should not be forgotten that an agent or landlord convicted of an offence under the ban is liable for an unlimited fine, if that is the route of enforcement that the enforcement agency wants to go down; £30,000 is the alternative to a criminal prosecution where fines can be unlimited and people can be subject to banning orders, which I am sure all hon. Members agree are extremely serious and significant deterrents. The guidance that we will produce will support local authorities in determining the level of the penalty in any given case. I urge the hon. Lady to withdraw her amendment.
Melanie Onn
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
We have aimed to be ambitious and tough in our enforcement approach to provide a sufficient deterrent to the continued charging of fees. Clause 8 sets out the fact that a breach of the fees ban will be a civil offence with a financial penalty of up to £5,000. However, if a further breach is committed within five years, that will amount to a criminal offence. In such a case, local authorities will have discretion on whether to prosecute or impose a financial penalty. Clause 8 provides that enforcement authorities may impose a financial penalty of up to £30,000 as an alternative to prosecution, as we have discussed. The level of fine reflects the feedback that we received during the consultation period. I will not rehash the arguments for why we think that is an appropriate level.
A financial penalty cannot be imposed if the landlord or agent has failed to return the holding deposit because they have received incorrect information about the tenant’s right to rent property in the UK. That reflects a recommendation from the Select Committee on this particular point. Before imposing a financial penalty, enforcement authorities must be satisfied beyond reasonable doubt that the landlord or agent has breached the ban on charging tenant fees. Only one financial penalty may be imposed per breach and an enforcement authority can impose a penalty for a breach outside its area. This clause should be read with schedule 3, which sets out the procedure to be followed by an enforcement authority after it imposes a financial penalty. Financial penalties, I believe, will act as a serious deterrent to non-compliance.
Question put and agreed to.
Clause 8 accordingly ordered to stand part of the Bill.
Schedule 3
Financial Penalties Etc
Question proposed, That the schedule be the Third schedule to the Bill.
Rishi Sunak
It is important that there is consistency in the way in which local authorities impose financial penalties and that the process is fair. This schedule sets out the procedure to be followed.
Enforcement authorities must give the landlord or agent notice of their intention to service a financial penalty within six months of the breach occurring. This notice must contain relevant information about the reasons for imposing the penalty, the amount and the right to make representations. The landlord or agent then has 28 days to respond. If the enforcement authority decides to impose a penalty, it must provide a final notice setting out the amount of penalty, how much to pay, the rights of appeal and the consequences of failing to comply. An enforcement authority may at any time withdraw or amend a notice of intent or final notice. The landlord or agent must be notified of this in writing.
Landlords and agents have a right to appeal to the first-tier tribunal against a final notice. This appeal must be brought within 28 days of the final notice and is to be a re-hearing of the enforcement authority’s decision, but the tribunal may admit evidence that was not heard before the enforcement authority, if relevant. The final notice is suspended until the appeal is determined or withdrawn. The first-tier tribunal may confirm, vary or quash the final notice. It may impose a penalty up to the same maximum penalty as the enforcement authority could have imposed. If the landlord or agent fails to pay all or part of this financial penalty, the authority can seek repayment on the order of the county court. Similarly, if the authority requires the landlord or agent to repay the tenant any prohibited fees and they fail to do so, this can be recovered under an order of the county court.
I am aware that concerns have been raised about the resources of local authorities. I trust that the Committee welcomes the schedule, as it enables an enforcement authority to retain the proceeds of any financial penalty, as we have discussed, for future housing enforcement.
Sarah Jones (Croydon Central) (Lab)
It is a pleasure to serve under your chairmanship, Mr Sharma, for our second day in Committee. As the Minister has set out, schedule 3 provides some clarity over financial penalties, including notices of intent, recovery of penalties and proceeds of those penalties. The Opposition support the schedule as drafted. We are seeking clarity, however, from the Minister on certain aspects, before we give our support for its inclusion in the Bill. I would like to focus on paragraphs 6 and 7, which deal with the specifics of appeals and the recovery of penalties.
As with any piece of legislation such as this, the right to appeal is extremely important. It is correct that this is reflected in the Bill. It is also vital that the conditions of any appeal are presented with the utmost clarity to prevent abuse or a miscarriage of justice. Pre-legislative scrutiny by the Select Committee rightly raised concerns about how the Bill defined grounds for appeal, arguing that a first-tier tribunal should decide appeals as complete rehearings, which should take into account all matters, whether known to the local authority at the time of its decision or not. We are glad that the Government took that into account and amended the Bill accordingly. However, a number of questions about appeals remain, and I hope that the Minister can offer some clarity in his response.
Rishi Sunak
It is a pleasure to respond to the hon. Lady. I am cautious, as I wish to stay on point, with your direction, Mr Sharma. The hon. Lady raised some review periods, which we will no doubt discuss more specifically towards the end of this sitting when debating the new clauses tabled by Opposition Members, and with regard to phoenix companies, which are specifically covered by clause 13. I will leave discussion on those matters to the debates on the relevant clauses.
On the hon. Lady’s broad point about the level of fines, I thank her for recognising that the Government took on board the advice of the Housing, Communities and Local Government Committee’s on drafting these clauses, and we amended the draft legislation. I hope that she appreciates that. As I said, we took on board the Committee’s specific recommendations about the first-tier tribunal and the process that will be followed.
More specifically, on the hon. Lady’s point about the level of fines that can be varied, as with all judicial matters that will be a matter for the tribunal or the judicial processes of the county court—whichever avenue the enforcement mechanism finds itself in. Guidance will be published on the appropriate level of penalty, dependent on a broad range of situations, which will serve as a framework for how local authorities will enforce that penalty. The first-tier tribunal will subsequently have regard to that. It will not be for the Minister or the Government to direct in every circumstance what the level of fine should be.
As the hon. Lady rightly recognised, it is appropriate, as it is across our judicial system, that the courts have the flexibility to determine things on a case-by-case basis. I hope she welcomes that flexibility, which was added to the Bill at the request of the Select Committee. I look forward to debating phoenix companies and other such matters with her when we debate subsequent clauses.
Question put and agreed to.
Schedule 3 accordingly agreed to.
Clause 9
Power to amend maximum financial penalties
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
The clause is straightforward and contains a power for the Secretary of State to make regulations amending the amount of financial penalty that a local authority can change. This is purely to reflect changes in the value of money.
Permitting local authorities to levy financial penalties of up to £30,000 for breaches of the regulations on fees is intended to serve as a significant deterrent to agents and landlords. Including a power to amend the maximum penalty ensures that the Government can address any issue where the deterrent effect has not kept pace with inflation. We consider that regulations by negative procedure are appropriate in this case, since the changes are intended only to reflect the value of money, not to alter the intent or effect of the legislation.
Subsection (3) enables the Government to make transitional, transitory or saving provisions in relation to the uprating, in order to ensure that there is a smooth transition from one upper limit to another. In summary, the clause will enable the legislation to remain relevant over time.
Melanie Onn
It is crucial for this policy and for the hopes within it to be impactful that the fines are sufficient to act as a deterrent. Opposition Members have raised concerns throughout Committee stage that they might not be.
Any punishments for wrongdoing by rogue landlords and letting agencies must be sufficient to be seen as more than simply the cost of doing business. That is not simply my opinion but that of a landlord advocacy group. Indeed, Richard Lambert, chief executive of the National Landlords Association, said earlier this year:
“The NLA supports making the punishment fit the crime because too many of the criminals who operate in the private rented sector”—
it is somebody within that sector who said this—
“see the current level of fines as little more than a cost of doing business and we would welcome greater consistency between civil and criminal penalties.”
As is clear from the amendments we have tabled, we have concerns that the Bill will not go far enough in ensuring that its aims can be fulfilled. The fines are a clear example of where the tension between aims and the probable reality of any impact is at its greatest. If fines can be as little as £5,000, as with the penalties for the display of tenants’ fees, that seems to act as a minimal deterrent to landlords. Surely the best that we should hope for is that those fines encourage the sector to operate well within that framework, and that they do not have to be levied. In the more lucrative markets, that is a very small sum. For larger landlords, it is small fry.
To add to that hypothetical, trading standards and local government up and down the country have had their budgets decimated. As we heard at the evidence session last week from Councillor Blackburn of the Local Government Association, as I have mentioned, there has been a 56% drop in trading standards enforcement officers since 2009—more than half of them have been lost. It is a vital sector, which will enforce the Bill, but without good trading standards officers, there is a real risk that the legislation, for all its good intentions, could lack impact on the ground.
There is a lack of expertise and resources, and those problems seem likely to get worse. Rogue landlords and agencies are likely to factor the likelihood of any claims being made against them into their business calculations, as Richard Lambert of the NLA suggested. As things stand, their calculations might suggest that taking a risk is worth it, particularly in areas where tenants are not as clued up, or where local authority services and budgets have been really affected.
Any changes need to be made by means of new primary legislation, but perhaps that is not the ideal approach; perhaps the Minister or the Secretary of State should be able to look at the matter again in conjunction with evidence about how the enforcement process has been going, and whether the fines are sufficient sticks to encourage that good practice across the board. It is clear that the Government want the policy to be part of transforming letting to make the tenant’s life much fairer than it is under the status quo, but for that to be done, there needs to be some real, critical engagement with the facts on the ground from the Government in future. For the legislation to have its proposed impacts, it is key that the Minister has an open mind about how it is best put into practice. The punishments have to fit the crime, and they need to be responsive to the realities of the letting market, which means that there must be space for rethinking that which is required.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Clause 10
Recovery by enforcement authority of amount paid
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
We want to ensure that when a tenant has paid an unlawful fee, they are repaid as soon as possible. Clause 10 enables an enforcement authority to require a landlord or letting agent to repay the tenant or other relevant person any outstanding prohibited payment or holding deposit. Similarly, if the landlord or agent required a relevant person to enter into a contract with a third party, they may be required to pay compensation. That may be ordered if the local authority imposes a financial penalty for a breach of the Bill. It does not apply if the tenant has made an application to the first-tier tribunal to recover the payment or if the amount has already been repaid.
Clause 11 enables the enforcement authority to require the landlord or agent to pay interest on any payment referred to in clause 10. That ensures that the agent or landlord does not receive any financial benefit from a prohibited payment.
Melanie Onn
For the Bill to have an impact, it has to be possible for prohibited payments to be recovered, and for those enforcing the legislation to fulfil their roles. We have already touched on our concerns about whether there are sufficient resources for local authorities and trading standards to function as the Government would like. These clauses highlight a particular potential issue in the legislation as it stands. The need for a criminal level and burden of proof for the civil financial penalties discussed in this Bill is a flaw that could well hamper its effectiveness. We all want to see legislation that is effective, that leaves tenants and landlords clear on what is permissible and what is not, that ensures that rogue traders are dealt with effectively, and that leaves tenants able to bring claims when things do go wrong.
Rishi Sunak
It is vital that strong action is taken against irresponsible agents and landlords who persist in charging unlawful and unfair fees to tenants. This will act as a strong deterrent and better protect tenants. Clause 12 provides that a landlord or letting agent who breaches the ban on fees commits an offence if they do so within five years of conviction or imposition of a financial penalty for an earlier breach. Agents and landlords who commit an offence are liable on conviction to an unlimited fine. An enforcement authority has, in each case, the discretion to decide whether to impose a financial penalty of up to £30,000 or to pursue prosecution. A financial penalty issued as an alternative to prosecution does not amount to a criminal conviction. Subsection (6) amends the Housing and Planning Act 2016 to provide that an offence under the clause is a banning order offence, which means that if a landlord or agent is convicted of an offence a local housing authority may apply to the court to ban them from letting housing and/or acting as a letting agent or property manager in England for at least a year.
In our consultation there was strong support for prosecuting and/or banning repeat offenders. We have listened, and the clause shows that we are serious about cracking down on rogue operators. If the court makes a banning order, the local housing authority must add the landlord or letting agent to the database of rogue landlords and property agents established under the 2016 Act. By giving local authorities the power to take robust action against the worst operators we better protect tenants and ensure that reputable agents and landlords are not undercut or tarnished by rogues.
Clause 13 provides that, as well as the business itself, an officer of a body corporate or a member with management functions can be prosecuted for a breach of the ban on letting fees. The clause addresses issues raised by the hon. Member for Croydon Central and is designed to ensure that individuals with responsibility for repeatedly breaching the ban on tenant fees can, along with their organisations, be prosecuted and banned from operating. That will help to prevent the establishment of so-called phoenix companies, whereby an individual moves from a firm that has been banned and opens up a new business only to continue disreputable practices.
Melanie Onn
I want to make a couple of points. On the rogue landlords database, have the Government conceded that they will open it up, making it far easier for tenants to assess whether their potential landlord is someone from whom they wish to rent a property?
The provision regarding phoenix companies is incredibly important and I am pleased that the Minister has taken the opportunity to include it in the Bill, but is he confident that it will work in practice? I have seen such companies operating in other industries, and I am concerned about whether individuals who are overseas can be prosecuted. Will it be easy to prevent such individuals from continuing to be landlords within phoenix companies? Although an individual may be named as part of a company in Companies House records, a phoenix company can arise in the name of someone else with whom that person has a close association. Parent companies and subsidiaries can be established and registered in other names, but an individual can have an association with each of the subsidiaries of a parent company that might not have direct influence on or knowledge of what those subsidiaries are doing. That might come about regularly, so on whom will justice be brought to bear for breaches of legislation?
Rishi Sunak
I am glad that the hon. Lady generally welcomes the approach to tackling something that I think we all want to see prohibited. We are confident that the provisions will work. Overseas landlords and letting agents are subject to all the existing requirements for being a member of a redress scheme, and we have consulted on those provisions and will extend them. It is mandatory for letting agents to be a member of a redress scheme. Without such membership they cannot function in the market and will be in breach of their legal obligations. Whether people are overseas or in the domestic realm, there are multiple levels of protection and they must comply with the regulations in order to let property.
Rishi Sunak
This clause, too, is relatively straightforward. It places a duty on enforcement authorities to notify other relevant authorities when taking action. That is necessary for a number of reasons, each of which the clause provides for. First, if a local trading standards authority takes action outside its local area, or a district council takes action, the relevant local trading standards authority is notified and work is not duplicated. The relevant local trading standards authority is then relieved of its enforcement duty, unless it is subsequently informed that the proposed enforcement has not taken place. Secondly, a record can be kept by the lead enforcement authority where a financial penalty has been imposed, withdrawn or quashed on appeal. That will inform whether any subsequent breach is dealt with as an offence. A trading standards authority must notify the local housing authority if it has imposed a financial penalty or made a conviction. That ensures that the relevant information is communicated to the right authorities at the appropriate time. As such, the clause has a key but simple role in ensuring that the enforcement of the legislation is carried out effectively and all relevant parties are aware of what is happening on the ground. I urge the Committee to support the clause.
Question put and agreed to.
Clause 14 accordingly ordered to stand part of the Bill.
Clause 15
Recovery by relevant person of amount paid
Melanie Onn
I beg to move amendment 13, in clause 15, page 10, line 36, after “that” insert
“, with the consent of the relevant person,”
This amendment provides that the consent of a tenant or the person acting on their behalf or who has guaranteed to pay their rent must consent to the use of a prohibited payment for rent payments or tenancy deposit payments.
Under amendment 13, the tenant would have to consent to their holding deposit or a prohibited payment being used to cover rent or deposit costs. We do not object to the principle of subsection (6), which the amendment seeks to change. The payment of a tenancy deposit or a prohibited payment into a deposit or as part of rent is entirely sensible and in many cases will be an optimal arrangement for both the tenant and the landlord. In the case of the holding deposit, this can be an important agreement between the tenant and the landlord that reduces the burden of paying a deposit, rent in advance and holding deposit all at the same time. Allowing a tenant to put that money towards a deposit can make it easier to pay what for many is a high fee and a significant amount, and prevent the holding deposit being held for as much as a week after an agreement has been made, when the tenant is likely to be short of money. We are therefore glad to see the principle in the Bill.
However, as the Bill stands, the landlord will have discretion as to whether to apply that payment. Although that does not seem to be a significant problem at first, and in many circumstances may not cause a problem, allowing landlords to do so indiscriminately could lead to difficulties for tenants in certain circumstances. The first problem arises from the fact that many people pay their rent on a monthly basis, through a fixed-sum standing order. Although standing orders are amendable, that can be a time-consuming process for the tenant. To deduct the prohibitive fee from a month’s rent, they must amend the standing order twice to account for the change. Government Members might feel that that is quite a trivial point, as making changes to bank payments is part of daily life, but we believe it will result in the tenant having to go out of their way for something that is not their fault. We must remember that when considering this amendment. It would be wrong for tenants to end up doing time-consuming work to receive their money in a timely and orderly fashion, given that they are not the ones who charged the fee.
A second problem that we seek to address with the amendment is how subsection (6) would apply to people with a joint tenancy. Taking the example of a joint tenancy in which the tenants pool the rent in one account and pay it to the landlord as a lump sum, if one tenant loses their key and is required to pay a default fee, which is later deemed to be prohibited, would the landlord be able to deduct that from the rent? In that scenario, taking the prohibited fee from the rent would not be a simple way of paying back the tenant. They paid the fee from their own pocket, but the rent deduction comes out of a pool for which all tenants are jointly responsible. Given that the deduction would not automatically be tied to the person who is entitled to it, the process could be abused by other people who are part of the pool. Although in most cases such agreements are set up by families or a close group of friends, it should not automatically be assumed that it is an easy or preferred way for the relevant person to receive their money.
It is their money. I have set out several scenarios, but a significant rationale for this amendment is the principle. Put simply, it is the tenant’s money, and they should have the final say about what happens with it. As it stands, subsection (6) allows landlords to do what they want with the tenant’s money that they have been required to give back and ought not to have had in the first place. I hope that Committee members will recognise that this is a practical and fair amendment. If someone has been wronged, it should be made as easy as possible for them to receive the repayment to which they are entitled.
Rishi Sunak
An important principle of the Bill is that any unlawful payment can be recovered in full by the tenant, as it is their money. Tenants can do that either by seeking direct recovery from the landlord or agent, or by going to the local authority or applying to the first-tier tribunal. It is important to note that they can also go to their agent’s redress scheme if they are seeking the recovery of a prohibited payment from an agent. Offsetting the prohibited payment against the rent or deposit will ensure the tenant is not left out of pocket. It is best practice for a landlord or agent to ask the tenant, or any person guaranteeing their rent, whether they are happy for any unlawfully paid fee to contribute towards a future rent or tenancy deposit payment. We are planning to encourage that through guidance, and we expect that most landlords and agents will do that. We do not currently see the need for specific provision to that effect in legislation.
That said, I have been considering this broad area for a while, and I want to ensure that what we have in place works. I hear what the hon. Lady said. The clause was designed to ensure that the repayment process is relatively automatic. We did not want to put extra steps, which might delay things, into the process. We are looking at some of the areas that she mentioned. With that in mind, if she will bear with me as I look through those things, I ask her to withdraw the amendment.
Melanie Onn
I am glad the Minister is listening. He said that the automatic expectation is that, to seek redress, tenants will go through a first-tier tribunal or go to a local authority just to get back what is theirs, which is in the hands of the landlords, despite the fact that the Minister clearly thinks it is best practice for landlords to have a good relationship with tenants. It is not inconceivable that the relationship has broken down if it is deemed that a prohibited payment has been made.
I was going to press the amendment to a vote, but given that the Minister has requested that we bear with him, I will not do so. I will hold him to his word. I will withdraw the amendment, but I reserve the right to table it again if we are not satisfied with what he comes back with. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Melanie Onn
I beg to move amendment 14, in clause 15, page 11, line 4, leave out
“all or any part of”,
and insert—
“a sum of money not less than and not more than three times”.
This amendment would enable tenants to claim back prohibited payments without assistance from the local authority, along with compensation from the landlord or letting agent worth up to three times the fee paid.
The amendment would entitle tenants who seek to claim back prohibited payments without assistance from the local authority to compensation from the landlord or letting agent worth up to three times the fee paid. During the evidence sessions, we heard often how the Bill needs more resources to enforce the new provisions that it will bring in and to fully achieve its aims. One thing necessary to improve the enforcement of the Bill is to provide further encouragement to tenants to self-report and to call out the use of prohibited fees by their landlords.
Trading standards will face practical difficulties in enforcing the Bill. They face a lack of resources across the country, which has meant their losing, as we have said, 56% of enforcement officers since 2009 and therefore lacking the expertise with letting agents that they would like. There is therefore a need to look at self-reporting as an addition to trading standards, and the addition of clause 15 to the Bill shows an acknowledgment of that by the Government. The amendment would strengthen that by providing tenants with compensation, when making a claim, for three times the initial sum charged.
A three times figure is already used to enforce deposit protection regulations, so both the three times figure and the idea of compensation for mistreated tenants has a basis in current property law. The amendment would act as an extra deterrent to landlords’ and letting agents’ breaking the law, by increasing the level of punishment, and would provide sufficient motivation and compensation for tenants to go through what could be a stressful and time-consuming tribunal process. As the amendment would help to enact the purpose of a Bill that both Government and Opposition want to be effective, I hope that both will accept it and thereby increase the enforcement power of the Bill.
Rishi Sunak
Tenants absolutely should get back any unlawful payments in full, whether direct from the landlord or agent, via the enforcement authority or through an order of the first-tier tribunal. However, we do not think it appropriate for the tenant to receive further compensation, given that the landlord or agent is liable for a significant financial penalty in addition to reimbursing the tenant.
It is also worth noting that the Bill provides further protection to tenants by preventing landlords from recovering their property, via the procedure set out in section 21 of the Housing Act 1988, until they have repaid any unlawfully charged fees. To add in compensation, as the amendment suggests, risks penalising agents and landlords multiple times for the same breach, which is not fair. We believe that our existing approach strikes the right balance and offers a serious deterrent to non-compliance. I ask the hon. Lady to withdraw the amendment.
Melanie Onn
Unfortunately, I will not withdraw the amendment. I do not feel entirely satisfied by the Minister’s comments on this and I do not think that he has addressed the issues around the negative position that tenants find themselves in compared with landlords, so I will press the amendment to a vote.
Question put, That the amendment be made.
Rishi Sunak
Clause 15 works with clause 10 to establish multiple routes for tenants to be able to recover any prohibited payments. It enables a tenant or other relevant person to apply to the first-tier tribunal for compensation where they have been required to make a prohibited payment or where a holding deposit has been unlawfully retained. We have listened to the Select Committee on this point and acknowledge that the first-tier tribunal is generally more accessible for tenants as it is less formal and costly than the county court. If a landlord or agent refuses to abide by an order of the first-tier tribunal, a tenant would be required to go to the county court to have the decision enforced and to recover their fees. We have made provision in clause 16 for a local authority to help the tenant with that. I ask hon. Members to agree that clause 15 stand part of the Bill.
Question put and agreed to.
Clause 15 accordingly ordered to stand part of the Bill.
Clause 16
Assistance to recover amount paid
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
Clause 16 is another straightforward clause. It provides that an enforcement authority such as a local trading standards authority can help a tenant recover unlawfully charged fees or a holding deposit that has been unlawfully withheld. That is because we recognise that tenants might require or would like assistance to navigate the county court process. The enforcement authority would help a tenant or other relevant person to make an application to the first-tier tribunal: for example, by providing advice or by conducting proceedings.
Question put and agreed to.
Clause 16 accordingly ordered to stand part of the Bill.
Clause 17
Restriction on terminating tenancy
Melanie Onn
I beg to move amendment 15, in clause 17, page 12, line 3, at end insert—
“(5A) No section 21 notice may be given in relation to the tenancy until the end of a period six months from:
(a) the day after the day on which the final notice in respect of the penalty for the breach was served; or
(b) the day after the day on which any appeal against the final notice is determined or withdrawn.”
This amendment would protect tenants against the issue of a section 21 notice when a penalty has been applied in relation to a breach under Clauses 1 and 2 of this Bill.
I believe the amendment would strengthen the provisions in the clause. As the Bill stands, landlords are unable to serve section 21 notices while there is still an outstanding balance of a prohibited payment or holding deposit to be repaid to the relevant person. The principle behind the clause is welcome. It would be wrong for a tenant to be served a section 21 notice while a landlord has failed to serve their obligations in terms of repaying money that was taken incorrectly. The same principle guides the inability of landlords to serve section 21 notices if they do not properly protect a tenant’s deposit, and more recently if they do not carry out their obligation to undertake any necessary improvements.
Such extra protections should improve a tenant’s rights and mean that rogue landlords cannot get away with retaliatory evictions if a tenant challenges bad practice. However, too often the principle is not matched in practice. This can be seen in the enforcement of the Deregulation Act 2015, which led to the banning of revenge evictions if a landlord was ordered to carry out repairs by a local council. A 2014 study by Shelter estimated that 200,000 private renters had been served with an eviction notice after complaining to their landlord about a problem with their home. The legislation should have led to significant action, given how widespread the problem of retaliatory evictions is, yet more than half of councils in the UK did not use the new powers in the Act a single time within a year of enactment. There is clearly a disconnect between what leaves this place as law and the reality of what is actually enforced.
Protection against section 21 evictions is vital for tenants who fear that standing up to a landlord could lead them to be evicted. It is worth remembering what landlords have to do to be exempt from serving a section 21 notice. These are landlords who do not protect tenants’ deposits, do not provide repairs in a timely manner, and who will charge prohibited fees under this new Bill. So these landlords have, at best, already shown a lack of knowledge as to their rights and responsibilities, and at worst are rogue and exploitative to the point where they will cross legal lines to avoid their obligations. This comes to the heart of why enforcement in this area is so important and needs to be done far better under current housing regulations, and needs to be enhanced in the Bill as it stands.
We know that the vast majority of landlords comply with regulations and discharge their obligations in a timely and professional manner. Those landlords would never threaten retaliatory evictions and would ensure that they followed the rules regarding serving a section 21 notice if needs be, but there are too many rogue landlords who look to shirk their responsibilities and exploit tenants at every opportunity. If a rogue landlord is willing to take a chance on a tenant’s not picking up on and reporting a prohibited fee, or to threaten a tenant with eviction when they ask for repairs, why would they suddenly act in a fit and proper manner when it comes to serving a section 21 notice?
During the evidence sessions, the NUS representative made the point that students often do not know their rights. They are often first-time renters and many will not have the experience of looking over a contract or challenging actions that are unlawful, which means that they may not be comfortable taking action against activities such as charging a prohibited fee or serving a section 21 notice. That could be particularly true if the Act required a tenant to take a landlord to court to prove that a section 21 notice was invalid, so tenants may end up leaving under an invalid section 21 notice when there is no reason for them to do so.
Too many rogue landlords get away with outlawed acts because there is not enough enforcement of the current laws that prohibit bad practice. The Government should consider carefully the evidence we heard in last week’s evidence sessions. It is fair to say there was a general feeling that there is not enough enforcement power in the Bill for it to do all the good it could do.
Enforcement could come through several different channels, such as increasing fines to increase the deterrent that rule breakers face, reimbursing a lead enforcement authority or reducing the barriers that tenants face if they report a landlord. Amendment 15 would mean that tenants were safe from retaliatory evictions that could result from reporting a landlord who charged a prohibited fee, for six months after the final notice of the penalty for the breach is served or the appeal is determined or withdrawn.
The amendment arises from what should be a guiding principle of good law making: in introducing new laws and regulations, we should learn from the mistakes of similar legislation and build a Bill that counters those flaws and pitfalls. To ensure that this Bill hits the ground running, it is important to look at other pieces of legislation that govern landlords to see where they have failed in the past.
We must learn from the effect that a lack of protection from eviction had on the repair of properties that were not in a fit or liveable state. As a result of that, tenants ended up living in houses with no protection from draughts, large damp problems and faulty electrics. No one should live in those conditions in this country, but tenants feared that if they complained about those problems, their landlord would serve them with a section 21 notice rather than carry out the repairs. Tenants were left with a choice between putting up with uncomfortable, unsafe and uninhabitable conditions and pressing their landlord to fix those issues when the landlord held the power to kick them out. No one should have to make that choice, because no one should be penalised for wanting a house that is habitable. Similarly, no one should have to make the choice between flagging a prohibited payment and keeping their landlord happy so that they do not get served with a section 21 notice.
To prevent tenants from retaliatory evictions when repairs are necessary, the Deregulation Act 2015 prevents landlords from serving a section 21 notice for six months after the council orders repairs to be made. Although there are problems with the enforcement of that Act, the principle of it acts to prevent retaliatory evictions. In particular, it prevents the serving of a section 21 notice for six months after the serving of an improvement notice, which gives tenants the same protection as they would have at the start of any tenancy. That is an extremely important addition to tenants’ rights, which helps to remove a barrier to self-reporting. There is too little extra protection for self-reporting tenants if the law simply states that the landlord can serve a section 21 notice the second they have managed to fulfil the obligation that they were reported for. That also covers self-reporting tenants who could be subject to retaliatory evictions if they report a landlord.
Just as it was sensible to extend the provisions concerning revenge evictions for repairs in the 2015 Act, it is sensible to learn from the past situation around repairs now and get the Bill right at the first time of asking, by bringing it into line with the thinking of that previous legislation and adding a six-month period in which landlords cannot serve a section 21 notice after a breach of the Bill.
Rishi Sunak
The Bill already protects tenants by preventing landlords from recovering their property via section 21 of the Housing Act 1988 until they have repaid any unlawfully charged fees. This approach is in line with legislation that already applies where the “How to rent” guide has not been provided or a landlord has not secured the required licence for a house in multiple occupation, so there is good precedence for our approach.
Further, clause 4 ensures that any clause in a tenancy seeking to charge tenants a prohibited fee is not binding on the tenant, so we do not consider that further provision is needed. The wording of this amendment would specifically mean that if a landlord appealed against the imposition of a financial penalty and this was upheld, that landlord would be restricted from using the no-fault eviction process for six months after the appeal was determined. That clearly is not fair. I therefore ask the hon. Lady to withdraw the amendment.
Melanie Onn
I thank the Minister for that response. It is unfortunate that he is not prepared to accept the amendment. It may well be the case that landlords will happily give people back the money they owe them and then still decide that they are troublemakers and seek to serve an eviction notice against them. While I accept the Minister’s comments regarding a landlord’s appeal, I think this is something that he should look at. If the Bill is about increasing and protecting tenants’ rights, this is a prime opportunity to do so. Despite that, I am happy not to press the amendment, but I reserve the right to discuss this issue further on Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
Clause 17 has been included following a recommendation specifically from the Select Committee during pre-legislative scrutiny of the draft Bill, and I therefore hope that it commands broad support. It ensures that a landlord cannot evict an assured shorthold tenant via the section 21 no-fault eviction procedure if the landlord has previously required a tenant to make a prohibited payment and failed to repay this payment or apply it to the rent or deposit. We agree with members of the Select Committee that this affords tenants additional protection and serves as a further deterrent to non-compliance for agents and landlords.
Similarly, a landlord cannot use a section 21 procedure if they have breached the requirement to repay a holding deposit. This clause is intended to establish a further layer of protection and security for tenants and to act as a deterrent to landlords. The approach mirrors that used to promote compliance with other housing legislation, such as licensing for houses in multiple occupation and the requirements to give tenants a copy of the “How to rent” guide and valid gas safety certificates. I beg to move that the clause stands part of the Bill.
Melanie Onn
We have made our concerns around this clause quite clear, and we reserve the right to come back and discuss it on Report. I sincerely hope that the Minister’s intention does work in practice. I think he is applying some of the principles to landlords who would never wish to be in breach of any of this legislation, and he is not considering fully the issue of rogue landlords, who are the ones we are trying to tackle.
Question put and agreed to.
Clause 17 accordingly ordered to stand part of the Bill.
Clause 18
Duty to publicise fees on third party websites
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
Thank you, Mr Sharma, for permission to group these three clauses. I will discuss them briefly in turn. Clause 18 amends section 83 of the Consumer Rights Act 2015. Section 83 places a duty on letting agents to publicise their fees and information about redress under client money protection schemes in order to provide greater transparency for landlords and tenants.
In the Government consultation on banning tenant fees, concerns were raised that these transparency requirements do not apply in relation to property portals, such as Rightmove and Zoopla. These websites are often the first port of call for tenants when searching for a home to rent. To ensure that tenants and landlords have easy access to relevant information, this clause extends the transparency requirements to third-party websites. I am sure that will be warmly welcomed.
Rishi Sunak
Clause 21 amends section 135 of the Housing and Planning Act 2016. It makes enforcement of the requirement for letting agents to belong to a client money protection scheme the responsibility of trading standards authorities. That has the effect in non-unitary authorities of moving the enforcement responsibility from district councils to county councils. Trading standards are best placed to enforce this provision due to their role in enforcing other legislation relating to letting agents. The change will ensure better alignment between enforcement of the provisions of the Tenant Fees Bill and client money protection.
In November to December last year, the Government consulted on the implementation of client money protection. I am pleased to say that the majority of the respondents—74%—agreed that enforcement responsibility should sit with trading standards rather than district councils, given their skills and experience. To ensure joined-up enforcement of relevant letting agent legislation, I beg to move that clause 21 stands part of the Bill.
Question put and agreed to.
Clause 21 accordingly ordered to stand part of the Bill.
Clause 22
Lead enforcement authority
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 23 and 24 stand part.
New clause 1—Enforcement: costs—
“The Secretary of State shall reimburse—
(a) a lead enforcement authority, where this is not the Secretary of State, for any costs incurred by the authority in the exercise of its duties under section 23 or section 24 of this Act, and
(b) an enforcement authority for any additional costs incurred by that authority in the exercise of its duties under section 1 or section 2 of this Act.”
Rishi Sunak
Clause 22 establishes a lead enforcement authority in the lettings sector to oversee enforcement of the Bill and associated letting agent legislation, including the transparency requirements in the Consumer Rights Act 2015, the requirement for letting agents to belong to a redress scheme and the forthcoming requirement for letting agents to belong to a client money protection scheme. Although, in the first instance, this responsibility lies with the Secretary of State, the clause gives the Secretary of State the power to designate a local trading standards authority as the lead enforcement authority. The clause also enables the Secretary of State to make provision, via regulations, to smooth the transition if there is a change in the lead enforcement authority.
In the Government consultation, there was strong agreement from respondents across the sector to the introduction of a lead enforcement authority; 86% of respondents were in favour, stating that this would lead to more consistent operation of the regulatory framework. We consider that trading standards authorities are best placed to act as the enforcers, given their other responsibilities for enforcing requirements on letting agents and consumer protection laws.
We recognise the overlap between the lettings and estate agent sectors and will work with National Trading Standards to ensure that the new lead enforcement authority works effectively alongside the existing arrangements in the estate agent sector. We intend to provide funding to support the setting up and workings of a lead enforcement authority.
Clause 23 describes the duties of the lead enforcement authority. Broadly, those duties are to provide guidance and support to local authorities in England with regard to their enforcement responsibilities in respect of relevant letting agent legislation. The lead enforcement authority will help to develop best practice in enforcement and ensure consistent application of the legislation.
The clause also enables the lead enforcement authority to disclose information to a relevant local authority to enable that authority to determine whether there has been a breach of, or offence under, relevant letting agency legislation. That power will, in particular, enable the lead enforcement authority to disclose information as to whether a financial penalty has been issued against a landlord or agent and thus whether an offence has been committed under the Bill.
We have taken into account feedback from the Select Committee, so the clause now places a duty on the lead enforcement authority to issue guidance to enforcement authorities about the exercise of their functions under the Bill. As discussed earlier, enforcement authorities must have regard to that guidance.
Clause 23 also provides a power for the Secretary of State to direct the lead enforcement authority to produce guidance about the operation of other relevant letting agency legislation and about the content of such guidance. The lead enforcement authority will be able to provide information and advice to tenants, landlords and letting agents to help them to understand the impact of the Bill and other relevant legislation.
The lead enforcement authority’s position as a central point of contact for local authorities will facilitate its duty to monitor developments in the lettings sector and, as necessary, to advise the Secretary of State. That includes the effectiveness and operation of the Bill and associated relevant letting agency legislation and related social and commercial developments.
Clause 24 makes provision for the lead enforcement authority to enforce the provisions of the Bill and other relevant letting agent legislation. We want the lead enforcement authority to play a proactive role in enforcement and to exercise best practice and provide support when it is appropriate and necessary for it to do so.
Individual trading standards authorities will remain primarily responsible for enforcing breaches of the fee ban. However, they may want to ask the lead enforcement authority for support. Alternatively, a local trading standards authority may not be taking enforcement action in line with its duties under the Bill, leaving tenants at risk of unfair loss. The clause gives the lead enforcement authority the power to take enforcement action in such situations.
Where the lead enforcement authority steps in and proposes to take action in respect of a breach, it must provide notice to the relevant local authority. The latter is then relieved of its duty to take enforcement action in relation to the breach, but the lead enforcement authority may require it to provide assistance. Relevant enforcement authorities will be required to report on their enforcement of the legislation and other relevant lettings legislation.
The lead enforcement authority will have a number of investigatory powers at its disposal to enforce the relevant letting agency legislation. As we discussed previously, those powers are laid out in schedule 5 to the Consumer Rights Act 2015, which this clause amends. That includes the power to require information where it reasonably expects that a breach has been committed.
I hope that clauses 22 to 24 stand part of the Bill and, with your permission, Mr Sharma, I will reserve the right to respond after the hon. Member for Croydon Central speaks to new clause 1.
Sarah Jones
New clause 1 sets out that both the lead enforcement authority and local enforcement authorities will be reimbursed by the Government for costs incurred in enforcing the Bill. That is necessary because the Bill as it stands will simply not provide adequate resources for proper enforcement. That view is backed up by experts from across the sector. We have already talked about the scale of the challenge, and my hon. Friend the Member for Great Grimsby has talked about the cut in enforcement officers and the—
Tenant Fees Bill (Fifth sitting)
Tuesday 12th June 2018
(5 years, 10 months ago)
Public Bill CommitteesRead Full debate Tenant Fees Act 2019 View all Tenant Fees Act 2019 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 12 June 2018 - (12 Jun 2018)
The Committee divided: - Ayes: 8 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 9 - Question accordingly negatived.
The Chair
I remind the Committee that with this we are discussing the following:
Clause 23 and 24 stand part.
New clause 1—Enforcement: costs—
“The Secretary of State shall reimburse—
(a) a lead enforcement authority, where this is not the Secretary of State, for any costs incurred by the authority in the exercise of its duties under section 23 or section 24 of this Act, and
(b) an enforcement authority for any additional costs incurred by that authority in the exercise of its duties under section 1 or section 2 of this Act.”
Sarah Jones (Croydon Central) (Lab)
It is a relief to come back and see that the Minister has not resigned and followed the advice of his colleagues. I am reassured that he is still here.
As I was saying this morning, new clause 1 sets out that both the lead enforcement agency and local enforcement agencies will be reimbursed by the Government for costs incurred in enforcing the Bill. That is necessary because the Bill as it stands does not, in our view, provide adequate resource for enforcement.
We talked this morning about the scale of the challenge, with 56% of enforcement officers lost since 2009. In our evidence session, the Chartered Trading Standards Institute emphasised the scale of the problem that exists with enforcement, pointing out that more than 50% of the landlords and letting agents that it works with in London are still non-compliant with the rules. Shelter has highlighted the extreme difficulty in assessing the true number of rogue landlords, saying that the number is still underestimated. Another challenge for enforcement is collecting sufficient evidence to secure convictions. This morning, my hon. Friend the Member for Great Grimsby cited the Chartered Trading Standards Institute among others, which has worries about the burden of proof and said that it will scare people off, including trading standards.
The Minister might point to the provisions to stop retaliatory measures that were included in the Deregulation Act 2015, but the lack of progress on enforcing those provisions serves only to reinforce the point. Following scrutiny by the Housing, Communities and Local Government Committee, the Government were forced to admit that overstretched local authorities were not even collecting the data that would allow them to see whether the retaliatory eviction provisions in the 2015 Act have been used. The Government wrote:
“We are currently unable to provide this data as local authorities are not specifically obliged to provide it and the Department does not routinely collect it. However, we recognise that this is an area of concern and we are writing to request this information from local authorities to inform our understanding about the effectiveness of the provisions.”
On that topic, Shelter’s most recent survey of tenants found that a quarter of renters who had a problem serious enough to report failed to report it because they were worried about retaliatory measures from their landlord or letting agent. That clearly demonstrates a failure to give tenants confidence in the policy, and backs up the point that tenants may be too scared to engage properly with the enforcement process to build a strong enough case.
The challenges to enforcing the Bill will come from all directions. We know from evidence that was provided that local trading standards authorities may not have the capabilities or expertise. For example, Shelter has raised concerns about how effectively trading standards will be able to police the use of default payments. Shelter has asked the Committee to explore whether local authorities will have sufficient powers and resources to evaluate whether a default fee genuinely represents a landlord loss, and the kind of guidance that the Government propose to provide to assist authorities in making such determinations. The Residential Landlords Association has argued that trading standards should not enforce the Bill at all, and that the responsibility should rest with environmental health departments.
Three concerns have caused us to table the new clause. The first is about getting the numbers right. We have serious concerns about the numbers being thrown around by the Government about how much it will cost to enforce this at a local and national level, as well as the confusion over how financial penalties will be calculated by enforcement authorities.
We have significant doubts about the Government’s argument that the cost of enforcement will be fiscally neutral for local authorities by year 2. The Government have been forced to admit that that will not be the case for year one. The £500,000 allocated by the Government for enforcement in the first year feels as if it was plucked from the air, with similarly little thought. It is unclear whether that figure will change if authorities’ costs are higher than estimated.
The very thin detail on enforcement costs first provided to the Select Committee in November as part of an impact assessment argued that the cost to local enforcement authorities would be £150,000 per annum. The Government’s assumption that the enforcement would be self-funded from year one was rightly questioned by the Select Committee, and the Government duly committed to providing additional funding to local authorities. In the full impact assessment published last month, the Government amended their assessment of expected costs to local authorities in the first year to £300,000. That is a significant jump from their assessment in December. The impact assessment also states that the Government assume £200,000 in set-up costs for the court system, thus reaching the £500,000 figure. However, they appear to contradict themselves in the explanatory notes to the Bill:
“We estimate that local authorities will incur a new burden in respect of enforcement costs in year one of the policy only and we estimate this to be no more than £500,000.”
Assuming that the £200,000 earmarked for the courts in the impact assessment actually goes to the courts, will the Minister confirm whether local enforcement authorities will be getting £300,000 as indicated in the impact assessment, or £500,000, as indicated in the explanatory notes? There is also confusion over whether that money is the maximum authorities will receive or whether the Government will fund the actual costs, and we note the use of the word “estimate” in the explanatory notes.
We had concerns about how the Government arrived at the year one figure before the Committee sittings began. They increased during the evidence sessions last week, when the Minister asked outright for any analysis that the Local Government Association had done on how much funding should be allocated for year one. It then emerged that the LGA had been asked for that information, but had been given just one week to provide the figure. I have a great deal of respect for the ability of the LGA, so if it cannot turn that request around in a week, I doubt that many others could.
It seems astonishing that the Government could still be unclear as to how much this crucial part of the Bill is likely to cost, and I worry that they are pulling numbers out of the air. If the Minister will not accept our new clause, will he explain how the Government arrived at this figure—and, indeed, what the correct figure is? If he cannot share the evidence now, will he write to the Committee? The key point is that, whether it is £300,000 or £500,000, it is simply not enough. As the LGA has rightly pointed out, that amount split over 340 local authorities is a laughable sum of money when we consider that the average budget for one council trading standards team is more than £650,000.
The confusion over costs extends to what enforcement authorities can charge as penalties. As we discussed earlier, the Government have so far left that open, suggesting that local authorities can take into account the need to cover the costs of their enforcement functions when setting the level of the financial penalty. As the Select Committee pointed out, that is a departure from the usual principle that penalties should relate principally to the gravity of the wrongdoing. The decision to fund enforcement from year two solely by fines risks creating a bizarre situation where enforcement areas with a lower level of offences require higher fines to cover their authority’s costs. The same logic goes for areas where the most successful preventive enforcement is happening.
Our second concern is about the pressures on local trading standards authorities. The Chartered Trading Standards Institute rightly pointed out:
“Resource is, without question, the pervasive issue which will determine the efficacy of the Tenant Fees Bill.”
However, as we have already emphasised, the pressures on local enforcement authorities are increasing at a time when budgets are stretched to an unprecedented degree. Some of the new burdens taken on by trading standards include enforcement around, as my hon. Friend the Member for Great Grimsby mentioned, the sale of knives, as well as the use of wood burners, which is related to the Government’s clean air strategy. The effect of that pressure is being seen in the private rented sector. It was pointed out on Second Reading and since then by many organisations that there is already legislation that requires letting agents to advertise their fees, but it is simply not enforced.
The fact of the matter is that after the first year, and probably during that year too, the money recouped by fines will be completely insufficient to pay for any semblance of an effective enforcement system for the Bill. Trading standards authorities will be in a vicious circle, with an inability to enforce due to inadequate resources that then leads to the funding stream getting even worse that then leads to the enforcement getting thinner, and so on and so forth until nobody is bothering to enforce the measures at all.
There is much evidence from across the sector that that will be the case, and the Government are simply ignoring it. The London Borough of Newham says that it does not consider that moneys recovered through the civil penalties will adequately cover local authorities’ enforcement costs. The Chartered Institute of Housing points out the danger of a funding gap, as well as the risk that councils will need to invest in additional resources without being able to guarantee a particular level of financial return. The Association of Residential Letting Agents argues:
“Unless specific funding is set aside for the sole purpose of enforcing these new laws, we will see the same lack of effective enforcement of the ban on tenant fees as has been demonstrated on the transparency rules under the Consumer Rights Act 2015.”
Citizens Advice says:
“The legislation in its current form is reliant on Trading Standards, which we believe risks rogue agents continuing to charge fees. The lack of capacity facing local Trading Standards means many will struggle to take on additional enforcement duties without support.”
We ask the Minister the same thing on fiscal neutrality as we did on the figure for first-year costs: he must provide evidence, either today or in writing, on how the Government arrived at that assumption, or accept our new clause for the Government to reimburse the costs. To force local authorities to pick up the bill for something his Department has not costed properly would be unacceptable.
Thirdly, we are concerned about lead enforcement authority and the pressures around information. The Bill rightly allocates a lead enforcement authority to help streamline and co-ordinate enforcement work—something that has been pretty much universally supported. However, the same questions remain about the resourcing of that body. The Select Committee recommended that the lead enforcement authority should be tasked—and, importantly, given funding—to launch a nationwide awareness-raising campaign, to promote the legislation to tenants. In its oral evidence last week, the Local Government Association again pointed out the need for a high-profile, national campaign to remind tenants of their rights and remind the sector that fees are outlawed. The need for that is made much more pertinent by the fact that Shelter’s tenant survey, which I discussed earlier, found that more than 20% of renters who had a problem that was serious enough to report failed to do so because they were not aware that they could raise it with their local council.
Unlike their other financial estimates, the Government have at least been consistent in expecting the costs of the lead enforcement authority, in line with similar lead bodies, to be between £200,000 and £300,000 a year. It is unlikely, however, that that will be enough to ensure that any significant awareness campaign is run. There is a big question mark over the ability of the lead enforcement agency to do sufficient work to spread awareness of the changes made by the Bill—and awareness is crucial to its success. As with my previous points, I ask the Minister either to support our new clause or provide details about how such an awareness campaign would be funded, perhaps through his Department.
My final point is about the pervasive disincentive that the Bill as currently proposed would create. As I have set out in detail, experts from the Chartered Trading Standards Institute, the LGA and various local authorities agreed that funding through fines will not cover the cost of enforcement if it is done properly. One of the most frustrating aspects of the Bill is that that will ruin any chances of good preventive work being done. Initial fines of up to £5,000 will not give authorities the resources or incentive to do proper work to prevent breaches. As authorities themselves point out, if trading standards enforcement activities are effective, civil penalties will rarely be charged. That is because most intensive activities of council officers concern monitoring practices and working with letting agents to comply with the law. That creates what the Select Committee called a
“pervasive disincentive for authorities to engage proactively”.
I hope that the Minister can offer us something constructive on that point. He will admit that nobody wants this important piece of legislation not to deliver what we want it to deliver. If he will not support the new clause, will he agree to look at ways to finance activity where authorities can demonstrate that good preventive work is keeping convictions down, and come back to us with a proposal to that effect on Report?
I re-emphasise the scale of criticism about the provisions in the Bill for enforcement. The Chartered Trading Standards Institute said:
“The central concept that enforcement of the ban will be self-funded from the proceeds of civil penalties recovered by trading standards is completely erroneous.”
I urge the Minister to look again at this core part of the Bill and, if he will not support new clause 1, will he agree, at the very least, to provide the information we request and consider what else he could introduce on Report to improve the situation?
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)
We believe that the new clause, which essentially provides a blank cheque to local authorities, is not the right approach. Given that my day job is Local Government Minister, of course I am minded to ensure that local authorities have the resources that they need to carry out their various functions adequately. That is what I spend most of my time doing. The provisions in the Bill are intended to be self-financing. Local authorities will be able to retain any moneys recovered through financial penalties for future housing enforcement. That ensures that they are better incentivised to undertake enforcement activity. We believe that that incentive impact and behavioural change is important and helpful.
I draw Committee members’ attention to the consultation, where it was generally agreed that ongoing costs would be met from enforcement. We heard from landlord and agent representatives last Tuesday that they, too, thought that would be sufficient, but that some initial funding as seed money is needed in year one for familiarisation and adjustment with the new regime. Indeed, the Government agree about that, which is why we intend to provide additional funding of up to £500,000 in year one of the policy, to support implementation and education. That figure has been arrived at through consultation and analysis together with several local authorities and officials in the Department to arrive at a bottom-up estimate of what overall costs might be. We are also committed to providing funding for the lead enforcement authority of up to £300,000 a year to support its important role of providing guidance and support to local enforcement authorities.
Sarah Jones
I have listened to the arguments and we will not press the new clause, although we reserve the right to return to this matter on Report.
Question put and agreed to.
Clause 22 accordingly ordered to stand part of the Bill.
Clauses 23 and 24 ordered to stand part of the Bill.
Clause 25
Meaning of “letting agent” and related expressions
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
Clauses 25 and 26 are reasonably straightforward definitional clauses. Clause 25 defines “letting agent” as
“a person who engages in letting agency work”
and goes on to define such work as
“things done by a person in the course of a business in response to instructions received from…a landlord…or…a tenant…seeking”
to let or rent a property. The definition of a letting agent excludes a person who carries out letting agency work under their employment contract, as we would not want to capture such people under the Bill. It also excludes legal professionals who are under instruction in a similar capacity.
Clause 26 defines various expressions used in the Bill. For example, as we discussed in our first sitting, it defines “tenancy” as
“an assured shorthold tenancy…a tenancy which meets the conditions”
regarding letting to students, or “a licence to occupy”. I commend the clauses to the Committee.
Question put and agreed to.
Clause 25 accordingly ordered to stand part of the Bill.
Clause 26 ordered to stand part of the Bill.
Clause 27
Consequential amendments
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
The clause makes consequential amendments to the lead enforcement authority’s enforcement functions in respect of relevant letting agency legislation: section 87 of the Consumer Rights Act 2015; section 85 of the Enterprise and Regulatory Reform Act 2013; article 7 of the Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc.) (England) Order 2014; and section 135 of the Housing and Planning Act 2016. That legislation relates to transparency requirements, membership of a redress scheme and membership of client money protection schemes respectively. Its effect is to require the relevant enforcement authorities to have regard to any guidance issued by the lead enforcement authority. The duties of those authorities under the relevant letting agency legislation is to be subject to the provisions of clause 24, which provides for enforcement of the legislation by the lead enforcement authority.
Question put and agreed to.
Clause 27 accordingly ordered to stand part of the Bill.
Clause 28
Transitional provision
Sarah Jones
I beg to move amendment 16, in clause 28, page 19, line 33, leave out “one year” and insert “six months”.
This amendment would reduce the period of transitional provision from a year to six months.
The Chair
With this it will be convenient to discuss the following:
Amendment 17, in clause 28, page 19, line 37, leave out “one year” and insert “six months”.
This amendment would reduce the period of transitional provision from a year to six months.
Amendment 18, in clause 28, page 20, line 10, leave out “one year” and insert “six months”.
This amendment would reduce the period of transitional provision from a year to six months.
Amendment 19, in clause 28, page 20, line 14, leave out “one year” and insert “six months”.
This amendment would reduce the period of transitional provision from a year to six months.
Sarah Jones
Amendment 16 would deliver an important and achievable result for more than 4 million households currently in a private rental contract. Along with its consequential amendments 17 to 19, the amendment seeks simply to speed up the pace of the changes that the Bill will deliver. As we draw towards the end of this Committee sitting and prepare to discuss the European Union (Withdrawal) Bill, it is fitting perhaps that that we set about talking about the transitional period.
We believe that the transitional period set out in clause 28 is correct. Landlords and agents will need time to come up to speed with new rules and to review the elements in their agreements with tenants that will subsequently cease to have effect. Labour Members, however, argue that a year is an unnecessarily lengthy period. Among other issues, a lengthy transition period may see unscrupulous landlords and agents charging excessive fees through loopholes, such as default fees, in a rush to extract money as quickly as possible before the law changes.
In opposing the amendment, the Government might cite concerns about the capacity of enforcement authorities to develop the requisite skills and learning properly to enforce the Bill. If they truly do have those concerns, they should look again at our proposals on enforcement. When the underlying issues with an overstretched trading standards system are so serious that the National Audit Office is warning of a direct threat to the consumer protection system’s viability, a six-month difference will not change much. I fully expect the Government to highlight the need for proper consultation with landlords and tenants to ensure that they are properly briefed, which is absolutely right, but there is no reason that work cannot start before clauses 1 and 2 come into force. The Government have been clear that a strong deterrent effect will be provided by the penalties and convictions described in the Bill. We have already set out in detail our concerns about enforcement, but we agree in principle that, if enforced effectively, the penalties will be a clear deterrent. If the Government are confident about their deterrent, surely the Minister will agree that landlords and agents will be motivated quickly to come to terms with the changes they will need to make. If not, will he tell us which specific measures he expects to take up to a year to put in place?
As we have previously pointed out, a Labour Government would have introduced the Bill years ago. The cumulative total of the money lost to tenants through the Government’s reluctance to do likewise has likely been millions. We owe it to all private renters to bring the Bill into force quickly.
We will shortly discuss the issues posed by the wording of clause 32 and the merits of our amendments 20 and 21. I will not go into too much detail here, beyond pointing out that clauses 1 and 2 are not currently included in the provisions that will come into force on the day on which the Act is passed. As we will hear, clause 32 is problematic, as it allows the Secretary of State to choose the day when the full Act, including clauses 1 and 2, will come into force, and it currently sets no limit on how long he or she might delay that decision. We believe that the combined uncertainty over the effective start date and the year’s delay proposed in clause 28 would be unacceptable to tenants. If the Minister does not support the amendments, will he set out a clear timetable, either now or in writing, for how that year will be used?
The amendment is not onerous. It would not cause disproportionate hardship to tenants, agents, enforcement authorities or the Government. What it would do is ensure that tenants get more quickly the fair deal they were promised which, I think we all agree, is something they deserve.
Rishi Sunak
Clause 28 deals with how the prohibitions described in clauses 1 and 2 will apply in relation to agreements that were entered into before the commencement of the relevant parts of the Bill. Upon commencement, the fees ban will apply to all new tenancies and agreements between agent and tenant. The transitional provisions in clause 28 mean that for a period of a year the ban will not apply to tenancies the terms of which were agreed prior to commencement. Similar transitional provision is made for agents’ agreements with tenants.
The amendments that we are considering seek to reduce that transitional period from a year to six months, and we do not believe that that would be fair on landlords and agents. Although most fees are charged at the outset of a tenancy, some landlords and agents will have agreed that tenants should pay other fees at a later stage. Tenants will have signed a contract accordingly, and we need to allow time for landlords and agents to renegotiate those contracts to ensure that they are not unfairly penalised.
Data from the English Housing Survey 2015-16 shows that 48% of tenants had an initial tenancy agreement of 12 months and 39% had an initial agreement of six months. Reducing the transitional provision would mean that more landlords and agents with pre-commencement tenancies—tenancies that were entered into before the legislation came into force—would be at risk of not being able to renegotiate their contracts, and would be responsible for fees that their tenant had previously contractually agreed to pay. That strikes me as retrospective and does not seem fair, and we do not seek in the Bill to unfairly penalise landlords and agents.
We recognise the importance of having a clear date when the ban on fees applies to all tenancies, and we know that tenants are eager for the ban to come into force. That is why the Government have revised their position from that reflected in the draft Bill, which had no end date for when fees could be charged in pre-commencement tenancies. The transitional provisions as drafted here mean that all tenants will see the benefit of the fees ban a year after it comes into force. Unlike the proposed amendments, they ensure that agents and landlords will not be significantly financially affected retrospectively, and will have an opportunity to review their contracts during that transitional period. I therefore ask the hon. Lady to withdraw the amendment.
Sarah Jones
I listened to the Minister, and I agree with him that tenants are eager for the clause to come into force, but I will not withdraw the amendment.
Question put, That the amendment be made.
Rishi Sunak
Clause 28 deals with how the prohibitions described in clauses 1 and 2 will apply in relation to tenancy agreements that were entered into before the commencement of the relevant parts of the Bill. As we have just discussed, the fees ban will apply to all tenancies, but the clause provides for a transitional period of one year during which the ban will not apply to what we call “pre-commencement tenancies”—tenancies the terms of which were agreed to prior to the commencement of the ban. After one year, any term of a tenancy agreement that breaches the fees ban will not be binding on the tenant, regardless of the date on which the tenancy agreement was entered into. Any payment accepted by the landlord and not returned within 28 days will then be a prohibited payment.
Rishi Sunak
Clause 29 deals with the financial provisions of the Bill, which we have already discussed at some length, so I shall be brief. The Government intend to provide funding of up to £500,000 in year one of the policy to support local authorities in implementation and up to £300,000 per year for the lead enforcement authority.
Clause 30 deals with the application of the Bill to the Crown. The Bill will apply in relation to the tenancies of those Crown interests that are capable of granting an assured shorthold tenancy but the Crown will not be criminally liable for any breach, as is customary. I am pleased to tell the Committee that the Queen’s consent has been granted.
Clause 31 sets out the territorial extent of the Bill, which is, in part, England and Wales, and in part, England and Wales, Scotland and Northern Ireland. As the Bill will apply in relation to housing in England only, and housing is a devolved matter in relation to Scotland, Wales and Northern Ireland, the latter perhaps requires some explanation. The amendments made by clauses 6(6), 7(4) and 24(10) apply the investigatory powers set out in schedule 5 of the Consumer Rights Act 2015 to authorities enforcing the provisions of this Bill. In line with that Act, they therefore have UK-wide extent, although the application of this Bill is England-only.
Question put and agreed to.
Clause 29 accordingly ordered to stand part of the Bill.
Clauses 30 and 31 ordered to stand part of the Bill.
Clause 32
Commencement
Melanie Onn (Great Grimsby) (Lab)
I beg to move amendment 20, in clause 32, page 21, line 17, leave out from “force” to end of subsection (1) and insert
“on the day on which it is passed.”
This amendment would bring the Act into force on the day it is passed.
The Chair
With this it will be convenient to discuss the following:
Amendment 21, in clause 32, page 21, line 21, leave out subsection (3).
This amendment is consequential on Amendment 20.
Clause stand part.
Melanie Onn
The amendments would alter the Bill by making the provisions come into force on the day of enactment, rather than leaving them at the discretion of the Secretary of State and when he chooses to bring a statutory instrument forward. The Government’s rationale behind the Bill was that it would save tenants millions of pounds and make the market fairer and more transparent. That is a principle we have long supported. However, the potential for a delay in the enactment of legislation surely flies in the face of such an intention. Although we welcome the legislation, we cannot see it as the end of the road for measures to improve the situation that private renters all too regularly find themselves in. There are aims in the Bill that all of us in this room support, because we know how much this is costing tenants and how confusing the housing market can be, but we need the Bill to come forward and make a positive change as soon as possible.
Right now, we are in the middle of exam season across our schools, colleges and universities. That means that in around two to three months, hundreds of thousands of ex-students and graduates will be taking their first steps in their new career. For many of those new graduates, that will mean moving away from home and, potentially, facing the rental market for the first time while holding down a full-time job. People in this group are exactly the type that the Bill should do the most good for.
Unexpectedly high fees can cause huge problems for those who are moving for the first time to start a job. For many at the moment, that means finding large amounts of money before they can even start to find employment, as they will have to pay tenant fees on top of a significant deposit and the first month’s rent. That can easily run into thousands of pounds for people who might have had little income to call on to get that sort of money, or even no income at all. That might mean that people in such a scenario have to turn down dream jobs or graduate placements because they simply cannot afford to move close to work. That impacts on the country as a whole.
Those costs are highest in our capital, which is where many of those dream jobs and placements will be, but people from poorer backgrounds in our northern towns and cities, who are unable to call on family for help in affording their deposits, might find that hurdle too high to overcome. That means that some of our best and brightest will miss out on the jobs and opportunities that are afforded to people who are able more easily to commute to London from a relative’s home, or who can call on family to support start-up renting costs.
This process will happen again very shortly: many graduate jobs start in September, although others go straight on the back end of school, college or university and will start as early as next month, so we should ensure that the Bill is in place for that cohort of people to enable us to prevent yet another year of unfair tenant fees and high deposits, which present such an affordability problem for many first-time renters and graduates.
As well as providing a better deal for tenants, setting a fixed date now for the Bill to come into force would provide certainty for landlords and letting agents by giving a clear set date from which they would have to comply. I understand that the decision not to specify such a date in the Bill is not a usual one, so perhaps the Minister will explain. At the moment, that point is simply to be defined by way of a statutory instrument when the Secretary of State so chooses. That means that landlords and letting agents will have no idea when they will have to stop charging prohibitive fees and tenants will have no idea when they will be entitled to challenge a fee.
I cannot consider the reason for delay in implementing the legislation to be justified in any meaningful way. The Minister has said that work is already under way on guidance. Therefore, it must be possible to get the guidance produced, published and circulated in a speedy fashion, so that tenants would be protected at the earliest opportunity. If the Minister feels that that is not possible, he should explain exactly why tenants will continue to be penalised while the Government get their act together. Perhaps trailing an implementation date now—with Government-led advertising and awareness-raising ahead of the duties’ coming into force, a bit like with the general data protection regulation rules—would provide for readiness across the sector and local authorities.
Rishi Sunak
We, like many tenants, are keen for the legislation to come into force as soon as possible, but we have to strike a fair balance between protecting tenants and allowing landlords and letting agents adequate time to become compliant with the legislation. The ban is not about unfairly penalising landlords and letting agents or driving them deliberately out of business. Letting agents should be reimbursed for the services they provide, but that must be by the landlord rather than by the tenant.
If commencement began the day the Bill was passed, as the amendment suggests, letting agents would have no time to renegotiate their contracts with landlords, which would have an adverse effect on their business model. We propose that there should be a fair period—a few months—to allow for that renegotiation and adjustment to happen. We are also taking steps now to engage with landlord and agent groups to ensure that they are taking steps themselves to prepare for the legislation coming into force. I ask that the amendment be withdrawn.
Melanie Onn
The Minister says he is keen for the legislation to be brought into force, but he does not seem to be taking decisive action, other than offering us a few months, which is particularly imprecise. It is unrealistic to suggest that letting agents cannot start negotiations when they know that the Government’s stated intention is going through Parliament.
Rishi Sunak
I gently point out that the Government’s approach is to have a precise date, and allowing them a few months to decide enables them to do that. The amendment specifies that the Bill would come into force on Royal Assent—that parliamentary process could take place be on any particular day—whereas the Government’s approach is to allow some time after Royal Assent so that they can set a specific day for all communications and so on. That provides the sector and tenants with greater precision than having an indeterminate day that is out of the control of Ministers, Government or anyone else. The hon. Lady’s amendment would result in the parliamentary timetable deciding the date of enforcement.
Melanie Onn
I am confident the Minister will have the ear of the Leader of the House when it comes to enacting the Bill. He says that he is confident that the sector will be provided with certainty and that that will happen within a matter of months, but perhaps he could prescribe whether it will take six, eight or 10 months.
Melanie Onn
The Minister is ready to say a few months. I reserve the right to return to the issue, but I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 32 ordered to stand part of the Bill.
Clause 33
Short title
Question proposed, That the clause stand part of the Bill.
Rishi Sunak
Clause 33 sets out the short title of this legislation, which is to be the Tenant Fees Act, and as such I hope it will stand part of the Bill.
Question put and agreed to.
Clause 33 accordingly ordered to stand part of the Bill.
New Clause 2
Transferable deposits
“The Secretary of State may by regulations made by statutory instrument amend paragraph 2 of Schedule 1 to make provision which enables a relevant person, at the conclusion of a tenancy, to transfer all or part of a tenancy deposit from the landlord or agent with whom that tenancy was held to a second landlord or agent”.—(Sarah Jones.)
This new clause would enable the Secretary of State to provide for a tenant to transfer their deposit from one landlord to the next when moving tenancy, rather than needing to find the money for a new deposit before the old one had been refunded.
Brought up, and read the First time.
Sarah Jones
I beg to move, That the clause be read a Second time.
The new clause seeks to build on the positive outcomes we all hope this Bill will have for tenants by allowing for much-needed changes to the tenancy deposits system. The new clause seeks to resolve the problem faced by large numbers of tenants whereby deposits are charged on new tenancies before the deposit from a previous tenancy is returned, costing significant sums of money every time a tenant moves. There is no need for such a situation to occur, and members on both sides of the Committee support looking at ways of solving it.
As we pointed out last week, it would fail tenants and be a waste of our time if we sat here and allowed through a Bill that simply reinforced the status quo. We have said repeatedly that we welcome the Bill’s ban on agency fees. We urge the Government to go further to resolve other significant up-front fees faced by private renters.
The most significant up-front fees are tenancy deposits, which I remind the Committee are significantly higher than agency fees, often running to several thousand pounds. We have already touched on the issue of the six-week cap for tenancy deposits, but I ask the Government one more time to look at that cap before Report and to think about what we could do. A lower cap would have a measurable benefit for tenants. There are options that the Minister could consider if he really wants to make provision for what he calls “high-risk tenants”.
Mr Robert Goodwill (Scarborough and Whitby) (Con)
If I may briefly interject, the hon. Lady identifies a problem, which came through in the evidence sessions, that affects landlords as well as tenants. The frustration of having a deposit locked up with the current landlord that cannot be given to the new landlord is a problem. However, now is not the time to address it. Indeed, the hon. Lady said that we should look at ways of solving the problem. Were we to try to do that in this Bill, we could end up delaying the introduction of legislation that everyone agrees will be of great benefit to tenants, because a lot of consultation would need to be done. We would need to look at situations where, for example, the tenant misleads the new landlord that all the deposit will be released when in fact there might be some deductions.
I absolutely sympathise with the feelings expressed, but I hope the Minister will not allow this issue to delay the Bill. Although I sympathise with the hon. Lady, I am sure many on the Conservative Benches will not be able to support the new clause at this time.
Rishi Sunak
I am delighted to say that I agree with both the hon. Member for Croydon Central and my right hon. Friend the Member for Scarborough and Whitby. We fully support and encourage innovation in the tenancy deposit sector. We know that it can often be difficult for tenants to raise funds for a deposit at the outset of a tenancy, especially if they are moving from one property to another; indeed, that is partly the motivation for bringing forward the Bill.
In the Government’s response to the Housing, Communities and Local Government Committee following the pre-legislative scrutiny, we emphasised our commitment to assess the merits of alternatives to traditional security deposits and promised to report our findings to the Committee. The Government responded only in May, so I hope Members will forgive me when I say that the work is not quite completed, but it is in process.
We have been exploring this issue for a while, including in the 2017 consultation on banning letting fees. It may interest hon. Members to know that my Department, like many others, offers an employer-backed deposit scheme to civil servants living in the private rented sector. That works in the same way as a season ticket loan, allowing employees to borrow from their salary up front to pay for a rental deposit and repay it from salary payments over the course of their career. Many private businesses, such as Starbucks, take the same approach, and we definitely encourage more to do so.
I am pleased to say that in May the Minister for Housing and Homelessness held a roundtable with my hon. Friend the Member for Broxbourne (Mr Walker), who has been passionate about this issue, along with the three deposit protection schemes and Shelter, to explore further how existing tenant deposit protection was working and what further innovation was possible. I am pleased to say that, as a result of that preliminary work, the Minister has been working much harder to progress the issue and will convene a formal working group with the deposit schemes and key representatives from tenant and landlord groups to explore it further.
There are still many things that need to be considered, as was highlighted by my right hon. Friend the Member for Scarborough and Whitby. For example, the key concern with deposit passporting is ensuring that landlords are still able to recover any damages at the end of a tenancy. There is a great deal of technical complexity that needs to be examined. That would involve understanding the percentage of the deposit that could be passported, and when and how liability for providing a tenant with the relevant prescribed information about where their deposit is protected should be passed from one landlord to another.
We certainly need to consult the sector and get its input before implementation. We are also keen to explore other alternatives, aside from passporting, such as payment of deposits by instalment. I hope hon. Members can see that the Government are taking this issue very seriously. My hon. Friend the Minister has already convened groups and is continuing to convene working groups to examine this issue and figure out a way forward. With that in mind, rather than delay this legislation, I call on the hon. Lady to withdraw her new clause.
Sarah Jones
I have listened to the Minister’s response, and I am glad that there are working groups, roundtables and other such things looking at these issues. As a former senior civil servant, I know well the line that there are still many things that need to be considered, which can be used to push things into the long grass so that they never get completed.
I take the point from the right hon. Member for Scarborough and Whitby that we do not want to delay the Bill and that we need to look at these matters properly, but I urge the Minister to speed up the working groups and roundtables and to try to come forward with something. If he did, I am sure he would have the support of the Opposition. I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 3
Report on operation of Tenant Fees Act
“The Secretary of State shall within a period of 12 months from the date of commencement of this Act and annually for the four years thereafter lay before Parliament a report on the operation of this Act, setting out the number of breaches of sections 1 and 2, the number and amounts of financial penalties levied by enforcement authorities, and the number of criminal prosecutions commenced and concluded in each 12-month period”. —(Melanie Onn.)
This new clause would require the Secretary of State to report annually for five years on the effect of the Act
Brought up, and read the First time.
Melanie Onn
I beg to move, That the clause be read a Second time.
The new clause is quite clear that it intends the Act to be reviewed and closely monitored by the Minister. There has not been a great deal of discussion around the monitoring of the implementation of this legislation so far. Assessing the effectiveness of the legislation is incredibly important, and I hope the Minister will be able to support it. We know from the experience in Scotland that legislation, even when well intended, may not be effective if the wording is not clear enough, the rights are not precisely defined, the impact is not fully, properly and regularly communicated to those who need it, and the enforcement mechanisms are inadequate. I do not want to let the Minister leave here without allowing for future Ministers and Governments to recognise early the elements of the Bill that are not quite working as intended. From the discussions we have had, it seems that the Bill will probably not come into force for 18 months, which is quite some time away. How it actually pans out in practice will perhaps be well out of our hands.
It is inevitable that there will be clauses of the Bill that, once in action, do not work quite as anticipated. To rectify that, the Government could accept this new clause, which would ensure regular assessments are undertaken of the number of breaches of sections 1 and 2, as well as providing details around the fines—how many have been issued, what revenue has been generated and whether there have been any prosecutions. It would enable the Government to show their demonstrable concern for tenants by making it clear that they were keeping a beady eye on the practicalities of the measures and not simply leaving matters to chance.
No doubt there would be a Select Committee inquiry without these changes. What do the Government anticipate that they might wish to hide? By being proactive, they would be ahead of the curve and would save the Select Committee a great deal of time that it might spend on other inquiries.
I anticipate that the Minister will say he is confident that local authorities will maintain such records. That might be suitable for him, but it would not compel him to collate such data to gain regional perspectives on the implementation. Given the failure on the display of tenants fees rules so far—so much so that they now have to be beefed up through the Bill’s enforcement powers—accepting the new clause would be an honest recognition that legislation does not always work well.
The new clause would provide for an ongoing evidence base from which future improvements could be made. It would show landlords, letting agents, councils and tenants that the Government were taking a responsible approach to a significant piece of new law and showing a keen interest in its future application.
Were it to be found that the funding for new burdens was insufficient, the Government could deal with that rapidly, rather than facing the worst-case scenario of the laws not being used and being completely useless. They could check where the laws were being best utilised, identify why and assist in the sharing of best practice around the country. They could check that the legislative process was quick and that the remedy was proportionate to the breach.
In housing, timing is often of the essence. Those who would be charged prohibited fees are most likely to be those who can ill afford them—those who are forced towards bad landlords or letting agents. Should resolution of the process take too long, a tenant may be two or three properties along since the original complaint was submitted. I urge the Minister to consider this sensible step.
Rishi Sunak
I rise for potentially the last time, to discuss new clause 3. I am pleased to tell the Committee that we do plan to monitor the implementation of the Tenant Fees Bill through continued engagement with key stakeholder groups representing landlords, agents and tenants, as well as through wider intelligence from agencies such as the lead enforcement authority and trading standards, which will enforce the requirements of the Bill. Unfortunately, however, we believe the new clause is unworkable.
We would not be able to identify all breaches of sections 1 and 2, as the new clause suggests, as we will be encouraging tenants to challenge their landlords and agents directly in the first instance if they have been charged prohibited fees. Indeed, we want landlords and agents to rectify breaches first, without the need for an enforcement authority, and it would of course not be possible or practical to record every time that that type of informal enforcement and rectification happened.
With regard to the number of financial penalties and criminal convictions under the ban, that information will, owing to the reporting requirement that already exists in the Bill, be captured by the lead enforcement authority anyway. Those agents and landlords who are banned from operating will also be captured on the rogue landlord database. Local housing authorities also have powers to include persons convicted of a breach of the fees ban on that database, as well as people who receive two or more financial penalties within a year for any banning order offence.
I hope that that reassures hon. Members that we will be tracking and reviewing the effectiveness and enforcement of the ban. We do not think it is necessary to prescribe further reporting requirements on the face of the Bill, but we will consider how to make the information available, especially regarding the lead enforcement authority. We will review the legislation within five years, in line with normal parliamentary and scrutiny practices.
Melanie Onn
The Minister says that the Department will monitor the process and the progress of the enforcement of this legislation. He also says it plans to review in five years. That raises the question of why that should not be included in the Bill. The Minister has diligently described to us all the varying places where that information is kept; the new clause simply seeks to ensure that it will be kept centrally by Ministers so that they do not have to go to various different organisations to retrieve it and will have it centrally, at their fingertips, so that reports and responses are full and accurate. Therefore, we will not withdraw the new clause.
Question put, That the clause be read a Second time.
Rishi Sunak
I gather that we are bringing proceedings to a conclusion, so if I may, Mr Sharma, I will briefly put on record my thanks to you and Mr Bone for your distinguished chairmanship of the Committee; to your team of Clerks for keeping us all on track and ensuring we followed due procedure; to the Whips for ensuring that we were all here on time and did what we were told; and to my fantastic team of officials, including those who are giving up valuable swimming and cocktail time to be with us today, which I very much appreciate. Indeed, I put on record my thanks to all hon. Members for their valuable and insightful contributions, and especially to Opposition Members for the constructive and good-natured way in which they have engaged with the topic. I look forward to continuing those debates in subsequent stages of the Bill. I make one final apology to the daughter of the hon. Member for Stockton South for depriving her party of her father’s presence.
Lastly, I put on the record my thanks to the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for South Derbyshire (Mrs Wheeler), who of course could not be with us to take the Bill through the Committee, but who put in an extraordinary amount of work in the months leading up to this point to ensure that we were discussing what I am sure we all agree—whatever our individual differences on certain points—is an important piece of legislation addressing a very important topic. She deserves enormous credit for her diligence and hard work in getting us to this point. I know we wish her well, not just at home but with all the other work she is doing to ensure that we bring fairness to the private rented sector, and we look forward to seeing her back soon.
Question put and agreed to.
Bill accordingly to be reported, without amendment.
Ivory Bill (First sitting)
Tuesday 12th June 2018
(5 years, 10 months ago)
Public Bill CommitteesRead Full debate Ivory Act 2018 View all Ivory Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 12 June 2018 - (12 Jun 2018)
The Chair
Before we begin, I have a few preliminary announcements. Will people ensure that they switch electronic devices to silent? I remind Members that teas and coffees are not allowed during sittings. Time Witness Until no later than 10.25 am World Wildlife Fund; Born Free; International Fund for Animal Welfare Until no later than 11.25 am Stop Ivory; Tusk Trust Until no later than 2.15 pm National Wildlife Crime Unit; CITES Border Force team, Heathrow Until no later than 3.00 pm British Art Market Federation; British Antique Dealers’ Association; Philip Mould & Company; Music Industries Association; Musicians’ Union Until no later than 3.45 pm British Museum; Victoria and Albert Museum
We will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication, and a motion to allow us to deliberate in private about our questions before the oral evidence session. I hope that we can take those motions formally, because we are a bit pressed for time.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 12 June) meet—
(a) at 1.30 pm on Tuesday 12 June;
(b) at 11.30 am and 2.00 pm on Thursday 14 June;
(c) at 9.25 am and 2.00 pm on Tuesday 19 June;
(d) at 11.30 am and 2.00 pm on Thursday 21 June;
(2) the Committee shall hear oral evidence on Tuesday 12 June in accordance with the following Table:
(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 13; Schedule 1; Clauses 14 to 19; Schedule 2; Clauses 20 to 42; new Clauses; new Schedules; remaining proceedings on the Bill;
(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 21 June.—(David Rutley.)
The Chair
I have been advised that the witness schedule on the Order Paper is incorrect. For the avoidance of doubt, the schedule in the order just agreed by the Committee is the correct one. We changed it slightly because of other events today, to ensure that the witnesses are dealt with appropriately.
The deadline for amendments to be considered at the first line-by-line sitting of the Committee was the rise of the House yesterday. The next deadline will be the rise of the House on Thursday for the Committee’s sitting a week today.
Resolved,
That subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(David Rutley.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room.
Resolved,
That at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(David Rutley.)
The Chair
We will now hear evidence from the World Wide Fund for Nature, Born Free and the International Fund for Animal Welfare. Before I call the first Member to ask a question, I remind Members that questions should be limited to matters within the scope of the Bill, and that we must stick to the timings of the programme motion. Could the witnesses introduce themselves for the record and to check the sound?
Cath Lawson: My name is Cath Lawson, I am the chief adviser on wildlife at WWF UK.
Will Travers: My name is Will Travers, I am the president of the Born Free Foundation.
David Cowdrey: My name is David Cowdrey, I am the head of policy and campaigns at the International Fund for Animal Welfare.
Sue Hayman (Workington) (Lab)
Q
Will Travers: That is an important question. Context is important; we all feel that it is important that whatever other considerations there are for non-elephant ivory-bearing species, they do not blow this legislation off course or delay it significantly. We all share the view that it would be a tragedy, to put it in informal terms, if we worked really hard to save elephants and other species were collateral damage in the process. But we need to consider a number of species.
We suggest that the Government commit to a rapid consultation after the Bill, to look at hippos, narwhal, hornbill—which are also facing extinction because their bills are a surrogate for ivory—walrus and not just CITES-listed species but non-CITES-listed species. We recognise that the trade—particularly the legal one—is entrepreneurial and will move to wherever there is an opportunity. Species such as warthog could come into the frame very rapidly as interest in ivory shifts from elephants, which are getting a huge amount of attention, to other ivory-bearing species.
In summary, we would like real attention to be paid to the issue, but we want to make sure that that does not in any way delay this process. That would be detrimental to what is under way.
Cath Lawson: We endorse that opinion. We are happy that the Bill as it stands, which allows for consideration of other ivory-bearing species at a later date, is sufficient. We would be comfortable with Will’s suggestion of expansion to non-CITES-listed species, too, but our concern would be that to include other non-ivory-bearing species at this point would cause delays to the Bill. With the illegal wildlife trade conference in October, we are keen that the Bill moves quickly through the legislative process.
David Cowdrey: Again, I endorse what WWF and Born Free just said. There should be flexibility in the Bill to include other species in future, but at this time the focus should be on delivering for elephant ivory, which the consultation was about and where a lot of the research was. That flexibility should enable the inclusion of further species should they be exploited and should there be a need to add them.
Mrs Pauline Latham (Mid Derbyshire) (Con)
Q
David Cowdrey: I totally agree with that. We have all worked so hard to get to this point to deliver one of the strongest ivory bans in the world. The initiative that has been taken by all parties and the cross-party support shown on Second Reading have been superb, and there is an opportunity to provide that protection. As we said, as long as there is that flexibility, and consideration for other species, which can be applied in future, and as long as further consultations can be held and we can have those discussions, I would agree totally with that.
Cath Lawson: Yes, WWF would be happy to engage in that consultation process, but for it to be separate to passing the Bill.
Will Travers: Just for the Committee’s interest and information, we are talking about huge volumes of trade in non-elephant ivory. I have four figures that might be helpful. From 2007 to 2016—just under a decade—78,000 hippos and hippo products were exported by CITES parties. Hong Kong imported 60 tonnes of hippo ivory between 2004 and 2014. Between 2007 and 2016—those dates again—7,000 narwhal products were exported and more than 172,000 walrus specimens were reported to have been exported on the CITES trade database. Those are not insignificant by any measure—they are enormously significant. With that kind of volume now, as we have just mentioned, the shift away from elephant ivory could put insupportable pressure on these other species, which is why we would like to see an accelerated process for that after this process has been undertaken. That is a very helpful suggestion.
Kerry McCarthy (Bristol East) (Lab)
Q
Cath Lawson: From WWF’s point of view, I cannot comment on the legislative process but we would certainly want to see a consultation process around those species before inclusion in a Bill. That is why it needs to be a separate process.
Kerry McCarthy
Q
Cath Lawson: Similar to the process we have gone through for the Ivory Bill, looking at the impact of UK trade on those species, and implications further down the line in terms of limiting that trade.
Kerry McCarthy
Q
Cath Lawson: Yes.
Kerry McCarthy
Q
Will Travers: In trade.
Kerry McCarthy
Q
Will Travers: My understanding is that it is genuinely an alternative ivory that is used in decorative materials. It is used in inlays and in almost exactly the same way as elephant ivory is used except less so on the whole. Less so in a large carved tusk in the shape of little elephants, for example.
Kerry McCarthy
Q
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
Q
Cath Lawson: We certainly recognise the risk, and that is why we are comfortable with there being the option in the Bill as it currently stands for consideration. Our concern is about including them in the body of the Bill now and the delay that a consultation process on that would cause for the passing of the Bill.
Henry Smith (Crawley) (Con)
Q
David Cowdrey: For me, in relation to the legislation and its global impact, introducing one of the toughest ivory bans in the world will establish us firmly as a global leader. In Europe at the moment there are discussions about an ivory ban; on Second Reading there was a discussion about how our ban should act as a template for the European one. It gives us a good opportunity to push for a European ivory ban equal to, if not stronger than, the one we are introducing in the UK. Globally, that will have a massive impact on closing down those markets and the trade that is currently going from Europe to south-east Asia.
Concerning the United States and China, China is implementing its ivory ban very strongly at the moment and doing a very good job. It still has further to go; Hong Kong will be closing down in 2022, and we look forward to that because there is still trade going on legally there. The United States also has its ban, which is doing very well, but it has a federal law and state law, so it is much more complex to interpret. The UK could provide the template for the rest of the world.
Will Travers: I agree with everything that has just been said. I will point out that the UK does not have anybody whose livelihood depends on ivory, whereas in China there were individuals whose livelihoods depended on the ivory trade. China has taken that resolute decision, notwithstanding the fact that people’s livelihoods to a degree depended on it, to move out of it. That is important. It is complex in the US, as has been said, because of the federal and state situation, but the US has also taken resolute actions. The UK, having proclaimed that it would take action quite some time ago, is now in a position to reassert itself as a leader on this issue, not only on our own domestic front, but in the investment we make in supporting African countries in their efforts to tackle illegal trade. Just this morning, there was notification of another seizure by the Kenyan authorities in Mombasa.
It will be one of the toughest. It might not be the toughest—I believe that Taiwan, for example, has a full ban, which is coming in in very short order, with no exemptions and no compensation—but we will certainly be up there.
Cath Lawson: I very much endorse what has already been said and reiterate the point that with the October meeting of the illegal wildlife trade conference, the passing of this Bill would put the UK in an incredibly strong position to advocate to those countries that have yet to make commitments, particularly the neighbouring countries around China, where we risk seeing a knock-on effect of China’s ban.
Alex Sobel (Leeds North West) (Lab/Co-op)
Q
Will Travers: As far as I am aware, they cover only elephant ivory.
Simon Hoare (North Dorset) (Con)
Q
David Cowdrey: For the October illegal wildlife trade conference we have a global stage. Senior politicians and Heads of State will come to the UK, and announcing that we have on the statute book an ivory ban that is one of the toughest in the world will be critical as part of that global leadership. As for acting as a deterrent, we know that closing down markets alone will not stop the illegal ivory trade—it is an illegal trade and we need good enforcement measures to go alongside it. We have opportunities with the illegal wildlife trade conference regarding our own law enforcement. The National Wildlife Crime Unit is funded only until 2020, and that funding must be renewed and become permanent if we are to show global leadership in acting as a deterrent and having the correct law enforcement. The CITES Border Force team is our frontline of defence at Heathrow, and they are conducting training all over the world. When staff leave or posts become vacant they must be renewed because we must maintain that capacity to act as a deterrent.
As organisations, we invest—as do the UK Government —in anti-poaching work on the ground. This is not just about closing down markets or legislation; this is about enforcement and feet on the ground doing that anti-poaching work. It is a mixture of measures, but with this Bill the UK can show that global leadership of taking the right steps in the right direction. We know that the Government are also investing in a lot of work overseas by having troops going to Malawi, training rangers, and other overseas investments.
Cath Lawson: We very much endorse that. To ensure that the impact of the Bill is realised there must be sufficient effort to raise awareness of it, and sufficient support resource going to the implementation of enforcement. We must particularly seek long-term funding for the National Wildlife Crime Unit.
Will Travers: Yes, I would agree with all that, and I want to show the Committee something that may help understanding. The question was about what the Bill’s impact on poaching will be, and it is hard to make a direct correlation. However, we can have a direct impact on other aspects that relate to poaching. I am holding a piece of ivory and it looks antique to me. It obviously looked antique to half a dozen ivory dealers who looked at it and said, “Yep, that is pre-1947. We would be happy to sell it”. We had it DNA tested, and it is from about 2000. It is a modern piece of ivory—well, the ivory is from 2000 but the carving was done later. This must have come from an elephant that was poached in the past 20 years. The Bill will help to deal with that, and that is a direct link to poaching. It is very important.
Investment in wildlife law enforcement in Africa is really important. It is about boots on the ground, but also about agencies that prosecute people. It is about legal systems and ensuring that deterrent sentences are indeed just that and are effective, and that people do not get off with a slap on the wrist. It is about ensuring that law enforcement officers are properly trained and can carry out their duties effectively. The African Elephant Coalition includes 30 countries with African elephants that have worked together, united, to try to deal with this issue across international borders. I am sure future speakers will talk about the countries of the Elephant Protection Initiative, which are coming together under a common agenda.
My final point is that we need to step up and think about investment in a slightly different way. In my view, there is a common linkage with our clear objectives in overseas development, which are to deal with poverty and to provide opportunity. Those are also based on healthy and secure environments, including wildlife environments. Many of the ecosystem services that the poorest people in Africa depend on come from protected areas. If we are not investing in the protected areas where elephants and other species live, we are not doing a great service either to the species we wish to protect or to the people who live literally downstream from those protected areas.
David Cowdrey: One of the points that has been mentioned is that the Bill is about not only law enforcement but deterrence. There is an opportunity here to introduce a set of sentencing guidance for courts in the United Kingdom, to provide that information to magistrates and judges when prosecuting cases. We need appropriate sentences to be given for the crimes at the end of the day. Having the Bill on its own and having law enforcement is one thing, but we need good sentencing guidance to ensure that appropriate sentences are given.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
Q
David Cowdrey: I attended the Partnership for Action against Wildlife Crime conference at Kew last week, and one of the questions I asked was about the growing issue of cyber-crime. Does the National Wildlife Crime Unit have sufficient resources to tackle the illegal wildlife trade online? Quite clearly that is something it would like additional resource for.
As Will said, these criminals are working in an environment where they can adapt and change very swiftly. The online market provides anonymity, as they can create false identities, so trying to prosecute them becomes much more difficult. Only yesterday we had the introduction of new guidelines on the control of trade in endangered species from the Department for Environment, Food and Rural Affairs, which was fantastic. They include a new crime if someone is advertising an endangered species on annexe A and does not have an article 10 certificate.
Steps are being taken, but we are always playing catch-up with these criminals. We need the resources to be able to prosecute them. That goes not only at the UK level but at international level, with Interpol and within the countries where these crimes are taking place on the ground with poaching.
Will Travers: One of the tools at our disposal is to make sure that the charges for the exemption certificates are sufficiently high. I know that it is meant to be a cost-recovery process, but they should be sufficiently high to make sure that the very limited number of exemption certificates that are applied for are not applied for in a frivolous way, so people are not applying for lots of exemption certificates, which would defeat the object. We need to come back to the core principles of what we are trying to do here and ensure that these exemptions are extremely limited. One way of doing that is to say that if you want an exemption certificate, it will cost—I will make up the figure—£1,000. I think people will think twice when they have to go through that process and fork out £1,000 but might not get the certificate at the end of the day. That is another mechanism that we should look at.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (David Rutley)
Q
There has been some concern that the ban might lead to displacement to other countries, for example in the far east. You have addressed that to some extent in your comments. Can you reconfirm for the Committee that you believe that the ban will help and that the October conference could be an opportunity to start tackling concerns about displacement?
Cath Lawson: Yes, very much. We feel that we have had the opportunity to input into this process, and we are grateful for that—the consultation process has been very inclusive. If the Bill can be passed in time for the October conference, we can show that we have one of the world’s strongest pieces of legislation on ivory. We feel that it would put the UK in a strong position to work with other countries, particularly those neighbouring China: Laos, Thailand, Bhutan. There is certainly a risk of displacement from China to those sorts of countries, and this would help them move forward with their ivory legislation as well.
Will Travers: I totally agree. With regard to the voice, it was one of the biggest responses in the public consultation, showing the depth of public concern. It was generated not just by advocacy organisations such as those represented here and others; the public in general wanted to have their say. With regard to displacement, the fact that the Foreign Secretary is so invested in the issue—as was his predecessor—bodes well, because the FCO has a really important role to play in making sure that our position on this issue is well understood in the countries that were just mentioned. Although the Bill is about the domestic ivory trade, it is important that it does not become a domestic issue; it is an influencer far and wide, particularly in those countries that have yet to make their position as clear as they could.
David Cowdrey: I agree. We have been listened to and consulted well. The consultation run by the Ivory Bill team at DEFRA should be congratulated on doing a superb job. They have consulted far and wide, with a range of organisations, and constructed a carefully crafted Bill.
There is always a risk of displacement to other countries. The investment that is being made and the training that the UK can provide—not only through our armed forces but through our police services—is excellent. The Metropolitan police in the UK have developed an ivory fingerprinting kit, which is now being rolled out to over 18 countries globally. The British high commission in Mozambique has invited me back to do some training with rangers and ANAC, which is the national parks authority. That is a piece of frontline equipment that can help catch ivory poachers on the ground, and it will also be appearing at the IWT conference in October. Team GB have a huge amount to contribute to law enforcement on the ground, and can provide expertise, training and resources where displacement is happening. Those are good strategic opportunities for tackling some of these real hotspots around the world.
Will an ivory ban help? Yes it will. This is a really good piece of legislation that will provide that global leadership and that position. The opportunities you have within the European Union to get a strong ivory ban in Europe and use this as a template are critical. Every available opportunity should be used to push this across Europe via colleagues, so that we can roll out this ivory ban and get a global ban. This is what we really need in order to start tackling the trade. You have a great opportunity and I wish you well.
Liz Twist (Blaydon) (Lab)
Q
David Cowdrey: Additional measures have just been introduced in the Control of Trade in Endangered Species (Enforcement) Regulations. Anybody offering an annexe A specimen will need to display their article 10 certificate. That is a new requirement that we welcome. Enforcement is an issue. There has just been a major conference with Interpol in Lyon with law enforcement agencies from across Europe and the world, which was co-partnered with IFAW. It was looking at how we can tackle cyber-crime and where it is moving—again, it is the impact of Facebook closed groups, which are very difficult to penetrate, and also the dark web. An awful lot of further work and investigation is needed by global enforcement agencies, but also by our own enforcement agencies. We have to remember that this is a criminal activity, undertaken by organised criminal gangs using the same routes they use for other commodities, such as guns, people and drugs. It is the fourth largest illegal activity in the world. It is undermining communities and Governments and therefore needs to be a priority. Tackling this in any way we can, and especially online, is going to be critical.
As Will said earlier, these are criminal groups that will adapt and change at the flick of a switch. When one market closes, another one will open. They will use technology to the fore. Now, with our tenBoma scheme in Kenya, we are creating a network to defeat a network, which is critical. We are using the same intelligence software used to tackle poachers before they shoot the elephant, so we can anticipate where they are going to be and make sure the resources from the enforcement agencies are deployed. Enforcement online and on the ground, and using technology, is vital if we are to defeat the poachers.
Cath Lawson: We certainly agree that the online trade is very much a concern, but we feel that the Bill as it stands, and the exemption for what is specified—with some tweaks that I hope we will have an opportunity to talk about later—is pragmatic and sufficient to not pose a significant risk.
Robert Courts (Witney) (Con)
Q
David Cowdrey: Yes, I agree. With 20,000 elephants being killed every single year—around 55 elephants a day—this is poaching at an incredibly high, industrialised level. We saw in a three-year period between 2010 and 2012 approximately 100,000 elephants being poached. This is genocide for elephants on a vast scale. It is industrialised poaching to go to the markets. Something absolutely critical on enforcement is therefore needed. We need to acknowledge the scale of what is going on and the legislation needs to deal with elephant poaching urgently. Over the past two years, the work that the Government has done in preparing the Bill—gathering evidence about ivory markets and ivory poaching, and listening to people—has been absolutely critical in developing what we have in front of us today. So yes, we agree.
Cath Lawson: The urgency is because of the detrimental impact on elephants, but also because of the leverage value that the October conference offers. Having the legislation in place by then means we can maximise that leverage value.
Will Travers: I agree with both colleagues. I do not want to bombard the Committee with statistics, but one that always sticks in my mind is that Tanzania was regarded, for many years, as an elephant stronghold—it had the second largest elephant population on the continent. Yet between 2009 and 2014—in five short years—its elephant population fell from more than 100,000 to just over 40,000. That is 1,000 elephants poached every month for 60 months. That just gives you a sense of how once it reaches that kind of critical mass, once law enforcement has broken down to the level that the poachers are winning, the situation can go from hero to zero extremely quickly.
Robert Courts
Q
Cath Lawson: That is my understanding, yes.
Will Travers: I am not at all technical on this, and you know it far better than I do, but it seems to me that if we can get this through, with the provision that the Secretary of State can look at other non-ivory-bearing species and bring forward whatever measures he or she wishes in short order, then the consultation may be very short and serve only to verify the situation, rather than to do a long exploratory digging into it—in other words, just to verify the kinds of figures I gave you earlier. The Secretary of State can then come forward with secondary measures, which will hopefully address the issue very quickly. I hope that would be the sort of commitment we could count on.
Robert Courts
Yes, clause 35(2) would clearly allow the Secretary of State to bring forward delegated legislation. Can I focus on one other thing you said? That is to include ivory from an animal or species not, for the time being, covered by that subsection. You mentioned non-ivory-bearing species. Did you mean non-elephant?
Will Travers: I am sorry; I meant non-elephant ivory. I have mentioned warthog. At the risk of upsetting people who are concerned about a very small amount of Aboriginal use of walrus, that is really important, but so is mammoth ivory. We should at least be aware of the volume of mammoth ivory in trade. Recall that this is in trade. I have the import figures for the United States. They keep a close record of all mammoth ivory in trade, and I will just give you three years. This is only mammoth ivory carvings—there are lots of different categories— but in 2013 there were 5,049 mammoth ivory carvings and 773 tusks. In 2014 there were 19,335 carvings and 338 tusks. In 2015 there were 7,822 ivory carvings and 120 tusks. That is a not inconsiderable amount of trade in an ivory product that, in marketplaces in the far east, is definitely a surrogate for modern elephant ivory.
Anna Turley (Redcar) (Lab/Co-op)
Q
David Cowdrey: Those are all excellent points. The Bill will clearly close down markets in the UK. The more markets we close down, the more we deprive people of money and income. The price of raw ivory that was publicly for sale was $2,200 per kilo. After China introduced its ban, it went down to $1,100 and then down to $600. It is now about $450. There has been a massive devaluation in the price of raw ivory, making it a less viable option. Such things are incredibly useful.
With regard to help for communities, on Second Reading there was an interesting discussion in which Members talked about how some of the Department for International Development’s budget might be used. We have to consider a holistic approach. The communities are not isolated from poaching, and the impact of poaching on communities is not isolated from the illegal wildlife trade; they are joined up and hand in hand. There are good opportunities that exist with our overseas development budget to take a more integrated approach to delivering holistic aid and support and anti-poaching measures, to help build communities and tackle corruption.
The support with efforts through the DEFRA challenge fund grant, through DFID and the FCO’s interaction with other communities is also important. It needs to go hand in glove. This is a complex situation that you cannot just wave a wand or a Bill at. It is all part of a jigsaw that really helps, but our overseas aid is another part that we could potentially re-examine and look at, to provide better integrated aid.
Cath Lawson: The WWF would very much endorse that position. I do not think we need additions to the Bill, but we are supportive of wider conversations about looking at overseas aid for ecosystem-based funding, and looking at bigger-picture landscape approaches to some of the critical habitats where the illegal wildlife trade impacts on the survival of certain species.
Will Travers: I endorse everything that has just been said, and I totally understand that when it comes to spending the £13 billion or so a year in our DFID budget, in most cases we must be risk averse. However, for this sort of issue—I used this term before when I talked about it with Justine Greening three years ago—we need a sort of adventure capital fund. We need a modest amount of money with which we try innovative, new things on the ground or with partners, and try to deliver something that will change the game on the ground and speak to all the issues that have been raised, such as secure ecosystems, secure livelihoods, alternative livelihoods and food security at landscape level. Sitting right in the middle of that can be conservation. If the brief is whether we can make conservation work for communities and people, I think the answer is yes, but it needs not insignificant—although not huge—pump-priming to really get it going. That is where DFID, which is a completely different entity from the one we are talking about right now, could have a major role.
David Cowdrey: I agree about some of the technical developments and initiatives that the UK can take. I mentioned fingerprinting earlier, and across Africa most countries do not even have an electronic fingerprinting database. When we are dealing with international criminal syndicates and gangs, countries are not capturing the information, and they do not have the capability to share it with neighbouring countries. These are transnational crimes. We must consider how we can develop these countries in a way that provides practical enforcement and really helps them to develop.
We can help to defeat these international criminal syndicates, and simple investments that can be done through development grants or a challenge fund are really important. A national fingerprinting database for a country could cost as little as £60,000. Look at that as an investment and a way to help tackle corruption and crime, including not just wildlife crime but crime and terrorism. That has a massive impact across the world. In tackling the illegal wildlife trade, we must consider some of those simple enforcement measures that can make a game-changing difference on the ground for those countries.
Mrs Latham
Q
Cath Lawson: It is certainly something that we would be comfortable with. I mentioned an amendment earlier. At the moment the Bill includes CITES-listed species, but mammoth, as an extinct species, are not a CITES-listed species and never will be. One option would be to remove that caveat in the existing legislation, but that could be part of a later consultation process.
Sue Hayman
Q
Cath Lawson: During the consultation process, we did not advocate for additional species to be added. Our advice in the consultation response was to focus on elephant ivory.
Will Travers: We did comment on other species, and we did advocate that there should be consideration, which is what I believe clause 35 refers to. The definition of ivory in the Bill is ivory from elephant species. I understand why it is important to make sure there is consideration of other species, for which there has been no full consultation. We want to understand what is going on with hippo ivory, with narwhal ivory, with walrus ivory, with warthog ivory—non-CITES listed—and with extinct, non-CITES-listed mammoth ivory. There may be—I am just trying to think of the right way of expressing this—specific exemptions that would have been considered for inclusion specific to, for example, mammoth ivory that we would be discussing now had that been part of the overall process to start with.
Sue Hayman
Q
Will Travers: No, but we are rather hopeful that we don’t restrict ourselves to CITES species.
Sue Hayman
Q
David Cowdrey: The built-in flexibility under clause 35(3), and the opportunity for the Secretary of State to add, means you would not need to go through a consultation process. If we were informing the Secretary of State of a shift that has taken place in conservation terms with species that are coming under threat, there should be an ability to provide that evidence for action to be taken swiftly to add those species immediately within the Bill. That flexibility currently exists under clause 35(3).
In relation to the speed of the Bill, I hand it back to you as hon. Members. That is in your remit—your court. As an NGO, we would like to see this Bill completed and into legislation by October, prior to the IWT conference, so we can have a global stage to announce this fantastic piece of legislation. So I hand the ball back to you.
Simon Hoare
Q
The other thing, very briefly, is whether you have had a look at the enforcement regulations, as set out in later clauses of the Bill. Do you think they are about right, too lenient or top-heavy?
The Chair
May I ask you to be quite brief with your answers? I might be able to squeeze in one more question if we are quite rapid.
Cath Lawson: On the point about the definition of ivory, I am not certain whether mammoth would be included. One of the points we would be keen to raise is that there should be a very clear definition of ivory within the Bill. At the moment, it is referenced in a number of places, and one clear definition would be useful.
In terms of enforcement, we feel it is appropriate, but as mentioned previously there is a need for sufficient resourcing to ensure enforcement is carried out in full.
David Cowdrey: On definitions, I would look at other ones within the Bill. There is one in the explanatory notes, where it currently talks about “outstandingly valuable” and outstandingly high artistic and cultural value. When the document was originally published, and the Bill was announced on 3 April, it referred to
“the rarest and most important items of their type”.
It seems to me that there has been a change in some of the wording that was announced by the Government in terms of what has appeared in the Bill. We would strongly advocate that, when it comes to definitions, the words
“the rarest and most important items of their type”
are reinstated in the Bill to make sure that, if an exemption is given, it is only for these extraordinary items, rather than creating something which allows trade in something which is just of outstandingly high value, rather than
“the rarest and most important”.
We believe there should be tighter control under the definition of the Bill.
Cath Lawson: That is something WWF would also endorse. Similarly, around the portrait miniatures, we feel very much that, within the body of the Bill, there should be a definition of what constitutes a portrait miniature—a specification of a size and the fact that it is painted on ivory.
Will Travers: Briefly on the enforcement issue, I think the provisions are okay, but it depends how frequently they are applied at the most severe level. Our judicial system should be encouraged to take the strongest possible measures provided for under the Bill—hopefully, the Act—in order to serve as a deterrent.
David Cowdrey: On the enforcement measures for portrait miniatures, having a size definition would be really important. One that has been put forward is something having a height of less than eight inches and a width of less than six inches. I believe you are speaking to a representative from Philip Mould later today. Getting that definition of a portrait miniature, which they have been working on with the Victoria and Albert Museum, is really important to help with enforcement, because if you have not got some widths, dimensions and a description, how can you enforce the legislation? Having that clarity of enforcement is really important.
Luke Pollard
Q
David Cowdrey: Absolutely. It is absolutely critical, where you have an exemption—especially for these items where I am challenging the definition and it should be “the rarest and most important”—that we should be publicly accountable for what is being listed. We have been told that this is only for exceptional items—we are anticipating 75 to 150 a year. Having a public register and seeing what has been sold for what amount is critical. Having that posted as an annual report on the website, publicly available to everybody, gives scrutiny to the legislation and to the processes involved, so I would fully endorse that.
Will Travers: I couldn’t have put it better.
Robert Courts
Q
Cath Lawson: Yes. Mammoth and warthog are not CITES appendix-listed.
Robert Courts
Q
Will Travers: Yes, the casqued hornbill has been on appendix 1 since 1975, and it is facing extinction right now.
Robert Courts
Q
Will Travers: It is appendix 1, so there should be no trade.
Robert Courts
Q
Will Travers: Yes, that is CITES appendix 1.
Robert Courts
Q
Will Travers: No, it is traded as if it is ivory. It is an ivory surrogate, whereas rhino horn is not traded as an ivory surrogate— it is traded as rhino horn.
Robert Courts
Q
Will Travers: It is not dentine. It is not made of the same material, but it is traded as if it is ivory. It is regarded by consumers and treated as if it is an ivory product, although it is not technically an ivory product.
Robert Courts
Q
Will Travers: It should do. Of course, because it is appendix 1 on CITES, there should be no legal trade anyway. It should all be illegal trade. I guess one could argue that there might be some historical antique going back to whenever, but that should be covered.
The Chair
I am afraid that brings us to the end of the allotted time. I thank the witnesses for their evidence.
Examination of Witnesses
Alexander Rhodes and Charlie Mayhew gave evidence.
The Chair
We will now hear oral evidence from Stop Ivory and the Tusk Trust. We have until 11.25 am for this panel. May I ask the witnesses to introduce themselves for the record?
Charlie Mayhew: My name is Charlie Mayhew. I am the chief executive of Tusk Trust.
Alexander Rhodes: My name is Alexander Rhodes. I am from Stop Ivory.
Sue Hayman
Q
Charlie Mayhew: The short answer is yes. There must be a concern that the criminal syndicates that operate in this space might well be inclined to move to trade greater figures in hippo, mammoth, walrus and other ivory-carrying species. There certainly is that concern.
Alexander Rhodes: Of course, there is the risk that that will be a result of tightening controls on elephant ivory in this way. I feel strongly, however, that sending a clear message, as this does, on elephant ivory is critical at this time. Our colleagues have given the numbers beforehand. Particularly looking at the conference in October, the focus on elephants is very important. We are talking about trying to achieve a decrease in the killing of elephants by stopping ivory being traded. We must continue to focus strongly on the elephant ivory.
Sue Hayman
Q
Alexander Rhodes: Without a shadow of a doubt.
Charlie Mayhew: Absolutely. The public, in whichever part of the world, who ultimately buy ivory do not necessarily differentiate where that ivory has emanated from. We have an opportunity here, in introducing this legislation, which as people have previously said is one of the toughest bans in the world, to send a message that ivory should now be socially unacceptable. If we can try to use this legislation, particularly with the upcoming illegal wildlife trade conference and attendees coming from all over the world, the rest of the world should follow suit.
Mrs Latham
Q
Alexander Rhodes: Yes. Perhaps as a bit of context around that, it is interesting to note that the crisis that was recognised just before the last London conference came about because of the professionalisation of poaching. Illegal organised crime stepped in and added elephant ivory to its inventory because there was no legal international trade and there was an opportunity. That took place in circumstances where, internationally, there was confusion, and there was no common position on whether elephant ivory should or should not be traded—that rift had been in place since 1989.
Over the four years since the London conference, strong consensus has been built internationally that the ivory market should be closed. Importantly, that has taken the form of two international resolutions, one at CITES and one at the IUCN, that domestic markets for ivory—that is what we are talking about—should close, as should some of the other leading markets for elephant ivory, such as those in China and the US, and we are looking forward, beyond there, into Europe. That certainty about the illegality of ivory has significantly changed in the price of ivory.
When we started looking at this issue at the time of the first London conference, many people said that closing markets for ivory was a stupid thing to do, because all it would do is drive up the price. They said that destroying stockpiles of ivory, or locking them up so that they could not be traded into the market, was a stupid thing to do, because it would just drive up the price, and that the more scarce you make things, the higher the price becomes. Interestingly, David mentioned prices earlier, and the change that we have seen during this period, and the effect of the measure, has been that, in China, the price of a kilo of ivory between the time of the last London conference and now has gone from $2,500 to $450. In some African countries there has been a similar collapse in the price of ivory paid to gunmen. That wider context goes to the point about clarity on the legality, or illegality, of ivory.
I tend to agree with what Charlie said, which is that if you say, “Ivory is banned”—this is called the Ivory Bill, and the basis on which it was built was a commitment to close ivory market—that is pretty clear, and it falls within the international consensus that has been built on elephant ivory. My personal view is that, yes, it would make great sense to expand the Bill to cover mammoth ivory and other types of ivory for species that are threatened as a result of this trade. Such a measure would disincentivise people from going and killing those animals, whether they are doing it cynically for their own profit or because it is the only choice they have on the table—that is possibly something else we may discuss.
The real question in my mind, however, is whether, if we start trying to expand the Bill now, we will lose the effect that we can get, and the UK’s role in that momentum, which is already making a massive change. I return to what David said, which is that this is perhaps more your area of expertise than ours, but I think that is the balance to strike.
Mrs Latham
Q
Alexander Rhodes: I am not.
Mrs Latham
So us doing something like that would set a further example to the world.
Alexander Rhodes: Without a doubt.
Anna Turley
Q
Charlie Mayhew: I am certainly not an expert in parliamentary process and the legalities of this, but if there was a way of extending the reach of the Bill to include those species without delaying the process, and without there being a threat of judicial challenge from any area, then we would all love to see that happen. Perhaps the issue really is where that challenge would come from if you were to extend the Bill to the other species. Representatives from the antiques trade will be coming in later today, and although I am not an expert in the area of antiques, I am not sure that they would object to hippo or walrus being included, because I suspect that their interest is in antique elephant ivory. I might be wrong on that, but it would be worth investigating. The point here is that we do not want to see anything that delays the progress of the Bill. The international momentum on the issue is very real, and we do not want to do anything to slow the process down, not least because we are losing 55 elephants a day to this illegal activity.
Simon Hoare
Q
Charlie Mayhew: Yes, I think that is broadly right. It is quite clear that the Secretary of State and, indeed, the Foreign Secretary, who has taken a very keen interest in the issue, are anxious to have the Bill on the statute book—or very close to being there—when they host the international leaders here for the conference. Otherwise, we would find ourselves in a potentially embarrassing situation in which China will have stolen a march on us—thankfully, actually. It would put us in a rather weak position as the host of the conference if we say that we have not got our own house in order prior to the conference.
That is the balancing act here. As I have said, I do not know whether legally you have to have a consultation period in order to expand the remit of the Bill, but after listening to what has been said, that might or might not be the case. As I said earlier, where would the challenge come from if you were to expand it? We need to find that out.
Alexander Rhodes: I agree with that position. However one expanded it, it is important to leave clause 35(3) in, in order to be able to add further species over time, if necessary, even if the initial list was expanded in the Bill itself.
Simon Hoare
Q
“an animal or species not for the time being covered by that subsection only if the animal or species is currently listed in an Appendix to the Convention on International Trade in Endangered Species of Wild Fauna and Flora.”
Would you prefer to see that caveat deleted, given that there may very well be some species that we may wish to take out but because they are large in number—a warthog has been cited—are therefore not covered by CITES?
Alexander Rhodes: Yes—I think the words from “only” onwards.
Luke Pollard
Q
You talked a lot about the October conference and just how important that is for the overall global effort against this activity. How powerful would it be for the UK to have introduced by that point a ban not only on elephant ivory trade but on other ivory trade? If banning elephant ivory is going to be such a big moment, would it not be an even bigger and better moment—an even larger cause of celebration—if we were also able to show in October that we have banned the trade in hippo, walrus and whale ivory?
Charlie Mayhew: Without a doubt it would send a very clear message to the world. It would also continue to show the UK in the lead on the issue; the UK was in the lead back in 2014, when it first instigated that conference. It would really help to focus minds at the conference on the need to put in place enforcement right across the world.
In addition, we hope to see at the conference further efforts to improve enforcement on the ground—we heard a little about that earlier this morning—and investment in tackling poaching. Since 2014 there has been considerable success in places such as Kenya, where poaching is probably down by about 80%, because they invested heavily in tackling the issue on the ground. It can be done, if there is the international will to get behind it and invest in the work.
Luke Pollard
Q
Charlie Mayhew: Potentially. It must have an influence when other countries see what we have done. Hopefully it would also influence our European colleagues, which is the next big prize for us. We want to see a similarly strong ban put in place across Europe.
Alexander Rhodes: My short answer to your first and second questions is yes, I think so. The second point I wanted to make about the impact of the London conference is just to re-emphasise the importance of closing the domestic market here in the UK for elephant ivory. The elephant protection initiative, which Will mentioned, was launched by five African leaders at the first London conference. We fostered and supported that initiative. The Government then supported the birth of that African-led initiative with funding through the challenge fund.
The elephant protection initiative is in two parts. The first part is to deal with the product, close domestic markets and put ivory stockpiles that have accumulated over time beyond economic use. The second part is then to deal with the animal. The proposal to deal with the animal is to implement the African elephant action plan. That is a plan agreed between all African states that have elephants. It addresses all the issues to do with the management of elephants alongside people. It deals with law enforcement and protected areas on one side, and human-elephant conflict and sustainable livelihoods on the other.
One of the great things that has happened since the first conference, and as we begin to look to the second conference, is the building of this international consensus to close domestic elephant ivory markets, as well as the collapse in ivory prices that we have seen alongside that. What that does in practice is relieve the pressure slightly on countries that have elephants and are trying to manage those elephants. It allows them then to focus more on some of the other issues, as well as dealing with illegal poaching and the interference of criminal gangs. It also allows them to focus on problem management, sustainable livelihoods and so on. Those things are obviously something that we would all come in behind on.
As we look to this next conference in October, the elephant protection initiative will form part of it. It is now 18 African countries strong, having started with five at the first London conference and having been supported by the British Government the whole way through. The focus at the conference will not only be on celebrating the push to close domestic markets, but very much on raising funding and applying funding under common national plans under the African elephant action plan. That is development funding as much as anything. Focusing on that as much as on what we were talking about earlier with elephant ivory more broadly will be critical in demonstrating the success of closing domestic markets in terms of the survival of the species.
Trudy Harrison (Copeland) (Con)
Q
Charlie Mayhew: I do not have that information, but I anticipate that that figure would be across most ivory, and you would see something similar reflected.
Trudy Harrison
Q
Charlie Mayhew: To the lay person, it is very difficult. If you walk into a market in Portobello Road or in Hong Kong, it is virtually impossible to tell the difference. It is certainly impossible to tell the age of it, as Will demonstrated with the piece he had.
Trudy Harrison
Q
Charlie Mayhew: Absolutely. That happens regularly. In fact, you only have to go to online markets to see people trying to pass off ivory described as “ivory-coloured bone” to get around the legislation. That is one of our big concerns, with regard to the Bill hopefully having a real impact in closing down online sales. That really needs to be looked at.
Trudy Harrison
Q
Charlie Mayhew: We have concerns about whether it will have the teeth to stop the online markets. That possibly needs to be looked at.
David Rutley
Q
The other point I raised earlier, which has not been so fully examined with this panel, was displacement, and what more you think we could do to stop it as the focus on ivory moves to the far east—whether the October conference will help, or whether anything else could be done.
Charlie Mayhew: First, I echo the comments of the previous representative of the NGOs. I think that DEFRA and the British Government have been extremely good at consulting with us all. We certainly feel that we have been very involved—as involved as we could be expected to be. That has been fantastic.
The 2014 conference saw the launch of the British Government’s illegal wildlife trade challenge fund. Tusk has been a beneficiary and has managed two very major grants under that programme that have had a significant impact on the ground. I urge the Government to continue to support that funding—if possible, to expand that funding. Only yesterday I had a report of a poaching syndicate that had been arrested as a result of some of the training that we had implemented under that challenge fund grant. We have also been working with the Ministry of Defence on the deployment of soldiers out in Malawi, which has been hugely successful and very welcomed by that Government.
The British Government have a significant role to play in using our expertise in various areas to help those countries—not only in Africa but, as was said earlier, in helping to clamp down on the trade in the far east. We should continue to provide as much support and funding as we can to eradicate this illegal trade, not least because it is known that the trade has been exploited not only by criminal syndicates but by armed militias, rebels and terrorists. This goes much further than just being a criminal activity; it really impacts on the security of many of these countries.
Alexander Rhodes: I would like to add my thanks to the Government, and to DEFRA staff in particular. The consultation has been run extremely carefully and we certainly feel that we have been well consulted. It seems that everybody has had an opportunity to put things in, as I think the public response demonstrates. The electronic means by which people could engage were heavily used by the public, in order to be involved in the consultation, so thank you very much for that. I endorse what Charlie said.
Dr Cameron
Q
Alexander Rhodes: Yes, I think so. There are a couple of parts of how the Bill works internally and we have put in submissions on that in writing.
Dr Cameron
What would you like to see?
Alexander Rhodes: First, it seems that the exemption certificates process needs to work hand in glove with the registration process. It would make sense, when one is looking at clause 10 on registration, for the Secretary of State to have to register an item under that clause if an application is made in the way envisaged in clause 10(1), and also on the issuance of an exemption certificate. That means that when an exemption certificate is issued, it is automatically put on to the register. Then I think the system ties up. Replacement certificates can be checked against the register much more closely because it is automatically part of the register in the first place. Everybody understands that things get lost from time to time, so I think it makes sense for there to be a provision for replacements, but if the exemption certificates automatically form part of the registration system, that will help.
Secondly, while accounting for data protection requirements, the register should be public, not least because if it is not, the Government are going to find themselves swamped with freedom of information requests, which we all know take up valuable time, money and resources. I actually wonder whether in the implementation, the technology may become more streamlined and efficient for the Government Departments that have to operate it. There was a question in the previous session about whether there were enough resources. Patently, one reason why the current system does not work is that the Government resources are too limited to operate it fully. If there was an electronic register and it was publicly available, that would help.
I will make one final point on this. As I said, these points are supplementary to the ones we have submitted in writing. There is some wording, if I can find it, that seems to envisage—if you have it, Charlie, maybe you will take the point?
Charlie Mayhew: In clause 4(5), we feel that more safeguards are needed for replacement certificates. As it stands, an item could have several replacement certificates, which could be used to sell similar items illegally. We are concerned that under clause 4(5)(b), someone could legally acquire an item but not obtain the certificate. A buyer should not be able to buy an item relying solely on the seller’s assurance that the item had a certificate but they do not have it any more. We suggest, as a minimum, the deletion of clause 4(5)(b), to avoid suggesting that dealing can take place without a certificate.
Alex Chalk
Q
Charlie Mayhew: If anyone had suggested back in 2014 that China would implement a ban there would have been disbelief around the table. The fact that they have gone to the extent of doing what they have done must be recognised and applauded. A great deal of credit goes to the Duke of Cambridge for the work he did on his visit to China and the conversations he had with President Xi on this subject. In that sense, the UK had significant influence in bringing about China’s ban.
We know that China is watching what the UK is doing; there has been plenty of evidence of that. By going ahead with the legislation we are proposing, we are at least backing up and endorsing China, which is the world’s biggest market for ivory. As was said earlier, we want to do everything we can to help China influence its neighbours; there is already evidence of the market displacing to some countries on China’s borders. It is good news that, although Hong Kong is working to a slightly longer timeline, it has indicated that it will impose a ban. Taiwan has done so as well, which is good. We need the other countries in the Asian bloc to follow suit; the UK taking this position now can only help to encourage that.
Alexander Rhodes: In terms of process, at a sub-governmental level we operate on the international stage in the same forums that Governments do at a governmental level—particularly, in this circumstance, through the CITES convention and IUCN. In terms of building international consensus, two international resolutions under the two international agreements stating that domestic ivory markets should be closed have been really important. The NGO community has been working closely, both together and with Governments, to try to build on and achieve those agreements, but ultimately, they are agreements between Governments.
As we look forward, although the market may close in China, there is real concern about some of its neighbouring countries. Those neighbouring countries need to come on board—first they need to agree that the domestic market should close, and secondly they need to do something about it. The UK Government will be in a much stronger position at the next CITES standing committee, and the run-up to it, if we stand shoulder to shoulder with other countries and tell them that that is what we think they should do, having ourselves passed this Bill .
Liz Twist
Q
Charlie Mayhew: This is not my area of expertise, but some of our statistics suggest that through the auction houses, 91% of ivory lots sell for £400 or less. That market in trinkets and small stuff is the sort of thing you see all the time on the internet, and often the descriptions will not say “ivory”—or if they do they will say that the ivory is pre-1947. You have to do a test on ivory at quite considerable cost if you really want to know whether it is pre-1947. There is undoubtedly a big online market, and it should be covered by this Bill. Such sales tend to be items that are 100% ivory and they will not fall under the de minimis exemption. The question is to what extent the Government and enforcement agencies can realistically enforce the ban for online trading—I am sorry; that is beyond my paygrade.
Alexander Rhodes: The UK domestic trade in ivory impacts on elephants because we are the largest exporter of ivory pieces to China. From 2010 to 2015, 36,000 pieces of ivory were exported from the UK to China. The next country by volume after us was the US, with just over 9,000 pieces. We play a big role in this, and almost all of that is mediated over the internet. To my mind, if it were possible the Bill should say that ivory may not be bought and sold over the internet because that would make it so much simpler for the enforcement guys. It makes it cheaper and easier. If someone is selling ivory online, that should be the wrong side of the line so that they can be chased down.
Liz Twist
Q
Alexander Rhodes: Yes. I agree with previous comments that the wording in the Bill does not quite reflect what was discussed in the consultation about the rarest and most important pieces of ivory. However, if a museum wants to buy a piece of ivory, which will necessarily fall in that category, it will not be buying it online. If a private collector is buying a piece that is of the rarest and most important type of its kind, they will not be buying it online. If you are buying a bit of inlaid furniture, you are unlikely to be buying it just online. You may see it online, but you are unlikely to be buying it online. The category of ivory that is traded online is the low-value Victorian stuff, which is being shipped overseas, where it contributes directly to consumer markets that are principally fed by modern, current ivory from elephants that are being killed as we sit in this room.
Under the current Bill, we can look at the provisions and enforce it for online trade. Fine. Why not just say you cannot deal in ivory online, which will make enforcement so much simpler? If one could achieve that, it would be the first prize.
Sue Hayman
Q
Charlie Mayhew: Absolutely. As part of this Bill—I believe DEFRA is planning to do this anyway—we need a significant awareness programme, not only for the judiciary but for the general public. That is essential. Educating the public, the judiciary and the enforcement officers is absolutely essential.
We very much hope that, in the same vein that DEFRA has consulted us to date, it will be willing to consult us on the guidance notes. I fully endorse that. There is a desperately increasing need to educate the judiciary in African countries on enforcing the legislation against the illegal wildlife trade, poaching and so on. In some countries, they are more advanced than others. We see how important it is that the judiciary fully understands the scope of this Bill and how it is going to be enforced.
Alexander Rhodes: It is interesting that a number of the African countries that are members of the elephant protection initiative and others have been working hard with support from colleagues to develop prosecution and sentencing guidelines for wildlife crime, in particular in relation to the ivory trade.
Sue Hayman
Q
Alexander Rhodes: Really importantly, it is something we can learn from and it is quite good that we can learn from what African countries have been doing in relation to that. Interestingly, we paid for it anyway. In the context of Angola, for example, where we are working at the moment, a challenge fund grant is paying for a programme of legislative reform review and prosecutor and judicial training.
Kerry McCarthy
Q
Alexander Rhodes: The purpose of this is clarity and certainty, so my preference would be for it to be straightforward. If it is ivory, you cannot sell it, and you cannot deal in it, online. To add a little context, you are right, of course. Not only are musical instruments with bits of ivory in them bought and sold online but some inlay furniture is also sometimes bought and sold online. However, it is the overwhelming minority of musical instruments or pieces of furniture that contain ivory of that kind.
My personal preference, for clarity and therefore for certainty, would be for it to apply across the piece. Of course, if it applied only to part of the piece, that would still be better certainty than its not applying at all.
Kerry McCarthy
Q
Alexander Rhodes: That is the opportunity of the Bill and of October. It is also the opportunity coming out of the broad consultation with musicians. We have had great conversations with them.
Kerry McCarthy
Q
Even in the future, I do not think that he would realise that there was a ban on him putting his guitar on eBay. I would not want people criminalised for doing something like that. You are not talking about people making huge amounts of money in the ivory trade; you are talking about somebody who just happens to have a product that has a bit of ivory in it. We will ask the Musicians’ Union what they think.
Alexander Rhodes: It is a balance.
The Chair
Are there any further questions? Okay. If there are no further questions, I thank our witnesses for their evidence.
Ordered, That further consideration be now adjourned. —(Mims Davies.)
Ivory Bill (Second sitting)
Tuesday 12th June 2018
(5 years, 10 months ago)
Public Bill CommitteesRead Full debate Ivory Act 2018 View all Ivory Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 12 June 2018 - (12 Jun 2018)
The Chair
We will now hear oral evidence from the National Wildlife Crime Unit and the CITES Border Force team at Heathrow. We have until 2.15 pm for this third panel. The air conditioning does not appear to be working so well today, so if people want to take their jackets off, feel free to do so. For the record, will the witnesses introduce themselves?
Grant Miller: I am Grant Miller, senior officer with the Border Force based at Heathrow, leading the CITES team that enforces the UK’s obligation to the convention.
Chief Inspector Hubble: I am Chief Inspector Lou Hubble, head of the UK National Wildlife Crime Unit. We work with police forces throughout the UK, supporting them in enforcement. We also collate and disseminate intelligence throughout the UK and internationally in relation to wildlife trade.
Sue Hayman (Workington) (Lab)
Q
Grant Miller: Our roles are quite distinct, which allows us to work hand in glove. The Border Force role is to disrupt the illegal trade—import/export—and trans-shipment of ivory through the UK. Our focus is largely on the export of our historically held ivory, which is traded over online auction houses and is then shipped predominantly to China and Hong Kong, but there is an emerging market in Vietnam for those goods as well. Border Force no longer has an investigation function; we hand all our intelligence from investigations to the National Wildlife Crime Unit with a view to it investigating those offences. So they are very much clear roles that allow us to work in partnership.
With regard to resources in Border Force, we have a dedicated unit that has been established for 30 years now and a team that is regarded as probably one of the best in the world at enforcing controls against the illegal wildlife trade. It is a team of 10 staff with national responsibility. We are, however, supported by every other uniformed Border Force officer, who has a basic level of skill in being able to identify animal and plant products.
Like every law enforcement manager, we could always use more resources and could always deliver more. However, what a small, highly focused team with clear objectives gives us is an easily moveable unit to actually address the changing risk. It allows us to be a lot more dynamic in addressing the risk and very flexible in moving from postal to air to maritime environments. At the moment, against the Border Force control strategy, our resourcing is adequate to control the threat.
Chief Inspector Hubble: When Border Force makes seizures of items being exported from the UK, it passes that intelligence to us. We collate that intelligence, develop it and research it to look at the number of items that people might be buying, selling or trading. We look at their associates. We try to map a network of people that they are linked in with, and ultimately we produce an intelligence package that goes out to a police force in the area where the person is committing the offences.
We have four officers who provide an investigative function to support police forces on the ground, and they work with police officers throughout the investigation: taking statements from witnesses, linking in with experts, compiling prosecution files, assisting with search warrants, and attending court to provide evidence. Due to our limited resource, we have to be really selective in what we deal with, so the number of investigations that we get where people are trading at a lower level would generally be sent to local policing to deal with. As a national unit, our focus has to be on those who are trading more and more products. Ultimately, that is where we can make a difference, linking in with the bigger players and those trading internationally.
One seizure by Border Force can result in months and months of investigation for us, and we can compile hundreds of intelligence logs from that one investigation. At the moment, we struggle to disseminate all that intelligence back out to Border Force, to close that loop, because we just do not have the resource to develop that. We have to be selective in what we deal with, but we certainly support Border Force in the work we all do on a day-to-day basis, and we welcome the introduction of the Bill.
Henry Smith (Crawley) (Con)
Q
Grant Miller: Chief Inspector Hubble and I were fortunate last year to do a training mission in South Africa for seven sub-Saharan Africans, in conjunction with the Chinese CITES management authority. During that workshop, the Chinese presented their comparative interpretation of the US ban and the Chinese ban and of the impact of these. It became evident that their view was that the Chinese ban was far more robust and had delivered closure of the trade. They felt that the US ban had left so many exemptions that the trade was allowed to continue despite there being a ban. If you accept their argument, we would like to see enforcement having to allow as few exemptions as possible so that the ban is, in reality, a ban on the ivory.
Henry Smith
Q
Grant Miller: From a Border Force point of view, we have two issues: establishing that it is ivory and then whether it is permitted. If those are identified, an offence has been committed. The more exemptions you have, the harder it becomes for the police to enforce.
Chief Inspector Hubble: I echo Grant’s comments. From an enforcement perspective, any Bill has to be enforceable; if not, it is just guidance. It is not legislation if it cannot be enforced. Within the Bill, we would welcome the minimum number of exemptions.
We also have some concerns that, as the Bill stands, we have to prove that it is ivory and that the person dealing in it knew, or ought to have known, that it was ivory. If you look on eBay at any given moment, you will find a number of items being offered for sale that are not labelled as ivory. From an enforcement perspective, if someone is buying something that is not labelled as ivory, and they are selling it as something not labelled as ivory, how do I prove they knew it was ivory? With the Bill as it stands, that, for me, is a real concern from an enforcement perspective. The onus should be on them to prove that they did not know, not on me to prove that they did.
Liz Twist (Blaydon) (Lab)
Q
Grant Miller: I do not think that a ban on trade is ever a good thing. The internet for me is cyber-enabled crime. It is merely a means to communicate better. The goods still have to cross borders. Canalisation is a customs tactic. Routing goods through set points is still a robust means to control the trade.
The online auction houses could do more to self-police. I think they avoid the issue. For instance, on the ivory listings we often see photographs of the ivory clearly showing Schreger lines, and questions have to be asked as to why someone is posting a photograph of Schreger lines. The other thing that has come up on listings on online auction houses is the weight of the goods. Again, when the trade first started to emerge, the weight was never shown. That now features on almost every single item. In effect, the ivory is sold per kilo. There should be better controls, but I do not think banning it completely is ever a good thing to do.
Liz Twist
Q
Grant Miller: It is misdescribed online. It is not sold as ivory; it is sold as ox bone. eBay has taken steps to say that ivory cannot be listed, but when individuals do not list it as ivory—“Chinese artefact” is another term that is used—how do you establish that it is ivory, and where do you stop controlling the trade and saying it is not allowed?
Liz Twist
Q
Grant Miller: From an enforcement point of view, our default position will be to go to the Customs and Excise Management Act 1979. The Bill establishes a prohibition on dealing ivory. That Act gives us far stronger enforcement powers and greater potential sentences—up to seven years and an unlimited fine. The Bill defines the offence, and I think it will give the police additional powers, but we would go for the “knowingly concerned” provision under the management Act. The Bill widens that slightly by referring to what a person should reasonably be expected to know. There may be some room for the Bill there, but from a Border Force perspective, the management Act provides us with all the powers we need to police any prohibition.
Chief Inspector Hubble: From a police perspective, as we have seen on eBay, if you ban the trade in ivory, people will not call it ivory. At the weekend, there were more than 1,400 items offered for sale on eBay as “bovine bone”. From the photographs of those items, I can see that a significant number of them are actually ivory, but it would not be practicable to issue a warrant for every single one of those 1,400 people selling ivory—we cannot achieve that. Some of them will be one-offs, where they have sold only one or two items; some of them sell it time and again as bovine bone. If they buy it as ivory and sell it as bovine bone, clearly they know it is ivory. If they buy it as bovine bone because somebody else has misdescribed it and they sell it as bovine bone, how do I prove that they knew it was ivory? I cannot.
Liz Twist
Q
Chief Inspector Hubble: I would love to have a dedicated cyber-team looking at this day in, day out, with real training and a focused effort. Lots of people in the NGOs we work with are doing work around cyber-related crime. We are in the process of setting up a cyber-working group to try to pull some of that effort and interaction together and to have that group as a priority delivery group alongside the priority delivery groups we have for the other six UK wildlife priorities. That is going to be a significant resource. I am not sure whether it is too big to manage, but we felt we had to do something to try to get people sitting around the table and working together.
Trudy Harrison (Copeland) (Con)
Q
Grant Miller: Yes, they have. Most recently, we and the National Wildlife Crime Unit did three training missions to Malawi. We first brought Malawian enforcement to the UK and then delivered three workshops out there, and they have adopted the UK model of having a wildlife crime unit to handle all the intelligence, with clearly defined roles. Our environmental security taskforce meets every six months to plan operational activity. The Border Force has trained in more than 50 countries globally—most recently in South Africa, as I said. We are doing work in Hanoi, Mongolia and Cambodia, where we hope to deliver in the next year. So yes, exporting our knowledge and working practices does go on and is proving successful.
The Border Force has also deployed 28 officers into Africa, and it is expanding a similar sized team in Asia to build general customs capability. Illegal wildlife trade will be one strand that is focused on. On World Environment Day a couple of weeks ago, an operation into illegal wildlife trade was run in Nigeria by UK Border Force officers. It identified eight dirty suitcases full of ivory that the Nigerian authorities had forgotten about.
Trudy Harrison
Q
Grant Miller: Elephant and mammoth ivory has distinctive markings called Schreger lines, and the angle of those lines will identify whether it is elephant or mammoth. Other ivory forms have very distinctive shapes or formations. For instance, hippo teeth tend to be quite triangular in shape, which affects the styles of carving and so on that can be done. We also deliver training, and all our officers have modules that teach them the techniques of identifying the five main types of ivory that we encounter at the border.
Trudy Harrison
Q
Grant Miller: If ivory is highly polished, the Schreger lines can become more difficult to identify, but again we generally have the skills within the team to do it. If we do not, we reach out to experts. We will predominantly go to the National Museum of Scotland and Andrew Kitchener, who will always provide expert advice, from an academic, about what we are looking for.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
Q
Chief Inspector Hubble: Our funding is committed until 2020, but beyond that we have had no formal indication that we will continue to be funded. That does cause concern. It is difficult for us to plan and commit to long-term strategies, and difficult for us to form business plans when in 20 months’ time we may not exist. It is difficult for me to keep my staff motivated when they have no job security—a whole raft of concerns are caused by funding.
Dr Cameron
Q
Chief Inspector Hubble: We act as a centralised hub throughout the UK to collate intelligence, and we work with all 43 police forces on that. I am sure you are all aware of the strains on modern-day policing at the moment, and dealing with ivory is probably not at the top of the list when they are looking at terrorism, child sexual exploitation, human trafficking, drugs and firearms. Ivory will not be up there with that, but as a national unit we can drive the issue and make sure that things are investigated as they should be with police forces. Without that central resource, it would very much be down to individual forces to decide what they do or do not deal with, and I fear that ivory may drop off the radar with some of them.
Dr Cameron
Q
Grant Miller: The Border Force is centrally funded through the Home Office, and CITES enforcement sits as a medium priority for Border Force. Because we are mandated to enforce the CITES regulations and the convention, we must exist to authorise and endorse the permits. There is no indication that the team is under any threat from Border Force management.
Dr Cameron
Q
Grant Miller: Certainly with the unit, and it is about the added value of our relationship with them. Border Force could exist and we would go out, detect and disrupt the trade. If we were to lose the unit, the capacity to then investigate and prosecute would be lost, but our key function would still continue, and we would detect and disrupt.
Mrs Pauline Latham (Mid Derbyshire) (Con)
Q
Chief Inspector Hubble: Would you like to ask Grant his question, while I ponder my response to that one?
Mrs Latham
Q
Chief Inspector Hubble: If we find somebody who is selling a few items, we would probably work with local police to go and educate that person rather than go for a full prosecution, because part of our work is about prevention. Ultimately, it is not about locking up the bad guys; it is about there not being any bad guys in the first place. If we can work with people and prevent them from committing crime, that has to be a good starting point. If we have low-level criminality, we would approach and deal with it that way.
We have an ongoing investigation at the moment, which I cannot talk too much about. We did a warrant earlier this year where we recovered a significant number of CITES specimens, including ivory, and we are continuing to push that forward. Watch this space for the outcome of that one. Our workload and work remit are significant across the whole spectrum of wildlife crime, from the really low-level individual to the significant traders making lots of money from the illegal wildlife trade.
Mrs Latham
Q
Grant Miller: No, we are not. The Bill, as it is scheduled at the moment, would list those items as prohibitions, and Border Force’s role is to secure the border against all prohibitions. So that would naturally fall into our remit, and we would be in a position to police that, if that was Parliament’s wish.
Mrs Latham
Q
Grant Miller: No, it would not be a problem.
Kerry McCarthy (Bristol East) (Lab)
Q
Chief Inspector Hubble: Yes, we would still have to prove that they knew it was ivory and that they had then mislabelled it, knowing that it was ivory.
Kerry McCarthy
Q
Chief Inspector Hubble: All the time that the burden of proof is on us to prove that they knew, that is difficult from an enforcement perspective. If the burden of proof was on them to prove that they did not know it was ivory, that would make enforcement much easier.
Kerry McCarthy
Q
Chief Inspector Hubble: Absolutely.
Kerry McCarthy
Q
Chief Inspector Hubble: That is because eBay banned ivory as a listing two or three years ago: eBay was openly selling ivory and an approach was made to it to say, “This is illegal, you cannot do this.” It took the ivory category down, so now people call it bovine bone or ox bone, but clearly it is still ivory.
Kerry McCarthy
Q
Chief Inspector Hubble: Absolutely. In general, we do not deal with the people who will apply for exemption certificates and who will register their items and apply for permits, because they are the responsible, law-abiding people. We deal with the ones who have a complete disregard for policy protocol legislation. We deal with the ones who are deceptive, who lie and who want to make money out of this. The burden of proof has to be manageable and has to be able to be enforced, otherwise it is not enforceable legislation.
Kerry McCarthy
Q
Chief Inspector Hubble: We have to apply a proportionate response to any investigation that we undertake, based on what they are doing, what they have done before and whether they are willing to engage through an education process or a preventive measure. All those factors determine the outcome and the sanction.
Kerry McCarthy
Q
Chief Inspector Hubble: Absolutely, yes.
Alex Sobel (Leeds North West) (Lab/Co-op)
Q
Grant Miller: Our ability to take cases and offenders before the courts would be impacted on greatly. We would be pushed into going out to each constabulary, looking for a supportive senior manager to take on an investigation on our behalf. If we were not able to find that, our activity would be just to disrupt and seize, and the threat would just continue. We share intelligence—we are very much a data-driven organisation—to get our targets and to know where we are working. If we do not get that feedback, ultimately we will become a self-fulfilling prophecy.
Anna Turley (Redcar) (Lab/Co-op)
Q
Grant Miller: We work very closely with Interpol, the World Customs Organisation, the United Nations Office on Drugs and Crime and the CITES Secretariat. In October last year, I took the chair of the Interpol wildlife crime working group, a global executive that co-ordinates and provides advice to the Interpol environment directorate on our activity. We are very well connected.
I am delighted to say that during the London conference on 10 and 11 October, we will host the Interpol wildlife crime annual conference, from 8 to 12 October. It will probably bring together in the region of 90 countries, to work through a five-day workshop along with civil society and academia, to develop intersessional projects that Interpol can work on to tackle the illegal wildlife trade. We are well connected.
We deliver training on behalf of the World Customs Organisation, in Operation INAMA, which is an African-based operation that assesses an organisation’s capacity to enforce the controls against the illegal wildlife trade. Border Force contributed heavily to its design and it is now moving on to the fifth country where the assessments will be delivered. Last month, 90 countries took part in a global operation called Operation Thunderstorm. Its results are embargoed until 20 June, but I can share with you that ivory exports from the UK were targeted, and we had some great successes. Those investigations are still ongoing with the National Wildlife Crime Unit.
Anna Turley
Q
Chief Inspector Hubble: Our role is to collate intelligence for people who are living outside the UK, and to disseminate it through appropriate channels to relevant countries. The National Wildlife Crime Unit sits on a number of working groups with Europol and Interpol to target the illegal wildlife trade. Last month, I went out to Vienna to speak at a United Nations Office on Drugs and Crime conference on how corruption facilitates the illegal wildlife trade. We work very closely with Border Force in delivering training in other countries to try to get that message across.
The Chair
Order. The microphones seem a little low today, and some colleagues are saying it is difficult to hear. May I encourage everybody to project and to articulate clearly? I am sure that will not be a problem for colleagues. A little louder, please.
Anna Turley
Q
Grant Miller: Border Force has a team of 10, and last year was our best seizing year. It was not good for civil society. In excess of 1,000 seizures were delivered during the year, across all commodities.
Chief Inspector Hubble: I have a team of 12. I have four investigative support officers working on the ground, supporting police forces, two analysts, three intelligence officers, one indexer and an office manager. I do not have the figures to hand for how many investigations we have been involved in, but every seizure that comes from Border Force will come to us. We also work across six of the UK wildlife crime priority areas. CITES is one of those priority areas, but we have a significant remit outside CITES, looking at domestic wildlife. Bats, badgers, bird of prey persecution, freshwater pearl mussels and poaching all sit within UK strategic priorities at the moment, and our work is split between all those areas.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
Q
The Government have said that the Office for Product Safety and Standards will be the responsible regulator. How do you see your respective organisations interacting with that new regulator in this respect?
Grant Miller: We would look to engage with it very early on. In the UK, we have a body called the CITES priority delivery group, which brings together all the actors involved in this, and we would certainly look to invite it to sit on that. The contribution it can make is through intelligence. If it identifies goods that may be imported or exported, it must get that intelligence to us to enable us to target better at the border. Having another organisation involved in the fight adds more strength. We are looking at developing our productive relationship with it.
Chief Inspector Hubble: We would be keen to establish protocols very early on. The Bill gives it the authority to inspect premises and apply for search warrants. We are keen to ensure its activities do not jeopardise ongoing enforcement operations, so it is key that we all link together to ensure that, if we are looking at the same people, we have a targeted, focused approach to dealing with them.
Luke Pollard
Q
Grant Miller: I do not think there would be a great expansion for us. Many of the species that you could be looking at, for example, hippopotamus, etc., are already listed on CITES. If we were to see them on import or export and there were no permits, our action would still be the same to seize and refer.
If mammoth ivory or warthog, that have been mentioned, are brought in, we have the ability to detect them, but we are not taking any seizure action. We are almost doing half of it. We are detecting it, but we are not then building the case and making the referral. I think the increase in work would be marginal for us at the border.
Chief Inspector Hubble: The role of policing throughout the UK is to uphold and enforce the law and deal with those who break it and we will continue to do that. From an intelligence perspective, we currently do not have any evidence to suggest that the trade around those other species is of significant number to warrant anything. We have to look at priority species that we deal with. In CITES, we have a number of priority species that we look at that have been raised there either from a conservation perspective or from a volume crime perspective. We would have to be intelligence-led and guided by scientific authorities before we would be able to put them on the Bill, because we have to be intelligence-led as a police unit.
Sue Hayman
Q
I do not know how we tackle this. This may sound naïve, but I do not know the answers. Do you have the ability to do “stop and search” random checks on items being sold from eBay, for example? Is that something that the police can do? If you looked at something and thought it was ivory, would you have the power to go in and check it?
Chief Inspector Hubble: If the information is in the public domain and the item is being openly sold on eBay, we can take screenshots, get details of the seller of these items and our intelligence function would do some research with eBay to look at other items that they have bought and sold. We would start to build that intelligence package with a view to going out to police forces to get some enforcement action taken.
Sue Hayman
Q
Chief Inspector Hubble: The Bill provides for an offence of facilitating.
Sue Hayman
Q
Chief Inspector Hubble: The approach to eBay initially got ivory removed as a category. People are now selling it as all the things that you have just looked at, and eBay will argue that it has too many items to police each one of them. It has a legal framework in place and anybody who tries to take eBay to court for facilitating an offence under the Bill is a braver person than I am.
Sue Hayman
Q
Chief Inspector Hubble: I do not know.
Sue Hayman
Q
Chief Inspector Hubble: We would certainly welcome better self-policing and self-regulating by online auction houses with some responsibility on them for the items that they are making money from the sale of. I do not know how we do that.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (David Rutley)
Q
To go back to the regulator for a minute though, do you both agree that having the regulator in place will help you with your work, because it will help to raise awareness of the new regime that will come into place, and because it will work with the antiques sector and musicians to help to improve compliance and assess compliance in future? Would that help you with your work?
Grant Miller: It would certainly help us. We have found the antiques trade to be very receptive. We have delivered training sessions to it on the rules and regulations, and generally, the larger auction houses have been keen to work with us and to drive the illegal trade out of their supply chain. An increased resource—another body—actually going round and delivering a prevention message, and helping and enabling an understanding of the controls, will assist us, but an awful lot of the illegal trade at the moment sits outwith the regular auction houses. It is private individuals who are sourcing ivory from car boots, house clearances and so on, and that illegal trade will continue. They have no intention of complying with any rules or regulations, so that market will continue for us to police.
Chief Inspector Hubble: From an enforcement perspective, we echo those thoughts about working with auction houses. We are regularly contacted by people within the industry for advice—for them to satisfy themselves that they are complying. Although it is good to raise awareness of an issue, ultimately that may result in increased reporting of it. Once the Bill comes into force, if a member of the public sees something on sale that they think is ivory, inevitably they will report it, which comes back to the issue of resourcing and how we deal with the potential increase in the volume of crimes that we will have coming in to us.
The Chair
If there are no further questions from Members, I thank the witnesses for their evidence and we will move on to the next panel.
Examination of Witnesses
Anthony Browne, Mark Dodgson, Emma Rutherford, Paul McManus and David Webster gave evidence.
The Chair
We will now hear oral evidence from the British Art Market Federation, the British Antique Dealers Association, Philip Mould and Company, the Music Industries Association and the Musicians Union. We have until 3 pm for this fourth panel. I invite the witnesses to introduce themselves for the record. I call David Webster first.
David Webster: Thank you very much. I am David Webster, the national organiser for live performance for the Musicians Union. We represent 30,000 musicians across the UK in collective bargaining and general representation.
Paul McManus: My name is Paul McManus. I represent the Music Industries Association, which is the trade body for the musical instrument industry that has been around since 1882 when it started as the Piano Manufacturers Association. We represent the shops that sell the musical instruments, the luthiers who make them, the manufacturers, the distributors and the music educators.
Emma Rutherford: I am Emma Rutherford. I am a consultant in portrait miniatures for Philip Mould and Company.
Mark Dodgson: I am Mark Dodgson. I am the secretary general of the British Antique Dealers Association, otherwise known as BADA. Our association is itself an antique this year—we are celebrating our 100th anniversary—and we represent about 320 of the UK’s leading fine art and antique dealers.
Anthony Browne: I am Anthony Browne. I am chairman of the British Art Market Federation, which is an organisation that was brought into being about 20 years ago to represent all the elements of the UK art market, whether it be principal auction houses, smaller auction houses or dealer organisations such as the British Antique Dealers Association.
The Chair
Thank you very much indeed, and congratulations to Mr Dodgson’s organisation. May I ask any Members who have a declaration of interest to make to do so now publicly, please?
Thangam Debbonaire (Bristol West) (Lab)
I received a donation from the Musicians Union at the last general election and the previous one. I want to put that on the record—it has been declared in the Register of Members’ Financial Interests.
Kerry McCarthy (Bristol East) (Lab)
I also received a donation from the Musicians Union at the last election.
Mrs Pauline Latham (Mid Derbyshire) (Con)
Q
Emma Rutherford: The suggestion of 6 inches by 8 inches for portrait miniatures—I have some with me, because it is always easier to show an object—is very sensible. I have three very typical portrait miniatures here, painted watercolour on ivory, which represent 80% of 18th-century portrait miniatures painted on ivory—this is the kind of size we are talking about. Six inches by 8 inches will cover 90% or 95% of portrait miniatures.
Mrs Latham
Q
Emma Rutherford: It is sometimes difficult to measure the actual miniatures because most of them are framed or cased, and we cannot get them out easily without damaging them. I would probably do it by sight of the ivory itself and not the frame, because the latter is probably unfair, given the differences in the scale of frames.
Mrs Latham
Q
Paul McManus: Correct.
Mrs Latham
There would be no new instruments with any ivory content, would there? When did that stop?
Paul McManus: We ceased in two real tranches: 1975 and 1989, when the two different types of element were made mandatory. That means that hundreds and hundreds of what we would class as vintage musical instruments are out there, belonging to musicians, and indeed representing their livelihood in many cases. But we ceased in modern manufacturing as the legislation came in. As an industry, we like to think that we have been very compliant with the right rules. We abhor the trade itself and have nothing but support for everything being done here, but equally passionately we support the exemption for these antique musical instruments that keep musicians in their livelihood.
David Webster: Absolutely. I cannot add to that. As we understand it, since ’89 there has been no use of ivory in the manufacture of accessories for instruments or of parts of musical instruments.
Mrs Latham
Q
David Webster: A musical instrument is a very personal item. For our members—musicians—it is probably the biggest investment they are ever going to make. In some cases, that investment needs to be of some value to them, for example if they need to retire due to ill health or they get to the end of their playing days and they wish to retire with some kind of dignity, which it is everybody’s right to do. The investment in that instrument is the most important thing they have. The ability to trade that instrument is the key to their being able to retire with some dignity and comfort, which is the right thing to do.
Mrs Latham
Q
David Webster: In terms of—
Mrs Latham
In terms of what they would pay.
David Webster: There is no one figure, but it is hundreds of thousands in some cases, tens of thousands in other cases and thousands in others. It all depends on the instrument, when it was made, who made it, its tonal qualities and who has played it before the current owner. You cannot pin it down to one particular price.
Mrs Latham
Q
David Webster: A Stradivarius. Some old and ancient cellos.
Mrs Latham
Q
David Webster: They might do. It might be in the bow. The very small amount of ivory in a violin or a stringed instrument would generally be in the tip or the frog of the bow, and it is a very small amount. There may be a little on the tuning peg. It could be an antique guitar.
Paul McManus: It can be pianos, too. In the 1960s, we had 40 companies manufacturing pianos in the United Kingdom. There are hundreds of old ivory-keyed pianos in circulation around the United Kingdom. They were made when other materials were not readily available. That all stopped back in 1975, but to take a good example, the largest piano auction house in the world is in the United Kingdom. It is called Piano Auctions Ltd. It sold nearly 500 pianos at auction last year, some 60% of which had old ivory keys. Frankly, it would not be in business if it was not selling them. The only alternative to the exemption—I know this would happen—is for piano shops to strip off those ivory keys, throw them in a bin and replace them with plastic ones. To me that would almost seem a double tragedy for the poor animal that gave up the ivory in the first place. Right down in the hundreds of pounds range, there will be an old piano that someone’s grandmother used to own that they are trying to move on to a school or whatever.
Mrs Latham
Q
Paul McManus: They can gift it, but lots of people are still trying to make some money from these products. There are hundreds of them around the United Kingdom. These are all one-on-one transactions. There is no trade here. These are just individual transactions between a musician and another musician. That is the way our industry works.
The Chair
Before I call Liz Twist, I want to say that members of the panel should contribute, even if you are not addressed by name, if you wish to. We can make this more interactive. If your contribution is relevant to the organisation you represent, feel free to make it.
Liz Twist
Q
David Webster: That is a concern, obviously, if the ivory was legitimately sourced and worked. So far as I understand it, for bagpipes it is the rings that go into the bit that comes out of the bag—I am not sure what you call it, but that is the part that has ivory. They could be affected, but if the ivory is old ivory—ancient ivory—and it has been worked legitimately since 1975, they might be caught up within the Bill. We are very happy with the Bill as it stands, and we would not like it to be changed unless there was a move to extend it to cover the instruments that you are talking about.
Henry Smith
Q
Mark Dodgson: We have looked at some of the figures from CITES; they have a database of exports of ivory. For example, in 2015 there were 1,200 CITES licences issued for items containing antique ivory going to China and Hong Kong.
Now, you need to bear in mind that the United Kingdom has—well, it was the second, and it is now possibly the third largest art and antiques market in the world. So, in the context of such a large entrepôt market and also in the context of so many cultural objects being repatriated to the Chinese—their ceramics obviously being the key one there—that number is actually not particularly surprising. I do not know specific figures for other countries.
Anthony Browne: What has happened generally in the art market in recent years is the rise of China as a major buyer for all sorts of works of art, so it is not particularly surprising that Chinese buying has had more of an impact in recent years than it had in the past. To some extent, it reflects that. It also reflects the fact that our history has meant that an awful lot of these objects that originated from China and Japan, and that came here, are finding their way back again.
Paul McManus: For our sector, it is practically negligible. I mean, we have nothing organised in collecting this to then sell it on anywhere. This is just individual musicians, as we said earlier, or the odd music shop here or there, but it is all sold within the UK—nearly all of it—because it is just a consumer-driven thing over here.
Emma Rutherford: For portrait miniatures, there is no market at all in the far east; there are no collectors there.
Mark Dodgson: Actually, that is quite an interesting point, because we find that there are a lot of western cultural items that contain ivory, or that are made entirely of ivory, that are of no interest to the Asian market. They are predominantly interested in their own cultural items.
Anna Turley
Q
Mark Dodgson: I think it is slightly difficult to give a quick answer to that one; we would probably want to speak internally about it. However, I have worked at the British Antique Dealers’ Association for more than 20 years, and my own experience is that I have not seen those materials—those items from those animals—incorporated in many objects. There is the concept of scrimshaw, but generally speaking—when I was watching the online broadcast of the earlier sessions, I heard someone suggest that ivory inlay from, I think, hippos was used in antiques. I have to say that in my experience, I have not come across that. I have asked a few people about that, and they are not aware of it.
Anthony Browne: I have nothing to add to that. No, I think I would concur with that. Ivory is the ubiquitous substance in the arts of the past, definitely, rather than these other substances.
Emma Rutherford: In portrait miniatures, it is elephant ivory and no other type.
Paul McManus: From our point of view, since synthetic materials came in, pianos have been coated with synthetic materials. The most another type of bone might be used for is repairing an old ivory key that had broken, but if that became banned—well, we would use something else.
Alex Chalk (Cheltenham) (Con)
Q
Anthony Browne: Yes, there are concerns, and I am glad you have mentioned this. The legal advice that was given to one of our members—I am very happy to make it available to the Committee—is that giving these powers to civilians is most unusual indeed, if not unprecedented, except where public safety considerations are in prospect.
The representative from the police who gave evidence earlier referred to their usefulness in making people aware of the legislation. We do not have an issue with that. The police and customs officers’ powers of entry, search and seizure are entirely in line with the Police and Criminal Evidence Act 1984, so again, we have no issue at all with that. We do have very serious reservations about the powers of seizure and so on, both in clause 17 and in schedule 1. I am not a lawyer, so I am somewhat out of my depth if I get into a detailed conversation about this. However, we have a memorandum that I am very happy to submit for consideration, if the Chair would find it helpful.
Alex Chalk
Q
Anthony Browne: That is one consideration, and we are not clear about that. Also, they have got these really quite draconian powers, which are not normally made available except in the case of dealing with public health, where there is a real public need to intervene.
The Chair
For the record, anyone, including distinguished members of the panel, can continue to submit written evidence through the parliamentary website with a reference to this Bill.
Kerry McCarthy
Q
Paul McManus: Let me be very honest: we are extraordinarily grateful that this exemption has been considered at all. The vast majority of instrument manufacture involving ivory ceased around 1975. There was some continued use of ivory, with the other ivory that was not brought into enforcement until 1989. While it would be tempting to say “Can we have a bit more, please?”, if I am totally honest, we were so delighted with the proposal as it stood that, considering it would catch the vast majority of instruments, we did not want to appear over-zealous in our presentation to you.
Kerry McCarthy
Q
Paul McManus: It is a challenge. As an industry, we have been dealing with the rosewood legislation that CITES brought in last year. Nearly every guitar is made with rosewood, so we have had to try to educate an entire industry that makes guitars—both here and overseas—and every musician buying or selling a guitar, about the fact that rosewood is now a protected product. It is tough; I will be honest with you.
I suspect that ivory will rise to the top in awareness quicker than rosewood did. We have had to use every communication channel we can. We have gone to special Department for Environment, Food and Rural Affairs meetings in Bristol to educate the whole industry and take our members to it. Back to the online platform debate—to be fair, some of the online platforms have now been putting up information saying, “If your guitar is rosewood, you need to be aware of x, y and z,” as they have done with ivory. It is a challenge, but we just have to do everything we can to communicate this. There are so many platforms that people can buy and sell through.
Kerry McCarthy
Q
Paul McManus: Every instrument will come to less than 20%. A piano is 3%, because of the total volume of the product the ivory keys are 3%. There are a few instruments, such as accordions, that will get into the double digits, but nearly 99.99% will come under 20%. It will not be a problem in the percentage; it will be the article 10 provisions that you have to—
Kerry McCarthy
You would think a light would go on in the head with a piano, because everyone knows that the keys are made of ivory. As David mentioned, if you have a smaller instrument in which a tiny bit of the bow is made of ivory, the issue is how that is even flagged up.
David Webster: It is difficult. You might find that on a banjo, for example, the fret board has a bit of ivory on it, or the tuning peg. As far as registration is concerned, the Bill refers to a fee for registering the instrument, to be set by the Secretary of State. We would ask that the fee be waived for professional musicians, who generally do not earn a large amount of money. They might spend many years doing various jobs, but they do not earn a huge pot. Their major investment is their instrument, and we would not want to see them pay a large fee to register it in order to be able to trade it.
Kerry McCarthy
Q
David Webster: It is not in the Bill. It is “as prescribed” by the Secretary of State.
Kerry McCarthy
No ballpark fee?
Paul McManus: A CITES article 10 is normally about £30, but the registration might be separate from that.
David Webster: These are working musicians and the instruments are the tools of their trade. It is an important distinction. This exemption is welcome because it really does recognise that these are working instruments, tools of the trade, and a cultural heritage as well as what the musician needs in order to do their job on the world-class platforms we have in the UK.
Kerry McCarthy
Q
David Webster: I think it would cause a problem for musicians, yes. If there was a total ban on selling instruments online, you would have to travel in order to have face-to-face consultations. Musicians generally know what they are selling when they sell their instruments. An online sale facilitates musician-to-musician instrument selling, and an online ban would not help at all as far as our members are concerned.
Kerry McCarthy
Q
Paul McManus: Yes, and the problem is that the minute you say something cannot be done online, people get around it. You can buy a gun bag on eBay with a free gift inside it, because you cannot sell guns on eBay. People will get around it. David is right; a lot of musicians need to talk to other musicians around the world about their products. If it has been promised to a guy in America for 10 years, it will be done online.
David Webster: If it is a serious sale, they will be able to see it online and pay for it online, but they might want to actually try it out. When you buy an instrument, it is not just the instrument; it is also the ergonomic feel within the body and the tonal quality. Collectors might want to buy online and that would affect them, but the professional musician will always play the instrument before purchasing it.
Trudy Harrison
Q
Paul McManus: There are a few, and they come under antiques. We saw a lute that had nearly solid ivory plating over the whole thing, but that was pre-1947. It dated back to the 1800s.
Trudy Harrison
What about post-1947 musical instruments with more than 20% ivory?
Paul McManus: There are virtually none. The most we could find was an accordion that was laden with ivory, but it still did not make 20%. We have some parity here across the ocean with the Americans, which is always a good thing. As far as we can see, the 20% de minimis would catch everything.
David Webster: When we went to our members and asked what they had, generally speaking they were things like bagpipes with ivory mouths, bassoons with an ivory ring at the top, cello bows and other stringed instrument bows, flutes with ivory caps, ivory screws and so on—very small amounts when you consider the entire instrument. Nothing really jumped out at us.
Trudy Harrison
Q
David Webster: But then you would destroy the instrument.
Paul McManus: You would also destroy the ivory by taking it off, frankly.
David Webster: You would pretty much have to destroy the instrument to carbon date the ivory, which is why we welcome the self-declaration part of the registration. We think that is a very sensible move, and we welcome that. Sometimes you have to destroy the instrument in order to carbon date, and that would be a great shame.
Trudy Harrison
Q
Paul McManus: You would nearly always break the ivory when taking it off the product.
Mark Dodgson: Most inlay that features on anything, such as the thin slither on a piano key, is very unlikely to be capable of being reused or exported. We have had this discussion previously. Objects with small, thin slithers are of no use to anyone who wants to use them further.
Dr Cameron
Q
Anthony Browne: The proposals on certification are very sensible. They deal with all the eventualities quite well. I have to say that this whole certification system grew out of discussions that we have had for a very long time with DEFRA officials and with NGOs, and it is very robust as it is. It will apply to a small number of very recognisable and unique objects, which is really why it will be effective. It is analogous to all sorts of licensing systems in that respect. The proposals for replacement, re-registration in the event of a transfer and so on, seem to me to be eminently sensible.
Mark Dodgson: The only thing I would add to that—I agree with everything that has been said—is that there should be some facility for someone to check whether a certificate is genuine, perhaps online. Likewise, in the case of registration, I wonder about online purchasers. It is not clear to me from the Bill whether a buyer will have the opportunity to check through DEFRA whether a particular registration has been made.
Dr Cameron
In terms of the documentation?
Mark Dodgson: Yes, I am talking about the items that are registered under clause 10.
Dr Cameron
We heard concerns about duplicate certificates. Is that not something that—
Anthony Browne: I would not have thought that would necessarily be a problem. You get a duplicate certificate if you lose one, I think—there is a provision for getting a replacement one.
Dr Cameron
Q
Anthony Browne: One would have to ask the people who administered that, but I do not think the provisions in the Bill are weak. They should be workable, just like issuing any paperwork.
Mark Dodgson: The certificates are in respect of the most distinguished objects. They are all unique, and they are not likely to be easily muddled up with something else. If the concern is that they could be mixed up with other objects and used for other objects, I think that is unlikely.
Anthony Browne: If I may, I will add something to this. Certification is straightforward, because you are dealing with objects that are unique, rare and important, so there are not likely to be lots of them. I do have some concerns with the registration requirement for the de minimis objects. There is a sort of Catch-22 built into the de minimis. The Government have opted for 10% by volume. We argued for a higher percentage, in common with other countries, but the Government took that decision—so be it.
What the registration of objects will mean is this. There are quite a number of common or garden, utilitarian objects—many of your constituents probably own them if there has been a death and the house has been cleared—with minute amounts of ivory in them. They are by no means unique objects: they are Victorian or Georgian chests of drawers with tiny ivory lock holes and that sort of thing. There is no indication as yet what the cost of registration will be—one of you asked about that—but it could make selling such things completely uneconomical. The managing director of Lyon & Turnbull in Edinburgh sent me an email making that point. They are frequently asked to clear out estates when people are downsizing or moving house.
In the future, families who want to sell such things will be faced with two options. If there is something that looks like a small bit of ivory, it falls within this Bill, although it is well under the de minimis. If the cost of registration is more than negligible, the family is very unlikely to want to do that as it will simply not be economical, particularly as they do not know whether the object will sell. It could lead to an awful lot of objects with small amounts of ivory, which are reusable and recyclable and can be used again instead of buying new furniture, ending up in landfill because people cannot register them because the cost is too great. Even if they do register them, they are by no means unique, so what will the register do to help? I do not see how the register helps with a chest of drawers that looks identical to thousands of its cousins. Our concept was always that if an object is below the de minimis, it should be saleable—straightforward. If you sell something above the de minimis because you get it wrong, you are liable to criminal or civil prosecution, which is as it should be.
The registration of de minimis will do two things. You will simply deter people from registering, and then these objects will be destroyed or mutilated, as people try to hack the bits of ivory off—what is the point of that?—or they will just end up in landfill. I do not think this is a sensible aim. I wonder whether the Committee could look at this again. I do not think it would weaken the Bill in any shape or form. It would still be very easy to police, as it is a very low de minimis, and it will be completely apparent whether an object contains more or less than 10%. The penalties exist, and so on and so forth. It will prevent a lot of things that can usefully be used again or bought by the next generation from being used in that way. I do not think doing this will undermine the objective of the Bill at all. I just suggest that as a point that has been made to me.
Sue Hayman
Q
Anthony Browne: Yes, I quite agree. I think the 10% means that it is pretty straightforward, but because of the penalties people will always err on the side of caution. We were very pleased that the Government chose volume, rather than weight, which is notoriously impossible to judge—volume is a sensible way of approaching it. As I said at the beginning, we think 10% is rather low, but we live in the real world. I do not think 10% by volume will be impossible, but people will err on the side of caution, so I would have thought that you will probably not get people rubbing up against the maximum and risking criminal penalties.
Mark Dodgson: Members of the British Antique Dealers’ Association were quite surprised at the 10% and the way it was set. We could not quite see from the documentation in the consultation why 10% had been chosen, versus perhaps 30% or 40%. Just so that you are aware, because the 10% is proposed to be set in that way, items such as a silver teapot—this is a Georgian silver teapot with an original ivory handle—
The Chair
Order. Although this sitting is being televised, it is not particularly regular for Hansard to have to describe artefacts. Given that this is perhaps a unique circumstance, could you briefly describe it for the record?
Mark Dodgson: Yes, I am showing an image of a silver teapot with an ivory handle. Sorry, Chairman. The point is to make it clear that this is the type of object that, set at 10%, would fall above the de minimis. It would be fairly straightforward to identify that as being more than 10%. My members are very concerned that the only other exemption that the teapot could attempt to meet would be the clause 2 exemption. The query among our membership is whether objects of that nature would actually meet the clause 2 requirements.
On the point about estimating the proportion of ivory, 10% for some items is all right. For inlaid objects it falls right in the middle of a series of smaller objects with ivory inlay, such as Indian Vizagapatam boxes and so on. It would be quite difficult for dealers to work out which side of the 10% they are on.
David Rutley
Q
Anthony Browne: The sense I get, having talked to EU colleagues, is that they are arguing for a much less stringent ban than the Bill adopts. If that happens, there is no doubt that, as far as the decorative arts are concerned, markets in Europe will inevitably be more attractive. That is the inevitable consequence of legislating in this way. With regard to whether the UK’s lead will be followed by the European Union, you probably have a better idea than I do. I think there is no doubt, as the preamble and explanatory notes to the Bill say, that what is proposed is one of the most stringent restrictions anywhere in the world.
Mark Dodgson: From my experience, I too think that continental people in the trade would resist the level of restrictions suggested in the Bill. People need to be aware that on the continent, until recently, ivory tusks have been exported. Germany still has ivory workshops. We are already a long way ahead of those countries anyway.
David Webster: I was talking to some musician colleagues at a social dialogue in Brussels yesterday and shared with them the content of the Bill, and they seemed very impressed by it. Yes, we would hope that the UK’s lead would be followed. I spoke at the consultation conference last December on behalf of musical instruments, along with our colleagues from the International Federation of Musicians.
Paul McManus: Similarly, we have communicated with all the equivalent trade bodies around the world about where we are. Everyone in the musical instrument industry has been rather impressed by what the UK is proposing, as being pragmatic, sensible and proportional. We have nothing but praise for what has been done so far.
Emma Rutherford: For portrait miniatures, my colleagues in Europe just hope that they follow the UK’s lead and grant portrait miniatures an exemption.
The Chair
As there are no further questions, I thank the witnesses for their evidence. We will now move on to the next panel.
Examination of Witnesses
Hartwig Fischer, Dr Antonia Boström and Anthony Misquitta gave evidence.
The Chair
We will now hear evidence from the British Museum and the Victoria and Albert Museum. We have until 3.45 pm for this session. Could the witnesses please introduce themselves, for the record?
Dr Boström: I am Dr Antonia Boström, director of collections at the Victoria and Albert Museum.
Hartwig Fischer: I am Hartwig Fischer, director of the British Museum.
Anthony Misquitta: I am Anthony Misquitta, general counsel and secretary to the board at the Victoria and Albert Museum.
Mrs Latham
Q
Hartwig Fischer: I am confident that museums in Great Britain and universities have enough experts to be able to deal with these questions and to come up with very sound judgments on the aesthetic or historical cultural significance of any object.
Dr Boström: I concur with that. We have world-renowned experts at the Victoria and Albert Museum in the history of ivory sculpture and objects.
Mrs Latham
Q
Dr Boström: We already have an opinions service, which is a public-facing service. Each curatorial department, on the first Tuesday of the month, has a public opinion session. We would certainly be able to offer the service through that. Whether a more robust service beyond that is needed, and what that might be, is one of the discussions that is on the table, I think.
Hartwig Fischer: In view of the importance of what the Bill addresses, I think provision should be made for those experts to give expert advice. There is an investment of time and expertise that should be covered, because it is during working hours.
Kerry McCarthy
Q
Anthony Misquitta: As museums, we are not in the business of selling. We are not really entitled to sell. Once an item enters the collection of a museum, that is normally it. The term we use is de-accession and we have very narrow powers to de-accede. Certainly, once it is in the collection, we are not in the market to then sell it back into private ownership. Normally—99.9% of the time, and probably more than that—when it enters a museum’s collection, that is it forever.
Kerry McCarthy
What about acquisition?
Anthony Misquitta: An example could be a musical instrument with more than 20% ivory content, of which we have some. We have some that are almost 100% ivory.
Dr Boström: Or a piece of furniture.
Anthony Misquitta: Or potentially a piece of post-1918 art deco furniture, for example, that is of significant cultural value.
Sue Hayman
Q
Hartwig Fischer: I would be very surprised if any of those institutions breached the law. We have extremely strict procedures in place for due diligence on provenance. Before any object enters our collection, it goes through many filters and is closely monitored. My understanding is that it would be exceedingly difficult for any of these institutions to do this. It is unlikely that something like this would happen inadvertently. It would be most exceptional for something like this to happen. I am very confident that these institutions are extremely conscientious when it comes to acquiring objects.
Anthony Misquitta: There is a very strict accreditation regime for museums in this country. Accreditation is by Arts Council England. Where a museum falls foul of those very strict rules, it loses its accreditation and that is catastrophic. It loses its Government indemnity scheme, it is unable to loan to or receive loans from other museums, and its charitable status is thrown into jeopardy. There are a number of checks and balances in the accreditation regime.
I will not say that museums never break the rules, because it is a very tough climate for museums—not the likes of the museums before you, but it is a difficult period for regional museums. Sometimes they are faced with the stark option of selling an item or closing, for example. They might sell an item and run the risk of losing their accreditation, but it is not something that they would do lightly and it is devastating if they do.
It may be necessary for the Arts Council to think about adding reference to this legislation to its accreditation tests.
Sue Hayman
Q
Anthony Misquitta: I think so. I am talking off the top of my head, but that is a possible answer.
Sue Hayman
Q
Trudy Harrison
Q
Dr Boström: According to the criteria that are set out here?
Trudy Harrison
Yes.
Dr Boström: It had not occurred to me. I assumed that we all speak as one. I imagine that there would have to be a quorum.
Trudy Harrison
Q
Dr Boström: Absolutely. I think the basis from which we all begin is as one on criteria. There might be a difference of date—1540 or 1545, for example. Some scholars like to get into the details, but I think difference would be more on that basis than on the general principles that we would abide by.
Anthony Misquitta: The Waverley Committee decides on whether an item qualifies for an export licence. I am not aware of the extent to which they differ in their views when they consider whether to allow a licence, but I think their procedures are robust. I envisage that, whatever committee is chosen for the purposes of ivory, it would adopt a similar framework and governance to the Waverley Committee, which I understand is effective.
Dr Boström: It is very effective in its checks and balances and decision making by committee on the advice of an expert.
Anna Turley
Q
Dr Boström: Yes, I am. I believe that, as Anthony has outlined, it would be rather like the way we act as expert advisers to the export licence committee through the Department for Digital, Culture, Media and Sport, based on the expertise we have among all the national museums. These export licences are shared across museums according to the expertise in place, so it would be absolutely directed to those experts in ivory—ivory carving or musical instruments—and the expert would pronounce on that. I have no doubt that the expertise would be in place.
Hartwig Fischer: Museums are responsible for collecting only what is really significant to deliver their mission, and we all have limited space. I think the criteria are robust and we can work with them because we have worked with them all along. It would be the ambition of any curator or museum person to get just what is really significant for the collection—that is to say for the public in the end, and for future generations to learn about the past.
Liz Twist
Q
Dr Boström: I would say that that ties in exactly with the way that the export licence procedures have prescribed institutions, experts and advisers. I imagine it would be largely along the same lines, so that seems perfectly reasonable.
Anthony Misquitta: As Antonia has mentioned, there needs to be a degree of flexibility in the definition, because depending on the nature of the object—musical instruments would be different from furniture—a different set of experts will be required. I would therefore welcome a degree of flexibility, and some guidance—I hesitate to say further secondary legislation—from DEFRA as to how the prescribed institutions shall be constituted on a case-by-case basis would definitely be helpful.
Alex Sobel
Q
Hartwig Fischer: It is a numerical question, basically, because we are talking about proportions and percentages, and I assume that can be measured. Conservation departments of all museums have specialists for all materials, and I am confident that they would have the means to establish the ratio when they look at an object.
Alex Sobel
Q
Dr Boström: Yes, it will be like any object analysis report. When any object comes in as a new acquisition or there is a proposal for treatment, very detailed reports are put together and detailed empirical and scientific analysis is done of the object. A lot can be established about materials with very sophisticated microscopes and other technical things. It is material science, and that is what we do very well, as does the British Museum.
Mrs Latham
Q
Anthony Misquitta: No museum will be selling to anyone, least of all an overseas institution. Speaking for the V&A, and I have seen the British Museum’s governing statute, I do not think we have the power—I know we do not, and I do not think that the British Museum does—to sell an item to an overseas institution, so I do not think that that would ever happen.
Mrs Latham
Q
Anthony Misquitta: They are loans. I have concerns about loans, which I would like to raise at some point, but no, once an item is in a museum, that is it.
Mrs Latham
Q
Dr Boström: In the rare cases that an object is de-accessioned, which is very rare and has so many strictures around it, it would always be through a third party. It would never be a direct sale to another museum; it would always go through an auction house or a dealer; it could never be directly to another institution.
Mrs Latham
Q
Dr Boström: To protect against inappropriate de-accession and sale. It is checks and balances.
Mrs Latham
Q
Dr Boström: Yes.
Mrs Latham
Q
Anthony Misquitta: Yes. The V&A, like the British Museum, has thousands of items on loan throughout the world at any given time. We also loan in items as long and short-term loans. As the Bill is drafted, on my reading a loan is “dealing”. That means is that we can loan a work—in the United Kingdom, for example, I do not think it will be a problem because we would loan a work only to another accredited museum; we would never loan it to a private individual.
On the international stage, we often loan our works overseas. ICOM is a dominant force in the international museum world, but it is not everywhere. For example, we have a very close relationship with an institution called the Design Society in Shekou, Shenzhen, in China. We have a long-term relationship and have loaned a number of items to that institution, but it is not ICOM-registered, so we have to worry about our commitment—these items are out on a medium-term loan of a couple of years. I have an anxiety that when the Bill is enacted, suddenly we will be acting unlawfully, because overnight such loans will become unlawful. It is fixable with some transitional provisions, but that is one of the anxieties that I have.
The other anxiety concerns loans from private individuals. At any given time, we have a number of very valuable loans from individuals—amazing works, amazing individuals who lend us their works, often for decades at a time—but those are loans in from individuals who are not accredited museums. So we have a large job on our hands, which is to identify all those works, to attempt to get certificates for them and to deal with a great deal of logistics in relation to such activity—that is achievable but will involve quite a lot of work on the museums’ part. Again, some generous transitional provisions may help ease that pain.
Mrs Latham
Q
Anthony Misquitta: The terminology used in the Bill is “dealing”, and the definition of dealing includes the word “hiring”. I am sure the intention is not to capture these loans, but as it is currently drafted the Bill does capture them.
Mrs Latham
Q
Hartwig Fischer: I would like to corroborate that. Lending is part of our key mission. We hold these collections for the public and share them as widely as possible. It is also part of our mission as national museums to project British values across the globe by engaging with other institutions by sharing knowledge and heritage. All our museums—ICOM museums included—are bound by an extremely strict code of ethics. Any museum dealing with another institution is bound to check the ethical validity of the other institution. To the best of my knowledge, all museums do that. Again, you have a number of codes and procedures in place to make sure that there is no breach. The fact that museums rank among those public institutions that enjoy the highest trust is evidence that this has worked and is reliable.
Luke Pollard
Q
“‘ivory item’ means—
(a) an item made of ivory, or
(b) an item that has ivory in it,
but does not include an item consisting only of unworked ivory”.
Can you help me understand how many of your collections include unworked ivory in this respect? Do you think that exemption is appropriate, or does it actually cover a much larger section of items in museum collections?
Anthony Misquitta: I do not think we are concerned by that. As a museum of art and design, we are not interested in unworked ivory; we are interested in worked ivory.
Dr Boström: That does not really pertain to us, no.
Anthony Misquitta: We are not worried by that distinction, because we work only in highly crafted art and design.
Hartwig Fischer: However, among the national museums is the Natural History Museum, which is one of the grandest and most important of its kind in the world, and it might have—it probably does—unworked ivory as part of its documentation of natural history. So yes, it is likely that our museums have only ivory that has been worked—carved, incised or what have you—but it might very well be that the Natural History Museum, in living up to its purpose and mission, has unworked ivory in its collections.
Luke Pollard
Q
Hartwig Fischer: My hunch is that since 1975 there have been no purchases of unworked ivory, so I do not see any museum—any natural history museum or any museum of this kind—engaging in anything like this. These are historical holdings.
Dr Boström: Further to that, because they are historical holdings—as in the Pitt Rivers Museum or any of the famous university museums with natural and artistic objects—I imagine that there is enough in the existing public collections, across all museums, that, should it be necessary to display or interpret unworked ivory for an educational purpose, we do not have to go anywhere else for unworked ivory.
David Rutley
Q
Dr Boström: Are you talking about the volume of acquisitions, or the objects that might come to us?
David Rutley
Q
Hartwig Fischer: I am personally not in a position to answer that question, I am afraid, because I do not have a sufficiently deep and detailed overview of what is happening in the trade. We see from the museum side that a very small quantity of objects qualify to enter the museum. When it comes to museums and what we see generally, even following what is happening in auctions, we are talking about small quantities. We are not talking about thousands of objects. The material that is historically relevant and significant is very limited.
Dr Boström: If one were to talk about taste in ivory carving and collecting, we always associate the working of it more with the 17th and 18th centuries, and the collectors with the end of the 19th century. It is not foremost in collecting practices or trends.
Hartwig Fischer: It remains to be seen what will actually come up for certification. One will have to react to the volume to see how best to deal and cope with it efficiently.
Sue Hayman
Q
Dr Boström: I imagine that, in parallel with the export licensing, even if objects were to come to a small museum or be associated with it, it will be devolved back to the major national museums—where many of the experts reside, because of a reduction of curatorial staff in our regional museums—to help them, in the way we do in other cases.
Hartwig Fischer: We have wide-ranging national partnership programmes in place. We work with 150 small and bigger institutions across the country. There is a well-established network of exchange, skill sharing and trust. We are confident that we will find a solution. We are engaged in helping museums that do not have the expertise to cope with these questions.
The Chair
If there are no further questions from Members, I thank the witnesses for their evidence today.
Ordered, That further consideration be now adjourned.—(Mims Davies.)